The Pomp Podcast - #383: Jim Cramer Becomes A Bitcoin Bull

Episode Date: September 14, 2020

Jim Cramer is the host of Mad Money on CNBC. He is a former hedge fund manager as well as an author and a co-founder of TheStreet.com. In this conversation, we discuss Jim's early days in the business, how he views the current economic environment, and then we go really in-depth on Bitcoin, gold, and inflation-hedge assets. ============================== Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

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. Let's kick this thing off. Jim Cramer is the host of Mad Money on CNBC. He is a former hedge fund manager, as well as an author and a co-founder of TheStreet.com. In this conversation, we discuss Jim's early days in the business, how he views the current economic environment, and then we go really in-depth on Bitcoin, gold, and inflation hedge assets. I really enjoyed this conversation with Jim, and I hope you do as well. Before we get into the episode, though, I want to quickly talk about our sponsors.

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Again, retirewithchoice.com slash Pomp. Let me know what you think once you try out BlockFi and Choice. Lastly, don't forget that I write a daily letter to over 50,000 investors about business technology and finance. I break down complex topics in the easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, Pompletter.com. All right, let's get into this episode with Jim. I hope you guys enjoy this

one. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys, bang, bang. I have the one and only Mr. Jim Cramer here. What's going on, man? Pop, I got to tell you, it's one of the most exciting times of my life because why? We have an intersection of sports and of stocks like I've never seen. It does seem

like every game is a championship game. And every stock day is a day where people reconfigure and say, you know what? This is the worst day ever. This is the best day ever. So when you get this level of excitement, when you get this level of schizophrenia, what do you want to do? You want to call the biggest schizophrenic in the world, and that's me. Wow. You know what month is the most important month? Which one? May. National Mental Health Month. Two cheers. Before we get into uh what you're doing now you have a whole life before uh cnbc media etc uh let's just start with uh kind of your background um you went to harvard you uh spent a bunch of time as a reporter then at some point you managed a hedge fund just tell us that story real quick for those that don't

okay so um i get out of harvard i don't get my degree of course because i criticize the guy who gives you the diploma he just waved me off the stage my folks you know first generation my folks were there and they're crying uh it didn't get my diploma for a month so i mean i got a late start uh then i went home and uh i was determined to try to get a job i was rejected by 57 newspapers i kept every rejection most of those are out of business i'm still here uh what i think was really important was that the phillies were having a great year and i i was determined to watch every single game i forgot that you have to work so my mom turned my bedroom into a den and told me to get the hell out. So I moved to Washington to be with my aunt, worked for Congressional Quarterly,

where I was the key operator, meaning that I had to operate the Xerox machine. Then I, that's true. That was my job. I applied to a million papers. I ended up getting hired by the Tallahassee Democrat because, I don't know, it was for $19,000 a year. That seemed like a great amount, which it wasn't, by the way, even in Tallahassee. And I get down there and I'm covering sports and I'm covering FSU. Bowden had just gotten down there. I tried to do an investigation of the NCAA and how they were handling the grade degradation

of the football team. They weren't doing it as well as you'd think. And I realized it'd be a bomb under my car. So I very quickly pivoted and wrote about Florida A&M and Florida State. And then I had a terrible break. I say terrible because I ended up living down the block from where Ted Bundy killed his girls.

and I did some reporting that got me hired by the L.A. Herald-Examiner where I really, for a long time, covered homestuck. Not a great beat. And when you're too cynical about it, it's time to move on. Then I moved back to New York. I was having some health problems that were indirectly, oh, check that, directly related to a huge amount of drinking. um i say that because i had a gigantic size of greenland mercator projector yellow stain which

i thought could wash off but my doctor who was a farm workers clinic doctor uh he explained to me no jim in order to get rid of that you have to do something that you may not want and he said you drink i said occasionally and i said wait a minute i said occasionally in the morning occasionally afternoon occasionally evening so i got my life together and then the rest is kind of good history went to harvard law got hired by goldman uh left to be a hedge fund manager and then started the street.com in 1995 all right so let's start with uh hedge fund world uh while you were doing that what was that environment like this is like late 90s into the early 2000s i think right yeah i left there were only about 100 hedge funds when i left goldman i left goldman in

february of 87 uh got it started uh had a lot of you know i don't know had about like like 40 million under management which was a lot then had a partner we had a tremendous dispute uh he left my uh my then uh girlfriend who only became my wife and then all became my ex-wife there's a journey for you uh i started work with me and told me right before the crash of 87 that this market was going to crash and we went to all the great beers and they all loved it said no no no no it's great we're gonna pull back and buy but we sold everything and because i was in cash for the crash I had a head start on everybody else for years because people kept giving me money saying, well, you need to get out of the crash. And I ended up doing pretty well.

I made a lot of money. It was fun. Gave most of it to my wife in the divorce. Didn't want to have a big fight. What can you do? I mean, that's real life. And started over. Got it.

And so when you say you started over, was this you went and did another hedge fund or this is where you started the street? Well, at the age of 50, the street had been going on for a while. um it's when i i did start mad money uh but look i mean divorce is something people don't talk about because it's very tough uh and i felt very sad about it and i speak to cam spoken to today i spoke to yesterday but it is um it's very very it's very very jarring because there's no handbook uh and i ended up marrying someone uh i met on a blind date about eight months after i broke up. There's a terrific article, if you Google the New York Times, it was number one in the New York Times for two straight days, about how amazing Lisa Detweiler is. It was

our wedding announcement. And the wedding announcement got a lot of attention. I'm very proud of that, even as I'm not proud at all about the divorce, obviously. Absolutely. And so tell us the story of starting thestreet.com, because I think that you've been way ahead of a bunch of these different trends that now everyone's talking about. and by way ahead I mean literally in some cases 20 years so tell us that story of why you started it and how and how you guys kind of built it okay so uh in 1991 I helped start smart money and smart money then immediately became wasn't maybe it was also Jim Stewart the great writer James B Stewart uh and we just had an unbelievably good time uh it was one of those things where

I realized that Steve Schwartz, SWRTZ, was a visionary. And he got us together and said, listen, I want to do a magazine that is about making money in stocks. Our first cover was like Finding the Next Amgen. It had a submarine. We were very single stock oriented. I suppose all these idiots now do all these ETFs and say it's dangerous on single stocks. Those people are charlatans. We'll get to them later. So we were coming out once a month. And I went to the editor and i said you know what there's this thing called the web this is after four years and we can come out every day we don't need to come out in the month and we don't need any delivery people for we can go up against even the wall street journal you don't need trucks you

don't need dead trees you know this and they said that's great idea uh we'll buy it from you for 400,000 i said no i mean if you're gonna buy from four i'll just go do it myself so i quit smart money I took the money I was making at the hedge fund and I started uh the street with my friend Marty Peretz uh and the first thing we did was I said me and Marty said let's get the best guy in the world so I went to Michael Lewis uh the great writer he came out to my farm in Pennsylvania we had a handshake deal and I never heard from him again and auspicious but then what I did was I went to I happen to believe in young journalists so I went to the editors of I just looked them all up of every single major college paper in the country and I offered them stock

and all of them today they're all working at great places like at Alex Berenson's doing great things and I oh I I've got I've got from uh Reuters and Dale Jones uh people all over the place who are high level and uh and are doing great things now that where they really got to start uh and i was very proud of the fact that uh even dan colarusso who's our editor-in-chief worked there we had some amazing people over the years came public in 1999 one of those ridiculous moments where our stock opened at 60 and then went to one uh with occasional moments where it stopped before uh paul allen put some money in got the stock up to four or five we had a series of um of ceo changes um and kind of went to hell uh got some money again from tcv which is the first investor in

netflix they're fantastic guys uh and that really didn't work out because it came in at 14 that was the level that stock then went all the way back down again because we kept being advertising oriented ultimately became subscription oriented and that's where the money is people didn't realized that. A lot of rancor, a lot of ugliness, not good, a lot of heartache. Was it worth it? Here's what I say. I gave hundreds of people healthcare insurance. And so therefore it was worth it. That's what I did. And I'm proud of that. Anything else? No. I am proud that a lot of people got healthcare insurance and that that is the best sing-pomp that I do. That's awesome. And so obviously you've been ahead of two trends, right? So one

is the subscription kind of media trend where you guys recognize that fairly early. And then the second is kind of this personality or what is now being called creator driven content. So let's start with the subscription first. You really, it sounds like came up with the subscription revenue out of necessity because the advertising revenue just kept being so kind of lumpy and so much fluctuation, right amen i mean it went from like 26 million to 12 million uh we were desperate i quit the hedge fund again rancorous sadly uh pre-medication a lot of rancor uh and then i realized look if we don't have a subscription revenue uh based on personality as you said we're not going to make it so i started doing uh we had doing real money which people paid for none of the venture capitalists

wanted us to do that but it was only real revenue and i realized i was writing on real money and people kept reading this one column where I was offering action alerts. You would get an action alert on real money, be a red arrow. And people would then say, Jim, I wish we knew more about those. So I started actionalertsplus.com, which is by far the biggest moneymaker that we have. I fought a lot of the CEOs over having a subscription model. I at one time even tried to buy the subscription business from a CEO who remained nameless um and in all times there was tremendous tension at all times uh and it was kind of like a jail it was a jail where I ended up making a lot of money I admit that but um it's the subscription business is a bear because

you got to be there every minute I'm very lucky to have Jeff Marks Zeb FEMA to back me up um we have the number we turned into a club that was important because we can't tend to do what we'd like to do because of the restrictions I have at CNBC for the Travel Trust. So we offer a club, we offer different recommendations. You have to know your suitability, but mainly we try to teach you. These people who are Robin Hood people, the 13 million strong, they should all, I mean, I was trying to figure out, do I do a skinny version for them? Because they desperately need the education that we provide. I'm very proud of the club, even though it's probably the biggest time consumer I have other than mad money. Talk a little bit about, I know that you're

very big on the financial literacy, right? Just the absolute lack of financial education that both our schools have, but then ultimately what ends up our population. Talk a little bit just about that problem and kind of how you see getting fixed. Well, one of the things that just absolutely drives me crazy is that the irrelevance of the vast majority of things I learned. And I was thinking today, I don't know why, I was thinking about my biology class in eighth grade. I mean, and you know, we cut up a lot of frogs. I mean, if we cut up a lot of dollar bills, we would have smarter. And it is incredible to me how little people know. I mean, frog legs versus fibers. There is, without a doubt, a dying desire for people to make money with what they see,

whether it be Amazon, whether it be Facebook, whether it be Snap, whether it be Twitter, whether it be Alphabet. They want to make money. And they want to make money in individual stocks. That's different from this long progression we have from individual stocks all the way to indexing. I think that's peaked. Now we're back to individual stocks again. I struggle because what I see is people making the same mistakes that I saw in 1980, 1990, 2000, 2010. Now they're doing 2020. They play with their hearts. They don't know what they own. I'll give just one really good educational tip that's worked for me. Before you buy a stock, give me three reasons why you would now see what happened is the electronic e-trading made it so that people

didn't have to ever talk about a stock they just buy a stock so a lot of people buy the vaxxers whatever it is the sorrentos um and it was a great city in italy and they end up completely getting killed because when the stock goes down they don't know what they bought so then they sell so my number one educational uh suggestion is if you have the time and inclination You can buy individual stocks, but you better know what you're buying or else you really do have to default and just try to save over time with an S&P index fund. But it is just terrible how little education. That's why people keep borrowing money to buy stocks. I don't mind borrowing money to buy a house because you live in it.

But when you borrow money to buy stocks and the stocks go down or the options go down, you're out of luck. And therefore, even though I'm Jimmy Chill, you're stupid. I mean, try to be Jimmy Chill. I love Jimmy not chill, but we'll take Jimmy chill today. That's fine. Thank you. In terms of the kind of creator or brand as an individual, right? Obviously Mad Money, people know you, you've on there every single day, punching buttons.

About 3,400 shows. 3,400 shows. Wow. Yeah. Hey, I'm Quim. So help us understand where did the idea come from in terms of making you the personality to drive all the media and content start from radio i had a radio show called real money uh started in 2001 why because we needed to make more revenue for the street i gave the revenue to the street i would introduce our writers uh the opening was a monologue and then i did the danger zone then i took calls uh i did a lightning round that's where the lightning round

came from. And then I do an educational piece. And then I would do what's coming up today or later in the market. It ran in a whole lot of radio markets. It was a very big success. It started out kind of a minor network. And then it went to Bloomberg. It used to run it three times a day. Loved it. And then we switched to CBS, which was fabulous. And I did radio and TV. I did real money and then went over to mad money until I got nodes in my throat. I was using 15, I was saying 15,000 words a day. That's too many. I wrote, I got a doctor's note

that I gave to Les Moonves, but that point was not disgraced and said, listen, he can't do the show anymore. Les let me out of the contract and I now just do TV. But the TV show is the radio show on TV. Got it. And did you have a soundboard for the radio show?

Yes, that's where it came from. I had a fabulous producer by the name of Dave Gorab who runs talk for Sirius Satellite. He's a genius. And he came up with Lighting Round. He came back up with Am I Diversified? He came up with the format of this opening. And then he came up with the idea that you have to be educating, educating, educating. So we had that big educating financial literacy block. uh the radio show i like the radio show very much because i happen to love dave and we had a lot of rhythm but when i i was about to leave uh cnbc uh because i wanted to do the mad money and they the ceo laughed at it and thought it was stupid got a new ceo jeff zucker he listened to the radio said hey i want this on tv and you know a month later we had it on tv right after the eagles lost

the super bowl uh because uh was that there um a donald nab threw up in the kind of seconds there was ill advice did you prefer television or radio and doing the show i got the face for radio i think that's important i i still can't believe like people would like watch me it's frightening um but i absolutely love tv because i'm surrounded by amazing people the tv radio is a very solo experience. People don't realize how solo it really is. I mean, you're sitting there with the headphones and the microphone, you know, like you're just going. TV, I've got this tremendous supporting group. I've got a great executive producer. I have a stage manager. I have all these great people in the control room. I've got all these people on the floor running

with cameras, all of whom, of course, are in my fantasy football league, the slump and dick of fantasy league. And they're all my friends. I've got great, I've got my head writer is also my only writer that's my nephew cliff mason who is my sister's kid he started as a high schooler we got all the other writers fired when he decided to go to college he wrote the show when he's in college he writes all the written pieces um i do the top though and it's just a it's an unbelievable support network of people who love each other and it's all that uh led by regina gilgan the executive producer who has built a team unlike any other i like team sports and i like the team that we put together and they make it possible if they decided they didn't want to play anymore

that'd be very hard for me absolutely how important is it that you had the experience as a hedge fund manager uh for all the stuff that you're doing on the media side it's everything uh because i know that what i say is based on real life mistakes i made and real life good things that i did i used to keep a shoebox in my closet of all my bad trades and every month I review it and curse it myself and look at what I did wrong. And it enabled me to be right. That's why I spend a gigantic amount of time talking about what you do wrong. Because if you do things wrong and you don't note them and figure them out, you're not going to change. Doing things right, well, that's just, you know, that's fine. You don't need to worry about that. But doing things

wrong, that is sinful. And I spent a lot of time in my book, Real Money, describing all the sins that I committed. And I think it's very important for people to recognize that the wins take care of themselves. It's the losses that wreck you. So you've obviously talked a lot about the things you did wrong. Was this a, hey, we did really well as a hedge fund, but we had mistakes and I talk about the mistakes or is this, no, we sucked as a hedge fund and I talk about all the mistakes? Well, we compounded it at 24% after all fees versus the S&P being at 8%. So we tripled the S&P. I know that there were lots of people who were skeptical about my numbers, not about the actual numbers, but skeptical because I did not run billions. I ran $500 million. That was a lot

of money to me. Hey, it wasn't my money. It was other people's money. I kept all my money in the fund. I was able to make a lot of money because I was betting on myself. I didn't love it. I hated myself. I did not comport myself well. I was physical in the way that I handled myself, kind of like an Eagles fan on a bad day. And I was not the person that I wanted to be. And there was an intervention done in November of 2000 by my best friends and my family to get me to quit. I weighed about 35 more pounds than I do now. I was very worried about my heart. I didn't work out. And it was time for a change.

But we made a lot of money in the interim. And, again, what I did was I said, look, if you work for me, it's a bargain with the devil. You're going to work six days a week. You can pick, I don't know, some people, it'll be Sunday. Some people didn't want to work Saturday, but you had six days a week and you must be in at 6 a.m. And you leave when I tell you and you must never, ever, ever come in later than 6 a.m. or else you're late. And there are a lot of people who didn't understand that. And there was a guy I'll leave it, leave his name out because he's just a repulsive figure. But he came in at 6.01 and I threw a water bottle at him and told him to get that.

Well, I was much more into F-bombs then. Now I'm Jimmy Choke. Throwing water bottles is better than most Eagle fans. They would throw batteries. Yeah, I know. I threw a snowball at Santa, but I didn't hit him. Batteries are very effective. Hey, which brings me to Dave Portnoy is constantly talking to me about the batteries and giving me a break. We threw punches.

That's what we were good at. And other fans, because we're like the worst drunks in the world. Now, I know that you know crypto, and I follow Portnoy very closely. and I love what he says. He's always talking about the suits and how they don't know what they're talking about and they discourage people. And that's very much all I like.

He's not a teacher so much as he is a pundit. Now, he got all in. I can see, I got this house at the beach. Let me back up. And it's on the Shinnecock Canal. And right across from it are these Winklevii. The Winkle Reed, the Winkle, Winkle. Winklevii.

Yeah, they made like a trillion, a trillion dollars in crypto. And I know that they follow, just like the president's son, everybody follows Portnoy, it's insane. And they have him going on the crypto, and Portnoy's making a fortune. That's what I understood. And then he leaves crypto. Now, you know crypto. What the hell happened?

So, Dave, I think, and we'd have to ask him for sure, but my understanding is that in 2017, when Bitcoin was- Hold on one second. We have to put words in Dave's mouth. In 2017, Bitcoin was going up from $1,000 to $20,000 that year. And there was a bunch of people at Barstool who started buying Bitcoin. And basically, they were talking shit to him, saying, hey, look, I'm making all this money, you idiot. And so he bought Bitcoin and then did this epic video that's now famous of – he's like, I just bought Bitcoin. I don't know what Bitcoin is, but I'm not going to sit around while everyone else gets rich and I don't get rich.

If everyone else is getting rich on Bitcoin, I'm getting rich on Bitcoin. So he goes on this whole thing. obviously bitcoin crashes uh a bunch of people lose money uh and he doesn't really talk about it for a number of years and then just recently when he started getting into all the stocks and everything uh the one thing that crypto is really good at is there's a bunch of people on the internet who've got memes and gifs and tweets and they're ready to rock and roll and so they've been chirping at him non-stop to stop playing around with stocks and go buy crypto so eventually he got the wink of eye to come they tried to explain to him you know here's what bitcoin is whatever

here's the best part is he put some money into uh into crypto and you know one of the things i like about dave is that uh when he does something he doesn't just kind of dip his toe in he jumps all in you know basically naked right off of the cliff and uh put you know if my understanding is a couple hundred thousand if not a couple million bucks in and uh it's super volatile so it goes up you know eight ten percent green hammers out he's ready to rock and roll he loves crypto Well, when it goes down 8% or 10%, he says, hey, stocks only go up. Crypto goes down. I'm out of crypto.

I'm going back to play with stocks. OK, so let's say that he actually wanted to do it in a serious fashion. What would he need to know before he did buy? Yeah, here's the whole pitch I think right now is if you look at Bitcoin specifically, the two things that are important to understand is the macro environment. There's no better asset in the world than Bitcoin in terms of you've got interest rates manipulated down to zero, you've got trillions of dollars being printed, which creates a fear of inflation, whether it ever happens or not, retail is going to rush for inflation hedge

assets. Inflation hedge assets can include everything from real estate, precious metals, Bitcoin, etc. And Bitcoin structurally, it's the smallest market cap, it's got the most volatility is likely to go up the most in value when people fear inflation, right? So if you look at like a Paul Tudor Jones, when he comes out, and he says, look, inflation hedge assets are going to do great in this macro environment. It's just Bitcoin's going to be the fastest horse, right? So they'll all do well, just Bitcoin's going to be the most volatile.

So when it goes down, that means Bitcoin draws down the most. But when all these assets go up, Bitcoin goes up the most. Let me give you the thing. I mean, there's a stock called Barrick, okay? Yep. The symbol is gold.

I like that because it's easy. I'm probably most like that. I said, I want to buy gold. He goes, buy gold. And I think gold is remarkable. And this company has an incredibly low cost. that gold is, they make about $700 per ounce. Does gold complement crypto or does crypto make it so you don't need gold? So the way I think about, take like a gold bug and a Bitcoiner,

you put them side by side. They agree almost to the T on all of the structural problems, the macro environment, all those issues. They agree on the theoretical solution, which is sound money principles. What they disagree on is the application of the sound money principles. So you can do that through a digital means, which is Bitcoin, right? Or you can do that through more of an analog means, which is gold. What most Bitcoiners would argue is if you put gold and Bitcoin next to each other from a utility standpoint, Bitcoin is more efficient. It's more divisible.

It's more portable. It's got kind of all these advantages, right? And there's an entire generation of people kind of 35 and under, 40 and under, whatever. They're choosing Bitcoin because it is a digitally native asset versus gold, which is kind of the boomer asset. sound money principal asset. Now, they're both going to do well. They're both going to do well. It's just which one's going to go up more. You're exactly right. I see the fluidity of gold and gold stocks in the GLT. I tell people if they can, and this is where I think that you've got the edge on

me, go buy bullion, put it in a safety deposit box, which you have to pay for, give keys to your kids. And remember that you can take bullion if you have to, or gold coins to the next place you have to go. But there's a big VIG for gold coins. It costs a lot. And the bullion is heavy and very bulky. And you can't just walk around with it. So yes, you're right. My curiosity about crypto is if I were more secure in it, I would say, OK, look, younger people, you may not like the analog. You maybe feel more comfortable with the digital. I totally understand. People want to dig a hole in the backyard and put gold. Well, forget it.

I mean, you know, the guys who cut your lawn got fined. So I feel very strongly that I have missed crypto. I haven't missed gold. I had my father buy a lot of gold. When you go overseas, you can put your gold in. In 1933, the government confiscated all the gold that people owned. That was FDR.

So how do I know? I read these stories, you know, about someone forgets the code or they lose it. And then I start thinking, well, that's too scary for me. Was that just a phony instance? And also, can the cyber attackers, like I like Zscaler, I like CrowdStrike, I like Palo Alto, and they always tell me that people are hacking crypto. Or also, they tell me that you got to pay ransomware in crypto.

So therefore, you better find out about crypto. So obviously, there's more uses, but give me a security story. Yeah. So if you think of gold, right, you can own gold, everything from own Barrick Gold, which is a company that's in that business, you can own gold that somebody else holds for you, right? You can go own the physical gold and put it in your house, or you can own gold and put it in a safety deposit box and have kind of the most extreme severe security setup in

the world, right? Same thing with Bitcoin in the sense of there's many different ways to get exposure, right? So you can go today and you can simply use GBTC, right, Grayscale Bitcoin Trust, and you can get exposure to the actual underlying asset, right? You can actually buy Bitcoin and you can hold it in a custody provider. So there's everything from BlockFi, Coinbase, Kraken, Gemini, all these guys have kind of institutional-grade custody providers. Then you can actually buy Bitcoin and you can take possession of it yourself. Most Bitcoiners are going to argue that you should take possession of yourself. They like the self-sovereignty.

They like the security, all that kind of stuff. Well, why is it in here? Yeah, well, so you can have a hardware device. You can hold it on a wallet on your phone. Again, there's a whole spectrum of ways to own it. What I always tell people is if you know yourself and you say, there's no way that I know anything technical, you can just go buy and get exposure in a stock ticker, right?

You can just buy GBTC. If you say, hey, you know what? I want to go kind of level two. I can buy actual Bitcoin on one of these exchanges and put it into an institutional-grade custody provider. So GBTC is like GLD? Exactly, for Bitcoin. Really? And it's $11?

It's $11. There's a premium. Why wouldn't people do that? Is there a VIG there? There's a premium, and it can get kind of nasty at certain times. I can really, really, obviously, frothy times with Bitcoin. It can go up. But again, if that's the exposure you want, right, then you can just do it there. So it's kind of a spectrum of control.

But I think the bigger thing here, when you compare Bitcoin and gold, you'll like this, I think. which is with gold, if I said to you, you know, how much gold is in the circulating supply, you'll give me kind of a really close- I expect 1% every year. So it's incredibly healthy. The shortage of gold right now is extraordinary. Yeah, but you'll tell me a pretty close estimate of what the circulating supply is.

You'll tell me a pretty close estimate to the incoming daily supply. I think part of what the younger generation is realizing with Bitcoin is everything is provably scarce. So one of the big differences between gold and Bitcoin is right now, you know, There's some guy somewhere who's digging through his field. All of a sudden, he finds a gold deposit, right? It's not going to move the market materially, but it increases the gold supply, right? And nobody knows, and there's a latency of information, all that kind of stuff. With Bitcoin, everything is provable on-chain.

So I know every single day, and I can prove to you that 900 Bitcoin are getting created each day. Then I can prove to you on-chain exactly 18,000 or 18,460,000 Bitcoin exists in circulating supply. and so it's this weird world of like i know that gold is scarce i just don't know like to the t how many ounces exist right nobody knows and having that provability i think that the younger generation just because they're digitally native say hey that's really attractive i can actually point to an exact number and audit it myself because it's transparent well but what happened to all the um what happened to all the mining i mean nvidia which is stock i love they were making cards that people use for mining it seems like that business went away so there's two

different types of uh ways to mine right so if you've got uh bitcoin they're using asic miners so think of these as specialized computers all right so just for uh for bitcoin mining there's also a bunch of people who are using um the kind of graphics cards that you would use for gaming or other types of things yep but they're not mining bitcoin they're actually mining ethereum and a bunch of other tokens. Are they jackasses? No, I mean, look, think of mining as just a data center business.

But the difference between mining and a data center business, right, is the data center business, you got to have a sales force and you got to go out and find customers. With mining, you have a 100% persistent customer demand for 100% of your computing power. Because all you're doing

is you're renting your computing power to an algorithm. And that algorithm is paying you 100% 24 seven. then you don't need a sales force. So the unit economics on mining compared to a traditional data center is much more attractive. So then what happened? Why?

I mean, my stepson one day came to me and said, listen, I want to mine. Oh, okay. So that was when it was at 19,000. So it's like everybody was a miner. Okay, so let me ask you this. Let me ask you a theoretical question. All right.

If I were coming out of college, no, no, no. If I was 32, 35 and it started to make money and felt like my principle, which is that you need 10% of your assets in gold. I've been a gold bug all my life. Do you think that I wouldn't even be thinking about gold and I would just be thinking I need 10% of my assets

in a great hedge against inflation, so I need to be in crypto, and that gold would be something that actually didn't compute because who wants to hide something in some place and pay for a deposit box? It's really an inefficient way to fight inflation. Yeah, I think the first key, and we talked about the financial education is people are waking up to just,

Hey, I should have an inflation hedge asset in my portfolio, right? There's a bucket there. I got to have it. The way that I talk about it is each individual person. So age, income level goals, all the optimizations are really hard to kind of give, you know, one size fits all advice, right? Obviously. What I do know is the zero exposure to Bitcoin is the wrong answer. So I don't know if it's 1%, 5%, 10%, right?

Each person's different, But getting off 0% is really, really important because what it does is gold and Bitcoin, while they both serve as inflation hedge assets, Bitcoin has a very, very different return profile, meaning that it's much more asymmetric. So right now, if you look earlier this year, remember, the volatility works both directions. So when equities drew down 30% in March, gold was down 12% to 15%. Bitcoin drew down on one day 50%. I mean, it's just nasty. Rip your face off, right? Yeah, it did.

Now, when we go the other direction and asset prices increase, Bitcoin's the best performing asset. So Bitcoin's up like 45% year to date, right? Gold's up about, I think it's 15% to 20%. Equities are flat to kind of single digit positive in some of the indexes. And so what you start to realize is if asset prices are going to go up and the Fed's going to continue to just inject trillions of dollars in liquidity and kind of all this macro stuff happens, you just want to have exposure to the most asymmetric asset, right? So I don't think Bitcoin will ever go to zero. So your downside may be, you know, again, 20, 30, 40, 50%, whatever it is, but your upside is hundreds of percent, if not thousands of percent. That brings me to, here's the most important thing

you've got to know about Bitcoin, the halving. So no one's explained this yet. There's something called the Bitcoin halving, right? And I'm going to tell you why this is important. I publicly in December of 2018 came out and I issued a million dollar, my partners and I issued a million dollar challenge to any manager on Wall Street. They could put any asset, any individual stock, any asset for a decade, Bitcoin will outperform it. A million bucks goes to charity, knock yourself out. Not one person took it. Here's why. Because the Bitcoin halving is a programmatic decrease in the incoming supply. So imagine if in 2008, when gold went down 30%, the government steps in, they printed a bunch of money, everyone ran to gold. It went up 200%, hits an all-time high in

2011. Imagine when everyone ran to gold, if 50% of the incoming supply of gold got taken out of the market. So 50% of the miners just shut down. Of course, the price would explode, right? That's what happened with Bitcoin. So in March, liquidity crisis occurs, government steps in, starts printing money, everyone runs for inflation hedge assets, Bitcoin being one of a bunch. In early May, there was a drop from each day, 1800 Bitcoin being created to now each day, there's only 900 being created. And that happens every four years.

So that'll go on for four years, 900 a day get created, and then it'll get dropped to 450 after that four-year period. So programmatically, what you see is you're actually making the asset more and more scarce over time. But it just so happens that this last one occurred at the exact macro environment where everyone's rushing for inflation hedge assets. And so I actually think Bitcoin's price

is going to top $100,000 by the end of next year. See, I have to say, I'm not going to disagree with that. And the reason why I've been focused on it, and I'm glad you gave me the education on it, is that Stan Druckenmiller is a friend of mine. And he's a great investor, though he is a Steeler fan, which then causes complications.

Although I have Juju, Simon, and Schuster there. I always call him Simon Schuster. But here's the problem. He said yesterday that in three to five years, we're all going to have to pay for what the government. And my friend, Joe Kernan asked me that. And I said, I have been so possessed by that because I know that we're going to get hurt. So when I go to my inflation handbook, what it says is buy gold, buy masterpieces and buy mansions. Those are the three things that that's it in my age. Okay. Those are the three things

you have to do. Now my wife's in real estate. So we've gone with the real estate as our hedge. all right what we didn't have in that menu was crypto and i think that you have to have i'm going to say still say gold or crypto because i have so much gold but you have to have one or the other and i like what you're saying about crypto i'm not in crypto remember i'm not in gold for the appreciation i'm in the goal i'm in gold for the alternative but i don't know how my kids are going to pay down what happened uh i i think we had to do it to avoid a depression so i'm glad we did it. But I see the dollar going down. And most importantly, I know that no one wants to raise taxes in this country. And even if we did raise taxes, we still can't afford it. We're not cutting

Social Security. We're not cutting Medicare. We're on a collision course, which makes me feel great about the gold I own. But I do feel that it's perfectly logical to add crypto to the menu. And now after speaking to you, I think that my kids, when they get my inheritance, won't feel comfortable with gold and will feel comfortable with crypto. And I don't want them – I try to put everything I own on one piece of paper. They won't understand the deposit box at, say, Toronto Dominion, okay? But they would understand crypto. And I have to start recognizing that maybe I am using a typewriter and using a PC. Here's what I'll tell you is if you take 10% of your gold position, right?

So just whatever you have allocated for your inflation hedge bucket, if you take 10% of that bucket, so let's say you have 10% in gold, you just take 1% of your portfolio, right? 10% of your gold. That's what I have. Okay. Take 1%.

You put it in Bitcoin. That 1% of Bitcoin will outperform the 9% of gold over the next 18 months. Hands down, not even close. And you want me to actually do the bit, let my kids set up the Bitcoin for me? Yeah, they'll do it or I'll help you do it. Whoever will help you do it. It's super simple. And what you end up doing is you would end up owning 1% Bitcoin, right, in your portfolio. If it goes to zero, you lost 1%. Not the end of the day, right? Not happy, but not the end of the day. No, but that's okay. I have stuff in it. I have an international fund that's done terribly until now. And I just said, look, I can't have all my eggs in U.S. basket. I want to have, like I said, I lost the masterpieces to my ex-wife. God love her, some beautiful paintings. hey man that tools will track you're not gonna um and but then i have the um i i have the gold

uh i have the the so-called mansion the real estate equation okay and what i do is i need and i'm not a you know paid spokesman for why i need gold or why i need crypto but i just need something that my kids will understand as i head to inflation and they will never understand gold and the reason why they'll never understand gold is they think gold's dangerous it's dangerous because it can be stolen. It's dangerous because they don't want to take it out of the bank. It's dangerous because they may forget where it is. OK, I mean, you know, let's say people talk about like, well, crypto gets hacked or whatever. You know what's really bad is when your kids can't find your gold. And that is, by the way, not unusual. So this is why I am fixated on needing

to own crypto because I fear massive amount of inflation and I don't have, you know, gold will do okay. And the houses will do okay. Those are going to keep me running in place as opposed to pulling off a cliff. The idea of actually making money, well, holy cow, I'd take a shot at that with 1%. Think about this. So one thing is important, right? Is when you talk to your kids about it, you got to make sure it's Bitcoin, not just crypto in general, right? Because Bitcoin specifically has the inflation hedge uh things that we're talking about here uh the other ones you know advantages disadvantages but bitcoin specifically is this kind of inflation hedge type asset the thing that i would say is uh that people forget when they hear this though it becomes

very attractive 60 40 global portfolio over the last five years or so about 7.2 percent return right annually right if you had taken one percent of your assets and put it in bitcoin even with all the crazy ups and downs everything you would have taken that 7.2 percent and gone to 9.2 so it added 200 basis points of performance annually right if that one percent had gone to zero you'd gone from 7.2 to 7 so 20 basis point downside 200 basis point upside so it's literally 10 to 1 in terms of risk reward right right the key is the standard deviation of risk stays about the same and the sharp ratio goes up over 20 percent really because it's a non-correlated asset over long here's the time now i'm correlated as you're so right now let me ask you a very obvious question

for you but not for me okay um will my kids understand where it's kept i mean is it an app so the way to think about this is uh wherever you buy stocks the way that your kids are going to get access to that is either through a will or you're gonna have to tell them the username password, all that kind of stuff, right? Same thing here. So if you don't self-custody it, meaning that you actually take physical possession, you know, sovereign possession, what you would have to do is let's say that you use Gemini, the Winklevoss thing, right? You can go on, set up an account, got a username and a password, you buy Bitcoin, you can hold it in there, you have a custody solution, right? And then you just got to make sure that your kids or

whoever oversees the will or whatever knows how to get access to that account, right? So it's the The exact same thing. The thing I'm thinking about this is I have trust in my kids, and they're laddered, you know, when they turn 30, when they turn 30, they're about 29, 26. And I have stock for them, index funds, because I don't have individual stocks. And I am thinking that when they turn 35 and turn 40,

I would look, I hope I'm there, but you never know, right? I would love to have right now some Bitcoin in there, but I'm worried what they'll do is they'll read the will, say, like, where's the Bitcoin? What did his dad do? What did he do? we managed high and dry. I don't have the code. I don't have the code. I just lost it. Someone hacked it. I want them to feel comfortable when they turn 35 and 40 that I didn't buy them

something that doesn't exist. Yep. Exact same thing. I mean, look, as long as you've got in an account where you want to pass it on, you just got to have them have the information on how to get in the account. Now, when Square tells me that they'll handle trades, can you keep it at Square or you really want to use like the Gemini? You can keep it on any of these exchanges. One of the things that you're just doing, right? Just like any other kind of financial institution is you're just offloading some of the risk

to that financial institution. So you've got to underwrite their security, their solvency, all that kind of stuff. The key piece is the Bitcoin ethos, right? The hardcore Bitcoiner is all about self-sovereignty. So just like you say, hey, go get the gold and put it in your backyard or put it in a safety deposit box, whatever.

Bitcoiners have the same ethos. One of the challenges for people who are older or not as technical is that there's a somewhat technical process to take physical control of a digital asset, right? And so what I always tell people is, like, get started by getting off 0% exposure, so get to 1%. Right. Hold it in one of these kind of well-known large custody providers to start. then you mentioned that Gemini I know you don't take any money Gemini is the one that that they're in the Winklevoss twins that that's their exchange right so you don't want to make fun of they're actually great guys they belong to a club that I belong to and they're incredibly kind and

upstanding and I see them I don't want to make be making fun of them but if you tell them if you tell them that we talked and you're going to buy Bitcoin they'll be your best friend hey you know they like my wife you know she's the head of the entertainment committee at the club we belong to And I need to do this for my kids. I need to do it because they are much more at risk than I am because of what happened. Let's say before this, OK, before February, before the pandemic. Well, I would have said, you know what? Stocks are doing well.

I feel like they're a good hedge against inflation. There's no inflation. But then everything broke down. And now I know I'm being reckless. See, I was being prudent with cash, OK? That's what I thought. because you have stock, you have cash. That's great for your kids.

Remember the 29, 26. After what happened during this period, it's not right. I know now I went from being prudent to being reckless. So do I have to go buy them paintings? Again, very hard and subjective, okay? Real estate, again, taking care. I've taken care of that asset. But I think that they will be,

by the time they're 35 and 40, much more comfortable owning, not the gold that they have, but the Bitcoin that they have, because they're digital. And I am analog. I love that. It's, you know, and look, I have no regrets. That's who I am. And I've loved gold.

And there's a lot of people who hated gold the whole time I've loved it. And I've loved it for exactly what you've been talking, scarcity value. I like the touch of it. But this touch of it is no longer as valuable as the scarcity. That's the one that I like. And as long as you're telling me that, Jim, this is something that you can put and you You can tell your kids. They will not be baffled by it.

They will not be scared. That's really important because I was concerned that they would be. They're going to understand it better than you will just because they're digitally native, right, which is crazy. Here's the best part about Bitcoin, right? And this is why Portnoy loves crypto in general so much is because not only is the asset great, but the community, they are the best memes and GIFs and tweets, et cetera, on the internet. That's how my kids think. Of course. That's how they think.

So if you just, you know, her whole rap is to do incredible Instagram and, you know, she takes photos of, of, of food. She takes, I have another daughter who is just me, loves the meme of me going like this. I mean, they all understand. And when I tell them about, look, there's this deposit box at this bank and like, they're like, dad, what, what two keys, like in the movies and what, and do I have to go? and like what everyone will see me in that room and when they know that i walked out of it they all know that i have it and you know gold coins when you tell me that you're buying a dollar gold

coin for 52 and i don't get that at all because i did that too i bought gold coins and i know it's just incredibly inefficient uh and i'm possessed by this which is why i you know tell them listen you can go buy a gold fund a junior gold fund allowed to do that but i i know that i'm being reckless now i know that when i saw that i was you know we got to talk i talked with my wife about this i said look i gotta breach this thing that i'm not comfortable with i'm just not and she goes well is that really good and prudent money magic why don't you educate yourself and i said well look i'm gonna ask this guy pop i mean i was gonna go to port north i was because yeah i mean i said okay he's in there i gotta figure this out and then he turned on them and

Yeah, and I'm thinking about seven years, 15 years, and 20 years. And I know that I am, if I just had that cash in there and some gold, that they may look back and say, what was my father thinking? Why didn't he know about this? He was supposed to be such a savvy guy. And I think the answer is because I'm scared. But I like this idea that the community is behind you. i like the fact that um this gemini is somebody you trust and i i have to do my work obviously

and the others you know what of course would be the easiest is like if you know if jp morgan which i have i just told jp morgan listen i want to buy some bitcoin but they i they won't do it so jp morgan hasn't done it yet i'm sure they will at some point but fidelity has a very fidelity all right so fidelity has a very big uh digital asset business and uh one of the things that they're doing is basically helping a bunch of their clients get into Bitcoin. They can help me? I think so. Yeah. They can basically, they can help. I have most of my money at Fidelity. Oh, then there you go. Yeah. They can absolutely help. When we get done, I'll introduce you to somebody over there who can help you do it. Oh, that would be great. I mean, look,

we got a little sidetracked here, but the reason I want to stay with this education, that's what I'm about. I'm a faux educator. If I don't know Bitcoin, you know, for a long time, People say, well, how about Bitcoin? I say, well, look, I don't trade coffee, and I don't trade cotton, and I don't trade Bitcoin. And that sufficed for a very long time. It worked until the $3 trillion package, because we don't have that. We don't have $3 trillion in this country. And you can raise them.

You can make the rich pay as much as you want. This is the first time in my life, and I've said it publicly, that i know we don't have the money and i that's one of the reasons why i like volks so much but like you said how about upside yeah i don't i don't ask you look when you buy insurance on a car you don't expect you know you don't like you have insurance on a toyota and then you get paid for lamborghini it doesn't work like that you get paid for the toyota and you're thrilled you're thrilled i would love it if i put insurance on the toyota and i got the lamborghini uh with a little bit of downside maybe they don't get as nice a toyota and so this is what i've been and it's

literally what i said this morning on on squawk on the street which is that i know it ends badly not the stock i can tell you that i'll find you the next nvidia whatever my my kids can't own you know they do i mean they later on they can do stock but i can find the nvidia but i can't find the cash. And the cash is what I'm most worried about. Because I know the cash is something that will be looked at as laziness, and will be looked at as I didn't pay attention to my kids. The best thing that you're going to see, and you've probably seen this chart before, is if you go back to 1971, and you take the US stock market denominated in dollars, it's like a perfect lineup at 45 degree angle to the right, right? It just looks like great

compounding gross. If you denominate the same exact stock market in gold, it's down, right? So the stock market's down denominated in gold. It's just that the dollar's being devalued, which again, that is what is happening. And the bottom 50% that are uneducated about this stuff, right? They're the ones who get hurt the most because they live paycheck to paycheck. They just have cash sitting in their accounts, all that stuff. But for those that can educate themselves, you got to get into these inflation hedge assets, right? And so gold is going to be just fine like it's not a gold's gonna do bad it's just that bitcoin is going to be way more volatile and over very long periods of time i think if don't quote me on this but if i remember

correctly bitcoin's compounded annual growth rate is over 35 okay right so it's just it just continues to be volatile but you need volatility to go up right would you do this here's why i own stocks i tell people like this point i said look i don't really trust the market but if you really got to get in let's use a very good example you really got to get i like nike okay and nike at the moment was at 118 and then it fell to 115 i it was at an all-time high at 118 today now it's 115 and i would tell people okay this is it buy let's say you want to buy 200 shares of nike buy 50 now people want to go all in they want to buy all i want to get started in crypto by buying the equivalent of 50 nike okay so the person i deal with well the first thing i'm going to say

is do i need to be insured do i need to have i mean you know i can buy insurance that my when i say insurance what i mean is that it won't vanish yep because that's what one of the reasons why i'm afraid to recommend it so i keep thinking it's going to vanish so here's if you're really really worried and it scares the hell out and you're the most conservative person in the world you can literally go buy GBTC. Now, GBTC is that ticker that just has the Bitcoin exposure. There's some premium to it, right? What I would tell people is if you're an accredited investor, you can actually go and participate in the private placement of GBTC. So you can go to Grayscale and say, hey, I don't want to buy this stock publicly. I want to invest in the private placement. You got to

hold it for six months illiquid, right? But at the end of six months, you still have the same price risk of bitcoin but now you capture the premium rather than pay for the premium okay so there's a little bit of premium arbitrage owning it outright is for owning it outright i think is the best thing to do i think that if i'm going to go in here's what i'm thinking i i merely get comfort with that grace why do i get company it's a stock stock of course i know that if you really uh want to own gold you buy gold bullion so i figure if i want to own bitcoin i should go buy bitcoin i mean to me the analog works yeah it does and the other thing you were talking about was basically dollar cost averaging so here's a crazy stat for you which is uh in december of

2017 bitcoin hit twenty thousand dollars right it fell from 18 until today it's now around eleven thousand dollars let's call it but if you dollar cost averaged every single month the same amount of money from the high all the way till today you would be up double digit percentages on your investment. OK, well, that's how I do things. I mean, I tend to either do it when I was used to be able to be more active. I would do it every month. I'd invest every month. And then if the market fell between 10 and 15, I would double up that month. OK, that's the plan I would have for Bitcoin. Now, I always am afraid that the broker will say, oh, my God, here comes Kramer again. Every single month he's do it. But you know what? I shouldn't worry about that. Right.

I mean, I shouldn't let that deter me from buying a smaller amount to get started because I'm not only using the word I'm afraid. I want to use the word that I want to get my feet wet. Yep. I think that's perfectly fair. And the whole thing here, right, is, as you know, if you want to educate yourself, the best thing to do is put skin in the game because you'll start paying attention. I always tell people, look, before you – I mean, I want you to pay for portfolio, but we've already passed that phase because I watch this. But I tell people, look, I don't want you, let's say you like Tesla, okay? All right, buy 10 shares of Tesla.

They say, no, I got to be big. No, I need you to feel like if it goes down, you can buy more, not if it goes down, I have to sell. And that is something, that's the buy high, sell low. For this, what would I have, let's say today when I have a conversation, and the one, let's just use $10,000, okay? Let's just pick that. So I say, I want to buy $10,000 worth of Bitcoin? Yeah, you could go do that.

Really? Of course. You say, listen, I want to journal the $10,000 from my cash account to Bitcoin. Of course. You basically, you just got to determine, do you want to buy it through Fidelity? Do you want to buy it on one of these exchanges?

You know, whatever, wherever you want to normally buy it. It's the same thing. I want to do Fidelity because that's where my assets are so my kids understand. Now, look, I apologize for my lack of knowledge, but let me just tell you. You're doing a great job. Well, I've got to put it in open hand. The fact that I've been a gold bug all my life has made me feel very comfortable as someone who likes alternative assets.

The fact that my wife did the real estate part of her portfolio is, again, that's the inflation hedge. When I saw that you wanted to talk with me, I said to myself, okay, why don't I just be naked about it and just say, I don't know. In the same way that I went to the Apple store the first time I bought the app, I went in. There was this fabulous guy at the Short Hill Small. I said, listen, I don't know anything about Apple. Show me everything. And he said, what do you know? I said, no, I don't know anything.

And, you know, there was a guy next to me. There was a kid next to me. He's like, oh, my God, what an idiot this guy is. I'm not afraid of being an idiot. The only way to start, if you're an idiot, is small, and then you get educated, and you become a rookie, and then you become, you know, second and third year. because I am convinced that my kids will think that I'm negligent. There was actually a little dispute between one of my kids. I said, listen, for some inheritance that my dad left,

I was very nervous because of the president, candidly, because I think he's a little erratic. We may disagree on that, but we're disagreeing. I mean, wow, he's a little erratic. So I did not put as much money that my father would have liked into the kid's account as stock for mutual funds. and I now feel I got a chance for Bitcoin because I'm not buying it at 20,000?

Of course. Look, it's a thing where if I'm right, in the macro environment serves as the tailwind, and if I'm right that supply and demand economics are going to remain valid, meaning that that Bitcoin halving is going to have a supply shock, right? And as demand increases, price has to go up.

Then Bitcoin is likely to be the best performing asset in people's portfolio. It's just, it's only a $200 billion asset, right? So it's so small in the global financial system that, of course, if, you know, a billion dollars of capital inflow to Bitcoin versus gold versus equities, you're going to get way more movement on Bitcoin because it's a smaller asset class, right? And so I think that's a key piece of this is it feels like everyone's been talking about Bitcoin for years, but it's still pretty small. Like the world hasn't started to really kind of move assets there. I think that this macro environment, you know, I joke and say the Federal Reserve ran a $3 trillion marketing campaign for Bitcoin, right? And so it's like people are starting to pay attention.

Again, before what happened, before the pandemic, I would have had a nice conversation. Oh, Bitcoin is kind of interesting. Yeah, it's not for me. I think that what really changed my mind was my daughter, my 26-year-old saying, hey, Dad, how are we going to pay for $3 trillion? But it was one of those questions. It wasn't like, how are we going to pay for three? It was like, no, dad, how are we going to pay? And I looked at her and I said, well, we have to raise taxes. She goes, but dad, what are you going to, there's not enough money if you raise taxes. So what happens? And I said, well, we don't know what happens. And she goes, but dad, you're the guy. and i said i i'm not the guy i i i have an idea which is not a good idea about what will happen which is bad and she said well what can i do and that's when i said listen we're gonna get your house get you some gold uh and i did i got it a beach house i mean all these are designed

for what i regard not it's not gonna be apocalypse it's just gonna be not good yeah and i want to hedge against not good i need i expect that there's going to be global warming and I expect that if I bought a house right on the beach, it's bad. So we bought the house, five houses in, okay? That was the hedge against, yeah, it's Ocean Grove, it's nice. That was the hedge against what's going to happen. But that's an illiquid asset that has, I think, a residential risk, particularly if things get ugly, okay?

Which I think is a perfectly, before I would have said, I said, what are you, crazy? I mean, the march of progress. But progress stopped. uh and this is a very serious issue and that the trillion three trillion so i gotta take action and i'm gonna take action after this video the uh my favorite stats are for the last six fiscal years the government has set a new record for federal tax income revenue right so we keep taking in more and more money but the intra-year deficit gets bigger and bigger so it's not it's

It's not an income problem, right? We just keep spending more and more and more and more, and people will debate, what should we spend and what should we not? I don't care. All I know is that when you print that much money, I'll tell you where it comes from. They're going to steal the purchasing power of all the people holding cash. Yeah, I told my daughter to read about Weimar, the Weimar Republic, read about what happened before the Third Reich, how they wiped out purchasing power, and then they wiped out savings. It was a one-two punch. Everyone was penniless.

One of the big reasons why you had the tumultuous, and I'm not saying it's going to happen again, but you had the tumultuous things that happened in Germany had a lot to do with them printing money the way we printed. They were walking around with wheelbarrows. I hope that doesn't happen. But as a student of history, I'm ashamed that I have not acted on what is the first time that I've seen a Weimar-like situation in our country. And I believe in 2011 with the I spoke to the Philadelphia Eagles when they just just had just downgraded the debt. And I said, listen, you don't have to worry. We're the strongest country in the world, blah, blah, blah. Now, it doesn't have to do with whether the strongest country. What it has to do with is we can't pay.

We just can't. So what do you do now? You can go overseas. I mean, that's not my plan. or you can hedge and uh a hedge with i've got the hedge on one side but i don't have appreciation of hedge and that's why i gotta make this move which is why i'm glad i talked with you because for the most part i'm a stock i'm a stock guy i know that i'm a gold guy i'm real estate guy because my wife um but i didn't have anyone to talk to and the reason i didn't want to talk to is because um of the of what i call the portnoy factor which is that is everybody's to speculate it and i'm thinking about 10 years because i'm thinking about when i mean my kids will not the moment i make that move my kids will not be able to touch this until 23rd okay of course so i i

that's i'm certainly not trading i and i'm going to buy it and stay just because i don't want to commit all one level but you know if you know you're not going to be able to touch something at 2030 and it's cash well believe me that cash is not going to be worth what you think it is and i am, I'd like to think I'm a pro. I'd like to think that I have analyzed the situation. But the $3 trillion that we printed changed everything that I believe in. And now if you told me, honest to God, if you told me that I should be buying lakes in Maine, because I would do it. I mean, I'm so concerned. I'm not frightened. I'm not scared. But I'm concerned that I'm not being prudent. And I now think that Bitcoin is proof.

When we get off, I'm going to tweet to everyone and tell them to send you the best memes that they have to welcome you to Bitcoin. And you'll be very impressed with the meme ability. Also, if I walked around with gold in my pocket and you said, welcome me, I'd hide under the rug because then everyone knows I'm walking around with gold. He must have gold coins sewn into his jacket. But this is one that obviously, it's not going to be stolen. I don't mean to push Fidelity. My money's been with Fidelity since 1977, so I have a long history with it. But what it tells me is that when the inevitable happens to me, it will not be like it disappeared.

It will be where the rest of the stuff is, and that my kids will feel that it's like cash but better. Absolutely. Before I let you go, I ask everyone the same two questions. First one is what's the most important book you've ever read? uh Anna Karenina uh because yeah uh Tolstoy because it really is about about love um and about uh health and about tragedy and about how sadly life doesn't work life does not work out and that's other than for Levin that's what that story's about and I want people to read it because many people think that the young people think that life works out and they need to have a

wake-up call that it doesn't and no one writes it better than tolstoy tolstoy is my favorite writer that's a great suggestion uh second one's more fun aliens believer or non-believer uh can i say ghosts you are the second person you're the second person to say you believe in ghosts but not aliens ghosts my um i was growing up and then i know we got just stuff to do uh my cousin you know i never met him was deceased but my cousin was a was a pilot he was a bomber pilot uh and he went it was uh he flew in the great raid of over hamburg and he was shot down it was the hamburg raid you couldn't there were so many planes it was dark he got shot down and he died and my grandma told me that there was a picture of him on the piano had been there the whole time

for the whole war and when she came home it had fallen and that it's impossible to rationalize and i say no it is it was a ghost now you could say well jim you're absolutely nuts but why did to fall i go to a uh my mom and my mom loved this place called the gritty pals uh in venice and that we ended up getting the same room and i swear i saw her in the mirror big mirror i swear i saw her and my kids do too and i genuinely believe in ghosts uh now i don't believe in ghosts to the point where like gay you know when you're past you get to be a ghost i just can't rationalize certain things other than to believe that they're ghosts so i may be certainly ghosts all right that's personal experience can't say anything wrong with that

listen thank you so much for doing this ladies and gentlemen mr jim kramer himself thank you