TFTC: A Bitcoin Podcast - #532: Q2 2024 Monetary Base Update | Matthew Mežinskis

Episode Date: August 31, 2024

Marty sits down with Matthew Mežinskis to discuss the Q2 2024 Monetary Base Update. Matthew on Twitter: https://x.com/1basemoney Porkopolis: https://www.porkopolis.io/topmoney/ 0:00 - Intro 1:25 - Baltic Honey Badger 5:37 - Introducing the update 8:23 - Inflation vs deflation 22:02 - River & Unchained 23:18 - Money printing and GDP 27:28 - Bitcoin status 38:54 - Gradually, Then Suddenly & Zaprite 40:31 - CAGR 48:14 - Corporate treasuries 52:55 - State treasuries 1:12:52 - Massie’s plan and political hopium 1:20:24 - Austrian econ popularity 1:27:21 - Unrealized cap gains 1:33:34 - Red scare and the state of Europe 1:41:32 - Optimism Shoutout to our sponsors: River https://river.com/tftc Unchained https://unchained.com/concierge/ Zaprite https://zaprite.com/tftc Gradually, Then Suddenly https://thesaifhouse.com/gradually TFTC Merch is Available Shop Now: https://merch.tftc.io Join the TFTC Movement: Main YT Channel https://www.youtube.com/c/TFTC21/videos Clips YT Channel https://www.youtube.com/channel/UCUQcW3jxfQfEUS8kqR5pJtQ Website https://tftc.io/ Twitter https://twitter.com/tftc21 Instagram https://www.instagram.com/tftc.io/ Follow Marty Bent: Twitter https://twitter.com/martybent Newsletter https://tftc.io/martys-bent/ Podcast https://tftc.io/podcasts/

It certainly will repair the balance sheet if they hold Bitcoin, we all know that it will. And the second thing is we know that they're going to do it. They're going to try to do it. So Bitcoin at about $1.2 trillion is still larger than Sterling, which is about $1.1 trillion. We passed the Bank of England lending the Bitcoin at any interest rate right now. It's definitely not worth it. In the face of a debt crisis, stablecoin demand for U.S. treasuries could be a way to... Six years ago, Bitcoin was a couple thousand dollars and the monetary base was under $20 trillion.

And now Bitcoin is $60,000 and the monetary base is... This rip of TFTC was brought to you by River. It's the best place to buy Bitcoin. Go to river.com slash TFTC and enjoy this episode. you've had a dynamic where money's become freer than free if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven 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 the button has been hit last day of recording from the back porch here in south jersey and the weather buddy has hit us with what seems to be the beginnings of a nor'easter i don't know what this is but there's a lot of wind bear with me freaks we are streaming i hope so on zap.stream we are live on zap.stream first noster live stream of tftc's history so thank you guys for joining us we're here for monetary base update with matthew mazingtious i had the pleasure of being in person with this fine gentleman across across the world from me last week baltic honey badger recap your perspective my favorite conference fourth time there i fucking love regalafia great to see you there man absolutely

uh inspiring weekend as always high signal and um just no bullshit it was uh it was great loved loved seeing you there what uh what were your impressions fourth time back to riga anything changed since 2018 no just people are more familiar with the uh the crowd there um it's like catching up with old friends now i love old riga walking around that's where i stayed again this year it's just a beautiful city um had the pleasure of experiencing a traditional Latvian sauna the Thursday before the conference that was an experience um how'd you like it I liked it I mean they beat the crap out of you but uh it did it did feel good afterwards so it was it was a good experience yeah it's great man no I mean I love it uh it's just great to have

the honey badger always come back to to my neck of the woods and um you know we talked a little bit about it but i mean the people just uh young people here in latvia and in the baltics just continually continually getting inspired by bitcoin and false stuff and uh i just i think it's fantastic i mean it's a big change if you juxtapose it with some of these slower older grain economies of uh the western world eastern europe is just uh it's just hustling and bustling man so it's it's really great it's great to have the the conference come there i was inspired and max and anna do a really good job of curating the content in terms of bitcoin conferences around the world that i've been to i think that's the most high signal most critical like what are we

doing here what are we building mixing in the economics with the technical and i always feel reinvigorated walking away from riga though the uh the travel is long was jet lagged there and then i was jet lagged here but i feel feel like i'm fully caught up now i've had three three nights in a row of nine hours sleep which has been good oh good for you that's lovely but you've been active with the kids active with the kids yes enjoying the summer by the beach jersey shore yeah we went to uh a bayfront water park yesterday and uh i was launching kids into the bay um it was fun i have to reconnect with your inner kid every once in a while i love it dude you were showing me pictures of the fam playing around this summer you just like look like the typical irish dad

that i remember from my childhood just active and active and you know with the polo shirt and the trucker hat just running around it was great throwing kids around happy for you well i'm happy for all of us we're here where should we jump in on this episode you've only released the the update on master right now correct yep it's just on master another thing i was inspired by enrique i just said you know i've been on there for a while but i haven't been posting too much and i'm just like i need to get to the full long form content of this uh you know these charts and the research and what better place to do it than you know noster and highlighter and primal and everything so that's where i am and uh you know we'll see maybe i'll i'll get it to twitter

whenever i get it there but yeah it's update number 25 marty so it's been six full years starting the seventh full year 25 quarterly updates um which is pretty wild you know when started six years ago bitcoin was uh obviously a couple thousand dollars and the monetary base was under 20 trillion dollars and now bitcoin is 60 000 and the monetary base is 26 trillion dollars down from 30 trillion in the uh just start of 2022 post-covid money splurge so things have changed um but it's not slowing down and did a couple different things i think it might be interesting to look at i looked at you know um a lot of different assets this time like stocks bonds population gdp the global increase of gold silver and i just wanted to show them to the reader on

like a sort of global like what's the trend line you know we've talked about the power trend lately that's got some attention lately that's fine but most stuff in finance economics is on an inflate and i uh exponential curve basically due to compound interest right so that's just means constant growth uh exponential growth that means the same percent continually compounding year year in and year out and for example if you have something like 10 compound growth it doesn't double in 10 years it's rule 72 it will double in 7.2 years so it takes 72 divided by the 10 minus a percent sign you will get uh 7.2 years so that's the that's kind of the brass tacks always have try to look at it don't look don't bother with uh cpi indices or ppi indices i think

there's a lot of noise there just look at how much money is actually be printing uh what's the size of it and what's the relationship of bitcoin to that so uh we're basically the same as we were in the last quarter as far as size we were uh the big one last quarter as we passed you may recall we passed the Bank of England, the balance sheet of the Bank of England. So we passed the oldest fiat currency in the world, the sterling. So Bitcoin at about 1.2 trillion is still larger than sterling, which is about $1.1 trillion equivalent and marching on. So I can show you it if you want to see the actual chart. Here we go. Thank you, Logan. So this is just the curve. You've seen it a lot if you've been following my stuff, right? We topped out at

about $30 trillion, a little over $30 trillion at the end of 2021, start of 2022. Now we've fallen all the way down to $26 trillion in 2024. But it's an interesting phenomenon here. And I'm trying to quantify it differently. It's kind of like a Wittgenstein's ruler thing. But we fall in $4 trillion. But if I asked you, and I've mentioned this before, so I like to give little quizzes, right? If I asked you, does that mean that banks are on balance printing something like 10% less money a year, or 5% even, would you say true or false? Because we're down over 10% from 30 trillion in two years. So does that mean that 6%, 7% per year, banks are printing less or something else i'm leading you into that question yeah it feels like

a trick question i'm going to say uh it would seem that they are but i feel like there's a gotcha to this gotcha is it's very interesting they're still they're they're flat and i'll show you in a second but really what you're seeing here this this this decrease down from 30 trillion is other this is witkenstein's ruler right we're trying to we can't orient ourselves because there's 50 different currencies in this data set what this really is this 26 trillion less now versus 30 trillion in 2022 what's what's really happening is all other currencies are losing value against the dollar but they are still they're flat or in some cases even printing more units follow that so they're still printing yeah so that's an interesting thing now some of them are decreasing

We know the Fed is decreasing its balance sheet. It got almost to $9 trillion. Now it's at $7 trillion and change. So the big ones, they are down. But overall, it's not necessarily like major decreases. So I'll show you that now here. My greens may be wrong for this chart, actually. So this is like a rolling, trailing 12-month thing.

So again, you would think that we'd at least be at a rolling negative 10% here per year, being at $30 trillion in 2022 to being at $26 trillion now. But you see, and I'll zoom in, you see the negative numbers, right? These are rolling, trailing 12 months, these bars, they're just barely negative. negative 2% here in the end of 2022. And then it went positive start of 2023. And now we were negative 1.4% in May 2024. Now we're negative 0.3% in 2024. So that's very interesting. So just to be clear, what these numbers I'm recording are, this is like, there are a couple of different ways to do this. But as I'm doing it, as I've done it for six years

is you're taking each monthly growth of each currency. So you have dollars going up, monetary base of Euro, Yen, all the different central banks are printing or not printing. They could be removing some money, right? And then you weight that by the size of those monetary bases themselves, of course, but how do we weight that? We have to put in exchange rates there. We have to look at the dollar value of those.

But I'm only looking at month by month. So one month, if it goes up, you know, blended 2%, it's that, and it's completely got my Apple, uh, Apple, uh, fireworks going there. I think we can't, we can't see it on the three now, but my hand, uh, okay. Anyway, point, point is, uh, it's a month by month thing and it just resets every month. Right. And then I just, I count it over the prior 12 months to give you this number. So it's very interesting. Basically, you would think, again, from $30 trillion in 2022 down to $26 trillion now, you would see some very big negative numbers when they're not printing as much. And it's true. They have cut back. But overall, it's way less than it might seem if you just look at the dollar figure. so again zooming in when when peak code was happening year on year right october november

december 2020 into february 2021 march we went up blended 33 all currencies okay and that translated into 29 trillion divided by 20 trillion okay and that's that actually looked pretty close to the the uh the difference there right i mean i can tell you exactly let's just let's let's catch it let's let's do the example so march 2021 it's 29.11 trillion divided by march 2020 it's 21.16 trillion minus one that's 37 percent okay 37 if you just take the gross dollar value you follow 29 divided by 21 trillion but then my trailing 12 month or that i find is 32.3 so it's pretty close slightly different but it's pretty close but what what these green bars are very they're very like in my opinion like as rigorous as i can be with something that's

nebulous like 50 different currencies i'm taking each individual unit uh counting them up what are those rates of growth, and then weighting that weight by the entire basket. So that's how you do it. So it's interesting that on the way up is pretty close, right? My method versus the actual dollar increase. But on the way down, as I've talked about a couple times now, just the dollar value collapses for so many of these currencies. And that's because... But the rate of decrease of the money supply doesn't necessarily collapse, as you can see. It's still like flat to zero, these bars here, right? It's like negative 1.4%. At the end of last quarter is negative 0.3% year-on-year growth, TTM growth. So again, to be clear, what that is saying, what that's

interesting is that they're still printing or they're kind of flat. They're flat, basically. And they've been that way on and off for two years. But because so many currencies have just collapsed in value of the dollar. Visually, the best I can show you this by counting them up is that the monetary basis shed $4 trillion in value. But they did not shed 10% per year or 10% over two years, a little bit more than that, of their balance sheets. They're more or less flat, a little bit down. So that's pretty interesting, in my opinion. shows you that we're getting close to the endgame or something because those currencies just are losing value massively against the dollar. And it's just getting wild. I mean, just look at this

chart. So anyway, if you want to take all the noise away, the number that doesn't really change that's been this way almost since I've been starting this, right? Sometimes it's been closer to 13%, sometimes it's been closer to 12%. But this black line, that's if you take a weighted average of the entire series of the entire 50 plus years and that's 12.7 percent compounded or a little over one percent per month and even with that like you can look at you know what they used to call stable central banking right back before y2k and even y2k that bump that's because precisely of y2k people were afraid of uh y2k that's why cash balance just spiked up here in 2000 um but then obviously you know you had you know they tried to raise rates after they

printed a lot after the dot-com 9-11 tandem and then the global financial crisis came and they just printed a lot qe1 is here two three just massive amounts of year-on-year printing right like as you see there the second item in my tooltip 30 percent may 2009 over may 2008 32 percent july 31 percent august over august 2008 massive amounts of printing then they try to normalize it even before covid and then they had to explode it again so the point is if you just look at this 50 plus year chart you can see you know okay for the first 25 30 years it's kind of hovering around this 12 and then it's just much more sporadic and wild in the prior 25 years which i thought was uh was interesting if you just kind of compare what's happened over the

last two years with that. Again, like I said, $30 trillion two years ago to now $26 trillion now. So it's Wittgenstein's ruler. It's hard to do a global blended way, but I've had this method for six years and I think it's pretty close. It's pretty interesting. Also, this method works like, for example, I don't have China's data in the first 30 years. It's definitely there. If someone speaks Chinese and can find People's Bank of China balance sheet from before 2000, please let me know. They only started publishing in, I think, December of 99. But, you know, so my method, obviously, if someone's not in the basket, they're just

not in the basket. But that's a little bit of how this works. and just find it interesting that we are $4 trillion left. It almost seems like they're really trying to normalize. If you look at the gross dollars here, dollar value of the base money, liquidity in the central bank system. But like I said, what that really means,

if you look at units upon units, like euros upon euros, yen upon yen, so on and so forth, and you weight that, you're kind of just flat weighted. And now, as we've heard from Jackson Hole, Powell is signaling he's ready to drop rates again, which means bread money. Yeah, and I think that's what's most surprising about the end of this chart. We've had two, two and a half years of aggressive posturing, particularly from the Fed, hiking rates at a pace that they have not done in quite some time,

and really trying to beat the drum like we're going to pull money out of the system to quell inflation but it seems like they really it was would you consider the data that you just presented like proof that not as effective as they would have liked it to be yeah or or just for as much as they talked about fighting inflation and getting things back to normal, it really wasn't that much. Let's just go through it. I mean, 2022 into 2023, it was down. Looking at the second item in the tooltip, those bars. So they pulled it down like 2%, 2.3%, 1.4%. Okay. So on a trailing 12-month basis, they were pulling it down a little bit globally. Again, that's not reflected in the gross dollar value falling because all those currencies were getting weaker simultaneously

against the dollar. But then they already increased it again, globally, globally, by the end of 23, up a couple percent, and now just a little bit down. So basically flat. I mean, all that they've talked... This is a global take, right? This is a worldwide take. So as much as the Federal Reserve might have been saying, well, we worked hard and we quelled inflation and we took interest rates above 5%, so on and so forth. In reality, the world has kind of, it's been too difficult for the rest of the world to do that. And you can just look at this chart, look at what is below zero on this chart generally. It's not often. It happened once when they were, you know, when I had the repo spike in September of 2019 before COVID. It happened like one month in

yeah december 2000 year on year zero percent you see like negative 0.0 rounded to basically zero money growth and then just these last couple years and the only time that money growth has been negative uh and so yeah i would say not only is it uh not indicative of like perhaps being effective like you said i would just say it's you just kind of got to, you got to look at what they do versus what they say. That's, that's what I'm trying to get with a lot of this stuff and what they do has

been, yeah, they've been hiking it. They know that they got crazy after COVID. You can see it going 30% plus year on year for many, many months in a row. But now it's, now it's,

it's, you know, it's, it's flat and it's, And they're all, even the big banks are signaling that they're going to drop rates again, which means print money again. So yeah, not effective and fuel to the fire, I think, for what's to come. This episode was presented by River. River is the best, most secure place to buy Bitcoin in the United States. Go to river.com slash TFTC, set up an account today. You'll be

able to DCA into Bitcoin without paying any fees. You'll be able to give people Bitcoin via River links. You'll be able to send and receive Bitcoin over the Lightning Network, and you'll be able to set limit orders. If you want to buy Bitcoin at a particular price below or above where it is now, you can set orders to buy Bitcoin when it hits that price. Go to river.com slash TFTC and set up your account today. This rep was also brought to you by our good friends at Unchained. Unchained is building a financial services platform for a Bitcoin standard. They have over 7,000 clients that are securing over 90,000 Bitcoin with 12,000 keys on their platform. their platform leverages bitcoin's native multi-sig properties their cornerstone product

is their vault product a two or three multi-sig vault which allows you to hold two of three keys in a multi-sig quorum that gives you full control over your bitcoin they also have an ira product a lending desk and they're rolling out a bunch of other products including inheritance protocol and sound advisory so go to unchained.com set up a call with their concierge onboarding team today Tell them that TFTC sent you and use the promo code TFTC at checkout, unchained.com. Well, that begs the question, how aggressive is the money printing going to be on the back end of this? Because we look at inflation, despite the fact that CPI would have you believe that

it is somewhat closer to the 2% target. People do not feel that at the grocery store, at the gas station, when they're buying insurance in the housing market. It is really windy here, freaks. I'm sorry if it's distracting, but the show must go on. You look at commercial real estate, seems to be rolling over. Their jobs reports, they over-reported by a million jobs this year. The jobs market is not as strong as they were positioning.

Props for props are due. They did revise GDP, Q2 GDP higher to 3%. So it seems like GDP may be higher, but having dove into the intricacies of that print and how that can be manipulated, but it seems like, was this rate hike regime successful in any way in your mind? And whether or not it was successful, like, what do you think lays ahead of us with Powell now explicitly saying that they're going to pivot next month? right i think it was par for the course in the uh in the context of this new normal that we're in that new normal being this just crazy pikes peaks and troughs and spikes that i showed you in the last 25 years it's par for the course of the new normal and it's going to continue uh obviously more aggressive than they would like you to believe um but as for the rest and actually

I can show you GDP because I showed this one on the, I showed this one on the, on the exhibit as well. So here's GDP over like 200 years of the U S it's an exponential growth. And you know, it's exponential because if you put it on log scale, there's a straight line, right? Okay. So here's the great depression fell way below the all time trend here after October, 1929. and then interestingly if you look at the growth of the 80s in particular and then into the internet

age you see that we're up at the top end of this trend so we actually are above trend and not like i don't i don't trade this i'm not saying that this is like gospel or something you know maybe someone can go back and find some more interesting data and you know it looks like i have no idea why it's like above trend right on uh in the early 1800s i mean the united states wasn't that great They had a lot of national debt at that point, but whatever. In any event, the all-time trend is if you measured the slope of this curve, the all-time trend of GDP is, and I'm not showing it here, but it is 5%. So that's the just all-time slope of this black line per year, five percent per year and you see that on a dollar basis 28 trillion and change ending june

um where the trend line is is only 17 trillion so again this depending on how much data you take this could the trend line's not really important here it's just to show you really the growth rate and yeah i think i think some of it is manipulated some of its inflation and some of it is the internet because you see it that that after you know the last 25 years basically it's always kind of at a higher level than what it has been in the past um so this is like gdp is just as as as you know and i've talked about a lot it's just nothing to really get that excited about i don't it's always going to go up as long as we're in this fiat system they're going to print to make it go up it goes up at five percent per year and as far as i'm concerned like that is that

yeah the um so how how's bitcoin faring in all this q2 2024 pulling up the year-to-date chart looks like it's pretty flat uh maybe flat that down march 30th we were at uh 71 000 ended the quarter june 30th around 50 or 60 000 like right around so we fell through q2 how did that affect bitcoin standing the global monetary base uh it's the same still at 1.2 trillion is still uh like i mentioned it's above the pound sterling pound sterling is about 1.1 trillion at the moment and for all of this by the way you can see it on the noster post uh the last chart i have a full breakdown of all the all the 50 currencies that i review central bank data and for those that are just tuning in never

heard of the monetary base before i don't know what the hell it is it's just the cash that the central banks print like physical cash that you know notes and coins uh in the united states different if you're paying attention. The treasury still strikes the coins, but that's a historical thing. So it's the notes and coins in society and as well as the bank reserve account, which is basically the fiat main account of each bank at the central bank. So it literally is the printing press. That's what the monetary base is. That's why it's comparable to Bitcoin. That's why we do this. So it's still the same. It's number six. But this one we have here, I've shown you variations of this chart before so this is price right and um here's the power trend price so unlike

all the other things and there's more exhibits like gold silver uh stocks bonds i talk about that as well in in this update those all are straight lines on log scale but this with bitcoin it's a sort of gradual asymptotic kind of slightly decaying curve and people may think oh it's how and decay and all this. And we've talked about this before. Sailors talk about all your models will be destroyed, which is fine. I'm happy for this model to be destroyed for the upside. Although it's funny. In one of his recent conferences, he as well put some per year return figures for Bitcoin and they were more conservative than what I have from what I recall. So that's also funny. But in any event, here is the price on this curve. It's 96% R squared.

it's pretty solid you know i've already been looking at this for like two years i first posted about this six years ago actually so it's been following this curve the whole time uh you know we'll see where it goes but you can also look at the returns and this i actually unfortunately i dated this uh a couple days about a week ago i didn't time to update it but it doesn't matter it's not going to change really price is still around the same so um what if we what if we reverse this and instead of looking at the price we wanted to look at actually okay say you bought bitcoin here at june 16th 2011 and held until today and today being a week ago uh fifty nine thousand dollar bitcoin what what would it look like it would look like here

okay now rather than say like i bought bitcoin 2011 got a fifth you know fifty thousand percent return or a hundred thousand percent return or whatever it is uh it's easier if you can put it into this as i mentioned this compound return or like an annualized return and this is this is like as scientific as it would be that this is if you held till today and when i say today i mean 59 000 bitcoin a week ago it takes into account time takes into account number of days uh and you bought say at this peak june 2011 35 bitcoin you would have a 75.5 percent compound return that that's an enormous return, like just mammoth. That means per year. So you bought it. So if you take $35 and you multiply it by 1.75.5 for a year, and then another year and another year, all the way until

today, you're going to get Bitcoin's price. That's how this calculation works. So this is actually kind of like how you would do a bond yield calculation and things like that. You can do it for Bitcoin. It's not a problem. And this is the return. Now you notice it gets a little wild here the compound uh the it's kind of like the reverse of options options get less volatile as as you get to the theta as you get to the expiration here when you get closer to as we're annualizing as you get closer to today that they get a little bit more volatile so i don't take uh i don't take all of the data into account i stopped like one month before today or one month before august 21st in this chart but basically imagine now if we want to smooth

this out and understand where this is going, we can put a trend line on that. And how would that trend line be? Well, it would simply be measuring this, doing the same calculation, but measuring these returns on the trend line, on this black trend line. And if you do that, then you get this nice trend line here. So I'll take off the actual price, just the actual power trend price, just to see and just to show you so here if we go back again to 2011 so you bought at the peak june 10 35 bitcoin uh 75 percent return because you were over trend i'm not showing the trend i guess i should put it that back on for my example here's the trend trend price is a dollar 64 okay but bitcoin in june 2011 had a you know one of the first first booms and i think around this day

It was the first Mt. Gox hack as well, although it might have not been known at the time by Carpellus. But anyway, $35 price. The trendline price back at that time was $1.64. So if you had bought at the trendline price and held till today, you would have 126% as it says. But if you bought at the actual price, you have 75%. Both are enormous returns, but that's how it works. And then if you just smooth this out, look at the times that you bought above trend, look at the times here for example in the crypto winter if you had bought below trend uh or again in 2019 during covid below trend as then look at the uh the green the green arrow there sorry the green uh dotted line and you'll see that your returns are above or under trend so now now we

can smooth that out and see really where bitcoin's been clearly i mean clearly this not only does the price trend work but also this return trend line right the last dotted line which which curves down so if you were you know trace mayor or roger veer or any of these guys buying back in 2011 right around a dollar per bitcoin the actual price yeah early 2011 is about a dollar also trend line price was about a dollar that's 126 percent per year still to this day that's that's what it is. 126%, 130% per year. And then it falls, but you'd be surprised how little it actually falls. If you go all the way until today, yes, it's lower, but it's still big. And you can still get larger returns, right? People think you need to like ape into shit

coins or something to get returns. If you bought Bitcoin here, when Peter Zion was on Joe Rogan saying it was $17,000 overvalued when it was $16,000. Your actual compound growth buying Bitcoin in December 2022 was 111% still, right to this day. $16,800 then, $60,000 now. So you could certainly make returns. Obviously, never financial advice, but you can much more easily look at the dips here and see when it is to buy under trend rather than over trend, in my opinion. I think generally people agree with that, right? So you can have huge returns still on a compound basis. Look at the... If you bought under trend here in September 2023, year ago, you'd have 136% return per year, right? Because Bitcoin was 27,000 then.

So that's how this looks. And then if you smooth it out with the compound curve, you get to today, about at 45%. That is what Bitcoin runs at. And then if you're running, well, how does this chart even like stay at 40 what if i go out a day what does that matter well and again this is a week ago mind you but if if we look at the trend line uh actually it doesn't matter if it's a week ago or not but from this point if we look at today uh august 30th 59 508 uh dollar bitcoin and then tomorrow, excuse me, but the trend line is 78,823, right? 78,823. And tomorrow, the trend line is 78,903. 903. Okay. So that is a $80 increase. That $80 increase is what translates into this 45% per year. That's why you might be wondering, how can this still be 45%?

It's just measuring the growth of the curve. So something to pay attention to. Again, through all the noise, through all the nonsense, the trendline is increasing $80 a day. And as a bonus, we are well under trend. We're 20 grand under trend. But if you're on trend, the trendline increases 20 bucks a day, or excuse me, 80 bucks a day, that translates into a 45% compound annual growth. And you pull that out all the way to the end of the decade, you're still at 36.4% per year. so bottom line still enormous uh opportunity enormous returns and you know distributed money that's permissionless so from a sort of macro big picture where bitcoin is i think that it still looks very good even though it is the fifth largest if you compare it to fiat money

it's the fifth largest and if you add golden it's the sixth largest now this is this is really good data because we've been talking about this a lot at 1031 with portfolio companies and i'm sure you saw grant's presentation in riga about sats flow and how we make investment decisions and then not only us bitcoin has a hurdle rate and being the portfolio companies when they're making decisions about should they hire should they invest in r&d like what should the hurdle rate in their mind be and it is that cagger of bitcoin over the long term so having this historical data is actually very valuable because ourselves and others within the portfolio actually have a higher cagger like anywhere from 55 to 65 percent so yeah actually honing in on what it is historically and yes you

may be above or below the historical trend at any given point in time but having this data as something to reference when you're running a business and trying to outperform bitcoin as a benchmark like this is very valuable yeah and indeed bitcoin is the benchmark this is the benchmark and right now it's running at 45 per year and by the way we're 20k on under trend so that should be viewed as a as a benefit to people that want to get in i mean it's that means it's going to be more once it gets back to trend quite a bit more right it's running at 45 percent per year on trend. And by the way, we're 20K under the trend. Quick break here, freaks. This rip is brought to you by Gradually Then Suddenly, a framework for understanding Bitcoin as money by

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fiat is systemically fragile and is a risk the rails that that currency runs on are risk as well you need to begin accepting bitcoin as soon as possible invest in the future of your business create a redundant rail by accepting bitcoin as payment using zap right and reduce risk for your business i've done this for my business here at tftc we use zap right it allows you to easily create invoices payment links or connect e-commerce stores connect your wallets or custodial accounts and be set up in minutes. We can also connect our bank accounts, our Stripe accounts, our Square accounts to accept fiat as well. The time is now, freaks. The fiat system is fragile. Invest in the infrastructure that de-risks the future. Invest in yourself. Bitcoin payments

with ZapRite. Go to zaprite.com slash TFTC to get $40 off their annual subscription. Zaprite.com slash TFTC, $40 off. Well, this actually brings up a good point too, because historically before, I mean, Bitcoin launched in 2009 and you had essentially zero interest rate policy from 2009 to essentially you had that blip in 2018 to 2019, but post-COVID going back to zero interest rate policy and then 2022 with these rate hikes, Bitcoin for the longest time was like,

oh, it's a child of low interest rate policy. That's the only reason why the price has gone up. but maybe we should touch on, sir, sir, I'm recording a podcast right now. I can't help. What do you think these last two years from a narrative perspective have meant for Bitcoin? The fact that it's gone up significantly

despite the fact that interest rates were jacked up to five and a half percent. Yeah, I can answer this directly with a chart as you know I like to do, so I will. um it's surprisingly converging on what is happening with money so let me show you uh logan can you pull this up so now in red i should have red bars for the other chart but whatever this same chart i showed you right this is the growth rate all right so on average on on really not even on average a weighted compounded growth very strong figure 12.7 percent per year

that's how much money is printed okay 12.7 per year over the last 50 plus years base money money that's comparable to bitcoin goes up goes down as we talked about now let's let's let's look at bitcoin's market cap as we talked about number six uh in the world including gold let's look at bitcoin's market cap and see how that lines up with these increases or decreases in the money supply and the fiat money supply. So I'm going to put that on in the bars here. I'll take off this. So this is interesting now. This is changing market cap of Bitcoin. This is huge, obviously. It's different. First of all, notice that my axis is four times higher. So you see on the left side is the base money growth rate. That's at 40%. It tops out. And on

the right side, I have the Bitcoin market cap. It tops out as 160%. And it goes down to negative of 10% on base money side and negative 40% on Bitcoin side. So it's a multiple of four. So keep that in mind. They're just so huge that I have to try to make this somewhat clear. I got to cap the chart. But notice that for the first two major cycles, let's say the 2013 to 2017 and 2017 to 21, we were pretty much independent of base money. You see that? Base money would be growing here at whatever, 15% per year, 12% per year, just up and down. And by the way, they weren't even growing. The Fed was growing none at all here. Think about that. A lot of Bitcoiners would be saying that all the central banks do is print money. And it is true. And

globally, generally, they do. But the Fed wasn't printing money from, say, mid-2014 all the way until COVID, essentially, until the repo crisis in September 2019. Nonetheless, you see that this money is being printed all the way in red here. Sometimes high, QE 1, 2, 3. And then it starts to finally taper out to that negative or level rate by 2019. Now, look at the change price of Bitcoin. This is a change in value of market cap. The value of the Bitcoin network, the growth of Bitcoin network. Absolutely huge. I haven't been mentioning them, but I'm sure if you've been watching, dear viewer, you've been seeing 1000% increases, right? All the time. And then when we go into the bears, okay, big, big decreases, it can go all the way up to like 70%. I think

there was a 70% this one. Yeah, there was. I caught it and I lost it. Let's zoom in. There it was. Yeah, January 2015, year on year. January 2015, Bitcoin's down 69.8%. so and base money still being printed so completely uncorrelated completely unrelated same thing happened in the you know the next boom run up 2017 all the way to 2021 i should say let's say let's say the bottom of the crypto bear as they call it the crypto winner till uh till the start of the boom after covid so it's it's it's interesting that basically from this repo crisis period, it almost started to line up. Bitcoin started to line up more with what the fiat central banks were doing. And they're still going crazy. And Bitcoin is

even growing crazier. But now you can see here from into 2020, 2021, the peaks are lining up and even the troughs are lining up. So the decrease in Bitcoin's value in 2022 amidst all those scams, lined up even with the decrease in the COVID money print amidst high inflation. And now Bitcoin is changing again, and it's already been changing over the last year. And there's a little bit of that money printing that happened at the start of this year and the end of last year from the central banks, as we see here, just a couple percent, Bitcoin up 165% at this point, February 2024. before. But this is an interesting question. And I wonder if we've actually made it,

like if this is already it. And by it, I mean, if this is like a full on... We were completely uncorrelated asset class before. But I wonder if now they're going to start printing base money, and then Bitcoin is just going to start printing USD market cap value on top of that. because it's lined up. It's starting to line itself up in the last cycle. So you're saying historically it was uncorrelated, but in the last four years it's become more correlated? Yeah.

If we are going into lower interest rate policy, monetary base expansion, could the upward price movement be pretty robust considering we've got this direct correlation now yeah yeah it's perhaps too early to tell and we know bitcoin or people expect at least bitcoin still on its four-year cycle you know year after the having things people think uh things really start to ramp up so on and so forth but i i i find this uh interesting i hadn't really noticed it before i haven't lined it up like this and you can people kind of think about it they always think about okay central banks print then bitcoin's gonna go higher that's been the narrative but

really that wasn't what was happening before it was it was completely uncorrelated they were always printing uh at steady rates before but then because of all the craziness that happened just before covid and then after covid uh it's lined up it's lined up and i think that's interesting because i i can't see if it if if it is not coincidental and it's just starting to become a major asset class that like major investors are sort of lining it up with their expectations of the way that the money supply works then i don't see why that would decouple anytime soon um but we'll have to see yeah it's bitcoin going through its maturation phase in its nascency and now like that's actually bring up a good point too that's talking about

like four-year cycles and will they continue and i know we've touched on this a couple of episodes i've recorded so far this year but like how much of an impact do the etfs have does bitcoin as a corporate treasury asset gaining more and more traction have moving forward like if it becomes like a de facto uh fiduciary responsibility for corporate uh cfos to incorporate bitcoin as a treasury asset on their balance sheet like how does that throw a wrench all this consider especially considering uh the fact that we've had the having uh 3.2 125 bitcoin being distributed every block now um we've got nation-state adoption picking up uh like where like how do you see these cycles playing out with all this supply being taken off the market by all

these new bigger well-capitalized actors in the world throughout the world it's not locked in in stone it's not locked in stone right i mean we how much do you suspect you probably know this figure better than i do but what do you think is locked up in real fiduciaries at the at the moment you know blackrock the etfs uh let's even call the miners uh like when i say real i mean like you know um active major corporate entities in the space it's still not going to be more than a couple million coins right luckily luckily we have a uh a website that is tracking this bitcoin treasuries.net uh yeah so we'll take out defy smart contracts so it's private companies etfs and other funds governments and public companies all together right now they're at

about 2.4 million yeah those four actions so that's that's that's the question i like i said it's interesting to me that we're lining up this cycle we're lining up with what the regular mainstream uh established legacy fiat money monetary system is doing we're lined up but i yeah it's an open question that it would continue and and i i would say certainly based on what the power trend does as well is that the four-year cycle the um just bitcoin is a system growing that way is stronger it's stronger than what any of these you know jokers yeah if we take out governments which historically have been weaker weaker hands we're at like 1.7 1.8 million bitcoin locked up in public companies etfs and private companies so call it two i mean even call it two

that's 17.7 that's in long term long term locked up certainly it can affect the price if a whale decides to move some of that you know we know there are big whales that have huge amounts of coins but I think Bitcoin's four year cycle

is going to be stronger I do personally I think it's going to be stronger than this for now uh any of these narratives i think it's going to continue to do what it does um i guess it's stronger stronger about directions or do you think stronger upside um less pronounced crashes from the from the peak let me let me rephrase it when i say stronger i mean it's possible that it could decouple again you know with this whatever the central bankers decide to do they're you know we talk about unrealized capital gains for people and just It's just doing things that, you know, in the regular legacy fiat world, they do.

They don't think about long-term, low-time preference type assets like Bitcoiners do. So I think it's possible that even though it looks like the money print is going up and down kind of the way that Bitcoin is, it's not guaranteed that that will continue. Let me say it that way. And if one of them is going to continue, I'd say it's the Bitcoin cycle over whatever these jokers tend to do with their money printing. Yeah. I think it's going to be, time will tell here. At least for this having, I think it's completely independent of whatever anybody does in any government. Well, that's a good part of the conversation to focus on the jokers, what they're doing.

I mean, we talked about treasury issuance earlier, but I think what's become more well-known since the last time we talked is the auctions that are happening, the duration of the debt that's being issued. It seems like they've been heavily dependent on the front end of the curve, short-term bills over long-term bonds. And so you have the situation where that has had somewhat of a quantitative easing effect on the markets as well. So like stealth QE from the Treasury and not the Fed this time around. If you looked into that, there was a paper written about it a couple months ago, funnily enough, co-written by Nouriel Roubini. But I read it. It was pretty good. um but it seems like with the fed being steadfast and holding up rates uh higher and for longer the

treasury decided that they needed to step in and sort of inject some liquidity into markets with these front end loaded treasury auctions over the last two years yeah i haven't read it um but i mean i understand the concept and that's yeah that's clearly they're gonna have to keep uh doing something to keep the interest there and um you know it's on not not envious of a fed official's position at this point uh it's just so they're in such a rock and a hard place um so you know i i don't i don't necessarily uh i don't necessarily think that we're going to find anything drastic here as far as it goes with bitcoin for the next cycle so it still doesn't lead me to believe that um let me say

bitcoin in relation to the legacy system as i talked about right but um you know has anyone checked in on austria lately right they have 100 year government bonds and uh you know maybe the u.s will go that route to just start expanding we're so good that you're just gonna have to take on our debt for for 100 years maybe they think that'll drive the interest they'd have to wait for fed funds right to come back down toward zero to do that right like that was the big knock on trump like he should have issued a hundred a hundred year uh bond or or yellen should have excuse me during like covid when it went when it went back down to zero they just didn't take advantage of that sure sure well uh we saw a lot of that effect a year ago

uh from the people that made the mistake of being in uh those types of instruments right their values get hammered if you're buying some long bond locked in at you know three percent or two percent when rates are at zero percent and all of a sudden rates go to four percent like you just absolutely effed and um we saw what happened uh you know and then they have to offer these different liquidity facilities they have to offer these different promises uh like it's just a game that like i said i'm not envious uh of the people that have to play that but again that's why we're in bitcoin i uh i don't worry about it too much honestly i really don't because we we know that there's like a real escape hatch there's real

value there the asset is just super global with bitcoin i mean it's going to be what did uh what did trace mayor used to call it i mean it's the risk-free rate like that's going to be the risk free rate if we're gonna if we're gonna talk about lending markets and stuff um is how much people are gonna lend their bitcoin which by the way is way too high at the moment uh like i would never ever uh you know maybe with the stuff that debify is doing i could borrow against bitcoin at uh if it's pledged into a multi-sig wallet that's interesting but lending lending the bitcoin at any interest rate right now it's definitely not worth it and it's not gonna be it's just it's it's too detached still from what the regular financial system is offering so whether it's

three percent 100 year austrian bonds or five percent one year american bonds what's the treasury rate 10 you're at right now regardless i'm not interested uh and i'm sure that you aren't either so that's that just shows you how decoupled we still are from the markets you know what i mean yeah what would it take for you to get interested 4.4 the 10 yeah that's no sorry no 3.8 yeah yeah the one the one is 4.4 the 10 is 3.8 um so it's quite inverted which again it's just it's just it's just clown town i mean well that's the other crazy thing about this year too is like because of the weaponization of the treasury market and the fact that it's becoming obvious that we do not have our fiscal house in order here in the united

states like demand for the long end of the curve specifically has been dog shit you've had 10 and 30 year auctions with terrible results in the last couple months alone and again they've been over indexing on the short end of the curve but even there like you look into who's really driving demand for these auctions like tethers quickly climbing up the list of one of the biggest buyers of of these bills um because of the way they they need to manage their liquid treasury for their stable coin like what is the emergence of tether into the treasury auctions what does that represent in your mind an embarrassment for everyone involved i mean it's just it's it's hilarious i mean these are the people that you know they want to come after right these are the

offshore greedy dirty euro dollar holders of their currency that they can't control this is the people that they denigrate and hate you know and i'm not you know not a huge stable coin buyer guy regardless but um you know i know that bitcoin has its uh different bitcoiners have their different opinions on that depending on which part of the world you're talking about and how how stable the local fiat currency is right but regardless uh i i think it's all a joke like paul ryan said on a bloomberg article or bloomberg uh interview i guess earlier this year that it's possible that in the face of a debt crisis stablecoin demand for u.s treasuries could be a way to uh salvage that somehow and make you know i mean i i just think it's remarkable that you're

a politician talking about how demand for stablecoins in a new gray unregulated market and you're going to bring that into the regulate regulatory fold like that's going to be the that that's the future of your financial markets would you use the dominate for 100 years it's just it's it's again it's a clown show so um i do and this gets back into the strategic reserve and then i have we can talk about that as well i talked about the strategic reserve a little bit in relation to my nazi gold speech that i gave at honey badger uh because talking about the how gold moved around europe during world war ii and how hitler like the first thing he did when he was invading a country was go you know go to the central bank say let me have

the keys to the vault please because they needed you know they needed to fund their genocide they needed gold because the reichsmark wasn't accepted around the rest of the world kind of like the russian ruble today except putin's so dumb he uh maniacally dumb he doesn't uh keep his international reserve short out before he invades but in any event uh the point of that is you have an asset to this day that can move around very securely, multi-sig, multi-jurisdiction, multiple backup that individuals can hold and corporates can hold and governments can hold, that's Bitcoin. It's clearly the best asset. It's clearly whether you're an individual, whether you're a government. So from that side, I think it's inevitable that the US actually,

the main conversation soon will be about the strategic reserve for Bitcoin. My personal philosophical views on that would go back to the Nazi gold presentation, which again, we can flesh out more if you want, where I don't necessarily think it's great if it just goes into the hands of the Federal Reserve or the Treasury, some Bitcoin. I mean, that's Bitcoin that's going to be forever locked up KYC Bitcoin and you're just never going to see it again. They're going to do whatever they want to paper over it in the future. Having said that, I certainly see the value of a strategic Bitcoin reserve in that you have... And I wanted to actually show you this chart this time, Marty. We'll do it next time. I didn't have it ready. But if you looked at...

I always tell you that there's no assets on the... Not the Fed now. We're not talking about the Fed. We're not talking about the money printer. We're talking about the treasury. There's no assets on the treasury's balance sheet. It's like the only entity in the world that doesn't have assets. So you have the debt, you have the national debt, which is $35 trillion. And then they have other liabilities. It's actually over $40 trillion. It's something like $45 trillion is the on-book liabilities of the United States treasury. And on-book assets are something like $10 trillion. there's like a 35 trillion dollar shortfall let me see if i can find it for you actually um

you there you hear me yeah i'm here we got wind and fire alarms going off so i'm just yeah yeah yep i'm gonna i'll keep talking then for the listener here let me find the numbers and then if i can find the chart i might even be able to get it up logan all right so total we're talking about the u.s treasury uh this is a quick uh balance sheet on numbers let me just zoom in uh for you if you got this on the stream why is my menu not zooming in here ah forget it uh anyway if you look here we're at 42 and change logan it's it's actually just too annoying to look at it this way let me pull out um let me pull out so 42 and train and change is the trez balance sheet yeah this this works

this is good enough what i just showed you so So $42.8 trillion is the total liabilities of the United States Treasury. That's ending last year, September 23. That's fiscal year 2023. Total assets on the books are those three in the green there. You see, we have property, plant, and equipment. That literally is like land, like federal land that's usually out in the West. Some of it confiscated from the Native Americans, some of it not, whatever. $1.6 trillion worth. You got direct investments and loans. This is just mostly fake money. It's investment in other schemes where the money's already been taxed, but they call it an investment, even though the money itself was already picked up

and taxed. It's like one hand of the government owns the other hand's liability. It's just robbing Peter to pay Paul stuff. Anyway, that's 2.3 trillion. And then other assets, 528 billion. Just forget that. Bottom line, that cash and gold line, I have the last line there, cash and gold, 922 billion. That's the only hard money, hard asset as far as the balance sheet goes. But regardless, this red shaded area you see on this chart, this goes back to 1994. This is a linear chart. This is literally how the balance sheet is reported. There are no assets. People don't quite understand this. The total liabilities as of fiscal year last year, $42.9 trillion. And the total assets are less than $10 trillion. Look at that asset mismatch

I have there. Negative equity of $37 trillion. It's like $5 trillion. I should have just put that on there, but I don't have it. $5 trillion in assets and only $922 billion in cash and gold, meaning some monetary gold, basically. And the hard assets is the percentage of the balance sheet as you see there which balance sheet is total liabilities here it's uh six percent uh last year well two years ago 6.4 percent 5.9 so it's a little bit lower back in the early 90s it was 23 mid 90s so it was higher then but it quickly fell down to this number that is like you know six percent of liabilities this is this is what the treasury is selling you every every week every month at these auctions this is what you're buying inside of the actual debt is numbered

the asset mismatch is 10x since 1996 that's insane yeah good other good way to look at uh it was still a lot right so um as a percentage i'm actually surprised i thought it was gonna be much better as a percentage you're still fortunate look at this in 94 you're still five trillion in liabilities and a trillion three in assets so four trillion in a negative equity so it's still a huge it's a huge number uh and then here you're five trillion so let me just do that five by 42.9 yeah it's it's something like 10 yeah it's a 10 uh coverage of all assets and all these assets are guard as I explained. The only asset that is not really garbage is gold. And the reason I brought this up

is Bitcoin would go here. So Bitcoin would be another green item, orange item on the balance sheet. And I understand the argument. I think it's good. I think it makes sense. It's clear enough. Bitcoin would be the only way to repay any of this debt, right? But at the same time, look, we all know, it's not like anybody here in the Clinton years or the Bush years or the Obama years was like, oh, we're going to wait for this moment where we have this great sound technology, this sound money, and we're going to buy it. And it's going to be our Louisiana purchase moment, to use a catchphrase there. And it's going to repair our balance sheet. No one thinks that way. That's not how the government operates. So I just don't have a lot

of sympathy for this idea of a strategic reserve. And if you watch my Nazi gold presentation, from rica you'll see that centralized bitcoin whether it's centralized bitcoin or centralized gold you know bad actors can come after it it's better be in the hands of the people anyway so those are my thoughts on that i agree with that but let's jump into it like yes clinton obama bush may not have been thinking about this but now that it's here and cynthia lamas and others are pushing it forth as the strategic asset donald trump co-signed it who knows how much of that was pandering uh versus actual understanding of the potential this type of policy and going back to like the the nazi gold thing too

like it is explicit in the bitcoin act that the keys to this reserve will be geographically distributed like let's just have among how many among how many federal reserve board governors or treasury uh well yeah i mean so let's like let's let's let's go down to um to pass a different thought experiment like one like you if you were the architect of the strategic bitcoin reserve like how would you do it to make it as robust as possible so that we don't fall into the same trap that many governments fell into in world war ii with the nazi gold seizures like right let's let's let's think optimistic here like in your mind like how what would need to be done to build a reserve that could actually begin to eat in to that chart that you were just

presented let me let me give a yeah a positive disclaimer there first of all i i think it it certainly will repair the balance sheet if they hold bitcoin we all know that it will and the second thing is we know that they're going to do it they're going to try to do it whether it's Trump or Loomis or maybe even if there's a Democrat administration that maybe they'll do it. But eventually they're going to do it and nothing I or you say is going to stop that. It's too powerful of an asset. It's too neutral of an asset that even though they might poo-poo it now and even though they might sell some Silk Road Bitcoins now, they still have the printing press that they could just easily you know buy up the whole market if they want but of course they

know that once they do that like it would be the case with the gold market they would explode the price and they wouldn't want that because that would make all the holders of that asset their overlords immediately and they don't want that and they're not going to let that happen so yes it's going to be a they're going to do it they're going to do something to the effect and it's i do understand that the debate or the argument that it's going to help repair your balance sheet and as i showed you the u.s is major in need of that repair we're a 37 trillion in the hole and really 41 42 trillion because only about 900 billion of that is good assets um so that's fine as far as making it happen in a good way um again i don't have much faith there

i think you know i think it's not going to be done in good faith i think uh even if there are people working on the project and really working hard to uh make it a reality you know the united states federal government at this point is just an unbelievable institutionalized beast on its own you know clinton thought he was like god's gift to humanity when he balanced the budget for his second term uh just before the year 2000 right for four years three four years and if i've shown you that chart before right the united states debt like it was maybe five six trillion at that time now it's 35 trillion add on the extra 10 trillion in liabilities i just showed you on this balance sheet or seven trillion you're you're really at 43 trillion dollars like it's it's not going to

stop any of the bad behavior of government the only way that you stop that behavior is by fiscal discipline it's not by an investment miracle well uh interjecting here what are your thoughts on the tax policy that's been floated i think thomas massey came out and so essentially lower the income tax increase tariffs and the assumption there is we're going to do that especially if you're going to increase tariffs you need to basically decimate the bureaucratic blob that exists within our federal government like yeah i thought you were going to ask me unrealized capital gains tax well that i mean that's from the other side but let's let's think positive here i mean we can talk about let's definitely touch on that and like why it's so

completely idiotic but in terms of cleaning up the fiscal house would this tax policy of increasing tariffs lowering income tax and then the assumption is if you're going to do that uh you have to have a malay style afuera the destruction of the the managerial class within the federal government yeah look i i feel like i tell you this all the time but i feel like i'm getting too too personally invested in my family too old to like really worry about that too much in an idealistic way i really i just don't i don't think it's gonna happen in a way that you want it or you want it to happen marty i don't know i i just don't i think that uh real politic is gonna come in you know democrats are gonna say they want you know to compromise on this but then

they want to get that it's just it's the same nonsense as always the only way the only way to do it, yeah, would be after lots of failing, come back and have a, as you said, Malay style sort of epiphany, massively cut the spending and massively reduce the debt as a result of that. But that's just not going to happen in the current state of the United States. I mean, military spending is ramping up world is you know getting uncertain uh promises are going to keep being made it's just not it's not going to happen you see that the slope of the charts there of the debt the slope of the charts of the treasure i mean there's just like it's a it's a it's a wall that's just growing and growing and growing and we are not at all talking about the us now of

course we're not at all in the state of you know multi-generational failed governments like argentina had uh the dollar is still accepted you know i showed you the monetary base of all the other currencies falling against a u.s dollar equivalent a u.s dollar valued monetary base even though the u.s is only you know 20 of that total uh their monetary base it's still a you know the dollar itself is just it's just huge the network effect is huge and it's something that they want to protect so uh i just think it's bullshit man i think i think all the talk of is just bullshit i think people get excited they get hyped up over the next election um but i i just don't i don't see it i get it the internal optimist of like if i'm being realistic and sober

um i like you're right but man can dream it would be awesome somebody with young children who doesn't want them to grow up in a failed state. Like, it would be incredible. And who knows? Maybe Trump, again, getting idealistic, naive, most definitely. But maybe Trump does have to try to fucking kill him. He's bringing in RFK. Had his uncle and father killed by this deep state.

Like, a man can dream that somebody can get in then have uh enough of a chip on their shoulder to like fuck it we're just decimating then you have like chevron deference that's another thing that got passed this year that many people are sleeping on as well like it sort of neuters that bureaucratic state to an extent too and i think we'll take time to see the the lawsuits that that stem from that ruling that that really lay bare that a lot of these alphabet soup agencies actually don't have any control and therefore probably shouldn't have um the budgets that they're getting uh moving forward um yeah the the slow and gradual uh pulling peeling back of the state is obviously preferred and would be

great to see uh i just i've never seen a i've never seen that happen in the real world usually it takes some sort of a revolution and i don't say that in a as far as like a bloody revolution or anything like this i'm just saying it takes a major crisis for that to change uh and that's actually what rothbard observed i've told you that right about the uh imagine we can get our anarcho-capitalist or libertarian president and i told you that story right like he used to write this uh it's some article uh way back from like 70s or 80s and he's like you know we all want our guy to come in and be that president who you know like superman comes in on the first day rips off his shirt and there's a you know the big a it's not the s and he wrote this and it's like

it's not uh you know he's not he's not our superman but he's our anarcho-capitalist he's our libertarian he's going to bring everything back to the way we want it to be but you know obviously that's just not going to work here we have a divided government we have multiple you know uh checks and balances the president is just one person and also it's very these are his words and i'm paraphrasing i remember him saying it's very difficult to expect that on the way up in that journey you don't get completely corrupted yourself and have uh you know just fall into the same malaise that everybody else does he made an exception for ron paul so ron paul was rothbard was initially against him but after he saw how unbelievably genuine ron paul was and unbelievably

rigorous and cutting spending that he of course supported him but that was the only politician he supported and then looking at today i i mentioned this too i think i think i mentioned this story on one of the shows when malay came in i i kind of you know i'm talking to friends down there i kind of see malay that way i know some people are giving them bad rap and whatever same old same old business but i i do think malay has the chops to be that person i mean everything he's said or done is definitely in that vein right i mean he's not he's not trying to he's just not trying to have another socialist basket case country like all the politicians have done before he really is trying so so that's another that's another one but man i mean they are

few and far between and uh i i don't have much much hope for the the trump people either i think they have sort of different objectives but i i'm i'm uh willing to be proven wrong there for sure but i don't have too much hope that i'm sure as sure as all don't have hope for the obviously the other side yeah well the other side is again pushing unrealized capital gains tax 25 percent let's yeah well before we get on to that like um i'm sure we've touched on this at some point in the last five years that we've been doing the shows but like would you say that today the austrian school of economic thought is stronger than it has ever been in terms of its acceptance not only in well definitely not mainstream economics but in the

hearts and minds of individuals around the world uh yeah i think so i think so i mean i think the surprising amount of people in all walks of life that are talking about it who was that uh brazilian fighter that was mentioning it remember him after yeah fights earlier this year like that's pretty wild um and you certainly get a lot of grounded sort of uh i don't agree with everything some of these people say but like if you're if you're like i say what joe rogan is doing obviously i mean he's like the white man's oprah he's bringing on real mainstream people that are not socially crazy and just want you know to bring back communism so that's a that's a very good thing um then on the other side you know you have real you have real problems in some parts of the world

with real war and and real uh people that want to destroy your rights and you know we've talked about that enough as well so i i don't know i'm mixed on on all of it i don't uh i don't necessarily see big changes but i do agree and i think it's good that young people today especially with the tools like bitcoin and noster that they can just use without permission uh you know you don't need anybody to set up a multi-sig or run relays and stuff and talk to people i mean it's just it's amazing it's amazing to uh to see and i think that's that's very compelling and a very good sign yeah and i think like what you're doing conversations like this that we have on a quarterly basis and the plethora of other independent content creators that are out

there putting it out like children's stuff too like i think we were talking about it in riga tunnel twins the uh cartoon like my boys love it it's just literally teaching them uh that bitcoin is sound money like why you need sound money like why communi like there's like four or five episodes and like why communism is the worst thing in the world and you have like these and again i'm an eternal optimist and maybe a bit naive but i i do feel like the these like guys is shifting in our direction and a lot of that is a product of the access to quality information that exists today that has not existed historically of course obviously as we've seen the last couple weeks like the governments that do not want this type of information getting out there

um are censoring platforms tiktok here in the united states uh you know telegram uh pavel the founder of telegram get ganked in france over the weekend and obviously there's a lot of pressure on platforms like x which is why it's important that protocols like noster exist but i do think in the digital age particularly information wants to be free and more importantly like it is free and it's going to be impossible to stop it from spreading and i sent out this note on master the other day but i think that's our job if anything and i think you do an incredible job of it because of the data that you bring to the world and to your audience and in my audience as well is that like it helps instill confidence in people like part of instilling confidence that

we can change these things is equipping people with good data and that's why i love that we do these shows four times a year because i don't think there's any better data in terms of really painting a picture of the the global monetary landscape than the data that you're providing the market right now and as people become equipped with that knowledge and that data they have better um arguments to make more confident arguments to make and you just keep playing that forward and keep chipping away i mean shout out to you six years in going into year seven like a herculean effort i'm sure there's been many quarters where you're like why the hell am i doing this is anybody even getting it but i i i can sense it like this

has become like this recurring conversation that we have every quarter is my one of my audience's favorites like i'm not sure if you follow the comments but every time we put an episode up people are like this is my favorite high signal conversation that you have on the show we just need to keep pushing this forward because like you said like the bureaucratic morass that is the federal government here in the united states and many other governments throughout the world like they're not going to fix it And we need to begin instilling confidence in people and then pushing them towards the tool that actually do give them leverage to push back and affect change in the world. Bitcoin and Noster being two of them, confident people leveraging those tools can bring the bloodless revolution that you alluded to earlier.

I love it, man. How much longer do you have? You have to run soon, right? We got 20 minutes. Good. Well, yeah. uh yeah thanks for those words i appreciate it man it's it's great it's um especially like i said inspiring come off of the riga conference uh and it's you know over here especially in

eastern europe like i said we are not at all for one moment you know uh jaded or cynical to or disillusioned with uh you know the system and that we think that oh yeah communism is the way to go definitely socialism is going to fix us and unfortunately there's a lot in the u.s that i think that way but like you said i think that uh by and large young people know that that's just bullshit you can't follow those paths you have to take the right steps for yourself for your family and um yeah i just i it's it's incredible it's incredible that we have bitcoin to do this because if we didn't and i was just showing you these charts you know and we'd have to go back to gold uh that's fine too but going back to gold like again you run into

the same centralization problems that we were running into with uh with uh and the whole reason why we got onto the bretton woods standard right is all the gold went into the united states after world war ii because everybody was running from dictators so that's that's definitely that's a lesson that i think people are learning they know it shouldn't be repeated and it's awesome i think it's absolutely awesome where where we are right now so uh well i mean let's get on to the unrealized cap gains tax like how idiotic is this let's break it down in layman's terms and we do have recent examples of this i think norway tried to do this but um i think in terms of explaining it you're much better position than i am to dive into the economic effects of putting this type

of incentive out there in the market yeah i mean it's an absolute socialist disaster yeah uh spain has done it as well they have it going but basically every you know you take a you take a snapshot value of your assets and that's a that's already problem one because who's going to define the value is your broker going to do it is it going to be end of day you know is it going to be how many assets is going to be your property is it going to be only stocks do this that so you take a snapshot value of your assets say at year one and then at the end of that year take a snapshot value of the uh assets again and the difference of that would be the gain tax the unrealized gain because of course you haven't sold some of it you've sold some maybe

which is also taxed but then they'll tax the unrealized gain it just becomes an accounting nightmare as if the system was already not an accounting nightmare i mean like i deal with I file my taxes to the US living abroad and it's not a fun process and this would just be more insane. Spain has a shortcut already around, which I think will show everybody how just insane this is. They have something called the 60% rule in Spain. And so in Spain, if you have unrealized gains or wealth. And in Spain, it's even actually a wealth tax. It's not an unrealized gain. So in Spain, it's a much lower number. 25% is obviously a huge number and that's a huge number on an unrealized gain. In Spain, and it's different by region, but they have these small percentages and

it's confusing. It's different by region, like I said, like 0.1%, 0.08%, 0.2%. And that's a snapshot on the value every year. And that's just a wealth tax, straight up wealth. Also insane way to do it. The percentages are different. But what Spain spans, the amount of wealth that they're trying to... It's a worldwide tax, right? So wherever you live, it doesn't matter if you have houses outside of Spain. If you're domiciled in Spain, you have to pay it. Except outside of Madrid, I think, which is obviously a big reason why a lot of people domicile in Madrid. But if you if you live in any of the you know the beautiful coast spain has you got to pay it and uh but they have all these workarounds like if your income your regular income that is you

know from your job or it includes your dividends from your investments if if the regular tax that you have to pay from all the rest of the tax code is uh you you find that you pay the tax right and then you look at the wealth tax at the next step. And if the wealth tax is an amount that is larger than 60% of your income, your regular income that I just talked about, then you only have to pay 60% of your income. So that right there is already the Spaniards got out of it, like in a real way, right? So I'm not saying it's a good, like, I mean, it's great to have loopholes. You got to have loopholes in these insane tax systems. But it's already the case in Spain that you'll never pay more than a hundred percent of your income on tax of your regular income of your real income

where you're actually having real cash so that's what spain but 60 of your income is insane it is it isn't saying i'm not i'm not saying it's a good thing i'm just saying understand that that that is immediately going to happen in the u.s there's going to be some loophole that they're like we can't you know what if you know and and there's all sorts of crazy scenarios right because this is above people for $100 million and above. What if Bill Gates has just a huge year and then he has to sell 10% of his stock to pay the tax? And then tens of millions of people own Microsoft stock and their value is going to be affected. But was their value affected before the capital gain? Unrealized capital gain calculation was made for the prior year. So they don't have any

money to sell the stock because Bill Gates just rugged them. I mean, it's insane. There's so many knock-on cascading effects that you have to do with such an insane policy, which is probably unconstitutional anyway. I don't see it ever happening. I'm not saying they won't try, but you see even just what Spain tried to do. They had this thing that's called the 60% rule, massively corrupt, I'm sure, massively problematic. You'd have something like that that would happen if it happened in the US. But anyway, it's not going to happen. In my opinion, there's just no way. You can have as many trillions of dollars of national debt as you want. There's no way that you're going to convince even people downstream from the 100 millionaire folks that when they

got to pay the piper, that's going to affect your asset value as well. And what if you got to sell stock from the prior years on realized gain and now you can't because they just rugged you by selling before you as a nightmare well and that's the other thing too is like the even the 100 million dollar threshold it's like these people got rich for a reason and uh most of them for a reason and one of those reasons being that they're pretty smart and so like they're just gonna game the system and just move all those assets offshore and then you're just gonna have to move this right oh it's not 100 million it's 50 million now and then people have 50 million dollars are pretty smart as well i'm just going to trickle down until confiscating like paychecks from from janitors at

some point yeah communism uh future of communism right there i i that's the united states is too strong for that there's no way we're gonna let that happen well i mean like another communist policy that's being floated around is like the price price caps because the price gouging as well like these people are overtly like and i threw out like i've i wrote about this in the newsletter and joked about it in a tweet but like i think we need some form of the red scare back where we like we need to like overtly ridicule these overt socialist marxists whatever you want to call them communists i know there's semantics arguments about the differences between those three definitions where they all mean the same to me at the end of the day they all lead to the same

outcome like we need to like just call these people out and say ridicule them and ostracize them as vehemently as possible because this would lead to destruction of quality of life and the economy overall if any of these policies get through and that's the same black i mean yeah you say you say they won't get through but that's the sad part about the city of america as an american citizen like most people are dumb they don't understand any of this stuff which again going back to what i said earlier why important we have conversations like this you get your data out there but most people whether we like it or not do not understand the intricacies of any of this blacklisted by history you know that book i do not blacklisted by history all of your freaks

should be reading that it's actually about the uh the real story of mccarthy and how he struggled later on in life but really his cause was pretty noble at the beginning what they were doing was at the end of the day they're trying to understand if you are uh you know this is back to the red the red scare obviously if you are actually trying to subvert the united states and its laws for the preference of another government. That's what they were trying to do. And they got started and, you know, it might've been a hodgepodge way.

He might've been, you know, harsh with some people, but the way that they portrayed him, actually, United States sort of lore that like, oh, you know, we're just, everybody, communists are really nice people. They want the best for us. They're not gonna harm us. They want the best for our policies.

this was kind of the conclusion of the mccarthy era it's actually not true at all and nor does the intelligence agencies i'm not saying to defend all the things that they do not at all as you know but the to just sit there and think that you know communist soviet union and now uh mafia state russia or communist china has the best interest at heart and is not going to try to subvert u.s democracy is that's absolutely naive and mccarthy was actually on the right track and read that book and you'll see that uh he's been his his legacy there has been completely whitewashed unfortunately no we're gonna have to learn again no it was mccarthy and then yuri bezmanov came in the 80s and he was ringing the alarm bell and he literally laid out

the the playbook of the color revolution idiots yeah i think he was the one that brought you to the english language yeah and that's somebody who escaped communist russia and came over here it's like hey here's what you need to look out for um they're they are going to try to subvert whether it's russia china whoever it may be like they want to undermine the stability of the united States. And they will do these subversion techniques. They'll start with the universities, they'll leverage the useful idiots, they'll cater to feels and emotions and act like they're good people. But at the end of the day, they have a multi-decade process by which they undermine institutions and then begin to push these Marxist, socialist, communist policies through.

um and you wake up one day in a country that is not what it's supposed to be yeah i know you always give me you don't like when i say it but this is where i'm i'm saying that you guys are so much better set up back back home in the states compared to like europe right now i mean look what europe's doing with the pants down with the regression that russia's doing and all that europe can respond to with any of these sort of whether it's telegram issue or whatever uh they just Europe or Bitcoin, Europe is supposed to be just the best regulator in the world. That's what Europe is hanging their hat on. We're going to be the best regulator. It's an insane way to run a society. And thankfully, the United States doesn't have that. And I think the United States

is still going to be set up much better than that. Again, fiscal policies, government policies, whole different thing. And we are careening down a bad path there, as we've talked about. but uh i still think that the u.s is way better set up i mean militarily structurally spending wise demographically as our friend peter zion who think thought bitcoin was sixteen thousand dollars overvalued when it was priced at fifteen thousand uh at least on that that part i do agree with him that the united states is still set up demographically so much better than other parts i think most importantly the second amendment like you look what's going on in europe australia other parts of the world where you have this chaotic dystopian government coming down like

and that's the other thing they want to take our guns um the democrats dude kamal harris is saying it explicitly now um and that is literally the the hill that we should die on as americans that Like you said earlier, you never want revolutions to get kinetic and draw blood, but you always need that sort of that nuclear option, if you will, in terms of the Second Amendment, the right to bear arms here in the United States to fight back against these forces. God forbid it ever gets to that point, but you're, you're going to want that second amendment if it ever does. And I do, I'm a peaceful man. I'm an anti-war guy. I don't ever want to see it get to that. I think we can have a peaceful revolution by winning hearts and minds of people. But I mean, history, history has proven ancient history. Recent history has proven that once you disarm the populace it's really trivial for a despotic government to put in speech laws and throw people

like what's going on in the uk they can't even they can't even express their disdain with immigration policy without getting thrown in jail that's insane yeah they are example number one and we'll see how they that's again a good way or a good example i guess to see that europe is a lens to the future of america i always say that right so like i've been here a long time almost 20 years and you know we have shitty cars no parking uh way too many regulations um europe is just a lens to america and specifically western europe eastern europe's much better but um of course we have to worry about real security with russia but uh that what happens in the uk in particular is very interesting right now specifically if they're

going to repeal these laws because i know they're trying to uh you know certain members of the right are trying to make that happen and they're going to have to i mean you just can't you can't jail someone for their opinion it's just insane as everybody knows but europe is a is a real lens to the future and i think america just has to keep looking at that eye on the prize and say that is not what you know whatever paradise europe is going for it's not that's not what we want um and i think i think you guys will get there i know it's a different it's a different view than sometimes you uh you worry about but i i i got i got more faith in the in the state i do as well i've become much more white-pilled this year i'm done doomer because there's no uh there's

no solutions and black pills and doomerism it's like well you don't have bitcoin you do have bitcoin yes uh like i said i mean i i'm still not perhaps not as optimistic as you are with the fiscal stuff. I think there's going to have some weird stuff happening there before it changes. But end of the day, you have to stop spending. I mean, that's what you have to do. And I find the government stopping spending about as likely as the government reforming the tax code to get to one page, which the tax code should be in one page, right? It should be as simple as one page. It's not. Everybody's invested. Everybody's lobbying. There's just so much nonsense. And at some point that has to break. That's where I'm not sure where the optimistic side, how quickly that can come if it comes. But as we always say, man, we got the escape hatch of Bitcoin. So it's just, it's amazing that we have that. it really is it's a perfect knot to the that's the perfect place to tie the knot on this

conversation because i gotta run here we've got rabbit hole recap if you're watching live we'll be live again in about 15 minutes anything else you think we should send the freaks away with matthew yeah buddy no just enjoy the recap um great seeing you again in riga as always glad you made it over here uh we're gonna make it we're gonna win it's all gonna be good stay humble as you say stack those sets and uh yeah if you want some real data uh at one base money on all the platforms i'm gonna i'm gonna start doing the long forms on nostra there i think that's uh in the good spirit i'm starting my seventh year off there and i'm gonna continue there so please uh follow there if you can at one base money on oster add one add one base money

you'll find me yep yeah all right it's always a pleasure sir it's great seeing you and uh we'll be back uh beginning of next year to do our uh q4 actually uh q3 no we've got one more this year this is late it's a late month already uh already hopefully by november we'll be doing again so december latest yeah we'll be back in a couple months enjoy your evening in latvia sir thanks brother good weekend you too see you buddy peace love freaks