The Wolf Of All Streets - Alex Saunders, Host of Nugget's News on Reshaping The Definition of De-Fi, Disrupting the Fed, Digital Age Infrastructure, a Trillion Dollar Bitcoin Market Cap and More

Episode Date: June 9, 2020

Alex Saunders, Host of Popular YouTube Channel Nugget's News has a keen eye for markets around the world. His educational platform has reached millions of views because of his ability to think years ahead in the realms of real estate, cryptocurrencies, technology and banking. Scott Melker and Alex Saunders discuss disrupting the fed machine, leaving banks in the dust, Bitcoin's potential multi-trillion-dollar market cap and much more. --- ROUNDLYX RoundlyX allows you to dollar-cost-average into crypto with our spare change "Roundup" investing tool, manage multiple crypto exchange accounts in one dashboard and access curated digital asset content and services. Visit RoundlyX and use promo code "WOLF" to learn more about accumulating your favorite digital assets when making everyday purchases and earn $4 in free Bitcoin. --- VOYAGER This episode is brought to you by Voyager, your new favorite crypto broker. Trade crypto fast and commission-free the easy way. Earn up to 6% interest on top coins with no lockups and no limits. Download the Voyager app and use code “SCOTT25” to get $25 in free Bitcoin when you create your account --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe.This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

What's up, everybody? This is your host, Scott Melker, and you're listening to the Wolf of All Streets podcast. Every week, I'm talking to your favorite personalities from the worlds of Bitcoin, finance, trading, art, music, sports, politics, and basically anyone else with an interesting story to tell. So sit down, strap in, and get ready, because we're going deep. Let's go. I'd like to thank my sponsors, Round the X and Voyager, for making today's episode possible. We'll hear much more about them later on in the episode. This podcast is powered by BlockWorks Group, the only events and podcast production company I trust. For access to the premier digital asset conferences and in-depth podcast content, visit them at blockworksgroup.io.

I promise you will not be disappointed. Today's guest found Bitcoin in 2012 and never looked back. While he's actually trained as a pharmacist, Alex Saunders is a key eye for markets and is not afraid to share his opinions. He runs a very popular YouTube channel called Nuggets News and calls himself, quote, the one-stop shop for cryptocurrency information and education. He covers just about everything from the housing market to global economies, cryptocurrencies, government policies, and more. Now, we've housing market to global economies, cryptocurrencies,

government policies, and more. Now, we've been trying to connect for a while, so I'm really excited to finally welcome Alex Saunders to the show. Alex, thank you for being here, buddy. Yeah, I'm really looking forward to it. Thanks so much for having me, Scott. Yeah. So I just realized this podcast is a classic setup for a joke. Like a pharmacist and a DJ walk into a bar and start talking about macro economics and finance. I don't really know where the joke goes, but I'm sure that you experienced the same sort of thing when you put your thoughts out there where people say, hey, you're just a pharmacist or you're just a DJ, you're just a musician. So it's always interesting to talk to people who have sort of diverse backgrounds, but then are into cryptocurrency and finance,

of course. Oh, man, it's so controversial with COVID, being a health professional. And I actually walked away from the health industry because there's a lot about it I don't like. But the other one that I get all the time is, you know, pharmacists, Bitcoin in 2012, you know, dodgy selling drugs on the dark web or what were you doing back then? I never even thought about that angle. Yeah, they probably think that you were making a living on Silk Road. Yeah. Yeah, exactly. So obviously everyone has their own story as to how they found out about crypto, where they came from, how they transitioned into it. And we just touched on it, obviously, that you started as a

pharmacist. Can you sort of tell us about your journey? For sure. So like a lot of people, I dabbled in investing and lost money to begin with. My parents had given me some shares for my 21st birthday, which was the GFC as luck would have it. So I asked them, we've lost 50% of our money. They'd lost a lot more than me, obviously. And we had a sort of money manager or whatever you call it. And I said, are we paying someone to lose 50% of our money? And they said, yeah, that's how it works. These guys say that no one can see it coming. And I thought, that's an easier job than the weatherman. I reckon I can do a better job than that, than lose 50% of my money. So I went down that rabbit hole and just wanted to learn

about how the world of investing and finance works. As most people know, that's a pretty deep rabbit hole. And because I'd always had a love for, I guess, maths and science, I just found options and derivatives so interesting. And the Black-Scholes model, how it all, I guess, clicks together. I just really loved that you could understand that. And then kept going down that rabbit hole. And in 2012, read an article on Zero Hedge about Bitcoin. And for me, it just clicked straight away because I'd done a lot of traveling and I'd seen firsthand the exchange rates. And particularly with Australia, the banks here just charge you all sorts of fees, even higher than the other bad countries

that you hear about. So, look, that all made sense to me, just a digital world, a digital currency, and there was a lot of debt globally. That was kind of the thesis I had in my head. But as you know, since then, it's just completely changed. Like negative interest rates, QE infinity. I think the case is stronger now than it was when it was $10. I don't think the case has ever been stronger than it is now. I mean, whether it comes out ahead or not, I think this is the first time, and I've talked about this on a number of podcasts on

Twitter, but this is the first time that I really think your average Joe is starting to see the cracks in how the world works and how global economies work and the dollar and fiat system. I mean, if ever there was a time for Bitcoin to shine, this is the time when all eyes should be on it. Yeah. And some of the stuff that I've concentrated on more lately is the world of DeFi and the role that stable coins are going to play in disrupting the US dollar and the whole global financial system. So, I mean,

I was kind of interested and dabbled in the alts, got burnt like a lot of people, learned those lessons and I didn't get into Ethereum in the ICO because I sort of had everything else is a shit coin in my mind. Then I took the time to learn about it once it kept popping up in 2016 and really went down that rabbit hole. So I believe I'm not a maximalist. I do believe that Bitcoin is obviously the blue chip and it's very important. That is a money play, whereas Ethereum is a technology play. They're very

different. I hate the tribalism. That's sort of the way I think about it. So talk about your interest in DeFi. I know that you've, as you said, gone deep down that rabbit hole. It's something of extreme interest to you. First of all, I mean, in case there are people listening, if you can just even offer the basics of what it is and why you like it so much and what you see the value is moving forward. Yeah. So I actually don't like the word DeFi. Decentralized finance is what it's setting out to achieve a more decentralized model. But I like the word open finance where it's just trying to be inclusive for everyone. So these days we've got widespread smartphone adoption through a lot of developing countries

and they've got basic internet connections. The world's really changed in the past 10 years. Now, anyone can download a phone app, a number of crypto wallets these days that let you get into that ecosystem straight away. If you're a blogger in Africa, you can start earning cryptocurrency and stable coins in countries that have got these hyperinflating currencies. So it's opening up the world of finance to anyone where you don't need banks.

And like a lot of these countries, skip the infrastructure of, say, phone lines and have gone straight to mobile. I think they're going to skip the infrastructure of banking and go straight to these mobile decentralized web three kind of apps where so much is possible and that's what i talk about a lot some of these things are very exciting and already happening and people aren't aware of them at all and that's one aspect of it whereas the whole other side of this is how he's going to disrupt the u.s dollar uh hegemony and the fed and policymakers i don't think they really understand that and see how big it is, this huge wave that I see coming. And why do you think that is?

Or do you think that maybe they actually do see it and so they've sort of remained hush and have a certain level of fear for it? I mean, obviously, not speaking DeFi specifically, but I was on recently the Goldman Sachs call and heard them basically just shoo Bitcoin off to the side as a non-event when you know that in the past they've invested in blockchain-related companies and are probably accumulating themselves. Yeah, I think it's the way that those in charge always, I guess, don't talk favorably about gold. It's the outlet, the better store of value. So that's, I guess, don't talk favorably about gold. It's the outlet,

the better store of value. So that's, I guess, why they talk down Bitcoin, because if they're going to do all this money printing, it's just mathematically more scarce. So over time, it should perform well. Whereas the Ethereum and the DeFi aspect is more the technology play, being able to get a yield on your stable coins that you hold, for example, being able to get a yield on your stable coins that you hold for example being able to send these payments cross borders that's why stable coins have taken off and the reason i'm so bullish on it it's just the better technology normally wins out particularly when there's no barriers to entry so anyone can send a stable coin anyone can get their hands on us dollars through this defile open finance system just by downloading that app and clicking a couple of buttons.

Whereas if that person is trying to get US dollars in these different countries, they can't or open up a business bank account if they're a tattoo parlor or even a crypto business in Australia, it's still hard to your banking? So there's just all these reasons that you're familiar with and so are your listeners, I'm sure, that crypto and that adoption is just going to really pick up because of the user-friendliness, the seamless on-ramps to become your own bank. But the global demand for US dollars at the moment with the number of countries that have got all this US dollar-denominated debt and the Fed are having to open up these swap lines. The dollar's rising. You've heard about this milkshake theory where everyone's sucking up all the QE that gets printed in the US and that's why we don't see inflation. Right. Tremendous demand for the dollar, obviously. Yeah. And I just see these other alternate payment rails, whether it's Tether, USDC, or the DAI stablecoin, it is just so much better and open technology.

And we've gone from $1 billion to $10 billion in very quick time. I think we could go to $100 billion or past the market caps of Ethereum and Bitcoin while we have this huge global demand for dollars and stability when we have all this uncertainty and markets crashing or whatnot, but just replacing and eating the market share of all these hundreds of world currencies that are just losing value. And people have got this other option for the first time in history. And then the stage after that is moving and understanding Bitcoin, which is a better store

of value than the US dollar and all fiat currencies that still are going to get printed and devalued. It's interesting that you mentioned to me that you had a whole thesis on stable coins, which you call digital thick shake, I believe, correct? And is that basically it or does it go deeper than that? Oh, it goes deeper than that. I think the whole opening up the world of money is one thing, but opening up the world of data and information is completely another thing. So just this week, we've seen Trump come out and talk about shutting down social media sites. I think Google Drive pulled files from someone's personal drive. So I actually, I interviewed James Tedra the other day, who is the hydroxychloroquine

doctor who had the Google Drive document. He will actually, my podcast with him will be out very soon. Or maybe actually will already be out by the time we've released this. So yes, I'm well aware of that. Exactly. All the YouTubers that are getting censored. So that whole censorship, the open nature of what is needed at the moment, that is just becoming a stronger and stronger investment thesis every day. So having a way to move value and information and data around the world in a censorship resistant fashion, all sort of clicks into this defy narrative as well as having a stable money

for these hundreds of countries out there, because compared to the system we've got at the moment, it's like trying to suck a thick shake to a tiny straw and there's not even enough straws. There's a dozen straws where the Fed have got swap lines at the moment, but there's probably 100 countries that need US dollars. And as we go into a recession or a depression, velocity of money slows down, the relationship with China, who's the biggest trade partner, breaks down. They're getting less US dollars. They're creating all these new deals and Iran paying in gold and this, that, and the other. So everything that's moving

away from the US dollar is actually bad for that US dollar milkshake theory. And it's more favorable for the DeFi, the digital milkshake theory, I call it, because it's just so much better than that legacy financial system. It's interesting. You touched earlier on Ethereum being a technology play and Bitcoin being a money play. I actually read an interesting thread, I believe it was by Ari Paul on Twitter recently, where he was basically saying, nobody's talking about this, but the existence of stable coins, the rise of stable coins, as you mentioned, I mean, the market cap of them increasing. Does that, to you, he claimed that it did, remove the argument, basically destroy the argument of Bitcoin as money? Because, for example,

if you want to buy a cup of coffee, you don't want to worry about the currency that you're buying your cup of coffee with changing value in the time that you're making that transaction. Or if you're paying someone for a service, they don't necessarily want to wait two hours for the transaction while there's volatility and the price changes. And that's solved by stable coins. So you did say, obviously, that Bitcoin is money, but is that going to be replaced, at least that theory? I think it comes in stages like I was hinting at before. So, what Ari's talking about is very, very true in America or throughout Europe or in Australia. But try telling that to people in Venezuela, Zimbabwe, Argentina, that the list of countries is just growing by the day that

is starting to experience steeper and steeper inflation towards hyperinflation. So to them, they're not really worried about that. Yes, stablecoins are good, but Bitcoin is still a better currency to them. But it definitely fills that void of cutting out volatility. So the stablecoins is kind of like this mid, this middle step, this middle middle ground because i see the path to bitcoin is at least a trillion dollars multi-trillion dollar asset class and becoming a global currency of sorts and until we get there we're probably going to have one or two of these big boom bust cycles where we go up a thousand percent and down 80 percent

and that's the volatility that we have to put up with because you don't just go on a straight line to a trillion dollars or a multi-trillion dollar market cap. We go through that human emotion cycle that comes up on the charts, the Wall Street cheat sheet. And that's the way I think about it. So eventually Bitcoin volatility will settle down and only be maybe 20% a year. And then it's very similar to most currencies. I mean, we were almost there in 2017. If you're talking about trillion, at least people were talking about it. And effectively, we saw that retrace that you're talking about already. So it's not an unfamiliar pattern. And I think that's a good way to project the future. So let's talk about banks and DeFi.

Do you think that conventional banks will evolve and adapt to DeFi and new technologies, or do you think that they're going to wither away? There's still going to be some functions, but it's not just a bank trend. It's a global trend that software is eating the world. And any job that someone does that's repetitive or that you can program, we can build that into a lot of what's happening in these different protocols. So, yes, I do think a lot of their functions are going to be taken away. And some of the most profitable functions for the banks

are the most basic things. So, you know, if I try to send money to you in America, that international transfer fee, that huge spread, getting money out of an ATM, all these things where they just take a little clip, it's actually taking value, economic value out of the economy because they're charging people for doing basically nothing. So removing all those little clips is a strain and holding back the economy. There'll be more money going towards better things once those functions of banks are removed but yeah some other things are you know complicated maybe mortgage application processes but even that you can say well what is

the 10 criteria they look at and if you can plug that in and there's already these defy apps that will tell you what's your income and you can sort of look at it on a chart. It'll tell you like what money per hour you are earning coming in and what are your expenses going out. And you can see if you're going forward or backwards. So all sorts of interesting possibilities come about once you can see your entire financial or economic profile in front of you in an app. Interesting. So how do national digital currencies play their role in this? I mean, do you think that the, you know, digital yuan, that China's digital currency could unseat the dollar and that actually could be negative for DeFi because effectively, or for stablecoins,

because effectively countries are doing it themselves. The way I think about it is, it's a step forward for central banks or banks and local currencies that are basically already digital. You know, cash use is less and less. They're trying to phase out cash. And I think that is to force everyone into negative interest rates. It's also to surveil everything that people are doing, particularly in China. So in China and a lot of these other Asian countries, the smartphone use, the QR codes, all these apps, the WeChats, they're fantastic already. That is almost entirely digital payments. So switching over to a central bank, they call it a cryptocurrency, but it's really just a digital ledger where they can monitor

everything you're doing. So that's not really a huge progress step forward in technology, whereas other countries, yes, it actually might be progress. But it's all just this middle step because it doesn't have any of the true features of Bitcoin or decentralized monies. So I think it's just all a bit of a distraction. These banks and politicians probably think it's fantastic and it's going to be the market leader. I don't understand why anyone would want a Chinese Yuan stablecoin. Think about these

emerging markets where they're trying to put them into debt. You've seen the princes of the yen, the IMF, the World Bank, these sort of stories. Of course. You ask any of these countries or these citizens, most of them are going to want the dollar. And that goes back to my digital thick shake theory where tethers exploded, USDC and these, I guess, more legitimate, more transparent ones have taken off.

I think DAI and decentralized models are just going to continue to grow and expand. So I just don't understand why anyone would want a stable coin of these different currencies. Like even in Australia and our followers, they want to be in US dollar stable coins at the moment. They don't really have an interest in being in an Aussie dollar stable coin. So yeah, China have got high hopes. I think it's just all a distraction. The Chinese are the ones that love Tether the most. Yeah, which makes sense. Let's talk about Tether. Obviously, you can't find a more controversial subject probably in the cryptocurrency community. What are your thoughts on Tether? Obviously, for a very long time, people believed that it wasn't backed, that they were

printing it endlessly, much like QE Infinity, just to move to exchanges and pump Bitcoin. Now they continue printing it, but it seems like the demand is actually there. So what are your thoughts on Tether in general, the FUD in the past and its role moving forward? This is such an interesting thing to talk about. So I actually fall into the camp that Tether is fully backed. So do I, by the way. Okay, cool. Being in the space so early on, these stories have come up every year that Tether's not backed. I've got friends who are shareholders in Bitfinex and Tether, and they

get paid out their dividends. These are huge, huge companies, hundreds of millions of dollars. Look at the cycles that crypto has gone through and these whales that take profits. There is no way if you're running fractional reserves, you'd be able to survive these 80 or 90% swings with people taking profits and going in and out. The problems arise because of the interfacing with the traditional finance system. So we don't know if someone in Jamaica wants to take profits and trying to get US dollars into their bank. And we face all those problems where the bank says, crypto, Bitcoin, you know, freeze that transaction. And that is the problem that they face trying to get money out to all these different places around the globe and where they had those funds seized last year. And that actually did take it back to

what was it, 77% back to whatever they admitted to be at the time. And that's when they did the right thing. And they said, look, we're going to raise more capital. We're going to patch that hole and ultimately we'll pay it back and get back to one-to-one. So I don't really believe those kind of rumors that it's just this printer. I think it's very clear. And there's people like Jesse at Kraken who are very trustworthy saying that we've seen huge demand, people pouring in dollars, and they go from their bank account into a stable coin, normally into Tether.

That's where you see $150 million of Tether being printed. It's not coming out of thin air. It's coming from that real world demand. Where this gets more interesting, and people don't often take this next step, is that if Tether has got 100 million in a bank, when you or I make a deposit, we know how fractional reserves work. So in theory, most banks might keep, say, 10%. So everyone's arguing whether or not it's backed one for one.

But even if it is backed one for one on paper or in the account, that actual bank, if people try to withdraw that money, you know where I'm going with this. And more recently, the Fed changed the reserve requirements down to zero. Down to zero, yeah. So, I mean, you can debate all you want whether or not, you know, there's fractional holdings of gold, whether they have enough. Fort Knox has actually got the gold there.

All the derivatives in Wall Street and whatnot. But even if all these stable coins are backed one for one, are there those reserves in the bank? And that's where we have Neil, is it, Kaskari come out on 60 Minutes and say, come in, take out all the money you want. We're going to print infinite amounts of dollars if you actually ever want to withdraw. Yeah.

I mean, it's almost like watching some sort of like dystopian future movie when you watch the interviews with Kudlow and Powell and the Fed. I mean, these guys literally have just come out flat open and said, we will print as much as we need to print no matter what. We have not even started to fire. We have plenty of dry powder. There's no end to what we can do. I mean, how absurd is that? It's such a confidence game and it's the same in every country. So people obviously don't follow closely what's happening in Australia, but they were almost the same as Powell's backflip where he was talking about raising rates and being on a set course and not worried about markets.

Whereas now, I think literally the other night he said, I watched the stock market closely. Like they've completely changed their tune. And when people go at them on Twitter saying they've got no idea what they're talking about, I interview economists like Steve Keen who have been saying this for 10 years. Their models are wrong. They don't understand or their models don't actually take into account banks, debt or money. It's all about the velocity and credit availability is what they talk about as the driver. So they just basically don't understand money. That's why they don't see these crashes coming. And now that they're at the zero bound and they've tried this QE,

they've got to try new things. And that's where it's becoming very clear that the two tools that they're telling everyone that work and that they're in control, well, they are out of ammo. So they've got to print infinite amounts of money to patch whatever holes come about, whether it's the repo market, the junk bond market, which I think is a whole nother kettle of fish if you want to talk about that. But these are all just patches and

they're trying to keep the ship afloat and keep it going as long as it can. But really, there's no answer here. It doesn't end well. I guess that leads to a question. And again, I come back to Goldman Sachs because they addressed it recently on their call. But it seems that actually your average person thinks that inflation is the biggest risk. But I think that the governments themselves are actually probably more worried about deflation in the short term than they are about inflation because they think that they can control inflation, but deflationary environment would term than they are about inflation because they think that they can control inflation, but deflationary environment would be much more damaging. Oh yeah, completely agree. If you picture that pot of money as the economy, if deflation takes hold and baby boomers sell

their shares and their house and they downgrade and they spend less and if people pay down their debts, that pot of money is shrinking. So, let's say that a trillion dollars of debt is actually paid down. That means the Fed now has to print another trillion dollars just to keep the amount of money in the economy the same size if the velocity of money stays the same. So, if velocity of money picks up and you and I are doing twice as much business together, obviously, we can pay down our debts quicker. But what we've seen on the charts is the velocity of money just come to a grinding halt. So deflation at a time when people are retiring and the demographic cliff, the pension funds, it's just this storm of deflation. That's why I think we're going to have to start printing

in tens of trillions instead of 1 trillion, 2 trillion here or there to patch these holes. So yeah, they're definitely more worried about deflation because you just can't pay off these global debts once the economy starts to slow down. And then inflation, they're not even worried about that. They're saying, we're going to let it run hot if we get it. They don't care. They think they can get back to 2% no matter what happens, basically. It's just mathematics. I mean, I'm into meditation and mindfulness, and I just sort of take the ultimate zoom out, big picture view, and you think we're on a finite planet.

We just mathematically, we can't keep aiming for 6% growth in China or 2% to 3% growth in every other planet. You come to this bound where there's not physically enough room for populations or food or we've got a lot of energy if we can start capturing the sun, obviously, and other things. But there are physical restraints to what we can continue to grow. And no one talks about sustainable.

Everything is about growth and that's what the debt-based financial system is based on. So it has to actually continue to expand. Even if it goes sideways, that starts the deflationary snowball where debt can't be repaid. Well, that leads us to the present situation, obviously. And I speak generally about the American economy because it's what I understand better. And obviously, the whole world is watching the United States. And we hear these terms, V-shaped recovery, U-shaped recovery, W-shaped recovery. I mean, what's your prediction for the economy moving forward with this attempted,

I call it an attempted reopening, because I don't think anybody can predict how successful it will be. But moving forward after COVID, or or if it comes back what are you thinking happens with the world economy the American economy Australian economy so we were lucky that we might have heard about this a little bit more than the average person because Australia and China have such a tight relationship and we did a video I think in January talking about this could put Australia in recession when there was only cases in China because of how dependent we are for trade and also a lot of students and the universities, the education come over here to Australia as well as real estate investors. And then the commodities is the big side of it. So look, all those reasons were going to put Australia in recession if they

slowed down. And then we started looking in the specifics of how the virus worked and, you know, the R-naughts and a few of those characteristics. And to me, the alarm bells were going off and people were saying, you know, you're a fear monger. And my message was that this has the potential to be something pretty bad, a lot worse than what people are saying at the time when Trump and the Australian prime minister were saying, you know, this is just a, just a cold or a flu. And you were talking about it in January, correct? Yeah. And I seem to recall you were actually talking about at the end of January. Yeah. And that was when there was sort of, you know, on my radar and doing these videos, but when I actually got really worried about it was end of February and I did a video 48 hours

before the market started crashing called, you know, the world has gone mad. So it was very clear that this was spreading. It was nasty. Stock markets were shrugging it off. And I just couldn't believe it. And then I think it was 48 hours later that decline started and people started to realize that, yeah, this is bad. Now I've kind of changed my message. I'm a little bit more hopeful. I think the data we were getting was maybe making it seem a little bit worse than what it was, but we still are learning more and more. So we might open back up and everyone wears masks and washes their hands. That appears to have worked pretty well in some of these countries that have had it before and they've been trained on how to deal with it. I can assure you that will not happen in the United States. Roundthex.com is one of my favorite companies in the entire crypto space. What they do is take all your small purchases and round them up to the nearest dollar and

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waiting to see now. What are the numbers going to look like as we start to reopen? And if we keep having these rebounds, it's a very slow process because of that incubation period that is around 14 days, let's call it. If you find out that there's been a big outbreak at a supermarket and everyone is just basically treating it like pre-COVID, there can be thousands of people that have it and then they've been in contact with thousands of people and then you've got to go back into

lockdown for another four weeks. So, that's what we're waiting to see and I just don't think the world goes back to normal even if it's just more working from home, less commercial real estate. Things have changed and the world was levered up and priced perfectly. So, at the moment, the markets have been just flooded with liquidity and you've got to just treat that as a parallel universe, the real economy and the stock market. So look, there's that joke, new high 4th of July, that could happen at a time when there's what, 40 million unemployed. Oh, and by July, that would be 50 or 60. Yeah. In the United States alone, of course. And it's interesting in talking about unemployment.

I mean, we have 40 million people in the United States as of now who have lost their jobs. And you keep hearing they're temporary, they're going to get their jobs back. But what I'm seeing is, I mean, you see Coinbase companies like Twitter are all moving already to remote fully. And I think that a lot of companies have in the last two to three months learned to operate lean and those jobs just are not going to be there. Even if everything opened up again tomorrow, which it won't, I still think most of those people won't have jobs because the bosses and companies have learned to operate without them. Yeah, I agree. It's just a matter of what percent this happens because it is happening. Some of the biggest companies have already made this move.

And that also has repercussions for things like mental health that I'm really passionate about as well. So I work from home and I've got a family now, a baby, the dog, but it is very, very different from being in that pharmacy environment, seeing hundreds of people a day and talking to people. And if you're like, I'm lucky down in Tasmania, I can go for a walk in the park every day and that sort of thing. Other people are trapped in their high-rise apartment.

Maybe you're not allowed to go outside. Even these concrete jungles and now you're working alone for the stressful 40, 50-hour-a-week job, not getting concrete jungles. And now you're working alone for the stressful 40, 50 hour a week job, not getting any vitamin D. Like, yeah, these things can have other repercussions that are all, I guess, net negatives for the individual and for the economy. And you touched on commercial real estate in one of your previous comments. If companies like Twitter and Coinbase, and we're going to see a number of huge companies, you know, stop filling office spaces. So first, obviously you lose the office space,

but then you lose all the ancillary businesses that are surrounding those. I mean, if you're in a city like New York, there are restaurants that exist only because there's a single office building next door to them and everybody there eats lunch, right? And then the transit systems and all these things. So I see just like this ripple effect through so many communities. But I know that you've had thoughts specifically on real estate. How do you think that all this will affect the real estate market moving forward? Yeah. And that's all true. And it creates opportunities. So if you're the little, what do you guys call them in America? Like the little stall carts? Oh yeah. Like, uh, the, the, the carts in the street that like sell, uh,

sell food, like a food truck or a food truck or something. Yeah. Yeah. Yeah. So, I mean, if they're flexible, they see this coming, they can adapt their model and maybe get on Uber Eats or move to a suburb rather than being in the city so look it creates opportunities but i definitely agree that the office job is one thing people being able to work via zoom or slack but technology itself was already coming for a lot of industries and that's very deflationary as well so i picture this world where virtual reality, augmented reality, the surgeon at home goes into his room. He's got those hands or the senses and he can perform heart surgery from home.

So I just think- Da Vinci robot, right? I mean, they do it in person. I'm sure they're going to find a way to do that from home. That makes sense. And that's also a lot more hygienic in a world that's possibly got COVID or other things that we're worried about. Super bugs in hospitals is a problem. So this actually solves other issues as well. And that's where I just see the world going, living more and more

of these digital lives where you can perform more real life tasks. Well, how about residential real estate? Look, Australia's got a bubble. I don't know how much you know about the Australian housing bubble. I think everywhere kind of has a bubble, but I'm not that well-versed on the Australian bubble, I'm sorry to say. So, in Australia, the average house price in Sydney is, I think it's back past a million dollars. And in Melbourne, maybe $800,000, $900,000. Where I live down in Tasmania, which is less than an hour's flight away, is $300,000, $400,000. So look, there's huge premiums in the two capitals. And the percent of annual income to house price is 10. And historically, it's been around two or

three. So these things are pretty out of control. We've got negative gearing, which means that if you have a house and your mortgage is $1,000 a month, but you can only rent it out for $900, you actually get to deduct that difference, the $100 off your taxable income for the year. So, a lot of people have, they don't even care if they lose money. Basically, that's the story. So it's just like this Ponzi scheme where even if you lose, you win and people have 10 properties. There's these classes on, hey, get a credit card, lever up, get 20 Airbnbs. We're seeing people, the landlord that didn't know that their tenant wasn't just a nice guy with a nine to five job. He was actually subleasing it out with his 20 Airbnb. So this is all kind of collapsing.

And at the moment it's being caught by the system and the banks kicking the can down the road six months and the government stepping into some degree. So look, that all has to sort of play out around September when these programs end. So there's different areas that are well pricedpriced, but anywhere near these big cities is just, I think, massively overvalued for residential and commercial. You can have a better quality of life, fresh air, a bit of a backyard, an hour or two hours in these suburbs if you can work from distance. And that's what's going to, I think, be more valuable, particularly to our generation. So do you think that we're going to see a mass exodus out of big cities? Because also

when people used to leave a big city for a job, even if they were within the same company, say you were moving from New York City to Austin, Texas, your salary would sort of drop, you know, commensurate to where you were living. Now we actually have this environment where theoretically, if your whole company is working at home, your salary shouldn't change no matter where you live. So in addition to all the things that you just mentioned, and obviously reasons that people would leave the city, real estate being too expensive, getting that green space. Now you also have a situation where people can actually save a ton more money by leaving. So do you think that we will see a mass exodus out of big cities?

I mean, I think water finds its level eventually with that happy medium, but to the same degree, we've got to think about internationally. So you can now get an architect in Southeast Asia for $20 an hour rather than paying an Aussie architect $100 an hour. So all these wages, they have to find this new equilibrium. And I just think a lot of countries that have been exporting cheap labor and the way that we're trying to bring jobs back home, it's a very interesting time to be alive. And to certain industries, you can't replace those jobs and require certain skills. And that's what people need to think about making themselves valuable and having side hustles, that type of thing.

So I do think that just millennials are going to put way more of a premium on not putting 40% of their wage towards a mortgage. They'd rather put 20% and go on a holiday every year or spend more money on things and time with their family, less time commuting. Yeah, it depends on the individual, but maybe socializing the gatherings there's always going to be reasons to go to a big city i think as you touched on millennials i think it was the washington post just had an article that called them the unluckiest generation in history um you know the oldest millennials actually basically experienced 9-11 and came into the job market in the, you know, economic downturn slowly after, then they experienced the great recession and now they're

dealing with COVID and the younger millennials obviously still have the latter too. I mean, pretty tough, tough, tough time if you're in your 20s. I really think, again, this is zooming out my big picture thoughts on how the world has kind of fooled itself so all we've done is pulled for this demand by going into debt so you talk to my grandpa I actually really want to get him on and do an episode about how attitudes towards money is changing but he's uh he's actually battling cancer at the moment he's not well enough to do it but sorry to hear that that's right um so I think that his generation, when I talked to him, he's saying, we used to earn $10 a week, but a house would only cost

$800. So you'd save up for a few years. If you had to get a mortgage, you'd be able to pay it off within a few years as well. So these days, people would never dream of saving up to buy a TV or a car or anything. So people graduate with huge student debt. It's not as bad in Australia as it is in America, but student debt, car loan debt, after pay to buy your TV and all your household goods and pay later. Then you've got your credit card debt. Again, speaking of DeFi, none of these banks in credit or debt that people are in

really talk to each other. That's kind of changing a little bit now with crosschecks, but it's very easy for people to continue to pile on and have 10 credit cards if they're all small. So yeah, I just see that we've borrowed from the future, but we've kind of got to that point where, well, how much more can you borrow? You know, a million dollar house that takes 30 years to pay off and you've got the car and you've got this, that and the other, your student loan that's taking all these years to pay off. Compared to a generation ago where the dad, you know, just overgeneralizing here, you know, the dad is the sole breadwinner of the house, mum is stay at home, you can afford to have three kids on that dad's wage and live a really comfy lifestyle now we've got two average wages are still not enough to afford an average house in a lot of these cities so we've dropped interest rates from 18 down to zero obviously that pushes up prices people go into more debt they can service that so unless you're telling me that interest rates go down another 18 to minus 18 and four people are going to pay off a mortgage, I just can't see where people

make these assumptions that housing is going to keep doubling every 10 years or the stock market and bonds are going to keep going up at the same rate. It's just been the luckiest or the best time in history for people that own these assets or able to benefit from this, but it's kind of time to pay the piper. My first savings account, I'm in my 40s. So it was in the 1980s. I can't remember the specific number, but it earned about 13 or 14% interest. A millennial who puts money into a bank account now would be lucky to gain 1% interest. Companies used to match your 401k, that's sort of gone. I mean, there's no way to even save your money and be guaranteed that it will grow like there was in previous generations as well. Yeah. I think the studies, there was 20 workers for every one putting into a pension,

you know, a generation or two ago. And in another 10 years or 20 years, it's going to be like one to one. So mathematically, there's just no way. And it's already pensions in the US that you hear about going bust. Which is a huge issue that people are not really touching on, but that's, I guess, a topic for another day. Yeah, exactly. I had another thought there. I was going to mention again. So I'm not sure if you saw, check it out if you haven't, the Argent wallet. So ARGNT, that's a DeFi wallet that came out the other day that's got all the apps and the lending all in one friendly interface. So you can download these apps or similar apps

and have your savings in it and earn 8% or whatever the DeFi yield is at the time. The other day, I think it was, you know, when 0x, for example, or there's a coin that's hot for trading, it was up to 30%. So, these millennials that are tech savvy, they don't have to know that it's even crypto. They can just say, do you hear about this app where you can get 10% on your savings instead of zero in the bank? And it's just this gradual move into this world that is just better and easier to use and gives the power back to the individual rather than the bank. Yeah, that makes a lot of sense. So I want to go back to something you were talking about earlier that you touched on,

which was we were talking about censorship and YouTube censorship. There's been this huge wave of crypto influencers, of course, being removed from YouTube. You obviously, your core audience, I'm assuming, is on YouTube. How much fear do you have about being removed? And how much would that affect you? I guess your bottom line, your business. And I guess, how do you protect yourself from that? How do you eliminate the counterparty risk of being someone in this space who's dependent on a social media platform? Yeah. So good question. So this all came to affect us on Christmas day. We were one of the channels that got taken down and I've been doing it for years and never had a strike. We don't really do the clickbait videos and don't really

promote the margin platforms as much as others. I personally actually like FTX because they've got a lot of cool products that I use and options and other things. But we don't encourage people to trade 100x altcoins like a few of those other YouTube channels. So we thought that we were one of the better channels that were going to be safe. And then that YouTube algorithm just went crazy and started knocking anyone off and giving them on Christmas morning I woke up to a first warning strike and thought oh what's going on there and after Christmas lunch I had a second strike uh and as you know three and you're gone so I was really worried jumped on Twitter and that one went viral and thankfully a few days later YouTube got everyone's situation

I guess remedied but they couldn't explain what had happened other than to say, I think there's an algo and we're working from home. It's harder to fix the good from the bad. It does seem like there's been another wave of that. Yeah. Yeah. I think there's another wave to do with COVID and a few other things at the moment. So the remedy for us, we've got 85,000 subscribers on YouTube, but we do post all our content to a number of platforms like Library, which is the decentralized one. So that can never be taken down. We've got the podcast. We've got our premium services, which are our main source of revenue.

So look, there will be ways around it, but certainly, yeah, as you know, YouTube and these sites are great for getting new traffic. But in an ideal world, that use case for decentralized platforms is slowly getting stronger and stronger. If you had asked how many people know about Library a year ago, even in the crypto community, no one had really heard of them. Whereas now, people are really aware that, oh yeah, if YouTube sends us a video, I'll go watch it on Library. Yeah. I mean, it's still very scary when you've built that huge audience and you've spent a good portion of your life building it to know that it could be taken away at any moment. I mean,

I mean, it's just terrifying. Where does something like, going back to the conversation, we obviously talked about national currencies and stable coins. Where does something like Libra fall in? Obviously, it was all the talk and that talk has diminished. We've seen some sort of companies pulling out. But I mean, a company-based currency, whether Facebook is the best one to do it, I doubt. But why wouldn't Amazon come out with a similar thing? What do you think the place is for something like Libra? Well, I mean, this payment space is just hotted up. So PayPal was ahead of its time, I guess, trying to make these new payment rails. But now we've got Revolut, TransferWise, Venmo, and then you've got Apple Pay coming out. I think Google

Card. So all these guys want to get into the banking space because it's just so profitable to do very little. but if you actually think about what Facebook try to do they probably trot on too many toes and they really just threw the politicians into a spin because they don't understand money or finance very well to begin with let alone when Facebook say you know we're creating this basket that's a global currency and it's going to include these different currencies so that was probably a little bit too ambitious and now they've when Facebook say, you know, we're creating this basket that's a global currency and it's going to include these different currencies. So that was probably a little bit too ambitious

and now they've backtracked. But at the end of the day, is it really that much different to USDC, for example, that's set up in America? They've done all the checks and balances. They're just a private company that have issued a US dollar stable coin. So that's why I think Facebook have gone down that path now. But this is all just that middle ground, that distraction

where people are going to use it for payments. It's going to get integrated into your Facebook or other apps. But compared to the reasons and the thesis, it's just another on-ramp. It's just building capital that's one step closer to going into Bitcoin and going, oh, there's a currency with a fixed supply and there's a currency that they're printing trillions more of each year.

Number go up, orange coin go up, this other coin is always worth a dollar. Yeah, that makes sense. Are there any specific projects that you're looking at in the crypto space that are under the radar that you would like people to know more about uh i mean anything i think defy is really popular at the moment but it's it's that sort of cycle where i get excited when i research something it's got a good thesis around it and it fits into the ecosystem where all these other projects are kind of plugging into each other and then you see the venture capital guys come on board and then you know that Coinbase is probably going to list it. So you know how this cycle back in 2017 was like hot ICO

and then what exchange is it on? That's kind of, I know it's probably a bad thing, but look, overinvestment is kind of needed in this space, I do believe. That's where I think a lot of money is going to flow. Grayscale keep coming out with these products. So, look, I just tell people, make sure you've got money in exposure in Bitcoin and Ether, the blue chips in my mind.

And then the top 10, the large cap coins is where the most capital is going to flow. And then if you're going to pick a small cap coin, my rule is half a percent or 1% of your portfolio because of how risky they are. Smart. And if you're picking the right thing and you're picking it early, even in the past two years, we've had a number of coins go 1,000%.

If you know you're getting it early rather than chasing that FOMO, that's when you can take out your initial investment or whatnot. But they're so risky. You're going to have coins that are going to go to zero. What I like at the moment, I hate shilling individual stuff, but I just say the world of trading, so the decentralized derivatives, the decentralized options, I just love the way that that's coming together with the, say, decentralized hedge funds,

the automated trading strategies like SETS protocol, and then a project called Nexus Mutual is one of the insurance backstops for all these DeFi smart contracts that kept getting hacked. So, look, I see those sort of ideas and think that's got potential. But there's a number of those doing that out there. Yeah, we do a monthly Ethereum update because there's just so much happening. And we actually got contacted by a documentary film producer that wanted to do an Ethereum series.

Because everyone understands the Bitcoin thesis now. It's kind of mainstream. But I think Ethereum and everything underneath it is still misunderstood. Yeah, I agree. I don't think that people understand the nuance at all, the differentiation between them. They all say that it's Bitcoin and everything else, probably, if they even understand that much. You just touched on DeFi hacks.

Obviously, BlockFi made the news recently because one of their employees was SIM swapped and someone got into the back end and got some of their information. How much is security an issue for all of these future plans and all this potential that you see for DeFi and stablecoins? I think are going to happen a combination of, you know, you've got your retina scanner, your fingerprint scanner. The next step is maybe the geolocation. So your wallet or your data will only be unlocked if you're in your home. Or if you're at the doctor's surgery, it'll only access your medical data there. Or maybe it's a multi-sig to your health records where you need the doctor,

another sort of permission, and then your personal key. So there's these layers that are going to seamlessly work in the backgrounds where we can make security better. And then some people are never going to be confident about the custody of their Bitcoin or their investment because people have never had to custody their own shares. And that's where insurance and custody, you know, BitGo's of the world, Coinbase's

and Gemini's are making these acquisitions where some people just want to invest. And that's one thing that we've noticed now. A couple of weeks ago, every second day, we're getting phone calls for people that want to invest $100,000, $200,000 and putting them in touch with brokers. And they can do the same as basically a gold or silver vault where they're keeping ledgers there for people. Yeah. I mean, I think that's one of the biggest barriers to entry in general for crypto institutionally and individually is that people don't know what to do with it once they get it. They don't necessarily trust the exchange, but they certainly don't want to be their own bank and worry about losing their keys and putting it on a hardware wallet. I still think that that's a

pretty significant problem for mainstream adoption. Oh yeah, it's terrible. I mean, like I had to try and help someone set up a Legendano S the other day and you forget that he's a pretty painful, clunky process compared to how easy, you know, how easy you think it would be. We've got all these brilliant devs and all these awesome apps and yet why is that still so hard to set up? And how terrible is it if you actually have an issue or the ledger fails or something like that? You have to understand your private keys. I think that a lot of people set them up, but there's no practice for when it goes wrong. I think most people who buy a ledger think that their Bitcoin is physically on the ledger, like cash in a wallet,

you know, they don't understand the blockchain itself or even how it works. So I just think, you know, that it's got to be far more simple, or as you said, that insurance has to sort of become the norm. So it removes that fear at least. And that's one problem we're trying to solve. So we've got all free education and resources on our website and we want to build like a Google where you type what you need to solve like, you know, my ledger's done this and it comes up with the answer for you and we've got dozens of units already but we're sort of making notes and we can see the questions and themes that are coming in and then the team go to work on building written guides and modules and then integrating my videos or tutorials if we've already done them. And just simple things,

as you say, like your private key is on your hardware wallet, not your Bitcoins. And those 12 words, you can actually plug those in and restore your wallet to any other compatible wallet. Yeah. Yeah. I really don't think people understand that. So speaking of security, you like me are one of like, you know, unicorns, a really rare person who's actually yourself in the crypto community. You're not, you're not an avatar or anonymous, but I can tell you from personal experience that that comes with a tremendous amount of risk. You know, I've been specifically targeted for hacks and SIM swaps. you experienced anything like that and do you have certain fears or reservations as a result of being yourself in this space uh yeah to a degree i mean i i might not have done it if i lived in the middle of melbourne or sydney um i mean i'm quite happy

in tassie and we're a bit out of the way here. And, um, I mean, I keep a low profile generally. And I mean, even from 2017 till now, I've kind of changed my attitude towards things and a little bit more cautious about this, that, and the other, uh, would I go out in public and do big meetups for everyone anymore? You know, I'm not sure about that, but, um, yeah, we did have a hack and quite a nasty uh trial early on and that was probably a good learning lesson just to get everything you know polished ship shape with

your password managers and your security because um yeah people law of large numbers once you get to that hundred thousand number it's just you're going to have people out there that don't like you and are nasty people or lost money on one thing you said so something that I'm aware of but try it look I mean I plan on stepping away at some point in the next cycle or so cutting back the workload doing other things but we're always trying to keep people happy as I said hopefully we're not doing anything that's ripping people off for our own benefit or any of that other stuff where I think people that's where you get in trouble. If you're actually, you know, ripping people off or yeah, not respecting your audience.

Like I have a rule that whatever we talk about, would I use it personally? Of course I have the same rule. My parents use it. So yeah. Yeah. I have the exact same rule. So what can we look forward to from you guys in the future? And you just talked about perhaps stepping back. So what else would you potentially be doing? premium services, which range from just a newsletter through to our community that's full of everyone from traders to investors to 80-year-olds. And that's been probably our most successful venture there. And we want to really expand that and have it more user-friendly, just that app and that interface. So that's why we sort of want to be the one-stop shop for all

things crypto. After that, I just love talking about anything that needs to be discussed that's interesting, kind of like the Joe Rogan or people are just so inquisitive these days. I'm sure you've covered other topics as well and that's the censorship or why isn't these super interesting things on TV or why can't we have an open discussion about COVID or the healthcare system with my pharmacy background? We did an interview with a doctor who's a whistleblower who was a diabetic surgeon who was having to cut off people's fingers because they've got such bad diabetes. And then he'd put his patients in hospital and they'd get fed Coke and ice cream.

And he's like, you can't feed my diabetic diabetic patients this and he came up against big food or big sugar uh and he lost his license and he fought it and won so look i just think there's so many of these type of stories where the world can be made a better place by shining light on these certain issues and then the issues that people want to hear about so you effectively want to do the same thing, but with a wider net of topics. And I think ultimately there's a lot of overlap to the decentralization. Like if blockchains are all about transparency, really censorship resistance. So if, for example, all these drug studies and data on a blockchain or some of these businesses and people selling our data, once all these models change and maybe they're on a blockchain,

maybe they're not, but I think there's a lot of overlap with everything happening in the crypto world, even if it's just the style of libertarian cypherpunks, the people that want to fight back against the system and make the world a better place. I think they're always kind of interested in these similar topics. That makes sense. So where can everybody keep up with you after this? So nuggetsnews.com.au or I'm Alex Saunders on Twitter and Nuggets News

on YouTube. Oh man, thank you so much. That was really enlightening. We touched on a lot of things that I had no idea that we would get into. I think that people are going to really, really enjoy that. So I know it's funny, the global world, I'm ending my day and I believe you're beginning yours. So I hope that you have a good one today. Thanks, man. I've really enjoyed it. Well done on your podcast. I know you're going really well with your newsletter and that as well. And I have to return the favor and have you on my show. We'll definitely do that, man. Thanks again. Let's go. Hey, man. Thanks again.