The Pomp Podcast - #619 Buy Bitcoin, Short Fiat with Saifdean Ammous

Episode Date: July 30, 2021

Saifdean Ammous is a leading researcher, communicator, and educator in the field of Bitcoin, and he has advised corporations on bitcoin strategy, and helped many investors with performing their due diligence on Bitcoin. He is the author of The Bitcoin Standard and has a new book, The Fiat Standard, available for pre-sale now.  In this conversation, we discuss bitcoin, inflation, the importance of debt, hard assets, monetary policy, political incentives, and the transition of monetary networks.   ======================= Public Rec is on a mission to make comfort look good. Their fan-favorite Flex Short is the ultimate crossover short you’ll need all summer long. From the beach to the gym, this quick-drying short has you covered. Comfort starts with a better fit. Free shipping. Free returns. Visit www.publicrec.com/pomp and use POMP at checkout for 10% off! ======================= With 10M+ users, Crypto.com is the easiest place to buy, and sell 100+ cryptocurrencies. The Crypto.com Visa Card gives you up to 8% back instantly, and 100% back on Spotify and Netflix. Also, Crypto.com lets you earn up to 8.5% p.a. on BTC, and 14% p.a. on stablecoins. Get $25 when you download the Crypto.com App with code "pomp". Download the App now: https://crypto.onelink.me/J9Lg/pomppodcast2021 ======================= Okcoin is one of the most popular licensed exchanges. Okcoin is the first to bring new cryptos to market, offering some of the lowest fees in the industry, an easy to use app, and Earn feature--you got to check out their brand new, beautifully designed app! And as of today, they also became the first US exchange to list NEAR. It’s easier than ever to sign up, buy and trade crypto in just 2 minutes on Okcoin with credit & debit cards or just link your bank account to the best new crypto assets. So get started, and go to okcoin.com/pomp

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. Safedine Amos is the leading researcher, communicator, and educator in the field of Bitcoin. And he has advised corporations on Bitcoin strategy and helped many investors with performing their due diligence on Bitcoin. He's the author of The Bitcoin Standard and has a new book, The Fiat Standard, available for presale now. In this conversation, we discuss Bitcoin, inflation, the importance of debt, hard assets, monetary policy, political incentives, and the transition of monetary networks. I really enjoyed this conversation with Safetine,

and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Public Rec. They simply make the most comfortable clothes in the world. No lie. Public Rec is on a mission to make that comfort look good, too. Their fan favorite, Flex Short, is the ultimate crossover short you'll need all summer long. When I moved to Miami, I was looking for a pair of shorts that I could wear anywhere and also go out to dinner without plenty of getting mad at me. And I found them. That's what Public Rec has. From the beach to the gym, this quick drying short has you covered. Comfort starts with a better fit. If you've got free shipping, free returns. Visit publicrec.com slash pomp and use code pomp at checkout for 20%

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most popular licensed exchanges. They are the first to bring new cryptos to market, offering some of the lowest fees in the industry, an easy to use application, and an earned feature. You got to check out their brand new beautifully designed app. It really is amazing. And as of today, they also became the first US exchange to list various other assets as well. It's easier than ever to sign up, buy and trade crypto in just two minutes on OKCoin with credit or debit cards, or just link your bank account to the best new crypto assets. To get started, go to OKCoin.com slash Pomp. Again, OKCoin.com slash Pomp. All right, let's get into this episode with safety. And I hope you guys enjoy this one.

And I can't wait until you get to the end. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Safety, how are you? I'm very good. Thank you for having me. No, thank you for doing this. Let's just jump right into it. You've got a new book coming out,

uh, which is a play on words from the last title, uh, the Fiat standard. Tell us, uh, kind of one, why are you writing a second book? I feel like that's not an easy task. And then two, what, what's the book about? Well, the short answer for why I write the book is that the first one seemed to work. And so, you know, you follow market signals. People like the first one, you give them more of what they like. Um, and it is a play on the title, but it's also more than just a play on the title. It's kind of like a play on the whole book in that I take the, uh, way in which i studied and approached uh the bitcoin standard in which i studied a bitcoin and i apply it to fiat you know um so think about if you were trying to explain fiat as if it was a

digital currency how would you explain it what would the white paper look like uh what's the dev team uh who runs a node how can you run a node if you think about fiat in these terms i think because bitcoin is such an advanced form of money and it was designed by a very brilliant engineer and it's been worked on by a lot of brilliant engineers since then i think it's a great example of everything that you need in order to make a monetary system function and so then you can look at fiat through that lens and you'll get a lot of clarity about how fiat actually functions so that was the motivation for writing this book as i started to think about fiat as another digital currency and i'm trying to explain and understand what it is doing and how it functions it actually

I found it to be very useful as a way of understanding the fiat system. And so when you start thinking about the fiat system, most people think of it as two completely diametrically opposed systems, right? One is transparent, decentralized, open source, programmatic, etc. And the other is basically the exact opposite. Is that your general read on the two systems? Or do you have some sort of kind of more nuance to the comparison? There's a lot to the comparison. So I think perhaps the most powerful tool is when you try and think about how mining works in fiat. So in Bitcoin, we know that the miners solve the proof of work problems, and then they get issued new coins, and there's a schedule for how many coins

they get. In gold, we know that you mine gold by digging into the ground and then refining it. But in fiat, if you ask yourself, how is fiat mined? It's a very deep rabbit hole. And When you start thinking about it and start thinking about the significance in terms of, you know, just think about how much of a big deal mining Bitcoin is. And then you transport, you apply that to fiat and you can see why lending is such a big deal, because the way that mining fiat works is through lending. When you go to the bank and you ask them for a million dollars so you can buy a house, the bank isn't taking one million dollars that somebody else had deposited in that bank and giving them to you. the bank is making mining essentially new Fiat so if they can get you to borrow they get to make new Fiat money that's the equivalent of solving a proof of work problem it's finding a lender finding a borrower who wants to borrow and who fulfills the criteria for borrowing and then

being able to issue the loan that allows them to make more money when you think about it this way the Fiat system begins to make a lot of sense so that's why everybody's in debt that's why in Fiat no matter how much money you get you just keep rolling it over into bigger and bigger debt people don't make money so they can pay off their debts people make money so they can take on bigger debts so individuals are in debt corporations are in debt governments are in debt at all levels municipal and national and everything everybody needs to get in debt because when you get in debt you know if you wanted to buy the house uh with cash if you just had a house and you wanted to buy it with cash well that's let's say a million dollar house but if you're able to

get it uh with a mortgage then the bank is going to effectively make eight hundred thousand dollars out of thin air you'll put up say twenty thousand two hundred thousand up front but then the bank managed to make eight hundred thousand so they can cut you a sweet deal here because it's not like you're uh taking up uh you know it's not like you're taking up their capital they just get to make new capital so if buying a house can be used as a way to mine fiat it's going to be very very profitable for the miner, and they'll cut you in on that. And that's why it makes sense for everybody to buy their houses in debt. Everybody buys their houses and their major expenses. You get into debt and you get a better deal than if you pay cash. Because obviously,

over time, the value of the money declines and the value of the repayment of the loan continues to decline. So when you think about, let's talk nation state debt versus individual debt and corporate debt. There's different players in the market that are all taking on debt. Is it fair to say it's all the exact same structure? So the government takes on debt because they're going to be able to pay it off with cheaper dollars in the future, same as the individual buying that house or some other good? Is that kind of a fair way to categorize it in your opinion? I mean, it's not exactly the same because it depends on your credit worthiness and it depends on your political connections. And so the issue here, of course, is that this isn't

an advanced and fair system like Bitcoin, where anybody can solve the proof of work problems and get rewarded. And the only way to guarantee that you can make more solutions for the proof of work is to mine more efficiently and have more miners and have more electricity. Well, in fiat, it doesn't quite work that way. In order to mine fiat, basically, you need to be well connected to the Federal Reserve, to the government, to the central bank in whatever country you're in. And the way it works is government obviously gets to borrow at the lowest rate because government has the advantage of being able to tax and inflate the currency to pay off the debt. So therefore, you'll see that they get to borrow at the lowest rate everywhere. And then everybody

else's interest rate will be a little bit higher. So effectively, you know, people are mostly probably familiar with the term the Cantillon effect. And the Cantillon effect refers to the fact that when you print new money, the recipients of the new money benefit at the expense of the people who are holding the old money. And the people who receive it earlier benefit the most. And then as the money trickles through the rest of the economy, the benefits decline. And then the people who receive it later don't even benefit from it. They are hurt from the inflation that it causes. So in the case of fiat, the way that the Cantillon effect works is essentially through interest rate. People who get lowest interest rates on their debt benefit, and so that's

government and the biggest borrowers in society, which are primarily the biggest financial institutions and banks, and then the bigger corporations that can borrow from the banks at lowest interest rates but then as you move forward as you move towards you know the uh hoi polloi and the peasants the interest rates go up and you are effectively uh missing out on the benefits of this you're not being able to catch up with inflation if you think about inflation in terms of cpi then you could get the impression that a lot of people are able to keep up with inflation but of course that's entirely dependent on the kind of goods that you include in the cpi and that does not include the desirable goods that are highly competitive because they're rare you know you

can't have miami beach real estate and manhattan real estate in the cpi because that's always going up much faster than the cpi and the best health care the best medicine the best all the things that are very scarce by their nature because they're very high quality all these things are rising at a much faster pace than the cpi and so the only people who can keep up are the ones who are the best connected. So essentially government and the big banks and the people who run these things. So we spent the first half of the show talking about what I call inflate gate, which is just the controversy around inflation and what the real numbers are. Do you have an opinion in terms of how off the official numbers are? Or maybe you believe that the official

numbers are correct? No, I think they're definitely off, but I'm definitely with Michael Saylor. I think Marcus Saylor is absolutely brilliant in the way that he explains inflation as being a vector rather than a scalar quantity. So you can't just summarise inflation with one number. You can't say that the economy's average basket of goods has gone up by 3% this year or 5%. It doesn't mean anything because that's entirely dependent on what you include in the basket of goods. And so you're essentially just measuring what you've included. But I think a more relevant metric is look at goods individually and you see the rise in the individual prices of goods then you can see that then you can portray inflation as a vector where each each good

has its own inflation rate and so in that respect you'll see that inflation is very high in prime real estate as i was mentioning it's very high in luxury goods it's very high in good education good credentialed education. All of these things continue to rise at much higher rates than the CPI. What is rising at this rate of the CPI are the main things that are included in the CPI are essentially things that are low quality that are available because that don't rise, that are not very responsive to inflation because they can be produced at a large scale very quickly in response to increases in demand. And so the best example in my mind is like junk food. there are very little limits on how much more junk food you can do there are a lot of factories out

there that can just churn out very large quantities of junk food and so if there's an increase in inflation they can increase the production and the price won't go up by much the same i think is true of cheap goods you know mass-produced cheap goods these things if you look at them you know you'll see that the rise in their prices probably are similar to what you get in the CPI, 1%, 2%, 3%, 4% per year. Digital goods, on the other hand, they get cheaper every year. So their inflation rate is negative. If you look at the cost of disk space or the cost of using Google or using YouTube, all of these technological things keep getting better and they keep getting cheaper over time. But that's just technology that's advancing.

but I think the real inflation shows up in the scarce goods. And I think another brilliant insight from Michael Saylor is you see it in bonds. You see it in how much do you have to buy? What is the size of the bond that you need to buy in order to be able to afford retirement? And so if you're thinking of retiring and you want, let's say, 20 years of income, how much do you need to buy, how much bonds do you need to buy for 20 years of retirement? And given the collapsing yield of bonds, the price that you need to spend on these things is enormous. And so that's going up much faster than the CPI. So quibbling over the little numbers of, you know, is it two or 2.5 or three or 3.5 or five or whatever, is, I think, kind of missing the big picture. And the big

picture is that for the things that matter, for the things that people actually want, for the things that can secure their future, you know, a house in a good neighborhood, a good education for your children, a house in a neighborhood that has a good school, retirement, all of these things, they're just getting expensive at a much faster rate than the CPI at a rate that closely approximates the increase in M2 in the money supply. When you think about what to do, is it just go buy bitcoin is it by real estate is it by gold other types of commodities um you know i think you and i are both sympathetic to the view of the world that like inflation is uh much higher um there's unlikely to be anything kind of stopping this from continuing just given the

macro structure um and and kind of uh we talked earlier about like the people who are in charge have no choice they know that they have to solve short-term problems at the expense of long-term damage because that is what the incentive system drives so it's not them individually their fault it's just kind of the the system that they're in but what does the individual do in your opinion so i guess the moral of the bitcoin standard you know the lesson of the bitcoin standard was that bitcoin's number goes up and therefore by bitcoin i think the uh the lesson of the fiat standard is fiat's number go down fiat has number go down technology and the best way to protect yourself from that is to short fiat and to borrow fiat. And I think it's given me a lot of appreciation.

And I say this as somebody who used to think that debt is just a bad thing and I don't want to get into debt and I want to just have savings. And this is why Bitcoin was such a great find for me because it was a form of saving that worked because before that you could use gold and gold was not very good. You know, it's been basically flat over the last 10 years. So when I found Bitcoin, it was very good because it's a form of saving that you can use. But now I truly understand that under a fiat system, if you're not getting in debt, you're essentially subsidizing everybody else for getting into debt. And so if you're the sucker who buys their house in cash, you're overpaying for the house and you're subsidizing everybody else who's buying their house on a

mortgage. Now, of course, that doesn't mean everybody should go out and max all their credit cards and get all the debt that they can um you know the the flip side of this is that it's not like holding bitcoin you know holding negative fiat balances is a highly stressful thing it means you have payments to make and you need to be able to make sure that your cash flows can cover all of your payments because if they don't you could lose your collateral you could get kicked out of your house or whatever it is so um it's a risky business but basically this is um i think this is the lesson of the fiat standard that it puts everybody on a treadmill where you need to be constantly highly stressed and making payments and close to insolvency

and highly vulnerable to any kind of shock that can affect your business because you can't have savings and you need to have uh you need to have debt and so everybody's more fragile and it's um in a sense it's like walking in a field of landmines you never know when something might happen and your business uh misses a couple of payments and then your business is gone so you know you have to be very careful with it but i think i i see the case for getting into debt in fiat and i think you know i used to live in lebanon and i saw the implosion uh of the lebanese economy and you know it's been absolutely terrible for people who had savings in the banks and it's terrible for people who lost their jobs but there's one group of people that

made out fine out of it which is people who had lebanese lira denominated debt so i have friends who are essentially uh paying off the remaining of you know the next 20 years of their mortgage they're going to be paying off uh something like 10 or 5 of their original payment because their payments were denominated in the lira so this is really the way to protect yourself against uh fiat and if you listen to what michael saylor says you know he says you should not sell your bitcoin ever you do what rich people do and apparently this has been something that rich people have known for quite a while and i've only just discovered it now which tells you a lot i guess uh but this is how rich people do it you know and this is what also robert kiyosaki uh

talks about. You want to get into as much debt as possible at as low a rate as possible, as long as you're sure that you can cover payments. And then you don't have to sell anything. You keep accumulating hard assets. That's the way to do it. Accumulate hard assets and get into debt in fiat. That's the cheat code, basically. You want all your assets to be hard or Bitcoin, ideally, and you want your debt to be fiat. Yeah. What you're basically describing is the whole idea of, you know, especially in America, parents always telling people like, go get real estate. Everyone makes money in real estate. And really the entire secret to real estate is you're borrowing money to buy an asset. And then if you're renting it out, using somebody else's money to make the

payments and therefore maybe you have a down payment or, you know, kind of one time payment or some small percentage, but you're essentially using financial engineering and this mechanism to end up owning the hard asset, but it's either borrowed money or somebody else's money. And then you end up with the asset at the end like that has been a time-tested strategy for you know literally decades if not centuries um now it's just as people start to understand it from a currency perspective in the fiat world and also see something like bitcoin michael saylor is executing uh you know what i think most people would have referred to as like this speculative attack uh you know converting that fiat into a hard asset but really it's no different than if

he was borrowing money to buy real estate he was a real estate business right i mean it's almost identical to you know a very similar thing yeah and the difference of course and that's kind of the um the the conclusion of the book is that bitcoin is real estate on steroids you know real estate does 5 10 15 percent a year or something like that bitcoin's been averaging 200 a year over the last 10 years and this year you know bitcoin only needs to end the year at 51 000 in order to continue the 200% annual growth rate on average over the last 11 years. So if this trend continues, I think that's going to be the most interesting question in the future, which is how do we deal with what happens when fiat is inflating because everybody's borrowing fiat

because they're buying Bitcoin. And so people are accumulating Bitcoin by borrowing fiat. I think one kind of perhaps sad conclusion from it is that the people who have fiat privilege are going to transfer their fiat privilege into Bitcoin privilege by borrowing large amounts of fiat at low interest rates and using it to buy a lot of Bitcoin. I think another potential possibility is that we might get some kind of government restriction on the ability of people to borrow and buy Bitcoin. So they may not clamp down on Bitcoin or make Bitcoin criminalized, but they might make it so that if you have Bitcoin, you don't get to borrow. You don't get access to capital markets. I think we could perhaps see something like this at some point. But I think because, you know, otherwise it's just you can't really see how else this would go.

You know, people are just going to see more and more Michael Saylors spring up and they're going to all want to do it. everybody's going to max out their mortgage and their credit card and everything that they can do so that they are in as big a fiat debt as possible so that they can stack as much stats as possible you know that just means much more dollar inflation and much more um bitcoin number go up so it'll be very interesting to watch how this unfolds over the next few decades so you're pretty convinced that they're going to stop people from borrowing to be able to buy No, I don't think so. I mean, I'm agnostic about the possibility. I don't know what the probability is, but I think this is one kind of attack vector. Yeah, it's an option. I think it's one way they could attack Bitcoin.

I think we're probably past the stage where they could just criminalize it like drugs and go after people door to door to check if they have Bitcoin. But this is perhaps one way in which the empire can fight back. Yeah. When you start to think about kind of the fiat system, what do you expect the conclusion here? Is there like a showdown, the final boss, that type of thought process? Or are you more sympathetic to the idea that over time we'll get more Cynthia Lummises in the Senate or Warren Davidsons in Congress? And they'll kind of get educated and they'll realize, hey, look, you know, this is actually a pretty good transparent system and they'll become proponents and advocates. And over time, you just need more and more of those people in positions of power and influence and they kind of start the slow adoption. Like, is it more confrontational or is it more kind of over time you just slowly get people familiar and educated with the asset and with the system and that leads to the ultimate adoption? i think the uh you know in the book i discussed both both possibilities and um you know i don't have a crystal ball to be able to tell which one's going to happen but i'll say up until

covid hit i was leaning much more toward the fact that this is just going to be and that was kind of the conclusion of the book that i was getting at when i first started writing the book which is bitcoin is the peaceful monetary upgrade it's like you got a smart software engineer into your house And he took out your old clunky Windows 7 or whatever it is that has been messing up everything in your life. And he just uninstalled it and gave you a brand new operating system that works. In a sense, you could think of Bitcoin as being like that. And I could see, I could make the case for why Bitcoin allows us to unravel fiat relatively peacefully. Because people generally think, all right, well, Bitcoin will lead to people dropping demand for the dollar and then people not holding as much dollar.

And so if demand for the dollar drops, then the price of the dollar drops and then we get hyperinflation. But that's not exactly how hyperinflation happens. Hyperinflation usually happens because of an increase in the supply. You know, if you look at places where the currency collapses, it has always coincided with massive money printing. There's always a point in the money supply where it does the hockey stick and then the value of the currency starts crashing. So you never get hyperinflation because demand declines. If the currency drops 95%, that's not because people in the country had dropped their demand for the currency by 95%. It's because the quantity of the money supply has gone up tenfold or something like that. so um in that sense i think people might be missing one thing which bitcoin does which is

potentially while yes it might lead to more and more uh debt creation but there is a case to be made that it might actually lead for the all to the opposite which is that um people start stacking um start holding bitcoin instead of holding debt assets so at the end of the day in order for you borrow you need somebody to lend and um usually you know if you think about why there's such a huge uh supply of uh loans out there it's because people want to hold debt as an asset on their balance sheet and particularly bonds and so if you run a company you have your cash balance or your treasury reserve usually you have some cash but you usually have a lot of bonds that's what people use bonds for because it doesn't have equity risk and it's senior to equity in terms of uh if there

is um a bankruptcy so it's a more safe asset to keep on your treasury but if people start realizing you know what we don't want to hold bonds we don't want to be lenders and we'd rather just hold bitcoin if and that's kind of the the other side of the michael saylor strategy which is all right he's borrowing himself but um he's not holding treasuries anymore and so there might come a point in which uh you know the demand the supply for people like michael saylor to borrow declines because everybody's doing a michael saylor by stacking bitcoin rather than holding bonds and so so we get a decline in the demand for the dollar because people are not holding dollars and they're holding more uh bitcoin but we also get a decline in the supply of dollars because

people are not borrowing as much people are not issuing as much loans because they're just holding on to bitcoin and so that way we can kind of make the fiat house of cards unravel peacefully where you could think you know you can take out take apart a house of cards if you take uh one card supporting the other you can remove the two of them at the same time you do it at each level and then you could unravel the house of cards neatly and put it back in the um in the in the card box uh and that might be what bitcoin does it increases demand for bitcoin decreases demand for holding dollars and decreases the supply of new dollars that are created and so what happens is that the price of bitcoin goes up the bitcoin based economy goes up and the fiat-based economy

starts shrinking in size relative to the bitcoin based economy until it's uh essentially shrinks into nothingness and there is a case to be made i think for the fact that this can unravel peacefully because when you get hyperinflation the reason you get hyperinflation is that at any country in which there's hyperinflation it's not just that the currency is being destroyed by the central bank it's also that the currency is being destroyed and people have no alternative so people in lebanon can't just switch to the dollar they can't just have an entire financial system that operates based around the dollar and you know just get rid of their leaders buy dollars and start over again and start doing all of their accounting in dollars that's not possible you don't have

dollar banks in lebanon but with bitcoin and you know still admittedly bitcoin is still a little too early to help a place like lebanon because you don't have the infrastructure but in five years 10 years time as inflation becomes a bigger problem you have a ready-made alternative and so inflation doesn't have to be catastrophic in the long run uh among the more advanced economies that are probably gonna be a few more years before they experience a very bad um inflation outcome and at that point bitcoin is just a ready-made lifeboat lifeboat slash space rocket where you know once it finally dawns upon you that um this fiat boat that i'm on is not doing very well you just upgrade you move to bitcoin you start getting paid in bitcoin you start making your payments in

bitcoin and more and more people do this and then you know maybe the transition you know you people lose some money in the transition but as long as you're able to upgrade to an operational system that is functional, then maybe that doesn't have to be catastrophic. But I think, you know, since I started writing the book with the coronavirus hysteria that has happened and the insane way in which governments have responded, both in terms of their monetary policies as well as their public health policies, I think we may be in for a rougher landing because you know, they're printing so much, the money printer is going very fast that who knows what's going to happen. You know, we may be witnessing very fast inflation before Bitcoin is large

enough to support a very large number of people before people can make this transition. And so we might not be able to unravel that house of cards very smoothly. Joe, John, what questions do you guys have? Yeah, I can go first. Thanks for doing this. I appreciate it. I was looking at kind of some of the information on the book website and I got a laugh out of Michael Saylor's recommendation that he he said the best recommendation or the best compliment I can give is that I read this book and then bought four hundred and twenty five million dollars of Bitcoin, which I thought was probably the best compliment you could get. So that's awesome. But my question is kind of was kind of answered, I guess, a little bit previously. But I want to see if you can kind of go a little deeper on it, which is about 20 percent of American adults currently own Bitcoin here in the United States. So I'm curious, like, how do we get to 40 percent? How do we get to 60 percent? How do we go higher? Is it strictly education? Is it regulatory changes? Is it adoption by public facing figures, maybe politicians, et cetera?

Just how do you think about that? First of all, I really doubt it's 20 percent. I think I saw a Gallup poll that said 6%, and I think that's probably more realistic. But yeah, in my mind, I think the way that Bitcoin gains in adoption is through number-go-up technology. It's the best advertisement. It's the value proposition. And I think the more bad monetary policy is, the better of an advertisement it is for Bitcoin. And I think this really is the best advertisement. I think, you know, all the work that we're doing on Twitter,

memeing and posting all day is great. I salute the effort of all the meme warriors out there. But I think realistically, you know, the most powerful meme is the fact that the price goes up. The most powerful meme is that you hear about Bitcoin and you hear about a price and then you hear about a crash and then you gloat and you're like, it was at 1000 and now it's at 200. What a stupid joke. And the next time you hear about it,

it's at 25,000. And then it smacks you in the face and then you start paying attention. I think that's ultimately, I mean, you can't buy that kind of marketing. There's just nothing like it. It's why I call it the unique and proprietary number go up technology. Nobody can copy this. I think that's really what it's going to take. And I think another one of powerful advertisement for bitcoin i think is going to be central bank digital currencies because it's um it's such an enormous concession of frame by the central bank it's amazing like they've just gone oh yeah you guys have better technology but it's fine because we're going to make it better than you um so they've just basically admitted that our technology is better than theirs and that's just forcing a

lot of people to start to think more about bitcoin and i think when they roll out these central bank digital currencies, which are going to be, you know, essentially bringing the Soviet Gosbank model in the People's Bank, the central bank of the Soviet Union, in which everybody in the country had an account with the central bank. And it was one central bank that, I mean, it was literally a central bank. There was just one bank and everybody had an account with it. And it controlled all aspects of your life. If we have that, I think, you know, you can imagine just how much politically that's going

to be abused by the um people in power who are going to use it to impose all kinds of ideological positions that they have so you can say goodbye to buying meat or buying fuel with your uh central bank digital currency because we all know that you know meat is boiling the oceans and uh your car is causing the um himalayas to melt and the oceans to acidify and you're killing all the fish so you're going to be banned from doing that and people who want to stay warm in the winter and people who like to eat meat are going to have to start looking into serious alternatives and that's you know if if the number go up misses them then i think the central bank digital currencies are going to get us all the rest i like that john what you got yeah thanks

for doing this uh congratulations on your new book i know that's not an easy feat i've never ever wrote one myself so i'm excited to uh excited to read it but i'm curious if you could elaborate kind of what you think about debt um versus bitcoin you talked about some people even taking it out right what you think about it in your like personal portfolio and then what people should think about it i know everyone's situation is a little bit different but um i hope you can talk about that a little bit yeah i mean honestly i i hesitate to give financial advice because i'm just not very good at that stuff i'm not a finance person i'm an academic who reads old old books and tries and to get the insights from those books and apply them to modern things and i'm

very hesitant to give people advice um i'll say like you know the case for stacking sats as much as you can is indisputable and you just hold bitcoin for four years at least and there's no way that you're going to be down. I was just running some numbers today. There's never been a day in which Bitcoin was down on a four-year timeline. The lowest it has ever been at four years was 4.2 multiple on a four-year basis. And the average has been something like 300x. The average over the last five years is around 20x. So basically, if you hold Bitcoin for four years, you're going to get a 20x or so. And if you're stacking, you're roughly, you know, if you're periodically stacking, you're going to be doing a 20x over four years, which I think is

phenomenal. And, you know, it's kind of ridiculous to be trying to beat that and to maximize on it. But, you know, people always try ridiculous things. I think there is a good case perhaps be made for getting into some debt in order to stack more bitcoin as long as you know for sure that you have um good cash flow that can cover it and that you have good collateral so you wouldn't want to take on large amounts of debt that could get you liquidated but i think you know perhaps a small amount um you know and for most people this is likely to be best achieved through getting a mortgage um if you if you're considering buying a house a cash outright versus buying it via mortgage i think you'll be able to probably stack more sats if you well almost definitely you'll

have more satoshis if you are borrowing to buy the house rather than paying in cash i think so there probably is a case for integrating debt into into your portfolio more than just stacking stats and i think because ultimately if you're not doing that you're effectively subsidizing people who are doing like you're forced to play this game because there's only one currency and there's a monopoly central bank and it's enforcing its interest rates and you have to play that game so uh you either play it by subsidizing others or you take advantage of it yourself and you try and get yourself a piece of the pie safety when you start to think about um kind of the milestones moving forward are there specific things that you're looking for uh to signal either adoption uh cracks in the

armor of the existing system uh or potentially that uh that harmonious uh transition as more and more people start to uh to understand bitcoin or is there anything that kind of sticks out in your mind as these will be uh kind of milestones maybe a public company buying bitcoin putting on a balance sheet was one of those but are there any others that you look at yeah i think public companies is a big one i think perhaps the next big um the next big milestone ahead of us might just be the point at which bitcoin becomes bigger than u.s treasuries at this point the u.s debt is around 29 trillion dollars and bitcoin is around uh 800 billion dollars so there's still about a 30 40 fold difference so bitcoin is only about 2.5 percent of the uh of the treasury uh of the

u.s treasuries and i think this is significant because when people are going to be thinking about treasury reserve assets that they want to use they're always thinking about what is the most liquid asset and the us treasuries are um you know the liquid the treasury asset of choice because they're the most liquid it's a 30 trillion dollar um liquid market and uh if you have some treasuries you're not gonna be uh in a lot of trouble trying to sell them relatively and at least that's how how it's worked over the past 50, 60 years of fiat. But I think the moment when Bitcoin becomes bigger than the treasury market, and realistically, Bitcoin doesn't even need to become bigger than the entire treasury market because the entire treasury market has a lot of different maturities.

So it's not exactly like you're buying one good, like one US treasury bond is not equal to one US treasury bond. One of them has a five-year maturity that was issued yesterday. The other one has a 15 year maturity that was issued 10 years ago. So they're different in and they all have different markets which they're trading. So Bitcoin is just one asset. So one Satoshi is one Satoshi. And so it's already bigger than big chunks of the US Treasury market. But when it starts becoming comparable, and when you know, when it's at 10 $15 trillion, and Treasury market is at 30 i think a lot of people are going to pay attention to it because at that scale you can get more liquidity by liquidating your bitcoin uh you know you can you can sell your

bitcoin and expect less slippage with your bitcoin than you would with treasury bonds and i think that's going to be a major turning point at that point you know if bitcoin has been around for 15 20 years or so and it has a liquidity that is uh close or comparable to the size of the us treasury market at that point it's going to be very hard for cfas across the world to justify not taking a position in bitcoin at that point it's going to really just be the bitter dead ender no coiners that are uh you know stuck out in um in in fiat land and refusing to deal with it but vast majority of pragmatic people are just going to recognize this is a much better asset And I think might be a major tipping point.

It might really be a major tipping point. I tend to agree with you, which I think my brothers do as well. Before we let you go, where can we send people? One, obviously, to follow you on Twitter, but also to buy the new book, The Fiat Standard. Yeah, you can preorder it right now and read it. You will get the full draft of the book. It's being sent to the printers soon. book will be out in december but you can read it right now if you pre-order it you can pre-order

the digital copy or the audio copy or the physical copy and you can also support my self-publication effort by buying a signed copy and getting your name listed as a supporter in the book and you can do that on my website safedean.com and for that page in particular just go to slash tfs safety.com slash tfs for the fiat standard so there you can pre-order the book and you'll get the digital copy today and you'll be able to read it it's not entirely final but it's very close to final awesome well i highly suggest people go check it out first you ever read the bitcoin standard i suggest that if you uh haven't yet pre-ordered the fiat standard definitely suggest you do that as well thank you so much for for taking the time to do this i literally could

talk to you for hours uh i feel like you just got a great uh great grasp of what's happening in the world and kind of where we're going so please keep it up and we'll do this again soon awesome thank you so much for having me guys have a good day thanks sounds good see ya