What Bitcoin Did - LIVE IN BEDFORD w/ Checkmate, Preston Pysh, Lawrence Lepard, James Lavish, Matt Pines & Alex Thorn

Episode Date: April 30, 2025

In this episode we have three sessions recorded live at CheatCode in Bedford. In the first session, Checkmate, Preston Pysh, and Alex Thorn break down the cracks in the fiat system, the rise of deglobalization, stablecoins, Bitbonds, and how Bitcoin and gold are emerging as neutral reserve assets. In the second session, Matthew Pines unpacks the global economic reordering, the U.S.–China trade war, escalating tariffs, the fragility of the bond market, and why Bitcoin may be the ultimate escape valve. In the final session, Lawrence Lepard, James Lavish, and Cameron Parry go deep on gold vs Bitcoin, the debt doom loop, the case for a Strategic Bitcoin Reserve, and the fight for financial sovereignty. FOLLOW: Danny Knowles: https://x.com/_DannyKnowles & https://primal.net/danny Checkmate: https://x.com/_Checkmatey_ Preston Pysh: https://x.com/PrestonPysh & https://primal.net/preston Lawrence Lepard: https://x.com/LawrenceLepard & https://primal.net/lawrencelepard James Lavish: https://x.com/jameslavish Matthew Pines: https://x.com/matthew_pines Alex Thorn: https://x.com/intangiblecoins Cameron Parry: https://x.com/CameronJParry THANKS TO OUR SPONSORS: IREN: https://www.iren.com/ RIVER: https://river.com/wbd CASA: https://casa.io/ LEDGER: https://www.ledger.com/ ANCHORWATCH: https://www.anchorwatch.com/

This basis trade is so huge, and it is so problematic and scary. It is mental, and I don't know how we come out of this without printing tens of trillions of dollars in the back end of it. There's a lot of leverage in the dollar system that can blow up. Because the world is fragmenting, folks are looking to what's the next system going to be. Clearly, Bitcoin is now becoming a geopolitically relevant asset. The financial system is in deep, deep trouble. And Fiat is, we're getting into the very late stage. of the failure of the fiat experiment.

Depression, hyperinflation, or extremely high rates of inflation. There's no reason to think that just because we're the world's reserve currency, that we're going to be able to escape that fate. It's coming. This is going to be the largest wealth transfer in the history of the world. What Bitcoin did is brought to you by our lead sponsor and Massive Legends, Iron, the largest Nasdaq listed Bitcoin miner using 100% renewable energy. Iron are not just power in the Bitcoin network.

They also provide cutting edge computing resources for AI all by, by renewable energy. So whether you're interested in mining Bitcoin or harnessing AI compute power, Iron is setting the standard. Visit iron.com to learn more, which is ironsen.com. Let's go. We've got Preston Pish back in Bedford, Alex Thorn, back in Bedford, and Checkmate has come all the way from Australia, and he had the decision to go to Vegas or come to Bedford, and here he is, which is amazing. At six foot seven, you only get one international flight a year. So I want to just, start by getting these guys to introduce themselves. So should we go down the line and start with you, Alex. Yeah, thanks, Danny. I'm Alex Thorne. I'm head of research at Galaxy. And I've been there for four

years and I was at Fidelity for 12 years before that head of blockchain research at Fidelity Center for applied technology there. Is that? I love Bitcoin. That's why I wear orange shoes. So I was a military helicopter, attack helicopter pilot for a few years. And then I got into podcasting and love Bitcoin. And a lot of my love for Bitcoin actually stems from seeing how broke the defense acquisition and the spending that is defense-oriented on this proof of violence fiat system. So I come with that lens. I also do venture capital in Bitcoin.

Yeah, so I used to be a tunnel engineer. I bought the 2017 top. You couldn't have bought higher than me if you tried. Learned markets, something about it really fascinated me. and then on-chain data was really where I kind of found my rhythm. And yeah, worked three and a half years for GlassNode and now founded Check On Chain. So it's been a, it's been a great journey.

Amazing. So this panel is obviously called What's the Solution. But I do think it's worth taking a step back first and getting into the problem a little bit. In the last week or so, we've seen just how fragile the Fiat system is. Checkmate, you wrote a piece about Trump's tariffs. Do you want to start off by just telling us what the fuck is going on? Yeah.

So I think the way I've been describing it recently, it's not the perfect analogy, but when you're designing a foundation of a building, I envision all the banks, the fiat system, the payment rails. Think about that as the structure, the building. You've got steel, you've got concrete. They can put it where they want it. But what really breaks an engineering project is when the ground under you starts to move. When your foundation's stuffed, it's a far more expensive thing to fix. And what I think is really kind of critical to see is that they are taking a sledgehammer to the foundation. of the financial system. So it's going to be disruptive. It's going to be pretty hairy. I think in many ways the Triffon dilemma is right in the middle of the Overson window. We're now talking about the fact that the US has hollowed out their domestic base. And it's a bit of a theory. Luke Gromens talked about it. But if you've got the Treasury, the Fed and the Department of Justice, the Treasury and the Fed, they want to keep dollar hegemony. But if you look at what the Department of Defense is saying, the biggest risk to them is that they lose the middle of America. They lose the American, right? Where they just, they continue to get poorer and poorer and move jobs

overseas. So the way you have to fix that is you need to remove the US Treasury as the base of the financial system. And then you go, well, what else do you put in there? How do you replace the concrete in the ground underneath you? And really, in my view, there's only two assets that can fit that brief and it's Bitcoin and gold. So they're really the only two assets that can fill that role, those neutral reserve assets. But these tariffs is all about band-aid off, start the process. It's not going to be pretty. It's not going to be easy. It's also not going to be months. It's going to be a multi-year process. It's a real fourth-turning shit. But at the end of the day, right, there is no other answer. Something has to change and as disruptive as going to be,

we're in the thick of it now. And I name that piece, there is no undo button. This is kind of like when they froze Russia's reserves. You can't go back in time now. So we're in the thick of it. So do you think these tariffs are a good idea? I think they're part of a strategy. Now, look, you know, how they do it, there's probably things they did well, probably things that they didn't do well. I think at this point in time, it is, it just is now. So I think tariffs is a part of the way to kind of force the engagement. We've got games of chicken being played, US and China, who backs down first. You've got the Treasury and the Fed, who backs down first, who blinks. And then the other one is you actually got Trump and the Republicans and in Congress, because at some point, if they keep

pushing things and things get worse, the Republicans are going to take away the keys and say, we need to get re-elected. So there's all these tipping points that at some point will click. So this past week, Ray Dalio, real famous billionaire, macro billionaire, came out with a, I thought was a really good article on,

he was saying the tariffs, everybody looking at the tariffs as being the thing, is kind of like a reflection or a shadow of this something else. And something else is this idea that de-globalization has started to take place. We've had globalization for, you know, four or five decades of the whole world coming into harmony and producing and shipping. Like if you go and buy flowers, why do they come from 8,000 miles away as opposed to somewhere that's local 100 miles down the road?

It doesn't really make much sense. But that whole globalization process has been playing out for decades. And now you're in this new era of de-globalization. And so your question, Danny, of are these tariffs a good thing? You know, Ray's article suggests, and I agree, that it's not necessarily, is it a good thing or a bad thing. It's a reflection of the incentives that have changed that are now causing politicians to say, hey, the fundamental unit that's being used, because if you go upstream enough of like what's driving the de-globalization process, it's because the fundamental currency that's being used, the U.S. treasuries and dollars are starting to fail mathematically.

And so that de-globalization process is now happening. And that's why politicians are turning to tariffs. And this is just, in my opinion, and I would say Ray would probably argue that as well, is that this is just the start of a much bigger process that's unfolding and taking place right now. Yeah, I totally agree. I have got a couple points related to both what Preston said.

And, Danny, I mean, a check, your mention of the Triffin dilemma, which I encourage everybody if you don't know what that is to go read. But the idea is that if you have a global, reserve currency in order to maintain that reserve globally. You have to supply the world with dollars, right? This is what leads directly to a trade imbalance that President Trump is so concerned and opposed to, right? It's not, he's saying it's unfair, the trade imbalance that the U.S. has with much of the world. It's not unfair. It's literally what we signed up for. It is we have to net export dollars so that they're all over the world and get used in trade, which results in us

buying everything with dollars from the rest of the world. And they do seem to want, even Stephen Miron, who's the head of the Council of Economic Advisors, he wrote a paper explaining that this is a problem. And it reflects a rise of populism, I think, in general, both around the world, but in the United States, which is a result of many factors. I agree that the dollars, the week, think about sanctions on the dollar, on countries we don't like, it adds encumbrances to the use of the dollar. So the politicization and weaponization of the dollar is one factor. Like horribly gone wrong, foreign wars like the war in Iraq and Afghanistan have soured the interest in the U.S. playing that global police role. The breakdown of national borders and

trades routes during COVID is also part of this story. And so tariffs accelerate a multi-polar shift, right to the end of globalization as preston says like there is we are entering a world of blocks b l o c s not b l o c s where and you can see it in the negotiations and pragmatism from the trump administration on the war in ukraine and and the the focus now on china and in that world it's very tricky to both maintain the dollar as the reserve and sort of step back into a more pragmatic, block-oriented national security and foreign policy strategy. And it does, just today, right now, gold is at all-time highs at $3,200 per ounce. And treasuries, despite the decline in equity markets, you would expect people historically would be fleeing to sovereign debt,

high-quality, sovereign debt. But with the amount of uncertainty created now, they're not fleeing to treasuries. And so it looks like they're fleeing to gold. And you do have to, wonder if you're a sovereign nation or corporate or a wealthy individual, like, how are you going to store your money in gold, right? You can buy a financial vehicle that owns gold like an ETF, but that has plenty of encumbrances too. The only way to transport a billion dollars of gold is with a literal warship. And so you have to imagine that Bitcoin becomes a more widely used alternative in that world. And just one more point there. I think something else that's really interesting to observe is how transparent they're being. Like Stephen Mirren wrote a paper six

months ago. I read it recently and I'm like, I should have read this six months ago because it's like reading what happened yesterday. Scott Percent is on Tucker Carlson saying, you know, gold is moving around. And by the way, Bitcoin's also a story of value. And what's interesting is that Wall Street doesn't believe them. That's why we're seeing so much volatility. This is such a big shift that breaks so many things. They're telling you exactly what they're going to do. Trump's been talking about tariffs for 40 years and people were surprised that he implemented them, right? This is kind of where we're at. So it kind of gives you an idea of the seismic shift that it is. So I think, Alex, you made a good point there where on the back of this,

equity markets tanked, yields on the bond market went down before quickly going back up, which kind of puts the Fed and central banks in like a tricky position. Like, what do they do now? And we've got Larry Lepard in the house who, his book couldn't have come out at a more perfect time, I think, called The Big Print. Check, do you think we are about to see a big print? This is, there's several levels of tension here. So the Treasury and the Fed have a, there's a complex relationship there.

The Fed kind of has their hands tied because the one thing that is different now is that inflation has reared its ugly head. And it's the one thing, right? No politician wants to go into an election with a recession under their belt. No one wants to go in with inflation. The one thing that counteracts anyone getting reelected is the price of gas going up, is the price of things going up because it hurts everybody. So, and if we talk about the equity market,

being down percent is very clear about this, right? The top 50 percent are going to be more affected by equities coming down. The bottom 50 percent, they're in debt. They've got nothing. So if you have the price of goods going up, so the Fed's in a very tricky spot where if they do too much printing too quickly, you create a political problem. And my frame of reference here is that at some point in time, there's a reaction function where they're going to have to step in to save the bond market. After 2008, they printed a lot of money. but it was asset inflation. We didn't see CPI inflation because essentially it was printing money into the financial system and what to people who are well off by, they don't buy more bread,

they buy assets. And in that way, I think we're probably more likely to see some kind of stealth QE. It's always going to be QE by another name, QE but not QE. And it's going to be something that's going to create asset inflation. It is going to be debasement, but they're going to have to hide it from Main Street in many ways. when I think about the solution to what's taking place. So like we know that the dollar, we know that the changing of that underlying currency is the fundamental problem.

But it's like, okay, from a solution standpoint, what does that look like from where we're at right now moving into the coming decade? And what I would just characterize it is is you have this array of ways that this can unfold, either more quickly or a little bit more slowly and maybe a little bit more stability in that development. So when I'm looking at like tariffs, as an example, de-globalization, you get maybe a more extreme

politics kind of plays into it and they just go hardcore into tariffs. And then everybody just doubles down all around. The response just ricochets. And what that does is it actually accelerates that trying to fight the declobalization process or this would be an accelerant of the declobalization process is going to usher in a faster, in my opinion, Bitcoin-Ey's world. When we look at, let's take it from maybe another angle where, you know, you have the tariff piece.

And then let's talk about like bit bonds. So this would be strengthening or slowing down the decay of the old system. But to do this requires a deep understanding of the people in charge of why incorporating one or two percent of Bitcoin. as a piece of all sovereign issuance so that you have a buyer, a desirable buyer, and it adds much more stability so that the yield curves on all the sovereign debt doesn't blow out very quickly. Preston, just to interrupt you quickly, it's probably worth you explaining what BitBonds are.

Yeah, so in short, like if you're buying sovereign debt today, it's not backed by anything, especially if you're buying anything with like 20 or 30 years of duration on it. So when you're looking at that and you're saying, oh, I'm going to get a 5% return, but I know M2 is the basing at 8 or 9 percent, so I have a real return of negative 3 percent effectively just without even accounting for the acceleration of that M2 blowing out more than 8 percent, which is what I think most people would anticipate moving forward, right? So if you don't actually put some type of hard sound, call it gold or call it Bitcoin, incorporate it into the repayment of the face value of that bond,

you're never going to really find a buyer that wants to buy anything. with duration. And when you look at the stability of a fixed income market, so much of it come, the underpinnings of that come down to, can we issue something with duration? Can we issue something with more time than a year on it and still have a buyer? And like you look at Janet Yellen in her last year. She didn't issue anything longer than like a year. Well, why was that? Because it really wasn't a buyer out there for how much supply already exists on the market. Now we look at this year, they've got seven to nine to maybe even 10 trillion that they've got a, refi effectively into the market. How are they going to do that? Are they going to do it with

one year notes or are they going to try to push further out in the yield curve? Because if they go further out in the yield curve, is there a buyer? Well, my argument, and Brian Estes is the one who's really pushing this, Perry M. Boring and some others are really propping up this idea of the BIP-on. And I personally like the idea because it's some form of trying to get a free and open market for fixed-income buyers, which, you know, all that sounds like a bunch of financial jargon, but this is what it really means. It might mean further stability for the system that's dying as we transition into a new Bitcoin-Eyes world. So is that better? Is that worse? Because it's taking longer? I don't know if it's better or worse. But what I think is when we're talking

about the solution, we're talking about a quicker solution or we're talking about maybe a more slower and stable solution as we're transitioning from an old system to a new system. And I really think that the whole discussion, like for me, it's not even a hard one on whether Bitcoin's the solution here. I think everybody in this room agrees that that's the solution. It's more of like, what does that solution, how does it actually manifest itself over the coming decade? So I think there may be a bit of disagreement on this panel, which is always fun. Checkmate, I know you've kind of faded the idea of Bitbonds. Do you want to explain what you think about them? Yeah. So it's not so what I'm fading. It's just, I'll see it when it happens, I'll believe it. Right. So,

And I think you had a conversation with Paolo from Tether. And you said, how much do you need to put in there to make me buy a 30 year? And he goes, pf. He said zero. Yeah, yeah. Yeah. The problem is the 30 year bond. It's not the Bitcoin.

So I think that's the problems. But if I then take that same argument, what does, what does Tether do? They, well, they got 40 tons of gold and a bunch of Bitcoin. So in many ways, I'm a, I think, right? It's not the world that you necessarily want. It's the world that I think is most likely to happen. A hard money, soft money, dual standard. This is where I think it's all going to,

end up where you have sound money. Gold and Bitcoin is the collateral. Over time, it will replace the foundation, but that's going to be a gradual process. Hard money to save. Hard money is collateral, and you borrow soft money. Right. So I think how many of your friends, I mean, in this room, you've probably got what, 20% if you're lucky of your friends that have actually gone, oh yeah, Bitcoin kind of makes sense. So the other 80%, they're just not interested. It doesn't matter how much you tell them. They're just not interested, right? It'll become part of their portfolio, naturally, but the vast majority of people are going to take a hell of a lot of pain when it comes to inflation. We see this in emerging markets. They take a hell of a lot of pain before they finally

switch. And likewise, governments don't want to give away the printing press. So my base case is that fair will remain. You'll have hard money collateral and you'll be able to borrow against it. Maybe that starts to manifest in bonds. I think we will see a lot of financial engineering. I mean, we're seeing it with strategy, just playing around with how Bitcoin, hard money and bonds fit together. Whether we can do it at a sovereign debt level to fix this problem, I'm not sure. I think, I think Tether's probably right there. I think one of the really important things when you talk about BIP bonds is you have to understand that the government level is at many different sizes. So we got like the town of Bedford, right? They don't print their own currency. They have to deal with

whatever comes out of at the, I'm saying the federal level. I don't know what the proper, yeah. Okay. So in the U.S. it'd be a small. town. It would be a state. It would be whatever. They don't print dollars, but they're denominating all of the debt that they're issuing for that municipality in dollars. And so if they're irresponsible or they've had elected officials that have gotten the city or the town or the state highly indebted, they have to come up with a solution to have a buyer for those munis that they're issuing, right? In my humble opinion, that's where we're going to see this take hold first, which is interesting because when you look at Bitcoin, it's a grassroots, almost like a life form evolving.

And it's not coming from the top down. And I think you're going to see the evolution of this and that stability take root for local municipalities because they have to do something to find buyers for this issuance. I like the idea of the BitBond in that it adds, you know, with like the Bloomberg guys, Eric Balchunis and James Safer call it hot sauce. It adds a little bit of reason to buy the long bond. And there is a need for people to buy the long bond. I suspect that the Trump administration is going to make as part of the tariff

negotiations some agreements that result in foreign allies buying more on the long end. I hope he does because that's needed. Yeah, he has to. And so my issue with the Bitbond is that I just wonder if there is demand at the at the sovereign level worldwide to buy that when you could either just buy the most of the bit bond is going to be a treasury. And you can also just buy Bitcoin. And I think you will see them starting to buy Bitcoin also.

I mean, obviously we've got sovereign wealth funds in the Middle East buying Bitcoin, some reporting that nation states are settling some trades using Bitcoin or other digital assets. So I just don't know. I'm open to it because I think anything that can increase interest on the long end of the curve is important for the United States. And this goes to the problem the Fed has. And to James's point about quantitative easing, like they don't want to, it's not benchmark interest rates that have to come down, although that would help for refinancing U.S. debt. I mean, there's also that needle to thread. But it is demand for the long bond. And so I could, I can imagine a scenario very,

very easily where the Fed starts buying long-dated U.S. Treasury debt, right? 30 years. right. And it's it's kind of inevitable. But that's not a free and open market. And that's the thing that I get like, oh yeah, they're going to step in and buy. Even though they call it the Fed Open Market Committee. But then it's not a free and open market, which is then affecting the cost of capital of everything. Well, and it spirals forever. It's really no deal. I mean, that is money printing. And it and it creates that positive feedback loop where if there isn't organic demand for the debt and you can't just, I mean, think about this, right? The U.S. dollar is by definition an algorithmic stable coin. They're literally printing money out of thin air, then denominating debt printed out of thin air,

and then the money printer is going and buying the debt, collateralizing the dollars with the debt that they printed, right? So that just spirals forever. And if the U.S. isn't prepared to also be the world's police and maintain international norms and give away the dollar and have, you know, no tariffs, then it doesn't work. And it looks like it's not willing to do those things now. So it looks like it's careening into a slow motion car wreck. I think Alex makes a really good point there, because if Tether, who are obviously a stable coin, but run by a Bitcoin, are they kind of a Bitcoin company, they are something like the seventh biggest buyer of treasuries, they're bigger than Germany, bigger than Australia.

Like, if even they wouldn't be open to buying Bitbonds, who would? Well, and I would love to talk about the stable coin piece to this as well, because I think it's a really important talking point for, you know, what does this future look like from a solution standpoint? But to your point, when I had the conversation with Paulo, this is this was the question I asked him. I said, would you entertain the idea of just not buying the notes at, you know, 5% coupon? But like if you could get 2% Bitcoin on a 30 year, would you, would you buy that? And he just kind of looked at me and laughed to checkmates point. And the reason why is because he doesn't have to make a risk assumption on what that debasement rate is. He can just buy this thing that turns over every month or three months.

that's already paying 5% and then he can take the 5% and sweep all of it straight in the Bitcoin or gold or whatever he wants to buy with it. And so he's because the turnover on short duration is so fast and the yield is so high relative to the long end, which is lower in some cases, right? That's a no-brainer, obviously. But my suggestion was that it would give him a higher yield and there's like a little bit of a Bitcoin kicker, he then has to like deal with all the fluctuations in the price as inflation and debasement rates happen at a faster pace or a slower pace. That's just all

risk to him. And he doesn't want to have to deal with it. He just wants to sweep the, I mean, what is that? Five billion, the seven billion a year based on how much of, you know, treasury he has of everything that he's backed up. So it's almost a no-brainer for him. It's like, I'm making so much money, why would I risk that for a 1% additional coupon kicker with all of this 30 years of inflation that's there? So to answer your question, like I know I went on and on, but the answer to the question is, I think it's going to be hard for somebody that understands Bitcoin so well and understands stable coins so well to bite on something like that. But there's a lot of other people that have fixed income mandates that don't understand any of this stuff. And they'll

look at like a micro strategy, and I know that's a corporate, and we're comparing corporates to sovereigns, which are way bigger. But there's a reason that every single micro strategy convertible bond that was issued was oversubscribed. And since the issuance has been the best performing fixed income instrument on the planet. And so that's maybe an example of what could happen. And not to mention, look at the financing rate. It was couponless on some cases. Okay. So when we're dealing with a with a country or a municipality that might be dealing with 5% in excess of interest rates and they could do something like this and it could maybe drop it down the 3%. I just think you're crazy to not try. Like it might fall flat on its face for all I know.

But when you're dealing with interest expense that's exceeding defense budgets, which is what we have in the United States right now, which is astronomical when you really take a step back and think of how big, the interest expense is, you should be doing everything you can to lower that interest rate, get creative, do something, test something out, try it with a couple billion dollar bond tranche, see how it works, and hey, you might be surprised. It might be a significant reduction in your interest expense. Why wouldn't you try that? It doesn't make a point about the stable coins. I think people aren't totally getting, but you have all these forces reducing the influence of the dollar, right? Whether it's, you know, the lack of demand for treasuries on the long.

end or high interest expense the U.S. has uncertainty in the U.S. fiscal policy landscape, tariffs which create multipolarity and all of that stuff is detrimental to the dollar status as the global reserve. One of the reasons bonds shot up this week, I think even after they, even with risk market selling off, is like, well, do you want to own, like we're looking at the tenure as sort of like that one of the baselines people like to look at. Well, sure, like, you might want a safe haven. That might be a reason to buy sovereign debt because it has a guaranteed coupon rate that's going to pay you, but also you're betting on the solvency of the issuer and the certainty and stability of the issuer. And it's not just the policies being enacted by the White House,

but it's also the method of execution, which has been very surprising and erratic, right? They'd been you know, conditioning the market to expect tariffs, but then they came out and did tariffs that were actually a calculation of the trade imbalance. They weren't reciprocal tariffs. So all of that reduces the likelihood that the dollar remains the global reserve. But on the other, a countervailing force that they are pushing is a stable coin explosion. And there's bills in the U.S. Congress in both the Senate and the House that will formalize, legalize, expand the use of stable coins. I think, and Scott Bess and the Treasury Secretary at the White House during that crypto roundtable, he said we, the dollar will remain the dominant.

currency and stable coins will help us do that. So I think the idea in their mind is flood the world with much more easy to use dollars as a countervailing force to this, you know, multipolar shift. They're also accelerating. But again, none of that solves the core problems of the dollar in the way that something like a scarce digital, non-sovereign asset like Bitcoin does. It does solve the transition, though, in my humble opinion, like it doesn't solve the, accelerates the demise of the dollar because there's just going to be so many of them relative to this fixed scarce thing. What I think is going to be an interesting thing to watch and just kind of see play out. Right now, there's a lot of debate happening on as the banks are creating

their own stable coins, which is coming, are they going to allow the interest or the coupons that are being kicked off by what they're being backed with to be paid out to the holders of the coins? So, Heather. Well, the house version explicitly forbids that. I know. And they like to call these payment stable coins because they don't want the stable coin to compete with the debt issuance, which. But here's the problem for the U.S. is you're going to start having other stable coin issuers outside of the U.S. that don't have this limitation or I don't even need air quit.

They're not going to treat it that way. And then you as a user, let's say, holding this stable coin, which is really interesting because I think I'd rather hold that than have a deposit at Silicon Valley Bank that doesn't actually, you know, if you're squatting on a million dollars worth of stable coins, I think I'd rather have the stable coins than have it on deposit. And as a stable today, the stables today are, you know, the good ones are fully reserved, unlike bank deposits. So now you're getting fully reserved things versus I have to trust the FDIC and Janet Ellen or whoever to make a decision over the weekend, whether they're going to, you know, give me the

money that I thought was there. That's one. And then two is the international competition of paying some of these coupons out to the end user of who's squatting on the coin. And if the U.S. passes laws that prevent the banks, which you would think the banks would be all for the idea that, well, by law, I don't have to pay out any of these coupons. And I can basically pull a tether and just sweep all of it into my own retained earnings, right? And I can put that in whatever I want, whether it be the equity market as marketable securities or whatever. So they would have that decision, right? But internationally, what happens in Europe? What happens in Australia? What happens anywhere where that's not the law? Well, the whole world is going to want to squat on that

stable coin because they might be receiving a five. Well, it depends on where interest rates go. If interest rates go to 10 percent and you're squatting on that stable coin, you might be participate in seven of the 10% in the issuer might keep the 3%. Meanwhile, in the United States, all 10% is getting swept straight into the bank of the issuer, which I don't think that's going to be competitive on the global landscape. So when we're talking about these solutions and we're talking about the speed of this transition, all of this is reinforcing why Bitcoin is different. Because as they issue more and more and more of these things,

and they propagate and extend, like tentacles, it's only going to get crazier. It's just pure never-ending arbitrary financial engineering, whereas Bitcoin is transparent and predictable. So I think is also worth pointing out, as you guys were talking, I was just thinking how much of this panel has been about the dollar. This is Brent Johnson's. This is why the dollar milkshake theory is a thing.

The world demands dollars. Whether you like it or not, that's just how the system is designed. This is what's going to happen because the world just demands it. It's a free market thing. You see it in emerging markets, they would rather have a dollar stable coin than they would the Turkish lira, right? But the quantum leap from the Turkish lira or the bolivar to the dollar is about the same quantum leap from the dollar to Bitcoin.

So what you're probably seeing here is a process. This is what probably the next decade is going to look like. We'll actually probably see an explosion of dollar usage, but that will also be, and this again, Brent Johnson's concept is the demand for the dollar is so strong that it's actually going to get bigger before it actually goes bust. So we're running pretty low on time, but Checkmate, there's one thing I did want to ask you. You were talking before about going to this kind of hybrid system of hard money and soft money. Obviously, I think most people here are going to think Bitcoin is that hard money.

But what chance do you think gold has in that, in the interim at least? I mean, gold being an all-time high is a signal. It is the only asset that is large enough and it has the network effect. So I think goal has a very important role and something I've been playing around with we'll see if it happens. There's a lot of talk of them revaluing the gold and I was thinking about what the extension of that is

if they were to revalue it, which is a bit of an accounting gimmick, they're basically saying it's $42 now on the balance sheet if we bring it up to $3,200, we get a trillion dollars of free cash which they can do whatever with. But I would actually say that if they were to do that,

that's actually the sign they've just reintroduced gold. And if you're China, right? Think about all these nations who are saving in, they've seen their savings get frozen with Russia. They're seeing all of these risks with the treasuries. They've been buying gold, measurably. If they revalue the gold, the next thing that I think comes

is we start seeing the deal with China is they go, okay, we'll buy your paper, but we want to settle stuff, final settlement, gold in the vault. And we might start seeing gold coming back out of Fort Knox and starting to move back around the system. We'll see if that plays out, but I do think that gold gets reintroduced because it's just the only animal that's big enough

to deal with the size that we're talking about. And I think Bitcoin's like a liquid layer that sits on top. We want to do final settlement. Here's your warship with gold. We want to do a couple of billion dollars here or there. 10 minute block time. All right.

We're getting low on time. But Alex, last year, one of my favorite moments at CheeCode was when you wrapped for us on stage. Are you going to wrap for us again? No, I don't think I'm going to do it this time. I'm just a little tired. Well, maybe if the audience gives me a sign.

See me fill in lines with rhymes every minute like block times. Laser beam eyes, they're making it difficult for me to drive. Yo, my crew on stage, they're heavy weights like bulky kids. We're four of four. We always send it like a multi-sig. My mind's a stone tablet, never-ending ledger of bad habits. Give me something nice and pump the price like jack rabbits. All right.

In the battle of the currency, Bitcoin best win this. We got soldiers in the trenches like Prestin Pish. He's a monster on the stage, so invest in this. He's eating haters on his plate. Now digest this dish. My rhymes are heavy like lead, but they're smooth like Danny's head. Fiat is a ball of hair, and we're going to pull this thread. We're unwinding everything created by the Fed with every signed transaction.

We broadcast on Bitcoin instead. Peter says he has chronic bronchitis. I'm not sure what that's like. I think Pete actually lost his voice from cussing out that fraud Craig Wright. We don't suffer fools who try to beg like, please play by the rules. No, get your fucking head right.

In the game of chess, Bitcoin is best. You rooks are wrecked, mate. Give up, Hater, see you later. The game's over. Check mate. Bitcoin is. Liberty, we have to help, and today is just the start. We can't all own football clubs and coffee shops, but you two can play your part. We're unseasable, unstoppable, unblockable, unbeatable, there ain't a hater capable to cause us to delete the bull. Markets stay on target, bring the coins

and baby show me, because we're all pirates on the pitch like my real Bedford homies. Let's go. Preston also has a wrap for us. Thank you so much, guys. Appreciate it. This episode is brought to you by River, the best place for Bitcoiners and businesses to buy Bitcoin. With River, you can set up zero-fee recurring buys, making stacking sats effortless. And while you're waiting for the perfect buying opportunity, River lets you earn daily interest on your cash balance paid in Bitcoin, which outperforms most high-yield savings accounts. What really sets River apart is their unmatched dedication to security. You have peace of mind knowing that River has monthly proof of reserves and holds all Bitcoin in multi-sid-cold storage.

and with US-based phone support, you'll always have someone ready to help. To open an account, go to river.com forward slash WBD and earn up to $100 in Bitcoin when you buy. That's rivir.com slash WBD. This episode is brought to you by Anchor Watch. The thing that keeps me up at night is the idea of a critical error with my Bitcoin called storage. This is where Anchor Watch comes in.

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This is their weekly newsletter that drops every Thursday, and it covers how authoritarian regimes use money as a tool for control, and how people are pushing back against that using privacy tools and, of course, Bitcoin. It's an amazing newsletter, it's pure signal, and you can subscribe for free at financial freedom report.org. All right, we've got Matthew Pines in the house. So, Matthew, the world's a bit mad right now. I want to get into everything that's going on. You wrote a piece called a global economic reordering relatively recently.

And I think we've kind of seen that start to play out. But do you want to start, just give an introduction, explain who you are? Certainly, yes. Thanks for everyone for sticking with us, staying between you and lunch. We'll try to keep it captivating as much as possible. So I'm the executive director at the Bitcoin Policy Institute.

We heard from my colleague Zach earlier. We essentially exist to make America decisively pro-Bitcoin. So we've been advocating a lot on the strategic Bitcoin Reserve and other related policy issues inside D.C. I come from a background kind of assessing emerging risks for the government, sort of looking around corners and trying to answer that what-if question. Various low probability had consequence events.

And so that got me originally into thinking about Bitcoin number of years ago as a just around the corner sort of what-if scenario. What if Bitcoin does become a global money? Okay. So let's get into all the craziness that we've seen over the last week. I almost need like a swear jar for when I say tariffs, because I've been saying it a lot today. But Trump's implemented tariffs.

Everyone went into meltdown. Give us the high-level overview of what's going on. Yeah, I think there's lots of hot takes. I sort of think about it, and I wrote about this in the, you know, essentially the mini book that we put out in November shortly after the election, because it was clear that factions around Trump wanted to restructure the terms of the global system.

not just the global economic system in terms of the balance of trade, but the basic terms that define the security order that has been led by the United States since the 1940s. And it's being driven by a number of trends that are challenging kind of the U.S. global power and sense of security around the world and essentially the rise of China, right? China as a peer competitor technologically, economically, and, you know, in many ways, you know, offering a value proposition to parts of the world that can,

with the U.S. And so this is the fundamental kind of strategic competition. This is the tension that is underlying this attempt to essentially try to reset the terms, right? And so I interpret a lot of these moves in this light of they have an objective here, which is to sort of re-anchor a global economic and security zone around terms that are set by the United States. So it's a very high-risk play because China has its own vote in this, in this, you know, very complicated game theory that's playing out.

But they want to essentially create what you could imagine as like a more explicit imperial system, where the U.S. is the core of this economic, security, and technology zone. And they want to make it more explicit the terms of entry into that club, right?

That we have advanced technology, we have one of the largest consumer markets, and we provide a security umbrella to the world. And they want to sort of make members of that club pay for entry. And so I think this is where you have this more kind of hard-nosed, somewhat aggressive, very coercive, very chaotic bargaining process playing out right now, which is, okay, we want to reset the terms, we want to make sort of the surplus nations of the world pay for the security

that underpins the global trading system, and that means bargains. That means agreeing to help fund our deficits and agree to, you know, our, you know, our reset of the terms of trade. And so this is clearly their gambit. I think the inside baseball was that Besson had an approach going in with Steve Moran to kind of do forward guidance on tariffs, that they wanted to set up this explicit kind of geopolitical set of tiers for these tariff regimes and then sort of escalate them on an incremental basis month over month to kind of create that pressure. Lutnik and Navarro had different ideas. This was sort of a go and punch everyone in the face all at once, maybe even try to collect some revenue to fund the deficits. And the bond market just

revolted because of all the leverage in the system in the past week. And then it took until Sunday, Monday for Besson to gain the upper hand and sort of try to steer things back. And I think that's what you've seen in the past 24, 48 hours. But now we're on, you know, we're in this, like they did it, right? So now there's a lot of second order effects that we have to think through. And this will play out, I think, with some acceleration in the next few weeks. So this is almost like the idea of who would win in a fight between a grizzly bear and a tiger. Like Trump and Chi are going to go in head to head here. I think it's fair to say this is real economic warfare.

Is there any chance that China win? Yes, I mean, there's lessons in history where great powers go at each other, and it doesn't end well. And it's not clear to me, right? Prima facie that there's a clear argument in favor one side or the other. The U.S. has a lot of, I say, legacy power. So like the stock of our power is higher than China's. But I think one of the reasons why Trump and even Biden, the last administration, were so aggressive and sort of ramping up technology controls, export controls, trying to kind of put more pressure on China is recognizing that kind of the flow of U.S. power was diminishing, whereas China has a lower stock of power, but it's rapidly climbing. And so that those trend lines are not in the U.S.

kind of long-term favor. And so there's a sense of, okay, if we're going to kind of force the issue, force a kind of strategic confrontation, and in particular, force other countries around the world that right now have an advantage of trying to basically play both sides, trying to force those countries to pick a side, essentially, which is a high-stakes game, right? The Japanese could decide, actually, we'll tell, you know, the Americans to go climatry, right? Maybe the Europeans decide to do deals with China. if you really try to back people into a corner and force them to pick aside, you know, China is the dominant trading partner for most of the world, and they are rapidly climbing

value chains with advanced technology and consumer goods that can compete with the West, especially like EVs as an example. And so it's not clear to me, like who ultimately has the upper hand. And I'd say one of the major strategic vulnerabilities that I've been paying attention to for a number of years and that was manifest in the last week is our bond market. Right? Like, you don't go into a fight with a glass draw, and the Treasury market is a glass draw. And we saw very clearly when you try to inject a shock in sort of the geo-economic system with a lot of tariff policy uncertainty, tariffs moves very slowly. So trade flows, you know, take a long time, but capital flows move immediately. And currencies respond immediately. And then there's

a lot of leverage in the dollar system that can blow up. And that's kind of what we saw. And so we have, we are hyper-financialized economy leverage to, you know, global, you know, conglombalm. and Trump and his advisors kind of want to move away from that type of system. We want to take power over those conglomerates and they want to defunancialize the economy. But you can't do that overnight, right? And you're going to impose a lot of instability in the process. And so that's the vulnerability that we have. China, of course, has their own vulnerabilities.

They have an extremely indebted system, you know, something like $67 trillion dollars in the banking system. That's like three times the size of our banking system. they're flirting with deflation in many ways, and their political system is quite unstable. I mean, President Xi just purged the number two general in the military, which is the first time that's happened in like 60 years. So there's a lot of uncertainty inside the Chinese political system as well. And, you know, it's not clear that anyone side has the upper hand,

but they're clearly in this high-stakes confrontation. So that's all very much unlike the economic side of this. How much does technology and energy play into it? Yeah, so one of the things that I think has been underappreciated about driving the sense of urgency and the, you know, escalating stakes of this fight between U.S. and China on the economic and the trade side now has been this view both in Beijing and in D.C. that there is a massive acceleration underway on breakthrough technology, in particular on energy and AI. So everyone is sort of is looking ahead of the next two to three years and anticipating. pretty foundational breakthroughs in energy technology, for example, fusion technology might actually become a thing in the next year or two as certain sort of research projects start to become commercially viable. And then, of course, everyone pays attention to AI. And these are like foundational

civilizational kind of substrate technologies. And they're kind of first mover, semi-winner take all in the sense of whoever can dominate AI, whoever can sort of commercialize these breakthrough energy systems will have a strategic advantage that will compound up pretty quickly. And so there's a sense of anxiety and urgency in the U.S., kind of security system, that China is catching up very quickly. You know, these sort of fusion projects recently China announced their own version of it. That was basically a copy. No surprise that. And I think senior folks in the White House were very surprised at how they were able to kind of replicate that.

design. And so this is an urgency to this competition that they're kind of need to kind of go all in right now to kind of restructure the global security zone, kind of re-underwrite our technological advantage, and then bring, you know, surplus nations that are aligned with us, say the Japanese and South Koreans, in a position where they're more explicitly kind of subsidizing our deficits, right? So they take some of their reserves and they help extend out our deficits by buying more duration. So when in response to like the equity markets tanking, bomb market going all strange, Trump obviously dropped the tariffs on the majority of countries, increase them on China. Is that him trying to kind of build allegiances?

Yeah, I mean, there's historical examples of this. You go back to the British imperial preference system. You could go to even like the Napoleon Continental System. During the Cold War, we had something called the Coordinating Committee on Export Controls, the COCOM system. like, you know, in history, you have the world divides up into geopolitical blocks or alignments, and those geopolitical blocks or alignments often try to create internal cohesion by lowering tariff barriers to try to create like an internal economic engine. And then, you know,

protectionist policies are put in place to protect their own internal cohesion and competitiveness, and then obviously to punish or to create an advantage over their rivals, right? So this is like not a new thing to create sort of economic coalitions where there's a usually strong hegemonic power at the core. You know, it was France in the Napoleonic system. It was Britain in the British Imperial Preference system. Sometimes you can also have like more loose coalitions, like the coalition between the U.S., China, Dutch East India, and India to kind of contain Japan in the 30s. And, you know, some of those are more successful than others. The Napoleon system kind of broke down. It didn't quite work to try to contain the UK, because the UK had their

their own global market. They had their navy. They were able to kind of route around what essentially was an attempt to kind of blockade them by the French and the sort of European continental system. On the other hand, you know, we were successful in the early 30s from a certain perspective at blockading Japan with a sort of economic warfare, but Japan just decided to screw it. I'll just, you know, let's go to the mattresses, right? And they just, you know, hit us at Pearl Harbor. And then we're over, obviously we saw what happened after that. So these economic wars, especially between great powers, they're quite unstable. They can lead to kinetic conflicts. They can lead to escalations. But there are also examples where they become somewhat stable and self-sustaining, like the

British Imperial preference system, which lasted for quite a while. So it's very much a case-by-case thing, but like this attempt to kind of create global economic blocks and then an imperial sort of implicit system where there's a hierarchy, right? And America stands at the core of that of that hierarchy and effectively wants its subsidiary is to pay dues, right, and to kind of band together to try to take on what they see is this rising competitor. But China has a lot of other carrots and sticks to wield as well. So if we were to like speculate out for the next few months, how do you think this will play out?

And secondly, is there like a realistic path to this turning into a real kinetic war? I mean, the U.S.-China relationship is obviously the most important one. and there's a lot of heated rhetoric, and obviously Taiwan and South China Sea is a flashpoint. I think in the near term, the strategy that I think Besson wants to execute is lock in a number of these critical deals, say with the Vietnamese, with Japan, with South Korea, get them to lower their tariff barriers

in this sort of reciprocal, almost like a free trade agreement, and also get them to kind of commit, at least some of them, the ones with large surpluses like the Japanese, to essentially swap their, reserves that right now, just to be technical, sit essentially in a Fed repo facilities, like $500, 400 some billion, just sitting there in cash, effectively. You know, Japan, I think, is about $150 billion in that pool. It'd be a simple ask, hey, Japan, we would love it, we would love for you

to take some of that $150 billion and buy 30-year bonds. And that would help keep the bond market under control. And I actually think that was hinted at today. Trump, there was a report that Trump had spoken with the Japanese leadership two days ago and said he's very interested in their FX policy. So clearly, like the Treasury market, which is the, you know, the most important market in the world, the Treasury security is the Global Reserve asset that has sort of underpin the Treasury dollar standard for the past several decades. It's coming under acute stress as the U.S. Treasury to like, you know, restructure the basic system. And the bond market is sort of revolting in some ways. And so the natural reaction is to sort of use your geopolitical

leverage to force sovereign pools of capital to effectively do yield curve control. Ultimately, I think that's why you're seeing the dollar crash to a certain extent, not crash, but like dramatically fall even as you see a bid for gold and other reserve assets like the Swiss franc, is that there's, you know, everyone's sort of assigning to pricing in. The U.S. government will not let yields run much further than here, right? 5% was sort of the LIS trust level. I think the advisors psychologically see 5% on the 30-year. And so effectively what you're seeing is this,

shift to, you know, geopolitically driven yield curve control, where instead of it being QE by the Fed, explicitly using the Fed's balance sheet, they're using foreign balance sheets, the Bank of Japan, or other sovereign pools of capital, to, you know, essentially do like bank shot QE. And we have dollar swap lines that they could use to sort of fund those purchases. So I can imagine a scenario where swap lines from the Fed are given to other governments to sort of fund their purchases of choices of trade securities. And effectively, you get into. to yield curve control via another measure. I think that the risk scenario is that you go from economic and financial war,

which is where we are right now with China, and one move that China could have would be to sort of ante up on the military side and do much more aggressive, ambitious displays around Taiwan to, one, spook the markets even further and sort of challenge Trump to sort of ante up. And if he deploys forces into theater as a kind of another peacock measure, I don't think anyone would intentionally want to go to war, but when you have two great power navies in the same spot,

bad things can happen. And so that's a risk scenario. I don't think it's plausible right now, but I could see if they keep anning up and they don't come to some leader-to-leader discussion, you could have failure modes. Okay, so in this kind of fracturing global system, where does Bitcoin fit into that as a neutral reserve asset?

exactly what you said. It's neutral reserve asset. I think as the world is fragmenting, intentionally driven by U.S. policy, folks are looking to what's the next system going to be. And I think in the middle of that crisis, the middle of that sort of chaos, that uncertainty, people sort of fleeted the old standby. I think that's why you've seen this massive bid for gold, which had been sort of building, right? There's been a lot of movement of gold around the world in the last few months as people started to anticipate what sort of major changes could be coming out of D.C., I think that's like the old standby. That's kind of the institutional reserve asset that is the fear trade,

but it's also kind of what sovereign wealth funds and banks and central banks kind of are comfortable with. I think Bitcoin is coming in from the outside now, and I think it's now being assessed as a potential supplement or complement to gold as a reserve asset in institutional portfolios, sovereign wealth funds, and then increasingly potentially at the national level, in official sort of national assets. And I think the U.S., you know, creating the strategic Bitcoin reserve by executive order and explicitly signaling, they view Bitcoin as digital gold as a strategic asset that's fixed supply.

They put that in writing with the president's signature and seal on it. That is picked up by other leaders around the world. They want to go, like, what is he doing? Like, what is he thinking, right? Is he serious about this? It was just a pat on the head to the Bitcoin constituency that helped get him elected. or is there actual strategic momentum behind it? And I think there's an increasing assessment

that the US is very serious about its pro-Bitcoin pivot, that this isn't just a matter of rhetoric, that they actually are operationalizing a lot of these policies inside the bureaucracy. You know, one anecdote, like the four-star admiral in charge of Indo-Pacific Command, a guy named Pamparo, he's actually like, he would speak on stage here. Like he's a raging bitcooner.

And very much in favor of a strict of Bitcoin Reserve. Right? So that tells me there's like a shift that's taken place kind of in the iceberg of the U.S. kind of security state, so to speak. And I think that's being picked up by other countries. I think folks in the Middle East are very attuned to these shifts. You know, obviously the Emirates have hosted Bitcoin Mina in November I was there. And there were delegations from Saudi Arabia, from Kuwait, from Bahrain, from Qatar, all with this question on their mind. like, does Trump really mean it when he says he's going to be pro-Bitcoin? And like, what is he thinking about this Bitcoin Reserve idea? And so it's trickling through, right? These are bureaucracies that have their own slow processes to kind of go from the national

leadership to the head of the Minister of Finance or the central bank. And they're among the more conservative elements in those systems. And so usually you start with the sovereign wealth funds, getting a starter position, as we've seen. And then, you know, eventually sort of evolves. from there. But yeah, no, I mean, Hong Kong has their physical ETFs for Bitcoin. And I know that there have been policy debates happening up and down the Chinese political system about whether to change their Bitcoin policy. You know, they banned mining, they banned transactions 2021.

That may, that may start to evolve. So clearly, Bitcoin is now becoming a geopolitically relevant asset. How it sort of interplays in this dynamic of global fragmentation, I could see it playing a role of if the U.S. creates this system kind of a more enforced treasury dollar standard in the West and gold kind of becomes this, you know, settlement asset intermediating trade between East and West, Bitcoin, I think, can play a much more effective role in that system, because it's very hard to actually settle trade with gold, right, without it being centralized and having these other kind of party risks, it's very expensive. And so it's like a 19th century style asset. It doesn't really quite work for a 21st century economy that will still have global trade.

Like we're not going to like, you know, complete isolated blocks. Like I don't think we're going to, you know, completely decouple. So I think Bitcoin can evolve and it could happen quickly, right, in the next few years into a role where it's taking some meaningful share from gold. Okay. We've only got about a minute left. But I would just like you, you've spoken a lot about the incentives for the US to adopt Bitcoin as opposed to gold.

That's very strong because of the amount of Bitcoin. domiciled in the U.S. with U.S. companies, ETFs. Do you want to just explain that? Yeah, I mean, just if you run the numbers, and these are, you know, sort of guesstimates, is if you add up the total amount of gold reserves in the U.S., the amount of gold and held in gold ETS, and then individual holdings of gold, gold jewelry that's, you know, used as a store of value, we have maybe 8 to 10% of the total above ground stock of gold. If we do the same analysis for Bitcoin and it's tough, you kind of have to do budget heuristics. I think a company the Bitcoin space is working on a report

that we might collaborate with on DPI to kind of show these numbers, but roughly say 35 to 40% of the total current available Bitcoin supplies owned by Americans or the American government or American ETFs or American companies like Microstrategy. So 35% versus like 8% to 10%. So if you imagine a scenario where

both these sort of neutral reserve hard assets start to become monetized in the global system, well, it's clear to me that we stand again disproportionately if Bitcoin succeeds relative to gold. Like China's been acquiring gold. Russia obviously has large gold reserves. India has a lot of gold. So like the Eurasian system would benefit relative to, say, the oceanic system, if gold were to sort of run back into the center of the global monetary system.

And, you know, Bitcoin, it's, I think, also reflective of our values, right? like gold is easily concentrated, it's sort of an authoritarian metal, right? Whereas Bitcoin, it's hard to concentrate, and anyone can take self-custody of it and use it, not just as digital gold, but as a global peer-to-peer settlement system that disintermediates, you know, these existing financial networks. And so fundamentally, I think it's aligned with our values. And so if it's not just this great power competition between East and West, but it values competition between open and closed societies and sort of models of technological governance,

I think Bitcoin is sort of the win-win. All right. Amazing. I've got so many questions, but we've run out of time. I mean, I'm just proud of myself for not asking you about aliens for 20 minutes. But everyone, give it up for Matthew Pines. This episode is brought to you by CASA, the leading Bitcoin self-custody solution. I've been using CASA since 2019, and I can't recommend them enough. Kasa have options for all Bitcoiners from a two of three multisig to a three of five and a private client option for absolute best in class security.

CASA also do inheritance which I very recently set up and it really couldn't be easier. My inheritance plan has gone from a vague treasure map for my wife to a rock solid security plan that I have total confidence in. To find out more about CASA, go to casa.io, which is c-a-sa.io. This episode is also brought to you by Ledger. If you're serious about protecting your Bitcoin, Ledger has the solution you need. Their hardware wallets give you complete control over your private keys, ensuring that your Bitcoin stays safe from hacks, fishing and malware. with Ledger's easy-to-use devices and the Ledger Live app managing your Bitcoin has never been more convenient. Whether you're a long-time holder or new to the world of Bitcoin, Leger makes it simple to keep your assets protected.

If you want to find out more, visit ledger.com and secure your Bitcoin today. That's L-E-D-G-E-R.com. This is going to be an amazing panel. We've got Cameron, James and Lawrence, everyone's favourite boomer. Do you want to start by running down the line and just introducing yourselves? Sure. Yeah, I'm Cameron Parry. I'm the founder and CEO of Tally Money. It's not a crypto, but it's built on many of the similar values to what Bitcoin was built on, or the principles Bitcoin was built on. I first got involved in the Bitcoin blockchain industry back in 2014,

and in 2015, we listed the world's first blockchain industry company to successfully IPO on a recognised stock market. In 2016, I came out. of that and a year later I started working on tally money which is a which is basically allows you to get an individual personal everyday account with a sort code and account number a debit card but you're operating in milligrams of gold rather than any government issued debt-based instrument called fiat currency I'm James Lavish I'm a long-time institutional investor working in hedge funds and private equity for over 25 years. I'm founder and co-managing partner of the Bitcoin Opportunity Fund, and Larry is a GP in that fund as well.

And I also write, some of you know, I write a newsletter called The Informationist, and it simplifies one complex financial topic weekly. And I'm Lawrence Lepard. I am a 40-year advocate for sound money. I used to be a gold bug, still kind of am, but I've pivoted hard into the Bitcoin world, and I've just written a book called The Big Print. Okay, so this will be quite a fun one because we have Lawrence, who is used to be a gold bug, now is a bit of a bit of a gold bug, and then we got James, the psychopaths bit of a bitcoyner. So I want to start with you, Lawrence. Over the last, well, a few months really, gold has basically been just relentlessly bidding. It's an all-time high after all-time high.

What do you think that actually signifies about the market? To me, what is saying is that we're in a sovereign debt crisis, and the market's becoming very aware of that fact. as I've said many times on Twitter, gold smells it first. It's more widely distributed, and it's the more traditional form of sound money, even though it's inferior. And so just as it did in the past couple of cycles, Bitcoiners should celebrate the move in gold because Bitcoin's going to come later but go much harder. So it tells you that the financial system is in deep, deep trouble, which it is.

And Fiat is, we're getting into the very late stages of the failure of the Fiat experiment. James, maybe it be worth you digging. in there and explaining just what problems we have and how they're kind of displaying themselves. Yeah. So one of the things that we're seeing right now, we've seen Bitcoin become a little bit uncorrelated to the risk assets the last few weeks. It's really interesting. But one of the big things we're seeing is that the bonds, the bond yields are spiking at the same time that you've got a drawdown in risk assets that makes no sense in a regular market. Why is that? Because typically when you're selling risk assets, you're fleeing into and you're dumping your capital into

risk off assets. And the risk off asset, the one that is the flight to safety typically is a U.S. Treasury. So what's going on? The U.S. Treasury yields are spiking right now. And it's confusing a lot of people. You can talk about tariffs, you can talk about inflation, when people are pouring their money into bonds, but that's not happening. And why is that not happening? Well, there's a number of reasons. The biggest reason right now that we're seeing is let's talk about tariffs very briefly, and people are worried about the tariffs and about inflation,

and Trump is basically waged war on China, and that is a really big deal. If you all remember back when we, when we, when, the start of the war, Russia and Ukraine, one of the things we did as the United States, possibly the stupidest, monumentally dumb move that we've ever made politically, is we shut off Russia from the Swift network, which is the money exchange network, right? And then we seized their treasuries. Now, why would you do that if you need, the treasuries, the treasuries, the the global reserve asset, right? So you need people to own this thing.

Well, you just told the world that if you do something that we don't agree with, well, we might just take those. So is that going to make you want to own those? No, it's not. So now we're getting into a flash forward to today, and we're in a tariff tirade right now, and we've waged war on China. Now, China's turnaround, and people are anticipating China selling their treasuries.

Right? So if they're going to anticipate that, then you're seeing regular investors and typically hedge funds, which are a very large buyer of Treasury, the second largest buyer behind pension funds. And you're seeing them front run that trade. So why does that matter? Well, it matters because we have something called the basis trade that's happening right now. Some of you have read this in my newsletter, and I'm going to make this really quick. So sorry, guys. But really, really, quickly, the basis trade is where a hedge fund will arbitrage to securities that are very much like. So they'll buy the U.S. Treasury and they'll short the Treasury futures, which are very much like them.

But then they'll turn around and take the money, the bond that they bought, and they'll repo it, meaning that they'll lend it out and get cash for it. All you have to know is that means that this basically costs them nothing, right, to arbitrage this just tiny, little differences in the bond prices between the bond and the future. Just a few basis points, there's hundreds of a percent of the bond yield. So why is that important? Well, it's important because they can leverage this trade up 20 times, 50 times, 100 times. And so now they've got this trade levered up so massively that suddenly you've got the Brookings Institution, which is a think tank in D.C. that is, they've just done a study about this problem.

Now, you think, okay, it's a think tank, no big deal. Except this think tank is basically a research arm of the Fed. And this think tank has a number of former Fed officials in it. And they kind of float ideas. And they research these things and they kind of get the temperature of the room and say, is this something we could do? Well, what did they just put a research paper out on? They just put a research paper on on that said,

this basis trade is so huge, and it is so problematic and scary that there's a trillion dollars of this paper out there, a trillion dollars on this trade. Now, if you all remember back in August, we had the Japan basis trade, which is a similar thing, but cross-border, and you saw the market crash in an instant,

and you saw the Bank of Trade, Japan swoop in and save the markets, right? Okay. Now we've got the Fed talking about not just printing money. We're going to get to the big print because this is really important, but not just printing money, but taking the entire trade off the hedge fund's books, saving the whole thing. They're just going to take not just the long side, but we'll take the short side too. They're just going to take the trade, put it on their books and say, hey, now we don't have any risk and we didn't have to print any money. Brilliant. Except this is this is basically signaling to the entire world that just do whatever you want, buy as many treasures as you want, and we'll print the money to take

them on our books to make sure that you keep buying them. It is mental, and I don't know how we come out of this without printing tens of trillions of dollars in the back end of it. I agree. We might need some more from you than that, Larry. But so, last Your book that's just come out is called The Big Print. I think you couldn't have timed that release better. Yeah, I got lucky. So how imminent do you think the next Brigprint is? And what kind of scale do you think it will be?

Yeah, that's a great question. None of us really know. Nobody can say with certainty. There's a lot of stress right now. And I, you know, I was talking with my partner, James and my partner, David Foley this morning. We were kind of handicapping. And we thought it's 50-50.

They calm this down and can extend it out for a while. We could be in it right now. I mean, there could be an emergency fed meeting in the next 30 days in my estimation. But I'm not saying there will be. You just don't know. What we don't know is are there going to be bodies that are going to float to the surface.

I mean, this has a little bit of a 2020 and 2008 or March 2000 feel to it, not March 2000, but. And so I think it is very close. I don't think there's much chance that they can't extend it beyond, you know, six to 12 months. And the reason for that is just the mathematical computation of the gap and the fact that all of the things

they've done in the past to print, like the reverse repos, drawn down. The TGA is very low. I mean, they, you know, and I mean, we saw, they're leaning towards it, right? So Powell took the QT from 25 to 5, and then he mentioned that maybe the running off of the MBS bonds, that he would use that to buy treasury bonds. So that's kind of QE. So they're, and they're leaning that way. They got a very convenient, low inflation print the other day. Isn't that amazing how that happens? Right. And, and of course, you saw some Fed officials come out and say, well, maybe our mandates, okay.

Look, they will change their mind on a heartbeat and say, suddenly the employment mandate is much more important than the inflation mandate. We're declaring victory on inflation, which, of course, is a fake victory. And, you know, it's just the natural thing. We have to do it. We have to print. Poor Powell, he wants to get out of there so bad. I mean, if he's got half a brain, he'd quit.

But, you know, he's got a big ego so hanging around. But to answer your question, it's, I don't know. But it's imminent because of the math. Okay, so Cameron, these conversations happen a lot in Bitcoin, and these have been happening for a number of years now. I don't really keep in touch with the gold community. What's happening in the gold community at the moment? Well, as I said, with Talley money, it is gold that you're using as your money, but we've combined the old store of value that is gold with, you know, modern technology, immutable ledges,

connecting it to the banking rails so that you can use the money instant. everywhere around the world. So we're doing something, to me, gold, and there are gold bugs who think gold is money and everything else is credit or nothing. But that's not my view. I'm not surprised that we built a monetary system where gold is the anchor of value,

but that's not really what it was about. And again, back to the values of Bitcoin and sort of reclaiming sovereignty, if any of this stuff scares the shit out of you, and it sounds like there's massive masses of the universe playing games with stuff that directly affects our lives, we as individuals need to be able to step out into something else. And Bitcoin's a wonderful thing for that, but it's got a long way to go before you can really use it as money for everyday spending and saving up in the shorter term.

Generally, as we're in some of the discussions earlier, you can see there's that tension between you know, Hoddle, get your Bitcoin, don't spend it, and then at the same time, oh, but spend it so that it then becomes more mainstream. So when I, I, design Talley money, really it's a little bit of an analog in part solution to, you know, in a digital age. And so I noticed with a cheat code website, there's 12 places, including Real Bedford, that will accept Bitcoin in this town of 100,000. But there's thousands of places that will accept Talley, because we are directly linked to the MasterCard network. You can do funds transfers. And you don't have to convince anybody, it's a good idea.

You're just operating your own private reserve currency that just happens to be gold, that you hold it spot, buy its spot and spend its spot. So that steps you out of all this, you know, what is going on in markets. I mean, it does have an effect on the gold price. There's no doubt. But as far as sleeping better at night, having peace of mind, you know, what can we do as individuals now to get, you know, sovereignty starts with self. And how can we be empowered to, you know, with anything? And so Bitcoin was this fantastic breakthrough, but there does, in my opinion, need to be other, you know, real common sense solutions that are like brothers in arms for the battle, which is against fiat currency, fractional reserve banking, this 50 plus year monetary experiment where our money supply is an artificially created debt instrument that the people making the decisions can arbitrarily inflate. and devalue at will to try and serve their own agenda.

And the people making, so there's no physical anchor or anything to that supply, there's no 21 million limitation or anything like this. There's no gold sitting in a vault, which is the case of Talley, limiting the issue of the currency. And also the people making the decisions, they don't suffer the consequences of it. The central bankers, the politicians, they're all stepping up in their careers. They're all living their best life. The hedge funds. All of us as individuals are getting poorer and, you know, frankly, you know, more under threat,

more fearful and more stressed about daily life. And whereas we're going about a business trying to be good citizens, be productive, you know, earn money. And it's just fundamentally wrong that, you know, our money in this system and with banks, your money is controlled by the people that give you convenience of payments. You know, banks, even commercial banks, use it for their own purposes to make money. We bear all the risk, they get all the profit, they pay us a pittin in interest. So this whole system, you know, I mean you could describe it with some swearing words, I suppose,

but it's a game where heads they win and tails we lose, which means you need to operate at least in part, and if you can mainly, in things like Bitcoin, like tally money, and hopefully over the coming years there'll be other options as well. Because if you've only got one choice, you've got no choice. we need to have, as I say, our brothers in arms, and we're dealing with the common enemy, which is fear currency. One of the important things that Cameron, you just said,

was not just that they can print money at will, but they must print money at will, and why is that? It's because we have so much debt. We are living in a debt world, and this is not just the United States. I mean, this is all over the world. We have a problem where we have a problem where we have, so much debt and we're running deficits where we can't pay off that debt. We have to literally

keep borrowing money in order to keep going, right? So, I mean, the United States this year has $9 trillion of debt that's coming due, that's maturing, that we've got to reissue, right? We've got to borrow that much money again just to just to keep supporting that part. And on top of it, we're running multi-trillion dollar deficits, $2 trillion a year. So we don't have a choice. because now we're at 36.5 trillion dollars of debt, mind-blowing how big that number is. It's really difficult to get your head around. But the reality is we need to print money, expand the money supply to have cheaper dollars pay down that debt later. And that's kind of where we are. We're trapped. Now, how trapped we are, Larry?

We're really trapped. I mean, it's just, it's so, it's so obvious. And I mean, that's what the book shows you that just, you know, the, I mean, James has done a great job with this newsletter of talking about something that he and I both called the debt doom loop. And I think most people here understand it, let me just reiterate it. You know, the bond market's a certain size, there are a certain number of people who want to buy bonds. And, you know, the federal government interest expense chart is like a heart attack hockey stick going straight up. And so that's a big, you know, it's now over a $1.2 trillion run rate. It's bigger than the defense budget. You know, Five years ago, it was in the 300 billion range.

And that number helps to blow out the deficit. What does that mean? How you fund the deficit, you sell more debt. Huh, the new debt has interest on it. And this is why the government, which makes the interest costs go up even more. And by the way, interest costs only averaging, like in the three range, as it resets,

all the numbers are in the four range. So it's going to get higher still. And so what you see is it's a reflexive negative feedback loop where as interest costs go up, interest expense gets bigger, deficit gets bigger, you need to sell more bonds. Selling more bonds into a fixed-sized buyer market makes interest expenses go up. This is how countries fail. When small countries have done this historically, you follow this pattern, their currencies fail.

In the book, there's a chart by Hirschman, Brian Hirschman, a very good chart. It shows 13 countries that did this in the past 100 plus year. 100% of the time, they had a currency event. They either had depression, hyperinflation, or extremely high rates of inflation. There's no reason to think that just because we're the world's reserve currency, that we're going to be able to escape that fate. It's coming. The question is when.

And so this is why it's just incredibly obvious. Why I wrote the book is that I don't think the average citizen of the world understands us. Everybody in this room understands it. It's a beautiful thing. You guys are all going to be silly rich. It's going to be frigging great. But, you know, for you, but it's not going to be so good for your family and friends. And that's who we got to say.

We got to tell the world. We've got to get the book into everybody's hands. we got to explain to them what's going on. This has happened before in history. This is not something I'm making up. It's mathematically divined. So it's extremely important in my view that we get this book to go friggin viral.

I mean, you know, I've seen shitty books that have sold 7 million copies. You know, I've only sold 15,000 of these things, guys. It's like, it's pathetic. I mean, we got to get it to everybody we know because there's going to be an enormous, this is going to be the largest wealth transfer in the history of the world.

It's going to be, and in a good way for us and a bad way for a lot of other people. And the world is going to be defined as pre-bitcoin and post-bitcoin. If you were in on Bitcoin, you're going to be in great shape. But the world isn't going to look so good, you know, read the mandibles. So it's just, it's math, guys. I mean, our dear friend and James and I were talking about this before we came up our dear friend Greg Foss, who is here several times before and has had some trouble

personally and is not participating in these things anymore. You used to say it's just friggin' math, you donkeys. I mean, it's very, very simple. And so, you know, that's why we all do this. But our job is to try to educate the world to the importance and the benefits of sound money. Because if we return to sound money, we solve these problems.

It's the only way to do it. It's again why I wrote the book. I watched a bunch of idiots arguing in a political debate last year. I was like, you guys are all talking about the color of the drapes and the fucking house is on fire. you know and and so we got to get a goddamn fire hose over here and go back to sound money so that's my rant you promised you wouldn't swear i know and and don't anybody send copies of the video of this to my

wife okay or i'll be in deep shit um yeah just add to Lawrence's point there education knowledge and knowledge is really important um but there are things you can do right now obviously there are ways of buying Bitcoin. And as I say, you can also now operate in an alternative everyday money with tally money. Either way, get out of your exposure to that filthy Fiat thing. Amen. So, Lawrence, the picture you painted there was pretty bleak in terms of the transition from before Bitcoin and after Bitcoin.

Do you think there's any way we can go through this transition in a relatively peaceful way? With really smart political leadership, we could do it. So the answer is no. So the answer is no. That's right. So basically, we're screwed. No, yeah, time and knowledge. So think of Robert F. Kennedy's speech at the Bitcoin conference last year.

He gets it. There are politicians who get it. Cynthia Lumas gets it, okay? There are politicians who get it. All we got to do is go back to sound money. We got a lot more citizens that understand that. Well, not that I understand that. We got a lot more citizens who want to feel.

fair system, then we have central bankers, bankers, and contillionaires. So in terms of if we want to, if we can, I don't know if we can do it with the vote. I tend to think we can't, but we got to try. That's our, that's our only hope is that we get a ground spring, you know, a, you know, like an Occupy Wall Street on steroids. We get the entire damn world screaming about sound money. Politicians come up and push for sound money. Bitcoiners are rich. We support those politicians, and we'll go back to it and we'll fix this goddamn thing. That's what we've got to do. That's the best way out.

It's a very narrow bridge to get across. And I think that, just like you're saying, Larry, I think that the key here is to get to sound money. What does he mean when he talks about that? Well, we have so much debt that we've got to somehow attach something that's sound to it and not keep expanding on this debt with just the Fiat currency attached to it. the ultimate the ultimate goal for the united states which you know this is the this is the the central power of the financial world it's so important is they they want to keep the u.s dollar as the global

reserve currency and the way to do that some politicians some of the really smart ones and the ones who are doing their own research and educating themselves and learning and reaching out they're understanding that we've got to add bitcoin to the balance sheet that's why symphony is Cynthia Lummis is out there pounding the table with something called the Bitcoin Act. She wants the United States to add Bitcoin to the United States balance sheet, a million Bitcoin to the U.S. Treasury balance sheet, in order to have something attached to the currency, attach our balance sheet that actually has value.

And so we can do it not just with Bitcoin. We can do it with gold too. And, I mean, I'm all forward. We just need to get to that point. And probably, the reality is it's probably less chaotic if you do do it with gold and Bitcoin out of the gates and eventually move over to full Bitcoin later. Well, and Andrew Hohn has this great idea of issuing Bitcoin bonds. You know, and Sailor has a great idea of sell the gold and buy Bitcoin so we can leapfrog China, which is what we should do. And so, you know, and I mean, it was with David Stockman three or four months ago or three or four weeks ago.

And he sat down and he went chapter and verse, how we can take our military budget. from 900. Military budget is the most corrupt, big shithole of wasted money you've ever seen. It just is. And we could take it from 900 to 400 and we'd be just as safe as we are today. But that involves, you know, blowing up the military industrial complex. And so it's just a lot of stuff that's got to be done. There is, but there is a way through. Yeah, yeah, the way that we reset it ultimately, first of all, I don't underestimate how many levers they've still got because they've been in a mathematical death spiral for a long time now. And we've spoken about these issues for many years and, you know, different forums.

Anyway, so there's really interesting times that we live in. But governments will go back to some form of a gold standard. But even when they came off the gold standard in 71, only 40% was reserve to gold. 60% was still credit. And, you know, government will try and be the solution to the crisis that they cause and somehow have us be grateful to them for it. But really, you know, in this day and age, with technology and with the options that you have between things like Talley and with Bitcoin, you don't need somebody else in between

messing around with your money or meddling with your money. You just go forth, be productive, have peace of mind because you're in control. And that's really, that's what self-sovereignty is about, you know, being self-personely responsible and looking after yourself, your family, your community and your society. And, you know, that's what we're about. So there are options. We're not in the financial crisis when they happen in 08. There was no Bitcoin, didn't exist.

The good news is it's going to get a lot better. It's going to be really great on the other side of this. The bad news is we got to go through the fire to get to the other side. All right. I'm afraid we can, yeah, yeah, very quickly. We're very quickly. So the reason that, and you're, I agree with you 100%, that this, we've been talking about this for a long time.

But we printed a trillion dollars in the great financial crisis and $5 trillion just a few years later in COVID, okay? What do you think the next print's gonna be? That's how this has gotten spiraled out of control. And that's how you know, that's your clue that we're getting really close to this collapse here. That's it. Give up for Cameron, James and Larry.