The Wolf Of All Streets - BTC Holds Strong In Time Of War | Crypto Town Hall

Episode Date: October 10, 2023

Crypto Town Hall is a daily X Spaces hosted by Scott Melker, Ran Neuner & Mario Nawfal. Every day we discuss the latest news in crypto and bring the biggest names in the space to share their insight. ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘2MONTHSOFF’ WHEN VISITING MY LINK.  👉 https://tradingalpha.io/?via=scottmelker  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/    ►► OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $10,000!  👉  https://www.okx.com/join/SCOTTMELKER ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL  - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets    Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor.  Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Scott, will you add me as co-host? I can't, but they're going to. It has to be the main account, unfortunately. Fantastic. That is in process. You said that you've been invited. Okay, there I am. All right, let's give it a few.

Yeah, guys. Quickly, I see Peter Brandt in the audience. We've invited you to speak. It should be in your DMs. Great. Yeah, I think let's just we've invited you to speak. It should be in your DMs. Great. Yeah, I think let's just wait for more people to join. Let's just retweet it and get people here.

From tomorrow, Mario's back because I think he's currently hosting the Warspaces, which I think obviously is right now a lot on people's minds. Although I do think that the updates in the war are becoming a little bit, you know, I think we're going to have these kinds of updates for months and months and months to come.

So this is not going to be a short war. Let's put it that way. I mean, even though Hamas said they were open to some kind of peace, you know, or some kind of talks or something like that. I don't think that this is going to be. They said a truce.

A truce. They said they'd be open to a truce. Yeah, sure they would. Very clear. They truce. They said they'd be open to a truce. Yeah, sure they would. It's very clear they're not. Yeah, they're not. And I think that this war is going to go on for a long time. I think it could go on for as long as the Russia-Ukraine war has been going on

because I don't think that this is something that's going to be resolved overnight. I think that the updates are going to start becoming more and more regular, so to speak, more and more normal as opposed to as shocking as they were in the last couple of days. Yeah, I think that that's human nature for better or for worse is that people's attention spans are short at this point. And generally, unless there's something massive, a massive change or something breaking, it will just become, sadly, a part of the news cycle. Yeah. Yeah. I mean, I think that's pretty normal. You can see the markets are actually responding exactly like that.

I saw futures were up today, NASDAQ futures. In fact, all the futures were up today. Everything's up. Dow is at 33,769. QQQ is at 360. I mean, everything is absolutely mooning. And a lot of that aligns, obviously, with sort of the premise. It's something that I actually talked about pretty extensively this morning, that it really looks like the yields could be topping and bonds could be massively oversold here. I mean, we have a lot of precedent of bonds being this oversold. You can look at TLT as

a proxy for that, obviously. But when we see bonds this maximally oversold on so many different timeframes, and then you see just how far they've descended below the 200 simple moving average, even just a massive mean reversion bounce here could be just huge for markets in general. Obviously, if yields start to drop significantly, bonds start to rage, you would somewhat expect that that means the dollar is probably topping, the euro goes up, and stocks perform exceptionally well. That's what's happened in almost every situation. I mean, last time that we saw bonds this oversold in this situation,

if we're trying to tie it to Bitcoin, is when Bitcoin effectively went straight from 30 to 60 something right and that's uh doesn't mean that that's what's going to happen this time but it does look just does look like bonds are extremely overextended here i mean i'm sure peter has thoughts on that there's peter up on stage let's get peter up on stage and peter welcome i want to talk about that and i want to talk to him about the cup and handle that's being printed on the s&p or i think it's a cup and handle yeah yeah that's what it is i get a strong seasonal huge shorts by uh the hedge funds set up for a squeeze seasonality for stocks to rally this time of year. Bearish sentiment, uncertainty,

which basically means a flight to quality, which basically means a demand for high-quality corporate instruments, S&Ps. Yeah, I think we're set for a strong fourth quarter rally in stocks. Peter, how do wars usually impact markets? and specifically when i'm talking about wars let's like look at like middle east type wars you know like you know usually israel's involved at some point you know we saw the oil price go slightly up just walk me through how wars impact markets and how you think this war is going to impact the market, you know, looking at things like oil and stuff like that.

Yeah, I mean, oil is a whole different story because you never know, you know, at what point you get a squeeze in supply or, you know, panics. But stock markets, you know, you can't say, you can't go back through history and make the case that wars are terribly negative for equity markets. I think there are other things. Initially, we'll bring in volatility, no doubt about that. Makes Marx a little skitzy because people are on edge, willing to panic or FOMO at any point in time. But I just don't think one can put a stake in the ground and pound it in and say, I've got to be negative on US equity or global equity, because

there happens to be a local or even a regional war at this point in time. So I think you just go on and you trade it based on other things. And personally, I just think war or no war, we are set for two and a half months of strength in U. So I think it's a bit challenging to look at historical periods, especially in this point in time, because equity markets have changed materially. A lot of equity markets today are driven by not only spot buying, but also hedging and futures and options exposure. So how does that release itself and how does that express itself? It's usually through volatility. So if volatility is low, a lot of these funds are essentially programmed, whether it be hedge funds or control funds to purchase equities. And it's sort of like a self-fulfilling prophecy. And you've seen a lot of people talk about this on Twitter. So if war spikes the VIX,

that means for a lot of these funds, just indiscriminate sell-offs without actually discretionary traders hopping in to think about these things, which feeds into a lot of these funds just indiscriminate sell-offs without actually discretionary traders hopping in to think about these things, which feeds into a lot of the technical analysis Peters and others do so well. So I'm watching the VIX and the VIX right now is sitting at just below 17, which historically means less than or roughly 1% move in the S&P daily. So, you know, if the VIX is still in control, there's still going to be that background bid for equities just through these mechanisms I mentioned earlier. Do you think it's surprising at all that even,

I mean, we saw maybe a temporary dip, which I don't think you can attribute to the news, but do you think that it's surprising at all that we're seeing such minimal reaction to such large news generally in geopolitics. Is that a function of, you know, algorithmic trading and high frequency trading, as you talked about? Or is it just that we're at a point right now where markets are effectively shrugging off news in both directions? From my perspective, I think it's we're sort of shrugging off news. But,

you know, the GDP of those two countries and the overall equity exposure there is fairly minimal. So in terms of direct earnings impact, it's going to be very low. So you're basically pricing in the potential for a spike in oil, a spike in broader conflict. But I think markets are saying, we've seen this so many times before, and we know how it turns out, and the players involved are less relevant directly to a lot of the earnings that we see on the global stage that it's not going to have a broader impact. But if the war spills out into other countries being involved, if the US is more meaningfully involved, I think that's when we see these things spike. But I've been personally a bit surprised how little reaction there's been in markets.

What about the fact that Saudi Arabia, I read a quote from the Crown Prince Mohammed bin Salman, he says, the kingdom's to stand by the Palestinian people to achieve their legitimate rights to a decent life, realize their hopes and aspirations, and achieve just and lasting peace. And that's after the U.S. pretty much pledged support for Israel and said, you know, we're going to do everything that it takes to get to help Israel defend its right to protect itself. Does this cause, like, tensions between the Saudis and the Americans?

Is this a proxy for the Saudis versus the Americans here? How does this play out? Ran, I think I do want to go to the guest there, but I think there's probably some nuance I've noticed in these statements where they're very clear to say they support the Palestinian people, but obviously you don't hear many of them saying they support Hamas. Yeah, yeah. I'm sure they haven't come out.

There haven't been any supports with with hamas so it sounds to me like like what the markets what the market's doing here is the market's basically saying look this is a war that's just going to go on it's going to go between israel and hamas it's going to be it's going to take a while for israel to do what it needs to do and for hamas to retaliate in whichever way they're going to retaliate and markets don't as long as it stays like it is markets just business as usual into peter's into peter's cup and handle yeah the other thing on that too and as i i just you know we've got the fed coming out this week

in light of kind of the global conflict i just would not see the Fed raising rates this week. You know, even if that would have happened had the war not been going on there, I just think it's an additional thing. The Fed is going to just take a pass this week. We'll see pretty much meaningless comments come out, but we'll see no rate hike this week precisely because of the war. So, Peter, I think the Fed, I think the next FOMC meeting is only on the 1st of November. So they still have – I mean, we've got economic data coming out this week. We've got PPI. We've got CPI.

We've got jobless numbers coming out this week. And I think we get the minutes from the previous meeting this week, but I don't think that the Fed actually meet for an interest rate decision until the 1st of November. I do think we have seven Fed speakers this week, but I don't think that the Fed actually meet for an interest rate until the 1st of November. I do think we have seven Fed speakers this week, though, which is just absurd. But you're absolutely right. There's no chance of a hike before November. And right now, what the probabilities are saying is that there's an 83.2% chance of

no hike in November. In fact, I've been watching this chart, and the probability of a hike at any point is now the lowest that it's been in a long time. And that's since the beginning of this war. So since this war started, the market has basically said that it believes that because or as a consequence of this war, the chances of any further interest rate increases is now diminished. The highest chance is a 24% chance, and that's on the next meeting, which is the 13th of December,

but that's the highest chance of another interest rate increase. Yeah, that's what I'm seeing as well. I didn't know if you were trying to address Peter on that. Maybe we should expand here, obviously. Patrick, I know you've been tracking this rather closely. What are your thoughts generally on how markets are reacting and what's likely in your mind to happen moving forward? I would tend to agree mostly with what um with what tom and and uh peter were saying um i mean i think it feels to me like most people are waiting to see whether this stays to be a conflict between israel and hamas or whether it expands to be a full regional war and especially what the effect on on oil is uh as far as btc specifically i think one thing that's been pretty

notable to me has been btc strength compared to compared to the rest of the crypto market which which um i attribute that to the fact that you know when we're when everyone's mind is on war right now and on global conflict a lot of the things that are built using smart contracts you know nfts defile those things they seem a lot less important and then as insofar as people think that crypto has value or could have value uh in this conflict it's the fact that it allows you to permissionlessly store wealth and move money internationally yeah i think that that makes sense i also think that a lot of that can be attributed to just this part of the cycle, right? I mean, anyone who's ever looked at the four-year

cycle of Bitcoin knows that at this point, you would expect that Bitcoin would be somewhat boring and that altcoins would be suffering. It's happened every single time. It doesn't mean it'll be different moving forward or the same, but I don't think there's any surprise in anyone's mind right now that altcoins have slowly sort of bled while Bitcoin has been boring. I think the more compelling part is that with all this volatility around and all these things happening in the world, Bitcoin has just been boring, right? That can be pointed to, I think, as good news.

Yeah. Scott, we see we've got burb here with us adrian adrian uh he wrote a paper or it was a co-author of paper called the seasonality of cryptocurrencies and in that paper he highlighted that there's going to be a massive pump of bitcoin in october november and december um so i think while we have him here, and I know he's quite limited on time, I'd like to hear, you know, his theory goes into what we've been talking about now. Birb, welcome, my friend. Let's maybe talk about your paper and why you think it's going to happen. Hey, everybody. Can you hear me properly? We can. How are you, sir?

Sound great. Awesome. Good to have you, Legends. Thanks for the invite. I can see Peter Brand as well. Nice. You've got some powerful spaces. Yeah, listen, I mean, there's been, of course, a lot of truth said already. And any sort of like a forecast, any prediction is a source of noise and uncertainty, right? So let's take everything with a grain of salt. However, I'm not going to rely much on the opinion, so I'm going to rely on the facts and something that already happened, right? Which basically generates 100% certainty anyway, right? your presidential cycle, I wrote an article with Jeff Hirsch, with the godfather of seasonal

studies himself, where Jeff and his father, his late father, Yale Hirsch, basically put together the first ever framework for institutions to communicate the facts and numbers, right, that are transparent and characteristic to specific seasons of the year. And you've got very interesting patterns throughout the year, such as for instance, the Santa Claus rally, where you have typically a rally towards the Christmas time and kind of like a strong finish of the year overall, or where you have a typical seasonal weakness throughout the quarter three when there is like less trading volume right when there is less less of the interest that transpires to less of this let's call it support cushion or demand on the market right as people take their attention

out of the market and just place it somewhere else so there are a lot of seasonal patterns and just like we observed the temperatures or just like we decide whether we take a jacket for what's coming ahead, for the next days or for today, we do not make assumptions based on the future because that's what we don't know. We take a look at the temperature that's been transparent over the past days, hours, years and decades. That's where we kind of like rely on the averages and the longer the data pool is, right, the more data in the pool, the more relevant the averages are, the simpler mathematical averages as the actual estimate, right? So we can more accurately place our

expectations at the averages in this terms. So long story short, just observing those presidential cycles, you know, we are in the pre-election year, 2023, just like 2019. So there are a lot of similarities, 2015, 11, etc. Those are the most bullish years on record, basically. And I just had a little bit of a discussion earlier today with Jeff, how in 84 years, there was only one loser, basically, for the pre-elections. It was only down the air for Dow Jones in 84 years. was only one loser basically for the pre-elections right it was only down the air for dow jones in 84 years that's a spectacular record right and there was about 20 uh 20 20 pre-election years total again if i'm not mistaken right and 19 of them were bullish

but yeah why do you think why do you think that pre-election years are so good shouldn't the year that's good be the actual election year because i think i mean like do you think that next year in november when the people go to the polls do you think they're going to remember that 2023 was such a great year or like is there any can you can you think of any reason why a pre-election year is the good year yeah yeah i mean again i mean it's just doesn't matter what my opinion is. In fact, right. I can comment on it anyway. It doesn't matter what my opinion is, because that's a fact. That's that's something that happens in a repeats over and over again over 84 years. Right. So it's hard to ignore that.

Still, I think, you know, it's a conjunction of many different reasons. One being basically politicians wanting to inflate the markets before the election to fund the campaigns and kind of like be, you know, at a stage of where the voting comes up, comes up so that people fear certain and confident, confident that they are the obvious good choice. Right. And they can only do it if the economy performs well, if the markets perform well, when everybody is happy. Right. Nobody gets reelected when everybody hates you, basically. So that is that is, I think, the source thing, right? Then, of course, with the popularization of crypto, well, crypto as well, but popularization of the computers, of the technical approach in the markets of quants, you know, I think that relying on this data may fulfill, well, may fulfill itself,

may chime into the self-fulfilling prophecy a little bit, strengthening the effect of the seasonals, because many people look at it, this is the same way so regardless of the very specific reasons it just happens this way it's just transparent and it just happens again and again and again and again so if you have 95 percent of the chances that were 84 years right of being right then why wouldn't you take the opposite guess so that's the first thing right and this is a little bit of a seasonal kind of like approach of of of intro is just to of being right, then why wouldn't you take the opposite guess? So that's the first thing. And this is a little bit of a seasonal kind of approach of intro is just to speak to the common sense, because if some people of course still are so averse,

are still so averse and so I would say prejudiced towards technical analysis and then the quantifying the records and not knowing you know rejecting the facts and kind of like focusing on their opinions that they forget that's exactly what they are doing with the temperatures right and taking the jacket like I said if you if somebody tells you that technical analysis doesn't work or it's worthless then it means they are gonna basically take a jacket into the you know fucking desert in the middle of the summer because why the past would define the future, right? So they have no sense. So let's talk specifically.

Let's try and narrow it down to your thesis now, specifically on Bitcoin and crypto. Yeah, correct. So I sent you, by the way, in the DM the chart that you may want to pin, right? It's just going to be, I think, a good point for conversation. Angela, if you could pin it, please please sorry angela's driving in the back if you could put it please i'll send it to you yeah yeah um so four-year presidential cycle is a is a fact right and the pre-election years are the best it's a fact and then bitcoin is driven first of all by strengthening correlation over the years where when where the actual correlation has strengthened when uh well what put together

what put together uh with uh with s&p 500 it's strengthened by almost 400 percent over the course of the past eight years or so, right? So there are a lot of reasons to kind of acknowledge that Bitcoin is slowly becoming a little bit of a more volatile beta tech stock, NASDAQ, right? So there are a lot of similarities and dissimilarities and strengthening over the long term. So what Jeff spotted, right, in our free PDF article, the first ever of this kind, was that it fully subscribes,

Bitcoin fully subscribes to what Nasdaq does in terms of the best eight months, sorry, the best eight months of the seasonal kind of like a strategy when they, you know, Jeff actually times this with the stock traders on Monarch. Big shout out to them, by the way. They use the MACD buy signal. I think it triggered yesterday for the S&P 500 as well, so it's a massive thing.

So they use the MACD for timing and the overall guideline for the seasonal studies for best eight months and the worst four months. So we've just skipped out of the worst four months and heading Octoberober through may until you get to see this pattern selling may go away which transpires again pretty well

it extends for it extends for nasdaq a little bit longer right typically into june transpires again quota free slow would subscribe itself to the worst four months so july uh july august september kind of like you you have this you know june j July, September, June, July, August, September are the four months that you do not really want to expose yourself much. Right. And October is a typical turnaround month for stocks, which has been the case many, many times in the past. So, again, if the pattern repeats itself again and again and again and over again then perhaps there is something to it right regardless of the reasons behind it so the best eight months have started basically right there still might be some bottoming process of course you know we don't know there's such a such a terrible thing going on with uh with the you know

middle east conflict right now in Gaza, my heart goes out to everybody up there. I hope you guys are staying safe. But I think what you're saying is that seasonally, the NASDAQ performs very, very well in the last four months of the year. Specifically, you're saying that Bitcoin has become more of a proxy risk asset in the eyes of the institutions

and that as a result of that, you're expecting Bitcoin to actually perform like a risk asset, which means that you're expecting a push in the last four months, right? Is that well summarized? Yeah, you can put it in this way, right? So October, on average, over the last 13 years for Bitcoin, it averages out 20% gain, right? As opposed to 6.5% loss on average for September, the worst month of the year. So from the worst month of the year, you get October, which averages 20% gain on average.

November, which averages 40% on average gain, right? Again, and December, which comes up with the Santa Claus rally and pretty much giving, you know, sealing the decent close towards the end of the year. That is a pre-election. You're otherwise bullish. So all that transpires to an average gain of 40 or 50% for quarter four as a fall, right? So it means that if you keep buying at the beginning of quarter four and selling at the end of a year, year in year out over the last 13 years, you're a 50% gain on average year by year.

That's a pretty powerful record, right? So one thing is Bitcoin is again, more beta volatile, you know, tech stock brother of Nasdaq. And it's subscribing itself to the seasonal pattern of best eight months and worst four months. Huge shout out to Jeff again. It also again transpires very powerful records on its own characteristic to Bitcoin. But the strongest month of the year, November, 40% gain. October is a decent warm up that typically comes up together, extends into November and then kind of like seals the whole thing bullish in December.

That's what typically happens. The best trading day of the year is 28th of October in terms of the cumulative average performance. Again, it's everything is in the tweet that I sent you over. Yeah, perfect. Yeah, the odds are pretty bullish. The context is bullish. Some people say this is maybe the final comment

before I rumble myself to death. Viv, you said you sent me the tweet. Where have you sent the tweet? DM, WhatsApp. Oh, okay. I didn't get it on the WhatsApp. Let me just put it here. Okay, send here.

I think that... Okay, I've got it. I've got it here. Andy, I see you with us. I'm keen to hear your thoughts about what Birb's saying in terms of last quarter of the year, keen to understand how you see the last quarter panning out for markets. Good to be here, everyone. Thanks for having me. You know, I have been at this for a very long time and I understand the validity of technical analysis. And as much as I would like to brush some of it away to technical analysis being somewhat flawed in markets that are controlled and rigged, I still come back to the fact that over time, it certainly

has proven to be more than accurate. But I look at things in a very different way, because, and maybe I'm an outlier here, but I look at things in a way that would say, well, yes, that's true in a 40-year bull market, in bonds, in equities, in real estate. But I look at things differently right now because this isn't what always was. I mean, we can talk about the fact that we've come the closest to defaulting on our debt in decades. We've seen losses on treasury bonds with maturities of 10 years or more at almost 50%. We'll go down as maybe the biggest bond debacle ever since 2020. We see the speaker of the house removed for the first time ever. Of course, we have war in Israel, war in the Ukraine. We have the mortgage rates hitting their highest level in 23 years. We have OPEC raising again or decreasing oil production, voluntary production cuts.

At the same time, oil has reached its highest price in over a year to $95 a barrel plus. And now you have war breaking out in the Middle East. And this is on top of record. Now, these are all records. $17.1 trillion in household debt. Record $12 trillion in mortgages as rates explode. Record $1.6 trillion in auto loans. Record $1.6 trillion in the largest asset of the United States, student loans. And yeah, you heard me right. Their balance sheet just came out. 155 trillion in debt when you add Medicare, Medicaid, Social Security, and government military pensions to a $33 trillion debt. And in the past, in case no one's noticed, in the past 18 days we've added 444 billion dollars to the debt in 18 days it took us

till 1975 to accumulate our first 500 billion and we've added almost that much in two weeks one trillion dollars why do you think andy why do you think that's happened like that in the last is that now the rate of spend or the rate of increase in debt? Is that now the new normalized rate or have the last few days and weeks been an extraordinary spend period? debt ceiling, it took us over 210 years to do to accumulate the first 1.5 trillion, we did that in eight weeks. And so you know, you're talking, you're talking a system that has gone mad in terms of its, its, its fiscal sanity. And we are spending money that we don't have. And we are behaving like we like everything is normal, and everything is great, but it really don't have. And we are behaving like everything is normal and everything is great, but it really isn't great. And this is why I think relying upon metrics that, yes, they've worked very, very well in orderly markets. And they've shown a great deal of accuracy

when you talk about markets that are behaving rationally. But these are not rational times whatsoever. And at the same time, when you look at what the central banks are doing, not only are they dumping bonds, China, Japan, Saudi Arabia. But they purchased 77 tons of gold in August, marking a 38% increase from July. This is going on and on and on for the past 18 months. The most well-informed traders on the planet, the central banks, have been buying more gold than at any time in history. So I don't think these are normal times. And then you have this rallying cry of all of these countries pushing back against the Western hegemony and the coercion that has, you know, strung up the bricks. So look, there's so much upheaval going on right now.

But I think we haven't even talked about the elephant in the room, and that is the banking sector. You have a banking sector that is very, very, very close to imploding. And I would bet, I would bet dollars to donuts that maybe 25% or more of the people on this Twitter space don't even know that it is law that if a bank goes upside down, it needs to be bailed in, not bailed out. That what happened with Signature Bank and Silicon Valley Bank was actually a violation of the Dodd-Frank law. That this is why the... What do you mean a bank needs to be bailed in and not bailed out? Right. So when the Dodd-Frank law was passed after the great financial crisis of 2008, a law was put into place that said if a bank ever goes upside down again, it will not be the taxpayer's responsibility to bail out the banks. Meaning just like when we bailed out AIG or when

we bailed out all of the banks that needed trillions of dollars of liquidity to bail out their foolish bets. They said that's illegal. Now, the depositors in the banks are unsecured general creditors, period, meaning anything over the bullshit FDIC lie of $250,000. And why do I say it's a lie? Because they have 128 billion in assets backing 18 trillion in deposits. And anything over that amount will be bailed in to the banks to become you are to bail in the bank. In other words, you are a creditor of the bank and you are unsecured. And that's why there was such outrage by the Republican senator from Oklahoma, when he was questioning Janet Yellen after Silicon Bank was bailed out. He said, Madam Secretary, you just bailed out Silicon Valley Bank.

And I thought that was maybe legal with the Dodd-Frank Act. She says, yes, it was. But we felt that it was too systemic of a risk to not bail them out. But it won't be at the taxpayers expense. FDIC will cover this. Okay, right. Sure. So no inflation on this. So but so he says, well, does that mean if a bank fails in Oklahoma, my constituents will be made whole? She says, absolutely not. It will require a majority, uber majority, as she called it, decision from the FOMC, which is the Federal Reserve, myself, the FDIC, and the President of the United States to deem if those banks are worthy to be bailed out or not, if it's too

systemic. In other words, she lit the fuse. She said they will be bailed in. And no one understands this. Wait until you see a bank fail. And you don't think that Moody's and S&P downgraded these banks just for the hell of it. You are going to see you have one point five, 150 billion rather, excuse me, 150 billion plus in short term loans that were were made by the FDIC, by the excuse me, by the Fed in these emergency lending programs. And they all are due to sunset in the next six months. You have balance sheets on these banks that are completely upside down. And it doesn't matter what the Fed does about raising rates or not, unless they want to get into yield curve control. Because as these banks continue to meet redemption requests, they are forced to sell their bonds, their 10-year treasuries, which which are underwater which pushes rates

up even further which kills the banks more and more and more and wait until this next bank is is fails and is bailed in and no one understands what that means that means you lose everything over 250 000 gone goodbye i don't care if it's a business account with five million in operating capital or or your life savings. Gone. Goodbye. Hang on, may I chime in real quick? Just one second. The response that we got last time from Yellen when the bank started to collapse was effectively all depositors will be, I don't want to say insured,

but I think you know what I'm saying. But that's illegal and you you have $18 trillion in deposits. Right now, there is over $7 trillion in uninsured deposits. $7 trillion in uninsured deposits. Just the top four commercial banks have over $4 trillion in uninsured deposits. Does that mean we're going to print $7 trillion? I mean, welcome to Zimbabwe. At what point? So what at what point does this become unfixable?

So what so I mean, what do you see? What do you see happening in the next in the next quarter, so to speak? I see chaos. And I hate to say it. And I am not saying this to talk my book. I am not saying this. I have three kids. My youngest is 16. I want, this country has been wonderful to me. But I will simply tell you that when the next bank fails, and there will be banks that fail, and it is bailed in, you're going to see chaos. You're going to see realization that people will flock to Bitcoin. People will flock to gold and silver. Where else do you put your money at a period of time when it's not even safe to keep it in the bank anymore? And there are a lot of banks that are hanging on by a thread and have borrowed as much as 100% or more of their equity from the Fed in a short term lending program, just to say solvent for a short period of time, you see one bank fail one big regional bank fail,

and it is bailed in. Watch what happens when everybody runs to the bank to rip their money out. And that in and of itself creates a cascade of rising interest rates, because these banks are loaded with 10-year treasuries that are underwater, and they have to sell them, which then pushes the yield up higher and drops the bond price further. upon itself as a vicious doom loop. And it's just very interesting to note that the number two economic advisor to the United States government, Lael Brainard, is a modern monetary theorist who wants to cull all the banks and issue money directly from the Federal Reserve. What did the Bank of International Settlements say recently? Every single country must have an operational CBDC by 2025. She ran point with MIT while she was at the Fed before she became the economic advisory to the US government. She also ran point for FedNow, which just came out. She is a modern monetary theorist. This is exactly what she wants. And

why is this happening? Let me ask you a question. Why the hell has the Federal Reserve allowed the reverse overnight reverse repo market for all these months to continue to take money market funds in where you're guaranteeing 5.3% with overnight or daily liquidity in a money market account when the regional banks can't touch that? Why would anyone stay in a regional bank where the best you can do is a one year CD at under 5%? Yep, you're locked in for a stay in a regional bank where the best you can do is a one-year CD at under 5%? You're locked in for a year in a system that we are told by Janet will not be bailed out unless under extraordinary circumstances. And these banks are over-leveraged and under-capitalized. And the next one that fails and gets bailed in, watch what happens. It will be chaos because nobody knows about it.

And it's law. Okay, so do you think that what we get now is we get in the next couple of months, first of all, do you expect any more interest rate increases? Or do you think Powell is well aware of what you're telling me here? I think Powell is trapped. I mean, look, he says his hero was Paul Volcker, who raised interest rates to 18 and three quarters percent. I don't know. What does he want his legacy to be? Does he have the courage

to do what should have been done a long time ago, and that is to raise rates above the level of inflation. And the level of inflation that we are told is real is fake, as is the information on unemployment. Anything that comes out of the Bureau of Labor Statistics, you should take out of the equation and look at what John Williams of Shadow Stats tells us. And we've got inflation at 11 or 12 percent based upon the metrics that they used to be before they changed it to meet their illusionary inflationary agenda. It doesn't matter if you raise it by a quarter or a half percent.

There are forces in play right now that will continue to raise interest rates unless the Fed embarks upon yield curve control. And then we head down the road of, you know, why my republic? Because who the hell is going to buy our treasuries at this rate? Who wants to buy our paper? And, you know, when you see, it's interesting that when you see the major players in the central bank arena selling treasuries, and we're supposed to believe that one of the top buyers of US treasuries right now is the Cayman Islands. Are we supposed to believe that? Or is it a shell corporation that's, you know, produced by the Fed hiding there buying up all the treasuries.

But who wants to buy these treasuries that are getting slaughtered? At the same time, you see a massive push to de-dollarize and to sell treasuries and dollars across the globe. It is impending, I think, interest rates going up. Rick Santelli out there saying his charts say rates can go to 14.5%. It's not me. This is just, I don't think it has anything to do with the Fed. It's the market. Yeah, I think we're delving into a bit of conspiracy theory and lunacy here, right? All treasuries are, especially on the short end, liquid dollars. And no matter what way you slice it, dollars are the denominator for every

asset in the world. They are the currency of the realm. They are 88% of global foreign transactions. They are 50% of global invoices. They are 50% of SWIFT payments. They are 25% of underlying global GDP. They are 50% of global cross-border loans. So until you find a solution to pay for things in assets other than dollars, we are going to have to live with treasuries being whatever the US government says they are. Whether that's right or not, I don't think it is, but it doesn't really matter, right? Bitcoin is not that solution just because bearer assets, the ability to transact in them is really challenging. That's why we went off the gold standard. So there could be some fluctuation and we can smooth business cycles. But maybe a CBDC facilitates that. I don't know. But for the

next, call it five years, right? The US government has the ability to monetize any debt because guess what? They print dollars. They print the denominator. So people aren't going to be running to the banks when the U.S. government could paper over any crisis that happens. We have that ability. It's just the law of the land. Is it conspiracy theory and lunacy, or does that what you just said sound ridiculous if you're the rest of the world? That's right. We'll just paper it over. We'll just modern monetary theory it away. Zimbabwe and Weimar Republic proved that to be untrue. And at some point, the rest of the world wakes up to this. Zimbabwe and Weimar Republic didn't control 25% of the world GDP, had the most successful corporations, have the best growth rate in the world. They didn't have the most

productive populations. Those are bad analogies, right? We can agree to disagree, but I think your recency bias is missing a growing trend. I think, look, I want to just step in here and say, Tom, I hear you that I agree that Zimbabwe wasn't the

highest manufacturing nation, but remember, Zimbabwe is very resource-rich and could be a very wealthy country if it was run correctly. So it's maybe not as much of a production nation as the United States, but it's certainly not a nation that didn't have anything going for it. I think the other thing where I do want to agree with Andy is that when you look at the U.S., you can see clearly that the U that the US is on the decline at the moment. Now, it might be still the cleanest shirt in the dirty laundry. But I mean, you can see that as a trend, it's very, very, very much on the decline, no?

I believe so. Oh, absolutely. Yeah, I think we're on a slow path to de-dollarization. My point is that it's not going to happen overnight. It's going to be a five, 10 year period. And I totally agree. Bitcoin, gold are absolutely fantastic ways to play that and to feed into that. My contention is, though, that's not going to happen overnight. It's not going to happen in one fell swoop. It's going to be a very slow and gradual process. But that's why you want exposure to these assets. I just push back against to be instantaneous sort of flip the switch moment, which, you know, biology sort of alluded to. But I never said it was flip the switch. I never said that. You said it's conspiracy theory and lunacy. It's a conspiracy theory and lunacy that the Bank of International Settlements reclassified gold as the world's only other tier one reserve asset in 2019. And as a conspiracy theory and lunacy that the Bank of International Settlements reclassified gold as the world's only other tier one reserve asset in 2019? And is it conspiracy theory and lunacy that the central

banks have bought more gold over the last 18 months than ever, ever, ever before in coordination with selling their treasuries? You're right. If they did it too fast, they'd cut off their nose to spite their face. Is it conspiracy theory or lunacy that all of the exchanges across the globe are being bled dry of all of their commodities, not just gold and silver, zinc, aluminum, all of the rare earth metals? Is it really or is it a growing trend? It's called logarithmic decay. Little by little by little by little by little and then bang all at once. When is the bang? Don't know.

I don't know. But I will simply tell you to think that it is normal and okay for a country just to paper over their problems. After printing $444 billion in 18 days, after increasing our debt by over $2 trillion in just a few months, we're on pace right now just in what they're doing to increase our debt this year by $11 trillion if they continue to print this way. So at some point, at some point, this recency bias will be exposed by the rest of the world who's just sick and tired of a country has has ruled the roost for a very long time that is is just printing money like like there's no consequences so but yeah but but i mean again like i think we've had this discussion many times on this basis and and other similar spaces

there's nowhere else to go i mean if you if you if you put your if you don't want your money to be in u.s dollars where else do you put your money other than I mean, you can say gold or Bitcoin, but where else do you put it? Why do you think there's a growing chorus to push back against the dollar and to settle all of these trades outside the dollar in other local currencies? Well, you know, everyone was upset that BRICS didn't come back with their gold currency here in August. But what did they say? They all agreed to de-dollarize and trade energy in local currencies and come back to the table next year with a plan for a local settlement currency. I'm not saying the dollar is going to go away tomorrow. But if you are not a contrarian, as my friend Rick Ruhl often says, I truly believe you will become a victim. And I think that is a reality, whether it happens in six years or six months or 60 days, I don't know.

But I do think that there are consequences for what we are doing. And I also find it ironic. One last point. You know, I ask people, well, what makes the dollar the world reserve currency? Okay, number one, it's the protection of the Saudi kingdom. Well, that's no longer in play because, oh, they signed an agreement with Russia. They joined the Shanghai Cooperation Organization. They joined the BRICS. And we told them that we're going green. We signed an executive order. Well, how about the full faith and credit of the US? Well, we're insolvent. We're a banana republic of 130% debt to GDP. And by the way, every single time in history, a country has gone over 130%. They have defaulted, period. End of story. Every single time in history. And so we're broken,

we're insolvent. Our largest asset is student debt. And how about the faith of this country? Do you really think the world looks at us the same way they did on liberty, on justice, on lawlessness, all of the things that are corroding? And so you take, remove the petrodollar, remove the fact that we are, we're broke, we're insolvent. Andollar remove the fact that we are um we're broke we're insolvent and how about the fact that people look at us as what the hell is happening in this country this ain't the u.s that i remember so you you throw all that away and do you know that the number one economic advisor to this country jared bernstein his main thesis is losing the dollar's world reserve status so when you add the number one and two economic advisors

to the equation, one wants to get rid of the world reserve status, says it's a privilege we can no longer maintain. And I don't know about you, but if I wanted to lose the world reserve status, I'd weaponize a dollar and tell Saudi Arabia we're going green and sign an executive order. And how about what's happening inside the country? I create divisiveness. There's no unity. Every time we've had our backs to the wall, we were unified. We have no unity anymore. You can't even go to Thanksgiving dinner and tell your family who you voted for because it creates a fight.

So when you talk about this country and being what we once were, I can assure you that much of the world doesn't think we are what we once were. And there will come that all at once moment, don't know when it is. But if you don't look at things in a realistic viewpoint, and think everything will be okay, we can just print and continue to coerce and bully the world. Well, I got a bridge to sell you. That's just my personal opinion. And I agree. I mean, I agree with you. I agree with you wholeheartedly that you can't do it. And I often use the analogy that if the U S was a country and the country went to,

you know, if the U S was a company and the company went to the SEC and said, look, we've got $33 trillion in debt, our annual debt payments at this, at these interest rates are $1 trillion a year. I mean, the SEC would probably, you know, open a case against all the executives and the DOJ would probably open a

criminal case for negligence or whatever the charge is. But unfortunately, you know, right now, they have the network effect of being the global reserve currency. And there's nowhere else to go. I mean, you can't put your money into the Chinese yuan and you can't put your money into the renminbi and all of those. So, I mean, I guess for now, that's what it is. Now, how long will this last?

That I have no idea. Tom, go ahead. Yeah, I'm sorry. I'm in violent agreement with Andy on a lot of these points, right? I don't think any of us are comfortable with the situation and there definitely will be a day when the other shoe drops. But that day, I don't think, is coming anytime soon just because of the momentum that we have in the global system.

And that is driven by U.S. being price, U.S. dollars, you know, being the denominator for all global debt. If you're issuing debt in another country, you're not issuing it in Argentinian pesos or whatever. You're issuing it back by U.S. dollars and U.S. debt. And that's just the law of the land for a lot of these countries. And that's all over the world. Unraveling all of that is an enormous headache. And then you have oil that's priced in dollars. Could BRICS price

oil in another currency? Potentially, right? But what would they back that currency with? They'd have to back it by dollars. There literally is not enough Chinese renminbi or euros to facilitate backing a currency by anything else but the dollar. So you potentially could do it with a basket of hard currencies that comes with its own problems. So I think we're getting there to say. And I agree a lot with what Andy is saying. And somebody who has really written extensively about the precarious situation we find the world in is Ray Dalio. And I recommend anybody go to his LinkedIn page and read his books. I think he has a great philosophical handle on some of these big themes that are going on. I just want to make one point. Stocks are the ultimate short dollar play. When you buy stocks, you go short dollars. And, you know, I would agree with Andy that the US dollar is a precarious asset. But the best short dollar position I can think of currently is being long stocks.

You buy stocks, you short dollars. That's the only thing I have to add. Are you saying buying stocks shorting dollars because stocks are an inverse play as the dollar depreciates, the nominal value of stocks goes up? Oh, absolutely. I mean, you think about it, you got to hold your assets someplace. the nominal value of stocks goes up. Oh, absolutely. I mean, you think about it, you got to hold your assets someplace. If you're holding your asset in dollars, that's not a good place to hold it. When you buy stocks, you're transferring your ownership position from something make-believe, that is fiat currencies issued by the U.S. government,

to something that has some realistic value of earning money and paying dividends over time. So, I mean, you look back through history, being long quality equities, S&Ps, SPY, you know, in a multi-decade perspective, it's the best short dollar play I can think of. So let me go through the panel here. And I just want to get a sentiment here. Question is one we've asked before. If you had to put your money into one asset for the next five years, you can't touch it for five years. You can only put your money into one asset for the next five years. What would the asset be? Maybe Peter, maybe this is a good one to start with you. Five five years no withdrawing no

swapping from place to place you get all your you get your full investment back in five years plus whatever it's returned what what is what would you put your money in for the next five years uh not government debt i'd put probably 60 percent into quality equity is probably... It's got to be one asset, 100%. Stocks. Stocks. Okay, that's a good one. Patrick? Energy stocks.

Energy stocks. Tell me why you'd say energy stocks specifically. Well, I think if you look at historically in periods of high inflation and as well as global turmoil, energy stocks have tended to tended to hold up well. OK, so Patrick's energy stocks, I mean, I take it you're going to say Bitcoin, but let's see. I mean, it's no secret that I've been holding Bitcoin for 11 years at this point, maybe more actually now. And my reasoning is very simple.

It is the only asset which protects you not just against inflation, but against any of the many ills and potential systemic collapses that have been discussed during this and the other calls that you have. It's the only asset which truly has no counterparty and which you can actually own yourself. All of the other assets you have, a middleman, which relies on the entire system working for you to be the beneficial, but not the actual owner. And not only that, it benefits from the fact that it has the best Sharpe ratio adjusted returns throughout this period continues to be the best performing asset this year. And I think we are in a world which is becoming increasingly volatile. The

number of times we see something shocking, which we said would never happen, has decreased from once every few years to once every year to now once every few months. And there's a real risk that we don't know what the next thing that will collapse is. And so if you want to be able to own something in a world which becomes increasingly digital and which you can truly own, there is only one asset, and that is Bitcoin. All right. So you're going to put your money in Bitcoin. No surprise there.

Tom, where would you put your money? money five years all your money into one asset ethereum global bet on the entire uh financial system digitizing so pretty straightforward from from my perspective all right dave to you i don't know if he's with us. Dave, are you with us? I am. Yeah.

I'm going to go GBTC. GBTC, because you want to get the, because by that time you believe there's going to be an ETF and you're going to make the premium and you're going to get the Bitcoin. You got it. Fantastic. Andy,

where would you put your money? This is one that I'm really interested in. Well, and a lot of people would say, put your money into silver because it offers such great potential. First of all, to the gentleman who just spoke, I would agree about Bitcoin having no counterparty risk, but the same is true about gold and silver. They are two of the only assets that do not have counterparty risk. They are simultaneously no one's liability. And so, I've always felt that cryptocurrencies and precious metals are cut from the same cloth and it should not be a one or the other, that it should be both.

I believe that vehemently. However, what I would say is, since the end of World War Two, there's been one tier one asset by central bank measurements, and that's been US dollars and US treasuries. That has been the exorbitant privilege that we have got since the end of World War Two. The Bank of International Settlements, which is the central bank or central bank it's it's the most sophisticated bank on the planet said oh by the way gold is now a tier one asset the only other one and what is the asset that all the central banks own and are buying gold if i had one trade and only one trade to make to me it's not about return on your money as much as it is return of your money in these very, very volatile and possibly upheaving times. So for me, if I'm looking to

protect and keep without risk, it's gold. Hold on, I don't know why only one getting that noise? Okay, sorry. Sorry, I was getting that noise. All right. So you've gone with gold. I think we've been through all the speakers. Yeah, we have been through all the speakers. Guys, I think on that note, I think we'll call it a day for today. Not much else happening on the crypto market.

It's been a pretty bland day. Bitcoin's the only one that's running the alt-soft pretty flat. I think we'll meet back here again tomorrow. If you haven't already followed the Crypto Town Hall, we're going to be hosting most of the shows now from Crypto Town Hall. If you want to get the notification, obviously just follow this Twitter account. It's the big red logo

which is hosting this one. Follow it because that's where we're going to be coming. I think Mario will be joining us again tomorrow when the law spaces die down and he can get back into the normal programming. On that note, I'll see you guys again tomorrow. Thank you, guys.