What Bitcoin Did - THE DOLLAR MILKSHAKE & BITCOIN w/ Brent Johnson

Episode Date: April 4, 2025

Brent Johnson is the CEO of Santiago Capital and the creator of the Dollar Milkshake Theory. In this episode, we discuss why the dollar may strengthen before it dies, how global debt markets rely on an insatiable demand for US dollars, and why Brent believes a global sovereign debt crisis will force a dramatic monetary reset. We get into the mechanics of the Eurodollar system, why stablecoins entrench dollar hegemony, and why attempts to escape the dollar could make it stronger in the short term and Bitcoin’s potential role in this endgame. FOLLOW: Danny Knowles: https://x.com/_DannyKnowles or https://primal.net/danny Brent Johnson: https://x.com/SantiagoAuFund 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/

A country's currency is the biggest tool that a country has against its people. And I don't think they're going to give away their biggest tool that helps them retain that power. You may not believe this, but I would be thrilled to see Bitcoin go to a million dollars. If the United States actually bought Bitcoin, then yeah, that would be a sign. What Bitcoin did is brought to you by our lead sponsor, a massive legend, Iron, the largest NASDAQ listed Bitcoin miner using 100% renewable energy. Iron are not just powering the Bitcoin network, they also provide cutting edge computing resources for AI all backed 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 irons. Brent Johnson, great to meet you. How you doing? I'm good. How are you? I'm good. I'm very excited for this show. I've been following your work for a while. I know you're not super bullish on Bitcoin and I want to. definitely get into that at some point, but maybe we'll save that till a little later in the conversation. Okay. But for any of the audience that don't know who you are, do you want to just do a little quick introduction? Sure. I mean, long story short, I am an investment manager. I'm both.

I've got a registered investment advisor that's registered with the SEC. I'm also registered with the NFA, which is the National Futures Association. So, you know, in a nutshell, I manage money for very wealthy families and individuals. I've been doing this for about 20, five years now started with a firm called Donaldson Lufkin and Genrette, which was bought by Credit Swiss. I was with him for a number of years, left there after the global financial crisis, went independent, and along the way set up my own company. So, you know, it's, I'm lucky. I'm one of those guys who likes my job. I don't hate going into work in the morning, but it's, you know, it's all markets based and always something new to learn. I'm one of those people that doesn't hate

my job either. I don't even feel like I've got a real job. This isn't a job. But so you're probably most well known for your dollar milkshake theory. Now, in Bitcoin, I think a lot of Bitcoiners think that the dollar is inevitably going to die at some point. To kind of paraphrase everything you say, I think you also think the dollar may die, but because of the strength of the dollar itself. So I want to get into that. Do you want to kind of give us a very broad overview of what the dollar milkshake theory is. Sure. Well, you know, probably a good way to say it is the dollar milkshake theory is the process by which the dollar does die. You know, I think history tells you that fiat currencies

don't last forever, empires don't last forever, everything comes to an end. But that doesn't mean they come to an end right away and things tend to last a lot longer than many people either want them to last or think they will last. And I was quite honestly a person who thought it was going to end a long time ago. And when it didn't end, and when it kept going, and not only did the system keep going, but the dollar actually got stronger rather than weaker, rather than just say it's going to happen, it's going to happen, I actually kind of went back and doubled down and really did some hard work on why I was wrong. And that was the genesis of the dollar milkshake theory. And really, what the dollar milkshake theory is is both an explanation

of how the system works, how the monetary system is designed and works. Secondly, what would happen in the event of a sovereign debt crisis, global sovereign debt crisis, not just a U.S. debt crisis, but a global sovereign debt crisis. And then what you would kind of see play out if and when that system was going to come to an end and the dollar was eventually replaced with something. And because I have always worked with individuals, so I've always managed money for individuals, My clients are not pension funds or hedge funds or professional investors, so to speak. I've always worked with really smart individuals and entrepreneurs, but they're not necessarily, you know, educated in financial lingo and they don't study monetary policy. So I often have to figure out common sense or common ways to explain fairly, you know, complex monetary concepts to them.

And the best way I could come up to explain to them what I thought was going to happen in the years ahead was it would be a continuation of what we saw in 2008. You know, and the extraordinary monetary policies, all the bailouts, all the fiscal stimulus, you know, the quantitative easing, however, the printing of money, however you want to describe everything that's happened, you know, in the last 15 or 20 years. But the point I came to was that despite all the problems that the United States had, the rest of the world had even more problems. And despite all the problems the United States has, they also have an incredible number of advantages that the rest of the world just doesn't have. And so I thought when we got into a crisis or a slowdown or some kind of an economic malaise, the world would respond.

How is it always responds? that's do more stimulus, do more printing of money, do more bailouts. But I came to the conclusion that it doesn't really matter who prints the money. It doesn't matter who injects the money into the system. What really matters is who captures it. And the milkshake is when everybody prints money, spends money, does fiscal stimulus, but only one country has the straw. And that's the United States.

And I can go into why that is. But the point was that the United States will drink up whatever. whatever liquidity the world provides. And as a result, not only would you see the dollar not die and not weaken, but you would see it rise versus its fiat peers. And you would see U.S. assets outperform the rest of the world. So U.S. equities would outperform the rest of the world. You know, U.S. real estate would outperform the rest of the world.

The interesting thing about it was that I'm not a bondable. And what I thought would trigger it was actually interest rates rising. So the initial, when I first talked about this, I talked about it in the years ahead, interest rates would actually rise. We'd been in a 10-year period with interest rates either at zero or negative, and I thought that was coming to an end. But when interest rates rise, that actually, and especially if U.S. interest rates rise, that would pull capital into the dollar because you get paid more to sit in dollars than you do for the rest of the world. And the rest of the world still has zero and negative interest rates.

And so not only would the dollar rise as, you know, money flowed into it, but then U.S. equities would rise. Basically, U.S. assets would rise as the U.S. kind of sucked up this milkshake. Now, eventually, we will get to a place where it will all come to an end. And I also, I should say that I never said this was going to be a straight line. I never said it would be easy. And it didn't mean that the dollar would necessarily retain its purchasing power. You know, I said gold would go up as well. One of the controversial comments I made at the very beginning was that the dollar and gold would go up together.

And we've seen that over the last five or six years. But at some point, this will all come to an end. And capital will leave the United States. It will go somewhere else. And then we will see, you know, probably the demise of, you know, the American exceptionalism. But I just don't think we're there yet. I think this is going to take a number of years to play out. But so far, I have not found another framework for thinking about things that has better

explained what's happened so far and what I think will happen in the future. I hope that that explains it. Yeah, it does. I want to dig into a little bit. So when you say the dollar won't retain its purchasing power, I assume this theory really is saying it may not retain its purchasing power, but it'll just do better than all the other fiat currencies. Is that right?

That's right. And there will be periods of time where the dollar, it kind of depends on where you're at. If you're a U.S. citizen, you can see the erosion of your purchasing power. But if you live in Bolivia and you hold U.S. dollars, the U.S. dollar has held its purchasing power against local goods and services. If you're in Turkey, the U.S. dollar has held its purchasing power versus goods and services. So it kind of depends on where you're at. You know, I do have clients in other parts of the world, not all of my. My clients are Americans.

And it's interesting you bring that up because most of the critics of the theory are Americans and they don't know how to think in two different currencies. So it is an interesting thing to think about. Well, it's funny, even on a way less extreme level, I live in Australia and I've been traveling to America for a while, but like traveling to America a lot for the last sort of of five years. And even in that time, I've seen things in America compared to Australia get incredibly expensive for me. The exchange rate has not been favorable in any way. Right. So do you think we've

already started to see this theory play out? Well, I think it has been playing out. So I started talking about this in 2018. It kind of really picked up. I started talking about it more in 2019. And I kind of thought it would all play out by 2025. You know, but here we are. And the process is played out, but we just haven't gotten to the end. So what I mean by that is, if you look over the last, you know, six years from 2018, when I first started talking about this, the dollar index was around 90, about now 90, something like that, 88, 89, 90. And at one point, it went to 113. Now it's pulled back to 103, you know, but over that same time period, the U.S. equities dramatically outperformed the rest of the world. Capital did flow into the United States. You know, despite all the bailouts,

despite all the money printing, despite all the Fed QE, you know, the dollar has dramatically outperformed its peers. And I think that, I think the theory largely explains why that is. So I think it is playing out. I don't think it is fully played out. And I think it will probably be another four or five years before it fully plays out.

If, if I'm even right at all. And what does fully playing out mean? So what's kind of the end state of this? My belief has always been that debt has consequences and debt matters. And when I say that I don't just mean the United States debt, I mean everybody's debt. Australia has a lot of debt. Japan has a lot of debt. Germany, Italy, Russia. Russia doesn't have so much, but they have some. China has an enormous amount. And I've felt that as the consequences of all that debt comes to bear, we will have a sovereign debt crisis.

And in that crisis, I think the dollar will return to its all-time high, eventually, you know, back to the DXY being 150 or 160. kind of where it was in the 1980s. But the system is just not designed to have a strong dollar. And I believe that the dollar going back to those levels will cause so much chaos, they will have to do some sort of a quote-unquote reset of the system. Now, whether that happens willingly or whether it happens forcefully, I'm not smart enough to know that.

But I think if and when the dollar gets so strong that they have to reset it, then that would probably be the end of the thesis. Okay. I want to get into kind of the minutia of this. But before we do, one of the things you've said there is that you think, obviously, the dollar strength is going to go up. But you also think U.S. equities, U.S. assets will go up. But my kind of layman's understanding was like strong Dixie is bad for risk assets. So how do you kind of like trade those two things? off. Well, I think in general, and over short periods of time, you're right. In general, if you see the dollar index spiking, that's typically bad for risk assets. But if you zoom out and you look at it over long periods of time, just think about where stocks were, U.S. stocks were in 2018 and look and see where they're at now. They've doubled or tripled. But despite that, the DXY is up 15%. And so I, and well, and you're Your point's a good one, though, because this was when I first started talking about, this was the people just didn't understand this.

Because, again, if you see the dollar rapidly rising, that is not a good thing. That is typically a bad thing for risk assets. And that still is a bad thing. One of the points I made, again, at the very first time I ever talked about this, was that while I thought U.S. equities would rise over time, they would be characterized by terrifying drawdowns along the way. And that's what we've seen. You know, we saw it in 2018.

We thought it in 2020. We've just saw it in 2022. We're perhaps starting to see a little bit of it again right now. But despite those terrifying drawdowns, equities are still much higher than they were five or ten years ago. So I think, you know, I think, you know, in Bitcoin, I've heard people often sometimes, you know, zoom out. Yeah, maybe it goes down over a one month period,

a six-month period, a one-year period. But if you zoom out, it goes up over time. I would make that same argument with the dollar compared to U.S. with U.S. equities. 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.

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Visit anchorwatch.com today, which is anchorwatch.com. I also want to give a quick shout out to the Human Rights Foundation's Financial Freedom Report. 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. Right, so let's get into this. So in this theory, where does the demand for the dollar continually come from? Well, it mainly comes from the debt that's issued in U.S. dollars. And when I say debt, I don't just mean loans that people have taken out from banks,

although that's a big part of it. But it comes from the extension of credit in U.S. dollars. And what your audience may know but may not know is that there is a huge market for dollars outside the United States, and that's called the Eurodollar market. And the euro dollar market, you know, started back in the 50s and 60s post-World War II, but it really took off after 1972 when the U.S. made the agreement with Saudi Arabia to price oil and dollars. And because the whole world needed dollars to buy oil and energy to run their economies, then everybody started saving in dollars.

And because everybody saved in dollars, that was the most common currency amongst a group of countries. that they shared. It would be kind of, think of it like a language. You know, if you have people from all over the world go to an investment conference, you know, the most common language that everybody speaks is probably either Spanish or English, right? And the default business language is English.

That's kind of the same thing with currencies. The dollar is the default currency to do global business on the global stage. And so, you know, post-1972, when this Euro dollar market really started to take off and go exponential, that market just expanded it and expanded and expanded. And the way our system is designed, our system is a debt-based monetary system,

which means money gets loaned into existence, which then also means that it either has to continue to expand or it crashes. You can have a short-term credit contraction, but if it contracts for too long, it collapses. So if you think about a system that was starting to grow in 1972, and now we're 50 years later, and it has had to grow that whole time, you can imagine how big it's gotten over that 50-year period. And the last time that it was people tried to measure this, gave a real hard attempt to measure this was like 25 years ago. And at that time, the euro dollar market was like three times bigger than the U.S. dollar market.

So if you think about that, both of those had to expand over the last 30 years. You can see how the euro dollar market, by definition, must be bigger than the U.S. dollar market. And so that is the source of the incredible demand for dollars outside the system. Number one, to conduct global business, number two, to trade in commodities, number three, to service the U.S. dollar debt that they own. And then number four, if you do, if you produce something, if you're a global business that produces something, more than likely your biggest client is the United States. It's not guaranteed. And of course, there's some exceptions. But in general, the United States is the biggest client for exporters around the world. And the United States does not pay in other currencies. The United States pays in dollars. And so those countries that are exporting, then receive those dollars. And then those,

dollars get used to buy other dollar-based assets. And so it's kind of a symbiotic relationship, I guess is the right way to say it. And it becomes this big network. It's just a huge network. And I would argue that the dollar network is the biggest network in history. Do you have you, I don't know how much you've looked into this, but do you think stable coins can kind of turbocharge your theory here? I was in DC a couple of weeks ago, and Paolo, the CEO of Tether was there. And I knew it was big, but I don't know if I realized the scale of it. So they're onboarding a quarter of a million people a day onto Tether. And it's obviously largely in the global south. And then that drives massive demand for US debt as well. So yeah, how do you think

that kind of fits into this whole thing? I think Bitcoin, stable coins, crypto, digital assets, however you want to define that space. And I know some people chop them up into separate little parts, but I don't think that they have challenged the United States dollar. If anything, I think they have entrenched the U.S. dollar as the global reserve currency. And the stable coins probably more so than any other part of that universe. If you look at the chart of stable coins and you look at what those stable coins are pegged to, right? Like 99% of them are peg to the U.S. dollar because that, and that's not necessarily by design. That's by demand. That's where the demand is. The world wants dollars, and that is the market responding to the demand.

It's not that all the stable coin issuers got together and said, we're only going to offer dollars no matter what the rest of the world wants. No, they were responding to the demand from the market. And I would argue, and the assets that back, those stable coins are often U.S. Treasuries or U.S. assets or U.S. denominated assets of some kind. And it just furthers the network and, and I would have said, actually increases the dollars use around the world rather than decreases it. Yeah. I mean, that's just categorically true. Like, they've tried to issue stable coins that are backed by like the euro or gold and no one cares. Like everyone wants the other. So in your world, like how many other fiat currencies do you think there should be?

And I don't mean that from a sense of like a sovereign nation shouldn't be able to issue its own currency. Obviously they should. But how many do you think the market actually demands? Well, it really depends on the universe you're talking about. I mean, on a global scale, there's only two or three that I think are demanded on a global scale. And that's the euro, the yen, and the US dollar.

Nobody, I mean, don't take this the wrong way, but nobody in Africa needs Australian dollars. Or there's not a huge market for Australian dollars in Africa, right? Yeah. There's not a huge market for Turkish lira in India. I'm sure there's somebody there that's say, oh, I could use it. But in general, there's just not demand for a currency outside. It's domestic market.

Interestingly, I'll bring this up because it kind of relates it. This is part of the reason why I say you're not going to see hyperinflation of the U.S. dollar, regardless of how much money that they print. And the reason, unless they were to start printing it physically. I mean, that changes things. But you can't have the hyperinflation of a currency when there's more demand for that currency outside the domestic market

than there is inside the domestic market. The reason a currency collapses is because nobody wants it anywhere. And especially if nobody wants it, if nobody wanted dollars outside the United States, then all the dollars would come back to the United States and you would have hyperinflation in the United States. But the fact is, is there's an incredible amount

of demand for dollars outside the United States. And if the rest of the world did send all the dollars back to the United States, which I would argue that they have been, but they're still the owners of them. So those who own dollars outside the United States have reinvested them in the United States, but they're claiming ownership of those assets. If they were to send the dollars back to the U.S. because they did not want them. In other words, they were selling them back to the U.S., the only way they could do that was if they first took care of all the U.S. dollar debt that they owe

and if they took care of all the U.S. dollar credit that's been extended in the euro dollar market. The problem is, and this is where it gets a little wonky, and I'm going to try to explain this in a way that you can understand. And it's not that you can't understand it. And if people have studied it, they understand it.

I probably can't. It's a concept that where if you're not versed in this subject, it takes a minute to get your head around it. But because money is loaned into existence and because loans have interest attached to them, there is never enough money to pay off all the debt. Literally. If somebody told you that you could have all the money in the world, but you also had to accept all the debt in the world, you shouldn't do it because you would go broke. So there's never enough money to pay off all the debt. And so if the rest of the world just defaulted on the U.S. dollar debt that they owe, you would get a credit contraction. And that would

make the supply of dollars shrink even faster than the demand for dollars. So even though the demand for dollars is falling as those loans get defaulted on, the speed with which the supply of contracting is even faster. And so if you get supply falling faster than demand, the price still rises. And that is what we saw in 2008 in the global financial crisis. And it's what we saw in 2020 in the COVID crisis. And we saw it a little bit in 2022 when the Fed started raising interest rates. Because, and, you know, as the dollar rises on the global stage, it just puts an incredible amount of pressure on the whole world because the whole world has borrowed in dollars. Okay. I want to just pick you up on one thing you said a little earlier. You were saying that the dollar won't hyperinflate and if they print dollars unless it was

physical dollars. Is that because bank reserves don't behave the same way as physical dollars? Yeah, because bank reserves are basically used as collateral to make new loans. Yeah. So when you go to a bank and you get a loan, they don't hand you somebody else's dollars. They create new dollars out of thin air and it's loan. Again, this gets back to this loaning money into existence and then there's interest attached to it. If the Fed were to physically print a dollar for every bank reserve that exists in the world, then theoretically it could happen. Even then it would be challenging just because there's so much debt in the world or US dollar debt, but if they did that, then you could potentially have that happen. But until that day comes, it just doesn't work that way.

And I should say this. I should say this also, like, I don't necessarily like this. I'm actually consider myself a hard money advocate. I understand both systems pretty well, and I completely understand why governments don't go on a hard money system. And I think there's many parts of the private market that don't want a hard money system. But I actually, I'm actually, if I had to choose between the two,

I would probably choose for, you know, a hard money system. But I don't get to choose. You know, I just have to react to the world as it is. And, you know, the world is definitely not on a hard money system. And I don't think it's going back to one either. Okay. So you just said that you don't think the world's going back to a hard money system. That's actually a surprise to me because I thought at the end of this kind of dollar

milkshake theory, you had theorized that the world kind of goes back to gold. So do you want to explain why you don't think it goes back to a sound money system? Yeah. Well, so I think gold goes up a lot. In other words, I don't think we need to go back to a hard money system for gold to go to $5 or $10,000. I think the market can just do that on its own. I mean, look, we haven't gone back to a gold standard and gold's doubled in the last four or five years. And Bitcoin, we're not on a hard money center.

Look what Bitcoin has done, right? Yeah. The private market can take it there just fine. My guess is that they may have to use gold or some kind of a, you know, hard asset in order to bring confidence back into the system for a short period of time. So perhaps gold, you know, would be part of some kind of a basket that is used to stabilize the monetary system if we got into some, you know, major, major crisis. But I don't think that the governments of the world will go back to a hard money system willingly. and they will do it only as a very, very last resort. So one of the questions I would have on this is, what happens,

if demand for dollars gets so high, with all these countries that have huge U.S. dollar-denominated debt, what happens if they end up just defaulting? Well, so that's where you get the 2008 scenario, because what happens is whether they default, whether they default because they just can't source the dollars or the default because they do it on purpose, the result is the same.

You get vaporization of the dollar supply because you get into that credit contraction where when loans are defaulted on, money disappears. So here's the other thing that many people don't think about. When you look at a chart of the monetary base, it's like $5 trillion. And then you look at M2 and it's like $20 trillion. And then you look at M3 and it's like $35 trillion.

And then you start looking at securitized debt and it's like 50 or 60 trillion. And those are different aggregates of monetary supply. But if you think about it, it's actually monetary demand. Because the only money that actually exists is the monetary base. Everything else is leveraged off of the monetary base. base. So when you see M2 of 20 trillion and you see the monetary base of 5 trillion, that tells you that the system is 400% leveraged. There's four times demand for every dollar that actually exists. And then as it gets bigger and bigger and bigger, you know, depending on which monetary aggregate

you look at, the demand just gets even bigger. And it's like musical chairs. You think of the monetary base It says musical chairs. You think of all the other money supply is actually money demand, but those are all the people circling around the chairs. And as long as the system is functioning, as long as people are spending money, as long as the money is circulating throughout the global economy, then you don't need a chair.

But the minute the music stops, you have all of those people rushing for the few chairs that actually exist, and the value of those chairs goes up dramatically. It's fraction, that's the fractional reserve nature of the monetary system. The same thing exists for gold. And you could argue the same thing exists for Bitcoin, right? There's certain platforms out there that allow you to leverage your exposure to Bitcoin. Well, if and when, you know, people think that they have all this exposure to Bitcoin,

but if it's leveraged and they can't actually get it, then, you know, the Bitcoin, you get into a short squeeze, so to speak, and the price of Bitcoin would probably rocket higher. Same thing for gold, same thing for dollars. It's the same dynamic. It's just a different asset. Is it the same dynamic, though? Because if that did happen with the dollar, they always have the option of printing more dollars

to help cover people's losses, whereas obviously with Bitcoin, you don't have that. You can't. That is true, but the point is, there's only one entity in the world that can print more dollars, and that's the U.S. government. out so remember let's keep this same example where we've got five trillion dollars of base money

20 trillion dollars of m2 that has nothing to do with the money outside the united states the money outside the united states it's circling around the room but it's outside the walls and there are no chairs so right so when the music stops there is no entity outside the united States that can provide any chairs to all that money circling around outside the building or outside the room. The U.S. can put new chairs into the U.S., but remember, they're just putting chairs in. They're not, they're not putting new supply of actual dollars. They're just putting the chairs in there to make everybody believe that they're going to be there. So in other words, it's more, how do I explain this? It's more a show of confidence.

than anything else. Because ultimately, they're not going to physically print all the dollars. They're just trying to get everybody to believe that the system is sound so that they start to go back

to making loans again. So a while ago, we did a show with Jeff Snyder that was specifically about the Eurodollar. We got into all the details. But I can't remember. Do you know,

is there a good idea of the size of the euro dollar market right now? It really depends on how you try to define it. I mean, I would say it's Hundreds of trillions.

Okay, so it's huge. It's much bigger than dollars inside the U.S. system. So I'll give you an example. If you go on the Bureau of International Settlements website, they will show that there's $13 trillion of bank debt. But that's just on the balance bank debt. But there's been a number of other studies that the Bank of International Settlements has conducted.

They did one a couple years ago that said if you start including the off-balance sheet items and you use things like, you know, vendor financing, you know, of one company to another, it's probably more like $60 or $70 trillion. And if you start doing derivatives, 95% of which are denominated in U.S. dollars, now you're up into hundreds of trillions. And this is all leveraged off of $5 trillion physical dollars that actually exist. So it's a huge, it's a huge, hugely leveraged system. Okay, I want to go back a little bit.

So you obviously came up with this theory in 2018. Since then, probably the biggest thing that's happened in relation to this is the freezing of Russian treasuries after they started, they invaded Ukraine. And again, since then, the adversarial countries like China have started buying a lot more. gold, although maybe that trend was already happening, and maybe divesting away from U.S. treasuries. So how does that impact the demand side of this theory? So this gets to be very circular. And I try not to keep coming back to the same point, but you always end up back at the same

point. And that is that there is not a way to move away from the dollar that does not push it higher if you don't pay off the debt first. Because if you've got to remember, let's say that, I'm just going to throw out a number. Let's say that over the last 50 years, 75% of transactions have taken place in U.S. dollars. And going forward, only 25% takes place in U.S. dollars. You have to remember that all of that stuff that's taken place behind us, that's all been loaned into existence. It's all the extension of credit.

So all that credit that already exists, it's still out there. So even though you're not growing the credit at the same pace as you were before, it's still growing, and that credit that's already been extended is enormous. So now as you go forward, if you're not using the dollar as much, then there's not as many dollars circulating. If there's not as many dollars circulating, but all that debt still exists and has to be serviced, it gets harder to get the dollars to service all that debt, because the circulation is not as high as it used to be. Think of it like a faucet. You know, you're basically, as you, you've got a sink full of water,

and now you're starting to turn the faucet off. So it's not going full blast in there. So now it's trickling in there, but all that water still exists, and that is the debt that is owed. And so, you know, the fact that there's only a certain, there's less water coming in now means it's harder to start.

service all that debt that already exists. So does it sort of prolong the period of time that this is going to take to play out rather than stop it playing out entirely? I think the quickest thing that would make this play out is if we had, if everybody stopped using the dollar and defaulted on all their debts, we would have a 2008 style or a 2020 style crisis. The dollar would jump to 130, 140, 150, and then the powers that be would have to come in and just shut everything down for a month, to a reset, and start over.

So to me, other than that, I don't see how, I don't see how this ends. I think that's ultimately how this has to end. And so when we get to the end, the dollar strength blows up the entire dollar system. What does happen then? Is that where countries,

to get together and reset the entire global financial system. I think that would probably have to be some kind of a plaza accord where the big countries get together and say, you know what, this just doesn't work in anymore. We have to write off all these bad debts. You know, we have to, you know, I don't know, maybe in that scenario they write up gold and, you know, they hold gold on their balance sheet and issue currency against the gold. But yeah, I think that is where they do the ultimate global bailout and reset everything at the same time. and everybody loses a ton of purchasing power on their currency all over the world. Okay.

I mean, that's obviously where I and a lot of the listeners would think Bitcoin comes into this. And we will get to that, I promise. But before we do... Maybe it will. I'm not... I just don't think that the governments are going to... I think my views on Bitcoin are a little bit misunderstood, but maybe we'll get into that a little bit. Yeah, we definitely will get into that.

But just before we do, I want to ask a question, which I know you disagree with, but I'm going to ask it anyway. Okay. Do Triffin's dilemma and the Dollar milkshake theory not contradict each other? And maybe in answering that, you can explain exactly what the Triffon's dilemma is. Sure. So not only do they not contradict each other, but Triffon's dilemma is at the heart of the dollar milkshake. So let me tell you what Triffon, the audience, what Triffon. I know you know what it is.

I'll tell the audience what Triffin's dilemma is. So Triffin's dilemma is based on an economist from back in the 60s, who was taking a look at the monetary system. And he basically said any time that you have an individual country's currency simultaneously serve as the global reserve currency, at some point down the road, the needs of the domestic economy will come into conflict with the needs of the global economy with regard to that currency. And so what that means is that the way the system is set up

is that it is a, the U.S. running budget, deficit deficits and the U.S. running trade deficits, that is a feature of the system. It's not a bug. That is the, and this is kind of the heart of Triffin's dilemma. Because to supply the dollars to the rest of the world that is needed to run as the global reserve currency, the U.S. has to run budget deficits and trade deficits. That's the way the rest of the world gets dollars. Now, when the U.S. was tied to gold, this was a burden because the rest of the world could then say, you know what, we no longer trust the dollar. You're printing the dollar like crazy. We'll just give you your dollars back and we'll take the gold. And France actually did that. France called the U.S.'s bluff. They took their gold back. And that's when the U.S. said, you know what, we're not letting anybody else take their gold. It's no longer convertible. We're going to now have floating exchange rates. And when they did that, there was a period of time. There was about a six to nine months, maybe a year period of time

where all these currencies were just floating against each other. And it's during that time period, you may remember this quote. There was the U.S. Treasury Secretary John Connolly said the dollar is our currency, but it's your problem. Because, you know, all the countries are like, we have all these dollar reserves. You're printing money like crazy. We can no longer get the gold. But when the U.S. convinced Saudi Arabia to price dollar or oil exclusively in dollars, that that was probably the greatest deal the U.S. ever pulled off because what it did is it increased the demand for the United States dollar.

And when they did that, it actually turned Triffin's dilemma into what I call the U.S.'s greatest weapon. because then the U.S. was able, without losing any assets in the process, to print however much money they wanted to get resources from around the world. I mean, we get oil from Saudi Arabia for printing green pieces of paper. We get manufactured goods from China for printing little pieces of paper. We get cars from Germany for printing little pieces of paper. Now, who got sacrificed along the way was the American worker, right? and the purchasing power of the dollar. But that allowed the U.S. government to basically have global seniorage.

So seniorage is when you can print something for free and get something for value in return. And it's the only entity in the world that has that global seniorage is the U.S. government. I refer to it like there's the one ring from the fellowship of the ring, right? It's like the ultimate power. And now, as a result, the U.S. can use U.S. monetary policy, and they can use the dollar as a weapon against the rest of the world. So what used to be Triffin's dilemma, and it was a dilemma for the United States, is no longer a dilemma for the United States. It's now a dilemma for the rest of the world. And I'll give you a couple of examples.

The easy examples are when you look back at 2008 and 2020, as the world. world was going through a liquidity crisis, it took the U.S. and the U.S. Fed to bail the world out by providing more U.S. bank reserves or bailouts, QE, swap lines, however you want to define that. But remember, that was done, the U.S. willingly did that. They didn't have to do it. They did it because they wanted to keep the system going as it is. then we get into 2022 and when they raise interest rates, this is a really good example, because in 2008 and 2020, that was a system where that was a situation where everybody was in the same situation and the U.S. bailed out the rest of the world because we were all in it

together. So that really wasn't Triffin's dilemma. That was when that wasn't the U.S. needing one thing and the international system needing something else. That was everybody needing the same thing. But then we get into 2022, and the needs of the domestic economy were that we need to raise interest rates in order to deal with the inflation at home. And by raising interest rates in the United States, they also raise interest rates on the rest of the world who owes in dollars. And by raising interest rates in the United States, they dramatically increased the value of the dollar relative to foreign currencies around the

world. It's not an accident that in August of 2022, the Bank of England had to bail out their government bond market. The Bank of Japan had to bail out not only the JGB market, but also the yen market. And the ECB had to bail out Italy because their yields started to spike. And that's also the time period when China's equity and real estate collapse really started to speed up. That's not an accident that that happened at the same time that the U.S. was raising interest rates and the dollar went to a 30-year high against its foreign currency peers. So that was a pure Triffin's dilemma. That was an example of where the needs of the United States domestic economy came into conflict with the needs of the international community. And while 2022 was a painful year for the United

States, it was much more painful for the rest of the world. And now, if we fast forward three years, now we're in a situation where we have Triffin's dilemma right on the front page of the newspaper every day. And that is with these tariffs. The reason the tariffs are such a big deal, it's not just a pride thing. Part of it's just a pride thing, you know, we don't want to back down to Trump. But the other part of it is that tariffs essentially are like a rate hike. Rate hikes essentially means it costs more to get dollars and as a result you're going to get fewer dollars. Tariffs kind of have the same impact for the rest of the world. If there's tariffs that are now being paid, that means there's going to be

fewer dollars flowing to the rest of the world. But because the rest of the world still needs all those dollars to service all that dollar debt and to function in that euro dollar market that we've already talked about, that is going to cause problems for the rest of the world. And so that is an example of the needs of the domestic economy. You know, Trump is saying, we can no longer afford to run these budget deficits. We can no longer afford to run these trade deficits. We can no longer afford to outsource all of our manufacturing for national security reasons. And as a result, we're going to put these tariffs on.

That is the perfect example of the needs of the domestic economy coming into conflict with the needs of the international community. And so that is part of the reason that, you know, you saw when Trump won, leading up to Trump winning and then when he won, you saw the dollar rise a lot versus its peers, you know, in the fall and into January. Now it's pulled back since he's been elected. And maybe, you know, it'll be interesting to see what they do tomorrow on Liberation Day with the tariffs. But if they go through with the tariffs, I would expect the U.S. dollar to get stronger versus the rest of the world just because there's going to be fewer dollars flowing out into the euro dollar market. 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. CASA 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 are very recently

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Preston Pish, Alex Gladstein, Nat Brunel, James Lavish, and so many more. We then have a football day where we'll hopefully see see Rail Bedford win the league again. Last year was amazing. This year is going to be better, but tickets will sell out for this. So if you want to come, head over to cheatcode.combe at UK and grab a ticket. Okay, I've got a few questions from that. The first one, this might be a stupid question.

But you said the US is the only country in the world that has this privilege of being able to print the money. But why does, say, the Bank of England printing money not give them the same advantage? So good, good question. And this is actually a big part of why I think the dollar gets stronger. The Bank of England can print pounds, you know, and the Bank of China can print yuan, and the Bank of Japan can print yen, but they cannot print U.S. dollars. But remember, when we talked about the euro dollar market, there is not a similar-sized

euro dollar market for the pound or the euro dollar market for the yen. I would say the yen has a pretty big market outside of Japan probably more so than any other currency. But the reason you see these other currencies falling versus the

US dollars, because when they print money, it stays locked in their domestic economy. It doesn't flow overseas. Because the U.S. can print that money and it flows overseas where it is needed, it doesn't all just stay in the domestic economy

and it doesn't create hyperinflation in the United States. But if Bolivia tried it, all those Bolivian notes stay in Bolivia, and it loses value. All the Turkish lira stay in Turkey. All the Egyptian, what's the Egyptian currency? I can't even think. You know, they stay in Egypt.

And so that's why they lose value versus the dollar. So if the Bank of England prints pounds, and it wants to go to Saudi and buy oil, it presumably has to do that trade in dollars. Is that what you mean? That's right. So they'll print pounds to buy dollars. But you're basically increasing the supply of your currency to go buy dollars.

So you're buying dollars that pushes up the price of the dollar versus your currency. Okay. That makes sense. And then the other question that I had was you talked about in 2022 when the bank of thing that had to step in and save the bond market. and that ended up costing this Trusser job. There's obviously been these things happen around the world. But recently, hasn't the Treasury auctions in the US, have they not been also pretty iffy?

It depends on what you mean by iffy. There has never been a failed Treasury auction, and they're always oversubscribed. So they may not be as oversubscribed as they have been in the past, but they're still oversubscribed. But I would say that if treasury auctions, let's say they're not oversubscribed, let's say they're undersubscribed. And as a result, U.S. interest rates go higher because there's not enough people buying the bonds. That would again be bad for the U.S., but it would be a nightmare for the rest of the world.

because if you have to now pay, if the U.S. has to pay five or six percent for a 10-year treasury, guess what Turkey is going to have to pay, right? Guess what Argentina is going to have to pay? Guess what Australia is going to have to pay? Guess what South Africa is going to have to pay. They're going to have to pay even more. If they want to get global buyers, they're going to have to pay even more because everybody needs dollars. Whether they want dollars or not is irrelevant. They need dollars to avoid default. And so if the price of the U.S. Treasury goes down and the yield on the U.S. Treasury goes higher, that's not a good thing for the rest of the world. It's not a good thing for the U.S. either. And this is actually the milkshake. When global debt gets repudiated, when sovereign debt is no longer purchased at the same level it was, yields rise. and then when yields rise, what do the governments do?

They typically get their central bank to go start buying the bonds. And when they start doing that, then that's the printing of money or that's the mechanism that leads to the printing of money. And because there's less demand for those other currencies than there is dollars, those currencies end up falling versus the US dollar. Does that make sense? Okay, that makes total sense, yeah. And so the Trump admin now, though, have come out and they say they want to weaken the dollar.

Obviously, that plays in complete contradiction to your theory. Do you think they're not going to be able to do that? Well, I will say their policies do not support. Their words support a weaker dollar, but their policies do not. I don't see how you can put tariffs on the rest of the world. and not send as many dollars out into the rest of the world. And then there is a way they could get a weaker dollar out of this. If they cause a recession, and as a result, people flock to treasuries

because of the perceived safety and because they're buying more treasuries than the 10-year yield goes from, let's just say, 4.5% to 3.5%. then that could cause the dollar to fall because interest rates have fallen relative to other places. And I think that might probably be their goal. And I think that's probably how they are planning to offset the current dollar strength or the potential dollar strength would be to get interest rates lower. The other thing is that while they do, I do think that they want a weaker dollar, but I'm not convinced they want it right now. And let me tell you why.

I think in order to do what they are going to do, I think they know that it's going to cause some pain. You know, I think there's a lot of people who think that Trump is just an idiot. Now, I don't necessarily think he's a super genius, but I don't think he's a super genius, but I don't think. he's an idiot either. And I do believe that with the team he's put in place, that there is a method to the madness. I don't think it's 3D chess. I think he's telling everybody exactly what he's going to do. But I think that they know that there will probably be pain, short-term pain from what they're trying to do. And if he takes that short-term pain now rather than later, he can blame it on Biden. Yeah. If he waits a year to do it, it's tough to blame it on Biden.

And if he takes the pain now, he can say, listen, I know this sucks, but you got to give me a year. I'm trying to turn this, you know, super tanker that's been going this way for 50 years. And I'm trying to turn it around so I can get you guys better jobs, you know, better, you know, a safer homeland, you know, more manufacturing jobs, all that kind of stuff. And I think they know that by doing that that's probably not accomplished alongside a weaker dollar. or at least it's a challenge for them to have a weaker dollar. The other thing is if you're building factories and you're buying all the materials and the resources that they're needed to build a factory,

you don't necessarily want a really weak currency when you're doing that, especially if you're trying to combat inflation that you're blaming on the previous guy, right? So if you're building, and then there's a third part of it. The third part of it is he's currently negotiating with all of these other countries.

Well, if you're negotiating with somebody else, you don't want them to be comfortable. You want them to be uncomfortable, because the more pressure you can put on them, the more likely you are to extract favorable terms. Well, the stronger the dollar is during those negotiations, the more pressure the other country feels. So I think after they get the trade deals done,

then perhaps they would, And after they start to get some of the manufacturing back, then I think they definitely want a weaker dollar. I don't know that they want it really weak right now today. But if you can get those trade concessions negotiated, if you can get some of the manufacturing coming back to the United States, you can get some of the jobs coming back to the United States, and then once you've started producing those goods that you're planning to export,

then maybe you want a weaker dollar. But I don't think you want a super weak dollar right now. But I also know that Trump would not love to see a spiking dollar either. So I'm not sitting here and saying that they want the dollar to be spiking. I don't think they want that. But I just don't know that they want it to fall 10% tomorrow. Yeah, I can totally believe that Trump is planning to let things kind of boil over now, blame it on Biden, and then run things really hot into the midterms in 26.

That seems like a very clear play to me. Okay, cool. So I think we should get into Bitcoin. in this theory, gold is obviously kind of the final boss of the dollar. You think gold will do really well in the Bitcoin milk, in the dollar milkshake theory. Why not Bitcoin? What's your take on it? Well, so I'm, you probably won't like this answer, but I'm really just kind of indifferent to Bitcoin.

I think Bitcoin could go to a million dollars. It wouldn't shock me at all if Bitcoin went to a million dollars. And that's what, 12x from here? I mean, that's a pretty good investment. You buy it at 80,000 and it goes to a million. 12x is a pretty good return. So I don't have an issue with people owning Bitcoin. I think Bitcoin, I mean, it's pretty clear.

Bitcoin is the greatest speculative asset in history. If nothing else, it is at least that. My biggest issue with Bitcoin is not Bitcoin itself. It's with the Bitcoin Maxis. Okay. And it's the Bitcoin Maxis who say that there is no possible way anything else can possibly happen other than Bitcoin taking over the world. And, you know, if you don't get in now, you are just going to,

you know, you're going to be poor and, you know, you're going to be a surf and, you know, it just drives me crazy. The certainty with which it has said just drives me crazy. I think Bitcoin has morphed from what it was originally intended to be into something else. That's, this is my perception. And it doesn't mean that's a bad thing. It doesn't mean it's morphed into something bad, but I think it is, as of now, I think it has failed as a medium of exchange.

I don't see it being used as a medium of exchange anywhere. I shouldn't say anywhere. Of course, there are exceptions. But in general, I don't think it is being widely used as a medium of exchange. I think it is an extreme, if you want to call it a store of value, I will accept that, but I will say it is extremely volatile store of value. And, you know, you could lose 50% of your purchasing power over six, over over five to six-month period pretty easily.

It doesn't mean that you won't make it back up six months after that, but it's a very volatile store of value. And then finally, I think, I don't think governments are going to adopt it the way the Bitcoin maxis think they are going to when they say the game theory angle. That once one country buys it, then all the other countries will have to buy it. I just fundamentally don't think that's the case. But, you know, I have almost all of my clients own Bitcoin. I have helped clients buy Bitcoin.

I've had to talk them out of putting, you know, an exorbitant amount of their portfolio into it just because I don't think it's necessary that a 70-year-old person have 50% of their portfolio on Bitcoin, right? I mean, I agree with that. But, you know, I have a, how old is he? I have a 72-year-old client that has probably 12% of his portfolio, 15% of that. of his portfolio on Bitcoin, and that's fine. He's a very wealthy guy and has done very well. He wants to own some of it, so we'll own it.

But I just don't think that, I just don't think it is currently acting as money. Could it act as money? Potentially it could, but right now it's not, I don't think. So, like, most of those arguments, the store value being too volatile, medium exchange not being used widely enough, it seemed like that's just all part of the monetization of a new asset, though. Like, do these things not just come in time? Like, Bitcoin is getting less volatile over time.

more and more people are using it as a medium exchange. And as it just gets bigger and bigger and older and older, do you not think those things will kind of solve themselves? Maybe. Again, I'm not saying that it can't happen. I'm just saying that I don't see it currently happening. I would say that Bitcoin was used more as a medium of exchange five years ago than it is now.

Maybe you can show me some stats that show me I'm wrong on that. But my perception is everybody just buys it and wants it to go up. I mean, I think Medium Exchange is growing. I don't have the stats like to hand. But again, is that not good because people see like if you have dollars and you have Bitcoin, why spend the dollars right now

if you think it's going to appreciate it over time and that kind of thing grows? That is possible. That is certainly possible. It's the Gresham's law, right? Everybody uses the bad money and the good money's gone. So yeah, I can't, here's the thing. It's not, I'm not sitting here saying

that Bitcoin can't become money or won't become money. I'm arguing against the fact of its inevitability. It's the inevitability and just it's the, it's that there's no other possible outcome arguments that drive me crazy. I mean, that's fair enough. So you said something before.

You said you think the way that nation states adopt Bitcoin isn't going to be the way that Bitcoiners think. We've obviously in the last few month or few weeks or whatever had the Strategic Bitcoin Reserve announced from the US. they're looking at buying potentially a lot of Bitcoin. There's also a bill going through Congress at the moment, the Cynthia Loemus bill, which would be the U.S. buying a million Bitcoin over the next five years, or 800,000 because they already own a couple hundred thousand.

Is that not how you thought it would play out? Like, what do you see differently there? Okay, so there's two parts of this. The Bitcoin, they have not purchased any Bitcoin. They've just said, we're not going to sell the Bitcoin that we already confiscated from the bad guys, right? Whether they got it from Silk Road or wherever they got it, I think the Rangers or whatever, the U.S. Marshal Service has the Bitcoin, and they're just not going to sell it. So I don't know that they're actually going to go out and buy it.

Maybe they will. I can't say for sure that they won't, but I have a hard time. Sorry, just to throw something in there. They've not bought Bitcoin yet, but they are looking at what they call like budget-neutral ways of buying Bitcoin where it doesn't affect the taxpayer. And they have a team looking at this. Sure, sure. And listen, let's use El Salvador as an example.

When El Salvador started buying Bitcoin, I cannot tell you how many emails and phone calls and direct messages and Twitter posts, I was told, game theory, this is just a matter of time. Everybody else will be doing it. You know, Vukali understands the U.S. is an evil empire, and this is his way to fight against it. And then a couple of years later, he agreed to sell the Bitcoin and, you know, take an IMF loan and, or he agreed to de-monetize Bitcoin as a, as a, you know, the official currency and he took an IMLeft loan in exchange. So, you know, and I, listen, I'm a fan of Bukaley. In general, I think he's doing a pretty good job. I think he's got a very tough job. And I think overall he's done a pretty good job. And, but, you know, you have to understand.

The people who run countries are not libertarian-minded people. If you think Donald Trump wants handcuffs on himself, you're crazy. If you think Putin wants to have handcuffs on himself, you're crazy. I'm sorry, I just will not agree with you on that. And I think as a last-ditch effort, would a country accept handcuffs as a way to save their currency, potentially? But even in that scenario, I would argue most politicians would sink the ship prior to accepting the handcuffs. So, you know, and the other thing is that a country's currency, you are probably not going to like what I'm going to say. I'm just going to give you the heads up.

You're probably not going to like this. That's okay. A country's currency is the biggest tool that a country has against its people. I mean, if you objectively stand back and look at the relationship between a country and its government, they are, one is supposed to represent the other, but they're usually in opposition, right? And the idea that the country is going to give away the biggest tool of influence that they can use against their populace, I think is just wrong. I would love it if they did it, but I just don't think they will. And so for countries to adopt Bitcoin or gold, we can put them in the same category as far as I'm concerned.

You have to have someone like George Washington in power or Marcus Aurelius in power. And these are very, very, very unique people in history. They just don't come along very often. So I'm not saying that it's impossible for one of these people to get into the office, but it's just very unlikely. And especially when you get into a crisis, when you get into a crisis, governments tend to want more control, not less.

And if you think the monetary system is starting to get out of control, then it's probably, and I'm in that camp, I think the monetary system is starting to get out of control. I think we're probably going to have more problems, not less problems. So if we're going to have more problems, then I think governments are going to want more power, not less power. And I don't think they're going to give away their biggest tool that helps them retain that power. So my argument would be that if you want to change the money, you first have to change the leadership. To change the leadership, you have to have the power to do that.

And I don't see anybody that has the power to displace the leadership at the top of the United States, China or Russia, and put George Washington or a Marcus Aurelius on the throne, who then very benevolently says we're going to have a hard money standard and it's going to be Bitcoin. I just, I have a hard time getting it. Maybe Bitcoin just get rich enough. They'll be able to do that. But so. But this is the point. Like, it doesn't mean you won't get fantastically rich by owning Bitcoin anyway. So if somebody says I'm going to get fantastically rich by born in Bitcoin, I would say, yeah, that's very possible. I don't have a problem with that statement. The issue I have is when they think it is automatically going to become the money that all governments adopt. I think that is just a fundamental misunderstanding of government. Okay. I know you've got a sort of limited time, but there's a few questions I do want to ask you there. Maybe let's start with the Putin point you made before, because I would probably be of the opinion that the biggest benefit here could actually be to the more adversarial nations to the US. And you say Putin doesn't want to put himself in handcuffs, but does he really not have a choice between two different sets of handcuffs, like the US dollar or Bitcoin? And it's like which one's going to be tightest? And maybe that gives them an incentive to own Bitcoin.

Listen, I cannot, I can't sit here and say that it cannot happen. But it's when people say he is absolutely going to do it because it's his only option. That's that I just can't get there. Okay. I mean, I don't know this, but I'm pretty sure he probably is already stacking some Bitcoin. And then on the other side of things, you were talking about El Salvador. El Salvador's obviously Tiny Nation. They were first mover, and they got a great advantage from that.

They did really well. I agree with you that it was disappointing that they kind of canned everything for the IMF. But they're still stacking Bitcoin as of right now. I think they stacked another one today. But does the US not fundamentally change this? Is this not like a completely different ballgame now if they do this? And we've also seen Saudi by just short of $500 billion worth of Bitcoin derivative, the ETF. So do you not think the game theory kind of changes when someone like the US steps into this?

I have not yet seen the United States buy Bitcoin. If they did, would that change things for you? Well, it would obviously be a big marker. If the United States actually bought Bitcoin, then yeah, that would be a sign, sure. Okay. And then the last point I want to make. So I listened to the debate you had with Safety, which was really good. People should go and listen to that.

One of the things you said in that, which I didn't know if you truly believed or you were just trying to make a point and be a little bit triggering, was that Bitcoin is like basically just Nvidia in terms of store of value. Do you actually believe that? That's a tough one. As of right now, I do believe it. But I believe that Bitcoin has certain properties that could change it. So in other words, let me explain. Okay. The argument that's been pit forth is because Bitcoin has gone up from whatever, $35 to $100,000

and that incredible amount of wealth that's been created and the incredible amount of return, that in and of itself, is proof that it is superior to the U.S. dollar and it's superior to gold. And that shows that it's not only a store of value, but it is a multiplier of value. But Bitcoin, in every single risk-off scenario that we have had, since Bitcoin has come on the scene, Bitcoin has fallen every time. There's not one time where we had a liquidity crisis where Bitcoin rose instead of fell. And so that's why I say it's a fantastic speculation. I think it's a pure play on global liquidity.

And again, I don't have a problem with people owning speculative assets or a store of value. I have no problem with people owning a volatile store of value. But if you're just going off of the return, if you're making your arguments based on the amount of the return, turn, Nvidia has done better. That's just mathematically correct. Now, I don't... Sure. But who gets to choose the time period?

This is the thing is once you start choosing time periods, then everybody can pick a time period over which their point was either right or it was wrong. You may not believe this, but I would be thrilled to see Bitcoin go to a million dollars. I think it would be really cool to see it happen. And I am not somebody who is, I'm just not a jealous person. I have never begrudged somebody else their success. If people think I want Bitcoin to go to zero, they don't know me very well. Because I have a lot of friends and people that I love that own a lot of Bitcoin.

I don't want to see them get wiped out. I don't want that to happen. But I can't rule out that it could happen even though I don't want it to happen, right? So it's not like I'm going to be doing a big dance if Bitcoin goes down 50 or 60%. But and from a fundamental perspective, I love what it stands for. I absolutely love what it stands for. I just don't think it has so far proven to me that it is capable of what it's so far. started out as being, and I will also say, I think it's a little strange that what started out as

the cyberpunk, you know, anarcho-capitalist free market currency is now being, now the true believers are cheering that politicians are getting involved in it. That's pretty ironic to me, right? Like, why? Why do you care what the politicians are doing? Why do you want them involved in your baby. When has government ever not screwed something up? So why do you want them involved in it? Right? And so I kind of have a problem with that part of it as well. Yeah. And I totally sympathize with that. Like, if Bitcoin was always about separating money in state, cheerleading the state seems strange. And there's obviously like the Trojan Hall side of things where it's like, well, if Bitcoin gets in, then it can change things from the inside. I don't even

know where I fall on that yet, really. But I completely understand that kind of framework. And in terms of like comparing it to invidia um yeah it was not the kind of pure play on global liquidity that i had an issue with because like you can look at global liquidity in the bitcoin price chart and they do the same thing so that's just true um and i think again this is all part of like the monetization of an asset and that will change over time but to be seen and really what it came down to is like bitcoin's not just price it's like price plus properties of bitcoin and like bitcoin has no CEO, it has no quarterly earnings, like it's just a monetizing asset. And that was where I had an issue with the comparison to Nvidia and comparing them a store of values. Yeah. I think that,

I think that, well, that's why I say it's pure play. Like there is, it's just, it's just an asset. And, you know, some people think it's a worthless asset. Some people think it's the most valuable asset in history. But to your point, that's kind of like gold, right? There's no management calls, you know, there's no, there's no earnings, there's no interest being paid, there's no dividends that get increased or cut. It's just, it's just, it's just, it's just is what it is, right? And so when it, when it first came on the scene, I was pretty excited about it, or I was very interested. Maybe that's the better way to say it. I don't know if I was excited, but I was very interested, very interested in it. You know, it's funny, I wrote a white paper on

it back in like 2015 or 16, and I was crack up when people say, well, you just haven't done the research. chat. I've been following this for at least 10 years, if not 15. So I, you know, it's funny, I've gone down the rabbit hole on Bitcoin probably three or four times over the last 15 years. And then I always come back up and, you know, my rationality takes over. And yeah, here we are. Well, next time may be different. So by the way, by the way, before I forget, do you remember what Safeddin said at the end of that, that debate? No, remind me. He said, It doesn't matter whether you went Bitcoin. Bitcoin is the bitter medicine that the people need.

It doesn't matter whether they want it or not, which I would say it's pretty disappointing because he's supposed to be one of the leaders of the Bitcoin, and that's exactly what a dictator would say. It doesn't matter what the people want. This is what they need. And, you know, to me, that's just another example of how it's migrated from what it was supposed to be, a free market, you know, store value, money, da-da-da. to becoming the bitter pill that the people must swallow in order to not be poor.

That's just, to me, it's just ridiculous. I mean, Safetyans done some amazing work in Bitcoin. He's written some great books. But he's definitely a polarizing figure. So I wouldn't take that as necessarily what all Bitcoiners would say. No, no, that's fair. That's fair. But my point of that that's, that is what I have the problem with.

Bitcoin itself, I have zero problem with. well when the US start stacking Bitcoin we can do this again and see where you're following but I would actually be a good good yeah I would love to come back and talk about that if they do it all right perfect well thank you so much for the time Brent I appreciate it all right thank you good luck before we close out actually where do you want to send anyone to follow your work oh yeah so you know a couple different places probably the best place to go is Santiagocapital.substack.com. And the reason I say that is if you go there, you get access to, we put out some free content.

It also publishes our weekly podcast that we do that's called milkshakes, Markets, and Madness. That can be found on YouTube or on Substack. And then we also have some paid content and some deeper dive research that can be found on Santiago Capital.substack.com. but I'd love, yeah, if people want to check it out, I would love to interact with you over there. Perfect. Thank you, Bram. All right, thank you.