We Study Billionaires - The Investor’s Podcast Network - BTC096: Fractional Reserve Banking Vs Bitcoin w/ Mike Stroup (Bitcoin Podcast)

Episode Date: September 21, 2022

IN THIS EPISODE, YOU’LL LEARN: 01:22 - The numbers around federal interest expense and rising interest rates. 23:58 - Mike's thoughts on the broad money supply being the best way to measure inflation. 28:36 - A comparison between now and 2007. 34:51 - Explaining reverse repo in a simplified way. 47:23 - How do countries use reserve to defend a currency and does the countries size matter? 48:07 - Why currency spreads are making it hard to service dollar denominated debts. 54:47 - Is this time different? 58:25 - Is the 50% attack vector even worth worrying about? 01:03:03 - Mike Stroup's background. 01:04:18 - Mike and Preston share military pilot stories. *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. Mike Stroup's Twitter The charts from the show. NEW TO THE SHOW? Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts.  SPONSORS Support our free podcast by supporting our sponsors: SimpleMining Hardblock AnchorWatch Human Rights Foundation Unchained Vanta Shopify Onramp 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 Bitcoin Fundamentals podcast. On today's show, I have former F-18 pilot turned information technology consultant, and that's Mr. Mike Strupe. Mike has demonstrated a profound understanding around the plumbing of central banks and traditional finance, and like many others, he's a proponent of what Bitcoin offers the world as a decentralized source of base money. On the show, we talk about how some of the traditional plumbing works and how fractional reserve banking has made market moves difficult for most investors to wrap their heads around. At the end of the interview, Mike and I have a little bit of fun talking about our own personal experiences as former military

pilots. So this was a fun one that you won't want to miss. So here's my interview with Mike Strupe. You're listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. Hey everyone, welcome to the show. Here I am with Mike Strupe. Mike. Welcome to the Investors podcast, Bitcoin Fundamentals. Awesome to have you. Thank you so much. I listen to show all the time. So really feel lucky to be on it. Thank you so much. So let's dive right into it. So we have a mutual friend, Brad Mills, who was trying to do some calculations on this maturing debt bomb. And when we're looking at the interest expense that the U.S. has, and we're just talking to the U.S., we're not even talking to other countries. And we're talking about how much this interest expense is growing as a proportion of the tax

revenues that are raised on an annualized basis. Brad reached out to you and you helped him through some of these calculations. Make it simple for everybody. I had some folks talk this in past, but I think you have the ability to really kind of make things easily digestible for people. So really lay it out for them. So debt is just barring from the future, right? So we've just become very very used to it, very comfortable with it. And then an average person walking down the street when you ask them, or if it ever comes up in a conversation, most people just assume, oh, there's those 30-year bonds, right? This debt that we have is just all 30-year bonds. And if the interest rates change a little bit, you know, who cares? Because it's just, it's all long-term

debt. But it's not for several different reasons, partly because of market demand, partly because short-term rates are normally cheaper. I think you get this result where majority of the U.S. debt, the U.S. marketable Treasury securities are very short term. And that, you know, when you do a simple pie chart of it, or if you just do a ladder chart, it really really comes up. And then what you'll really see the effect of that is when we talk about the interest rates, as they've gone up lately, you can see a huge change in the overall interest expense from the U.S. government just over the last six months, you know, the running 12-month total of the amount of interest they've been having to pay is it's just skyrocketed

because there's so much short-term debt and because that's just what they rely on. And side note, it's a little bit reminiscent of layman and the stuff that has happened in 0-6-07 a little bit. I'm not trying to say that something like that is going to happen again, but people love to borrow short-term at super low rates and just keep rolling in, rolling and rolling it until, you know, maybe somebody you can't roll it again. all of a sudden the yields that they were used to and got comfortable with or not even close to where they were at. You sent me some slides that I'm going to go ahead and project here for people that are watching this, the video version of this, they can see it. Make sure that you are

explaining this to the folks that are just listening via the podcast. But as we go through this, you have U.S. fiscal position here. And one of the first things that you highlight is this majority of the U.S. debt is short term. The number that I hear as far as like the duration, if you'd take all the debt and you'd kind of normalize the duration on it, it's around five years. Is that accurate? Or what would you say that the average duration is for all the outstanding debt? Well, duration's a pain. Duration is funny because it's somewhat complicated. And I don't want to go down the rabbit hole of tips too much, but you have tips which change their principle based on inflation, so that'll change the duration because that's just all way out there.

I think seven years, I've heard seven years is kind of typical for duration. And that's really not something you want to calculate by hand. I mean, you know, just pull up a Bloomberg or whatever and pull that up. I think that kind of makes sense. The thing that's going to affect your duration is all those little interest payments along the way. So it's just a measurement of, you know, how much interest are you getting along the way, how much interest you're getting at the end, the principal at the end, that type of thing.

And then so what I did here on just a simple pie chart, I basically redid a chart I did a few months back. I pulled down the data from the U.S. Treasury. And this is something that should be easy to find. Like you should be able to Google debt outstanding by a year and find stuff like this. But for whatever reason, it's probably available, but it's just hard to find. And I found it easier to just run the numbers myself. So right here on the chart is just marketable securities. So these are not U.S. treasuries that Social Security owns in their trust fund, for instance.

And it just breaks it up in a pie chart by year. So between the next three years, you have 50% of all U.S. treasury debt, including tips, that is coming due within the next three years. That's crazy. So it's heavily weighted as a short term. And as they're rolling that over, and this is the point you were making earlier, so if they're rolling over half of this in the next three years, and we're dealing with these higher interest rates, things become really unaffordable, really fast.

Let me go to this next one here. You have rising rates hit government bottom line fast, exactly what we just said. Go ahead and walk us through this one a little bit. So this is the rolling 12-month interest expense. Jim Bianco is one of the few guys on Twitter that will kind of post this occasionally. So if you follow him, you'll sometimes see it. if it's between times when he hasn't posted it, then again, that's what I found myself,

just running the numbers because I, because like, man, Jim hasn't tweeted about this in a while. But you can just pull this down, again, from Treasury and run the numbers there. And it shows over the last 12 months, you know, how much interest has been paid. So the gross interest was kind of humming along at about 550 to 550 to 570 in the pre-COVID times.

When we had the interest rates really bottom out, that expense dropped to about 470 or 480 in the trough. And then from there, as we had the rate heights, it's just skyrocketed. So the gross interest expense for the last 12 months right now is about 718 billion. We as Americans have kind of gotten used to just billions and trillions, who cares. But to put it in somewhat a perspective, the military defense budget is 750 billion, something like that. So you could say, you know, it's almost like we have an extra military. And then the U.S. military, as we all know, is huge. It's the largest in the world.

You spend more on it than anyone else. So we basically have two militaries of the biggest military, which is kind of interesting. And then just one little point on this is backwards looking. So even if rates just stopped right now, you would still see this number continuing to go up. And then the other thing is that there. Explain that real fast, Mike. Explain why that number would keep going up. Yes.

It's a 12-year backward. look back. So this is including September of 2021 all the way through August of 2022. So even if rates sort of, we kind of plateau with rates, you'll drop off the September month and add October. And then you'll drop off. And so you'll eventually just pick up more and more months that had higher rates. And because that debt is so short term. And then just one last thing, this is net interest. And so there is an important point to be made about net interest versus gross interest. So net interest is actually closer to $310 billion. But that gets, I'm not necessarily sure that that matters so much. So it's important to keep both of those in mind.

But the main problem here is that as rates go up, the Fed and Treasury are in a tough situation, because the more that they raise rates, the more expensive, you know, their life becomes. So it's a pickle. Let me ask you this. I'm assuming you're familiar with Luke Roman's work where he's talking about a lot of the stuff that we're seeing between Russia and the Ukraine and pretty much NATO in general versus net exporters and them demanding payment in their currencies. Do you believe that they're looking at this and saying there's no way they can get through this without further debasement? And that's why they don't want to necessarily be paid in euros or dollars. Do you buy into that thesis? Well, Luke is awesome. I have his subscription. I kind of roll off.

It's a little on the pricey side, so I do a couple months and then come back later. Again, I mean, there is that wider point about certain nations no longer want to hold U.S. treasuries, Russia, China, Iran. You know, we could get into a discussion about is China holding their treasuries in a Belgian subsidiary or not? You know, how do we know, play detective, whatever. There's people who push that research, which is interesting. But I, for this particular point, I don't think that matters. For at least the short to medium term, the U.S. is the cleanest dirty shirt. So we're just talking U.S. debt, fiscal monetary position here.

You know, if you've got a choice between euros and dollars, you're going to choose dollars every day of the week. And so I don't, that kind of point you were explaining about a broader, you know, is there, is there a way to kind of for Russia to put a short squeeze on the U.S. in terms of their debt position? No, I don't, I don't really think so, at least not in the short to medium term. Gotcha. Okay, so let's go to this next one that you got. It says tricky fiscal position, even with rising interest rates. And you're just laying out more of the numbers here. And there was your comment right there with the U.S. being still the cleanest of the dirty shirts.

Let's go to this one. Can the U.S. inflate the debt away? And your answer is, no, not really. And you're breaking it out between Social Security, Medicare, Medicaid, and defense. Talk to us on this one. So you mentioned Luke Gromond. This is a bit of a point in sort of a pushback on his thesis slightly, which is, in theory, in in past history, governments have tried to inflate away their liabilities.

So lessen the value of their liabilities by just inflating their currency, whether it's the basement, so changing the metal, whether it's clipping the coins around the outside, all those kind of thing that are in Savadine's book and, you know, if you read the Austrians or whoever. What we have in sort of modern times, at least in developed markets, we have a lot more inflation indexed liabilities. We have a lot more inflation indexed promises. So at the end of the day, this will be settled in the political context. But when we break down our three big expenses, Social Security, Medicare, Medicaid, a lot of those are going to be hard to decrease those commitments through

inflation. So Social Security is the worst one here. It's about $1.2 trillion. It's the benefits are fully index to the CPIW. That's very similar to the main CPI that you always hear about. How much of Social Security's overhead versus payments? I mean, I don't know, maybe 20%, maybe something. But so let's say it's, let's say it's 200 billion worth of clerical workers and, and one trillion worth of payouts.

It's probably not right, but let's say it is. No, no, no. I'm laughing because I'm thinking that's probably not right, but hold on a second. It probably is right. Who knows? Go ahead. So the payout that they got for 2022 was a 5.9% increase, which was right aligned with CPI.

And then starting in 2023, they're probably going to get at least an 8.7% increase in their Social Security benefits. So if it's $1 trillion paid out per year, then that's another $8 billion in spending, you know, just kind of like that inflation. spiral that people talk about the wage price spiral. This isn't wages necessarily, but it's a little bit. It's, you know, it's a transfer payment. People are going to take that money and go out and spend it. And the reason why we kind of now already know what that payment is, they average the July, August, September inflation stats to get the payout for the next year.

And it's kind of tricky how they do that. You know, and elections are in November. So incumbents are smart. They announced the new Social Security bump in the next. October, mid-October to get it just a week or do before elections, so everyone knows to vote for the incumbent who helped him out. So there's your Social Security there. A big portion of it is inflation indexed, which makes it hard to just inflate your currency and make the value of these promises weaker. Yeah, that's such a great point. And I think that's something that a lot of people

fail to think about. And I think when you look at the defense number as well, so much of that goes into material and labor costs, which I would also imagine are extremely tied to inflation, right? Yeah, good luck if you're going to try to get a defense contractor to eat some inflation increases. They definitely, my experience with military contracts was they really know those contracts, and they will find a way to, if you don't specify exactly what you need, just to the letter. They will finagle their way to say that, hey, that wasn't in the contract. We can add that for you, but we're going to need to do an addendum contract. And you see a lot of these addendum

contracts where you want to add one little feature, one tiny little feature, whether it's software or hardware or anything. And they find ways to really get you on a new contract. So any of these three, I mean, good luck trying to, to, you know, have flation outpace the increase. That the pre- programmed the legislatively required increases to these payouts. So if I could just push a little further on this one, if you were to think a little adversarial and you would say, okay, the, you know, that the federal government has an incentive to somehow report a CPI that's not as bad as what it really is, or they have incentive to try to find ways to decrease these, these liabilities more than what CPI.

So I think as CPI prints come out, I think one thing I like to do is I like to go through all the little pieces. Let's see like, hey, what's weird? You have some of this right in here. Hold on, let me find it. I saw some, a chart that you had that was talking to this. Well, just the, I don't know that wasn't it? Yeah, it's somewhere in there. Here it is.

There it is. Yep. So this isn't so, this slide here isn't so much a conspiracy about CPI. because this, so we're looking at a slide here with owner's equivalent rent and how it contributes to inflation, stickiness. Owners equivalent rent has kind of been written up in the literature over the years as being a lag, having a bit of a lag. And so knowing the methodology on this is kind of useful. So the way they, so shelter is roughly one third of the CPI. It's a big, big part of it.

That's probably equivalent to most people. people's spending basket is. The way they measure shelter, they have rent, and then they have owner's equivalent rent, and then they have, you know, a tiny bit for hotels or whatever. And the methodology for owners equivalent rent is they just say, they just ask people what they think their house would rent for. You own a house, how much you think they would rent for? And in past history, that has always lagged inflation because people are busy.

They're not a real estate agent, and maybe they don't know. and if you look at past in times of inflation increases, this has lagged and then continued after the rent prices actually stopped dropping just because people aren't paying attention or whatever. I would argue that it's a weird way to do the methodology in 2022 to just ask people. So I posted here the Zillow Rent Index, which a couple, after I kind of ran this, I saw a couple other people like to post charts on this too, which is cool. but you could see for the last year, oh, you know, it looks like I included an extra month there.

It's not 12. So a tiny mistake there on my methodology, but I think you're going to have like an 11 or a 12% increase there on your solo rent index. And a key point on this, a lot of times when you talk to normal people, even if when you talk to economists, you know, they'd say like, oh, 6%, 12%,

that's just a 6% difference. It's not. It's double. It's a 2x difference. It's a double difference. So sometimes that just gets mistaken. People talk about, oh, inflation, should we target 2% inflation or 3% inflation? That's not just one point difference. That's a huge difference. So, yeah, that's interesting there. Another thing that we've seen that's really interesting. You can go and look at the statistics for automobile prices and the CPI index. And according to the Bureau of Labor statistics, automobiles have been the same price for about like 30 years since the late 90s. But of course, what they're doing there is the hedonic adjustments.

And we all know that that's not really true. That automobiles are the same price, but there's lots of weird chicanery, you know, that happens with the CPI stats. And then, of course, there's no, there's very few ways that I know of, and I've tried to read as much about this as I can. There's very few ways to do a hedonic adjustment. up to increase the price of something. So airplane flying stinks.

It's a lot worse than it used to be. When you had to fly with the mask on for a whole flight and you couldn't get a drink or anything, did the BLS bump up the price of an airline ticket for how uncomfortable it was? No, they didn't. But what they do is for things that are easy to measure, like a big screen TV that's 1080P instead of 720, well, that's really easy to just throw that data in the model and then say, hey, everything's cheaper with a hedonic adjustment. So I have a real, I don't know,

just one final thing on that. If you could buy a chair, if you had a time machine, you could buy a chair from IKEA right now or you could buy a chair made in 1910 by somebody with their hands. Which would you rather have? Which do you think would last longer?

And then, you know, has there been a hedonic adjustment down and how terrible IKEA furniture is? I don't know. Probably not. 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.

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Go to shopify.com slash WSB. That's Shopify.com slash WSB. All right. Back to the show. And then it begs the question. I mean, this is something that Michael Sayfidine, many have brought up this idea that inflation is a vector. if you could make up the rules for a day, how would you try to account for this?

Because it's such a complex problem when you really try to pull it back and try to assess this. I mean, I know what Lynn's proposal is for tracking it. I agree with that from just a simple way to keep track of it. But I'm curious how would you know the money supply? Yeah, the broad money supply, really kind of being the metric and that there's lag to it manifesting. itself. But I'm curious how you think we should go about it. There's just a fundamental reality

that everybody's basket is different. Everybody's consumption basket is different. Maybe in a perfect world, you have a retiree basket, a family basket, college kid basket. I don't know. I mean, if we really have tons of data available and we have tons of compute available, maybe that would make sense to have those out there as, uh, it's just something to look at. I don't know if it'd be good to, to make policy off it.

It's, it's just such a difficult question. And I talk about it with my friends and so forth, mostly just to make them aware of it. And to just, to just pay attention to it. Because if all you do is just listen to the newspaper telling you, inflation's been 1% this year,

inflation has been, 10% the other year, that really kind of misconstrues the reality for somebody, let's say, that's raising kids, trying to pay for college. Look at the price of college over the last few decades. It's nothing but up, right? So, man, that's a really tricky problem. And I don't know if there's a right answer. Where I get hung up on it is really kind of accounting for asset prices.

Like, if they're stepping into a bond market and they're buying the bonds, they're pushing yields lower. I mean, that's just simple math, right? And if we're using interest rate, I mean, look at what's happening right now. Interest rates are blowing out in the equity markets. Anything that's equity based is having to reprice itself, right? So as they're adding supply or they're reducing supply, and then it's a credit-based system, so then you have this multiple being constructed on top of the baseline money, it makes it so smushy and so difficult to account for all of those factors in addition to the prices of individual things in different age categories and all of that, right? It's just super complex. So I guess that's why I just default to Lynn's,

you know, constant its broad money supply over a long enough time period. Like if you're looking at the last 10 years and the broad money supply had a kegker of 5%, well, the inflation rate in very general broad brush terms is probably 5%. the tricky thing about the broad money supply, just looking at that. And I'd like to have a chart of base money in M2 and M3 in front of me right now, just to discuss this. But the, no, I'm not saying pull it out. I don't know.

I'm going to try to get something here. So just from recollection, one of the things that tricked a lot of us right after 2008 was thinking that the money that was a bailout to all the banks would somehow cause inflation. And that really is anyone who's still saying transitory nowadays or anyone who's still saying inflation is not sticky nowadays. That's the thing they keep hanging their hat on is like, well, you know, like you can increase the money supply, but you can necessarily, you know, have that hit inflation because it would all be trapped.

But part of the thing, part of the issue was. what happened back then was that the new money just like solidified the banks and the huge leverage that they had. So the banks just had huge leverage went way out beyond kind of what was prudent and where they were supposed to be. And all the new, a lot of the new money that we introduced sort of just made them whole. And then after made them whole and never got spent again, never, never went out. Yes, we did have interest rates go lower and that did affect asset prices. We didn't have an increase, you know, elsewhere because it didn't never really hit the real economy. So the chart I have pulled up here, Mike, the dark blue line on the bottom there is

your M sub O, your base money, and then the light blue is your M2 or your broad money supply. And you can see it goes back quite a few decades there. You can see the massive jump that we had in the base money in the 08 crisis. And you can see how they've been exercising and growing that quite significantly ever since in a very non-linear way. This is a log. The y-axis is a log scale. You can see how the broad money supply throughout all of those gyrations and the base money that we saw has been pretty, I mean, again, it's it's a log scale on the y axis but linear in those regards where they've been able to really kind of control the broad money supply there the top line until the COVID crisis where you see

it really jump with everything that they were doing and this was to Lynn's point she has an amazing article on this maybe we can throw it in the show notes where she talks at depth about this dynamic and how you're not going to see inflation start showing up into the prices until they start doing things that are very similar to what we saw happen here post the 2020 COVID shock. But I think even if we zoom, like on linear scale, we zoom in on what happened in 08. I think we had a huge increase, you know, unprecedented up until then. We had huge increases in M2, I believe. So, yeah, you can see the M2 did grow.

So here's the bump. Here, let me see what it is percentage-wise. Through this 2008 crisis, it was up, broad money was up 8%. And what appears to be, let me see what the time frame here is. It was up about 8% over 217 days. And then it was fairly flat for like the next year. And then it continued to grow at a very similar pace that it had grown for decades. Yeah, I mean, to give maybe like a utopian answer, I mean, it would be, we started this off kind of talking about inflation statistics and how to measure and what's more accurate.

I mean, if we get to a hard money standard, then this isn't as important, right? It's going to be less important for people to have their, you know, to constantly be paying attention to inflation and have their, you know, make sure their salaries index to inflation and that type of thing. I just did another measurement there on the M2 post COVID. And approximately for people listening, it's about a 40% growth in M2 over a two-year period of time approximately. So when we compare that growth rate. I mean, we had that fiscal, you know, we had that fiscal impulse there, which was way different. Yeah. Yeah.

In terms of just handing out money to people. That was Lynn's big point was just like, you know, when you mix QE with fiscal, simultaneously, that's when you're going to start to see it show up in the broader or the CPI gauge. And you can see the M2 was really, especially in the comparison to the base money and you see how violent the base money was changing. And you look at the M2, it was really quite flat and normal considering all those gyrations that you were seeing in the base money until the COVID crisis. So let me ask you this. I mean, Luke is of the opinion and he says that he thinks that a lot of the fiscal stimulus is going to have to be there in this next crisis that's brewing, right?

Would you agree with that? Do you think that they're going to have to do more UBI like things like they did during the COVID crisis? I think if you are somebody that enjoys free markets, that pays attention to markets and monitors all this stuff, we have just. We have left the world of free markets long ago. Maybe it was 30 years ago, maybe 20, maybe 10. Yeah. And we've entered the world of geopolitics and domestic politics. And anything that you're trading or any market you're looking at or whatever, your number one question, like as you open up a new chart or whatever is geopolitics.

It's like Luke talks about, it's energy, it's resources, it's this and that. and I think we'll see governments continue to have no, you know, no qualms about stepping into that market, like a, you know, 800-pound gorilla and just messing up whatever was there, whatever incentives, whatever, whatever the charts we're doing, don't matter. And that's just the thing I think we're going to see more and more is the geopolitics politics will continue to be more important. Yeah, we're seeing in Europe, we're seeing in order to help with high inflation, high energy prices. We're going to just hand out money to pay for it.

Right now, it's kind of just tough because it's very difficult to just snap your fingers and make a power plant. You know, the problem's been, the problems been, you know, brewing for a while. But yeah, I think we'll continue to see more and more issues like that. And the exit valve is the currency. You know, the exit valve, you know, like we saw with the London. and metals exchange with the nickel contracts that, you know, there was a huge short on and somebody should have lost a ton of money, but the exchange just sort of paused everything.

Now there's lawsuits. You know, somebody had probably had a great bull thesis there on wine. You know, nickel should have gone up, but it didn't matter. When it comes to, like, the survival of the exchange or the survival, the sovereign, you know, things will be done that may destroy markets permanently, but it kind of doesn't matter if you're just going for survival of your government, survival of a group of politicians. So yeah, we'll see more of that going forward for sure.

And the currencies of the exval, like a yen, the euro, you'll just see those just skyrocket. Yeah. Hey, I'm going to pull up a chart here that you shared, and I really want you to make this one simple for us. Because I think anytime somebody hears reverse repo, it's just kind of like, what are we talking about here? And most importantly, how is it more relevant and a broader understanding of how the markets are functioning?

If you can lay that out for us, I think people would be thrilled with hearing that simplified. Sure. And in all this stuff I post on Twitter, these slides, it's really just publicly accessible information with a little bit of kind of like first principles behind it to try to try to get to some insights. there's nothing that's, you know, proprietary or something you can't get anywhere else or anything like that. But if we look at a chart of the overnight reverse repurchase, we kind of see, you know, we had a little bit of that gone in 2008, or excuse me, 2018. But for a while, it's, you know, even back then it wasn't that much, maybe a couple hundred billion.

And then we kind of, you know, when things are going good, nobody uses it. And since kind of mid-2020, we've seen the amount of, of that reverse reverse repo go up to like 2.2 trillion. It's kind of hanging around at 2 trillion. And let's see, let me make sure that I get this right. So a reverse repo is when, you know, money market fund or a bank or whatever, when they have cash and they lend it,

they basically buy a bond from the treasury, or excuse me, from the Fed, which the Fed has. And then they sell the bond back later at a slightly higher price. to make a little bit of money. And right now that's, you know, on the order of, I think it's like 2.3% currently. And so the issue here is like it's kind of weird because the Fed has a ton of bonds in their portfolio because of QE. And now they're like repoing these these bonds back out to the street overnight and then bringing them back. It kind of doesn't make any sense. But it, I mean, we have just a huge pile of dollars, a huge pile of cash at banks and at money market

funds and so forth. And so kind of that little picture I put down there in the bottom is just my little kind of thinking about the future. We have a ton of QE that the fence's been doing. And there's been talk about, there's plans and there's talk about quantitative tightening. And we've seen a little tightening so far. Tightening being when the Fed starts to sell the bond that it, the bonds that it owns. So the issue is like, well, who's going to, who's going to buy these bonds? So we have kind of like a huge cash file of $2.2 trillion that can't buy these bonds. And that is actually buying them every night, you know, for a 2.3% rate. And then one of the points here that I like to make is the, you know, whether we talk about this,

whether we talk about interest on excess reserves, a bunch of these different programs, these rates are lower than some of the bond yields. Like they're lower than, let's say, like a one-year bond yield. but it's overnight, right? And there's no commitment. And this is kind of like if you're not sure what you want to do, there's a great spot to sort of kind of park your money without any duration. So the duration problem being as rates change and then as the bonds that you hold changed

value, there's a risk there. So as rates go up or rates go down, if your bond has duration, that'll affect the value of the asset you hold. So 2.3% for a repo is pretty darn good, especially considering that the banks pay basically zero to their customers. Some money markets pay a little bit more. But yeah, so I think it's just a, it's a very interesting, like big pile of money that's been collected.

I think in the long term, that will be kind of like a standing bid for some of the QT. I mean, but it's been very interesting to think about how slow, you know, how slow the QT roll off is. How slow should it be, you know, if it's too much, let's spook the market. Yeah. You would think that for the banks that this would be a huge boost to just their revenues by having these interest rates coming up and getting that higher interest rate without having

any type of risk, really. But I've seen a couple reports in the last couple days where some of these banks are saying that they're going to have a huge hit to their net income in future quarters here. Are you tracking any of this? I'm just kind of curious if you're dialed in on it because I'm, I'm not. And I saw just a couple posts on it and was trying to piece it together, but it wasn't making sense to me.

No, I'm not, unfortunately not monitoring the banks, the U.S. banks. Okay. Nothing for you there. That's all right. That's all right. I'm still piecing it together myself. Let's go back to this slide is just a title, but I find the title really interesting. And I want to hear your thoughts on this.

What are you saying here? You say proof of work or data center. What is, what are you saying here? So I just this morning listened to your, your podcast with Pierre, which is great. He's amazed. So smart. So smart. Yeah, he's awesome.

And of course, an accountant. So that's great. That's the only reason we get along. It's on the topic of the title of the name Bitcoin mining. So, you know, he, he, he, he. put out a paper on it. There's people are kind of chattering about it on Twitter. And the, the bigger conversation here is, you know, what's the, if the name of Bitcoin mining is to change with what's the goal? Is it to make it more technically accurate? Is to make it so that

new people coming into Bitcoin to understand what's happening? Different people can disagree. I think someone like Pierre and Peter Todd and those those folks kind of wanted to be just super technically accurate about what's happening, which is fine. You know, if I was to put my shoes, if I was to put myself in the shoes of a public minor in the United States right now, and I were to list, you know, the top three or so risks to my company, just not mitigated or not, just what are the risks? In that top three is definitely legislative risk due to proof of work, you know, ESG type energy use legislation. And unlike some other risks, you know, the risk of a five, you know, the risk of a fire, the risk of fraud, the risk of somebody stealing your hash and directing it somewhere

else and taking the Bitcoin that you're hashing. Unlike those other risk, you know, I would say that that legislative risk is the one that's the least mitigated, you know, the least protected against. You can't really buy an insurance policy on that necessarily. So my recommendations, you know, power in charge of the world for the name of Bitcoin mining, it would be to go just one level up in terms of taxonomy from what Pierre was talking about. So Pierre was talking about, you know, timestamping, like what's actually happening on technical level with the computers. Let's think about what data centers do.

Let's think about the cloud, right? Data centers host stuff in the cloud. Typical things would be compute, storage, that type of thing. Now, your typical investor, your random person in Congress, do they know the difference between like an Amazon S3 bucket? an Azure blob storage? No. Do they even know that,

that, you know, exactly what's happening in the cloud or in data centers? No. They just know that that's a building over there. It's got a ton of computers in it. It's got internet connected to it. It's got electricity connected to it. And the computers do stuff in that building. So if you're a public miner like Marathon or Riot or whoever,

you're kind of a data center company. You're a data center company just like Equinix or Digital Realty. And do you do storage? No, not really. Do you do compute? Do you do on-command compute for customers, for clients? Yeah, yeah, you do. What type of compute?

Well, you do a very specific type of computer to Shaw-256 compute. But that's what you are. And so I think that one of the biggest threats we face right now is the ES3 threat to prove a work. Nobody kind of really seems to understand it. I would love if we could change the narrative and the framing of this to be more in line with those data centers that maybe they're hosting funny cat videos or maybe they're curing cancer by folding proteins. Who knows?

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is 7.8%. Past performance does not guarantee future results, current distribution rate as of 1231, 2025. Carefully consider the investment material before investing, including objectives, risks, charges, and expenses. This and other information can be found in the income fund's prospectus at fundrise.com slash income. This is a paid advertisement. All right, back to the show. Okay, so I'm going to switch gears on you, Mike. This question comes from Eddie. He asked, do central banks hold reserves simply to defend the currency if needed? He said, I never understood this notion of fiat backed by XYZ assets, say gold, when the currency is not redeemable. it's just back to sell for said currency to make it stronger or, you know,

maybe they're doing it to make it weaker. I don't know. What's your take on that? Yeah. So the first thing there would be to separate it out, you know, develop market, emerging market. So, you know, reserves that the U.S. has would be very different. Some people might say, like, wait, does the U.S. have reserves?

Well, on their balance sheet, technically, they still have some gold. which is kind of reserve, right? It's an old school reserve, but it's a reserve. Now, would the U.S. ever sell gold to defend its currency? I mean, it did in the past. It's kind of a relic of the past. But if we think more about emerging market, yeah, your typical, you know, emerging market country

will hold FX reserves. And it depends on the, I guess, on the setup that they have. If they have a peg, then yes, yes, they need a ton of reserves because they need to defend the peg. It's sort of like the lunus situation from crypto where you had to have a ton of reserves to try to defend the peg. And, you know, if it's a floating peg, if it's a floating currency, like absolutely floating currency, then, yeah, I mean, in general, there's less the need for those reserves in the traditional sense to defend the currency. I mean, hopefully they answer just the question.

I don't know if there's anything deeper to it than that. It seems like you put it into really maybe, I would make. be quantified as three buckets. You got the U.S., you have everybody else that's a developed nation, and then you have non-developed nations as far as them trying to defend their currency. I'm curious if you would agree with this. From the U.S. standpoint, because it has such a tremendous network effect, it almost serves as its, and you have so much dollar-denominated debt, that almost provides a floor to a certain extent for its strength, as we're seeing right now, with how they're, you know, they just got to tighten a little bit and it's just magnified

because there's so much dollar denominated debt and this massive network effect around the world. When you look at other countries and you go into the opposite side of the spectrum and you're maybe dealing with a developed nation, they have to have something tangible as a reserve in order to defend the strength of the currency. Obviously, debasing it is pretty easy to do, but as far as defending its strength, they have to have something to sell against it, right? Well, the key distinction there is if they're actively trying to control that currency to a peg, or even if it's a partial peg or something. Yeah, yeah. I mean, the issue with the U.S., the network effect that you're kind of talking about, I mean, that would also be economists who would call that, like,

the exorbitant privilege, right? That would be the Kent. No, not the Kent. That would be the Triffon Dilemma. Triffin Dilemma. Right. Where if you have the reserve asset, you need to make enough of it for everyone else to use.

And because the U.S. money is basically like, in some ways it's not even fiat money. It's like debt-backed money. We use debt mostly to make new money, to make new dollars. So there's kind of like an unlimited bid for those dollars because it's the reserve asset. So it gives you that exorbitant privilege

to just kind of run those, you know, run those deficits, run those debts. And then, you know, the term people typically use is to just other places can then sterilize all that spending. So if you're another country and you're kind of kept in line by the markets, you know, those bond vigilantes are sort of selling your bonds, making your rates go up if your debt's too high. If you have that kind of the situation, then you can't just borrow as much as you want and have other people take your currency.

But the U.S. has been in a pretty happy position where it's just been able to just sterilize those huge debts and deficits because of the demands, you know, the offshore demand for those dollars. How do you see the housing situation playing out here in the U.S. in the coming 12 to 24 months? This is a really popular question that I personally get all the time. And I just don't know that I have a good answer for people. The first point, I don't have a super strong position.

on that, but I do think I have like a maybe decent framework thinking about it. The first point is as investors or whoever we are, a lot of times people talk on podcasts about this will happen. Our job is to assess, you know, the five, six, three different paths the future could take and then think about probabilities of each of those and then set ourselves up okay for each of those. and it's it's trendier it's cool to say like oh this will happen housing will drop 20 percent and i probably in this podcast i probably already made a bunch of calls like that where i'm saying you know this is going to happen but the point is to is to have a good understanding like what are the possibilities for for some different paths and and not necessarily just

pick like pretty sure housing dropped 20 percent by next year whatever so when we think about housing his first point is i think generals always fight the last war I think that's very common to have that recency bias and to be prepared for what just happened. I think it's highly unlikely we'll see a 2008-style crash. I think you still have some real imbalances in terms of supply and demand in housing. 11 millennial generation,

delayed, getting married, delayed, having kids, that type of thing. And then with COVID, you know, they finally moved out of a problem. apartments in one and more space. So I think we have a pretty big structural shortage in terms of housing, and I still think that's there. Now, rates are very high. Yeah, they are high. I think it's going to be a headwin for home prices in the short term, but I don't think it's likely that we'll see a major crash like we did in 08. Do you think that we're going to eventually see rates come

back down into these really low figures that we saw pre-COVID. Or should I say post-COVID? Because after COVID happened, that's when we really saw them spike down. To get kind of a pivot, I mean, this goes into the whole like, uh, the fed's in a quarter. They're going to have to pivot. I don't know. Neither do I. I don't know.

I don't necessarily want to bet on it. Yeah. And I don't necessarily want to bet on the timeframe of it. And, man, there's a ton of stuff happening. I mean, I'm sure in Europe they want the U.S. to stop hiking rates. I'm sure Japan probably does. So there's some geopolitical implications from raising rates. You know, maybe the Fed will be able to find like some weird novel workaround

or they're able to raise rates domestically and kind of pinch off inflation here, but have some kind of way, do wall or swap lines, whatever it might be to help out. It seems like we're at the point in this long. long-term cycle, right? If we go to like the Dahlio long-term credit cycle, that things are starting to break down and that that can be part of the reason why we're seeing the inflation prints that we're seeing. I mean, the railroad thing that that's getting ready to play out, like what's the ramifications of that? Like all of that, all that erosion of trust that seems to be playing out right now, almost like we're starting the end game and we're now,

like maybe in it, like what does that mean for prices in their ability to control their prices? And if they're using CPI and the bond market's obviously using CPI in order to price all the bonds that are out there on the open market, how are they able to get that under control? Even if we go into a deep recession, you know, it just doesn't seem like it's like the previous ones, and I know the classic phrase this time is different, but it sure is starting to feel like there's some things that are much different than previous just business cycles that we've seen ever since we've been alive. Yeah, God, that's a hard question. That this time is different question is important. My short answer to that would be the time that it is different.

it's going to look like all the other times all right up until the end. Every stakeholder, people in power, institutions, there's major incentives to just kind of shorten your short-term thinking less and less and less to just survive one more day. Also, humans are great at, you know, not thinking about the disaster that's coming. I mean, do you remember like the Ukraine stuff in February? Yeah, it's inconvenient.

where people were, you know, kind of partying in Kiev, like right before the invasion thing and like, oh, it's just a bluff, it's just this and that. So I think that's a short answer is that we're, there's not going to be great signals to know that this time is different. We just know that structurally, like, everything is set up for like Ray Dalio talked about, kind of the end of a dead super cycle. We know that all those, all those structures are in place and whether that kind of stuff unwinds, you know, what's the end game? Does it happen in a year? Does it happen in a few months? Does it, do we get another crackup boom? And it happens the next cycle.

That's hard. And that's hard to say. And that's not something that I want to bet on necessarily. I don't want to take investments or take positions betting on like, oh, it's within a year, but not in four years. I just think for us, for Bitcoiners, we have that long-term understanding of what the end state's going to be. The path dependency is a little tricky.

But I wouldn't set anything up for trying to. call like the short term in terms of the year or so. It's very difficult to know like if there's going to be a pivot, if there's going to be major a pivot in terms of the Fed and their policy. I'm, I lean towards the camp of, no, this time is different. Powell, Powell's close to the end. This is his last term, I think. I think he wants to just not be the guy that's known for for letting inflation run. I think they want to kind of keep rates pretty darn high. I don't think there's a huge incentive to just pivot and light up another crack-up boom, unless it comes from those allies like we were talking about, situation in Europe, the situation in Japan. That would be

the only thing I see changing my view on kind of a crack-up boom happening. Risks to Bitcoin, as you see them today. Oh, it's good. There's plenty of risks. A lot of them are mitigated, however. In terms of unmitigated risks, the main one that I see, and I'm going to get a little out over my technical expertise here, but it's the, and I don't know the word for this, it's the nation state chain tip DDoS attack with a large amount of hash power. It's that type of attack where a non-economic actor tries to kind of de-dos to basically just send out tons of new blocks and reorgs and different things like that to just put a lot of chaos into the consensus of what the heaviest chain is, what the valid chain is.

That's something that I see is a little bit unmitigated. There's not much that's in place right now and I kind of prevent that. You know, we had a situation where a bunch of the hash rate left China, but now you have a ton of hash rate in the U.S. and that's something that I do worry about a little bit. I was shocked at how well the protocol handled that, considering, I mean, it was no joke, 50% of the hash rate was just straight taken offline. In a matter of, what was it, 45 days, 60 days.

And the two-week adjustment just kind of crunched through it. and, you know, economic incentives sent those rigs to all over the world, a lot, like you said, here to the U.S., but, you know, on that one, I don't know. Have we already checked that block as far as the 50% attack vector? I mean, I think it's highly unlikely. Yeah. And there's a lot of stuff that has to happen in meat space to do that. Yeah. And so it's a little bit like when people talk about war, you know, that have never picked up a gun.

and they say, well, this is going to happen, and then this is going to happen, and then that's going to happen. Like, okay, well, you know. It's kind of like flying an F-18 in the top gun movie, right? It's just like the top gun movie. Yeah, for sure. Yeah. But there's a lot of things that need to happen in real life and with physics. And in order for that type of attack to happen, I think it's unlikely. But if you ask me, like, what is the one thing that's kind of still out there?

That would be the one, yeah. How terrible was the movie or how much did you love that movie? It's a good movie. Yeah, it was an old school. Top Gun was kind of a good old-fashioned action movie without it. They upgraded to the F-18, right? Yeah, they flew rhinos. They flew the Super Hornet, so that's the newer one. I flew the legacy, so the one from the 80s.

But very similar. Control is very similar. I've got like five hours in the Super Hornet in the front seat. They're very big. the size difference between the Navy and the Marines and depending on which it's almost like a completely different aircraft right the size well it's it's bigger um has more internal fuel capacity that's i be saying if you know what to look for you can kind of spot the the differences it's not that much bigger i mean they're both kind of pretty small fighters but yeah in terms of

the movie it was it was cool to see a movie with some f18s in it they did a fantastic job so I don't know how long the production was on that. But I'll tell you one thing, when I was in Miramar in 2017 or 2018 when I was still in, their team came in to just kind of spot locations and things like that. So they'd been working on this for a long time. That director was there and all that. And it was in the works for a while. They put a ton of work into it.

And it's the, so the action wasn't very accurate, but they did amazing job. of shooting a bunch of stuff in the cockpit, making you feel like you're in the cockpit. Yeah. And then the culture and the surroundings and costumes or whatever, they did a great job with that. So I don't mean like, I mean just like the type of pen that somebody has in their sleeve, we always use these four color pens like black, green, blue, red.

And you always have it in your sleeve right there. And they all had those. It's just like it was very authentic in terms of the shots. I mean, maybe the dialogue and stuff was in the last year. Yeah, the mission was total crap. Yeah, yeah, the mission was pretty nuts. But they made you feel like you were in there, that's for sure. So if people haven't figured out yet, we're done talking about the finance.

Now we're going to just talk about pilot stuff. And yeah, so I'm kind of curious just to kind of pick your brain because, you know, as a former military pilot myself, yeah. So you went through flight school. How long were you, did you, were you in for like 10 years or what did you do? About 11. 11 years. Okay. So as you know, but the audience may not know.

I mean, there's pretty long contracts for pilots in the military. And, yeah, you do all the training up front. It took about three and a half years from my pipeline. And then you owe them eight years once you're done. So it's a long time, that's for sure. How many hours did you come out with? Oh, I think about like 1,300 or so. These days, I'm not flying professionally.

So I don't have my, I don't keep up to the day with that too much. But yeah. We're similar. We're similar. Yeah. I'm around, I'm going to say it was like 1,200 or something like that. Okay. Okay.

Yeah. The joke is always, what was it for the Rotary guys? It's like they think at 20 knots ground speed or they think it. It's two knots ground speed. But we think at 480 knots ground speed. Yes. Yeah. Yeah, it was, we did a joint exercise over in Korea one time where,

we were working with the, it was with the Air Force. We were working a joint exercise with their F-16 unit where we were lazing hellfires from one aircraft and shooting them from the other, then vice versa. And so we got to go up and I got to go up in an F-16 and experience it. And I was just like, after that flight, I was like, oh my God, I am so glad I fly helicopters. Like that is, that is like running a marathon. Like I think we only logged like 1.5 hours. And it was like, I got out of that aircraft. Now, we did air to air coming back, which was just exhausting. I felt like my brain was put in a scrambler and was just like, this is, this is out of control. You know, like the G suit was just squeezing the living hell out of me. I mean, it was a really

neat experience, but like very taxing on the body. Like, I was not expecting it to be that taxing. going straight into an F-16 is pretty that's a that's a hell of a jump because they you know they pull some of the or the have the capability to pull some of the most cheese thing it's like a 90G limit yeah reclining seat and all that stuff we did we did seven uh I did like seven point one or something like that and I was I mean it just felt like your brain was gonna pop yeah yeah it's a hell of a workout what would you guys what did you guys pull five you were probably restricted by the armament and stuff so yeah it depends on the weight depends on the fuel load and different things. You have a computer that kind of automatically calculates it. And then there's a gene limiter switch on the very bottom of the stick.

So with your, kind of with your bottom two fingers, if you really need it in war time or whatever, you can kind of pull on that thing and just yank for all your worth and go way past the gene limit. But we had, it was like 7.3 was kind of the normal gene limit. And then at lower fuel states, you can go higher to like 7.5. I accidentally pulled 8.4 once when the jet was real, real empty of fuel. Yeah. It just kind of honked it on too fast. But yeah, it's...

Dude, it's brutal. It's tough, man. I mean, you remember just moving your head. So the thing is, you're not pulling 9Gs, just right here like this. And it's not huge. You're pulling 9Gs, but, you know, the bad guys back there.

So you're having to just, like, put your head in this craziest position. They'll try to look behind you. Hopefully he's not behind you. Hopefully he's right in front of you. But you're having to do that. So it's, yeah, it's definitely pretty tough.

taxing on the back and the neck and so forth. Yeah, I just remember landing and I was just like, you know, because I've done some pretty taxing things on the body through the years, just whatever. And I got out and I was just like, that was brutal. That was brutal. Yeah. And you're right. What's neat about the rotary wing, I would say, is like we're down in the trees.

So it's much more of like a roller coaster kind of feel where you have the relative velocity that you're seeing just kind of whizzing by where, you know, like on my flight, we were like, I flew with the battalion commander of the squadron and the squadron commander. And, you know, we went up and we were over the LFC and he's like, all right, you want to break the sound barrier. I was like, of course. And so, you know, he breaks the sound barrier. And there really wasn't a lot to it.

I was kind of, I was really kind of blown away. Like there was just like this little shutter. It got a little quieter. And he's like, all right, well, you just, you did. did that and I was like, okay, well, that was it. But you're not like seeing the relative velocity where in the helicopter, you're going so much slower, but you're, I mean, there's a lot of relative velocity if you're, you know, flying tactically. It's just different. I was in a debrief with a guy one time, a cobra guy, so a helicopter guy. Yeah.

And he was kind of talking about like how there's a bush here and a tree here. And he was just like doing this to, I had, I just, he seemed really into it and I just let him kind of go. because he was kind of really getting into his tree and his bush in this little hill. And he was talking about, I don't know, like a 50 meter, 100 meter kind of space that he was in for like an hour. And I was like, okay, this is, yeah, it's a different world. It's a different world. I got kind of a crazy story for you. So one time we were doing a flight.

We were at Mots, so in Yuma. And this guy, this helicopter guy, so did you ever carry sidelines on your helicopter? No. Okay. It can put them out there on the end, but we never. flew in that configuration. Okay. So the COBRA's same thing.

They can put sign runners on there. Realistically, I don't know if they've ever flown like that or how often they do. But for this mission, you know, simulated loadouts, we had those. And he claimed, so he's like some red force or something. He claimed that he shot down one of our F-18s. So like 10,000, 15,000 feet. And he's like, oh, yeah, you know, it's a valid shot and tone and this and that. I'm like, okay, whatever.

Like, get out of here with your, like, valid, you know, By the book, like valid shot from your helicopter, you know, 15,000 foot straight up. That's why. Hey, you know, you know, some of us are just a little insecure. Yeah, but it's fun. And then I spent some time in infantry too. So I was just in the back of the helicopter all the time instead of walking. I much prefer that.

Yeah. Then it's all, then all of a sudden it's really fast. Yeah. Yeah. And then we did a ton of work with Ospreys too. in the Marines. So those are pretty nice as well. Expensive. Yeah, 250 knots. Oh, yeah. It gets you from here to there is a lot better than like 150 or so. Yeah, twice as fast. Five times it's more expensive. Oh, that's awesome, man. That's pretty cool. I'm sure we could talk

this for literally hours more, but we'll close it out there. I really appreciated this, Mike. You are so knowledgeable. Love the chat. The charts were awesome. And give people a handoff. If they want to learn more about you or they want to follow you on Twitter, just give them a handoff to some stuff. Yeah, so I don't really have anything to pitch. But one thing I was kind of hoping to talk about, just mentioned it here real quick, is kind of having some sovereign stats, having a sovereign stack. So I just want to kind of make the point that I think folks should be thinking about, you know, acquiring some Bitcoin, not from Coinbase, or not from someplace like that. And it's been a really good time to do that.

over the last couple months, like 18,000, 19,000, prices are pretty low. Yeah, you're going to pay more if you buy it in ATM or if you buy on BISC or wherever like that. But I'd love to really just normalize whether it's finance bros, whether it's stratify people, whether it's, you know, cyberpunk people. I think it's really important for everybody to kind of have a little bit of that sovereign stack that's a little bit more private. And who knows, maybe someday you may need to use it in that kind of manner.

So I'll just put that out there. That's one thing I wanted to plug. And then also, my Twitter is at Mike's Group 10. So, yeah, that's where I am if you want to get touch with me. We'll have a link to that in the show notes. So just click on the show notes and make sure you follow Mike. Amazing posts on Twitter, some of the best charts. I've enjoyed following your account.

And I really appreciated this conversation and you're making time. Awesome. Thanks, Preston. Yeah, it was a blast. Absolutely. 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, and I'd love to have you as a regular listener.

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