The Pomp Podcast - #718 The Inflation Game w/ Jason Williams

Starting point is 00:00:00 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. Jason Williams is an entrepreneur and investor. He's the co-founder and partner at Morgan Creek Digital. In this conversation, we discuss Bitcoin, inflation, real estate, using debt wisely, the bull market, and what young people should think about financially. I really enjoyed this conversation with Jason, and he's always hilarious. So I hope that you enjoy this as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Crypto.com. They're helping to mainstream the crypto industry, signing major global partnerships

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Starting point is 00:03:32 or nyc coin all right let's get into this episode with jason i hope you guys enjoy this one 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. Jason Williams. Yeah, what's going on, guys? No pit vipers today. So that must mean that you're serious. What's going on with all this inflation stuff? Well, just to start, I said I wasn't going to answer to anything other than

Starting point is 00:04:14 my true title. Did you see my tweet that I sent to you? So I think we should begin correctly. What is your true title? Hold on. Let me look real quick. Do I even want to know what your true title is? Hold on. Hold on. Oh, yeah. I would like to introduce Jason Williams, the top 10 bestselling author in macroeconomics, international finance, Mr. Going Parabolic Guy, Jason Williams, is here with us now. Can you please tell us about inflation? Yeah. I think it's important to be humble, first of all. So I wanted to make sure that people understand that about me. I'm just a humble guy trying to make a buck, wrote a little book. It's doing well, Ray Dalio. You are behind me, behind me on that list.

Starting point is 00:04:57 I'm with the sovereign individual. All right. So what's going on with inflation? No, this is crazy, man. Like, you know what, Pomp? This number still doesn't seem real to me. So this is like the highest inflation, CPI inflation we've seen in like 30 years. But I don't think it's right.

Starting point is 00:05:13 I think this number is north of 14%. I think I heard you and Saylor talking a little bit about this. I mean, what's your guys' impression of this? But, you know, I think the number is higher than that. Yeah, the part to me that feels like it's so misleading is that when you go to the store, right, whatever store you go to, if it was two, three, four, maybe even 5%, I don't think most people would actually recognize 5% inflation, right? in terms of if i go to the store and let's just say i'm buying uh a ten dollar you know a piece of food or something that's ten dollars and fifty cents i don't think i really noticed that and maybe some people do maybe some people don't but that's not like a very material thing but if i go

Starting point is 00:05:57 to the store i thought it was gonna be ten dollars and fifteen whoa that's a lot right people are saying that oh i went to chick-fil-a and it was eighteen dollars right oh i went to go get coffee and coffee's up 88% according to the official numbers. And so it feels like, again, 5% is material from a percentage standpoint, but if you're buying kind of everyday items, I don't think you feel the 5% with like sticker shock. Yeah, so check this out.

Starting point is 00:06:24 When you roll all that up, look at housing, lumber, copper, all the components that you need to build a house. People are sitting on their houses if you're so fortunate enough to own one. and you're like, oh, wow, the price of my house is up 30%. I'm doing well here. Well, you have to remember, if you sell that house and want to buy another house, that house down the street's up 30% also. There's the inflation. The inflation's baked into that. So the poor, the middle class,

Starting point is 00:06:54 those who don't own a home that want one, you're getting rapidly priced out of a market. Rich people, they don't hold cash. They hold assets like houses, et cetera. I was going to say Bitcoin But, you know, they're laughing all the way to the bank. They don't have cash. They get these low interest loans. They have assets that do well in these inflationary environments. And really, it's the poor and I'd even say the middle class that suffer in this environment. It's really bad. And also, gold sucks. I thought I was coming on here with Peter Schiff because when I clicked on the room, it said pump and Schiff. I was I was like salivating like it was like Pavlov's dog. Someone was ringing a bell. I was over here like, oh, man, I get to go after this dude and start talking about how gold is down 77 percent in 12 months against Bitcoin down 13 percent just this month. That is some garbage. Gold doesn't work, folks. i i was trying to get him to come on uh today as well and uh bring it where's peter ship i was not

Starting point is 00:07:57 gonna bring you guys on together but i was going to bring him on uh but he he uh he's busy today uh he said uh and he said we could talk about inflation tomorrow he said it'll still be here which i appreciate uh all right so let's talk about what uh what people can do like one of the things that uh i think a lot of folks who watch this uh say this is all right cool i hear you guys, right? Inflation is here, it's high. What are some of like the really basic things that you either you've done, or you've seen people do that you're like, this is probably pretty smart, low risk things that you can do to protect yourself from this type of inflation? Man, look, you know, I think about stocks, bonds, currencies, commodities all the time.

Starting point is 00:08:39 I put everything against Bitcoin, I started to denominate everything in Bitcoin, The fact that most everyone can participate in owning this pristine asset, this is about buying Bitcoin, understanding it, buying Bitcoin even before you understand it. And that may sound like incredibly naive investment advice, but I'll claim that. I'm telling you to buy Bitcoin and learn along the way. This thing is so important. And this moment is so valuable to you. Bitcoin's at $68,592 right now. I still think it's incredibly undervalued. It is the inflation hedge. It is the alpha amazing store of value asset. And I believe down range a bit, it's good money. It's money that regular people can just hold on to. It won't be inflated away like your dollars have been designed to do. Dollars are not designed to hold. They're not designed to save. They've been designed to spend and be inflated away. And watch out for CBDCs, central bank digital currencies, because I believe they're going to program that digital money to actually expire, to be a surveillance tool. There's so many weird things going on right now. Bitcoin should be your focus. Learn about it. Own it now. Learn along the way. Don't sit here and say, I have to understand Bitcoin in totality before I make an investment to own it. I think that's a mistake. When you think about real estate or some of the legacy assets, do you see people selling those right now? Or are they holding them and barring them against them? What are you seeing in those legacy assets? Yeah. So in my circle of friends that are real estate investors that actually own 100 percent of it, like it's not a mortgage piece of real estate. Let's say it's a it's a tier one or tier two piece of real estate. So it's got a very well capitalized tenant. If it's an income producing piece of real estate, commercial piece of real estate. the people that I run with and myself included are taking mortgages against those properties

Starting point is 00:10:55 and we're buying Bitcoin with it. So, you know, from my perspective, I'm trying to unlock equity in these legacy assets that I was holding, because if I can borrow money, you know, whether it's just a traditional line of credit against an investment account or against a piece of real estate, like you've lifted as an example, and I can get that money for sub 3%. And that's the numbers I'm being quoted. And I can buy an asset that's going up 171% year over year, projected out over a decade. I think that's a good trade. The question you should be asking yourself is how much money can I borrow to buy that asset that's outpacing by like 160% plus? Yeah. One of the things with the real estate as well that seems to be taking hold is some of these cities, but Miami is a great example, but there's others as well. They've just seen skyrocketing prices. And there's almost a situation where if somebody was in the Miami market for 10 years, 15 years, I never thought this piece of property would ever in my lifetime get to X price.

Starting point is 00:12:09 but it went up 300%, you know, in some period of time. And they're just dumping, they're just like, hey, just get me out of this thing and forget even borrowing, I guess, or any of it. Like they just can't believe the prices. Now it remains to be seen, will the prices continue to go up? Well, is this, you know, the top or near the top?

Starting point is 00:12:23 We'll see, but it's pretty interesting to see that you're almost getting legacy real estate investors capitulating in some markets because they can't possibly believe that the asset price has gone that high, you know, during their lifetime. Yeah, Pop, I think it keeps going. I mean, like play it back.

Starting point is 00:12:38 Where is the inflation being hidden? Lumber, switchgear, electronics, wiring, plumbing, heating and air conditioning units. We have all kinds of weird supply chain issues that are global, and they're impacting these markets now. So the inflation is being hidden in these assets. If you hold them, you can trade them and make big numbers. Where do you put your money once you flip out of those assets though? So I don't know. I don't think it goes away. I think they start the money printer up again next year. And stocks only go up and Bitcoin is number go up technology.

Starting point is 00:13:19 Talk to me about Bitcoin and where we are right now. We hit $69,000 this morning. what uh what do you think about bitcoin and where we are yeah i was on the phone with drake drizzy drake this morning and you know i just need to hit 69 420 so i can hit a big smash buy i'm excited about that but man we're not even close to where i thought we'd be by the end of the year you know i was saying big time six figure bitcoin by december 31st i still believe we go there i think the FOMO is hitting so hard right now. And you pop 70K, 80K. I think the air gets out of this and we go parabolic. And then there's all this anti-gravity. People are floating around.

Starting point is 00:14:07 And I'm trying to high five you and your 17 brothers. And we're just all high fiving each other. It's just crazy. It's a bunch of Poplianos. It's all these hands. And we're just clapping. all these questions you guys got high five jason uh what what are you doing personally are you just buying as much bitcoin as possible are you buying more real estate just talk through what you're doing with uh seeing these inflation numbers yeah so um i've been mortgaging real estate i think i talked to you guys about that before so i kind of call it like the vampire attack of your assets so if you have assets that have been traditionally illiquid that I have avoided taking leverage on simply because I'm a retired guy and I only have so much cash flow, so I can't really take on a lot

Starting point is 00:14:55 of debt and increase or decrease my debt to income ratios. I've started to do that though and borrow against the real estate. So that's level one. Level two, I'm selling assets to buy more Bitcoin. Three, I'm trying to get back into the job market. Four, I'm trying to get a liquid venture unlocked if I can, so that I can flip that into Bitcoin holdings. But everything I'm doing, you know, historically investing in stocks, bonds, currencies, commodities, my time, everything is going to Bitcoin. It may sound foolish to people listening to this to be so focused on one asset class. You're the fool, son. You're the fool. Jason, I saw you tweeted a few, maybe it was weeks or months ago at this point, but you bought a beach house or a vacation

Starting point is 00:15:46 property. And you talked about how much it would be worth if you had invested in a Bitcoin. Do you regret that or are you having fun at the beach? No, man. I mean, I'm having fun at the beach, but I thought we were friends. You tweeted it. And let me describe what happened. So this was a cash transaction but at that moment i was going to buy bitcoin and i sat down i was talking to the fam they were like you know big dog big papa you know rick ricky rose we want a beach house i was like all right i know where you're going and it wasn't that much it was 1.4 million dollars but at that time boys bitcoin was ten thousand dollars so i literally was going to buy 136 bitcoin i didn't do it got the beach place having a good time but when you galaxy brains bring up that

Starting point is 00:16:36 event doesn't feel good take 136 times it by 68 557 that number is probably north of 10 million dollars and that's you know one year so that that doesn't feel good i'm trying to live a life that i hold bitcoin and i have chairs in my house you guys know that meme sell your chairs by bitcoin we as bitcoiners have to figure out how to have ferraris and chairs and a beach house and our bitcoin it's probably through some borrowing mechanisms uh that become more sophisticated and more traditional in the future so holler at me fidelity let's do this let me let me borrow against my bitcoin by having to give it to some shady dark web guy john what do you got what's up, Jason. So you're obviously not very diversified at this point in time. You're very

Starting point is 00:17:30 convicted into Bitcoin. What do you think about what's going on in the stock market right now? We're seeing all time highs all over the place. Do you think this will continue into the next year and the next five years? Do you think kind of a crash is coming? What are your thoughts around that? Yeah, I was one of those people who thought that, you know, the stock market was going to have a big correction in 17, 18, and I exited the stock market. I was really heavy into real estate and illiquid venture. So I'm not as focused in terms of my investments in the asset class of Bitcoin as I'd like to be. I'm not 100% in Bitcoin. I'm getting close to 50% of my net worth in Bitcoin, which is really cool. But no, I think that the stock market is a protected class

Starting point is 00:18:18 now, whether it's a Republican political party, Democrat political party, they know how to turn the money printer on and they will not let that fall on their watch. There's no advantage to allowing the stock market to drop. You kind of lose your place in office. So it's a political pawn on the chess game of running the United States for four to eight years. Stock market's a joke gotcha do you think the stock market or bitcoin's price goes down first oh that's a tough question because there's one lead the other yeah well i was gonna say i think bitcoin's price going down is an early indicator that the stock market will follow actually my my my experience says that have you do you agree with that pop yeah i think that uh they're definitely have some

Starting point is 00:19:10 relationship i don't think that there's as high of a correlation as people look if you look at a pure correlation you know bitcoin 0.15 or so correlation which is pretty low uh but what i definitely do think happens is there's an element of bitcoin likely is the leading indicator just given that it's 24 7 365 there's no uh sorts of circuit breakers it's more of kind of a free global market and then the stock market kind of follows from it you see on the weekends bitcoin price runs, then stock market opens. And then there's some, you know, movement in the individual assets themselves. So I definitely think that Bitcoin goes first and stocks go second. But I don't think it's a correlation in the sense that people think of everything goes up, you know,

Starting point is 00:19:50 together. It's more so one happens and then the other follows. No, I totally agree. And I think also Bitcoin seems to be responding to more sophisticated scenarios than back in the day, like back in the day, Bitcoin would go up if there was a big Bitcoin meetup in New York City. But now Bitcoin goes up off of the news that CPI is the highest it's been in 30 years or the smooth brainer Janet Yellen says, I'd like to tax unrealized capital gains because that sounds interesting to me. And Bitcoin's price kind of responds to that. Or the fact that gold is like boomer technology that's doing nothing. And if people are being honest with themselves, that market cap is going to drop.

Starting point is 00:20:34 And I think the capital flows will be into Bitcoin because Bitcoin really is everything that gold ever aspired to be. I got two more questions for you, then we'll let you go do all the important fun stuff that you have to do today. Rare Pepes, baby! The first thing is, what do you think about them trying to tax unrealized gains? Well, I may be directionally incorrect or being naive when I say they kind of do that now with property and real estate, right? Think about this. You own a property, and every year or a few years, they come in and they assess a new tax basis for it.

Starting point is 00:21:09 So regardless of whether this is an income producing property or a property that you're just holding, they can ratchet up the tax exposure or tax bill on that property. So it's really like taxing unrealized gains. Now, to do that in the stock market or to do that with Bitcoin would be, I think, devastating. It would force you to liquidate the asset. And it's, I think, a tool to extract wealth in a very, very nefarious way. that I don't think would end well. That would be very painful, Pomp. I don't know if you thought much about it, but can you imagine a world where at the end of the year, you get a tax bill for

Starting point is 00:21:52 unrealized capital gains and you're left to manage? How do I pay that? It's crazy. It's hard for me to even conceptualize. It's a very dangerous concept. And it shows me that these folks that are saying these things don't have assets. They're not really managing this stuff. I mean, we should sit down with Nancy Pelosi. She and her husband are like the best investors in this room right now. They're not supporting that. Nancy Pelosi's not supporting this. I guarantee you. Nancy Pelosi is saying, no, we are not going to tax unrealized capital gains, baby. I agree. My last question for you is my favorite question. What is your price prediction for Bitcoin by December 31st, 2021? End of year, what does Bitcoin hit? What's the

Starting point is 00:22:38 highest number yeah it's north of two hundred thousand dollars mark yusko sitting before me with a large pepperoni pizza i'm laughing at that dude i'm hitting him with pepperonis hitting everybody with pepperonis and all the pomplianos and the pepperonis we're all laughing at this dude jason and mark for anyone that doesn't know uh well i guess we're going to talk about it now jason and mark have a bet uh over two hundred thousand dollars no i think it's 250 by the way i think the bet is 250 i gotta make sure i feel like i'm like a little bit of the referee i think the bet is 250 but maybe it sounds like 250 i'm here i'm here for it i think it's 250 and uh they they have bet uh pepperoni pizza over this and the reason why they arrived

Starting point is 00:23:23 at that was uh regardless of who wins they both get to eat pepperoni we're both winners we're both winners pop will be there too you guys can all come and have pizza mark's paying in that case we want to get two or three all right so you think two two hundred to two hundred fifty thousand dollars end of year yeah man i'm telling you december 31st 11 45 p.m i'm gonna have the moon block on the war paint the shirt will be off i'll have like oh probably a hula what is that thing called lay hula lay yeah i will be on it truly's in both hands 250 000 bitcoin for all of y'all truly's in both hands is all time all right i appreciate you coming on where can we send people to get the bus to the book first where where can we send people bestseller

Starting point is 00:24:15 you can go to the grocery store you can go to your the the you know down to the bodega it's everywhere son or you can go to amazon.com and check it out there it's on audible too number one bestseller the the book is very good i uh i just went ahead and uh dropped the link in the chat for anybody who wants to uh to get it how many did you have to buy to get to number one bestseller oh man i heard about these shenanigans i'm a poor man i'm a working man this book is doing its own thing 600 reviews congratulations all right second thing is everyone go follow him on twitter at going parabolic but before you leave i want to say thank you to the top 10 best-selling author in macroeconomics and international finance mr going parabolic guy

Starting point is 00:25:03 jason williams did a fantastic job i think if we had to rate jay his performance today what would we give him out of uh one to ten ten ten ah perfect you guys are good we're bros man let's do this your uh profile picture is all time i'm american i love america i know you guys do too superhero hi man i appreciate you coming on we'll talk soon see you guys bye

The Pomp Podcast - #718 The Inflation Game w/ Jason Williams

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