The Pomp Podcast - #1017 Max Keiser On Helping A Nation Build On The Bitcoin Standard

Episode Date: June 23, 2022

Max Keiser is a Bitcoin OG, popular podcast host, and has a new book "The Book Of Max". In this conversation we discuss Max moving to El Salvador, helping El Salvador build on the Bitcoin standard, and the progress that has been made in the country. We also go over Michael Saylor's 10 points on how Bitcoin can be strengthened over time. ======================= Bullish is a powerful new exchange for digital assets that offers deep liquidity, automated market making, and industry-leading security. Combining the innovations of DeFi with the regulated environment of traditional finance, Bullish empowers users to trade with certainty and earn passively at scale across variable market conditions, in an environment backed by multibillion-dollar liquidity contributions from the Bullish Treasury. Visit bullish.com/pomp today to learn more.   Note: Bullish is licensed by the Gibraltar Financial Services Commission. Virtual assets and related products are high risk. Consult your investment advisor and trade responsibly. Bullish is available in select locations only and not to U.S persons. Visit bullish.com/legal for important information and risk warnings. ======================= Since 2018 Copper has been at the forefront of institutional digital asset development.   From award winning custody solutions, to creating the first truly off-exchange settlement function, Copper pioneers technology, products, and services, in lock-step with a rapidly changing world.    No other infrastructure provider covers as many assets, across as many exchanges, with the speed and security that Copper can offer. To learn how Copper helps the world’s largest institutional investors secure their digital assets, head over to copper.co   Copper - the unfair advantage. ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin.  Visit http://compassmining.io to start mining bitcoin today!  =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now, let's kick this thing off. Max Keiser is a Bitcoin OG. He's also got a very popular podcast, and he's got a brand new book, The Book of Max. In this conversation, we go through the 10 points that Michael Saylor listed as to why Bitcoin has the potential to become a stronger asset. Some of them Max agrees with, and some of them he doesn't. This was a fascinating conversation, and I hope that you enjoy it. Before we get into this episode with Max, though, I first want to talk about our sponsors. This episode is brought to you by Bullish. Bullish has reinvented the digital asset

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is brought to you by Copper. Since 2018, Copper has been at the forefront of institutional digital asset development. From award-winning custody solutions to creating the first truly off-exchange settlement function, Copper pioneers technology, products, and services in lockstep with a rapidly changing world. No other infrastructure provider covers as many assets across as many exchanges with the speed and security that Copper can offer. To learn how Copper helps the world's largest institutional investors secure their digital assets, head over to copper.co. Again, copper, the unfair advantage. Check them out at copper.co today. Next up is Compass Mining. Compass Mining is the world's largest marketplace for mining hardware and hosting. With Compass,

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compassmining.io. Go check them out and let me know what you think. of his personal opinion. This podcast is for informational purposes only. Ladies and gentlemen, boys and girls, the man, the myth, the legend, Max Keiser is joining us next. Mr. Max, how are you, my friend? Pump, pump, they call him Pump. Pump, pump, pump.

That's my gang sign for Pump, the Pump Show. Are you calling into this show from the United States or from El Salvador? I'm in El Salvador. What is going on on the ground in El Salvador? Give us an on-the-ground report from the one and only Max Keiser. Yeah, sure. So, as you know, the country made Bitcoin legal tender a year ago. And they are experiencing all the benefits and changes that come with that. The economy is doing very well. They printed a 10% plus GDP gain.

They're looking to do that or more this year. Tourism is up by a couple of hundred million dollars. They just completed a surfing competition, international surfing competition that attracted people from all over the world that brought in millions of dollars. They've got forward and direct investment coming in in the billions of dollars. So that's all happening. That's very positive. Now, additionally, the government has decided to crack down on gangsters. So they have essentially arrested and incarcerated thousands of gangsters. And this also has a very beneficial impact on the economy. It's estimated that the gangs are extracting about $6 billion a year.

And this is an economy in aggregate. I think it's like a $45 or $50 billion economy. That's a big difference to this economy. It's like giving everybody a 25% to 30% tax break because they're not paying the extortion. For example, you've got 5,000 pupusa sellers. Those are the local delicacy that are sold on the street. There's 5,000 of these around the country. they're primarily women. And so they would pay up to half of their revenue to these extortionists, to these gangs. So now they are being, the gangs are being wiped out. So that has a huge knock-on effect. The confidence people have in the economy, you see entrepreneurialism is getting very strong. We have a venture capital fund here called Alzonte Capital, which is investing in local startups. And And we've got an incubator starting with Jimmy Song, who's training up some local coders.

So there's a lot of talent here. You want to germinate and feed that local coding talent. So that's going on. And it's all happening. They're having a tremendously positive impact. Now, people will say that they bought their Bitcoin at a higher price. They've got an unrealized loss on the books. last I checked, it was like maybe 30 or 35 million. But, you know, you got to put that

in the context of what's happening throughout the economy, right? So without the Bitcoin law, you wouldn't have those hundreds of millions of dollars worth of tourism boost. You wouldn't have all that investment coming into the country. It's essentially the cost of a rebranding. And, you know, in the world of corporate America and global corporations, the cost of rebranding a major corporation would be hundreds of billions of dollars, certainly hundreds of millions of dollars. So here you have a rebranding of a country, thanks to this Bitcoin law, and they've got an unrealized loss on the books of approximately $35 million. But that will be a net gain as Bitcoin continues to march higher. So that's what's going on. So when you start to think about

El Salvador. They're creating a playbook. And that playbook, based on many of the metrics that you shared at the beginning of the conversation, seems to be working. How do you take that playbook and get it in the hands of other countries? And are there other types of countries that you think will be the most receptive to this? Are they developed nations, developing nations, certain geographies around the world where you say, yes, that's where we expect this to be adopted next? Absolutely. So the president here in El Salvador hosted a get-together of, I think it was 44 central bankers from around the world, mostly the global South. This took place just a couple of weeks ago. And they all came to El Salvador. They were down in El Zante. They all got a Bitcoin

wallet. They were all using their Bitcoin wallet, hyper-Bitcoinization. And then they went back to their respective countries, having been orange-pilled. So the president, President Bukele, is orange pilling central bankers by the score, you know, dozens of them coming to the country and getting orange pill. And then they go back to their respective countries and they carry the message. Obviously, we've got the Central African Republic or CAR has made Bitcoin legal tenders. So that's that's happening in Africa. And he's orange pilled. And the way he talks about Bitcoin is very, very strong. He's got all the very strong talking points there. So you see it spreading there. But the playbook is key. You know, Samson Mao, who left Blockstream recently to join a company here in El Salvador that he's starting called Jan3. That's the sole business model was Bitcoin as a service, as a sovereign solution.

And now he's going to other countries in this region, specifically Guatemala, Honduras, and he is talking to higher ups and getting them to get on board with making Bitcoin legal tender. So that that playbook, as you as you call it, is is being spread to other countries, particularly in this region. And they the people that the folks are really receptive because they see the effect of the positive impact it's had here. When you think about the average citizen, what is the path to educating them on the actual asset, on monetary history, on economics? How far deep down the rabbit hole do you think that the average citizen has to go until the light clicks and they say, oh, I get it. This is something that I want. This is something that I need to use. Well, this is, you know, this is the always the big question, you know, because Bitcoin is is is not something that you can pick up over the weekend.

You know, you really have to think about it for a while and and think deeply about it. You know, for me, what I always talk about first, whenever I talk to people is the quality of Bitcoin, where it's unconfiscatable. So this is really unique in history. We've never had, as a species, the opportunity to have wealth that's absolutely unconfiscatable. And that resonates, that really people like that idea. And the folks here who were unbanked, 70% of the country before Bitcoin was unbanked, now 70% of the country is relatively banked, as they all have now the Chiba wallet and they have access to Bitcoin.

So that was a flip, an incredible change. And people like that idea. come up to me all the time in the street and they pick up their show me their phone and they go, I have $20. I'm like, wow, that's fucking awesome, dude. And they know that nobody can take that. This is theirs. It's unconfiscatable. And they can't be inflated away. It can't be taken from the government. It can't be stolen. It can't be extorted. And this is significant. The other thing is that it's uncensorable. So this is particularly key for remittances, right? So money going back and forth from El Salvador to the US, this money can go and nobody can stop it.

Nobody can stop that transaction. It's uncensorable. So those two key points, I think, get into it. People, they get some over the hump. They're like, well, that sounds good. Let me try it. Let me download this. Let me get started. So there's a recent appearance by Michael Saylor, he went and he talked with Bloomberg, and he gave 10 steps that he believes will make Bitcoin a stronger asset. I want to go through each one of these 10 and kind of get your thoughts in terms of ones you agree with, ones you disagree with, or ones that you think that you can elaborate further on. The first one is that he says that there's an absence of the no-wash trading rule, which basically allows people, if Bitcoin is purchased at $50,000, it drops in price,

you can basically sell it, buy it back, you can book the loss, and then continue to hold the same amount of Bitcoin. Agree, disagree, good or bad for Bitcoin? Yeah, I'm glad you brought this up. I think this is really interesting because Michael Saylor is at an interesting point in his Bitcoin experience, right? He's now going through what anyone who's been in this space for, like I've been in it for 11 years, right? Started buying it at a dollar. I've been through three halvings. I've been through four, maybe five, 80% corrections. And so Michael is having his first big cream pie in the face of volatility everyone experiences with Bitcoin at some point. I think his basis at MicroStrategy is $30,700. And of course, they're down on paper from that.

But so this list of things he came up with to try to address what he says and what he thinks could be improved upon. Now, the wash sale trading rule, I would give that a fairly ambivalent about that it's like yeah that would be kind of nice but um i mean he's trying to avoid this hyper trading that's going on uh people trading without any cost whatsoever uh into kind of the fastest moving uh you know i'll say shit coin i don't know you know i mean altcoin uh and there's a tremendous amount of social media where you see hyping of of a meme coin and so there's no penalty for that mass of meme coiners out there to just jump into a new one. There's no tax penalty, et cetera. So bringing in a wash sale rule would theoretically put a buffer between that kind of

murmurations, as I call it, pump. If you ever look up in the sky and you see starlings flying, and they're flying in these fantastic constellations of birds, and they seemingly just can go with thousands of birds simultaneously. That's kind of like the altcoin market. And all these traders, they're hyping on social media and they go from very rapidly from one to the other and they're playing this extraordinary game. And so that theoretically would kind of put a bumper

on that activity. So I guess it's okay, but you're opening the door to regulation. So that's where I would say, put a caution light there. The next point that he made was that there's 520 unregistered and unregulated crypto exchanges that offer 20x leverage. And his point was that this often leads to unprotected investors, which can lead to massive losses.

Agree, disagree, and good or bad for Bitcoin? Well, you know, again, Michael is somewhat of a newbie. You know, it wasn't too long ago when over there at BitMEX, you can get 100x leverage. So 20x leverage is moving toward a more sane environment than 100x. But I mean, obviously, again, that kind of leverage is not consistent with the kind of the guardrails that should be in place for the average retail investor. And so having access to that, it's almost guaranteed you're going to get wrecked. It really turns platforms like Coinbase and others, they become more like casinos. I've called them casinos before, unlicensed casinos.

And so it has that element to it where you're really putting up a penny and you're gambling on a 20x or a 30x. And as you know, that type of trading is almost guaranteed a loser. Uh, so, I mean, he's right, uh, in terms of, um, of that kind of, um, existence of, of, uh, you know, as a casino operations going on, uh, he's correct. Again, it opens the door toward regulators. So that's, that would be the downside. So the next point that he made was this idea that there's 19,000 cryptocurrencies being cross-collateralized and associated with Bitcoin, and that currently holds Bitcoin back by comparing it to badly managed, unregistered securities. I'm scared to ask you, but agree or disagree, good or bad for Bitcoin? Well, this is an interesting point.

So, you know, we've been in this for a while, and these points are not new. You know, Michael is just discovering them, you know, because this is the learning curve people have. But, you know, everything that's not Bitcoin, as I've said on your show before, would come under the heading of either relatively or absolutely centralized versus Bitcoin, which is uniquely decentralized. Additionally, a case can be made applying the Howey test that everything that's not Bitcoin would be an unregistered security. Right. So and it also brings up the question about Senator Lummis and her bill that she's trying to get through Congress talking about applying some regulations to, quote unquote, crypto. And she does things like she equates Ethereum and Bitcoin. She calls them both commodities, which I think is false. I mean, you can make a case that Bitcoin is a commodity like gold, but clearly Ethereum is an unregistered security without without any doubt whatsoever.

So Gary Gensler over at the SEC had kind of pushed back against all this and said, hey, lady, you know, stay in your lane. You don't know what you're talking about, which I think is the correct correct response. But when the cross collateralization issue that he's getting at is really, really the crisis du jour, I would say, because of what we saw with Terra, Luna, and all these other DeFi coins that they're manufacturing that yield, you know, POMP from kind of cross-collateralizing and putting money to work into other DeFi coins. And these other DeFi coins are generating returns by creating coins out of thin air. I mean, by definition, that's a Ponzi scheme. So a lot of that DeFi return is just cross-collateralizing into new situations that are creating coins out of thin air and rewarding early

coin rewards, et cetera. Again, unregistered securities. So that's definitely an issue. And here, I think that this is definitely a regulatory issue where this definitely would require regulatory kind of enforcement. And you see these things, for example, with Luna, these guys are definitely getting into big trouble. I believe they're completely prevented from leaving South Korea. They're being held by the police. So, you know, this is definitely an issue. So I think with that, you know, he understands that this is what's And what's keeping the lid on Bitcoin at the moment is you've got hundreds of billions of dollars. You've got people like Sam Bankman Freed over at FTX, who's become a kingmaker by creating these enormous kind of cross-collateralized market making, unregulated situations where price discovery can't take place. you know this is something that people talked about a couple years ago they said will bitcoin

experience the same problems gold has because there's no good price discovery in gold because of all the derivatives uh and so wall street can can really decide what the price of gold should be not the market and what sailor's pointing out is we're seeing this now in bitcoin you've got derivatives or d5 that are making creating price discovery for bitcoin uh and it's and it's it's blocking it from a more natural price discovery from taking place. So I think he's got an excellent point there. And this is definitely under the wheelhouse of the SEC. They definitely should be enforcing in this case. And they're being lax. And it's unclear why the SEC is being lax. So his next point was connected to this, which is this idea of these wildcat banks,

the ability for centralized platforms or decentralized in name platforms to actually offer unsustainable yields and kind of gamify or celebrate a lot of these? What is your thoughts there? Good or bad for Bitcoin? And do you agree or not? Well, it's like a tag on to the previous point, right? It's just that he's just emphasizing the same point. You've got these what he called wildcat banks, these big platforms, and they're interrupting price discovery. And they're doing so in a way that's manipulative and fraudulent. And it's the perfect opportunity for the SEC to step in and enforce the rules. And so when you start to think about his next point, he listed ignorance and fear of the asset class as a lack of technical know-how still terrifies many,

as does media coverage telling of the many supposed deaths of Bitcoin. Kind of the sentiment, the conversation, the lack of information being a problem? What are your thoughts there? Agree or disagree? And good or bad for Bitcoin? Well, the adoption is definitely tied to understanding Bitcoin. And we know that the more you learn about Bitcoin, the more of a maximalist you become. Nobody who learns about Bitcoin fails to become a maximalist. Only people who really don't take the time to learn about it, are left in the camp of a no-coiner or a skeptic. But on this point, I think what he's missing is the global nature of Bitcoin. So in the US, which has the US dollar and it has a much different culture and the financial markets

are in a much different place, this is a bigger problem to get through to people who are bombarded with so many things happening in the financial space and the way that that's changing You know, I look at how, for example, gambling has become legalized with platforms now that we didn't really have even a few years ago. But if you look around the world and places like El Salvador, the global south place, Africa, the need for Bitcoin is so great that the learning curve is very fast. They just get it. There's a need for it. And that's where you're going to see the growth pump. You know, Bitcoin is really very much going to be the global south making a move on the global north. You're going to see the changing of the guard. The central banks, the Federal Reserve Bank and the Bank of England, European Central Bank are going to be usurped. They're going to be overtaken by this Bitcoin revolution and it's going to come from these other countries.

It's not going to be led by the United States. So I would suggest to Michael Saylor that he take his message to overseas. You know, get get take your yacht and sail to countries that where Bitcoin is adopted and the learning curve is rapid because there's a real need for it. You know, throw America under the bus for now because they're just mired in too much other stuff. These other countries, however, it's where it's happening faster because the need is clear and the asset is performing brilliantly for these millions of people and soon to be a billion people and more. He made the point that we don't have a real stablecoin yet because there isn't one that is fully regulated and approved. Agree or disagree and good or bad for Bitcoin? All right. This I totally disagree with Michael Saylor, because when you're talking about a regulated stable coin, you're talking about a CBDC, a central bank digital currency. You're talking about USDC, the circle coin. You're talking about a Fed coin.

You're talking about a surveillance coin and you're removing one of the best aspects of Bitcoin in that the on ramp would be outside of the banking system. right? Bitcoin exists outside of the banking system. And so when you have a regulated stable coin, you're creating a regulated on-ramp to Bitcoin and defeating the purpose of Bitcoin. So in this piece that Michael Saylor mentions, I completely disagree. And I think it goes against the ethos of Bitcoin. This is something that he and I have talked about before. I am 180 degrees in opposition of this idea. So let me ask a clarifying question here, which is regulated stablecoin is different than stablecoin. Is your thought process that there will be stablecoins and people will use them, but they just won't be the central bank digital currencies? Or like,

how do you think this plays out? Do you think these stablecoins end up all failing and nobody adopts them? And Bitcoin is kind of the last remaining one? Well, Tether is working great. It's the biggest one out there. And they just added the Mexican peso and they added the British pound. They have the US dollar. I believe they have the euro. And it works fine. And it works for the unbanked. So the Tether model is fine. And it will resist being encroached upon by nefarious regulators. And so when you think about that, it's really just the regulated component versus more of a free market stable coin is really where the difference in maybe you and Saylor's opinion? Yes, I would say that's correct.

Yeah, it feels like stable coins are going to be a thing. But I think the nuance of free market versus regulated is up for debate, right? So that makes a ton of sense. His next point was around the absence of a spot ETF in the United States. We obviously have the Bitcoin futures ETF. We have a short Bitcoin futures ETF, but still no spot Bitcoin ETF. Agree or disagree with them here and good or bad for Bitcoin? Totally agree. It's unconscionable that Gary Gensler and the SEC would allow this to keep going without having a spot ETF in the marketplace. And by allowing things like a futures Bitcoin ETF to exist and the futures based ETF products are notoriously horrible. They almost never work. And they're not suitable for retail. They're not even

suitable for institutions. They're not suitable for anybody. And yet somehow these things have gotten into the marketplace. Other countries have spot ETFs. Their argument that there's no good price discovery in Bitcoin is fallacious. It's false and easily disproved. And so again, when it comes to the SEC, it's really hard to understand who they're working for. Are they working for the open and transparent markets on behalf of investors? Or is there some other agenda going on? I cannot, for the life of me, understand their reasoning behind this. It seems to me to be some element of corruption here going on. Obviously, a lot of people don't want Bitcoin to succeed because it challenges them and it challenges the banking system. I mean,

is that what's going on? Is there a conflict of interest? Because it makes no sense. I'm an expert in this area, having invented a virtual currency in 1996, a patented virtual currency in market making and securities. I mean, I am one of the foremost experts in this in the world. And I've looked at Gary Gensler's reasoning on this, and it doesn't add up. And in conjunction with the other decisions he's made, as we've said, failing to enforce some of these obvious scams. I mean, I really, I really, I really question this guy's integrity. I really do, Bob. When you start to look at the next point that Saylor makes here, he says that there's a lack of regulatory guidance and support institutions that currently must overcome. And he also

makes points that include the lack of insurance, as well as guidance in becoming involved with the space. So it's hitting on a lot of the same points you're talking about here. Agree or disagree? And do you think that more regulatory guidance would be helpful to Bitcoin? It would definitely be helpful for Michael Saylor, because as a corporate officer, he has to comply with a lot of regulations. And he's also trying to get his other corporate CEO friends involved. And there's a lack of it for them. So as a reserve asset for a corporation, he's seeing a paucity of guidance from regulators that would help him communicate with his stakeholders and investors and to other CEOs and CFOs out there that would be interested. So it would help institutional or corporate

adoption, for sure. Ultimately, it doesn't matter to Bitcoin as such, because it's a self-regulating entity. It doesn't need regulation. It regulates itself. Bitcoin regulates the regulators. So in the long run, it doesn't mean anything to Bitcoin. But yeah, it'd be great for him to be able to, on his 10 Ks and 10 Qs, refer to something that was written by the regulators to guide his ship of Bitcoin that he's trying to put together there. So it would definitely help him. When you start to think about the macro environment right now, Bitcoin is down 70%. I think that you have lived through maybe four or five different drawdowns of 80 plus percent. what is similar to past market drawdowns and what is different about this one compared to

those past market drawdowns i think in the past there was a definite uh lack of liquidity going on so you know mount gox was the only exchange around and it was incredibly buggy and wasn't suitable for making markets and so when it started to blow up you had a pretty predictable fall in the price. Other exchanges that were dominant, like BitMEX and others, were run without much thought to concern about hewing to regulatory guidelines, let's say. I think when Saylor first started buying Bitcoin, he made the comment that maybe $50 million a day in volume was actual bitcoin the rest was wash trading you know bitcoin has had a wash trading problem for years you know exchanges trading for the in them own their own accounts to create simulated volume you see that

in the nasdaq market all the time you know nasdaq is a network of dealers right it's not like the new york stock exchange where you have a specialist at this post uh making a market you have a network and and that nasdaq is for years guilty of wash trading amongst themselves to create the painting the tape and all these other techniques to create the illusion of volume and to manufacture prices. And Bitcoin had this problem for years. And so when the sentiment changed, you would have an 80% drawdown because there's just no volume. There was no volume. Now, what's different here is that over the past, let's call it the Michael Saylor era of the past several years, the volume has become legitimate and the demand is legitimate. And so the markets are legitimate. But the issue

here would be the layering on top of this market of these derivatives or DeFi and cross collateralization. So that's created an obstacle for good price discovery. So that would be the difference. But the net effect is the same. People always, of course, ask me and ask you and ask others for price predictions. And it's an incredibly volatile asset. So it really is incredibly difficult to make a price direction, prediction, other than to say that what I've been saying for 11 years, I think I'll tell you the direction of Bitcoin is up. If you hold it for three or maybe three and a half years, anyone who's held it for three and a half years or four years is in the black. So if you've got a time frame of, which is not a long time frame, three

and a half, four years, you're going to be in the black. But I think that would be the main difference is that also, you know, in this environment, when I was at the Bitcoin Miami 22, you know, the conference, the difference between that conference and let's say conference from 10 years ago was the quality of the suits, right? So the people on stage are wearing, you know, $3,000 suits. Back 11 years ago, 10 years ago, people would show up in torn t-shirts and there were coders and, you know, rarely came out of their basement. But it's the same kind of struggle to come to terms with this emerging asset class. And in a lot of ways, it's the same. You just have a higher grade of speculator. You have, of course, the amount of money that's been

flooding the system has increased every year for many years now. I mean, the central banks have decided within the last six months to raise rates and really put an end to a 40-year bull market in the bond market. So on the macro side, this is the first time Bitcoin has faced a rising interest rate environment, which causes on the macro side a huge shift in the funds. You see, for example, something like the Russian ruble is the strongest performing currency in the world in 2022 because it's commodity based. I think starting in February with the Russia-Ukraine conflict, we saw the end of a 40-year bull market in bonds and financialization. In the beginning of a secular inflationary move in global markets, that'll be

tied to commodities. Commodities were not a big factor for 40 years. It was financialization, interest rates, extend and pretend, just create more bonds, lower the coupon rate, extend the maturity. That's the way the world worked for 40 years. Now we're in a new world where suddenly the price of stuff like energy and food, it cannot be hidden anymore. It's actually hitting people's bottom line. And that's not going to change anytime soon. That's a secular shift in the inflation, in the economy, in the globe that's going to be with us for years, not a few months. And so that's something that is new for Bitcoin. And ultimately, it's going to do well in that environment because as people begin to understand that

the financialized world is crumbling, I often say Bitcoin is a risk-off investment. It's not a risk-on, it's risk-off. This is where you put your safe haven cash. It's hard to make that case with the volatility the way it is, but when you have something for all the other reasons, it's unconfiscatable, uncensorable, immutable. It makes sense. And it makes a lot of sense for a billion or 2 billion people out there that have been unbanked. That's where the growth's going to come. That's where the adoption's happening. So those are the changes, some differences, some similarities. When you think of the macro environment, the Fed says they're going to continue to raise interest rates. They're going to conduct

quantitative tightening. They're going to get a soft landing. Inflation will come down. Everyone calm down, and all will be good in the world. How crazy are they? And how off are they in their thought process that they can actually get inflation down and not push us into a recession? You know, it's, as I said, I think this is a kind of a follow up to what we were just saying there. So the Fed is still thinking like the world is similar to the way it's been for 40 years. You know, starting with Greenspan, you had the so called Greenspan put, you know, Every time markets came down, Greenspan would flood the market with more cash and lower interest rates. And that went through Bernanke, Janet Yellen, Jay Powell.

The activist Fed, the model has been with us for 40 years and that there's no problem that can't be solved by money printing. What happened in February 24th with Russia-Ukraine now is that that model is dead. And the price determining factor for prices is shifted from the New York Fed or from the Fed to the East, to Russia, Russia, China, Iran, India, Central America, South America, Brazil. Those countries are going to be determining prices going forward. And so the Fed only makes, can only operate if the world is on a globalized U.S. dollar standard. But that's no longer the case. You know, on February 26th, two days after Russia-Ukraine conflict, the Fed seized like 600 billion, I think, or million, billion in Russian reserves. so you know china looked at that and said you mean our reserves aren't safe

so um that was a huge you know self-owned you know that was that was one of the stupidest things that anyone could have done so now we're on a we're in a new world and i just think jay powell and these guys and janet yellen they're thinking they haven't adjusted yet but you know markets are cruel, you know, and the market price ultimately works its way into reality, and that gas price isn't going down. You know, we're talking $10, $11, $12, $15 a gallon for gas in the United States. You know, and that, do the math, Bob. That's not going to, that's a fundamental shift in the standard of living for the United States. That's just, That's just a fact, because we don't have the ability to control these markets and prices anymore because nobody people are dumping the dollar.

Dollar is not going to be world reserve currency. And the guys with the actual energy. Are in control. So how how are we how are we going to fight that? And all the rhetoric coming out of the UK and these other countries seems like people are totally tone deaf to this reality. Germany, let's look at another industry, for example, the ESG industry, you know, the climate change industry, the move toward renewables. Well, you know, that's that's completely blown out of the water. Germany, which was heading toward 100 percent renewable, is now going back to coal. Like all these countries are going back to coal now because because of what's happening in the energy markets. And so that's that's just a total shift.

So, I mean, you're a bully. I believe you're a millennial and pomp. And, you know, I think of it as being one of the unluckiest generations ever in history. You know, you kind of grew up through 9-11. You've been through the 2008 crisis, the subprime crisis. And now you're going to watch the U.S. dollar lose world reserve currency pomp. You know, you guys and your brothers are really the you got you. You lost the generational lottery. I can say that. Max, while I agree it's been tough in the streets, you, my friend, have gone through all of those things as well, plus more shit before we were even born. So I agree that there is generations that are, it almost seems like these crises are happening faster and faster from a timeline perspective. And I definitely agree that they don't have as much control as maybe they want to have. The big question is going to be how quickly do people understand what's occurring? and those who don't understand will likely get hurt and those who understand uh they'll be able to uh kind of position themselves uh so they don't have as much of an impact well yeah at the first point you know i started on wall street in 1982 i wasn't born yet max i know that was the peak

you know volcker took rates up to 16 17 on the 10 year and so my entire professional career has spent by watching rates go down. I've literally not had to work a day in my life, Bob. It's just been riding this wave for 40 years. And never make a mistake, just add more debt with a lower coupon and a longer maturity. It's been great. But now that game is over. But yeah, the going forward, I think that the generational rifts and all the other societal rifts. So you've got what what The Economist magazine euphemistically calls cohesion risk, which is their way of saying social unrest. So in the U.S., you know, people are already, you know, tense. There's a number of different issues that people are rallying and gathering around. And there is the cohesion

of our society in the United States is fraying. And you add in higher costs and a downshift in the standard of life, and it's only going to get worse. During the globalization period, when America was shipping jobs to China, the quid pro quo there was that, okay, I'm making less, But the stuff I'm buying at Walmart that's made in China, like TVs and clothes, is so much cheaper that I don't notice that my quality of life is degrading much. Because even though I'm making less or I don't even have a job, the stuff I'm getting at Walmart is so cheap that I don't see much of a difference. Well, that's completely reversed now. Now everything coming in is going to be more expensive and your wages are still squeezed so that it's going to be shocking reversion to the mean where quality of life, the standard of life is going to take a remarkable downshift. And, you know, people are people don't like that. And they're going to be there's going to be more unrest.

I don't want to be like a doom monger, but how can it not be? Historically, every time you have that kind of looting going on at the top, and let's be honest, you got to refer to it what it is. The ability to, through the practices of a Cantillon effect, where you're printing trillions of dollars and keeping $1,000 for a banker and giving $1 to the plebs, that process was going to eventually lead to a huge social dislocation. And that's what we're on the doorstep right now. And there's no way, you can't print your way out of this. This is the problem. You cannot print your way out of this if most of the world's actual population, not by GDP, but by headcount, is against you, right? That axis of China, Russia, India, Central, Latin America, South Africa, that population is greater in number than the ones that are supporting the U.S. in its current trials and tribulations. You've got a global split here.

You've got a domestic split. But the leadership is lacking. I don't want to get into a pissing match and to throw the president under the bus. But I mean, clearly, it's not the finest political leader that America has experienced that we have leading us now. And the people on deck don't appear to be particularly ready to embrace this job either. So you have political breakdown, you have societal breakdown, you have an economic breakdown. You know, again, people should be buying Bitcoin like their life depended on it because it does. I could literally talk to you for hours about this stuff. We unfortunately don't have hours, though. So, one, you have to promise me you're coming back again soon.

and two where can we send people to find you on the internet learn more about your new show learn about your podcast and learn about what you're doing in el salvador oh oh uh well you just find me on twitter and i will definitely shit post on you and troll you and uh you know that's like the nicest guy on twitter what do you mean yeah i'm like i'm a sweetheart uh yeah you know i'm trying to get up to half a million on Twitter after 47 years on Twitter, you know, you and fricking Michael Saylor are in the millions. I'm sitting here sucking hind tit. You know, how do you guys do it? What's your secret, man? I mean, is it just a good looks? Is that it? I got it. No, listen, you got to get one of these.

I got a suit and tie. This suit and tie helped defeat the 2018 bear market. I'm going to wear it until we defeat this 2022 bear market. You got a suit jacket. I'm going to get you a tie like me. I'm so old, Pomp, that I remember when people used to make fun of you because you wore the same jacket and tie on two consecutive interviews and they going back a few years and they thought that i had lost the tie but this is the only tie i own and boy does it do wonders you know how easy it is to pick your suit and tie up it's a good tie and shine get a shine on your shoes and you can conquer the world this is american not americant that's it max we will see you next time, my friend. Later. Thanks so much for listening to today's episode. I really hope

you guys enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to palmscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.