What Bitcoin Did - The Fed Is Trapped: Why Double-Digit Inflation Is Inevitable | Lawrence Lepard

Episode Date: June 22, 2026

“The whole goddamn thing is a charade… finger in the air, wild-ass guess, total gaslighting and bullshit.” In this episode, Lawrence Lepard is back on the show to explain why the Fed is trapped between persistent inflation, an accelerating sovereign debt crisis and a financial system that cannot withstand genuinely tight monetary policy. Lawrence breaks down the Fed’s retreat from forward guidance, why its new playbook gives policymakers cover to change course without warning, and why he believes today’s hawkish stance will ultimately give way to rate cuts and more money creation. We also explore his “decade of inflation” thesis. He argues that the cycle began in 2020, that double-digit inflation is still ahead, and that a major disruption in the Treasury or bond market could trigger a “break-glass” response from the Fed, sending Bitcoin, gold and other hard assets dramatically higher. In this episode: • Why the Federal Reserve is abandoning forward guidance • How the Fed could redefine inflation • The sovereign debt problem • Why double-digit inflation is coming • Lawrence's outlook for Bitcoin and gold THANKS TO OUR SPONSORS: ANCHORWATCH BLOCKWARE LEDN BITKEY SWAN CAPE FOLLOW: Danny Knowles: https://x.com/\_DannyKnowles or https://primal.net/danny Lawrence Lepard: https://x.com/LawrenceLepard

and the Fed. There should be no Federal Reserve. We should have a sound money unit that we all transact in, and the price of that money should be set by the free market, and that's called the interest rate, period, nothing else. There should be no bailouts. If you fail, you fail. The chairman sets the tone. And the dissents, even the dissents are somewhat planned. I mean, it's all, it's all Kabuki theater to make it look like, oh, we've got these 12 wise people trying to figure out exactly what the monetary policy should be. And there's so thoughtful and deliberate. And they're going to get it absolutely right. And since 1913, they've done nothing but fuck it up.

What they're going to do, in my opinion, is this decade, and I've said this for a long time, this is going to be a decade of inflation. It started in 2020. We're six years into it. We're not anywhere close to the end of it. Before this is all over, we'll have double-digit inflation. We almost had it last time. We got to nine.

We're going to get doubled-ditted inflation. And the good news is, you know, the economy will probably be cooking and unemployment will be relatively low. How are you doing anyway, sir? I'm doing great. No complaints. It's all good. I'm looking forward to a sound money future. Well, we, me too. We were just saying before the show, the sentiment in Bitcoin seems incredibly low right now. I'm hoping that's a bottom signal. I don't think, I think even during sort of the FDX crash, it was a better sentiment than it is today. Yeah, I'm trying to remember that. It was pretty bleak then too, but yeah, probably the most amazing. thing about this one is you kind of got Bitcoinsers eating Bitcoins and that just drives me

nuts because we're all in the same team. A hundred percent. It's funny. Like then everyone banded it together because that was kind of like, although obviously hugely impacted Bitcoin, it was kind of a shit coiny thing that was fraud, SBF like doing his thing over there. Like it didn't really impact us and it felt like everyone

kind of all the Bitcoiners were on the same side there. Whereas now there's so much infighting over Sailor, they're fighting over Bit one turn. It was a sleaze ball, trashed and and blew up and so all crypto got thrown out, including us. Yeah, no, you're right. I mean, we were all in it together. And, hey, it's 15.

It's down hugely, but so what, right? And, yeah, now, and I think, you know, I think a lot of people really kind of bought into the narrative. We hit 100, we had 126. You know, we're on our way to 200. And then, you know, it didn't happen. And so you've got a recipe for disappointment and anger and so on and so forth. And nobody ever said this was going to be easy. But I tell you one of the things I really take comfort in Danny is,

is that, you know, if you look at all the drawdowns, I mean, you look at any asset class, you look at the history of the asset class, right? If you look at the drawdowns in Bitcoin, I mean, you know, what do we had, 90, 75, 80, I mean, they're all big. I mean, you know, over 60%. And as painful as this has been, you know,

October we had high, what, 124, 126, you know, now I think the low on this one is 60. So just a tad over a 50% drawdown. I mean, hey, this is nothing. And to me, that speaks to kind of the institutional adoption. You know, there's a strong bid at the low end of the power law is kind of how I see it. So I'm just not worried, you know, it's like everybody else.

I'm impatient. You know, I'd like to see it go to 200 tomorrow. But, you know, if that happens next year, so that's okay. Yeah, I mean, if you'd have told me five, six, seven years ago that we're only going to have 50% drawdowns, I'd have bit your hand off for it. So I guess we can't complain about this. We're moving in the right direction. I mean, if 60 is the new 15, all right, I can live with that because I know what that means when we do get into the upswing phase that we're going to 180 or 200 or 240 or something.

It's going to be much higher than it was the last time around. So here we are. Yeah, Bitcoin will continue to win. But I want to talk to you about everything that's just happened at the Fed because Kevin Wash just had his first meeting. There's loads of stuff I picked out a bit that I thought were interesting. I think it seems like he wants the Fed to kind of change course. on some of the stuff that they're doing. But before I get into my thoughts,

I want to hear your thoughts. You'll know this far better than I do. So what was your general take on it? We just, and it'll be interesting to compare our perspective. So first of all, may I call for confession, I actually thought he would say some dovish stuff.

I mean, I feel like they need to be dovish eventually. They, you know, they had to turn QE back on, although they call it reserve management in December. And they've been buying along Treasury ons with,

you know, the short term, notes. And so, you know, I see strains in the monetary system. And the, in the 10-year hit 470 and the Japanese, you know, 10-year went up and the yen is struggling to go, you know, look like it's going to go through 160. So, so it seems to me like, you know, financial conditions are kind of indicating that they're going to have to print here at some point. So I kind of thought they would do it. And in part also, I thought that because pre-being appointed, he had kind of said, hey, you know, we're going to use this trim medium PCI,

which is a, you know, 100 points, 100 base points lower. So 2.3, it's the Dallas version. And by the way, he said, I kind of see myself like Greenspan. I think all this AI is going to lead to productivity, and therefore we can have lower rates and not have inflation. So I kind of thought he might surprise on the inflationary side. I was wrong. It was dead-ass wrong.

What he did was very interesting, and this just shows how they're so good at always changing the game. I mean, basically he came out and said nothing. You know, like zero guidance. I mean, it was like, it was like Greenspan, you know, like if you understand what I'm trying to say, then I haven't done a good job of delivering my message. I mean, he gave literally no message.

You know, we are not giving forward guidance. We don't know where we're going. We're going to do a big overhaul of everything. And like the good bureaucrat that he is, you know, we're going to create these new committees. We had a name for him. The task force, the AI task force. Yes, yes.

Mr. Task Force. So we have a task force, five task force to deal with all these different interests. Okay, great. And so, you know, I guess the way he decided to play it was, and I take this because Trump,

you know, reacted positively to what he did. I think the game, it's clear to me that what the game plan is, is, okay, he can't come in and immediately cut rates because he looks like he's bowing to Trump. He's got to establish that.

He's a mean, tough, fulker-like, you know, sound money guy, and he iterated that, you know, the 2%'s too high. and I mean, the inflation is too high, and we are going to get it back to Turk.

He said that multiple times. He emphasized that message, okay, that's important. You know, didn't say how. And then he said, you know, we got these committees going to work on these problems. And I think what he's going to do is he's going to throw the inflation committee, you know, a bunch of gobbledygook. And they're going to come back and tell them, you know,

yes, sir, we actually can cut rates because trim mean people, PCI is lower and you are getting the productivity gains you got you thought you were going to get. And I think he is going to cut. He's going to have to eventually, whether it's the next meeting, the one after that. My guess is the next meeting, because the midterms are coming up. And so, you know, I suspect at that point. But at that point, he will be able to say, hey, look, I'm a hawkish guy, but I'm telling you the right thing to do here is to look through this data and cut.

And that's what Besant was saying, too, the data, the data is. I couldn't believe Bessonet used the word. He said, he called it transitory. I was like, dude, that's not a very good word. I mean, I got got run out of a rail. So, so I was wrong, but I don't think I'm entirely wrong, longer term. I think he's ultimately going to have to crump and, and cut rates. Now, his whole ballot sheet reduction thing, and he also, you know,

calmed the bond market by saying he intended to do that. You know, I'm not sure. I don't think he can do that. You know, that's where I part ways with this whole Fed is that they, you know, they are a machine for creating money. I've had a chart that I put up on Twitter a lot that shows the growth of debt and the growth of GDP and the two lines are separating because debt is growing faster than GDP. Well, that's a problem. Eventually, you can't support the debt unless you create more M2 to make the nominal GDP higher, maybe not real GDP, but at least nominal. So I think, you know, I still think my big

print thesis is real, whether it happens in a big print or a medium print or, you know, the time, who knows, but I think it's real, but I guess I was kind of, I, you know, I thought to myself, I mean, he also sounded kind of arrogant. I mean, my partner said it was kind of like Ted Lasso does a Fed meeting, you know, like, you know, arrogant and folksy, and we're going to get it right, and it's all going to be okay and trust us. I'm like, really, dude? I mean, come on. So, you know, we'll see what happens. Obviously, you know, if he had been more dovish, our stuff would, you know, taken off gold, silver, Bitcoin, but he wasn't, and here we are. But, you know, it's not like we got hit hard either. I mean, remember, he didn't say rate hike. He just said, I'm not going to tell you what we're going to do.

So, you know, like Greenspan, he's kind of letting everybody read their own, read it and say to themselves whatever they want. I mean, I'm sure there are those people who think, oh, he's going to slay inflation and be hawkis. And there are people like me who think, no, he's going to ultimately cut. He's just not saying it yet. He's a trying to try and. He's a trying to. to establish this credibility. So, so I came away. I was disappointed because, you know, I want to get on with the show here.

They're going to prank. Why don't they just do it? But, you know, I understand why he's doing it the way he's doing it. He had to establish that he's not a Trump but boy and that he was willing to be, you know, firm on inflation. Give some credibility. You know, I mean, to be honest with the day, the whole goddamn thing is a charade. I mean, the 12 people are voting, all the stuff they say.

They make it sound like it's, it's, it's. It's so damn scientific. And in fact, it's just, you know, finger in the air. It's old vibes. Wild-ass guess, total gaslighting and bullshit. Do you know what I mean? They are good. Mathematically, they are going to print money.

They always have printed money. They will always have to print money. Unless, unless, I mean, where I'm wrong, where we are wrong is if the government gets responsible and balances its budget. But I just check those. Yeah, I just check those numbers and we're running at $2 trillion or more. You know, and the war didn't help. So, you know, we're just, we're waiting.

We're waiting for Godot, and it's a little annoying. I'm annoyed. Everyone's annoyed, but, you know, it is what it is. I'm very comfortable that we're on the right side of this. So that's how I thought. How did you see it? I mean, probably quite similar. One of the things that I did think was really interesting what he said was he's going to

have, I think, an inflation task force where they're going to go, I think he used the term back to first principles on what inflation is, which to me, sounded like he was going to reinvent what inflation is so it fits his narrative better. And then on the other part of that, he also said that he cares about the left part of the decimal place, not the right. So he's essentially in that said, he doesn't mind if inflation's 2.9%. As long as it's got a two at the start, he's okay. So it felt like they were moving the goalposts a lot with both what inflation is and how it's calculated and what the Fed are happy with, which to me it seemed like he was setting up to start cutting rates and being a bit looser. But who knows? What do you think

they're going to do when they go and look at the inflation data and what it is? Do you think they are going to reinvent the wheel on that? They could. I mean, they could use the trim mean, PCI, which throws out the outliers. There are lots of different ways to measure inflation. And, you know, I mean, we interpret inflation as higher prices, but sometimes higher prices occur. And it is, I mean, inflation is. When something costs more, we all call it inflation, but sometimes it's a supply issue, right? I mean, you know, to a certain extent, some of the inflation we're feeling right now is the fact that we had a war and the straight of Hormuz got closed and oil was $60 or $50,000 pre-war and it squirted up into the 100 range. And so that got

passed into everything. So that was, you know, that's not M2 growth directly. That's actually a supply issue, you know, a tightness of supply, you know, causing prices to go up. Now, you know, we all interpret it as inflation, but it's not M2 inflation. So, you know, there's just a lot of things. I mean, and there's this measure, and I've been meaning to look into it. I haven't had the time to get on Claude Chet to UPT and dig into a lot of it. But some measure called truflation. Some of your listeners may know something about it. Apparently it's pretty low. And so, you know, I'm not sure exactly what they're doing or how they're calculating it, but, you know, this is lying with statistics. I mean, you can, you know,

I mean, you can, you know, you can basically make anything true if you massage the numbers hard enough. And so, so yes, I picked up on both those points that you said, and that's my estimation of how we're going to go, how this is going to go down. But we'll just have to see. I also think it's interesting. He did say, you know, he said, look, I want to shrink the balance sheet, but I remember, I read the statement where he said that, very careful, this was a week or two ago, or maybe even longer. and he, you know, he also kind of said absent, you know, extraordinary conditions. And, and I thought, you know, I don't know if he used those exact words, but he said, all, you know, markets being calm or in normal conditions, I think he said, a normal condition, I want to strike the balance sheet. Okay, well, that's leaving yourself the exception for what Hank Paulson recently talked about is the break glass moment.

And you and I haven't spoken. I've spoken on other pods about this, but you know, I haven't spoken about this. I don't know if you saw it, but sometime in the last six weeks, Hank Falsett, so he's the architect of 2008 and, you know, the bailouts and all. And he comes, and he's retired, he's rich and ex-Golden Sachs, ex-Treshery secretary. And he just decides to come out, and he hasn't made any noise. I mean, he hasn't been active in anything for, you know, since then, really. I guess he wrote a book.

But, and he comes, he decides to come out on Bloomberg and say, you know, this death thing is really somewhat of a problem, and we've got a lot of debt that's building up. It's getting large relative to underlying economy, you know, blah, blah. blah, blah, blah. And, you know, there could be a real problem here at some point in the future. And it could even lead to what I would call a break the glass kind of moment in the debt markets. And we ought to be probably thinking about what our plan is, if and when that occurs. Now, that really, I was like, wow, because that's what we all think could occur, right? I mean, you know, the debt will be too large relative of the GDP, and they'll have to print more money to address that discrepancy. And so here's the former

Treasury Secretary coming out un, you know, unprompted and saying it, but I don't think he was unprompted. I think somebody at fairly high levels said, hey, why don't you go flight this trial balloon? And he did. And so to me, that was kind of a warning. And there have been others who've said it. I mean, hell, even Powell used to say, you know, this can't go on forever. This, that growing faster than GDP. So, you know, they kind of know it in the back of their minds. And, you know, I mean, I think where we get the big print, where my book looks right, is if something really breaks. And it kind of, everything cascades into a correlation of one and there's just not enough money in the system. And, you know, then, I mean, you know, the bottom.

And the warning signs for that that I watch are the U.S. 10 year, the Japanese tenure and the Japanese yen, because it's where all the carry trade is funneled through. And so, you know, right now they're all under control. And I'm sure that, you know, Treasury Department watches them very, very closely too. but my point is that if something were to very quickly, you know, if we were to have like a Liz Trust kind of moment, you know, like you guys had in Britain, you know, the monetary fire hoses would be brought to bear very, very quickly.

And at that point in time, you know, our stuff just goes bananas. So, and we'll just have to see. I'm not guaranteeing that's the outcome, but I think it's in the realm of possible outcomes, right? If you hold Bitcoin for long enough, there's probably going to come a time when you need some dollars. Maybe it's for a business expense, a tax bill, a property purchase, but whatever it is, you might not want to sell your Bitcoin. That's where Ledin comes in.

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clients since 2020, and if you're serious about acquiring and securing Bitcoin, I recommend Swam. You can meet the team at swan.com forward slash WBD, which is swan-a-n.com forward-slash WB-D. This sounds a little bit tinfoil hat, but do you think the Fed sometimes will look at the situation? They'll realize that their sort of fiscal deficits way too high, and they're waiting for something to break, kind of hoping something breaks so they can do this. Because like just under normal marking conditions, they don't. They can't, obviously. Yeah. Well, certainly something breaking gives them cover, no doubt. I think they would prefer to not have things break, though. I mean, it's embarrassing when they break. It hurts their credibility when they have to come in with

fire hoses, you know, et cetera, et cetera. And we're all starting to detect a pattern. I mean, my book talked about that, you know, 2008, okay, that's big print one. COVID, that's big print to, you know, the next one, and each one kind of got kicked upstairs. I mean, you know, 2008 was housing and financial leverage in the Wall Street banks. You know, 2020 was an economy shut down, but we kind of kicked it up at the sovereign debt level. And the next one's kind of the big one. I mean, if people start to lose faith in the currency, you know, we got to go to yield curve control. And that's what they did in World War II. And, you know, I mean, as I've said in the past, I mean, if it really does break and it breaks hard,

you know, the Fed might step in and say, okay, well, we stand ready to buy, you know, whatever treasury bills you folks want to sell, you know,

at a, you know, at a, at a fixed rate. And, you know, that rate will be low enough compared to inflation

that the entire bond market is going to look at the Fed and say, sold to you. And, and, you know, the total Fed balance sheet goes from, you know,

what's six something now, it was nine at the peak, you know, to 18 because the bond market is 30 trillion plus. So, you know, that's, that's one of those possibilities. And I actually think there's a decent chance of that happening. But, but they, you know, they don't want it to happen. And they're going to try to, you know, incrementally do it, you know, kind of keep everything together. I mean, and, you know, and they've done a pretty good job of that, right? I mean, when, when Silicon Valley Bank failed in 2023, I thought, okay, this is it. Here we go. They're going to, you know, it's They patched it all back together.

They created the BTFP. They yollen came out and said she guaranteed all the deposits, even though she couldn't because there's $17 trillion, and the FDIC only had a couple hundred billion. But it got everybody calm down. And there's a certain, you know, there's a certain bias in the United States that we're, you know, we're doing a good job and we're still the best country in the world.

And we've got, you know, the best currency in the world and all that other stuff. And to some degree, those things are true. But we're also, you know, the boat is also leaking. And some of the weaknesses are showing. And so, you know, I think there's a, you know, but do they want it to break? I don't think so. I think they want to incremental. I mean, they want to, they want to just keep the system.

My guess is that every single Fed share just wants to keep the system going, as is status quo, you know, 7% inflation, but call it to and, you know, become a hero and end up like Bernacki on the cover of magazine or Powell who got an award from Princeton. as being, you know, the most noteworthy alumni in the last, you know, 30 years, or, you know, whatever it might be. And I'm sure that's what Worse is aiming for as well. I mean, he doesn't want to have a fire breakout. And so, you know, that's why they're doing this reserve management program. They'll do other things, too. They'll, you know, I know, I know, I know,

there's a point of this out. My partner, James Lavish has, you know, really dug into the fact that the supplemental leverage ratios that the banks are changing and that'll allow, I mean, they'll probably try and do QEV via the banks. I mean, if they don't want to put about their balance sheet, they'll try and the banks to put them on their balance sheet. And who knows? I mean, they could probably create some new program, you know, some new acronym, a new program and give the banks an incentive to buy those treasuries. I don't know what that'll look like, but it wouldn't surprise me to see them do that.

But those treasuries got to get bought. And if they don't get bought and people think that the currency is failing because, you know, too much money is being printed and too much debt is being accumulated, well, then, you know, then problems arise. I mean, you know, I mean, I just saw that we had 1.3 trillion run rate, last 12 months at 1.3 trillion of interest expense in the United States. And we've got, I mean, total defense spending was $900 billion, and Trump was taking $1.5. Of course, that's not going to help the deficit.

And, you know, 1.3 trillion is a lot of money. And I've also seen that, you know, depending upon what you look at, that we've got a role, we've shifted all the debt to the short-term, you know, bonds or notes, and we've got to roll nine plus trillion of it. in the next 12 months. And I mean, the one thing that cutting rates would do is it would actually help their P&L. I mean, if, you know, they're paying, they're now paying on these shorter notes, you know, three something.

And, you know, if we took rates down to one and a half percent, I mean, we'd have a hell of a lot of inflation. They'd run it hot. But it would also cut the government's interest bill because they could sell notes at that level and, you know, okay, great. They're not paying as much. Now, you know, again, eventually, you know, what, what all of these moves will trigger and what they're trying to prevent is Gresham's law, where, you know, I've studied hyperinflations.

I wrote about them in my book. We all know how these monetary systems fail. Most of these other systems have failed were not the world's reserve currency in the most powerful country in the world. So we're not talking apples to apples, but a system, a monetary system fails when everyone knows they can't stop print. When it becomes completely obvious to everyone that they can't stop printing the currency, they all abandon the currency. And the currency becomes worthless. There is no longer any demand for it. And so, so the question is, how close are we to that point? And I would say we're not that close, but we're closer today than we were before 08 and before 2020. And, you know, I think with every piece of debt and every, you know, program that they put in, we get closer still. And so at

some point in time, you know, it's like, this is like a critical stage, there's a name for it, but it's, it's like when something changes form like you know water goes to ice or or boils and goes to gas I mean it's like or an avalanche or a volcano I mean it can stay a certain way for a long

point in time and then you get the last snowflake that falls and bang you know the avalanche releases and goes down and the same or the same would be true with you know a volcano I mean the magnet can be bubbling around and nothing's going on and suddenly enough pressure gets built up and wow you know you got you know on hell Mount St. Helene, I mean, it's like, and I kind of feel like there's a little bit of a parallel there with this monetary system.

You know, they can keep pile on this debt and keep patching it up. They can keep doing all these various things. But at some point, you know, we could get to the point where guess what, there just isn't enough money in the system. And if they don't cure it and cure it fast, you know, we've got a correlation of one event. And we've seen them. We saw one in 2008. We saw one in 2020. You know, nothing about the system has changed. So why wouldn't we see another one? That's kind of how I see it. Yeah, it's with you saying, like, this will fail when everyone realizes they can't stop printing. Like, you and I know they can't stop printing.

Bitcoiners know, gold bugs know. Like, enough people know right now. And if they do it again, that sort of pool of people that know is just going to increase. With each event, it gets larger, right? 08 created a bunch of gold bugs. 2020 created a bunch of Bitcoin bugs. The next one will create. I mean, but, you know, I mean, I don't know what percentage of the, I mean, I think most of the population knows that inflation is a problem.

I mean, that's because they go over the earth. store. We all know that. But I also think most people in the population don't know what causes inflation. That's exactly right. That's the problem. I think there's probably 10 to 15 percent that really understand that the fundamental issue is the printing money and the Fed and the government deficits and have really connected all the dots, you know, and that's why I wrote my book was to try to help educate everybody else so that eventually, you know, as this continues, it keeps getting worse, everyone keeps losing more and more money and having to live, you know, on less and less money on a relative purchasing power basis, you know, we start voting for advocating for sound money politicians.

I mean, you know, the two brightest things I've seen in the United States, I don't know how familiar you are with either of these guys are guys named Thomas Massey and Warren Davidson. Thomas Massey's awesome. Yeah, these are sound money people, you know, I mean, Cynthia Loomis is too, but unfortunately, she's retiring. And they're, and they're in, and so that's a start. You know, Ron Paul was a sound money person, but he aged out, sadly, you know, but, but there be more because, you know, people will experience pain and realize that this is the cause of the pain and, you know, eventually we'll get through the other side. I mean, one things that angers me the most, people call me a dumer, and I'm not a dumer. I'm very optimistic in the human condition.

I'm very optimistic at technology. I mean, our lives are getting better in so many ways. But in an unfair, we have an unfair system where the lives of people at the top are getting better, the lives of the people at the bottom are getting worse. That's just tragically unfair, and it's what creates a lot of dysfunction. And, you know, we've got to get back to the sound money system if we want to solve that problem. And so, you know, having blue scream at red or having red scream at blue, that's just not doing anything.

That's all just, that's unfortunate. That's a Higelian. I mean, they want you to do that. It's because it takes your eyes off of them, them being the Fed and the people, the bankers and the system and the politicians that are laughing all the way to the bank, right? 100%. It's funny, you know that I'm no macro guy. I'm a macro tourist.

And I feel like over the last six months, I've been going down this path where I've been like maybe the big print isn't coming. Maybe like reserve management, maybe they can find a new way out of this. And then if you imagine this is like the bell curve meme where on the left it's like big print, on the right is big print. I was somewhere in the middle. And the thing that's pushed me back to the left is I was reading one of Luke Gromens pieces recently.

And he was talking about this $8 trillion or $9 trillion. in the next 12 months of debt that has to roll over. And it's rolling over into very high rate. And you look at that, there's so much stuff that's unsustainable, but you look at that and it's like, that is completely unsustainable. Like, that cannot continue without something breaking. And I just think now, more than I have done in a little while, I just think a big print is inevitable.

And I don't think we're that far away. Like, I can't imagine it last 12 months of this rate. Well, you're, you know, you're singing my song, but honestly, I'm, I wrote the book. I'm afraid I might end up looking wrong. I don't know. I mean, Lynn, who I respect enormously is much smarter than I am.

I mean, thinks that they can gradually, you know, work their way through it, and they may be able to. And I just don't know. And I really look to it and he's brilliant. And he's got,

you know, I think he leans a little bit more on my side, you know, just there's going to be nuclear level of printing. But we just don't know. We don't know. There's so many moving pieces. There's politics.

There's, you know, a ton of other things. I mean, I will say this, in favor of the big print, my partner, David Foley and I have done a lot of work on it. There's just a lot of leverage, a lot of bubbly shit in the economy.

And so, you know, one of the things that leads to a monetary problem is when you have pumped up valuations that deflate. Because, you know, somebody made economic decisions based on those valuations and therefore they got to change their life and cut back. I mean, and, you know, there wasn't necessarily a big print around the dot-com bubble in 2000. But I mean to tell you, they started the housing bubble after that as a reaction to that. When that burst, there were a lot of pumped up valuations and dot coms. And when that burst, the NASDAQ went down 82% and stocks went down 50%. That was no fun for anybody. And, you know, they didn't print there.

They took rates to 1% and blew a housing bubble. But, you know, we can't blow another bubble because the next bubble would be on Mars. I mean, we're at the sovereign debt levels, but there's no more bubble left to blow. But I guess what I'm alluding to is when I look at a SpaceX or some of the, you know, the valuations of the chip stocks right now, I think there's a lot of, you know, paper value in these things that at some point could deflate when, you know, if they don't come true the way people think they're going to come through. And I'm not anti-AI. I love AI. I used all the time. It's going to change the world. It's it's just like the Internet. It's going to be enormously important. I totally agree. great. I was in the internet. I invested and I made money in it. I rode the bubble. I got hurt on the backside of it, although I did short some things too. But one of the things that was certainly true was that in 2000 and 2001, we didn't know exactly what was going to happen. We didn't know, you know, I couldn't see that Amazon would become Amazon. I couldn't see Facebook. I couldn't see all the,

they didn't exist or they weren't fully developed. You know, we invested like crazy in a bunch of fiber, all which got used, but which got totally devalued. I mean, WorldCommon, all these other companies, you know, went bankrupt or had to get restructured because they took on too much debt to build too much fiber. And, you know, and I just feel like that same, you know, that same story is being played out in AI, right? Yeah. That, you know, that it will change the world, no doubt. But, you know, chasing the, it's the new shiny thing. And by the way, actually, that's part of why Bitcoin is kind of punk right now.

I mean, I know people in Bitcoiners and tech guys who are. kind of like, yeah, Bitcoin's old hat. I'm all in on AI. I'm okay. All right, good luck with that. What are you paying for? What are the cash flows? How does that all work?

You know? I mean, and both of those things can be true. Like, I'm with you. AI is clearly going to change everything. But the market can also be overvaluing them right now. Like those both can be true. And this is a pattern as old as time. It's happened with railroads, canals.

I mean, you name it, the automobile, radio, you know, RCA. I mean, all of it. The thing that I think is interesting, though, is like when you talk about the U.S. economy doing quite well, like, I don't know if it is outside of AI stocks. Like, AI stocks is the economy right now, it seems. And so, like, and do they let them fail if, do they let the bubble pop? Well, you get into the strategic, yeah, the whole strategy, we've got to win this versus China. And, you know, you see the U.S. investing in Intel and so on and so forth.

I mean, you're right. I mean, the U.S. GDP would not be doing very well. without, you know, what is it? I think it's this year, it's 600 billion, and it's trending towards a trillion of capex on AI, on data centers, chips, machines, etc. I mean, oh my God. I mean, look, I hope they know what they're doing. And I see, you know, I see really good companies, you know, taking on a lot of leverage to do it. And the one that I kind of respect a little bit is Apple, because they're not doing it. I think, you know, my partner and I've talked about this, they might be just sitting around waiting to see how it all shakes out. But,

even Google is, you know, they're all, they're all making an enormous KAPX bet that winning this race is important. And they may be right. They may be completely right and I may be completely wrong. But I look at it and I also just get the feeling that it has that dot com, you know, we don't really know exactly how it's all going to work. And, you know, and the other thing that I think is a threat there that I don't think enough people have focused on is that this deep seek thing in China. I mean, this stuff may not be as proprietary or as hard to replicate as everybody thinks. Everyone's like, well, it's a race and we got to win it. Well, is it or can somebody in China do it cheaper and easier and better and faster?

I mean, we kind of saw a glimpse of that with deep seek. So, you know, I just don't know. Look, I'm excited by it because I do know. I look at my life and I look at how much my productivity goes up. You know, I mean, I want to understand something quickly. You know, I hop on Claude and chat, and I can get my arms around in a company, you name it. It's just, it's stunning. And that's going to be replicated, you know, a thousand times over it's throughout the entire economy.

So that's a really good thing. But, you know, is the capital being allocated correctly today? It doesn't feel like it to me. I'm skeptical. I mean, I look at space. I mean, you know, the satellite business, you know, the Starlink business, that is a fabulous business. I want to own that business, but I don't want to own it at this price. The thing that keeps me up at night with Bitcoin cold storage isn't Bitcoin failing,

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And the sort of open source models that you can run on your own computer are like getting very, very good. They're not quite as good as the frontier models, but they're very good for most things. And I just wonder when people stop paying for it and start using this sort of open source ones you could run at home. That might be too techie. That might be unrealistic. But it's a trend that I'm definitely going to be watching. Well, and also, I mean, I'm paying for Claude. I'm paying for chat.

I'm just at the $20 a month level. I'm not paying for the big stuff. But, you know, as I understand it, I haven't used them much. I mean, you know, Grock and Gemini, I mean, I think with Grock, you've got to be paying, you know, you've got to be a blue check mark on Twitter. But that's not terribly expensive. And I think isn't Gemini free, the Google product? I don't know. I think it's very low cost, I think.

Yeah, I actually don't know. I think if you have a Google account, you get like some usage for free, I think. But I don't exactly know. where they try and uptrade you like, yeah, like chat. Yeah, no, I started using chat, but I quickly hit my question limit. And I was kind of like, all right, I'll pay you the 20 bucks. I mean, so it is going to be really interesting to see how it plays out, though.

Because one of the things I was talking to Peter Dunworth on the show recently, and he made a point that I think was actually very interesting in that there's a lot of people in this AI trade right now. It's clearly taking the wind out of sales of Bitcoin a little bit over the last sort of 12 months or so. but when that trade does roll over, and at some point it will, like it could be in five years time, who knows, but at some point that trade will roll over a little bit. Like, where do people put their money?

Because like the bond market is not looking attractive, like other equities outside of AI aren't looking particularly attractive. Like, does that start flowing back into things like gold and Bitcoin? Like, these are people who are sort of tech savvy, you'd imagine on the whole, the AI investors. Like, Bitcoin looks pretty attractive then. I think that's right. I think that's absolutely right.

The Bitcoin does look attractive. you know, Bitcoin is just, it's, you've got to be patient with this asset. You just, you really have to be patient. And I've got people that I put into it last year that I'll probably have average costs of 100, 1005, 110, and they're calling me and they're scared. And I'm just like, look, I told you when you did it, you know, you got to be prepared for a 50% drawdown and think to yourself, if that happens, I'll buy more or not sell. And I don't think they're even close to the buy more.

I'm trying to prevent them from selling. But those of us who've been around It a long time You know, we just we understand it And it's just kind of like, okay, you know, it is what it is I mean, this is This is the nature I mean, you know, go back and study the growth of Amazon

I mean, Howard Marks, you know, made a fortune I think it was Howard Marks No, it was somebody else I'm getting my name, the name's wrong But there was a fellow who was an investor in Amazon From the beginning And, you know, he suffered big drawdowns And he just kept, you know,

He'd buy the dip And did extremely well with it. Yeah, Bitcoin just looks more and more attractive. The thing that this kind of plays into, and one of the questions I had for you about the Fed meeting, I want you to try and clear this up for me, Larry, is the idea of getting rid of forward guidance, because that has been a thing for the last, I don't know how long, but when power was talking about higher for longer and things like that, they have given foreign

guidance and water wants to get rid of that entirely. Why do you think that is? because is it the idea that they want to keep some optionality, keep some flexibility, they know that inflation's high, they know that the Treasury market is not in great shape, and instead of telling the market what they're going to do, they want to kind of keep that flexibility, or is it that they think the market calm sort of is too fragile to have the forward guidance at this point? Well, that's a great question.

I, you know, I'm not quite sure. I think it just, in my mind, it just kind of falls into the list chain, what's continually changed the rules of the game to keep the other side up. We're the other side, right? We're trying to figure out what the hell they're going to do. And so, you know, they'd gotten to the point where they had dot plots and projections and Nikki leaks and all kinds of stuff. And I can see where they kind of said, you know, we're hamstrung by this.

We've got our, you know, got our arms tied behind our back because we're giving, telling people shit. We got to warn them of shit and, you know, all that kind of stuff. And they thought they were being responsible. in doing that. And now they have decided they want to have optionality without any restraints and, you know, let it let it just, you know, let's let it rip. And to me, this takes us back to Greenspan.

I mean, Greenspan did the same thing. I mean, he talked in total gobbledy cook. I mean, he gave forward guidance, but you couldn't figure out what it was. And, I mean, he even joked about it. Now, you know, if you think you understood me, then obviously I didn't do my job very well. He said that once. And so, you know, the job, I mean, really the job is the job of a con man. I mean, they're supposed to sit there and convince us they've got inflation under control,

and yet they don't, and they're doing things to inflate. That's really the whole job. I mean, in a nutshell, that describes what a Fed chairman has to do. He has to gaslight the public into thinking that the money is sound and the Fed has got 12 people. I mean, you know, I find it hysterical, Danny, that people say, well, you know, wars can't get the votes to cut rates. I mean, give me a break. The way this works is that the chairman bullies everybody else.

I mean, read, you know, read the books about, you know, what Bernacki did to Thomas Honeg or what, you know, Greenspan. I mean, you know, or yelling. I mean, the chairman sets the tone. And the dissents, even the dissents are somewhat planned. I mean, it's all, it's all Kabuki theater to make it look. like, oh, we've got these 12 wise people trying to figure out exactly what the monetary policy should be. And they're so thoughtful and deliberate. And they're going to get it absolutely right. And since 1913, they've done nothing but fuck it up. I mean, and it's kind of like, you know,

Jesus Christ, guys, just stop gas. I stop with the fucking bullshit and admit that you're the Department of Inflation and your job is to inflate, you know, at a rate that we can all tolerate. and, you know, basically keep this fucking game going in favor of the bankers and the politicians. Why don't you just say that? I mean, obviously, I'm being facetious. They can't say that. But that, you know, that's, to me, that's really what's going on here. It's just, they're just playing a game.

And I'm just so annoyed by it and so fed up with it. And the sooner we can get rid of it and we get the entire world to realize that it's a, it's a sick joke on all of us, the better off will be. I mean, that's, that was the whole Ron Paul movement. just end the Fed. There should be no Federal Reserve. We should have a sound money unit that we all transact in, and the price of that money should be set by the free market,

and that's called the interest rate, period, nothing else. There should be no bailouts. If you fail, you fail. And you want to take on a bunch of leverage and swing for the moon, great. But if you blow it, you know, you lose everything and you're out of business. You're not, you know, bailed out like Lloyd Blaine was when he was won in Goldman Sachs in 08. You know, and now he, you know, lives in a mansion on Long Island and, you know, and holds forth on Twitter about all kinds of policy issues. Just makes me sick.

It's like, you know, the guy shouldn't be bankrupt, right? A hundred percent. I couldn't agree with that more. It's, like, what it says to me, the lack of forward guidance is they just don't know what they're going to do. Like, at least with Paddle, like, he was saying higher for longer and the market you could kind of digest that. And I know it kind of sucks at the market trades on the words of this one person. but it just screams to me that they don't know. They don't know what they're going to do.

They're stuck. I do think the Fed looks trapped here. One of the things that I've been reading, though, Jeff Ross's substack is brilliant. I've been reading it a lot. And he was talking about, like, the Fed don't actually set the rate, the market sets the rate. And it's the two-year bond and the overnight funding rate.

And I was looking at that recently, and that now is signaling that rates need to go higher or will go higher. Do you think that is, probably likely in the next meeting. I know earlier you said, do you think they're going to cut at some point? Jeff Conlock thinks rates need to go higher. Same thing.

And we all know that the two-year, you know, really is the Fed Funds rate kind of in disguise. And Groman has a great char where he just shows the two-year has been going higher, you know, open above the rate by a significant amount. Yeah,

I think that would be a great way to run it. But as a practical matter, I don't think that's how they are going to run, because I think they're political. and I think I think the cent is in on all of this and as much as said, they expect to grow their way out of it. And how do you get growth?

You drop interest rates so that you get more projects being taken on. I mean, you know, one of the problems right now is all these people have frozen in their houses. There are people who have 3% mortgages that can't move because the new bigger house that they want would have a 7% mortgage. I can't afford it. And so, you know, if they can get rates down substantial, you know, the housing market will pick up, you know, I mean, look, we, if what they're going to do,

in my opinion, is this decade, and I've said this for a long time, this is going to be a decade of inflation. It started in 2020. We're six years into it. We're not anywhere close to the end of it. Before this is all over, we'll have double digit inflation. We almost had it last time. We got to nine. We're going to get doubled-ditted inflation. And the good news is, you know, the economy will probably be cooking and unemployment will be relatively low. somebody's got to build those data centers. Somebody's got to do all this work. But the bad news is that, you know, with, you know,

and somebody's got to do those houses, you know, all of it. When we get interest rates low, economic activity will pick up. So we won't have an unemployment problem, but what we will have is we'll have a red hot inflation problem because the money supply growth will start to pick up again. I mean, it's already running at four or five percent, and it'll run significantly hotter, and then that'll filter through to the economy.

And, you know, heaven forbid that the stock or the bond market breaks, because if either of those things break, that's what it will take to get the big print, right? The big print, if we just run it hot, we'll end up looking like, you know, Turkey or Argentina or, you know, will be kind of an emerging market economy with good nominal growth and high inflation. I can see. That's actually a scenario that I think is reasonably likely that, you know, that does not require a big print.

but that leads to, you know, $10,000 gold and $400,000 Bitcoin. I mean, I, you know, and, you know, $10 gas or $15 gas and $25, you know, ground beef. I mean, I'm talking five years out or something. I mean, I guess one of the possible paths. And, you know, I would guess that would kind of be more of Lynn's, you know, medium print. You know, if something breaks, if this, if we get a leveraged unwind, you know, whether it be AI or, you know, private credit or who knows what. But if we get a leveraged unline somewhere,

the stock market breaks, the bond market breaks, well, then we're going to get a big print. And then it's going to get really hairy, really fast. And, you know, 12% inflation is going to look like a good thing. I mean, it's going to be 20%. And I think in the next one,

I mean, that's the one that could lead to, you know, the reset, the monetary reform. I mean, if you use the fourth turning model, I'm modeling. we fix all this in the 2030 to 2033 time frame. And that's just a guess, but it's based on fourth turning's lasting a certain amount of time, and this one started in 08, right?

So it lasts 20 to 30 years. I mean, let's say it lasts 30 years. That would take 2038. Maybe it will last that long. I don't know. But it appears like the pace is picking up. Certainly the size is picking up. I mean, Bernacki printed $3 trillion.

It took him four years to do it. Powell printed five. trillion in 18 months. So, you know, the next guy could print eight or nine trillion in six months or something. I mean, I'm just, you know, I'm spitball in here, but, you know, you never know. The scale of it's insane. I honestly, without Bitcoin, I don't know how you'd look at this with any kind of hope. Because, like, you were talking about people moving house at this point. Like, I'm looking at buying a house at some point. And, like, Bitcoin gives you that low time preference where I'm like, Bitcoin's at 60K right now. If I wait a year or two, like, I'll,

I'll probably get a house at half price. I can wait for raids to come down. I mean, it can also put you in a kind of stasis where you don't do anything because you know you have the best performing asset. But like it does give you time, which I just don't know what you'd be doing if you didn't have Bitcoin at this point. Well, that's the thing. I mean, you want to own assets where time is on your side. And, you know, impatience kills so many people. I mean, probably one of the biggest mistakes I see everybody in particular people in the younger categories make.

and I've learned this lesson so many times the hard way is, you know, you just, you want to get there faster so you'd use leverage. Oh, boy. I mean, and that's, by the way, that's kind of what, you know, that's kind of what some of the treasury companies are doing. Do you know what I mean? And I'm, I'm, I'm, I'm, I'm, I'm, don't get me wrong. I'm a micro strategy holder and I believe what I think what, you know, what sailor's doing is fine. But I'm just, you know, leverage in an asset like Bitcoin can be, you know, can be a life-altering experience in a negative way. And, you know, there's enough, there's enough upside here that you don't need to use leverage. I mean, if you want to play around with, you know, five or 10 percent of your money in a levered way, fine. You know, if you, if you blow up, you blow up. But, you know, you don't, this is, this is asymmetric enough that you don't need to use leverage. 100%.

Can we talk a little bit about micro strategy? Because they, sailors been getting some heat over the last few days about stretch. And I saw it today, the price of stretch went down to $83, which is pretty insane. It really is. I was, I was actually buying a little this morning. I mean, it makes sense. And you think it's going back to par,

this is a great time to buy it. It will go back to par. I mean, it definitely will. I mean, I, Jesse Mayer, you probably saw it had a good tweet on it. We talked about it. It felt like a leveraged cascade. You know, like somebody was getting liquidated.

I mean, somebody would probably borrow cheap and gone in there and to get the 11% and levered themselves up. And guess what? They just got a gut check, a big gut check. Yeah, I think it'll come back to par over time. I think, you know, the dividend is very well covered. I think all the strategy hate,

I mean, it's sad to see. I mean, there are a lot of bitcoins that I know, like, respect, etc., who've gone negative on Sailor. I think they're mistaken. What people call them deceptive, I just don't think that's true. You know, I think he's been aggressive,

but, you know, he wants to win. And, you know, I think he's evolved the strategy, no pun intended, but I think he has evolved. And, you know, that's okay in my way of seeing it. Conditions change. It's a war. You know, you change.

I mean, he's fighting the Fiat Lords, and he's really running a speculative attack on the dollar. He won't say that, but he is. And so, you know, you do what you've got to do. You know, my view is it's a $1,000 stock in a few years. You know, the only way it doesn't work, I mean, if Bitcoin adoption stops and Bitcoin ARR stops going up at a very nice rate, well, then strategies leverage Bitcoin. It's going to fail before Bitcoin fails.

But I don't think Bitcoin's going to fail, and I strongly believe that the ARR is going to continue it to be, you know, north of 20, you know, I mean, 30 or 40, very possibly. And so to pay, you know, to pay a boomer 11% dividends on a preferred and strip out the volatility, some of the volatility, not all of it, because you can go down 20%, if you're not patient, but strip out some of the volatility. you know, that strikes me as not unintelligent.

That strikes me as intelligent. Now, he's got to be careful not to get too far out over his skis. I mean, I think, you know, how far he pushes stretch is a question mark. And, you know, because as we do know, there are these drawdowns. But, I mean, my partner and I, David Pollard, we've, we've battle tested this thing. We've done all kinds of scenarios. I mean, you can't break this company. I mean, he's going to be totally fine.

And all this sailor hate to me is it's just a bare market phenomenon. And if I look at what he's done for the space overall, you know, this drawdown wouldn't have been just 50%. It would have been 70% if we hadn't had, you know, the strategy purchases that have taken place. And, you know, his activities have encouraged others. And I mean, it's, look, it's becoming institutionalists. And for those who say, well, I'm a purist, I mean, I think you should just hoddle and encourage others to hoddle. and it's money and all this other stuff is noise. That's just not realistic.

I mean, the fact of the matter is we have an existing Fiat financial system. And we need to, you know, the transition from a Fiat financial system to a purely Bitcoin system, which I believe is taking place, but we'll probably, you know, take more than my remaining lifetime to complete. But, you know, I think in 10, 20, 30, 40 years, it will complete. You know, it's, you've got to go through. There have to be fiat related. products that are that are Bitcoin backed like strategy and and to me that's okay that's that's a

positive so um I'm not I'm not in the hate sailor camp I'm I respect sailor and I think what he's doing is is smart and correct and like the odds of him failing at it are quite low so I'm I'm a big strategy shareholder and comfortable being so yeah I mean I agree with the vast majority of that I do think for most people you're better just owning the asset rather than owning you know I don't disagree. I mean, my actual cold storage Bitcoin holdings are much, much larger than my strategy holdings. But my micro strategy holdings are not trivial. I mean, it's a meaningful. It's a meaningful number. And because it can and will outperform Bitcoin. And by the way, I may trim it at some point in time. I mean, I think in an up cycle, you know, it may go back to an MNAV premium of, you know, I don't know,

one three, one five, one seven, one eight. And, you know, they may come. a time where, okay, Bitcoin's up, you know, we're at the top of the power law, you know, my strategy's way up, you know, we're trading in a big MNAP. And I might sell it, you know, because, you know, I know how these things work. I mean, it is sacriacal. And, you know, I think one of the things that I think people were afraid right now, I think one thing they should do is they should go buy Fred Kruger's book on Bitcoin One Million and read it and understand how, and look, get on, get on X and look at Giovanni's work on the

power law and just understand how powerful this power law thing is. You know, it's, it's perfectly marked all these bottoms. And if we're not at one right now, we're very, very close. And I, you know, could we work down into the 50s? Maybe. You know, maybe, but we won't stay there a lot. And, you know, my sense is that, you know, once this bottom is in place, you know, the next leg up takes us to kind of 180 minimum and maybe up into the

twos, hard to say. but, you know, and that's what the power law predicts. Yeah. I mean, with the, like, how strategy you perform in the next bull market, I could believe it goes to 1.5, 1.6, something around there. What I don't understand is people that think it's going to go back to, like, a 3xM nav. Like, there's no way that those shares don't get diluted before it gets there. Like, I don't see that ever happening.

Totally agree. Totally agree. I mean, those early days were kind of unique, and we won't ever see that again. But, you know, it should trade at an MNAF premium to the degree that he can access credit markets and source capital, you know, at well below the Bitcoin ARR. I mean, you know, I mean, Hugo Stennis did this in Weimar, Germany, right? I mean, he borrowed money cheap and he used it to buy real stuff. And then when the currency hyperinflated, he paid back the debt with, you know, with paper with hyperinflated currency. And that's all Sailor is doing.

he's just doing a financial arbitrage where he can borrow money at, you know, in the stretch case, you know, 11.5, I mean, probably be 12 soon. When you borrow money, you know, relatively cheap, put it in an asset that's growing at 30, you know, it was at 40 now probably trending towards 30. And the shareholders capture the difference. And so, you know, to me, that works. So it's not, there's nothing more complicated about it than that. And, you know, look, if Bitcoin fails, he's screwed.

You know, if Bitcoin, ARR, goes down, he's screwed. I mean, how does that happen? I was on another pile this morning. I said, there are only two ways that happens. One, if something technically occurs that just proves that, you know, 16 years and 900 and some about thousand blocks, you know, it's not going to work. Or adoption really slows and people stop buying it and there's just no, no growth in the underlying adoption of the asset. And I just don't see that. I, you know, I see, I see more and more groups, entities, ETFs, etc. I mean, it's just, it's getting more and more broadly. distributed and and it'll continue to do so.

Yeah, I don't see that happening either. I do wonder whether this sort of 20% drawdown. I know he's had drawdowns from the $100 sort of part. Yeah, there were a couple of others. If I look back, let me just look at my screen here. I'll tell you. This is definitely the deepest one. Back in November, it got down to like 90.

Yeah, November got to 90. Yep. And then he had another one in February. It got to 93. Yeah, no, this is the worst one. This is the worst one by far. So you know, like, the real institutional investors far better than I probably ever will. Do you think this will put people off, like, the big money looking at this off?

Oh, yeah. Oh, yeah. Some of it, it'll put some of them off for sure. I mean, it, you know, it, yeah. I mean, it's, I mean, heck, it, you know, it put, it put me off to an extent. I mean, I, you know, I own some. you know, and I didn't sell it, but then, you know, it wicked down to this.

I was like, no, this is ridiculous. I mean, this is, you know, he's got this covered. And, I mean, you mean to tell me you're going to pay me 11% plus I get to buy this in the 80s, you know, and it can return to par, so I could pick up another 15% there. That's just too good a deal, you know. But I, you know, I kind of, when I bought it originally, I always kind of knew that it was a sort of, of thing that if people got freaked out about Bitcoin, it could do this. I mean, this is a, you know,

it was kind of a correlation to one event with Bitcoin. And it's, it's a little bit of a sentiment indicator on Bitcoin. I don't think people fully understand it. And, you know, let's let's face it. And I mean, the sentiment right now in our space, it's really bleak. I mean, it's really, really bleak, which historically as a professional investor having been doing this for 40 years, that's a very, very good time to be by, but it also doesn't feel comfortable. You know, I mean, I know that buying this morning, I'm kind of like, shit, maybe it goes to 70, right? I don't know.

But now I got to nibble at this, right? I mean, in the 10 years I've been in Bitcoin, I think the sentiment is the worst it's ever been. And I've said this before on the podcast, but I think it's because there's nothing to point at, not necessarily as tangible at least. Like when they crashed in 20, 24 or whenever it was, 23 with, F-TX. There was huge fraud in that space, and you could point at why it was crashing and be like, it's Sandbachman-Fri's fault, it's three-eros capital, it's lunar, and it's not that anything's

wrong with Bitcoin. I think now people are questioning whether Bitcoin is going to do what we think it's going to do. I'm not questioning that, but I think maybe the broader market is, and I think that's one of the reasons why sentiment is so bad. But on the stretch thing, I've got one more question on this. I assume you can short-stretch, right? I don't know. Yeah, I would imagine you could. Yeah, I mean, you've got to pay the dividend, right? Yeah, so, like, if you, obviously, like, funding rates might be high.

It might not make a lot of sense to short it all the time at 100. But, like, are these drawbacks always going to happen because people can short at 100? They know it's not going to go above that. All they have to do is pay the funding on the contract. Maybe. Maybe. I mean, yeah, it's, you know, you've got to pay the dividend, though, if you're short the stock. So, you know, you've got a negative 11%. So, you know, it's very risky.

Yeah, it's risky. I mean, but, but obviously if you, if you felt like you knew when, when, you know, we were going to have one of these cascading events where everyone kind of freaked out on Bitcoin, you know, or on strategy, well, fine. I mean, it's, you know, it's, it's interesting. I mean, the, the big money has gotten into this space. And, you know, my sense is that they're testing sailor, you know, at a lot of different levels. They're testing them on stretch.

They're testing it on MSTR. You know, I think he's going to pass the test with flying colors. And I think there are going to be some people who are going to be on the wrong side of these trades. They're going to get their faces ripped off. But, you know, there's a lot of capital out there that can, you know, play this game. And, you know, it's, you know, it is what it is. I mean, it's a very volatile asset. I mean, the way I look at it, we math it out.

I mean, $120,000 Bitcoin, you know, $200,000 Bitcoin is an $800 stock. I mean, it's, you know, you buy it right now for $116, 112 today. It's down another $4 bucks. So, you know, to me, it's, it's a, it's a very, very leveraged play. And, you know, do I think Bitcoin's going to go up 8x in this next run? No, I think it'll probably go up 4x. But, you know, you take Bitcoin from 60 or 3x. take Bitcoin with 60 to 180 and you've got a three-bagger.

You know, you take Bitcoin from 60 to 180, and I think micro strategy is a five to eight bagger, depending upon what happens to them now. So, you know, that's what you're playing for. But in turn, you know, you get the outside. Yeah. You could say Bitcoin's going to go up 2x or Bitcoin's going to go up 100x, and I'll agree with you.

I just the time frame changes. Like at some point, you know. Look, I think the cycles will continue. This will be, you know, I mean, look, I'd like to have it go up a X on the next uprun. But I, if you kind of look historically at the upruns, the multiple cuts has gotten progressively smaller, you know, as it gets more widely distributed. And that makes sense, just like the drawdowns have gotten smaller. So yeah, it's totally logical, right?

I do, I do think, though, if this is a stress test for a sailor, that's got to be a good thing. Like, whether you love sailor, like, someone holding that much Bitcoin, like, they need to be stress tested to the highest degree. and assuming he comes out of this well, which I think he probably will, like that's good. That's a good thing. Absolutely.

Absolutely. I mean, that's, look, it's amazing to me that more people don't see it, and it's amazing to me how much hate there is out there. And I just, I don't get it. You know,

I just don't get it. So. I do think some of the hate comes from the position where maybe they don't necessarily hate Saylor, they don't necessarily hate what he's doing, but I think, a lot of people don't like that retail's being dragged into buying micro

strategy or stretch over just buying the underlying asset. And I think maybe some of the hate is to try and address that. I'm sympathetic to that. I'm sympathetic to that. I mean, I think retail, you know, look, if you really want to protect yourself financially, your absolute first move has got to be to buy the native Bitcoin and

cold store it, full stop. Because, you know, they could 6102 you with an ETF and, you know, all the other stuff. I mean, you know, you got to, it's a Bitcoin or you've got to start off owning native Bitcoin in your own self-cussy. That's, that's, I always believe and preach that. Now, if you then decide you want to do some other stuff, you know, for the obvious reasons that I've just talked about, you know, with a smaller percentage. And okay, fine. I mean, I, you know,

earlier I said don't use leverage. And of course, here I am advocating use a leverage with my strategy. But, but I want to point out that, you know, my micro strategy position is probably less than 10% of my Bitcoin position. So, you know, I'm, I'm playing around. at the margin, not betting the farm on micro strategy. Yeah, exactly. It's all about how you position. But I mean, and who am I to tell anyone what they should do with their money? I just think there's nothing more powerful in owning self-gusty Bitcoin.

That's what people should be striving for. Absolutely. I mean, it's what, you know, and we need to do it. And more people need to do it. And, you know, the ETFs are good, but they're not great. And, you know, I mean, I get a little worried, and we haven't talked about this at all, but I get a little worried about what happens if and when, you know, we get a blue team instead of a red team.

And, you know, they start to, you know, tax the hell out of, I mean, just saw Illinois put it to tax it, they want to grab it, they want to, you know, outlaw. I mean, you know, they're not particularly, you know, friendly to this stuff. And so, you know, I mean, they could grab the ETFs like they did with gold, et cetera, et cetera. So, you know, I like knowing that, you know, 12 words, I can go to any country in the world and live and tell the U.S. government to pound sand.

if they want all my money. So that's still the original and best use case for Bitcoin. I mean, 100% agree. Why do you think SATA has done reasonably well while Stretch has been struggling? That's a great question. You know, James Lavish, my partner at BOF, is on the board there, and I haven't talked to him about it. I think it might be they're not as big a target as a strategy. I think it also might be they're not as leverage.

I don't know. I haven't even looked at that. I could be wrong. Maybe they're more leveraged. But I think, you know, I think strategy, one thing is I think this might be informing Michael about two is he might be looking at this and say, okay, we probably push this just about as far as we can go for now. In other words, you know, I mean, well, one, he doesn't want to sell it, you know, down this cheap. But, but I mean, you know, there's, I mean, the balance he's always trying to figure out is how leverage does he want to get, right? I mean, he can always add leverage. But in a very volatile asset, there's a certain amount of danger. to that. And, you know, based on how stretch is performing right now, market might be saying, hey, dude, you kind of got to the point where you got enough leverage and we don't want you to get any more. You know what I mean? Yeah.

And I think, I think, strive, you know, their product, you know, they might not be quite as leverage and that might be why it's holding out a little better. I don't know. That's a hypothesis. I haven't checked out. I don't, for all I know, they're more leverage. I don't even know. I think they do have very low leverage, but I

could be wrong on that as well, to be honest. Larry, I always love talking to you, man. What's the key takeaway from this? Is it the Fet's Tracts? They're going to print buy self-dustly Bitcoin. Is it as easy as that? I think the key takeaway is, you know, let's go back to, you know, first principles 101, you know, what Safeedine taught us with a Bitcoin standard.

You're in this shit. You've got to have long time preference. Full stop. Anybody who's complain. And look, I mean, I know the feeling of wanting more money faster. all, that's, that's human nature. I mean, I, you know, I manage a gold and silver fund. I mean, the fund was up 175% last year, right? And this year we're kind of flat. I'm like, geez, I want that to happen again, you know? And, and it probably will, but not, not instantly. Do you know what I mean?

And so, you know, this, I mean, this is a, this is a, this is a decade-long trade, this monetary debasement trade. We, we will be proven wrong if the government becomes responsible. So that's what I'm watching for. I mean, you know, entitlement reform, cutting back on stuff, balancing the budget, all that kind of stuff. Hang on a second. We got to, we got to slow down here. But I don't see any of that. And so, you know, my view is just take a multi-year view of this thing. You know, we're in the right place. And, you know, I know there are a lot of people and I've got investors in my fund that I put into Bitcoin. They're like, God damn, man, it's at 60. I can't even bear it. And I know that two years from now, it'll be 180 and they'll be like, oh, God, it's 180.

I should buy more. I'm like, well, you could, but you know, you really should have been buying it back at 60. You know what I mean? And so it's just, it's very hard. I mean, so, you know, dollar cost averaging, you know, understanding the power law. I mean, compared in the power law model and compared to its 200 day moving average,

Bitcoin has only been this cheap about 10% of the time. So with that, if somebody came to, when somebody comes to me and says, should I buy some Bitcoin? I generally say yes, but you can only buy what you're willing to have a 50% drawdown on on and DCA the rest. but actually if somebody came to me and said, how much should I buy today? I'd say, you know, shoot your wad, shoot a big piece of your wad today

because we're in that band where it's cheap. And that's what's hard for people to see. I think 60,000, that's not cheap. You bought it at 10,000. That would be cheap. Well, it's never going there again. Okay, so, so, you know, and I'll wait until it gets to 40. Well, then you won't buy it because it's not going to 40.

You know, 60,000 using the models, the sophisticated model that's got a 95% R squared that Giovanni built and that Fred Kruger's elaborated on, you know, tells you that it's cheap right now, so buy it. So, you know, and then, I mean, the rest of it is just like, like go live your life. I mean, I'm, you know, I've dialed back a little bit on these shows. I've dialed back on, you know, making appearances and stuff.

I mean, I do the pods with people I really like like yourself. And, you know, I mean, I'm focusing on, you know, my family and fitness. And, you know, because I just want to make sure. I want to be around to see the failure of the central bankers. like I live for that. Okay. I mean, you follow my ex-feed, you know.

I hate central bankers. Absolutely hate it. And I want to, I want to be around to see them with egg on their face. Yeah, we need you around for that, Larry. You don't keep up the cross fit. Keep it going. I'm telling you, man. I'm aiming for it.

My mom's in her mid-90s. I'm turning 69 next week. You know, God damn it. You know, I'm aiming for 100. And I think by then we'll see it. So, you know, let's hope, let's hope I don't, you know, nothing happens and I can get there. But the point is that, you know, you got to dial out here, guys. I mean, it's going to be fine.

This is all going to be fine. I mean, as early as December, we could be, you know, high-fiving each other. I mean, you know, six weeks from now, the Fed's going to meet again. You know, his task force is going to have some great report and he's going to blame it. He's going to follow it, maybe, and say, you know, we actually need to reduce. or be thinking about reducing rates. They'll have, they'll probably have a couple of good prints

between now and then, because housing is soft, you know, particularly in Florida and Texas, and energy will be soft. And so, you know, and right now, you know,

the Fed-Fed-Wash site is saying there's like an 80% chance of a hike this year. Well, when the market wakes up and realizes they're not going to hike that, in fact, they're going to cut,

what do you think is going to happen to this ship? It's going to explode. You know, we're going to, I mean, you're going to see Bitcoin at 120 before you can blink your eye. You're going to see gold at 7,000 before you can blink your eyes. So, you know, am I willing to wait until December for that to happen?

Sure. Yeah, that's not, you know, I don't care. What have I got? I got nothing but time. I mean, am I, am impatient and frustrated? Sure, I am. You know, I blew the call. I really wish, I thought he was going to be dollars and I was wrong.

But they're pretty smart and they decided to change the game. Oh, let's go to this no guy. and let's reiterate how serious we are about tackling inflation. And, oh, and we're going to, we're going to, a new strategy, we've got a committee. We have a task force that's going to figure out how to solve this problem, and we're going to rely on them, and you're going to believe in me. Good God, what a bunch of crap. You know what I'm saying? Yeah, people see through this shit.

It's just, it's just total horseshit, Danny. You know it. I know it. So, you know, like, let's all just chill and stop attacking each other because it's all going to work out great. We're, you know, we're all going to be rich and, and eventually we'll have a sound money system and we won't have to deal with these jokers anymore. So.

So that's, I look forward to that future. That's where I am. You know what I mean? Hawkish now, doveish later. It's always the same. Tell everyone where they can go and buy your amazing book. Oh, yeah. Thanks for putting the book up.

is available on Amazon, hardcover, paperback, audio, Kindle, all that stuff. And, you know, I wrote it to try to help the average person understand how and why they're being screwed and how to solve it. And I've gotten feedback that it's worked. It works. Not for everybody, but for a lot of people, it works. And so if you like it, please pass it on to your friends. I mean, we've got to develop, we need a sound money army in the world so that, you know, we've, we've, we've, we've, we've vote for, push for, advocate for, make noise about, and eventually return to sound money, because when we do, things will be so much better. I mean, so many of our problems will go away. That's my strongly held belief. So hopefully we'll do it. There's some first turning shit right

there, and I can't wait for the first turning. Let's go. You'll have, you'll be married, you'll have kids. It's just going to be great, Danny. It's all going to be great. So let's still married to more kids, hopefully. Oh, still, oh, I'm sorry, I didn't realize you're married. You have a child? Yeah, I've got a daughter. Oh, I didn't realize that. Oh, I'm out of date.

I'm sorry. I didn't realize. That's all good. So more children. That's long-going. Yeah, exactly. There you go. All right, Larry.

Appreciate the time, man. You're one of my favorite people to speak to, and we'll do it again soon. Anytime. I love it, Danny. Thank you. Thank you.