We Study Billionaires - The Investor’s Podcast Network - BTC072: Macro Overview w/ Lawrence Lepard (Bitcoin Podcast)

Episode Date: April 6, 2022

IN THIS EPISODE, YOU’LL LEARN: 01:31 - What market indicators are surprising Lawrence the most right now? 09:17 - The energy market in a time of war. 09:17 - What are his thoughts on the equity "melt-up" thesis? 18:55 - If gold can't rally in this environment, when can it? 34:01 - The battle between deflation and inflation. 39:21 - What are some key knowledge points to watch out for? 44:11 - What would Yield Curve Control look like? 58:43 - Portfolio construction versus age. *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members. Lawrence Lepard's Twitter. Lawrence Lepard's PE Firm. New to the show? Check out our We Study Billionaires Starter Packs. Are you looking to start investing? Check out our article on How to Invest in Stocks: The Ultimate Guide for Beginners. SPONSORS Support our free podcast by supporting our sponsors: River Toyota Fundrise 7-Eleven The Bitcoin Way Onramp Public Vanta ReMarkable Connect Invest SimpleMining Miro Shopify Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

You're listening to TIP. Hey everyone, welcome to this Wednesday's release of the podcast where we're talking about Bitcoin. On today's show, I have a veteran investor and fellow bitcoiner with Lawrence Lepard. Lawrence has been in the private equity space for multiple decades and goes by the byline, fix the money, fix the world. During our conversation, he provides an in-depth framework for why the current circumstances are a very different setup compared to anything we've seen during the past 10 years. We talk extensively about the inner plumbing and the,

the flows of the various financial sectors. We talk about the impacts of global events that are making prices skyrocket. We talk about why Bitcoin will be so instrumental to a portfolio in this type of environment among many other themes. So without further delay, here's my chat with the thoughtful Lawrence Lepard. You're listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. All right. Hey, everyone, welcome to the show. I'm really excited. This conversation is long overdue, Larry. I'm really excited to have this and have it recorded. So welcome to the show. Thank you very much. Nice to finally talk to you one-on-one.

Yeah. And I'm excited. Hopefully, we bump into each other in Miami here next week. For sure. It's the plan. So here's where I want to start off. And this was the question that I saw posted online for you specifically, and I just really like this to kind of kick off the discussion, the person asked, which market indicators are you most surprised about, concerned about, or paying attention to right now? A great question, very smart. So, well, a couple things. I mean, just the general stock market, and this ties into what probably is going to be one of your later questions, which is, why hasn't gold taken off, given all the gold-friendly stuff that's going on, or even Bitcoin? Why has Bitcoin

kind of mired down below its all-time high, given what happened? in Russia. And I think, you know, I think what pressing what's really going on here, this reminds me a lot of 82 and 83, and I was an investor back then, which tells you my age, and it takes a while for the world to wake up. You know, you got big investment committees, you got decisions that take time. I mean, you and I can change on a dime. I mean, we see Putin do something. We're like, oh, I know what that means, boom, do it. But, you know, big asset allocators, I mean, they get reports and they have a timeframe and they have to have votes. And, you know, It just things don't happen instantly in investment land.

And to that point, you know, it's shocking to me. Probably the biggest indicator that I'm most shocked about is given everything that's going on, it's shocking to me that the S&P is still within 5% of its all-time high, right? Yes, sir. We had this dip and it just came rallying back. And it just goes to show you how ingrained this buy the dip is. And it's because, you know, it's muscle memory. It's because it's worked since 2008.

I mean, there are people who are stock market investors who've never seen anything close to a bare market. You know, I don't realize that between, you know, the peak in 206 and the bottom in who, 08, stocks lost 50% of their value. You know, the same story in 2000, from 2000 to 2002, stocks lost 50% of their value. I don't think the world at large, many investors today don't understand that that's possible. And those were from lower levels on any way you want to measure it, right, in terms of, you know, the value compared to earnings, the value compared to the margins, the value compared to sales,

you name it. We're moreover valued now. So I'm watching the stock market very carefully, because to me, that's an indicator of the sentiment living in quote unquote, the old world. I think our world is in the process of changing from a deflationary world that we enjoyed from 1980 to 2000, 2019, 2019, and we're slowly rounding that bottom and we're now entering an inflationary environment, a serious inflationary environment where molecules and stuff are going to be a lot more important than paper. And so I'm watching the stock market carefully. I'm also watching the bond market carefully. And so the 10 year, as we all know, has just taken off like a rocket ship. And, you know, mortgage rates are going up a lot, right? We've seen them go from 3% to 5% on a 30 year.

And obviously, this is all because inflation's going up. And so these are all natural things you would expect, given how much inflation's gone up. But people are thinking, well, this is temporary or it's going to turn around, not transitory. Even the Fed got rid of that word. But the one that amazed me as a guy on Twitter, a great guy does a great piece of work named Macro Elf. And he laid out the bond swaps five years out.

People think that from 2027 to 2032, the five-year inflation swap is at 2. So that means the general people, sophisticated people who are investing in the marketplace today think we're going to eventually get all this stuff under control and go back to a low inflation deflationary environment. And I think that is just absolutely and completely wrong. And so it's classic investing in the river mirror. Let me draw in this 1982 example because I think it's useful. So, you know, I'm just out of, I'm out of college and I work in Walser a couple years and I go to business school. I'm out of business school and I'm investing money profession. That's my job.

And I remember the time playing very, very well. And everyone was saying, you know, and we had just come out of a decade, the 70s, where bonds just got annihilated. Stocks got annihilated multiple times, kind of they were seesawing up and down. And everyone thought inflation, and inflation was extremely high. Gold had gone from 35 to 800. And the consensus view in 81, 82, and 83 was inflation is going to be with us for the rest of our lives.

It's a serious problem that will never go away. inflation will never go away. And therefore, bonds are the worst investment in the world. And stocks are the second worst investment in the world. Now, it had all just changed. And the one smart guy out there who I listened to was a guy named Gary Schilling, who was an economist way back then and he wrote a book and he foresaw what was coming and he bought the 10-year strips. I don't know if you know what that is, but it's where they strip the principal off of a 10-year and actually about the 20 and the 30-year strips as well. He put his entire net worth into that, like in 1981. And this was when the 30 year was trading at 10 or 14

percent or something, right? And he made multiples of his money in the next five, enough that he could retire. And so the point is that he caught a trend change from a inflationary environment to a deflationary environment. And stocks took off. And of course, it took a while to get going. I mean, it was, I remember 82 and 83. It was pretty choppy, you know, for stocks. And, you know, The bonds did well in that timeframe because inflation slowly started to come back down. But remember, you had an entire world thinking one way and it took them time to shift their thought pattern. You still have an entire world thinking that Lacey Hunt is right. And he's dead ass wrong. He's completely and utterly wrong. And he's talking his book because he's made all his money

off the deflation trade. And so, you know, what's happened here is we underinvested in real productive capacity and it's now showing up everywhere. You know, we don't have enough things and we got plenty of paper. And, you know, you're beginning to see this playing itself out. I mean, things have been doing better. Paper has been doing worse, but there's still a lot of doubt and, you know, it's going to take time. My opinion is when, you know, we're very, very close to what I call the launch pad for silver and gold, which is, and then we'll get to Bitcoin in a minute, but, you know, which is when gold gets through 2000 with authority and silver gets through 30 with authority, it's going to be game on. People are going to start to realize, okay,

you know, this is real. We've got inflation. A new all-time high in gold, that'll be meaningful. But right now, you know, they've been able to, and, you know, they've been able to hold it down. That's the other thing. The government obviously has their own set of interests. You know, they know that these are the warning signals and alarms. They know that oil is a problem. I'm sure they're out there creating paper oil and paper silver and paper gold. But at the end of the day, and probably paper natural gas, if they can. But at the end of the day, paper natural gas isn't going to warm Germany, right?

And so. Oh, boy. What a problem they got there. Right? And they got a serious problem. Yeah. And it's not going to, you know, and, you know, fertilizer that's gone up 5x, you know, is going to significantly increase food costs.

And so, you know, I think, whereas I think a lot of people are thinking, well, this inflation is bad, but it's because of COVID or it's because of the poor, it's because of supply. You know, it's all because of things and things will go back to getting better. And all I would ask people to consider is maybe they won't get better. What if they actually get worse? You know, and I think that's a possibility. I think it's a real possibility that the market is just starting to come to grips with.

So that's kind of a long-winded answer to your question, but that's kind of how I'm looking at the world right now. And I agree with everything that you're saying. The one thing that I want to go back to, because there's a lot there that we're going to obviously talk through the rest of the episode, but the 5% off the highs on the S&P after what we've been seeing in the marketplace with the Russian invasion, the inflation prints that look like they're going double digits, I would suspect here in the coming quarter or two. And equity, is priced at, what would you say the equity market is priced at, two, three percent as far as the yield right now? Right, exactly. It's totally crazy. And you had alluded to this idea that everyone has been duped into this by the dip mentality because it's just, it has worked.

Larry, what do you think that the average participant, they've probably never even lived through a bare market? When you think about the age of a lot of these analysts on Wall Street, and when they kind of came in, anybody under the age of, what would it be 30, 35 years old has never even experienced a bare market. Right. That's exactly right. I mean, the last 12 years, you know, or more have been nothing but bull.

And, you know, and the other thing that I think people aren't factoring in is look at what the Fed is saying. Now, we all know they're going to have to flip-flop and they're going to pivot. We'll get to that in the future part of this conversation. But, you know, any one of the things they're talking about doing would create a problem. Okay, I mean, well, first of all, the two 10-year spread turning over that says we're going to have a recession. Yeah. But secondly, more importantly, I mean, they're talking about nine rate hikes.

I mean, good God, man. Look at what they did from 2015 to 2017. They had to very, very slowly creep it from zero to two. And that almost blew up the markets. And that was, and they're talking about. And you didn't have any inflation to like, you know, there was nothing. Well, and they're talking about tapering. Qu-T, you know, they never really tapered before. All they did was let it run off.

Yeah. And as you'll recall, when Powell said, yeah, it's going to be boring and, you know, it's all this, you know, this tapering, it's all on autopilot, you know, the market quickly dove 20 percent and he had to do the first pivot. So, you know, we know a pivot's coming in the future, and that's what will lead us to hyperinflation, in my opinion. But the point is, and we also know corporate margins are falling, right? So they're going to lose, you know, if demand is soft, they're going to lose pricing power,

But labor costs are going up. We know that. We saw what happened at Deer. You know, they got 5% gains for five years on wages, which is obviously below inflation. But, you know, and we're at peak margins right now. I mean, average corporate margins, average profitability right now is 11%. It's the highest it's ever been. So, I mean, here's a perfect storm.

You got the Fed tightening. You got the Fed withdrawing liquidity. You got all your corporate costs going up. You got soft demand up above and you got peak multiples. I mean, Husband's right. the market could go down 75% and still not be fairly valued. Yeah. I mean, it's insane.

I mean, this whole 60-40 thing is just going to blow up in everybody's faces. It's going to be tragic. I mean, first of all, the 40 is going to be worthless. You know, and the 60's going to get marked down by 50% at least, in my opinion. So it's, it's, I mean, my hair's on fire. I'm telling you. I'm sitting here. Well, you say it'll get marked down 50% at least.

You know, maybe I'm even more bearish. than you in that in order for them to continue this manipulation in place, I just don't know how they're going to be able to sustain any semblance of normal price signals. And if we look at the bond market currently priced at, what, two and a half percent-ish to three percent, if inflation starts blowing out double digits, we're more than 50 percent then maybe. Oh, easily. And yeah. And, you know, so then what do they do? I mean, you know, the thing that gets really super interesting is trying to game theory out, you know, moves and counter moves. I mean, it's been amazing to me the way the Fed has been bluffing, you know, this tough

guy fed, you know, I mean, I've got Bullard who used to be the biggest dove trying to be the biggest hawk, you know, and they're saying, well, we'll go to 50 basis points, we're going to have nine increases, you know, we could do withdrawal next month. I mean, it's interesting, though, they talk about all that stuff. And you notice when it comes down to it, I mean, like, if in my view, if Powell had any balls at all, he would have said, oh, it's 50. basically, it's 100 basis points. You know, if you've been serious about it. But here's the thing that they don't say that we all know, they really need this inflation. The reason they need it is that they can't deal with this debt structure unless, you know, they get inflationary

growth to make the inflation, you know, to make the numbers such that the debt is a smaller percentage of GDP. That's key to their whole thing. So, you know, my sense is their playbook is they're going to talk about how tough they're going to be and how they're going to get inflation on control, but they're really not going to do very much. Yeah, just let the market sell off. They're going to let it go. Yeah, they're going to let it go. Wow.

Okay, let's talk a little bit about just the Russia piece here. So this is coming out next week, so we're going to know the outcome of how tomorrow kind of happens. But Putin has made the comment that they're going to pay with Rupil. And if they don't like it, then he's going to shut off the power. Is this something, is this a real threat? Is he going to actually have to flip his cards? at the end of this hand and demonstrate that he actually is going to shut off the power to the EU? I suspect he is, and I suspect he will. I mean, I don't think he's bluffing. I agree with you.

Yeah, I agree with you. Look, I mean, it's hard. This is a very tricky situation to be in because, you know, I don't like the political leaders on, you know, all around the world. It was one of them. And I in no way support this guy. Okay. I mean, he's a, you know, he's an evil guy. Having said that, I understand what he's doing and I understand why he's doing it. So I look at it from an analytical point of view, not a judgmental point of view. And I think that he is in a situation where he knows he's got the bull whip. And he's got what the world needs. He's got commodities.

And he was very strategic in the way he let us get way out over our skis with all this leverage. And now he's saying, fine, you know, you want my stuff that you need. That's great. You can pay me in something that's real because, you know, in my opinion, what he's doing now is like what DeGal did in 71. And that's why this is, to me, this is an enormous monetary earthquake. I mean, I thought gold and silver were going to work and Bitcoin were going to work beautifully long before Putin did any of this stuff. To me, what just happened, I was like, I fell out of my chair. I was just like, this is a major, major accelerant to the trends that already

exist. And then when the US reacted, well, when Trudeau reacted to the truckers, and then the US reacted to Russia by freezing stuff, I mean, that's like an advertisement for Bitcoin and gold. right yes the authorities can grab your money you know uh i think the fx reserve piece was you know i was talking i think the luke groman the day that that happened and i know when we stopped recording we were just like i can't believe this just happened like this is yeah me too yeah i had the same reaction i mean it's like you know it's i mean what happened to the rule of law you know what i mean it's you know and so and of course we're demonizing this guy but you know it's like okay But is what we just did, is that correct as well?

Whatever. Let's not get into the what's right and what's wrong. Let's just look at what's happening. The fact of the matter is, he is saying, I'm not going to take this paper in exchange for my real stuff. And we are trying to demonize him. And, you know, I think the U.S. strategy has been, well, let's see if we can piss off all his oligarchs and maybe they'll knock him off.

But my sense is that he's pretty well defended and that's not going to happen. And he's going to be able to carry through on this thing. You know, I'm guessing the way I read it, if he doesn't get payment from Germany in the form of rubles, he's not going to ship the gas. They're going to turn the pipeline off. So what happens then? Because I'm with you. I think that that's the highest probable outcome here is that they don't pay.

He shuts off the gas and then what? Well, they go into some form of rationing. You know, gas prices go up even higher. You know, fertilizer prices go up even higher. You know, I think that, I mean, he can sit there. he doesn't need to sell that gas, you know, whereas the Western world needs, the Western world is highly leveraged with a lot of paper, a lot of derivatives, a lot of stuff, you know, that it's all linked together.

And when you pull out the actual physical piece, the physical collateral, you know, the paper stuff doesn't work anymore. And so, you know, we've already seen, I mean, you know, you've seen prefigura and some of these big commodity houses have had serious problems. And we saw what happened with nickel, right? I mean, the nickel blowout, that basically just revealed the LME to be a complete farce. Yes. Right?

And something very similar, by the way, could happen with silver and gold. I think it might. I mean, I can't predict it and I can't guarantee it. But the point is that we've got this enormous paper structure built on these underlying things. And if you stop the flow of the underlying things like he's doing, everybody looks around the paper and says, huh, what's this paper worth if it's not connected to something? Yeah.

You know? I mean, my counterparty is going to fail. And so this is, you know, you had the same thing in 2008, but the paper was all built on the houses. And it was the banks and it was at a lower level. And the Fed could step in and say, okay, no problem. We're just going to, we're going to make all these guys money good, you know, with fake money. Well, you didn't have this strategic situation kind of playing out.

Right. Yeah. Right. Right. So, yeah. So here, I mean, you know, look, it's a big mess. And it is going to, in my view, get worse because I don't think this guy is going to back down. I think he understands the vulnerabilities.

I mean, there's a lot of data that says he understands how fractional reserve the gold market is. And it's interesting, the choice, the ruble price he chose for gold was perfectly calculated to match today's price. And so he's basically backing the ruble with gold. I mean, he's not exchanging. You can't take the ruble and get gold out of his fault. So it's not full exchangeable standard, but in a piece by setting the prices the way he has, he's taking people to a gold standard because he's forcing other people who want his resources

to pay in something that's real. And that's huge. And it's going to be, you know, the West is going to find that there's not as much stuff out there as we thought. And we've underinvested. We've invested in the wrong things and we've underinvested in the right things. And so the price of everything is about to get a lot higher. And, you know, I mean, I'm shocked.

I'm sure you've seen this. I saw, I think on Twitter yesterday, I saw some $7, $8 for gasoline in California. Yeah. I mean, how long? I mean, and so you look at the stock market is within 5% of its record high. You've got $7 gasoline. I mean, I'm like, you know, like my head is spinning. I mean, how is that possible?

Yeah. You know, it's just, it makes no sense. And the reason is the stock market guys are doing. a Tina. They're going, well, there is no alternative and there's lots of liquidity. And, you know, we can lever it up and it's work so far. But you know it. I know it. This is going to end badly for bond bulls and stock bulls. And it's going to end better for commodity people. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the

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at Shopify.com slash WSB. Go to Shopify. That's Shopify.com slash WSB. That's Shopify.com slash WSB. All right. Back to the show. I think your comment about the nickel when they stopped the exchange and then they rolled back trades that happened that entire day is truly a precursor for what's to come, I think, for maybe the rest of this year or even the year after.

Absolutely. I mean, Twitter had it right. I mean, you know, the house doesn't like to lose, right? I mean, they did this to the hunts. I mean, and this is something for all Bitcoiners, gold people, silver people, we've all got to be aware of this. They are going to change the rules. Yeah.

Okay. I saw this firsthand. I was massively short the financials in September of 2008. They outlawed selling the financials in September 2008. I lost 5,000 basis points, you know, in three weeks. And my fund went from having an up. I had the Michael Burry trade on, but I didn't know what CDS was. And my fund was up 50%.

And I ended the year down six. Wow. Because they changed the rules. Because they changed the rules, right? I mean, the Hunt brothers, the Hunt brothers had them beat. They had them cornered. There wasn't enough silver. And they changed the rules.

I mean, whoever was long those nickel contracts, they had it. You know, I mean, this was, but look, I mean, they did it with GameStop. They did it, you know, they do this over and over again. So how do you difference? The difference with Russia is they can't change the rules if you need the physical stuff, you know. Yes. I mean, right?

I mean, you either have, you either have the oil and gas, you know, or you don't. And, you know, the paper is irrelevant, right? Well, so people from the Bitcoin space that are listening to this, they hear you say that, that they're just going to change the rules on you. How do you think that they could do that with respect to Bitcoin? Well, you know, fortunately, it's quite a ways down the road and they're going to have a hard time, you know, we've got some senators in favor and et cetera. They're going to have a hard time coming after it that way. But having said that, as things get more and more desperate, you don't or know where they'll go. I think they're going to do one, well, there are a couple things I predict.

First of all, you know how when you, if you have foreign money overseas, if you're an American and you have an overseas bank account with more than $10,000, you have to report it. A lot of people don't know that, but you do. You send a form to Detroit every year. I do it because they have some accounts in Switzerland with gold in them. You know, and they do that, they did that to try and crack down on tax evaders, right? My suspicion is that something very similar will be coming for Bitcoin. And they'll say, okay, you've got to report your Bitcoin addresses. And you've got to tell us how many coins you have because this is a tax evasion scheme. We don't like it.

You got to do it. And at that point, every Bitcoiner in this country is going to face some difficult decisions, right? You know, do you want to just have the 12 words? What do you want to report? What don't you want to report? Whatever. We're not going to go there. But the point is, you know, that's an issue.

So I could see them coming for that. I could also see them coming for, you know, windfall capital gains taxes on gold, silver, and Bitcoin holders. But again, the advantage of these assets is that they are bearer assets. Yes. And maybe this, you know, maybe you can hang on long enough to the point where this regime fails. I mean, in France, in, you know, in the French Revolution 1789, the Assignat failed, okay?

And, you know, basically the government at the time was very anti-gold. And they knew all the, everyone hoarded gold because they knew the paper was failing. And so they said, you got to report your gold, you got to turn in your gold, of course. course, nobody did or a lot of people didn't. And they found people who had hidden gold or had not reported their gold, and they guillotined them. Okay. So, I mean, you know, governments can be brutal with respect to people that they think are, you know, behaving outside their interests. And you could certainly see a scenario where they say, you know, we had this great, you know, fiat money scheme going. Well, they wouldn't say that. But, you know, we had this great economy growing. We

have this great system going. And you sound money people, you totally trashed it for us. You know, you're anti-American. You've ruined our system. You know, we need to tax you. We need to know what you hold, you know. You're already seeing some Wall Streeters saying these things about our community. I mean, Mike Green's a perfect example where he was saying, you all are un-American. And at that point, I was like, okay, I disagree with you and I don't really want to hear your opinion anymore. I have no time for that guy. I just don't, I don't buy into this idea of either you believe in free and open markets, right? And that the best You know, if I want to go out there and I want to buy something that you think is worthless,

if you actually believe in free and open markets, you should promote the person to do that because then they're going to have less buying power and less influence into the direction of where everything goes, right? To imply something like that, to me, is such a fundamental flaw of what this country stands for, which is free and open markets and just capitalism, right? And freedom and freedom. Yeah, completely agree. I mean, at some fundamental level, you have to decide, you know, who is who is more sovereign,

the individual or the state. And, you know, status believe that they have a right to tell you how to live their life, live your life. And I don't believe that. I don't believe that's what the Constitution says. I don't believe that's what the majority of Americans believe. And so I am very anti-statist. But there are people who are status who, you know, they use all kinds of different mechanisms to try and control people. I mean, you know, and this has been going on for years. I mean, all these wars are driven by status and they, all these wars are financed by fiat money. You know, if we had sound money, we wouldn't have these wars. You know that, I know that. Bitcoiners know that. Gold people know that. You know, and the status know it too. And that's why

we're their enemy because it, you know, their system rewards them and punishes us. And it really, what it really does is it punish, it doesn't just punish us, but it punishes the average working people were unable to save their labor and therefore basically get in a situation where they can't even retire because they never know if their money is going to last. One of the glimmering hopes that I see in government is at the state level relative to the federal level. So let's just pull the thread and let's say at the federal level that it becomes politically popular to do some of these things that you're talking about that have been demonstrated throughout history, it appears like states like Wyoming, Texas, and a few others have already

started passing some type of protective measures for self-custody. And I guess I'm hopeful that that competitive dynamic that exists here in the United States between the rights of state powers versus at the federal level will really kind of kick into gear and protect the interests of people that are local into some of these jurisdictions that have demonstrated a strong resolve for protecting self-custody. What are your thoughts on some of that? Well, I think that's right. And I, you know, there could be a succession of several states. I mean, obviously Florida and Texas are two most likely candidates. And yeah, I mean, it's, I'm in favor of that. I mean, the federal government, I mean, what do they do, really? I mean, they conduct wars and they redistribute

income. I mean, those are the two biggest line items in their budget. And, you know, if Texas or Florida were to say, you know, sorry, we'll opt out. You know, we'll send you our share of the military budget for national defense and we'll opt out all that other stuff. You know, it would be quite a challenge. You know, I don't think we're going to fight another civil war. But it's, to me, it's interesting that there are big pieces of this country and hopeful that there are big pieces of this country that understand just how broken the political system and how broken the federal system is. My personal view is that the way this is going to go down is before that happens with the states falling off.

I, you know, people, one of the questions you put up a thread to what are questions you want to ask, Larry, I think we're going to have hyperinflation, Preston. I really do. I, you know, I don't like saying that, you know, I know others believe it, but don't say it. Well, I'll say it. I think it's going to happen. And I think when the currency fails, just because mathematically it's, it's kind of baked in.

And historically, it's the pattern that happens when we see what's going on now happens. I don't know the timeframe. It could be two years. It could be eight years. But it's somewhere in that window. And when the currency outright fails, when it will not spend, when everyone has given up on it, well, that'll lead to all the politicians being throwing out, everyone being very angry, you know, a lot of suffering and pain all around for all of us.

It'd be horrible. And yet, you know, I believe that there's a remnant of smart people in this country and others that will say, you know, the reason this occurred to us is that the government was broken and we've got to reform it. got to fix it. So we'll get, you know, Mayor Suarez will become President Suarez and, you know, we'll go to a Bitcoin standard or a gold standard and we'll have term limits and we'll, you know, try all the criminals who put us into this mess and, you know, there'll be a better system coming out the other side. That's, you know, to me, that's the task of Marty Bent's generation

in this fourth turning. I mean, you know, Marty and Jack Mollars are going to be the leaders of the hero generation. They're going to lead us to the other side when this collapse occurs. And to me, it's pretty inevitable that it's going to occur. I mean, I think Fiat's going to be worthless and not that far away. Yeah, I'm with you. I think that what we see playing out, and people ask me this, they're like, well, how do you have so much conviction in that idea? And I'm saying, it's not necessarily that Bitcoin is going to like pull it there. I think it's more that the existing system and the macro backdrop, especially in fixed income, is so incredibly broke that it's going to push and force this.

It's going to thrust it on us. Absolutely. It's just math, guys. It's just so simple. You can't increase the debt load faster percentage-wise than you increase the productivity without having, you know, eventually it has to implode. It just by definition it has to because we have to continue. continually print more and more money. And so to me, to me, the next big thing that's going to happen

is we're going to have the next Powell pivot. And I don't know when that happens. I can't predict. Nobody does. But given what they're doing and given how fast things are moving, my suspicion is it's probably not going to be that far out. Because when, and, you know, the Fed now has three mandates, right? They always had the mandate of, you know, a full employment and controlling inflation. But the third mandate really is continuous markets. And so, you know, as we were talking about earlier in this conversation, what happens when the bond market starts to break? And everybody, you know, I mean, look, I mean, the tenure in and of itself is absolutely ridiculous.

We're getting there. You got, yeah, it's already broken. But I mean, I'm not talking about really breaking. I mean, you've got 8% inflation and you're getting a 2.something percent yield, right? Yeah. That doesn't make any sense. So pretty soon, the entire bond market is going to say sold to you fed. And, you know, for eight, and so as people sell out of the tenure, which they've been doing

substantially, and it goes much, much higher, it just starts shutting. cutting off everything. And then the government says, well, okay, you know, and they can't sell their bonds. And so they have to continue to buy them themselves. And, you know, what's standing between us and hyperinflation right now is just lack of awareness by enough people in Gresham's law. I mean, and I've said this many times, read Ryan Howard and Rogoff, read all this hyperinflation books. What you under what you come to understand is that hyperinflation is not, it's money velocity based on people dumping the money. And people dump the money when they come to the conclusion, as Gresham's law, they come to the conclusion, there's absolutely

no way the government could stop praying. And some of us already know that. I believe that. You believe that. Others, Bitcoin generally believe that. Most of America doesn't still believe it. They're probably worried about it. They're starting to be worried about, but they don't believe it. Once they come to believe it, they're going to want out of every single dollar they've got. Yeah, they're going to sell every single bond they've got. They're going to sell a lot of the stocks they've got, and they're going to move into real things. And they're going to see the price of real things going up really fast. And that's how hyperinflation happens. It's an abandonment of the currency because the stewards of the currency have so abused it and there's no way they can

bring back the confidence. I mean, you know, Volcker did it. I mean, we had a mini version of this, obviously in the 70s, the world went from 35 to 800 and it did it when inflation was high in the teams and so forth. But, you know, we weren't as indebted and Volker was able to step in with a 20% interest rate and bring back confidence. I mean, if we had a 20% interest rate today, entire country would go bankrupt. I mean, there's just, there's no way, right? Immediately. Immediately.

It looked like the Great Depression. And actually, one of the great questions on your thread was, you know, for me, was, well, are we going to have hyperinflation or, you know, or deflation? And the answer is both. I mean, it's, you know, but it's just not clear in what order because, you know, the inflation is going to be so messy that activity is going to collapse and that's going to lead to deflation. I mean, I think sadly what's going to probably happen is we're going to have, you know, deflation in assets, everything you own, and we're going to have inflation and everything you need

to stay alive. So, you know, which is why, you know, another question was, what is housing a good store of value? Yes, it is if you don't lose it because it's got practical utility. The thing that's wrong with it is the government can tax it, you know, but at least it's a place you can live. And, you know, if you know your income is solid and you know, you're not too levered on it. I mean, in some places it makes sense, you get a 30 year, I mean, there was a time and you get a a 30-year mortgage for 3%. I mean, you're putting on a Hugo Stennis trade by levering yourself up to buy something you needed, right? Which is why, you know, I think that housing was up 20% last year. I mean, isn't it amazing? Housing prices are up more in this cycle than they were

in the 2008 housing bubble? Yeah. I mean, it's, you know, to me, that's just people realizing that this is an asset that's real. And so there, it's, you know, it's Gresham's law for housing. Larry, I got a question for you. You had mentioned that getting the timing of the Powell Pivot is something that you can't forecast. When I'm looking at the bond yield curve, and I'm looking at the last 40 years of this downtrend on the yields that we've seen, they seem to hit like this mechanical stop that is very predictable when you look at all the different durations and they all kind of hit a different yield depending on which duration you're looking at.

And when I'm looking at this, just as an example, like the 30 years, year right now is suggesting that once we get to around 2.87, we start to hit that 40-year trend line on the 30-year, and today it's at 2.5%, we'll call it 2.5%. So we're like dangerously close to this limit that we've seen for 40 years, at least on the 30-year. You go to the 10-year, I think we're already there. And so you had mentioned that you think we're getting dangerously close to whatever that limit is for the Powell Pivot. Do you think that this is a good way to kind of, if a person was trying to estimate on when that's going to happen or like how much is left before things dangerously start to fall apart in the fixed income market, is this a tool

that you think you could rely on? Is there anything else? No, it's a great tool. Well, yeah, I mean, I think, yes, that's probably your primary tool. The things I'm watching, I'm watching that, I'm watching the stock market because as the stock market starts to sell off, you know, there's negative wealth effect and so on and so forth. I'm watching the price of Bitcoin and I'm watching the price of gold and silver. I mean, to me, those really are your, you know, your dashboard for what's going on here. And everybody else is watching them too, and this is the common knowledge game that we're playing, right? So, you know, if the bond market really starts to fall apart, I mean, recall that what created, what created, I mean, we had a preview of it.

frankly, it's a good preview. So in March of 2020, COVID hit, right? And stock market, you know, big, exogenous shock. Stock market, boom, you know, just took in a huge diet. But the thing that, the really interesting clue there is what normally happens, stock market takes a dive bond market should have been well bit, right? It was just, okay, great, stocks are cratering. Oh, yeah, I'm running into bonds. You know, bonds should have rallied like crazy. Well, they did initially. And then they started to sell off, right? And it was kind of like, and eventually, as Groman points out, eventually there was no bid in the bond market. Well, that's scared of the Fed.

You can see it. It's in their minutes. And so, you know, that's when Powell came in and did his druggie and said, okay, whatever it takes. And that's how we printed $4 trillion worth of money, you know, in a couple of years, which was basically all the QE's from 2008 to 2013. You know, we did it all in two years. So it's the Hemingway, you know, bankrupt. How'd you do it? You know, well, two ways, you know, gradually then suddenly.

Watch the acceleration. Watch the second derivative, right? I mean, if we see serious acceleration in the sell-off in the bond market and rates going up, we see serious acceleration in stocks, we see serious acceleration in gold, silver, or Bitcoin, you'll know what's happening. That's, to me, those are the clues. And we've seen all of those. I mean, we saw, you know, just recently we got a pretty serious, the Russia thing hit,

we got a pretty serious acceleration in gold. But then they kind of got it under control. Nickel blew up, but they put that back in the can. And, you know, they got everything under control. And we're, you know, gold's come back off of the down below 2000, came back and tested, you know, below 1900s. I mean, you know, so you get these, it's like waves. You get a wave and then it'll stop, you know, you'll get a retrace, but not all the way back.

I mean, gold's not back in the 1800s, the 1700s, right? I mean, Bitcoin, same thing. Or Bitcoin was in the high 69 area. You know, and, okay, it slowed down. It ran awfully hard, right? I mean, everyone who was in it at 5 or 10,000 was feeling pretty good at 69. I recall it. They were all telling me I was an absolute idiot for owning gold.

And, you know, I mean, look, I get it, you know. And then it backs off to 30. You know, there was a lot more silence. It's kind of like, oh, okay. So these are the, to me, these are the indicators, right? Because they are the most liquid, most watched signposts. And you can bet that when Bitcoin did that, alarm bells were going off in Washington, D.C. and at the Fed. I mean, they had, right? I mean, an exchange stabilization fund, just as when gold takes

out 2000 the next time, which I think it will within a month or two here, you know, it's going to, it's going to squirt on up to $2,500 or $3,000. It's going to be game on and these stocks are going to go berserk and, you know, everybody's going to go, huh, what's going on here? And it's going to be because of the obvious inflation and more and more people coming to realize. I mean, I think I've said this many, many times, but it's just substitution. I mean, you've got 350 trillion of financial assets. You've got 7 trillion of sound money assets. All that 350 trillion has to do with some piece of that has to say, hey, I'm not holding my purchasing power. Give me some of that sound money stuff. And so even if it's only 10%, that's 35 trillion fiat assets chasing 7 trillion of gold,

silver, Bitcoin, and gold stocks. I mean, it's, you know, what's going to happen? The seven's going to get bigger, you know? That's just going to happen. I mean, that's a fact. And so, people have asked for my targets on this stuff. I mean, I think this year we'll see gold at 3,000. I think this year we'll probably see Bitcoin at 150. I think this year we'll probably see silver at 50, you know, in the next wave up. And if the pivot comes, and that's even, that's even before the pivot. So when you say pivot, are you saying yield curve control is basically what's going to have to happen for them to get things under control? Or what do you think that that pivot? No, I'm saying, yes, yield curve control would be one form of the pivot,

they have to spend, you know, they have to grow their balance sheet to do that. They've claimed they're going to shrink their balance sheet. Yeah, yield curve control. Any reversal of this tough guy Fed talk that we've heard. But my sense, here's my sense, Preston. This is important. A lot of people are like, well, they're going to roll over right away. I don't think so.

I think they're going to, I think they're aware of how they're, how much fire they're dealing with here. I actually think they're going to let the, I mean, Joe Wang on Twitter does a good job. I think they're going to let the stock run go down 20 or 30 percent. I mean, I really, you know, I think, and I think the reason they're going to do it is they kind of need to do it to create demand destruction, to have a chance of getting oil and all this energy inflation back in the can. So, you know, the previous selloffs, I'm sorry to interrupt you, the previous

selloffs that we've seen that have been pretty sizable in the last, if you even want to call them this, in the last decade, have been around that point that you just said, that percentage drop. I know the March, we were down 30% in March on the NASDAQ at least. So when I chart that out from the high that we've seen in the NASDAQ, it's pretty much right where you're saying another 25% from here before they're going to step in and do anything. And it seems like that's their trigger that things, if they let it go any more than that, it's going to really get disgusting and maybe difficult to even calm the markets. I think that's exactly right. I think they know that's the point at which people really start to freak out and they got no chance of bringing it back.

And so, you know, as much as, I mean, and they'll, you know, they'll probably have some excuse for it. It'll be, I mean, it's interesting to be the way. Russia. Right. Right. Yeah. Yeah. Yeah.

I mean, it's not our fault. We had to do this is the only natural thing to do. You know, and they'll do, I mean, they've already started doing this, right? I mean, the gasoline prices are high in California. Pelosi says, we should start sending checks to people as rebates. Other countries have talked about that too. Yeah. So, oh, where's that money going to come from? Well, we're going to print it.

So, you know, look, there will be, and people will be screaming, you know, bloody murder in terms of gas prices and food prices. You know, there's an election coming up. So, I mean, one thing I'm sure of, my guess is before the election comes up, you know, Biden's going to forgive all the student debt, right? He'll just waive that. You know, that's an interesting call. And I think you might be on to something there because they're going to have to do something pretty miraculous in order to turn the tide here. based on the numbers that I'm seeing. Well, yeah, he's got 40% approval rating. It's going to get lower. I mean, look, you know, you would not want to be a politician in this country, anywhere, really, in the world in the next year.

I mean, there are going to be a lot of really righteously pissed off people. I get it. And they're going to take it out, I hope, on all the incumbents, because frankly, they all stink, you know, and then hopefully, you know, over time, probably not this cycle, but a few cycles out, we actually start getting some sound money incumbent, you know, or sound money candidates, you know, who were like, look, you know, you hate the inflation we're living with, we do too. Here's how you solve it. You do a monetary restructuring, you know, and that would be a lot easier, not easier, but it would be a fairer way of solving this problem rather than letting

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Back to the show. So here's my issue. I think you already know my issue with gold, right? I don't have an issue with gold on an individual level. Like if an individual investor wants to own it, it to preserve buying power. I have absolutely no issue with that. Where I get frustrated with gold is on a sovereign level in that you're going to have governments

that through branding and marketing suggests that they've got a peg when in reality, I mean, you can go back and look at even in this country from the 1940s until we came off the gold standard. Did we really have a peg? Or did we have a peg in branding and marketing? Because we were adjusting the money multiplier. I've got charts that kind of show how we were adjusting that money multiplier based on what they had in the vaults, right?

And so although it briefed well in practicality like any other gold standard, it failed because they were manipulating the ledger and they were manipulating the amount of currency that was riding on top of the amount of gold that was in the vaults. So where I get a little bit frustrated with, and you would see this, I think Russia is a perfect example. They're threatening or they're, I don't know, you called a threat, they're saying that they're going to start backing their currency with gold or that they're going to accept gold for their oil sales and that it's becoming sound money.

But in order to actually truly run a peg, you have to be willing to sell the gold in the vault at a certain price in order to peg the currency. I think, and this is me, when I'm looking at the competitive landscape that we've got happening around the globe to engineer growth through debasement, you're in this ultimate rat race of like a hundred meter sprint where the only way you can possibly win is by cheating better than the person standing next to you. So thinking that any one of these nation states are somehow going to just, oh yeah, we're going. going to, we are going to actually run this race by the rules, fully knowing that nobody else here running the race is going to run by the, obey the rules. I just don't see it happening. I don't see it happening based on the demand by the populace for manipulation of currency and the basement, the free college, the you name it, right? The populace wants this as of right now.

That's about to change like you've like so eloquently highlighted. Like there's going to be a call for the exact flippening of that. But I think right now to think that that anybody could go along with this for sound money policies at a time where the cheating is the only way you can possibly stay in the race, I just don't know how it's possibly going to work. Yeah, well, I agree with you there. I mean, I don't disagree with any of that. And there's no doubt that the great flaw, the gold model is that it's not verifiable

and it's hard to move and you can cheat on it and everything else. I mean, it's failed. I mean, the gold standard has failed. At a sovereign level. Yeah. At a sovereign level. Yeah. At a, you know, until Bitcoin, it was invented, it was the, it was the best, you know,

the best of all alternatives. It was the, you know, the least worst alternative. And now Bitcoin's a better alternative, you know, because of the way it's structured. But yeah, I mean, it's still relevant, though. And, you know, some people have asked the question of, you know, how do I see it unfolding? And will gold have, you know, any monetary value in 10 years? And look, time, time, it takes time. for people to change perceptions and you got, you know, 5,000 years of Lindy effect on gold.

You got, you know, I don't know, what is it, 12, 13 years of, you know, on Bitcoin. And so I don't, gold's not going away. You know, I'm completely where sailor is that Bitcoin's a superior form of gold, you know, or sound money. But I'm, but I differ with him in the sense that I don't think gold is Bitcoin's enemy. You know, I think that I think there's a transition period that's going to occur between the two. And they both sound money with slightly different characteristics.

And so, you know, I foresee, I mean, Bitcoin is clearly the faster horse in the race and the better of the two and probably where we'll end up in 20 years in terms of base money, which we need a neutral reserve currency. I mean, I don't think, you know, I don't think most people in the world even have a clue of what Triffon's dilemma is. But, you know, at top monetary circles, they understand what it is. And so we will go to a neutral reserve currency, I think, out of this fourth turning, Because what will happen is these will be so awfully broken and people have suffered so much

that somebody smart will get in there and say, this is the solution. I pray that that solution is ultimately Bitcoin. I think it probably will be. But I also think that there's a chance that between here and there, you've got three nuclear powers in the world, three big nuclear powers, get more, but Russia, China and ourselves, and two of them are betting pretty heavily on gold. And we could leapfrog them if we bet on Bitcoin. I think we should.

And hopefully that's what Jason Lowery is able to convince them. the Pentagon of. But, you know, it's a tricky issue. And I wrestle with it every day. I mean, you know, my personal account, my PA, you know, I'm much more heavily Bitcoin than gold, but I also manage a gold fund and gold stock fund. And, you know, a lot of my investors are boomers that want nothing to do with Bitcoin. And, you know, I've got 20% of my fund in Bitcoin, and they've seen the performance and they like that. They, you know, they don't want to give up on the gold. And I understand why. You know, this is a new technology that they view as not being widely accepting and having risk. I think that's falling away. I've said in the past, I went to

the gold show and I gave a speech on why all gold people need to own Bitcoin. And a speech is available that's out on the web. And, you know, this was a gold show with a lot of older people who've owned gold for a long time, been very frustrated. And somebody asked the question, said, how many of you guys own Bitcoin? Half the hands went up. I thought that was impressive. Your gold holder is your best Bitcoin convert. You know, they understand the monetary issue. They just need to understand what, you know, digital immutability is. But Bitcoin's not Doch, right? I mean, it's completely different.

It's not XRP. It's the real deal. And so once they come to understand that, most of them eventually embrace it and start transitioning over and like me, you know, become more and more, you know, into it as time goes by. So but how this whole thing unfolds, none of us know, right? I mean, there's a lot of politics involved. I think that what I can say with what I can say with confidence, what I believe anyway, is that for

individuals and families, if you want to carry your savings and wealth through for your kids, grandkids and your family, your next generations, you know, your best places to be are, you know, in this order, you know, Bitcoin, silver, gold. Or maybe gold, silver, silver is more volatile. But, you know, and somebody asked some question on the thread, you know, if you had 100,000, how would you allocate it? You know, I'd probably put the average person. probably put them a third into each of those three things. I mean, I know there people say, well, you should go 100% Bitcoin. Well, whatever.

I mean, look, they're all going to maintain value, you know, over time. I think a really important thing that's missed, especially with the few characters that you have on Twitter, is age when you're doing portfolio construction. And you're also considering, well, what lifestyle is this person trying to preserve at that particular point in their life, or if you're dealing with a young person, right, how much is this person trying to grow and how much risk tolerance are they willing to take based on how much more time they have to catch up if they're wrong? And these are nuances that are vital to portfolio construction. Absolutely. Absolutely. No one ever addresses. Yeah, absolutely. And I'll

add to that volatility, which you alluded to with the risk point of view. I mean, You know, the, I mean, look, people in the Bitcoin space can handle a 30% drawdown, a 50% drawdown, even an 80% drawdown because we know what it is. We believe in the long term, we know it's going to win. They're going to be worth millions of dollars per coin, you know, full stop. So we're good. But, you know, if I take my 80-year-old mother and put her into Bitcoin and she's looking at the statements every month, right?

And I put all her net worth into Bitcoin and she, you know, her net worth gets drawn down by 50%. She is going to freak out. I mean, she is going to completely and totally freak out. And she just can't handle that. So, you know, as you point out, everybody has a different risk tolerance. There are different points in their life. And, you know, gold has never had an 80% drawdown.

It just hasn't, you know. So, and yet they, you know, they all represent sound money in today's world. Here's a question I loved. I don't think you're prepared for this one. Okay. When will clown world peak? Yeah, so I love that question, too. I think clown world will peak when it gets very serious and real.

You know what I mean? And I'm sad to have to say that. But I think, you know, let's look at a prior example. Let's say the roaring 20s when everyone was, you know, drinking like crazy and partying and the good times were roaring and the stock market was going up. And, you know, I remember my grandfather had a business and he levered it up and he almost lost it because of that leverage. You know, that was that was kind of happy times clown world and it's maybe similar to

what we've lived through here with this bull market. Okay. And then the depression hit and he was struggling to survive and so was everybody else. They were just trying to feed themselves. And then, you know, I mean, there were people who in the Midwest who lived by, you know, I've read stories with it's when they literally lived by, you know, the fact that they had a gun, they were able to shoot squirrels and possums and, you know, they were, that's how they got their food, right?

You know, and then a war broke out. And, you know, it was an existential war. It was for all the marbles. You had a bunch of evil powers that wanted to take over the world. And, you know, we had to go overseas and slay them. You know, the people who did that, you know, those were serious people. I mean, that was, that was the greatest generation. Those were very serious people who addressed a very serious issue. And there weren't any clowns left. And after that, you know, we had a pretty stable world in the 50s and 60s. It didn't feel stable to them because they worried about the Cold War and a lot of other things, but there's a lot of good going on, you know, before they decided to assassinate

a president and start a war. But I guess my point is, I think that when times get tough, and sadly, I think they're about to get really tough, that clown world's going to go away. NFTs aren't going to have any value, you know, it's, I mean, we're going to go back to some fundamental values. You know, who do you know, who can you trust? What do you value, you know, family and friends, you know, what really counts? And, you know, what do you produce? Not what do you lie about or say you've got or how much paper can you shuffle, but what can you actually do? You know, are you a doctor? Can you heal people? You know, whatever it might be. You know, are you an oil field worker? Can you help, you know, get oil out of the ground? Are you a farmer?

Can you produce food? I mean, the people who do real stuff have been terribly left behind and undercompensated in this 40-year finance bubble. Amen to that, sir. Amen to that. Right? I mean, it's tragic. It's just tragic. Look at the way that Midwest was hollowed out.

You know, then you have the Sacklers come in and, you know, mess them all up with all those drugs and kill all those people. I mean, what's happened to this country is absolutely tragic. And yet, and yet there are enough people around. There's enough of a remnant around who remembers what it used to be like as we grew up in the good times and we knew we had grandparents who fought in those wars and, you know, and uncles and aunts. And we believed, you know, in the fundamental goodness of this country. And it is a great country with great people. And even though, you know, it's gone very much astray, tough times,

you know, and Marty and Jack's generation, they're going to step up. Yeah. They're going to step up and go, you guys F this up and we know how to fix it. And here's what we do. We go back to sound money. You know, we reward the right things. We get the money out of politics. We put in term limits. You know, we go back to what the founding principle. We investigate the CIA.

Maybe we shut it down. You know, we go back to the founding principles. This country was founded on. And, you know, and therefore our, you know, our grandkids will live much better lives. And, you know, there's a lot of good out there. There's a lot. There's been so much in the way of technical advances that are fabulous. Yeah.

But, you know, and there's a lot of good out there. I mean, if we can just stop from blowing ourselves up, I mean, that's my greatest fear is just that, you know, even in this little thing. I mean, this little Ukrainian thing reminds me very much of, you know, World War I and how they stumbled into that. Yes. And I mean, you know, so, I mean, you know, insulting, I mean, sitting there and having like, you know, schoolboy bully fights with each other. I mean, the way Putin talks to Biden and the way Biden talks to Putin, I mean, it's ridiculous. I mean, these guys have nuclear weapons, you know, in. their hands. You know, who knows if somebody makes them a misstep, right? I mean, to me,

that's, it's a very dangerous thing that's going on. And they need to calm the war side of this down. If they want to fight it at an economic level, great. You know, let's fight it out over money and sound money and resources. Okay. You know, that's a fight. I mean, if we get back to a neutral monetary standard, Luke, I'm sure in your conversation with him pointed this out, if we get back to a neutral monetary standard, U.S. industry will grow. I mean, Intel's putting a plant into Ohio. You know, I mean, we will come back. I mean, the mistakes we made will get solved with a sound monetary standard. But they won't get solved until we get there. And sadly, I don't think our leaders today aren't smart enough to take us there without having this blow up.

And it's going to blow up. I mean, that's one thing I really strongly believe in my bones. It is going to blow up and soon. I mean, certainly within 10 years and probably within five. So, and that's sad. I'm not happy to say that, but I, you know, what I'm good at, what I've been paid to do is analyze stuff. And I've looked at historically the patterns and it's, that strikes me that that's the pattern. It's going to blow up. Larry, the last time we had this shock to the stock market, you and I both agree.

We think that this is coming pretty soon. The NASDAQ was down about 30% through that March 2020 sell-off. Right. That same period of time, gold was down. down a lot, Bitcoin was down 60% through this sell-off with equities. Now, it had a substantial recovery, very quick- It got fast. Very quick recovery. Do we see something similar to that on this go-around? You could. You could. With each cycle, people get smarter. So it's different every time.

I mean, Bitcoin has had several 80% drawdowns. I mean, but I think there's more. and more people who are realizing that it's a safe harbor. And I actually feel the same way with gold. You know, in 2008 gold sold off hard. I mean, look, in a liquidity crunch, you know, correlations go to one and everything goes down. Everyone's just scrambling for cash. Yeah. Right. To stay a lot. So you sell, you don't sell what you want to sell. You sell what you can sell, right? You have to sell. Yes. I mean, I, you know, I actually had, I had a bunch of silver ounces that I had put it at a depository and levered them up. And I, you know, in March of 2020, I got a call basically said, you got to come up with X,000 dollars. It was a big number. It was like almost

a, it was a big six figure number, you know, in three days or else, you know, we're going to force sell your silver at $12 an ounce. And it kind of was a lesson for me about leverage, right? And, you know, that's why I've often said on Bitcoin holders, other holders, be careful not to be leveraged. Yeah. Right. I mean, you got to know what you own. You got to know why you own it. And you got to be prepared. You know, and it's the same with houses. I mean, people are well, okay, I'm to do the Stenestrade. I'm going to buy this house because they're going up and I know it's going to work and blah, blah, blah, I'm going to get a mortgage. Well, okay, you do all that. We have a depression. You lose your job. Your house in value is inflated. You know, you can't make the mortgage

payments. You're going to lose the house. Yeah. So, you know, it's to answer your question, I don't think we will have that deep a drawdown in silver, gold, or Bitcoin this time around because I think a large percentage of the people have become aware of the issue. And the issue is the monetary, you know, the basement. And these are your safe havens. In fact, I've seen more and more things where at the stock market, you know, we've seen days where the stock market will be weak, the bond market will be weak, and the gold share market will be strong, you know, which is very interesting to me.

You're starting to see, you know, you're starting to see these correlations break. And I mean, you're to date, you know, my fund is up. You know, year to date, the stock market's down. I mean, it's not a huge gap between the two, but that's unusual. That hasn't happened for a while. Hey, that's worth bragging about, Larry. That's worth it. It's not bragging.

It's just an observation. And I think that gap, I think that gap's going to get bigger. Yeah. I think that gap's going to be. But, I mean, certainly on a short term basis, could any of these things get hit? Absolutely. Absolutely. You know, it's, I mean, there's a get on Twitter and,

Google, Murmican. Have you seen the Murmican chart on the German Deutschmark in... Oh, yeah. Yeah, the volatility. Yeah. Look at the volatility, right? I mean, yeah. I mean, there's...

I think that's a really important chart for what's going to come here in the next five years for people to fully understand. Exactly. Yeah. Exactly. I mean, you know, and that's, to me, that's the, you know, as you're trying to guide people through this, it's extremely important that you help understand what they own, and why they own it.

You know, I mean, like look at the bitcointers who pumped it at 17,000 to people who didn't understand what they were buying. And then it went down. And then they blew it out at 3,500. And guys like me bought it at 3,500. Yeah. And I was buying, by the way, I bought it at 17,000 too. But the, but you see, the point is, this is like we're flying an airplane and

conditions are getting really bad. And we're maybe on the borderline of crashing. I mean, the dials are going to start going nuts. Yeah. You know, and you're going to, I mean, when the dials are going nuts. You got to have your hand on the stick and you got to understand exactly what you're aiming for. And so you don't want to get blown out of your sound money assets. You don't want to get blown out of your house.

You don't want to get blown out of your, you know, your Bitcoin. You don't want to get blown out of your silver or your gold. You know, and leverage can do that to you. Larry, this is my last question for you. So people here in this, this can get depressing. This can get people down, right? But give people kind of a message of. hope or a message of, you know, if you're on the right side of this, there's large opportunities

here for folks. So, oh, absolutely. I mean, look, I mean, you know, it's, I got smashed from 2011 to 2015, you know, I got absolutely smashed because I was long gold in gold stocks. I mean, I watched my net worth, you know, really severely decline. And that was horrible. It was one of the worst things I've ever been through. And yet, it was that smash that caused me to really.

I realized I was physically out of shape and I wanted to be around to fight the battle and win at the end of the game. And so I went crazy on getting into shape. I got into CrossFit and everything else. And so the point I guess I'm trying to make is that, you know, this is going to be tough, but you can view that as bad or you can view that as an opportunity. You can view it as a chance, you know, and you know, we're all playing for posterity, right? We've only got so much time here and, you know, some point, you'll be near the end.

game and the kids will be saying, man, grandpa did it right. You know what I mean? I mean, you know, things really sucked. I mean, I'm sure it wasn't fun being 18 years old in 1939, you know, in the United States and, you know, the Japanese have attacked Pearl Harbor or, you know, 41, 42, the Japanese of attack Pearl Harbor and, you know, the Nazis are rolling through Germany and, you know, you're fighting age, you realize this is going to suck. But the flip of that is, you know, you got a chance to, you know, to prove yourself. in a very tough environment. And if you come out the other side, you're going to be the greatest generation.

I mean, and I do think, I mean, there really is brightness on the other side of this. I mean, when we fix this, you know, it's going to be a much better world. It really is. I mean, it's not a bad world. I mean, what we've got is we've got bad leaders in a broken system. And so every generation has the challenge that they've got to endure. And, you know, this group of us living today, you know, we've, I mean, and the boomers, you know, look, the boomers are going to suffer later in their life. That's because we've had a

pretty cushy life, you know, for the last 30 or 40 years, right? And now we're about to get tested. And it's going to really suck for some boomers if they're not on the right side of this. For young people, arguably, it's an enormous opportunity. Enormous. You know, they get on the right side of this. And, you know, I mean, I don't think this is going going to last 30 or 40 years. And this is going to get taken. This is going to be over. I mean, If you look at fourth turnings, if you look at fourth turnings, they're typically 20 to 30 years long. And I think this one started in 08.

Yeah, I agree with you there. So, you know, okay, worst case, it's 20-30, you know, eight-ish. So, you know, young people will have a lot of good life post this issue. And I don't think it's going to go that long. I think it's probably going to be over by 2030. That's my opinion. So I have been wrong on timing, though. Things sometimes do take longer than I think.

So perhaps it's a bit longer, but, you know, it's, look, it's an opportunity if you view it as an opportunity. And irrespective of how you view it, you know, we don't get to choose the conditions we live in. All we get to choose is how we respond to them. And so, you know, I've always been very much of the Stoic philosophy that, you know, I mean, whatever the time throw at us, let them throw them at us. You know, what matters isn't, you know, I mean, what matters is are we doing it right? Are we doing what's honorable? Are we doing what's correct?

Are we doing what's ethical? Are we working hard? Are we being the best version of ourselves? I don't know. I don't know. Personally, I don't want a cushy life. Do you know what I mean? I really don't.

I love that. I don't. I don't want to push. I mean, you know, I'm in the CrossFit. It's like you, you know, you just push yourself as hard as you possibly can. I, you know, I want to be the best version of me I can be. I don't want a cushy life. I want to be challenged.

I think Bitcoiners feel that way. too. They want to change the world. I totally agree with that. Fix the money, fix the world. And if anyone's listening to this or looking at this, I mean, the people who are inclined to listen of this, you have a set of knowledge that most people don't have. And so imagine, you know, understanding, fully understanding what's going on and being in a position to help yourself, help other people, help your friends, educate people, change the world for the better. So, you know, There is a, in my view, even though there could be some very rough stuff that happens, and there'll always be rough stuff happening in the world, you know, there's a way for all of us to feel good

about it and to, you know, to make progress with it. So, let me just say this. You know, I go to gold shows and the people are depressed because they've been fighting this battle for so long and they're so depressed. I go to Bitcoin thinks everyone's fired up. That's what I love about Bitcoin. I mean, it's such a sharp spear. Yeah. It is definitely, I mean, the other side, they're totally I mean, we're going to win. I mean, we're going to win big time. And that's going to be fun too. But along the way, is it going to be rough?

Yeah, it's going to be rough. There's no doubt. I love that. Harness your environment. Don't be a victim of it. I love the message. Larry, thank you so much for making time. We have to do this more often.

I need to bring you on to the show more often here because I'm just a wealth of knowledge. Yeah. I do I talking to you. It's really a lot of fun. It's off the cuff, I know. We got to get a high five in next week down in Miami. Yeah, I'll see in Miami. It's only a week away, so I'll see the next week.

Awesome. Awesome. Thank you so much for your time, Larry. Thank you. If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use. Just search for We Study Billionaires. The Bitcoin-specific shows come out every Wednesday,

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