TFTC: A Bitcoin Podcast - #424: Q1 2023 Monetary Base Update with Matthew Mežinskis

Episode Date: June 1, 2023

Follow along with the charts: https://twitter.com/1basemoney/status/1664179527784734720?s=20 Matthew on Twitter: https://twitter.com/1basemoney 8:12 - Baltic hockey 17:17 - Debt ceiling bye bye 22:55 - New basemoney drop! 36:19 - Bitcoin base vs top fiat, reverse repo 49:41 - Bank failures 1:01:54 - Treasury markets 1:05:34 - Fannie & Freddie debt numbers 1:09:32 - Balaji says FedNow is a CBDC 1:17:02 - Sidebar on children 1:18:19 - Back on topic, centralization will continue 1:23:45 - Sovereign sat and gold stacking 1:34:41 - Quick stats 1:35:56 - Full reserve in Texas 1:45:37 - Wrapping up Shoutout to our sponsors: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Unchained⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠River⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠CrowdHealth⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Bitcoin Talent Co⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TFTC Merch is Available: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Shop Now⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the TFTC Movement: Main ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Clips ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Website⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Instagram⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Marty Bent: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Podcast⁠⁠⁠⁠

what's up free city boy marty here to introduce this rip with our good friend maddie mazingtious back again for a quarterly update on the global monetary base always a fun rep with with maddie great conversation talk some full reserve banking at the end make sure you stick around for that before we jump into the sponsors got to read the top four boost from last yesterday's rip with Matt Dines. Rip 423 retirement funds in the age of

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sorry cryo sats at pies 250 sats great rip thank you guys for boosting rip 423 I hope you enjoy rip 424 and then if you're listening today we got rip 425 coming out tomorrow it's a long one

Balaji Trinvonson um great rip great rip this is a great rip too i love maddie we've been doing this i think three or four years now he's been doing his monetary base update for five years fives are high things are good rolling into the end of the week feeling high here guess what river rebrand not really rebrand redesign new design and guess what they just added a new functionality I just got the email before I sat down

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I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Have we ever not had technical difficulties? I think this was only the first time, frankly. This is definitely not the first time we've had technical difficulties. Usually we get up and runny with these charts, no?

Sometimes. At least I feel like they're pretty. The mic thing messes up every once in a while. I don't know, man. How it goes, right? It is how it goes. What is up, freaks? We're here for our quarterly update, Q1 2023.

how you doing it looks beautiful over there it is uh you know just won the bronze medal in the world hockey championships beat the usa beat the mighty usa that's huge for us man i mean you got to think about team sports and when you talk about the national level like it's not often where you get a nation of two million people first of all beating a country of 330 million let alone meddling in a world either world championship or cup slash olympic uh you know major event it's pretty it's pretty uh it's pretty cool so it was like they declared a national holiday on monday today let's go yeah it was big man it was huge how many like how many lafians are in the nhl uh i think none at the moment there's a few in the ahl but i don't think there's any

at the precise moment that are still playing in the nhl so um and there's a lot playing in europe we left this continental league which was this russian league after the invasion of ukraine so it's been a lot of turmoil a lot of craziness but yeah just winning it's big man i mean you think like you remember iceland qualified for the world cup a couple years ago new zealand as well like these are small countries new zealand's bigger than latvia but iceland is not iceland's 300,000 like they didn't make it out of the group but it's still huge it's huge you make something like the world cup and we've tried like again and again and again to get to the medal rounds in both the uh world championships this is of course i'm speaking post soviet union even though

we were you know i think the origins of hockey there were probably some international massive matches before world war ii but uh you know that's it's pretty rare when you have like a such a small country in a team sport medal so like it really is a huge thing and in the the semi-finals playing canada we were up uh to one with 10 minutes left in the third and i'm losing it unfortunately but but it doesn't matter winning that winning the bronze medal game was just absolutely huge like lithuania has done it a few times with basketball in the olympics which is huge for them but i can't think of like another country when you're talking about you know one two million people where you can can represent like it's just a cool thing i mean it's a bit odd you know because you have

obviously you know the u.s doesn't pay attention as much to these international sports as we do but uh you know it's it's still it's it's a pretty it's a pretty big thing it's good to represent through sport right yeah not through not through other nonsense but just do it through sport if you want to show off your culture and people it's perzingis the uh the biggest uh star latvia for latvia uh yeah you have uh some good lithuanians you have valentunas you have sabonis sabonis's father obviously he's a legend like top five center but um yeah i mean it's you know we have good players and they definitely compete on the international level both in hockey and in basketball but uh it's rare i mean it takes it takes time to build up you know every few years

to get the guys to gel together and have a good streak so it's pretty cool is jokic serbia yeah yeah he's in the finals what the hell's going on there don't know it's uh seems crazy yeah it's crazy uh that's a part of the whole european mission that nobody seems to have gotten right ever like going back 100 years so well that's actually i don't know i told you i uh recorded with bellagio yesterday five hour podcast for east get ready for that that'll drop tomorrow congrats i want to talk about it no the one thing about the five hour podcast we talked about the dissolution of uh the ussr actually we talked a lot about the baltic states and how they benefited the most because they defected first and didn't take any of that that sovereign debt with them

basically had a clean slate out the gate yeah that's interesting that you talked about it i mean it's a it's the most remarkable i think example of how freedom can peacefully you know secede from tyranny uh we had some benefits though like we had free nations before uh they occupied us illegally in in after world war ii so like between world war ii and world war ii we were like fully free but then even before that you had like the polish lithuanian commonwealth which was basically it was like the biggest european state for 450 years um but from you 1800 from 1800 on you basically had the czarist empire of russia pretty much dominating eastern europe so now obviously we see these repercussions coming to this day but our our countries have had

like kind of a again it's funny when we talk about this like a libertarian right like some people think power is a good thing or like a good historian you know a good uh powerful history is a good thing it's you know it's a proud swede or a proud norwegian a proud viking these types of things um it's just kind of funny like that of course i'd reject that that like you need to have a strong history to have a good identity although we did it's just we were more oppressed over the last uh you know 200 years and it takes time for countries to you know get past that i think obviously i'm referring as i always do like the most typical example right now is what's going on with ukraine so they didn't have they tried they tried to have their own

revolution uh after world war one but unfortunately it failed and like the bolsheviks won and they became part of the soviet union whereas we uh lenin uh did not pursue the baltics going for fully you know modern independent nations so yeah i mean it's the history is interesting for sure um but we yeah like we're we're a good we bucked the trend in a lot of examples you know paul krugman was pissed he's getting in fights with uh tomas ilves who's the former president of estonia back in the 08 crisis because paul krugman was trying to say like oh you just need to devalue devalue have the imf come in there devalue like always and we said like absolutely not we're just not going to do it we've seen what happens to too many other nations we're not going to do it

and we didn't do it we we could afford to devalue internally like to to to lower public wages we actually did real austerity and uh we didn't devalue the currency we were pegged all three currencies the estonian croon the latvian latin the lithuanian lita were all pegged to the euro and we didn't devalue and it was very good it was very good that uh you know we we did the hard work internally we didn't let the globalist imf come in and devalue the currency and that was like a major thing that's a big egg on the face of paul krugman i mean he's just yeah he was destroyed by two more sales the president of estonia on twitter it's great so we bucked the trend in a lot of ways there and obviously you know i'm proud about a lot of it but uh yeah you just gotta keep

carrying on and uh it's it's unfortunately a powder keg part of the world right like i wish we had more you know i wish we didn't have a major war in our lands like since the u.s had one civil during the civil war you know i wish it was that long i wish we could recover and you know have more peaceful times and stuff but uh it's just not like that around a lot of places in the world so we've been doing well i mean it's like it's good for it's good for us like we're stoked obviously this week as well when we went in you know non-military uh competitions as well it's great but yeah it's uh for for a lot of the countries around here it's it's still pretty tough and uh you know it's going to be the story for for sure for the next day i was saying this

eight years ago when when ukraine was first uh you know taken over by uh by the little green men so um yeah that's it's just going to be a battle it's good to see that austerity can work it's very topical here in the united states with the debt ceiling impasse seems like that's going to get raised again i heard it was uh raised and not even raised it was just eliminated until the end of biden's term until the end yeah until 2025 till january 1st 2025 they can spend as much as they want yeah which is great i mean it's a it's a hilarious it's a hilarious uh little voodoo sort of uh ceremony that we go through every few years with that ceiling like everybody knows it doesn't mean anything but we act like it does it's a mirage it's actually nauseating because

i've read a newsletter about it a few weeks ago it's just every 18 months now we have the debt ceiling debate the left is like raise it immediately everything's gonna go to shit the right's like we're gonna hold the line and then at the last minute the right bent the knee the ceiling gets raised and nothing gets fixed the u.s does again bucks the trend or at least what you would think about the modern uh ideas of debt has done it many many times i did a short on this as you know i've been starting these youtube videos this year and it's taking a while to get some youtube stuff to get a get trending but it was still my best short on the u.s debt was like 100 years uh 250 years of u.s debt and you go from like first of all

they owed debt to the french the spanish and the dutch after uh world war uh after the revolutionary war which i would encourage anybody who just you know if you want to be a full-out non-interventionist that's good i understand you know i know you had this discussion with constantine kishin and other people but uh like it's it's also okay to help other countries the u.s was helped against britain in its revolutionary war like that's a fact you can't you can't deny that they were they were helped uh and then the u.s paid off that debt right andrew jackson paid it off but he also was like not very good at the indians so it's not like there's any angels in that story necessarily but then after uh the civil war the debt remained from the civil war to the founding of the fed

that remained pretty flat after it exploded during the civil war um you know it went up from like basically nothing right because he extinguished it in the 30s andrew jackson and then lincoln exploded it during the civil war but after it goes up you know billions during the civil war it remained basically flat for the next 50 years or so and that was the greatest growth of an economy in the history of the world was the u.s u.s post-civil war period so u.s has a lot of great history of bucking the trend there as well like you you don't need debt to grow an economy we did it actually better than anyone ever had in the 1870s 80s 90s and before the founding of the had well then why today flat or even went down even went down a little bit yeah and then today

let's see the people in power seem to think that's an impossibility it's the gravity of the debt situation is a lot a lot bigger than it was you said man everybody's in a mirage and just making up stories on their their own ways on their own side on their own political party no one would look at the economic history facts you just don't so as always that's why we need bitcoin just got to force their hand on it yeah eventually it will be it's that's the other thing i in that newsletter i mentioned that's what i really leaned on it revolved around with thomas pain quote like if there's going to be trouble let it be in my day so that my children don't have to do it and that's

where both of us have young children. And that's what I'm beginning to think more about. It's like, fuck, like, I'd rather just rip the Band-Aid off now. Stop kicking the can down the road. I don't want my boys to wake up a decade, two decades from now and just live in some debt-fueled hellscape. Accelerate. You also have that, yeah.

and then you also have that uh allegory quote that joe rogan likes to bring up right it's like good men you know hard hard men what is it hard times make hard men hard men make good times good times make soft men soft men make hard times that cycle so that's i think there is some truth to that as well uh unfortunately it's kind of like yes as you say it is incumbent upon us but the unfortunate fact about a lot of this more history you read the more you see it right the the repetition i mean it's just uh you know might not be fully repetition but it definitely rhymes and yeah it seems like we we whether whether we can actually do it for our kids and then our kids kids will be okay is a totally open question i think obviously you and i both believe

bitcoin is going to be a big part and hopefully hopefully that that that can be the case that it's a much more optimistic future but then there is something to be said too about the cyclicality of history is people having to relearn the same lessons and getting soft and not working hard you may say we're creatures of habit to a certain extent you may you may speaking of habit it has become a habit here on this podcast over the last three years to do our quarterly update that's what we're here to do in the last yeah buddy the last three the last two we've had some interactive charts we went through a lot of technical difficulties to make sure we get the charts up on this this particular rip that's what i was just

to defend myself that i don't think we had any other technical difficulties besides for those big charts but anyway um yeah yeah it's uh it's it's actually the fifth full year this was five years this uh this posting five five years i've been tracking the shit and it's only getting better central bank uh monetary based central bank currencies get what is getting better the quality of the content the the breadth of the content no i thought you were going to talk about the uh the printing of the money is getting better or something like that well if you're i mean it's getting worse but depending on how you depend on how you view it yes depending on how you view it it's certainly getting better

in some people's minds it's crazy expansion yeah we can uh we can go into that one um but let's look at the interactive because i just as we talked about uh last quarter you know when we did the show last quarter that was about the time that balaji made his big bet conveniently you just talked to him so it might be interesting just to look at it again uh i'll put it up here uh if you're ready logan there you go i've replaced myself and um so we got the old price chart you can see this okay right yep okay so this is when i do a lot um you know no stock to flow nonsense just use a uh single variable regression it's a trend line the best fitting for bitcoin it's 95 r squared it's a power trend line just tracks tracks the growth and the 95

simply means that the price moves around the average 95 better or with 95 less variance so it's a pretty good trend line if it was 100 it would literally track the trend line exactly the price would obviously we know that can't happen so here's his bet i understand he paid it out what like already a few weeks ago right maybe a month ago yeah he gave up on it yeah so here's the expiry he spent a million to let us know they're printing trillions right right um but this is yeah this is a little bit of nuance totally separate from the monetary based stuff but still it's interesting to look at um remember this this is the great trend of 2011 2010s is even more insane but if you go out so you can use these predict and once i predict it's a loose

term i'm not to you i'm not saying i know the future it's a statistical term here but the trend of 2011 shows three billion dollar you're not reading that incorrectly three billion dollar bitcoin by uh by december 31st 2030 so unfortunately we we have bucked that trend as well we're off it be great if we get back on but we're clearly off it uh at the time it was 85 percent r squared but i'm just not looking at any more pricing data up until after 2011 so just shows you the difference and then you might remember as well another trend line this is not on this chart but you remember that so the trend line that we're on will take off 20 uh let's take off 2011 now the trend line that we're on has basically been the same since 2016 which is pretty cool we can come back to

that next quarter all the different trend lines different years but like this does not move too much as bitcoin has gone on from 2016 2017 2018 2019 you may think like it's always fallen right So here's 2011. Here's the current. 2011 is the dotted. The current is solid. You may think that the tendency of this trend line is to always fall, but it's actually not true. I don't go too on this because I don't have all the trend lines. But if I showed you the 2016 trend line, it'd actually be below the all-time trend line, this black trend line. So just something to keep in mind, right? And then biology came along a couple months ago, said Bitcoin's going to a million by june 15th he would have to be on this trend line all right now this is the gradual trend line but

he'd have to hit it and uh you can actually look at the observations throughout history you might remember i showed you this last time we did hit it just a couple days we hit his trend line in 2011 so uh it's actually a three to four sigma event is what he predicted a three to four sigma so remember three sigma is 99 six sigma was the jack welch like you know insane amount of you know uh good production per per million or whatever like you have like i don't know six six defects or something that's that's the sigma it's basically just you know how many observations uh are are below the trend line here so three to four sigma it's not as insane as six sigma but it'd be pretty crazy to catch the trend and even if you looked at a three sigma trend line that's here and we

can just look at it uh three sigma is a half a million bucks per bitcoin all right our current trend line is fifty thousand dollars per bitcoin all right we're not even at the current trend line right that is the trend line but we're not at it we're under trend at the moment and the biology needed to be right about here uh a million bucks that was his trend line and that means it was above three sigmas actually what not as high as four sigma but it's between three and four sigma so very very rare we didn't hit it uh i told you we weren't going to hit it but you know i think most people understood that but i just wanted to show you the actual statistics of how it worked and uh as we suspected it didn't but i understand you didn't talk about the bet after

after you talked with him for five hours you didn't talk about any of this no we went deep into the history i'm sure it's awesome it was a big history talk it was a big history talk yeah yeah he's good he's good he can he can pull a lot of good stuff out for sure so i don't know i we don't have to go more into this do you have any other questions no do you use this as like uh i do i do videos on this a lot i mean this is the kind of stuff i do anyway for the day job which is not really crypto bitcoin related but um i mean we don't try to give out financial advice here but to use this like definitely no financial advice to ape in like if it's a certain standard deviation away from the power regression i have i have yeah i mean here's

three sigma down right so this means 99 of the observations uh would be above this line okay it's actually 99 and a half percent but let's not worry about all this because you know you got to count the top side too and then let's show you one more thing two sigma down is an interesting one right that that's actually kind of is some long-term support you see that i bumped here let me take the three let me take all this shit off this is just two sigma down okay so What's two Sigma? It's two thirds of the time. All right. So, uh, no, sorry. One Sigma, one Sigma is two thirds of the time. That's one Sigma line is the blue. The purple line is two Sigma. That's 95% of the time. And three Sigma is 99% of the time. Roughly. These are rough. It's just the

rough, uh, meaning of these, uh, deviations. And so you can see that one, it does break below. it has you know like during the crypto winter it did uh it did a little bit here in covid and then it did with our our good uh goofy friend from the bahamas it broke it but interesting look at the two sigma down it has kind of acted as some pretty strong support it's very very rare i mean you'd have to go back to here which is basically just nonsense data right i mean it's like very very thin markets i start this at bitcoin pizza day you know sub penny uh bitcoin so everything from bitcoin piece of data is data that that counts equally but still regardless it's an amazing trend that bitcoin does hold and um yeah too simply down is something to i think pay attention

to i do videos on this people are interested but also another thing to think to think about as well is it's extremely rare when you even cross the line like just look at the how many times it crosses like even ignore the very early times but like it's just got one two 2011 just ignore that three four five six seven eight down nine ten it's only 10 days in like we're getting on something like 6 000 days of pricing history here is what's represented on this chart and 10 times it's crossed the trend line so these are major it's a major major trend and those are like that's a major event if it crosses and we went down in 2022 and stayed down obviously like really puked because of uh because of the scumbag in in the bahamas yeah so it's only crossed the two

sigma below 0.16 percent of the time that bitcoin has been trading with pricing data uh 0.16 yeah something like i mean it's like 90 uh no no it'd be it's 95 it's two and a half it means two and a half percent below this line two and a half percent above the other line the other two signal on the top side it's 95 of observation of the outside of these purple bands two and a half on the top two and a half percent on the on the bottom yeah i just divided by six thousand oh no no that's uh that's a different calculation that's how much it's crossing the uh just the trend line that's just what i said this out how many how many times the prices shot across the trend line itself yeah yeah totally yeah yeah it's just a different

it's a little bit different i don't i'd have to actually count it i don't think it works that way that's a good question no it doesn't work that way because you'd have to it could cross the trend line like yeah it could cross the trend line 10 times like it has so i don't know i don't think it really matters that way anyway that's how it is so uh yeah we're below trend like in my opinion that's uh still quite bullish area we're not as bullish obviously i mean everybody knows nominally it was pretty good buy here in hindsight but still as you see here below trend below uh above above the two sigma downtrend right at the one sigma so it's kind of an interesting

uh level and yeah it's just something to keep in mind like i'm not really a trading view guy like just like drawing crazy things off of wicks and stuff definitely if you want to if you want to do that i think people can make a lot of money doing that but i'm it's not for me i just i just like looking at the long picture you don't create any nine nine hammers no i don't i don't told you a lot of people with that back in the day yeah he did he did so we're below trend right now as it stands if we're following the power trend bitcoin should be trading at like 52 000 i think that's what i saw yeah 50 grand is the trend line and again keep in mind that's not the all-time low like 2016 and i think 2020

are below this trend line and when i say like what does it mean when i say those years it just means i'm calculating data only from 2016 or only up you know from 2016 and before let's say up to 2016 and up to 2020 when i say 2016 20 trend line it's like the 2011 trend line you're only looking at data from the very beginning up until 2011 it's a crazy awesome trend line but we just we obviously fell off of that trend line but the amazing thing is with bitcoin is that from 2016 um you know you're pretty much you're pretty much right around this black line 95 are squared and you know we're close to the to the ballogy bet so that's where the you know again i i totally sympathize with with the with the message good on him for spending a million bucks to basically do

it and talk about bitcoin for three months and get like mainstream press about it but statistically it was it was above a three sigma move if it was going to happen yeah i think the marketing value of the uh million dollar bet was over a million dollars i think it was a good you think i think it was a good media deal that's good putting myself back on i think we're good there hell yeah so i mean the price has been pretty flat well it actually bumped up pretty significantly the first quarter of this year how did that affect uh bitcoin's pecking order or or place in the pecking order on the monetary base about the same um yeah logan if you could pull up the tweet thread i mean i could just i'll just tell you the uh so the the best chart

actually for this is i'm not sure but it's basically we're we're 10 i keep going down i think right there that one with the bar chart up up a little bit that one yeah so this is basically the top 10 fiat currencies base money central bank money reserve money has nothing to do with bank money has nothing to do with fiduciary media yes banks are not good in this day and age i'm sure you talked about that with biology i mean like we're we're becoming ever more monopolized every day fdic insurance all this stuff is just a mess never should have been initiated uh but the but none of that is like bitcoin so that's why i always that's why i do this this project basically so i've been doing it for five years no matter what you think about where bitcoin is going to

go for scaling in the future i think it's going to be great i'm sure it's going to scale but none that stuff we'll compare economically because it's it's using banks it's not using the monopolistic central clearing settlement or it's not using the prior market clearing settlement media which was primarily gold before that silver so that's why i include gold and silver as well the actual stock values of gold and silver that are available available up ground uh everybody kind of here's the 10 trillion number with gold it's actually closer to 11 trillion so it's always it's always number one it's ahead of every other central bank money got the top four there euro the dollar chinese yuan and the japanese yen are the top four and in that order at the moment

and then the last mid-major that bitcoin has not cleared yet is the british pound it has never passed that it has passed switzerland and india before 2021 uh it has fallen behind and it's like basically right at india like if if the price when i posted it was 27 500 or something probably would have been above india you know so this is where it's a it's a little bit of a dull report because again i hate to i i wish i could give you like fully updated information but these central banks i mean that some of them don't even publish until a month after so as i always say right so it's like it's june 1 now and you're looking at monetary base values as of march 31st and i didn't get them until like at least start of may so uh it's just how it goes but anyway you see there

the bitcoin comparable price at the level of each central bank's monetary base so uh we'll soon pass india again whenever we get on the next run switzerland should be pretty easy as well silver as well we've passed silver before and uh it's just it just comes back to the the old british pound we probably did you see the 64 000 like we did get above 64 000 right in i think november 2021 but we never closed these are always month end closing sort of data sets right so we've never closed ahead of the british pound ever that's the last mid-major currency to take to take down and then coming for the sorry i think i think we'll get the pound in 2024. it would be great i would be i would look forward to that that uh quarterly update we have to you

know shit talk to all the boe people mark carney wherever he is doing his his green energy company initiative uh all these jokers so yeah it's real it's real stuff i mean this is like this is where this is where i do think you got to be a little bit rigorous and go through the numbers which like nobody apparently does which is hilarious like you cannot find this stuff on like bank bank for international settlements imf they don't track the monetary base but it's you can basically think of it like the central bank's balance sheet there's a slight asterisk one asterisk for the uh for the dollar because they have this huge reverse repo facility which can basically think of it's like base money for non-banks money market funds hedge funds basically

institutions and entities that are in the market that don't have a banking charter and sometimes they can even be like a sister company of a bank but they just they themselves don't have a banking charter and the fed has even opened up their liquidity to them and there's like a two trillion dollar plus repo facility it's a repurchase agreement for the fed it's a reverse repurchase agreement for these companies but it's just insane so like the fed's balance sheet is actually i mean it was it's it's closer to nine trillion nine trillion dollars um this is only the money that exists the core of the banking system that's what the that's what the monetary base means so that's why that's why but the fed is just doing crazier and crazier things and it has the last few years

as you know well speaking of the crazy things with the reverse repo and the entities that have access to that market particularly that was one of the insane things that happened after the spasm in 2019 that's when they expanded the access to that pool of money to these they they blew it up yeah pretty much from there it was it was like up and down it was higher uh a little bit before that and it was coming down just like the rest of the balance sheet right after and this is another thing like i always say try to be rigorous like how many bitcoiners i've said this a thousand times for me saying it but bitcoin is from like 2016 2017 it's like all the fed does is print money print money no actually they weren't at that time from 2014 until that moment that you described

the spasm in september 2019 they were keeping their balance sheet flat or declining it that means they were keeping the monetary base flat or declining it decreasing it uh and it was solely to just try to get back to normalcy that's what they said they wanted to do get back to normalcy and couldn't do it and i think that surprised them that so many non-banks caused that repo rate to skyrocket that they're like holy fuck like we got to do we got to do something with them too like we thought we were you know just dealing with a banking system and now we have to deal with them and so all of the non-banks now like the fed basically has a facility it's a base money facility for non-banks it's not going out into the economy but it's not good either it's just

to bail out like park your money we'll give you you know a safe interest rate take it it's good no problem like there's no question that's going to be inflationary down down the line or just wreck you know well so that was that was a rumor in 2019 is that it was like a 0.72 millennium i believe citadel as well they got into trouble and that's when they expanded the facility um of individuals and entities that have access to the reverse repo and they included like the fic i believe which is like a proxy for those hedge funds and so essentially they were funding hedge fund margin balances um that obviously were going into financial assets yeah yep absolutely it's a it's just a spot where they can park cash i mean they don't they don't uh

you got to be careful with some of that because like if you just go back to the traditional money multiplier right or like the uh what banks would traditionally lend uh how much they might issue fiduciary media beyond the value of base money that's the that's the money multiplier just in the traditional banking system even today like there are many countries the european union is one of them i mean the zone the eurozone countries ecb uh many many central banks that don't have a reserve requirement at all and until march 2020 the u.s was actually one of the rare countries that had one for the largest banks and it was 10 10 reserve requirement um um all of that's just gone out the window though from covid i mean from covid it's like

whatever you want to do we're there for you don't worry about it uh you know store if you need to put liquidity and make you know give yourselves a trustworthy counterparty why go anywhere else but us and that's basically what's what's happening um you can you can you can say that uh it's like they can margin that up and go outside like they but actually for the for the non-banks it's a bit more really for both for the banks and for the non-banks it's a bit more uh you never know you know like everybody's trying to be like if you actually look at the reserve ratio it's huge right now i mean there's there's a lot of base money in the banking system right which you see is right there in the chart that i that i showed the bar chart that five trillion

five six trillion uh even just looking at that not the not the repo facility it's just sitting there and they're not lending out like they were before 2008 even so um well i don't know it's just a long-winded way of saying like you never know what's going to happen but for sure the central bank doesn't know what's going to happen and they're the more that they increase this base and then the more they increase the like the base of the non-banks which never happened before at all like just giving them this security this feeling like okay if you really need it you can come to us there's just lots of unintended consequences that will come from that and that's the that's again it's the theory of like free banking like if you didn't have this entity you

would have many other banks that would have just failed very quickly would have been over with been done with and and that's it but just keep kicking the can down the road that's the it's a long-winded way of saying i guess how i'm doing it well two things here i think mentioned that first i've been paying attention to i mean a lot of the talk around the debt ceiling and the massive need to roll over a bunch of treasuries in the coming year has stoked conversation about the treasury being able to uh put their hand into the reverse repo markets to fund their operations what's the mechanics there no i haven't like the treasury themselves i mean the treasury the way that the banking usually works is still

through the fed like the treasury has an account with the fed um they could they could expand the treasuries balance sheet like they did during uh covid during covid they basically issued all this subsidy right they issued it all out like pump money pump pump pump like all this uh like the easiest way to think of that is the stimulus check all right so when you have from the treasury a check that's like which is hilarious that the u.s still uses checks that want to do it with cbdc eventually but when you got a instrument from the treasury that says okay this is money you can put it in your bank account it's a check right uh once they couldn't sell enough bonds in the free market to cover that amount of money that they had to put into the

bank so they needed the fed yeah do it themselves so the fed uh basically just credited their count and bought the bonds directly which is totally something that they never have done before ever i did a i did a video on this on my uh on my channel people want to check it out uh and um once they pull up the tweet logo because this is what i'm referencing once you do those checks it comes down but it takes time yeah um so this is what stuck that don't let claire tweet out last week and i saw other people talking about it um will the treasury look to replenish its coffers by issuing short-dated paper at higher rates which will likely be neutralized by a drain and reverse repo uh so that turning over of short data bonds with a higher rate

will force people to seek liquidity and reverse repo it's not the treasury directly accessing it well every yeah everybody's trying to figure out how to do that right now i mean like that's that's the story of svb as well it's just higher dated on or uh you know shorter uh excuse me rising rates with longer dated bonds but in the short term you're gonna have to revalue your books at some point uh that's that's where all the pain comes from and that's obviously where the madness happened in february march well that's what i'm looking for right now is when we last recorded was before after that was the second thing i wanted to ask did the banking failures happening before after our last which was probably before but um

that the balance sheet did expand they took it down uh a few hundred uh billion i'm gonna make my my numbers correctly i'll just look it up they peaked at nine trillion all right So again, you can count all of it, count the reverse repo, count the monetary base. They almost hit $9 trillion. And then they reversed it just before the banking collapse. They're trying to cut it down. And just before the banking collapse, they raised the balance sheet again,

like by 50% of what they had decreased the balance sheet by. So basically, they lost 50% of the effort. that they had tried to make basically in all of 2022 uh two yeah the famous jackson hole speech all that stuff like i'm gonna raise rates which you like told everybody would that was kind of a pivot from what he'd been saying for years before and yeah i mean when you raise rates you're gonna have lower values now of course people aren't taking these losses all of them you don't have to mean like jp morgan's not taking it they have a big mark to market non-mark to market losses i should say um you don't have to take the loss is what i'm trying

to say so they're they're uh it just depends it depends on how much uh people trust your your banking system and i mean the the fact that you have this central bank that's just stepping in all the time to bail out it's just another horrible signal to the market whereas if again if you just if you just let banks fail and work through it themselves it would be okay but you know there's plenty of history of this in the united states too of them screwing up you know it's like canada had a free banking system and they uh had a worse great depression higher unemployment than the u.s had in their great depression and like 10 000 u.s banks failed in our great depression in canada you know how many banks failed in canada

no zero zero zero they had no they had no uh central bank so uh you know the system was just much better much bigger better regulation it was more uh decentralized it was more i mean the u.s just had a horrible like all these thrifts that like you couldn't branch between states in the u.s before the federal reserve the federal reserve was the first bank besides the first and second national bank which which andrew jackson stopped the second but uh the prior two central banks there's a bank of north america as well but prior yeah that was before that was colonial time so the prior two central banks during the course of the united states they were the only banks that could branch uh interstate like go go beyond you know the state charter banks the east coast yeah

no state of charter banks could branch and often i mean most of the time they couldn't even they couldn't branch at all not even just outside of their state but outside of like their city is the most unbelievably stupid system that was the national banking system and um so you know you had all these bad banks that had no idea what they were doing they had no idea like how the economy was in the neighboring market in the neighboring state or whatever and so the federal reserve was the first bank to branch so it was like a great example of the united states just again taking a cue from like the worst keynesian teachers of history like saying oh yeah this is great like we need a monopolized federalized bank that's the one that can branch uh it's going to be great

you know everything will be fine and safe and everything and then 20 years after it was founded the banks were actually going to the federal reserve to take loans they don't do that now but for the first 20 years which no one talks about during the creation of the federal reserve that was that was what the discount rate was called they would go to the discount window to the fed and they would just uh draw on the federal reserve they would take loans from the fed and that and that caused the uh great depression 1933 1913 1929 1929 1929 yeah october 29 yeah people give different end dates but i mean some people argue it didn't end until world war ii yeah so well that's the other thing too like going back to like perverse incentives

you mentioned just let the banks fail and that's like the weird thing that the fed has done this year particularly it's like it's let certain banks fail and others not uh that's not new right lehman uh aig like you had these different uh examples right wamu yeah like different uh examples of you know banking and financial services industries where some were looked on more favorably some weren't bear stearns obviously so uh they just they've been fucking that up for years and i think probably go back to like ltcm long-term capital management this is jim rickards's firm he was a lawyer there um in the 90s they had a big blow up um and they were but even you go back before that you go to the savings and loan crisis in the 80s they were

bailed out it's just they're always bailed out again and again and again they're bailed out so that is an important point to keep in mind is that it's just nothing new the regulated centralized entity that is the federal reserve will always come in and bail out and that will give more distortion to the uh to the system and anybody that's trying to work with it and work with banks that are in it yeah i'm not being rude here i'm looking for the particular chart i'm sure you've seen it the bubble chart of the magnitude of the banks that have fallen this year compared to 08 yeah let me find yeah it's uh it's a good example because it's biology that one a lot too that's like the crazy the crazy thing right now is

how massive this banking crisis is compared to oh hey already we've only had five or six banks fail and the value of those banks compared to the value in 08 yeah you're comparing different you know 08 versus 2023 but the value of those banks is much bigger much bigger yeah i can't find the chart but i'll search for it um i wrote about it somewhere I have it. You got it. Yeah, let me put it in the chat.

Yeah. Or I can just do it myself. Actually, I'm not set up. Can you take an email on your phone? Or you guys get it ready? Yeah, we're going to get Telegram. I don't have it set up. I don't have it on this computer.

Will the email work or no? Yeah. it's coming there you go anyway this is one of them that's not the uh it's the bubble chart it's not there's a there's a bar one two but it's this is this one actually is better logan's got it uh it's different than the one i sent you but yeah that's also good it's the same same same deal yeah but if we look at this we have wamu the biggest bank failure in u.s history on the left that big circle around 08 and then fast forward 2023 and we have the second, third, and fourth biggest.

Yeah, the Wamuu is actually bigger. It's funny, on the bubble that I sent you, how much is Wamuu on that one? I can't read it. How much is it, Logan? $307 billion. It says $427 on the one I sent. Open up the one I sent to you.

It's in color. It's more interesting because you can see the... It's kind of weird, actually. It's $427 here. It's bigger. regardless uh you're right wamu was the only major one compared to these three yeah that's like do you think the banking crisis is over or are we just in uh oh hell no i mean that's like in the eye of the storm

it's the same thing as always right i mean like it's gonna be more uncertainty gonna have to lower rates lower rates are going to cause problems and they have to raise rates I mean it's just the same charade again and again and again I do think that

as we were just talking about all these facilities all this implied security that you're getting on one level and then on the other side the other assets that are not as secure as a bank reserve right which is the base money asset but like have a term to them and have interest rate risk have duration risk to them as we're talking about i

mean well you know i'm not a fan of measuring inflation uh per se like as the uh the price inflation right i mean there's so many different indices you can find people argue about this ad nauseum i mean you can look at like chapwood index which is like i think one of the better ones really good shows you but then you can look at like some crappy federal reserve one you can say look at john williams who's not really publishing anymore but he was always saying it was at least double the inflation the real price inflation rate was at least double what the federal reserve and the bls the government agencies published so you have that issue you have that problem and you know that's just different for every sector of the economy not

only every sector but you know every type of economic actor whether a household whether your business whether your government actor which is way too big a part of the economy at the moment right so that's the problem is you get your your asset value of your books are really going to get crushed even if you don't have to realize them those losses immediately due to some banking again bad banking regulations um it's still going to bite you at some point those out of whack uh maturity values i mean it's still like where did i see this i mean fanny and freddy are still just these most zombie like the debt on fanny and freddy to this day is just insane it's never gonna get paid back it's an insane amount of debt trillions hundreds of billions trillions

trillions trillions it's the biggest debt uh holders like in the world private private i mean it's public private partnership but they're they're the biggest the companies with the largest debt in the world still fannie and freddie and that a lot of that zombie debt is held as an asset by the federal reserve they hold the at the asset side of their books but who holds that liability it's fannie and freddie and this is just it's it's just that's your perfect example of how this this this plays out right like if you want to know what happens 10 years from now like what happen with fannie and freddie their only solution is to zombify more banks and non-banks at the moment which is the problem with this reverse repo facility because let them all fail that would be

the normal free market free banking solution uh that would be the normal thing to do yeah well like bring this back to treasuries too i'm not sure if we discussed it i checked that's what one of the things i was checking the last time record was march 23rd so the banks have failed like a week before yeah yeah yeah like a week before yeah but with the debt ceiling getting raised again or about to be raised again the conversation has shifted to treasury markets in the fact again i mentioned it earlier but at some point over the next two three years a lot of the treasury debt is gonna have to be rolled over and if interest rates stay where they are at significantly higher rates uh and then on top

of that on top of that excuse me you have janet yellen coming out and choreographing that they're open up the the treasury buyback window for the first time since 2001 in early 2024 so one what does that rollover at a higher rate mean for the financial health of the united states and then number two what does the treasury buyback window opening up in 2024 signal to you nothing good man i mean i i can't i don't i don't have a crystal ball here like everybody else that's why i prefer the trend lines of the bitcoin price uh it's the most reliable but um yeah i don't know what are your thoughts i can't i can't like uh i think we we the what we just discussed is probably a good way to summarize it again because i'm gonna find it for you the fannie and freddie values i mean

it's just that it's just a zombification of already illiquid poor uh made bad decisions yet we're gonna decide to bail you out because we don't want to take the pain situation uh that's how i would that's how i would again reiterate it yeah well then but it also like it sends a signal to me at least that we're close to the end game because if you have to roll over something like 50 percent of the treasury market at the rates that they're at now if the fed doesn't reverse course obviously that increases the the payment on the interest that we owe for the debt and then the treasury buyback opening up is yelling essentially signaling like hey nobody's going to want to buy our treasury so

we're going to buy them ourselves and if you have to refi rollover the the treasuries at these rates like again when we're talking about the amount of debt that we are now 30 trillion arguably it'll be a bit higher than that when when the rollovers start like those are significant increases on the interest payments owed by the federal government look at this uh i'm just i'm doing on the phone here i'm sending this you've seen this website it's actually pretty good it's called company's market cap i have no idea if it's the same dude that did coin market cap and sold out to finance they explicitly say on the website we are not associated with coin market cap

but uh they do pretty good scraping of data and put it together in a helpful way i sent you uh freddy by the way i found the chart that you were uh the actual generator for the chart both the inflation adjusted and the absolute value ah that's what it was inflation adjusted yeah got it cool makes sense again although i'm sure they're inflation adjusting it in a poor way but you know that's just me again harping holy shit look at that balance sheet size of freddie it's 3.17 trillion right now and and in 2010 after the full bailout look at that number after 2010 2.3 like what are you doing what are you guys doing i mean this is this is all you need to see right here this is that it follows perfectly as you as i was saying in 2014

2015 2016 they actually tried to normalize you see that their debt levels fall here as well and now it's like 80 higher or whatever that turns out to be right yeah it's 60 higher 60 higher uh probably 80 if you took the nadir like that you know 20 15 level but from the the height of the post crisis right 20 you know it's 2010 level there 60 percent higher this is this is the insanity this is all you have to see right here it's a great website by the way really uh respect to put this together i don't know how they're doing it but they're like you can you can sort by market cap you can sort by debt you can sort by revenue for like a plethora of companies it's got it's got eight billion in market cap in 3.1

that's insane oh my god so what is that it's 10 10 it's open up uh times three in the search bar go to fanny do fanny do fanny in the search bar f-a-n-n-i-e yeah you got it and then over to the on the more that's market cap go to the more in total debt i mean what are you guys doing no one even no one even knows about this no one even talks about these are the largest this is the largest debt in any company in the world and their and their market caps 1.87 billion so that's like a 3 000 4 000 x like it's that's not going down man how do you unwind this how do you unwind this you do not you do not

unwind it's zombification i mean it's what we've been talking about for five years now well are debt jubilees on the table like do they need to be i saw arthur hayes mentioned that with uh peter mccormick um what are your thoughts on jet debt jubilees it has been a thing uh it has been a thing and uh like when you look at that it's like yeah what are we gonna do the the problem there of course is like you're having the people that cause the problem solve the problem and are they going to solve the problem in a fair and equitable manner like the answer is most surely no um on the other hand we we haven't had like this sort of a

uh choose my words carefully here a well-oiled uh fiat machine in a digital age like we've never had that yet right the next step would be the cbdc and i'm sure you talked to biology about that you know then you could you could grease the skids even more very easily like you don't have to do checks just airdrop cash all the time so they there are still options to get people by and to pay it's just you got to optically manage that price inflation risk on the other side of it while you bail out the same people uh you know simultaneously that are causing all the problems Well, we did talk about this, and you're not going to be happy. You're not going to be happy.

Why? Prepare yourself. Pelagio thinks FedNow is a CBDC. Oh, my God. He even said, I saw a tweet from him a while back where he admitted that it's not. Well, it's functionally not, but Logan, go to the pictures in this tweet. so if you look the fed fed now is in the middle of all this everything touches it actually what's important is the next the uh explanation here um next get the next picture

there's more pictures yeah this one zoom in uh step three the fed now service validates the payment message for example by verifying that the message meets proper format specification specifications and complies with applicable controls so he's pointing at this particular line and saying that there are particular controls that people integrated with fed now have to comply with which have you heard the term have you heard the term intermediated cbdc no it's uh it means that the banks themselves are kind of like playing around with cbdc but you and i don't uh touch it like have the cbdc doesn't want to touch it it's kind of getting there but it's still not okay i mean i i'm just like i'm not defending fed now i'm not defending

like any of these things but but uh europe has had the exact same system it's called sepa for 15 years no one has been up in arms about cbdc what's going on right here with this all it is is a program that certain banks can apply for and once you apply for it like you said if you meet the formats of this tokenized message system whatever you want to say i mean even the word token was probably a uh would trigger people or something it's uh it's still it's not it's it's intermediated it's it's like a clearinghouse working together with the banks it's it's just not a cb it's not a ledger that everybody can hold the cbdc on their phone it's just it's just not it's uh i'm not defending it separate in europe and then there's like upi in india vietnam i believe

yeah yeah it's similar i don't know that's in vietnam or it's called that that as well but maybe uh i'm sure i'm sure they have something like that i mean they're communists so the more communist regimes will absolutely love this as we know because the it's the more control you get more control that you have um look we're talking about all this we're doing this shameless plug we're doing the cbdc tracker for the human rights foundation with uh janine from this month in Bitcoin Privacy and Nick Anthony from the Cato Institute, you know, working with Alex and People's Human Rights Foundation to create it. So by the end of the year, we will have one and you will see. But it's just not, I can't put it on. It's not made like a CBDC. This is great.

This is good. You brought this up. A CBDC is an actual thing that needs to be recorded somewhere. Okay, it needs to be recorded on the Fed's balance sheet. That is the supply of the money on the monopolistic money suppliers balance sheet. What Fed now is, is playing around with the bank reserve portion. All right. It's like, I told this with Peter McCormick, right? It's like, you're Wells Fargo, I'm Bank of America, old school checks. I have a billion checks I send to you, a billion dollars worth, you have a billion and $1 worth of checks that get to me by the end of the week or whatever, when we filtered all that. out and we know that this is the day that we want to clear these we only need to clear one dollar that's how it works that's how bank reserves work that's how that that's that's why base money like that is the is the core system it's just i'm not defending the system i'm not defending the monopolization of it it'd be much better to clear with gold or bitcoin for sure in a free market system no question or have something like lightning and other things yeah i'm just describing it but the cb like fed now is a cbdc it's just a slight changing of that current system to make clearing

of bank reserves faster that's all it is it's like instead of the analog checks where i have a billion dollars in checks to send to you you have a billion and one dollars checks that you've already sent to me like they're in my coffers they're in your coffers we like all right we want to just be done with this let's set all our liabilities uh you owe me one dollar right or you wonder i can remember my example regardless you get the point you just you settle and it takes time like you do this a day end and even at that you know that you're two or three or four maybe like a week out from all those checks making their way into the to the teller's offices and the banks all this shit it's got completely antiquated so all that fed now does is it

automates that with a central clear which is the federal reserve but that was the federal reserve already it was the federal reserve already so again i'm just saying it's not it's not like Europe has had this for 15 years, then they had SEPA instant for five years, the same exact process, there's nothing. So a CBDC, it is also going to be a liability on the Federal Reserve's balance sheet, just like, sorry, if it sounds like I'm getting exasperated with this with you, obviously, no, I'm not. It's just with people that talk about this, you know, like, there's physical currency. And there's those bank reserves. Those are the two things that make up the monetary base there, this will be a third thing, a third line item on the Fed's balance sheet, central bank digital currency. And the example that I always say is, before people run off and get too crazy ideas about CBDC, don't forget about CBPC, central bank physical currency. That's also included in this monetary base update. I didn't even tell you the number, by the way, this quarter. It's $28.2 trillion. That's the latest number. It's a little bit down from prior years because the dollar is still stronger. It got up to $30 trillion. But how

much is the physical component of that monetary base nine trillion dollars nine trillion dollar equivalent that's not nine trillion dollar bills that's nine trillion of the dollars only like two trillion of that it's it's nine trillion uh euro un yuan every fucking currency in the world the top 50 but that's like mass vast majority of the value all right so don't forget about cbpc that's nine trillion dollars worth of physical currency in the world and it's growing at 10 and a half percent per year. It doubles faster than seven years. And that is a 50 year trend. And that trend is increasing. That trend is going up. It's not going down. So whatever anybody tells you about if people are or aren't using physical cash, they are. Just look at India from four or

five years ago. Remember that they tried to demonetize the 500 and 1000 rupee notes? Yep. That money supply is up three, four X, maybe three X from that amount. So point is, physical physical currency is increasing much faster than you even realize like no matter what anybody tells you cbpc is a part that that is a physical thing on the balance sheet that they have to account for and by the way global population increases one and a half percent per year over the last 50 years it's doubled once so think about that when you want to talk about purchasing power those are the real numbers like to think about like physical currency doubles every seven years on a blended weighted average us as people we have doubled once over the last 50 years

we've gone from four to eight billion so just think about that um that's the first thing second thing just very quickly is that banks are going to hate this system sorry my daughter just woke up can you hear the background she needs she needs a bottle no no my uh my wife's got her but you know just uh yeah can you hear that yes okay okay we um i haven't gotten sleep the last two nights yeah i had the oldest in bed from 11 p.m till till morning two nights ago then the youngest decided to wake up at 3 a.m last night he's getting an attitude now he turns one soon he was this little lovable just stayed still

laughed smiled now he's crawling causing chaos slapping me in the face it's incredible though it is man I love it

love to hear it how big is he? how much does he weigh? I don't know 22? 25? I don't know yeah

I think that sounds right he's short and fat i'm sure he's a lovable chap that gives you so much joy it's a great thing man really is best thing i've ever done for sure you can tell that to all the dear listeners and viewers out there um just to finish the thought though about the cbdc the second thing is like banks don't like it so uh well like they're gonna the only other play if you're not gonna take it from physical currency all right and and bank reserves is not a real thing like that's not for you and me so don't worry about that uh then um the only other place where cbdc could come from is

bank deposits and banks own the federal reserve do you think banks are going to be happy with deposits draining from their nice loanable funds to uh some finicky crappy uh fed you know fed cbdc uh app on their phone what if they essentially become the same thing because with this banking crisis we're seeing the consolidation accelerate up into it's funny too they change the vernacular it's no longer too big to fail tb tf now it's sfi systemically important financial institutions they change the words on the go emerging markets global south too big to fail sci-fi c-fi systemically important financial institutions but it seems like particularly with the fed policy the posturing from janet yellen and the treasury and then

the fdic that that leaked um video from november of last year i'm sure you saw it where they're like people cannot find out how bad the banking system is and how little money we have to actually support the the insurance we tell people we have could you see a scenario where it consolidates into the c5 banks jp morgan's wells fargo's bank of america city i guess i think those are the big four and then it's just like they're they're okay with the cbdc because they have this buddy relationship with the fed and they're essentially just like a front end for the cbdc that is used as a what's the word i'm looking for um when it's used to um plausible deniability to say we don't have a cbdc we have these banks these banks are running the money but it really effectively it's

cbdc with the commercial bank front end yeah i could see it i mean you're just talking about more nationalization of banking infrastructure and makes perfect sense that it's going to happen again when i don't know are we in the end game maybe you know i mean i've been telling you for many years like never say never you could have been that gold bug in 1980 wait 20 years for that that bull market turn around but it doesn't seem when you stack up all the things in the negative column and then you stack up like the few things in the positive column about the whatever global financial system but certainly the u.s financial system uh it doesn't seem great and certainly when we have the threat of even higher rising interest rates or the threat

of more volatility in that you know and managing your book that way none of that seems uh good so i agree like it definitely could happen it's a nationalization of the system and uh it's not gonna be good it's not gonna be good if a few banks are in control of our money this is why we need bitcoin it's like the long road to failure of this generations and this like sort of era's epoch of central bank money you know it's it's like started 300 years ago a few holdouts a few good countries uh you know for a time the best you know uh sweet uh scotland and canada sweden as well before their central bank really wasn't like a central bank like the bank of england's even though they had a technically older central bank but uh-oh you lost your audio there

sorry i don't know i must have lean with a random with now with a random key yeah hit that i don't know what it was but um what i was just saying like the the free banking systems have been great uh they've shown us a lot like i said about how you can handle crises with not having a lender of last resort without not having all of this monopolistic marketing propagandistic stuff that you need to save people it's bullshit basically so we've had that we've had that we have had the lessons but despite all of the good lessons despite all of the good free banking history it has all failed i mean every nation in the world has a central bank right now every nation in the world has a at least some monetary authority that pegs themselves to another stronger

currency like the dollar and we're we're going to continue to centralize and i think that you're probably right that like that's a very viable option the few big banks they take over they're able to manage their interest rate risk better all of the non-sib or whatever the other new act you know systemically important banks the non-systemically important banks will fail get rolled up and yeah but this is this is precisely why we need a free market neutral money like bitcoin yeah and speaking of which let's get bullish on bitcoin some things have happened particularly the mining industry in the last few months since we last met due to the fact that they got swept up in the bankruptcy proceedings of block fi and celsius became known to the world

that the sovereign wealth fund of bhutan has been stacking bitcoin not only that mining bitcoin with excess electricity at their hydroelectric dams we had marathon digital here in the united states announce a joint venture announce a joint venture with abu dhabi city in the uae uh so we have signals out here nation state signals obviously abu dhabi is not a not a nation but i think i think we can sort of uh throw it in that bucket they're all sort of interesting over there in the uae what they're trying to do with different cities yeah so the game theory seems to be playing out like bhutan i think is a massive signal because if they didn't get swept up in the bankruptcy proceedings they probably would

still be under the radar stacking bitcoin mining bitcoin but that's been one of the long-standing theses of hyper bitcoinization or bitcoiners in general they say hey the smaller countries that have little to lose much to gain by getting into bitcoin early will do so that seems to be have been validated in the last few months since we last spoke we had a professor on our show from columbia recently and he's iranian he thinks that's it's possible he doesn't know for sure but he thinks it's possible that iran is as well i mean we just add up everything that's happened to that country of course there's a lot of human rights abuses and things that need to be fixed there too uh but you know that's up to them obviously but um the fact that you're having

so much you know the economic weapon used to be called so much sanctions by the western world against these countries yeah they're going to take uh take another avenue so i i think it's definitely gonna happen i'm i'm not the person to talk to like to really champion champion those things i'm not saying that the examples you used are like super bad with human rights but you know i mean this is the same story right china russia like gold bugs use this i think it's the most bizarre thing like we have bricks box gold gold back currency and like you know old guys on twitter like are tweeting about how it's great that china is stacking gold bars to this day you know and like i'll talk about this a little bit in prague some gold history versus

bitcoin history you know bitcoin history and what bitcoin can learn from it um you know i just don't i don't see that as we've already had very very bad examples in world war ii with you know nazi gold um and very very bad centralization practices uh i don't know how you can possibly think that you're going to have some salvation from a government that is a human rights abuser communists all the things that i hate i don't know about you know everybody but i i just you know where i am in eastern europe you know my my stance so i don't i just don't think that that's like a something to hang your shingle on that like this okay this is where it's going to be um this is like this is gonna this is gonna bring us monetary freedom i'm speaking from the gold

bug perspective right and then when you add that to bit when you when you transpose bitcoin on that i think it is different it's different it's definitely like there's more security in holding bitcoin even in a centralized way mining bitcoin in a centralized way there's more resiliency there but there's certainly just as much ease of theft by a corrupt crony dictator i mean it's just as easy to steal bitcoin as it is to steal your oil and gas resources is it you know if you control the keys and you're mining it i'm saying if i'm saying if you're a sovereign i'm saying if you're a sovereign that's my only point if you're a sovereign and you loot your country like russia like russia has stolen everything from their citizens i mean literally all

you know they're they're the most resource rich nation in the world and um look i know a lot of Bitcoiners love it when it's, you know, Russia could be the next great Bitcoin country, like El Salvador or something like that. I mean, hold Bitcoin on your own, control your own private keys, things like that. But I'm just saying as the sovereign, I don't see any difference necessarily compared to say,

we've had a lot of bad track records of gold running countries. And by the way, United States isn't immune to that either, are they? No. i think they can order 6102 obviously 6102 in reverse that's yeah the difficulty adjustment epox is indeed 2016 but i agree i mean my perspective is so i've read about this or i talked about it about a month ago in the mining industry it's pretty well known if you talk to brokers who are selling asics that some of the larger manufacturers are selling more asics to russia than anywhere else in the world right now and yeah some people can be like yes there's a

validation of bitcoin's value prop which it certainly is um but my perspective is like hey we need to get serious and luckily over the last couple weeks here in the united states uh part of the debt ceiling deal nicks the excise tax on mining out of it that's good uh here in texas the cap on miners ability to participate in ancillary services particularly demand response was nixed as well so we've gotten good signals that the mining industry at least for now uh broadly in the united states and particularly in texas uh is going to be allowed to flourish to a certain extent as of right now but when i see stuff like that butan i'm happy a nice small kingdom up in the himalayas getting smart increasing their economic wealth via bitcoin

love to see that when like you bring like russia venezuela iran china into the picture i'm not like yes you have to objectively um recognize that it is a validation of a political money peer-to-peer network you can access but too it's like all right we need to get serious here in the united states over in latvia about competing and not letting them out compete us and the the race to accumulate as much hash rate as possible. You know what I'm talking about, though. Like, I 100% agree with you. It's just for mining, I mean,

when you're mining Bitcoin as a nation state, like, the people aren't going to be controlling those keys. No, and that's why I think we have an incredible opportunity here in America to just, and we've done a great job. We have probably the most hash rate concentrated here compared to anywhere else in the world, which is good.

And that hash rate is owned almost 100%, I think. I don't think there's any states or certainly not the federal government mining Bitcoin by private entities, entrepreneurs. We just need to keep fostering that and letting that flourish and send that out as a signal to the world, like, hey, we're letting the free market

take care of Bitcoin here and hopefully attract some great minds from abroad that want to live in a free nation. yeah completely agree come to the country legally just don't walk through the border just get in line do your stuff completely agree there's maybe some municipalities localities like uh in montana or something we're mining bitcoin this is like years ago i'm just pulling this deep from memory but like yeah definitely not no state level that i've heard and but um even if there are local municipalities it's still better it's much better it's still corruptible but you know

not as uh regardless like i totally agree with everything you said and um i think that that's uh that's what we got to do and also it's a neutral money it is a validation of it um and it's in some way maybe maybe it can be better than like a gold you know obviously gold mines are totally toxic this has been discussed in many places right in bitcoin land comparing gold mining to become mining over the you know over the many many years now uh but yeah i i think it's it's most laughable it's most laughable when you get old old gold bugs on twitter quoting about how awesome it is that bricks bucks is coming and you know china's increasing its gold reserves by the way there's less central bank reserves sorry it's one more thing there's less central

bank reserves now than in 1965 uh and the overall gold supply is about 3x higher it's like rough round numbers like 2 billion ounces in 1965 totally uh like including jewelry and now there's 6 billion ounces 6.4 billion ounces so that tells you something right there about the dilution of gold versus in central banks versus outside and just in total all right yeah so central banks were holding more gold in 1965 in 1965 and that was a bigger concentration of the total because there was only two billion ounces and they held more than they do today i don't remember the exact percentage but now uh that now the percentage is like a sixth of the total total gold maybe a fifth if you count available gold but now it's like a six it's about a billion ounces central

banks hold and yeah so it's like 50 percent uh in 1965 monetary central bank official gold uh now i mean gold has been 3x in the last 50 years bitcoin can't be 3x no uh as far as supply so it's another great thing for bitcoin but yeah i just i just find it hilarious that like these human rights awful communist abusing countries like these gold bugs yes just stacking gold bars i will agree with the the gold bugs but not for the reasons that want me to i want them to stack the gold bars because bitcoin is just going to leapfrog gold let them go back to that chart 580 000 bitcoin yeah let them accumulate uh the analog bitcoin and we'll uh manual bitcoin whatever the the pet rock as people like to call it

we'll get the good hard i love it man i love it good stuff uh you want to wrap it yeah we got more i got just two i got two stats for you um because i've been posting shorter threads i used to post like 60 tweet threads and now i've been posting a little bit shorter but i also think i'm shadow banned on twitter uh people have been saying that which is weird i haven't really checked these third-party sites but they said that i have been uh the uh turkey over the last year increases monetary base 65 you've probably heard what's happening to turkish lira 65 argentina increased their monetary base 52 in the last year the argentinian peso black market i don't know if you've seen a chart it's insane it's over 500 it's over 500 pesos per dollar

where the official is like 200 i mean it's so sad i mean it's like everybody knows there what's going on they got to get dollars they got to get bitcoin it's this is a story that everybody knows but if you just think about it in terms of actual percentage increase it's 58 50 53 percent uh increase of the base and you you can see the black market is at least double yeah official rate and argentina just sent their their interest rate to 97 which is insane yeah uh one thing maybe we should talk about before we wrap up what we're talking about before we hit record the uh the texas law that did pass down here uh is that bitcoin exchanges bitcoin companies have to be fully reserved and you were sharing a tom woods clip with pierre about the praxology

for full reserve you're saying it's not well they just fraud i yeah i just i'd like to hear you know some full reservists get their story together it's basically two things it's either uh it's fraudulent or it causes the business cycle or it does both uh they can't agree on it themselves uh there are many many people that say that's the fraudulent side of it's not the story at all no one even believes that no one talks about it uh i got lots of quotes as i told you that tom wood show is one of them because i you know i'm interested in this stuff i follow it i like i like freedom i think banking is just one of these weird things where walk us through the individual argument fraudulent business cycle both

all right it's uh i try to do it in very very short time for it period um the fraud argument is i think pretty straightforward people think that uh even though this has been litigated on and adjudicated on for two millennia uh it's not recognized by the people like primarily the followers of Rothbard that, um, my daughter's coming in here. Hey, Bob, good off camera. Um, it's, uh, it's not, you know, it's not, uh, recognized by the, uh, Rothbardians that these are legitimate market transactions. I mean, Murray Rothbard is the most famous person. He actually argued in man economy and state his tome he argued for the state to abolish fractional reserve banking think about that an austrian arguing yeah an austrian arguing that the state

abolishment of fractional reserve banking is a good thing again i can think of no other sector, business, anything, where an Austrian wants government intervention to make the market better. This is the only one. And it's only for this sort of, my buddy Fernando, he always calls it quicksand, right? It's like, you tweak these words, you don't talk about assets and liabilities, you don't just talk about normal market things, but this is fraud. Forget the fact that we all signed a bank agreement. This has been two millennia of adjudication and legislation on this stuff. It's fraud. And then Tom Woods quote that I posted, he said this years ago, again, I wrote it down because it's easy to, and it's a good point. And I agree with it. He said, well,

the Austrians, they don't like to argue that Rothbard talked about it, but we don't talk about fraud anymore. That's not actually where it's at. It's not fraud. But we do think that it causes the business cycle. And the business cycle is just a part of the credit intermediation. So there's two things. Fraud, I think I just addressed the fraud. And this is where I would not absolutely at all agree with any law from any state that encourages more government intervention in a business, in anything. So I don't know why banking is an exception. So that's that. uh the as far as the business cycle theory goes uh that's that's where most of them hang their hat on now i think most you know followers of rothbard or followers of again i like stuff rothbard says i like his reading it's great stuff he's great with the market uh he's just got this thing about fractures their banking that he's like he's really he has a soft spot for gold

right macy's had it macy's never never explained it in the way that rothbard he was very explicit about that he wanted 100 gold reserve dollar standard many things were written about that but um in any event uh i think i addressed the fraud the second thing would be does it cause the business cycle because in banking you intermediate credit uh you're basically borrowing short and lending long but when you're lending long you're lending with a possible maturity mismatch right where you have loans which are assets on your book as a bank that could come do you know like like we have long dated maturities right 10 years out but you have on-demand liabilities and this was precisely what happened to svb by the way and especially in a day

this day and age where um you have bank runs and you can have them on your phone i mean i mean in this day and age you can bank run on your phone that's what i meant to say so you can very easily withdraw cash you know in 60 seconds you know this is fiduciary media bank deposit you can transfer from one bank to the second bank if you have that bank account uh that can certainly cause problems all of which i would agree with it's just they go further and they say like this causes the business cycle this and that all of those things i would agree with in the context of the central bank this is where the writings of george selgin larry white come into come into mind that when the central bank does all these things that we've just been talking about the whole episode

increases the base money with no concept of how to deal with the demand for that money because they're, you know, as Friedrich Hayek says, this is the pretense of knowledge. No planning board can do this. Soviet Union taught us this. No planning board can do this. No one, no one in the economy knows what the reserve ratio should be. The Federal Reserve, as I told you earlier, the 10%, which is only for big banks, some central banks have 0%. No one even knows that. No central bank knows that. Like you got to go down to the micro level, to the individual bank level, to a branch level. That's how you would solve these questions in my mind, in a free market, in a free banking society. So that's my response to them. Hopefully it was clear as basically,

I completely agree that free banking, or excuse me, fractional reserve banking causes problems in a central banking context, but it clearly has not under free banking context. I gave you the example of Canada earlier, zero banks failing where 10,000 American banks failed. You can go on and on and on. I mean, the Scottish free banking systems for 200 years, they had like 1% of gold in the vault. And compared to the banknotes that were outstanding, the deposits outstanding represented by banknotes. And that's simply because that's what the depositors preferred. And that's how the banks worked out better. And then the final, final thing I should say about this, which again, these just kind of top of my head, I wasn't, you know, thinking you're gonna

ask me about this, but like the sacred demand deposit, this is where it always comes down to Somehow, like, I think after a lot of these guys, they're thinking about these things. Okay, fraud, we can't really say fraud anymore, because we do sign the bank agreement. But we have this sacred demand deposit. All right, it's sacred. We it's just a thing. Everybody thinks they have it. You know, the ability to go withdraw their cash on demand. That's like false marketing. It's bad marketing. unfortunately for these guys with this uh this idea the demand deposit represents like two percent of all loans outstanding in the united states maybe even less now maybe one percent as far as total money supply which i've calculated as well i've done videos on this demand deposits prior to 2008 by the way the the percentages i'm giving you are prior to the the loans are correct But what I'm about to tell you right now is prior to 2008. It has exploded, as we talked about, because there's no reserve ratio anymore. But prior to 2008, apparently a fractional reserve bank is supposed to cause that crisis. Demand deposits were sub 10% of the money supply, even sub 5%. I can't remember off the top of my head, but very, very low. And as a proportion of all loans, like 1% to 2%. So the demand deposits, they're just not relevant to this situation. And even if they were, it should be up to a bank and a free market system to intermediate as they wish.

And if you're an untrustworthy bank, withdraw your money and the bank should fail. So that's the solution to the problem. And then you get into this circular recursive argument because, again, some people ignore the fraud thing. Some people just focus on the business cycle thing. And then as I just explained both, and then let's say they, of course, disagree with me. they're like well no but it's fraudulent you know even though i just said uh you know you can withdraw your money everything like no it's fraudulent yeah but this is we have a monopolized system which i'm not a fan of if we had a free banking system you could easily withdraw your

money and anyway the fraud argument is like no one no one even worth their salt will make the fraud argument right now rothbart did and he turned a lot of heads that way but as tom wood said in 2016 which is the quote that i made for like a decade probably even more no one wrote seriously about the fraud i mean selden and white just destroyed the fraud argument it's just it's destroyed like you sign a bank agreement it is not fraud that you open up a bank account if like why are you even holding a bank account if you think that it's fraudulent and then if they say oh because it's a monopolized system i agree with you but that doesn't mean that you should engage in fraud yourself if you think you're in some you know fraudulent and lending your money

to the bank or whatever so again you get to these circular arguments it's quicksand i've already talked longer than i wanted to i hope my point got across it got across uh it's basic stuff man it's it's not i don't even find it intellectually stimulating anymore or interesting like it's not you know it's it's a very very niche small portion and look if you were if you're a bitcoiner you want fully reserved bitcoin fully reserve your bitcoin withdraw your bitcoin i encourage it i do it myself use multi-sig be private don't be an idiot like you and me doing podcasts be private use multi-sig be safe yeah i agree it's the more intellectually stimulating thing is just accepting all that and then figuring out how we can bring hal finney's vision of a free

banking system built on bitcoin to life may or may not happen i'm even open to it not like i would love a lightning only world you know we saw some struggles with that with the ordinals right on and off ramps we don't have to get in a lot but i'm saying i'm like i said i think i might have said this on your show i say it a lot like it's not just uh it's not just a nuclear it's like use nat gas use renewables it's certainly not just renewables like germany germany already answered that question for us it's not just renewables so when you have this energy mix you got to use everything and i would just simply apply that logic to scaling payments because at the end of the day that's all we're talking about is scaling payments yes and if you want to just go through

this nonsense withdraw your bitcoin bitcoin makes everything easy by the way you don't own your bitcoin when it's on exchange you don't own nothing you but you have a claim on bitcoin we've talked about peter peter todd peter todd made a great quote he's like what's the probability that you own that Bitcoin or something. I'm like, you have 0% BTC, you have 100% IOU. That's what you have. When your Bitcoin is on a claim, when your Bitcoin is on an exchange, just like when your real physical dollars are in a bank, you have a 0% title. Legal, you have no title to that. All you have is a claim. It's called an IOU. It's called a deposit. It's called a mutuum. In Roman times, it was called a mutuum because it was mutable. You give back something like kind.

i don't know on and on and on man it's it's uh it's a it's a dead argument as far as i'm concerned it's not it's not even interesting bitcoin makes everything easy all right so freaks you didn't have to listen to last 10 minutes of the show is not interesting so yeah i'm kidding it's always interesting with you, Matthew. Thanks, buddy. You as well. Enjoy Prague. Yeah, will do. Very much looking forward to it.

Taking the fam. It's going to be great. Send my love to all the Bitcoiners who will be in Prague next week. And yeah, I think the next one should be interesting. Q2 is what? We got 30 days. Yeah, the

Bitcoin price is probably going to be flat. But I'm sure there'll be stuff that goes on between now and the end of june and actually the end of july we'll do some different we'll do some different interactive charts next time not just the trend lines okay we could do some balance sheet stuff we can whatever you want man yeah don't forget the freddy and fanny balance sheets they're freaks yeah it's interesting stuff look for that it's a great site i'd like to know more about who's making that and why but uh he's ripping some interesting data putting out there for everybody to see yeah zombie companies they're everywhere

don't be a zombie don't be complacent take full reserve bitcoin into private keys that you control well they're public addresses associated with the private keys but you know what i'm trying to say matthew it's always a pleasure thank you for never sure congrats on five years it's a big milestone thank you my friend really appreciate it marty how long do you think you'll be doing this decades a decade cbdc tracker is just starting up so let's see all right well we'll still be here doing this as long as it's going on so i think we probably will all right go enjoy your night i'm gonna go get ready for rabbit hole recap thank you freaks for joining in the live chat on VEDA

everywhere peace and love take care