The Breakdown - Hacking Humanity With Bitcoin, feat. Max Keiser and Stacy Herbert

Episode Date: December 23, 2020

Max Keiser and Stacy Herbert are one of bitcoin's most dynamic duos, producing a variety of content, including the Orange Pill podcast. In this discussion with NLW, they talk about why this year was transformational in terms of how people view the aging economic system, and why 2021 is poised to mint even more new bitcoiners. Find our guests online:  @maxkeiser @stacyherbert

If you were God and you look down on Earth and you said, how did it get so fucked up? How can I fix it? You could just show up one day and fix it, but that would freak everybody out. Or you could hack humanity with Bitcoin and get the greedy humans to create the perfect money in a way that solves all these problems that God can't do by just showing up and waving his magic wand. And I think that's going to become clear in 2021. Welcome back to The Breakdown with me. me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. The breakdown is sponsored by crypto.com and nexo.io.

And produced and distributed by CoinDesk. What's going on, guys? It is Tuesday, December 22nd, and we are back with another edition of the breakdowns end-of-year extravaganza, 14 amazing brains, 21 minutes each, the story of the year that was in macro, Bitcoin, and Beyond. and today we have Max Kaiser and Stacey Herbert, two of the best known, most beloved, and longest standing advocates and evangelists for Bitcoin.

They are content creators through and through, and I've been loving their new-ish Orange Pill podcast, so let's stop yammering and get on over to the interview. All right, Max and Stacey, welcome to the show. Good to have you here. Good to be here, Nathaniel. Yeah, baby. So this is going to be a fun one.

end of your show all about the things that we've learned, the things we've seen, the things we've observed. So let's start with the biggest of big questions. What was the most important economic story of 2020? In a year of big stories, I think essentially it was money printer go brr. Because it covers quite a lot of stuff. Not only did we see just unprecedented money printing, it is in such a way that it snapped it from the rest of history. And there's no going back from that, I think. But it also changed the mindset of the population itself. And you see it, everybody's asking, well, why not print more? Why do we have to pay taxes? Why do any of this? Yep, I agree. That's a huge development for sure. It's unbelievable breaking of the dam holding back

this money, money printing. There's no pretense of making any economic sense. It's just the dam is burst and it's just this flood of it is coming out now. I think the point that you just made that is so salient with this too is the notion that its impact wasn't just in terms of whatever the actual economic impact is, but expectations and changes in sort of mindset shift from people, right? the fact that you had, I mean, I remember when the sort of the, the, the, the printers started to get revved up in April May, right? And all of a sudden, FinTuit just looked like Bitcoin Twitter, you know, like everyone was having, it was the same memes, the same ideas, the same question. I mean, normal people asking, why the hell do we pay taxes if this is, if this is what we can do. And it was a real sort of, it jumped out of our little corner of the world, it felt like. Yeah, absolutely. I think it did cross over to the mainstream, and everyone out there is now aware the fact that there's a rogue element in place called the Federal Reserve Bank, and they are out of control.

And I think this is impacting the way a lot of people are thinking and going into 2021. It also helped people understand what had been happening for the previous 20 years, essentially, what it felt like to be a cantillionaire. You know that show, who wants to be a millionaire? Well, this was like, who wants to be a cantillionaire? And suddenly, half of America is sitting in lockdown at home and they're earning more money than they ever have, thanks to the enhanced unemployment benefits, the $1,200 stimulus check. And they're like, this is a pretty nice lifestyle. We don't actually have to do anything for our money. And I don't think once you give them that, once you let them know how it feels to have that privilege, I can't see them wanting to go back to work for a reduced salary, by the way. They're earning more in unemployment than they are having to go out and pretend to work. Because our economy doesn't really have to work anymore because of the U.S. dollar, right? So it's like the Chinese and the Europeans who are making everything for us.

Right. And to follow up on that, people who took that stimulus check and they bought Bitcoin with it, they're up more than 100%, which, of course, you can use as collateral to buy more assets that keep going up in value. And that's how contillionaires make all their contillions of dollars is by using all the money printing to buy assets that are increasing in value to use as collateral to buy more assets. So that the average person got a taste of that with all the COVID bailout money that was gifted to them. And anyway, the ones who went into Bitcoin, they understand now how the game works. So how do you go back?

You know, they've seen now the man behind the curtain. So in that light was this sort of UBI trial, just the democratization of Kentucky, trillionaires? And if so, is there any upside to that for just kind of the awakening of regular people? So I think we're entering the 50th birthday of the U.S. dollar, all Fiat Global Standard, in 2021. And I think it is the suddenly part. You know how bankruptcy happens slowly and then suddenly, this is the sudden, you know, Americans themselves, ordinary Americans, who aren't contalionaires will have a brief moment of failing like what it was like to be one of the the contillion class of America before it all falls apart because we're already seeing the likes

of this demand for a great reset, a new Bretton Woods. Those are the people outside America that are sending us all these goods and services that they're saying, hey, wait, like their money is just like printed out of thin air like even more than ours is. So let's perhaps come up with a new system whereby we get actual real wealth, or at least some semblance of it, because America has given up even the pretense. When we first went off the gold standard in 1971, remember it was supposed to be temporary and the notion at that time, and then Paul Volcker was saying that the dollar is as good as gold, and he proved it by bringing interest rates up to 20%, near 20%. Well, you know, now we've even given up that pretense. Like we don't even

pretend it's anything but magic internet money. So let's go to kind of a variation on that first question, which is the first one was what's the most important economic story. This one is what is the most important economic story that people didn't pay enough attention to? I would say what's happening in Nigeria. So Nigeria is not 30% hyper-Bitcoinization. They're already far along the track toward using Bitcoin as a unit of account. And so they are leading the world. economically because they have the world's hardest money and they're transforming themselves. And I think that's a story that's not gotten enough press. To kind of part and parcel of that would be the countries that are actively involved in

mining and hoarding Bitcoin, and that would be Iran, Venezuela, Kakistan. So these countries are looking as a way to get escaping the U.S. dollar egemony. And they recognize Bitcoin as a way to do that. And that's gone completely under the radar here in the U.S. mainstream media? I think twofold. I think, you know, amidst the U.S. elections and the week before the IMF did come out and say, hey, I think it's time for a new Bretton Woods. I think that's just a remarkable moment. And we'll look back on that as, you know, the beginning of the end, like the open end. This is, the dollar won't probably survive. It's 50th birthday. I also,

think that the other important story, you know, I think the economy is also a big story and it has is a story that has to be told. And I think people don't understand the significance in 2020 of the storytellers of Bitcoin, the Renaissance 2.0 that I call it, the artist of Bitcoin that are able to tell the story in such a brilliant way that is is kind of like it's like that vibration that suddenly becomes like ugly to beautiful like it becomes a perfect symphony and there's a sort of sense of this harmony that has hit the bitcoin space in terms of that storytelling community and i think that leads into the economic story that the changing mindset of the population in in general like the people sitting at home with their ubi they're there these memes the culture the art

of Bitcoin is seeping into their space and they don't even know it that it's changing their minds. Yeah, I mean, you see a lot of examples of this in terms of who starts cropping up across a lot of different fields and a lot of different disciplines as a Bitcoin. Or we've seen that over and over again this year. Plus, I think you have more, almost like a more fluent spectrum of evangelists who can speak to a lot of different dimensions of Bitcoin for different audiences without being, without kind of telling competing stories of Bitcoin. just wear kind of their emphasis, which part is the door that they're trying to allow people to walk in.

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Your Choice. Get started at nexo.io. I guess I'm interested in almost the contrast between each of your two points. Max, I think that you're right that one of the, it has gone undernoticed relative to a lot of stories, how these sort of other governments have started to look at and engage with Bitcoin. I wonder, one, does that increase the likelihood of, you know, the U.S. trying to come after Bitcoin or specific politicians within the U.S. trying to come after Bitcoin because you just listed basically the axis of evil, right, you know, to use an old antiquated term. But on the same time, you have this new generation of evangelists, too. So on the one hand, you have more people who can speak and who have infiltrated sort of normy parts of the economy and of society who are advocates for this technology and for the asset. But at the same time, more potential, I mean, as it gets more politically powerful, just inherently, there's more potential for political pushback. How do we, you know, how do you see those forces playing out over the course of the next year? Yeah, I see kind of the opposite happening.

I think we're heading into a sputnik-like moment where the U.S. recognizes, oh, my gosh, the Soviets have put a satellite in space. We need to get in gear and compete. And so I think once the U.S. realizes that these countries are pulling away with what I call the hash war or the hash race, they will galvanize support and say we need to acquire Bitcoin. We need to mine. Bitcoin. And I think that's the more likely outcome. That's great. I mean, I, that is certainly the optimistic outcome. I think also you are seeing some indications of that, too, particularly with regard to China, right? You're seeing China's mining being brought up not as a reason to write off Bitcoin, but as a reason to have a coherent Bitcoin strategy. You're also seeing the infiltration

in the popular narrative of like Neil Ferguson's essay from a couple weeks ago in Bloomberg, where he literally is saying Biden administration, don't do what China's doing. in terms of central bank digital currencies, figure out how to integrate Bitcoin. The system in the US was always supposed to be a more freedom promoting system. This is the way to do it. I mean, what did you think, did you guys have a chance to read that essay? Or, you know, what do you think about that sort of emerging narrative of central bank digital currencies on the one hand versus Bitcoin as a freedom money on the other? Yeah, it's interesting, people like Neil Ferguson and others. So Bitcoin has attracted a higher quality of storyteller in the last year. You know,

And they're echoing themes that we've been talking about for 10 years, but told on the more cyphor punk level or the geek level or the dark web level, suddenly you've got these mainstream economists coming out and trying to argue these points to a wider audience. The underlying fact is that Bitcoin itself is on its own vector, and it can't be moved off that vector by no government, no group of governments. And whether or not the Biden administration takes that advice and takes a more proactive approach of Bitcoin or not is immaterial. I think that the U.S. dollar is extremely impaired. And I think 2021 we're going to see a huge markdown in the U.S. dollar. And I think the U.S. economy is also

going to be struggling. And if, in fact, you told me that the U.S. economy were going to collapse in 2021, my response would be that, well, maybe that's what we need to restart. In other words, you have to just take your lumps and start again. I think that's what's probably more likely in 2021. And politically, that means the folks who are at the top of the political spectrum, there's probably going to be a lot of shuffling around, a lot of changes, all kinds of changes. We can't even imagine, I think, the kind of changes we're going to see. Well, I'm totally 100% optimistic.

I think, like Max said, the level of thinker and speaker and articulator in this space in the past year is remarkable. And it's not just the older people. It's like Generation Z even, like millennials, people in their early 20s, able to articulate stuff and ideas and concepts that in the Fiat generations like Generation X and boomers, like we didn't have those sort of thinkers like this, this space is. attracted. I think Sean Lennon on Orange Pell podcast said it best is like, this is the new rock and roll. This is the space that attracts like the coolest best people with a great story to tell. That's why somebody like Paul Tudor Jones, who is a legendary, a genuine legendary Wall Street investor, a hedge fund manager, that he comes into this space, not like early Bitcoin, not like the narrative that was around in 2011, 12, 13, 14,

like we're going to replace Visa and MasterCard and PayPal. Like he comes in saying, hey, Bitcoin is a store of value that is a bet on the future of humanity, that human ingenuity will save us and rescue us and deliver a better, brighter future. So that's one thing certainly that the U.S. always has excelled at. We have an ability to, you know, land on the moon because we do have, we are willing to bet. Even like, no matter how big and evil the state gets, like they have been always been willing, especially with Silicon Valley, to risk giving them the capital to take us to the moon. Or Elon Musk to, like the stuff he's done this year.

I mean, this has been a mind-blowing year of a lot of crazy stuff, but like the SpaceX stuff was pretty mind-blowing, right? Like, here's, like, we haven't had this sort of positivity and optimism and just technology taking us, even just like our minds to a new place. And I think that taking our minds to a new place, the psychology of the human collective is really important. And I think it's a good one right now. Yeah, I mean, I think it's interesting that there's such a perception. around Bitcoin of it's a hedge against total chaos. And so there's kind of this idea of Bitcoiners as this dreary drab lot. But it's a remarkably optimistic group in exactly the way you just mentioned. And I actually loved the Sean Lennon moment. You know, right when you guys

dropped that podcast, there was, most people were really excited. But there were a few tweets that were like, why do we care what Sean Lennon thinks about Bitcoin, right? Which is natural. It replaced Sean Lennon's name with any celebrity or whatever. And my comment was like, look, do you guys remember three years ago when we were at the same price at roughly the same time in the year, the celebrities that would have showed up on a podcast would have been promoting an ICO, like monetizing their fan community in some way to do something that was never going to be launched. It's like, this is a remarkable shift in three years that people like have developed these ideas entirely on their own to no gain really. You know, it's not, again, Sean Lennon wasn't out promoting Sean

coin, you know, for, for his podcast. I think, I think it actually was a, a remarkable moment in terms of the parallelism of this year too. Yeah, but he, you know, that was also a profound statement. His father is, you know, the number one band in history, according to Rolling Stone. Like, that's, that's, that's, they define that era. And that's the era from which, you know, we're passing. Like, this is a passing of the baton to a new era. The boomers are, you know, dying off. The dollar, their dollar is dying off their fiat scheme. And this, is like the new rock and roll, the new, the new place you want to be, the new thing you want to be. The new, the way to, you know, the escape hatch from this, whatever the oppressive system you were.

And because even back in the rock and roll days, you know, they were rebelling, resisting against a certain, like, stale, cultural, like, horribleness at that time. And then rock and roll burst onto the scene and changed consciousness. And I think we're seeing the same thing today. The new bleeding edge. Along those lines, one of the things that has also been very notable this year is the introduction of new types of institutional actors into the space. You mentioned Paul Tudor Jones. Obviously, we have Michael Saylor and the whole corporate treasury thing happening.

Do you guys worry that that force provides a countervailing force? Like how much do those people have to adopt to the Bitcoin system, this bleeding edge, this new rock and roll, versus how much are they going to try to co-opt it to force it into their rubric? Well, you know, it reminds me of a project. We were involved with 15 years ago called Karma Bank, where we said we're going to monetize dissent by incentivizing hedge funds to short stocks and companies that activists are trying to get to change their behavior.

And so it's similarly, the more institutions, the better because you bring their buying power and you get the number of price go up as a result, but their ability to impact the vector that Bitcoin is on is zero. And the widespread benefits that are being enjoyed by everybody increase almost exponentially. Remember, Bitcoin is gold meets a messaging app. When you put those two together, you end up with Bitcoin. And so, again, it's like this Carmar Bank monetization of dissent concept that we were working on 15, 16 years ago. But now it's being applied to money, in this case, Bitcoin.

So, yeah, you know, we want all the institutions out there to get into a buying panic and to feel paranoid that they don't own enough Bitcoin and to feel lesser than. I want Michael Saylor to feel like Bitcoin is the way for him to catch up to Jeff Bezos. And he can personally be worth $300 billion if he buys enough Bitcoin. That's what we want. because just like the protocol attracts a certain amount of greed that becomes almost alchemistically into altruism, we can turn that institutional money into a much greater good. Again, I think how amazing the storytellers have been in Bitcoin has determined the institutions getting involved and how they approach it and what they're saying now versus what they're

were saying back in 2012, 2013. So when you look at Paul Tudor Jones and how he says it's a bet on humanity, or you look at BlackRock, the largest asset management firm in the world, like they're not coming in at it like we used to see the institutions refer to Bitcoin back in 2011, 12, 13, 14 as a threat, as, as, you know, drug dealers and, and, you know, dark web stuff and all this sort of thing. They're coming in, you know, Larry Fink, the CEO of BlackRock, you know, and some could argue, you know, they're as powerful as the government, or perhaps even more in some ways, that they're saying, like, well, you know, Bitcoin's interesting and it could replace the dollar on the international stage. And you're like, okay, well, if he's on our side, then it makes it

even more difficult, your concerns earlier about would the U.S. government shut it down? It's like, well, if our entire financial system and the mines are viewing Bitcoin in this positive way, like it's hard for the government to pass any legislation that's going to shut that down. I certainly agree. I think the deeper that the corporate and financial sector gets into Bitcoin, the more difficult it becomes for governments. They miss their window to the extent that they wanted to cause material harm to it. The bigger line of business it gets, for sure. All right, just to wrap up, this has been a super fun conversation.

But I have one question that I've been asking everyone kind of to round it out, which is, what's one prediction that only you have? So a prediction that other people may not see yet, but you have high conviction around. You go first, Max. Well, I have maintained, and I believe in 2020. that we will reach consensus that Bitcoin is self-aware. You know, you can go into that quite deeply, but, I mean, that's the bottom line,

is that this is a life form that is self-aware. And it's, I've said that it's a way, if you were God and you look down on Earth and you said, how did it get so fucked up? How can I fix it? You could just show up one day and fix it, but that would freak everybody out. or you could hack humanity with Bitcoin and get the greedy humans to create the perfect money

in a way that solves all these problems that God can't do by just showing up and waving his magic wand. And I think that's going to become clear in 2021. All right. We're coming back for another show on that next year. Right. I think that most people don't have any memories of the sudden part. So a lot of stuff has been slowly happening and 2021 is going to be the sudden part. We've had previous times in history of sudden huge cultural shifts and monetary collapses and, you know, chaos or economic chaos or geopolitical stuff. But I think there's going to be a lot of sudden stuff happening, but it's not going to be negative and violent like it has been in the past.

I think it's going to just be a sudden shift. in consciousness and an acceptance of it. I think there's just going to be suddenly everybody's using Bitcoin, Satoshi's bits as Adam Back wants to bring in. That's crazy. That could be a crazy prediction. That Adam Back's bits is going to go universal. No, but I think it's going to be pretty sudden that it's going to seem very sudden, but in fact it's been slowly happening. It's the exact opposite side of the dollar and it's declined. Yeah, but how is that different? Because you're saying it's a global instantaneous sudden shift in consciousness, consciousness.

True, true, I guess. That's what I'm saying. You get a self-awareness of Bitcoin. And that changes people's consciousness because they're looking at it with a whole other view. And that has, it brings with it a quantum leap in our experience here on Earth as sentient human beings. And that's not happening in 2021. History is going to remember these next 10 years as like Florence of, you know, the 1500s of the time of Medici, Leonardo da Vinci, Botticelli, Michelangelo, and Raphael.

You know, they're going to remember this period looking back as the same time. You know, their period of time came right out of the Black Plague, out of Inquisition. So, you know, it was pretty chaotic back then, but they created an amazing. society that the ideas and the art lives to this day. And a thousand years from now, the same thing will happen. People will look back and say, wow, what was it like to be back there in that time? Just like anybody would love to go back into like mid-1500s, early 1500s of Florence. You know, like, who wouldn't want to be there and just hang out with these guys, right? Well, the same thing. People are going to say, wow, that period of time altered history.

Well, listen, I love both of your optimism. I share your optimism. I'm excited to see what the year has to come. So thanks so much for hanging out today. Really, really fun. And we'll talk to you guys soon. That's very Donald Trump, right? Yeah, right on.