00:00

So biology comes out, he says, I will take that bet. You buy one Bitcoin,

So biology comes out, he says, I will take that bet. You buy one Bitcoin,

00:04

and I'll I'll send one million

and I'll I'll send one million

00:07

dollars to an escrow.

dollars to an escrow.

00:09

To be clear, this is forty to one odds. So he's basically saying not only is this unlikely to happen. Like, if this is even odds, It would have been like, dang Ball is gonna lose a million dollars because Bitcoin's not likely to be worth a million dollars. Then he added in ninety days. Which is already a radical move. Then he said,

To be clear, this is forty to one odds. So he's basically saying not only is this unlikely to happen. Like, if this is even odds, It would have been like, dang Ball is gonna lose a million dollars because Bitcoin's not likely to be worth a million dollars. Then he added in ninety days. Which is already a radical move. Then he said,

00:27

and by the way, the million dollars versus one Bitcoin. Bitcoin's currently at twenty six thousand at this at the time he made this bet. He goes, forty to one odds that I'm laying you.

and by the way, the million dollars versus one Bitcoin. Bitcoin's currently at twenty six thousand at this at the time he made this bet. He goes, forty to one odds that I'm laying you.

00:43

Alright. We got an episode here with pomp, Anthony Pompliano, who you may know as the Bitcoin guy. He's huge all over YouTube, Twitter, everywhere else.

Alright. We got an episode here with pomp, Anthony Pompliano, who you may know as the Bitcoin guy. He's huge all over YouTube, Twitter, everywhere else.

00:51

He came on. We're actually gonna do this as a two part episode because at the beginning,

He came on. We're actually gonna do this as a two part episode because at the beginning,

00:56

It was all business. We were business in the front. We were talking about this crazy million dollar apology bet where he's betting that Bitcoin is going to a million dollars in the next ninety days. We talk about that. Why biology thinks it? What we think about the bet? And Pompe does a, you know, I don't know, econ one zero one where he explains

It was all business. We were business in the front. We were talking about this crazy million dollar apology bet where he's betting that Bitcoin is going to a million dollars in the next ninety days. We talk about that. Why biology thinks it? What we think about the bet? And Pompe does a, you know, I don't know, econ one zero one where he explains

01:14

what's going on with the banking system from his perspective.

what's going on with the banking system from his perspective.

01:17

That was good. But here's the thing though,

That was good. But here's the thing though,

01:20

in that episode, the whole episode is about something that's gonna happen inside the next ninety days. So if you're gonna, like, it is a little fearful listening to it, and so actually listen to the whole thing, because and do it now because we're talking about something that's happening in ninety days. And then go ahead. The second episode was way more fun, and

in that episode, the whole episode is about something that's gonna happen inside the next ninety days. So if you're gonna, like, it is a little fearful listening to it, and so actually listen to the whole thing, because and do it now because we're talking about something that's happening in ninety days. And then go ahead. The second episode was way more fun, and

01:35

it was pretty wild. Go ahead. We talk about his business empire, you know, what he's building and why he's building it that way, why he gave back all the money from his fund and shut that down, why he It's huge. Turned off all his advertisers, millions of dollars of advertisers, what he's doing instead. So we talked about that. And then we talked about it then it went off the wall. And, the the pod a little crazy, but in a great way. I think people are gonna you're gonna love part two.

it was pretty wild. Go ahead. We talk about his business empire, you know, what he's building and why he's building it that way, why he gave back all the money from his fund and shut that down, why he It's huge. Turned off all his advertisers, millions of dollars of advertisers, what he's doing instead. So we talked about that. And then we talked about it then it went off the wall. And, the the pod a little crazy, but in a great way. I think people are gonna you're gonna love part two.

01:58

He broke down, like, all of his businesses and how they work. It's very impressive. It it was pretty wild. And,

He broke down, like, all of his businesses and how they work. It's very impressive. It it was pretty wild. And,

02:04

it was it was he's he's impressive. He's significantly more impressive than a lot of people think, I think, because there's way more time to scenes. Pretty funny stories, which pump is usually he's pretty buttoned up on his on his main channel because he's talking finance. He's talking serious, but he tells some pretty funny stories. So the second part two is the more fun episode episode. Part one is a more serious episode. I think you'll like them both.

it was it was he's he's impressive. He's significantly more impressive than a lot of people think, I think, because there's way more time to scenes. Pretty funny stories, which pump is usually he's pretty buttoned up on his on his main channel because he's talking finance. He's talking serious, but he tells some pretty funny stories. So the second part two is the more fun episode episode. Part one is a more serious episode. I think you'll like them both.

02:24

And we have to remind you guys that our episodes, we work really, really hard. And unlike every other

And we have to remind you guys that our episodes, we work really, really hard. And unlike every other

02:31

type of podcast out there, our stuff's not free, but you don't pay with money. All you have to do is go to our YouTube page. We call this the gentleman's agreement. What is it? The lady's understanding The lady's understanding.

type of podcast out there, our stuff's not free, but you don't pay with money. All you have to do is go to our YouTube page. We call this the gentleman's agreement. What is it? The lady's understanding The lady's understanding.

02:42

You go to our YouTube page, and the reason it's called that is because it's an understanding. It's an agreement. We be there behind your screen to check this otherwise we would, but everyone's doing it. So just go ahead and do it and click subscribe on YouTube, and then just go ahead and do that on Spotify and iTunes because

You go to our YouTube page, and the reason it's called that is because it's an understanding. It's an agreement. We be there behind your screen to check this otherwise we would, but everyone's doing it. So just go ahead and do it and click subscribe on YouTube, and then just go ahead and do that on Spotify and iTunes because

02:57

the more you do that, the more our volume goes up, and we get more downloads and we could do keep doing this type of stuff. Pom ain't gonna come on to episodes like this if if we don't have a big listenership. Same with all the other guests. Alright. Enjoy.

the more you do that, the more our volume goes up, and we get more downloads and we could do keep doing this type of stuff. Pom ain't gonna come on to episodes like this if if we don't have a big listenership. Same with all the other guests. Alright. Enjoy.

03:11

Pump. We're live, by the way. We we always jump right into this thing. No small talk.

Pump. We're live, by the way. We we always jump right into this thing. No small talk.

03:16

Let's go. What do you guys wanna talk about? Dude, I'm so glad you're here. You are

Let's go. What do you guys wanna talk about? Dude, I'm so glad you're here. You are

03:21

You are the Ryan Seacrest of the of the industry. You are the hardest working man and content entertainment.

You are the Ryan Seacrest of the of the industry. You are the hardest working man and content entertainment.

03:27

I'm so glad you're not doing your, like, five AM

I'm so glad you're not doing your, like, five AM

03:30

show anymore.

show anymore.

03:33

I'm sure you're also pretty glad you're not doing that every morning. How does it feel to get some sleep?

I'm sure you're also pretty glad you're not doing that every morning. How does it feel to get some sleep?

03:39

I've always slept, pretty well, but the content stuff is, it's the best way in the world to learn. You put information ideas out there. And the people who agree or have, like, things to add, they're super constructive and they respond to emails. They tweet at you. They do all that stuff. And then the people who vehemently disagree, they make their voice heard, you know, very well. And so you, like, quickly figure out, like, good ideas, bad ideas, and then you also get all these, like, rabbit hole go down. And I think that probably the reason why, you know, YouTube, myself, and many of the other people that we all know and spend a lot of time talking to, we enjoy it Like, the internet is this amazing thing that we all get to use on a daily basis. And so, creating content I found is just this great way to, to elicit like minded people and, and to learn.

I've always slept, pretty well, but the content stuff is, it's the best way in the world to learn. You put information ideas out there. And the people who agree or have, like, things to add, they're super constructive and they respond to emails. They tweet at you. They do all that stuff. And then the people who vehemently disagree, they make their voice heard, you know, very well. And so you, like, quickly figure out, like, good ideas, bad ideas, and then you also get all these, like, rabbit hole go down. And I think that probably the reason why, you know, YouTube, myself, and many of the other people that we all know and spend a lot of time talking to, we enjoy it Like, the internet is this amazing thing that we all get to use on a daily basis. And so, creating content I found is just this great way to, to elicit like minded people and, and to learn.

04:22

So I was,

So I was,

04:23

pump. I we have a lot to talk about, and we'll do, like, a proper intro in a second, but I was talking to my friend Jason Yana who you guys used to work together. He worked for you. Now he has his own company, and Jason works pretty hard. He told me that you were the hardest person. Always used to work for you?

pump. I we have a lot to talk about, and we'll do, like, a proper intro in a second, but I was talking to my friend Jason Yana who you guys used to work together. He worked for you. Now he has his own company, and Jason works pretty hard. He told me that you were the hardest person. Always used to work for you?

04:38

He he, him and his partner, Mike Polito, they were, the two guys who helped me start the podcast initially. They, they tricked me. They literally came to me and they were like, hey, you should have a podcast. And I was like, what's a podcast? And they were like, you know, like, all these other examples. And then I was like, I don't know how to do that. They're like, what we do And little did I know they had no clue what they were doing. They instead convinced me to do a podcast, and then they deemed. I'm pretty sure Gary Vaynerchuk's like podcast guy. Was like, hey, we're gonna start a podcast. Like, what equipment do we need?

He he, him and his partner, Mike Polito, they were, the two guys who helped me start the podcast initially. They, they tricked me. They literally came to me and they were like, hey, you should have a podcast. And I was like, what's a podcast? And they were like, you know, like, all these other examples. And then I was like, I don't know how to do that. They're like, what we do And little did I know they had no clue what they were doing. They instead convinced me to do a podcast, and then they deemed. I'm pretty sure Gary Vaynerchuk's like podcast guy. Was like, hey, we're gonna start a podcast. Like, what equipment do we need?

05:05

It's like kudos to those guys. That was pretty Good hustle. And now they have a media company that does tens of millions of dollars, whatever. It worked out. And Jason works pretty hard.

It's like kudos to those guys. That was pretty Good hustle. And now they have a media company that does tens of millions of dollars, whatever. It worked out. And Jason works pretty hard.

05:14

Jason told me that you're the hardest working person he's ever been with. He said that they used to work at your office seven days a week and that you just were nonstop. But then when I went off to dinner with you recently, you told me your schedule. It didn't sound very hard. It sounded just normal. So which is it? Well, which is true?

Jason told me that you're the hardest working person he's ever been with. He said that they used to work at your office seven days a week and that you just were nonstop. But then when I went off to dinner with you recently, you told me your schedule. It didn't sound very hard. It sounded just normal. So which is it? Well, which is true?

05:31

I think it's probably both. So one of the things, I always use as a framework is,

I think it's probably both. So one of the things, I always use as a framework is,

05:36

there's kind of gas and breaks in life. And so at certain points, You need to hit the gas. And other times, you can kinda, like, let your foot off the gas coast as the car, and then other times you need to hit the brake and knowing when to hit the gas, when to hit the brake, is pretty important actually. You don't wanna kinda be hitting the gas when there's a wall in front of you. Like, you wanna make sure you, are able to kinda go all in when, when it's necessary. But the second thing is you gotta last. Right? You can't just sprint all the time. And no matter how athletic you are, you gotta have some level of endurance. And so that's probably one of the things that I've really, learned to do over the years. I wasn't great at it at the beginning now. I'm probably pretty good at it. But, you know, we're recording this on Monday. Yesterday was Sunday, record a podcast Sunday morning at, you know, eleven o'clock in the morning after I did a two hour meeting with a friend at nine AM. And a lot of people were like, that sounds crazy. But I'm like, no. What did you do? You, like, went and did all your hobbies. I have no hobbies. I literally hang out with my family and I work, but I do it because I enjoy And so if you enjoy doing it, like, this isn't hard. I'm, like, looking forward to today talking to you two because I'm, like, you know what? They're probably gonna be ridiculous. Probably gonna have a lot of fun and we're gonna learn something from each other. Like, how lucky are the three of us?

there's kind of gas and breaks in life. And so at certain points, You need to hit the gas. And other times, you can kinda, like, let your foot off the gas coast as the car, and then other times you need to hit the brake and knowing when to hit the gas, when to hit the brake, is pretty important actually. You don't wanna kinda be hitting the gas when there's a wall in front of you. Like, you wanna make sure you, are able to kinda go all in when, when it's necessary. But the second thing is you gotta last. Right? You can't just sprint all the time. And no matter how athletic you are, you gotta have some level of endurance. And so that's probably one of the things that I've really, learned to do over the years. I wasn't great at it at the beginning now. I'm probably pretty good at it. But, you know, we're recording this on Monday. Yesterday was Sunday, record a podcast Sunday morning at, you know, eleven o'clock in the morning after I did a two hour meeting with a friend at nine AM. And a lot of people were like, that sounds crazy. But I'm like, no. What did you do? You, like, went and did all your hobbies. I have no hobbies. I literally hang out with my family and I work, but I do it because I enjoy And so if you enjoy doing it, like, this isn't hard. I'm, like, looking forward to today talking to you two because I'm, like, you know what? They're probably gonna be ridiculous. Probably gonna have a lot of fun and we're gonna learn something from each other. Like, how lucky are the three of us?

06:42

Two out of three ain't bad. So

Two out of three ain't bad. So

06:45

let's, we gotta get to this crazy biology bet. And then I'm gonna ask you what you're doing with your life after that because I think you've gotta catch a little empire. You have to set the stage for who he is. Right?

let's, we gotta get to this crazy biology bet. And then I'm gonna ask you what you're doing with your life after that because I think you've gotta catch a little empire. You have to set the stage for who he is. Right?

06:56

Who pomp is? Okay. So let's start with who pomp is.

Who pomp is? Okay. So let's start with who pomp is.

07:00

I think you're known as, like, the Bitcoin guy, I would say. That's the that's kinda how you built your brand. You've obviously

I think you're known as, like, the Bitcoin guy, I would say. That's the that's kinda how you built your brand. You've obviously

07:08

done a lot more than that before that. I think you worked at Facebook and even Snapchat for a little quick lunch and,

done a lot more than that before that. I think you worked at Facebook and even Snapchat for a little quick lunch and,

07:15

and and so you worked in tech.

and and so you worked in tech.

07:17

You,

You,

07:18

started to build a big following on Twitter

started to build a big following on Twitter

07:20

are around crypto and Bitcoin,

are around crypto and Bitcoin,

07:23

built one of the bigger, like, newsletters and brands in that space.

built one of the bigger, like, newsletters and brands in that space.

07:26

And since then launched a bunch of, like, you know,

And since then launched a bunch of, like, you know,

07:29

businesses around it. So you had a, you got a VC. You sort of had your own, you know, VC fund or you worked at VC fund and launch your own. You,

businesses around it. So you had a, you got a VC. You sort of had your own, you know, VC fund or you worked at VC fund and launch your own. You,

07:36

have like a kind of like a crypto jobs company. You have a bunch of things in that ecosystem. Since then, I think you've you've you've made some changes now. So I so I wanna hear about those in a in a bit. But then we have this biology bet. And, pump, why don't you

have like a kind of like a crypto jobs company. You have a bunch of things in that ecosystem. Since then, I think you've you've you've made some changes now. So I so I wanna hear about those in a in a bit. But then we have this biology bet. And, pump, why don't you

07:49

just give us the quick sixty seconds on who biology is, and then we'll we'll frame what this what this crazy bed is. And then I have some inside info also. Alright. So I don't wanna be a spokesperson for Balaji. So, and everything I said is my opinion. This is my description of him. This is my description bet.

just give us the quick sixty seconds on who biology is, and then we'll we'll frame what this what this crazy bed is. And then I have some inside info also. Alright. So I don't wanna be a spokesperson for Balaji. So, and everything I said is my opinion. This is my description of him. This is my description bet.

08:05

But Blahashi Street of Boston, is probably best known now,

But Blahashi Street of Boston, is probably best known now,

08:09

for being one of the more, kind of public figures to have predicted a lot of what happened for COVID.

for being one of the more, kind of public figures to have predicted a lot of what happened for COVID.

08:15

He was very early calling out, hey, this is a risk. If this risk becomes a reality, here's how bad it could get. And, you know, again, as with predictions, a lot of it was right, some of it was wrong, but generally, I think people point back and they're like, man, we should have listened to that guy. He then went on, like, a two or three year heater where he kept making predictions and kept being right about a lot of things.

He was very early calling out, hey, this is a risk. If this risk becomes a reality, here's how bad it could get. And, you know, again, as with predictions, a lot of it was right, some of it was wrong, but generally, I think people point back and they're like, man, we should have listened to that guy. He then went on, like, a two or three year heater where he kept making predictions and kept being right about a lot of things.

08:36

And so the internet kind of,

And so the internet kind of,

08:39

rallied around this idea of, like, the worst words to ever hear was Balaji was right.

rallied around this idea of, like, the worst words to ever hear was Balaji was right.

08:43

And so when you build that type of, kind of following and that type of,

And so when you build that type of, kind of following and that type of,

08:48

reputation,

reputation,

08:49

now people put a lot of weight when you say something. And so his latest thing is Bitcoin is going to hit a million dollars in the next ninety days,

now people put a lot of weight when you say something. And so his latest thing is Bitcoin is going to hit a million dollars in the next ninety days,

08:58

which sounds absolutely insane bit points trading at twenty seven thousand dollars, it's like, you know, whatever forty x from here and to do it in ninety days. Like, we've never seen an asset really ever do that before.

which sounds absolutely insane bit points trading at twenty seven thousand dollars, it's like, you know, whatever forty x from here and to do it in ninety days. Like, we've never seen an asset really ever do that before.

09:08

Now

Now

09:09

I don't agree that that is highly likely. I would put it at, like, maybe, I don't know, five percent chance, which is actually much higher than probably most people would put it

I don't agree that that is highly likely. I would put it at, like, maybe, I don't know, five percent chance, which is actually much higher than probably most people would put it

09:19

but to me, the most interesting part is, like, the reasoning behind why he's saying this. And,

but to me, the most interesting part is, like, the reasoning behind why he's saying this. And,

09:24

you know, I think it's important to call out the Bellagie's bet is like the best meme of twenty twenty three. He was able to essentially create a meme that has caused millions of people to now talk about this idea

you know, I think it's important to call out the Bellagie's bet is like the best meme of twenty twenty three. He was able to essentially create a meme that has caused millions of people to now talk about this idea

09:36

of hyperinflation,

of hyperinflation,

09:38

bank failures,

bank failures,

09:39

and Bitcoin. And I think that's ultimately what he was trying to do. So if you asked him in a private room, like, Do you really think Bitcoin's gonna be a million dollars in ninety days? He's putting two million dollars on the line. So, like, he definitely thinks there's a chance, but I don't know if he's at, like, ninety nine point nine nine nine percent likely or if he's trying to call attention to it. What's two million to him? Is that a big deal or no?

and Bitcoin. And I think that's ultimately what he was trying to do. So if you asked him in a private room, like, Do you really think Bitcoin's gonna be a million dollars in ninety days? He's putting two million dollars on the line. So, like, he definitely thinks there's a chance, but I don't know if he's at, like, ninety nine point nine nine nine percent likely or if he's trying to call attention to it. What's two million to him? Is that a big deal or no?

09:59

It's hard to tell.

It's hard to tell.

10:01

So Blagie,

So Blagie,

10:02

before he became known as the, like, Blagie was right guy. He built and sold a number of companies.

before he became known as the, like, Blagie was right guy. He built and sold a number of companies.

10:08

I think at least two that I know of had nine figure exits. Like, he's, like, real. Right? He he's a great entrepreneur.

I think at least two that I know of had nine figure exits. Like, he's, like, real. Right? He he's a great entrepreneur.

10:14

He worked at Andrews and Horowitz for a while.

He worked at Andrews and Horowitz for a while.

10:16

He was that coin base as the CTO. Like, he's a very real entrepreneur and investor, and so he he he's done well for himself financially. But, like, I don't care how rich you are. You don't go publicly bet people two million dollars on,

He was that coin base as the CTO. Like, he's a very real entrepreneur and investor, and so he he he's done well for himself financially. But, like, I don't care how rich you are. You don't go publicly bet people two million dollars on,

10:27

Twitter unless you have some degree of confidence because in some way, like, two million may or may not be a big number. Like, your personal reputation

Twitter unless you have some degree of confidence because in some way, like, two million may or may not be a big number. Like, your personal reputation

10:36

is, you know, quote unquote priceless. And so, like, that's basically what he's staking here is he's using the money to draw attention

is, you know, quote unquote priceless. And so, like, that's basically what he's staking here is he's using the money to draw attention

10:42

to what he's saying, but really he's staking his reputation on something that a lot of people think is absolutely insane at the moment. And the bet started because this guy Metlock. I actually don't know who I I forget his first name, but he basically tweeted something and it said, like, hyperinflation

to what he's saying, but really he's staking his reputation on something that a lot of people think is absolutely insane at the moment. And the bet started because this guy Metlock. I actually don't know who I I forget his first name, but he basically tweeted something and it said, like, hyperinflation

10:56

is not going to happen. And then,

is not going to happen. And then,

11:01

biology replied and said, I actually think it will happen. And in fact, I'll bet I'll take your million dollar bet that hyperinflation is gonna happen in the next ninety days. And this is related to the Bitcoin. I or that's another bet on top of the Bitcoin one. Then you wrote wrote this post. And you had one line. You had a couple lines in there that I hated.

biology replied and said, I actually think it will happen. And in fact, I'll bet I'll take your million dollar bet that hyperinflation is gonna happen in the next ninety days. And this is related to the Bitcoin. I or that's another bet on top of the Bitcoin one. Then you wrote wrote this post. And you had one line. You had a couple lines in there that I hated.

11:20

And I hated, I mean,

And I hated, I mean,

11:22

it was like it stung me

it was like it stung me

11:24

one of them was you quoted, Lennon, you know,

one of them was you quoted, Lennon, you know,

11:27

one of the folks who ran the Soviet Union, you said there are decades where nothing happens, and then there are weeks where decades happen. You said that, and then you had a few other lines and I started reading this and I got scared. I, like, I was legitimately scared and I texted you and I was like, is this real? And you're like,

one of the folks who ran the Soviet Union, you said there are decades where nothing happens, and then there are weeks where decades happen. You said that, and then you had a few other lines and I started reading this and I got scared. I, like, I was legitimately scared and I texted you and I was like, is this real? And you're like,

11:44

maybe maybe not. I I forget exactly what you said, but, you wrote this in such a way that I was, I I was fearful.

maybe maybe not. I I forget exactly what you said, but, you wrote this in such a way that I was, I I was fearful.

11:52

Yeah. So I definitely don't wanna fear monger, but I do think that, there have been two points now in the last three years where it's like kind of shake people and wake them up and be like, hey, pay attention right now. The first was, during March of twenty twenty. I wrote a couple of different pieces. People had similar reactions to it. And, you know, one of the pieces was like, I I basically was arguing that unemployment was going to be double digits and millions and millions of people were gonna lose their, jobs And I had people, like, privately emailing and be like, you are insane. Please stop fear mongering. Like, this is crazy. And then the next week, six point six million people filed unemployment claims. Right? And so, like, if Balaji is, like, a plus, I'm, like, d minus maybe in analyzing some of this stuff.

Yeah. So I definitely don't wanna fear monger, but I do think that, there have been two points now in the last three years where it's like kind of shake people and wake them up and be like, hey, pay attention right now. The first was, during March of twenty twenty. I wrote a couple of different pieces. People had similar reactions to it. And, you know, one of the pieces was like, I I basically was arguing that unemployment was going to be double digits and millions and millions of people were gonna lose their, jobs And I had people, like, privately emailing and be like, you are insane. Please stop fear mongering. Like, this is crazy. And then the next week, six point six million people filed unemployment claims. Right? And so, like, if Balaji is, like, a plus, I'm, like, d minus maybe in analyzing some of this stuff.

12:34

But at least what I wanna do is call attention to, like, hey, this is serious and, like, you should pay attention,

But at least what I wanna do is call attention to, like, hey, this is serious and, like, you should pay attention,

12:40

because if this goes the wrong way,

because if this goes the wrong way,

12:42

it could be catastrophic not only for people, with their personal finances, but also, like, as a nation. And I think it's also important to call out that, like, yes, it is important But I don't think most people want this stuff to happen. Right? Like, the United States of America is this amazing place. There's millions of peoples around the world that try to come to this country and it's because we have democracy and capitalism and stability and like all the things that we know make this country great. If we were to lose some of that stuff, Like, this isn't about a financial product or an asset going up or down in price. It's like if there is complete chaos in a country,

it could be catastrophic not only for people, with their personal finances, but also, like, as a nation. And I think it's also important to call out that, like, yes, it is important But I don't think most people want this stuff to happen. Right? Like, the United States of America is this amazing place. There's millions of peoples around the world that try to come to this country and it's because we have democracy and capitalism and stability and like all the things that we know make this country great. If we were to lose some of that stuff, Like, this isn't about a financial product or an asset going up or down in price. It's like if there is complete chaos in a country,

13:15

people don't care about what currency they're holding. Like, they want guns.

people don't care about what currency they're holding. Like, they want guns.

13:19

Right? And, like, that's not a world we wanna live in. And so I think it's less about, kind of finance and and kind of investing, and it's much more about, like, pay attention to this serious situation that's playing. I think that's what Blahashi's doing with this bet. That's why I tried to get across with the piece that I wrote, last week. You also had this other line where you said bodies keep floating or you said, a friend yesterday told me bodies keep floating to the surface. Meaning,

Right? And, like, that's not a world we wanna live in. And so I think it's less about, kind of finance and and kind of investing, and it's much more about, like, pay attention to this serious situation that's playing. I think that's what Blahashi's doing with this bet. That's why I tried to get across with the piece that I wrote, last week. You also had this other line where you said bodies keep floating or you said, a friend yesterday told me bodies keep floating to the surface. Meaning,

13:41

the Silicon Valley Bank. That's just one body, and we're gonna keep seeing more bodies. And so you, like, used a language

the Silicon Valley Bank. That's just one body, and we're gonna keep seeing more bodies. And so you, like, used a language

13:47

that, I'm fairly on I mean, I have a high level understanding of this stuff. So nowhere close to a lot of smart people, but you use language that that stung me. And when I see people who, like you who write like that, it's almost like, this is how I describe Malcolm Gladwell. When I read his books,

that, I'm fairly on I mean, I have a high level understanding of this stuff. So nowhere close to a lot of smart people, but you use language that that stung me. And when I see people who, like you who write like that, it's almost like, this is how I describe Malcolm Gladwell. When I read his books,

14:04

they're so convincing. Tucker Max is not the guy who does this. He's they're so convincing because they're such good writers, and they're so so good at just explaining their points that I have to remember that like, a Malcolm Gladwill book, it's like, dude, this is all just,

they're so convincing. Tucker Max is not the guy who does this. He's they're so convincing because they're such good writers, and they're so so good at just explaining their points that I have to remember that like, a Malcolm Gladwill book, it's like, dude, this is all just,

14:19

a theory. And I could probably find lots of examples of why he's wrong but he's so good and you are so good at writing about it that I I begin to believe you and I have to, like, pinch myself sometimes. Like, wait, this is just his opinion, and there's actually people that are probably equally smart and equally experienced that have a different opinion. And I find that to be that whole thing though, I find it to be very confusing and and I and unsettling.

a theory. And I could probably find lots of examples of why he's wrong but he's so good and you are so good at writing about it that I I begin to believe you and I have to, like, pinch myself sometimes. Like, wait, this is just his opinion, and there's actually people that are probably equally smart and equally experienced that have a different opinion. And I find that to be that whole thing though, I find it to be very confusing and and I and unsettling.

14:40

It's,

It's,

14:42

this viewpoint that, like, you want to argue ferociously

this viewpoint that, like, you want to argue ferociously

14:45

one point of view so that the response both the critiques and the support is as ferocious back. Right? If you write a piece and if people are just like, whatever, like, you know, I've heard this a hundred times, like, nobody even takes the time to respond. On the internet, like, you kinda have to go all in and really argue a point. But if you are intelligent, hopefully, if you get new information or you see a critique that you're like, oh, that's actually a great point. And you're willing to change your mind, then you can very quickly iterate your way closer to the truth. It's hard to always get to the truth. But I think that's kinda why I write that way is just argue ferociously, and then you'll get the ferocious response, and that will help you get to the truth faster.

one point of view so that the response both the critiques and the support is as ferocious back. Right? If you write a piece and if people are just like, whatever, like, you know, I've heard this a hundred times, like, nobody even takes the time to respond. On the internet, like, you kinda have to go all in and really argue a point. But if you are intelligent, hopefully, if you get new information or you see a critique that you're like, oh, that's actually a great point. And you're willing to change your mind, then you can very quickly iterate your way closer to the truth. It's hard to always get to the truth. But I think that's kinda why I write that way is just argue ferociously, and then you'll get the ferocious response, and that will help you get to the truth faster.

15:20

What's the best me ask one more question about this Sean really quick. What's the best argument

What's the best me ask one more question about this Sean really quick. What's the best argument

15:24

as well as the best person that you like to read that takes the opposite stance of you that you can see that you can you would say, if I'm wrong, I think this could be true. Like, who do you who do you like to read that thinks you're wrong and they could be right? So it's different on every topic, obviously, and and even in individual situations. I have friends who I agree on ninety five percent of stuff with, and then there's that one thing that they like vehemently disagree with me on, and I actually pay attention more when they disagree than to the person who disagrees with everything. Right? It it's like once somebody has shown that they're a clear thinker and somebody's able to actually,

as well as the best person that you like to read that takes the opposite stance of you that you can see that you can you would say, if I'm wrong, I think this could be true. Like, who do you who do you like to read that thinks you're wrong and they could be right? So it's different on every topic, obviously, and and even in individual situations. I have friends who I agree on ninety five percent of stuff with, and then there's that one thing that they like vehemently disagree with me on, and I actually pay attention more when they disagree than to the person who disagrees with everything. Right? It it's like once somebody has shown that they're a clear thinker and somebody's able to actually,

15:59

think through individual ideas and they don't just succumb to like, oh, Sam and I are we always agree on everything. So, like, on this new topic, I should just agree with him. Actually, I wanna surround myself with people who they are very clear when they agree and they're very clear when they disagree. And what you want to look for is like volatility

think through individual ideas and they don't just succumb to like, oh, Sam and I are we always agree on everything. So, like, on this new topic, I should just agree with him. Actually, I wanna surround myself with people who they are very clear when they agree and they're very clear when they disagree. And what you want to look for is like volatility

16:15

in agreement. So the more that somebody agrees with you, you pay attention and put weight on when they disagree. And then the more that somebody disagrees with you, that you wanna pay attention when they actually agree. So it's that volatility or that kind of reversion

in agreement. So the more that somebody agrees with you, you pay attention and put weight on when they disagree. And then the more that somebody disagrees with you, that you wanna pay attention when they actually agree. So it's that volatility or that kind of reversion

16:29

away from the mean that ends up being important to pay attention to. But who who who who who are those people in this case? Is there anyone?

away from the mean that ends up being important to pay attention to. But who who who who who are those people in this case? Is there anyone?

16:37

Right now, I would say, so it's less about, like, individuals. I think there's a whole cohort of people. Everyone has kind of a little bit different view, but let me explain first to kind of what's happening. And then it'll help me under, explain why I think that there could be a a counterargument to it as well. So the main argument is that if you go back to the beginning of twenty twenty,

Right now, I would say, so it's less about, like, individuals. I think there's a whole cohort of people. Everyone has kind of a little bit different view, but let me explain first to kind of what's happening. And then it'll help me under, explain why I think that there could be a a counterargument to it as well. So the main argument is that if you go back to the beginning of twenty twenty,

16:54

the economic and financial system was, like, pretty good. Right? Unemployment was pretty low. Inflation was under two percent. Like, we're kinda chugging along We'd been in a decades long bull market. Everything seemed fine,

the economic and financial system was, like, pretty good. Right? Unemployment was pretty low. Inflation was under two percent. Like, we're kinda chugging along We'd been in a decades long bull market. Everything seemed fine,

17:06

if not good.

if not good.

17:07

Obviously, COVID happens. And the first kind of big shock to the system was all the government lockdowns. Right? So across the world, people said, hey, go sit in your homes. When you do that, what's called the velocity of money or or the amount of commerce goes down. So if you used to go to the bar, if you used to go and buy stuff at the store, like, you're just locked in your house now. You're not spending as much money. So when velocity of money goes down, people get scared. And when they get scared and they're fearful, there ends up being something called a liquidity crisis. And the best way to think of a liquidity crisis is just like, you look at your portfolio of assets and you're like, I want dollars. I want safety. And so you just sell everything that you can to try to get dollars. So people didn't care if it was stocks, bonds, cryptocurrency, if they had liquid, you know, real estate assets, they could sell commodities, anything. They just sell everything, and they want dollars. And so if you go back and look in March of literally meaning cash in a checking or savings account. So that's like step one. And then if you remember during,

Obviously, COVID happens. And the first kind of big shock to the system was all the government lockdowns. Right? So across the world, people said, hey, go sit in your homes. When you do that, what's called the velocity of money or or the amount of commerce goes down. So if you used to go to the bar, if you used to go and buy stuff at the store, like, you're just locked in your house now. You're not spending as much money. So when velocity of money goes down, people get scared. And when they get scared and they're fearful, there ends up being something called a liquidity crisis. And the best way to think of a liquidity crisis is just like, you look at your portfolio of assets and you're like, I want dollars. I want safety. And so you just sell everything that you can to try to get dollars. So people didn't care if it was stocks, bonds, cryptocurrency, if they had liquid, you know, real estate assets, they could sell commodities, anything. They just sell everything, and they want dollars. And so if you go back and look in March of literally meaning cash in a checking or savings account. So that's like step one. And then if you remember during,

18:01

March and April of twenty twenty, people didn't know what's going on. Like, went to the ATM, and I pulled out a bunch of cash. If you were literally pulling physical cash out, they're like, well, just in case, right? Like, who who knows what's gonna happen? They also were like buying toilet paper and doing all like the crazy stuff because fear takes over.

March and April of twenty twenty, people didn't know what's going on. Like, went to the ATM, and I pulled out a bunch of cash. If you were literally pulling physical cash out, they're like, well, just in case, right? Like, who who knows what's gonna happen? They also were like buying toilet paper and doing all like the crazy stuff because fear takes over.

18:15

And so when these liquidity crisis happen,

And so when these liquidity crisis happen,

18:19

all assets go down and the dollar becomes stronger. And central banks and governments have to make a decision. They can say, hey, we believe in the free market, and we're just gonna let this play out. Yeah. It'll be painful in the short term, but like the free market will kinda figure it out over time, or they can what they normally do say, we are gonna intervene. We're gonna step in. We can't let our people suffer. And so of course, like politicians and central bankers, they're very short term optimized because they're pain that millions of people experience,

all assets go down and the dollar becomes stronger. And central banks and governments have to make a decision. They can say, hey, we believe in the free market, and we're just gonna let this play out. Yeah. It'll be painful in the short term, but like the free market will kinda figure it out over time, or they can what they normally do say, we are gonna intervene. We're gonna step in. We can't let our people suffer. And so of course, like politicians and central bankers, they're very short term optimized because they're pain that millions of people experience,

18:46

on a day to day basis, and it's hard to sit by and watch people suffer. So it makes sense from like a human viewpoint as to why they would step in although I disagree that many times they probably should not step in. And so that's what they did. They stepped in. They basically dropped interest rates to zero percent, which just made it incredibly attractive to borrow money. Right? If people are borrowing money, that means they're going and they're spending it. They're buying houses. They're buying all this kind of different stuff. And then they also pumped between the central bank and the politicians trillions of dollars into the economy.

on a day to day basis, and it's hard to sit by and watch people suffer. So it makes sense from like a human viewpoint as to why they would step in although I disagree that many times they probably should not step in. And so that's what they did. They stepped in. They basically dropped interest rates to zero percent, which just made it incredibly attractive to borrow money. Right? If people are borrowing money, that means they're going and they're spending it. They're buying houses. They're buying all this kind of different stuff. And then they also pumped between the central bank and the politicians trillions of dollars into the economy.

19:14

One key thing that a lot of people missed, including myself initially,

One key thing that a lot of people missed, including myself initially,

19:18

is that regardless of how the money got into the system, The money ended up in the banks. So if they gave twelve hundred dollar checks to individuals, whether they bailed out the airline industry, whether they created all sorts of stimulus packages, whatever, When people received the money, whether they spent it or they held it, someone, an individual company, put that money in the bank. And so the deposits of these banks exploded.

is that regardless of how the money got into the system, The money ended up in the banks. So if they gave twelve hundred dollar checks to individuals, whether they bailed out the airline industry, whether they created all sorts of stimulus packages, whatever, When people received the money, whether they spent it or they held it, someone, an individual company, put that money in the bank. And so the deposits of these banks exploded.

19:40

Silicon Valley Bank is a great example. They had about sixty billion dollars of deposits

Silicon Valley Bank is a great example. They had about sixty billion dollars of deposits

19:44

to start. They ended up having about a hundred and ninety billion dollars of deposits.

to start. They ended up having about a hundred and ninety billion dollars of deposits.

19:49

So kinda three x growth, hundred and thirty billion dollars or so. But what does the bank do when some people show up. I'm like, here's a hundred and ninety billion dollars. They're in the business of making money. And so in a zero interest rate environment, they can't buy short term debt. Right? All that means is, like, they're buying treasuries that are three months, six months, nine months, twelve months, two years, whatever. But all of that basically has no return because interest rates are at zero. So instead what Silicon Valley Bank did is they went

So kinda three x growth, hundred and thirty billion dollars or so. But what does the bank do when some people show up. I'm like, here's a hundred and ninety billion dollars. They're in the business of making money. And so in a zero interest rate environment, they can't buy short term debt. Right? All that means is, like, they're buying treasuries that are three months, six months, nine months, twelve months, two years, whatever. But all of that basically has no return because interest rates are at zero. So instead what Silicon Valley Bank did is they went

20:16

and they bought ten year bonds. Meaning that they're gonna buy a bond today. If they hold it for ten years, they'll get back their principal plus whatever the return on the bond is. Now that bond that they were buying had about a one point five percent return. Right? So you buy it today. You hold it for ten years. You're getting your principal plus the the one point five percent, type return over that ten year, period. Which is a conservative play.

and they bought ten year bonds. Meaning that they're gonna buy a bond today. If they hold it for ten years, they'll get back their principal plus whatever the return on the bond is. Now that bond that they were buying had about a one point five percent return. Right? So you buy it today. You hold it for ten years. You're getting your principal plus the the one point five percent, type return over that ten year, period. Which is a conservative play.

20:38

Super safe, super conservative backed by the US government. Like, everyone looks at treasuries and, like, that's the safest thing to buy. Right?

Super safe, super conservative backed by the US government. Like, everyone looks at treasuries and, like, that's the safest thing to buy. Right?

20:46

Now that is all good and fine

Now that is all good and fine

20:49

if the environment continues how it is. What ended up happening is that all that money got pumped into the system,

if the environment continues how it is. What ended up happening is that all that money got pumped into the system,

20:55

inflation exploded. We had the highest inflation in forty years. And so now all of a sudden, inflation's at nine plus percent. And the central bank's like,

inflation exploded. We had the highest inflation in forty years. And so now all of a sudden, inflation's at nine plus percent. And the central bank's like,

21:02

oh, boy. This is not good. We have to bring inflation down because inflation actually doesn't hurt rich people. Rich people make money on inflation because they own assets.

oh, boy. This is not good. We have to bring inflation down because inflation actually doesn't hurt rich people. Rich people make money on inflation because they own assets.

21:11

It's the poor people, the bottom fifty percent. They're the ones who get hurt by inflation. So let's try to get inflation under control. And so the way they did this is they jacked up interest rates from zero percent to about four point five percent. And then they started selling assets off their balance sheet. They sold about a trillion dollars of assets.

It's the poor people, the bottom fifty percent. They're the ones who get hurt by inflation. So let's try to get inflation under control. And so the way they did this is they jacked up interest rates from zero percent to about four point five percent. And then they started selling assets off their balance sheet. They sold about a trillion dollars of assets.

21:29

When they do that, basically, they are tightening financial conditions, making it harder and less attractive borrow money and spend money. What did they sell? What did they sell? The central bank, this is actually a crazy statistic. They had about a nine hundred billion dollar,

When they do that, basically, they are tightening financial conditions, making it harder and less attractive borrow money and spend money. What did they sell? What did they sell? The central bank, this is actually a crazy statistic. They had about a nine hundred billion dollar,

21:43

balance sheet coming out of the global financial crisis, they ten bagged it. They literally went from nine hundred billion to nine trillion between the global financial crisis and twenty twenty two. Right? So they expanded by buying all sorts of debt and treasuries and and various assets, and that's how they get money into the system. Is they exchange the dollars for these assets. And then when they contract or they try to make tighter financial conditions, they sell all of those assets. Right or or a good portion of it to kind of get, to pull liquidity out of the system.

balance sheet coming out of the global financial crisis, they ten bagged it. They literally went from nine hundred billion to nine trillion between the global financial crisis and twenty twenty two. Right? So they expanded by buying all sorts of debt and treasuries and and various assets, and that's how they get money into the system. Is they exchange the dollars for these assets. And then when they contract or they try to make tighter financial conditions, they sell all of those assets. Right or or a good portion of it to kind of get, to pull liquidity out of the system.

22:12

But when they did this, the banks are basically left holding the bag. And what I mean by that is the banks took that, you know, Silicon Valley Bank hundred and thirty billion dollars. Eighty billion of it, they bought these bonds. That earn one point five percent, which is great in a zero percent interest rate environment. When they've now increased interest rates to four and a half percent, that bond that you bought previously

But when they did this, the banks are basically left holding the bag. And what I mean by that is the banks took that, you know, Silicon Valley Bank hundred and thirty billion dollars. Eighty billion of it, they bought these bonds. That earn one point five percent, which is great in a zero percent interest rate environment. When they've now increased interest rates to four and a half percent, that bond that you bought previously

22:33

is no longer good. It's actually cheap. And so it trades lower. So if you spend a hundred dollars on the bond, Now if you were to sell to someone, maybe you could sell it for eighty cents. So you'd lose twenty percent on that bond.

is no longer good. It's actually cheap. And so it trades lower. So if you spend a hundred dollars on the bond, Now if you were to sell to someone, maybe you could sell it for eighty cents. So you'd lose twenty percent on that bond.

22:46

The reason why that doesn't matter historically

The reason why that doesn't matter historically

22:50

is because the banks actually get special accounting treatment. So let's say that Sean has a portfolio and in one of them, he bought a stock. And he spent a hundred dollars a share. Right? So he's he bought a stock for a hundred bucks. If he goes to the bank and now the stock is trading at eighty dollars and he wants to use that stock share as collateral. They don't give them credit for spending a hundred dollars. They're like, hey, moron. It's worth eighty bucks. Like, you get credit for eighty dollars, not a hundred.

is because the banks actually get special accounting treatment. So let's say that Sean has a portfolio and in one of them, he bought a stock. And he spent a hundred dollars a share. Right? So he's he bought a stock for a hundred bucks. If he goes to the bank and now the stock is trading at eighty dollars and he wants to use that stock share as collateral. They don't give them credit for spending a hundred dollars. They're like, hey, moron. It's worth eighty bucks. Like, you get credit for eighty dollars, not a hundred.

23:16

But the banks have a special accounting treatment where they can actually take some of the assets on their balance sheet, and they can put it in a special area and they call it hold to maturity.

But the banks have a special accounting treatment where they can actually take some of the assets on their balance sheet, and they can put it in a special area and they call it hold to maturity.

23:27

Hold to maturity basically means we get to count what we bought it for, not what it's worth today. And the reason why they're allowed to do this is because they can hold the bond until the maturity, the ten year period, and they'll get the principal plus the return. So as long as they don't sell it before it matures,

Hold to maturity basically means we get to count what we bought it for, not what it's worth today. And the reason why they're allowed to do this is because they can hold the bond until the maturity, the ten year period, and they'll get the principal plus the return. So as long as they don't sell it before it matures,

23:44

then it ends up being worth what they paid for.

then it ends up being worth what they paid for.

23:47

The only time that this does not work

The only time that this does not work

23:49

is if all of the depositors want their money back at the same time. Because now the banks have to sell all those assets and take that money to get back to depositors. And that's what happened to Silicon Valley Bank. Is basically there was a bank run when the bank run caused the bank to sell assets, they lost billions of dollars which then scared more depositors. So then they went and said, hey, give me my money back. And it just became this reinforcing cycle. And in twenty four hours, forty two billion dollars was drained out of the bank, which caused them to eventually be insolvent and the government took it over. And ultimately,

is if all of the depositors want their money back at the same time. Because now the banks have to sell all those assets and take that money to get back to depositors. And that's what happened to Silicon Valley Bank. Is basically there was a bank run when the bank run caused the bank to sell assets, they lost billions of dollars which then scared more depositors. So then they went and said, hey, give me my money back. And it just became this reinforcing cycle. And in twenty four hours, forty two billion dollars was drained out of the bank, which caused them to eventually be insolvent and the government took it over. And ultimately,

24:21

great ex explanation. That was awesome. You killed it there.

great ex explanation. That was awesome. You killed it there.

24:24

Biology and a few other people are betting that that's gonna happen to other more consumer based banks in the next ninety days. Is that right? So it's already happened. Like, this isn't just a Silicon Valley bank thing. Like, a lot of the politicians,

Biology and a few other people are betting that that's gonna happen to other more consumer based banks in the next ninety days. Is that right? So it's already happened. Like, this isn't just a Silicon Valley bank thing. Like, a lot of the politicians,

24:37

they this was like a a softball served up to them down, you know, right down the plate.

they this was like a a softball served up to them down, you know, right down the plate.

24:42

They were like, oh, great. The crypto and tech companies are a bank customer.

They were like, oh, great. The crypto and tech companies are a bank customer.

24:47

It must be their fault. But like Silvergate Bank, Silicon Valley Bank, Signature Bank, now Credit Suisse, but these are not, you know, crypto banks or or just tech banks. This is a

It must be their fault. But like Silvergate Bank, Silicon Valley Bank, Signature Bank, now Credit Suisse, but these are not, you know, crypto banks or or just tech banks. This is a

24:58

complete global financial

complete global financial

25:00

system issue.

system issue.

25:02

And now there's reports coming out that hundreds

And now there's reports coming out that hundreds

25:04

of banks are actually underwater

of banks are actually underwater

25:07

in terms of holding these assets.

in terms of holding these assets.

25:09

And so that's why you've seen the central bank and the governments around the world step in and say, we will backstop

And so that's why you've seen the central bank and the governments around the world step in and say, we will backstop

25:15

a lot of these deposits

a lot of these deposits

25:17

because they don't want people to be so scared that they go when they try to take their money out of the banks. Because if everyone goes to do that, that then basically creates a cascade of bank runs. And so Blagie's argument and why he's making this bet, is that when the government steps in to protect the depositors,

because they don't want people to be so scared that they go when they try to take their money out of the banks. Because if everyone goes to do that, that then basically creates a cascade of bank runs. And so Blagie's argument and why he's making this bet, is that when the government steps in to protect the depositors,

25:32

that is an inflationary

that is an inflationary

25:34

pressure,

pressure,

25:34

and it's going to take trillions and trillions of dollars to do it. And so at the same time you're getting trillions of dollars of inflationary pressure,

and it's going to take trillions and trillions of dollars to do it. And so at the same time you're getting trillions of dollars of inflationary pressure,

25:43

you also are getting this psychological awakening and people are saying wait a second.

you also are getting this psychological awakening and people are saying wait a second.

25:47

Maybe the dollar isn't as strong as we thought it was. I should look for an alternative.

Maybe the dollar isn't as strong as we thought it was. I should look for an alternative.

25:52

And when those two things happen,

And when those two things happen,

25:54

hyperinflation

hyperinflation

25:55

can occur doesn't guarantee it, but it can occur.

can occur doesn't guarantee it, but it can occur.

25:58

And I think really if you kind of boil down his entire argument and why he's created this essentially meme with the bit signal,

And I think really if you kind of boil down his entire argument and why he's created this essentially meme with the bit signal,

26:06

is that people in the United States, we've never worried about this. But this is not new globally.

is that people in the United States, we've never worried about this. But this is not new globally.

26:11

There are people listening to this podcast right now. They they'll tweet at us afterwards. Like, dude, I live in Argentina. Like inflation's like seventy eighty percent year over year. I live in Venezuela. I live in Zimbabwe. I live in Zimbabwe. I live in all these countries. Where they live with hyperinflation on a day to day basis. It's just that in the US, we've never thought about it. And then two is, like, you comp you add because the United States dollars, the global reserve currency.

There are people listening to this podcast right now. They they'll tweet at us afterwards. Like, dude, I live in Argentina. Like inflation's like seventy eighty percent year over year. I live in Venezuela. I live in Zimbabwe. I live in Zimbabwe. I live in all these countries. Where they live with hyperinflation on a day to day basis. It's just that in the US, we've never thought about it. And then two is, like, you comp you add because the United States dollars, the global reserve currency.

26:34

So if we screw this up so bad that we hyperinflate the dollar,

So if we screw this up so bad that we hyperinflate the dollar,

26:38

I don't even understand. I don't think a lot of people understand, like, what happens globally when the global reserve currency hits high inflation or hyperinflation.

I don't even understand. I don't think a lot of people understand, like, what happens globally when the global reserve currency hits high inflation or hyperinflation.

26:46

So again, it goes back to like, we don't want this to happen. But damn, people should be paying attention right now to make sure that they understand what's occurring and kinda how to prepare for it.

So again, it goes back to like, we don't want this to happen. But damn, people should be paying attention right now to make sure that they understand what's occurring and kinda how to prepare for it.

26:56

I can't find this client info. Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data. Across every application. Every team can stay aligned. No out of sync spreadsheets or dueling databases.

I can't find this client info. Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data. Across every application. Every team can stay aligned. No out of sync spreadsheets or dueling databases.

27:12

So let me,

So let me,

27:14

add a little color on on what you just said. So,

add a little color on on what you just said. So,

27:18

there was a apology tweeted this out, which is a a a like a memo or a note from

there was a apology tweeted this out, which is a a a like a memo or a note from

27:24

the Kansas City Office of the Federal Federal Reserve. And they had said there's kind of this, like, one section that he highlighted, which it said,

the Kansas City Office of the Federal Federal Reserve. And they had said there's kind of this, like, one section that he highlighted, which it said,

27:33

at year end twenty twenty one, so basically two years ago, only four community banks

at year end twenty twenty one, so basically two years ago, only four community banks

27:38

were below the kind of five percent ratio

were below the kind of five percent ratio

27:41

of, of their of their assets that they had available. So they were basically only for four banks would be at this threshold that we would be worried about.

of, of their of their assets that they had available. So they were basically only for four banks would be at this threshold that we would be worried about.

27:51

Fast forward to today. That's now three hundred and thirty three community banks in the So three hundred thirty three community banks are essentially insolvent is what this what this means

Fast forward to today. That's now three hundred and thirty three community banks in the So three hundred thirty three community banks are essentially insolvent is what this what this means

28:01

and could be if was a bank run on any one of these. We would have the same problem that we had first at Silicon Valley Bank. And then what was about to happen on, you know, last Monday or whatever where everybody was gonna go to, you know, I know here in California. First Republic Bank was like, you know, the domino that was ready to fall before they came in and said, no. No. No. Everything's everything's safe. All your deposits are guaranteed.

and could be if was a bank run on any one of these. We would have the same problem that we had first at Silicon Valley Bank. And then what was about to happen on, you know, last Monday or whatever where everybody was gonna go to, you know, I know here in California. First Republic Bank was like, you know, the domino that was ready to fall before they came in and said, no. No. No. Everything's everything's safe. All your deposits are guaranteed.

28:26

Don't worry,

Don't worry,

28:27

to try stop that from happening because there are thirty three hundred and thirty three banks just in the United States that they say are below that ratio.

to try stop that from happening because there are thirty three hundred and thirty three banks just in the United States that they say are below that ratio.

28:35

Now what that would do to the next tier, who knows, and also,

Now what that would do to the next tier, who knows, and also,

28:39

overseas

overseas

28:40

because the you the dollar is the the the reserve currency overseas. There's a bunch of banks hold,

because the you the dollar is the the the reserve currency overseas. There's a bunch of banks hold,

28:46

dollars. And they're they're worried about what if there's a bank run on us?

dollars. And they're they're worried about what if there's a bank run on us?

28:49

And so, like, you know, just last night overnight on a Sunday night, You know it's bad when they're sort of working on a Sunday night and, you know, making these announcements,

And so, like, you know, just last night overnight on a Sunday night, You know it's bad when they're sort of working on a Sunday night and, you know, making these announcements,

28:57

where they're like, oh, we're we're establishing this, like, swap line. And I was like, what's the swap line? Swap line is basically,

where they're like, oh, we're we're establishing this, like, swap line. And I was like, what's the swap line? Swap line is basically,

29:03

hey, we'll bail you out too. So if you need dollars, the central bank of the United States, we'll give it to you to European Central Bank and all these other places. So they basically established this overnight

hey, we'll bail you out too. So if you need dollars, the central bank of the United States, we'll give it to you to European Central Bank and all these other places. So they basically established this overnight

29:14

back channel, which said, if you need dollars because you're gonna get hit with a run, We don't want you to fall over and cause this cascade of fear and panic and and withdrawals.

back channel, which said, if you need dollars because you're gonna get hit with a run, We don't want you to fall over and cause this cascade of fear and panic and and withdrawals.

29:24

So we will also backstop you just like we backstopped,

So we will also backstop you just like we backstopped,

29:27

you know, the community banks in the United States. So that's to topology's credit. I think he is correctly identified just like he did with coronavirus that, hey, This might be a lot worse than you think.

you know, the community banks in the United States. So that's to topology's credit. I think he is correctly identified just like he did with coronavirus that, hey, This might be a lot worse than you think.

29:39

And there's actually data to support that the conditions are worse than you think. Now what's funny is

And there's actually data to support that the conditions are worse than you think. Now what's funny is

29:45

Bology actually did this twice. So he had like a v one of of trying to spread the word same. I don't know if you saw this one. So for v one was he goes, the bit signal.

Bology actually did this twice. So he had like a v one of of trying to spread the word same. I don't know if you saw this one. So for v one was he goes, the bit signal.

29:54

He goes, how do you raise ring the fire alarm on the internet? How do you show it's not a false alarm? I'm putting up the bit signal. He goes, I'll put a million dollars in Bitcoin to alert people about this stealth financial crisis.

He goes, how do you raise ring the fire alarm on the internet? How do you show it's not a false alarm? I'm putting up the bit signal. He goes, I'll put a million dollars in Bitcoin to alert people about this stealth financial crisis.

30:04

I'll give a thousand dollars to the best thousand tweet that show a reply with a graph, a stat, a meme that will bring attention to what's happening

I'll give a thousand dollars to the best thousand tweet that show a reply with a graph, a stat, a meme that will bring attention to what's happening

30:12

because the central bank of the banks and the big regulars have bankrupted us. They're trying to hide the insolvency

because the central bank of the banks and the big regulars have bankrupted us. They're trying to hide the insolvency

30:17

of the banks to you, the depositor.

of the banks to you, the depositor.

30:20

Which is a weird thing to do. Right? That's, like, it's helpful that he's he's trying to help, but it Sometimes that doesn't help. Right? So this was a pure giveaway. Right? This is not a bet. He said I'm giving away a million dollars

Which is a weird thing to do. Right? That's, like, it's helpful that he's he's trying to help, but it Sometimes that doesn't help. Right? So this was a pure giveaway. Right? This is not a bet. He said I'm giving away a million dollars

30:30

to the I'll give a thousand dollars to the thousand best tweets that will spread the word.

to the I'll give a thousand dollars to the thousand best tweets that will spread the word.

30:34

This tweet did pretty good. Thirteen thousand likes.

This tweet did pretty good. Thirteen thousand likes.

30:38

And he tried but then he he hit you with just like a bunch of like, you know, things that topology is like light reading. But to the rest of us, it's like, oh, man. Like, I gotta, you know, I gotta hook up to an oxygen tank just to intake this amount of information. So it's like this this crazy thing. So he'll tweet this table of, like, you know, forty five currencies that have done hyperinflation.

And he tried but then he he hit you with just like a bunch of like, you know, things that topology is like light reading. But to the rest of us, it's like, oh, man. Like, I gotta, you know, I gotta hook up to an oxygen tank just to intake this amount of information. So it's like this this crazy thing. So he'll tweet this table of, like, you know, forty five currencies that have done hyperinflation.

30:57

He'll tweet out a thing that basically shows some random meeting minutes from the fed in two two thousand twenty two that showed that they knew something. Right? Like, all these these data points, but it wasn't really going viral

He'll tweet out a thing that basically shows some random meeting minutes from the fed in two two thousand twenty two that showed that they knew something. Right? Like, all these these data points, but it wasn't really going viral

31:08

until

until

31:09

This guy James Medlock comes out and he goes, I'll bet anyone a million dollars. The US does not enter hyperinflation.

This guy James Medlock comes out and he goes, I'll bet anyone a million dollars. The US does not enter hyperinflation.

31:15

And James Medlock, by the way. I think by the way, he had it. It was even scarier. I think he said

And James Medlock, by the way. I think by the way, he had it. It was even scarier. I think he said

31:20

everything that we're talking about, by the way, it's in within ninety days of, like, last week. Right? No. First, it was James Miller just said, I'll bet anyone hype hype one million dollars hyperinflation doesn't happen. Okay. That was just that was that guy sweet. Apology just takes us random. By the way, I I interrupted you. Say who he is. Say who he is. I don't know who this guy is. I don't his bio's a social democrat

everything that we're talking about, by the way, it's in within ninety days of, like, last week. Right? No. First, it was James Miller just said, I'll bet anyone hype hype one million dollars hyperinflation doesn't happen. Okay. That was just that was that guy sweet. Apology just takes us random. By the way, I I interrupted you. Say who he is. Say who he is. I don't know who this guy is. I don't his bio's a social democrat

31:42

markets.

markets.

31:43

The market market socialist in the sheets. I don't know what this guy's talking about. This guy is like, it's a meme account. It looks like. So,

The market market socialist in the sheets. I don't know what this guy's talking about. This guy is like, it's a meme account. It looks like. So,

31:50

You know, like, he's got a picture that I I don't know who this is. Mean words with a million dollar bets.

You know, like, he's got a picture that I I don't know who this is. Mean words with a million dollar bets.

31:55

Yeah. Exactly. You'll hit your this email is a at mass to don dot l o l. Okay. So, like, let's be real. But what's going on there? So biology comes out and he says, I will take that bet. You buy one Bitcoin,

Yeah. Exactly. You'll hit your this email is a at mass to don dot l o l. Okay. So, like, let's be real. But what's going on there? So biology comes out and he says, I will take that bet. You buy one Bitcoin,

32:06

And I'll I'll send one million

And I'll I'll send one million

32:09

dollars to Anescrow.

dollars to Anescrow.

32:11

To be clear, this is forty to one odds. So he's basically saying not only is this unlikely to happen? Like, if this was even odds, it would have been like, dang, Ball is gonna lose a million dollars because Bitcoin's not likely to be worth a million dollars. Then he added in ninety days, which is already a radical move. Then he said,

To be clear, this is forty to one odds. So he's basically saying not only is this unlikely to happen? Like, if this was even odds, it would have been like, dang, Ball is gonna lose a million dollars because Bitcoin's not likely to be worth a million dollars. Then he added in ninety days, which is already a radical move. Then he said,

32:29

I'm and by the way, the million dollars versus one Bitcoin. Bitcoin's currently at twenty six thousand at this at the time he made this bet. He goes, that's forty to one odds that I'm laying you. And he says, all we gotta do is find some, you know, a mutually agreed on, like, Escrow or custodian.

I'm and by the way, the million dollars versus one Bitcoin. Bitcoin's currently at twenty six thousand at this at the time he made this bet. He goes, that's forty to one odds that I'm laying you. And he says, all we gotta do is find some, you know, a mutually agreed on, like, Escrow or custodian.

32:42

And he again, he tweets out this bit signal graph. And so he's like, you know, I'm doing this again. Now this this tweet goes viral. This one gets eleven million views. Because it's more provocative. It's

And he again, he tweets out this bit signal graph. And so he's like, you know, I'm doing this again. Now this this tweet goes viral. This one gets eleven million views. Because it's more provocative. It's

32:53

it lets anybody. And at at first, the wave of tweets, myself included was like, Bologies nuts. He's gone crazy.

it lets anybody. And at at first, the wave of tweets, myself included was like, Bologies nuts. He's gone crazy.

33:00

Like, this doesn't make any sense.

Like, this doesn't make any sense.

33:03

and so, you know, because he was, like, not only was the bet unlikely to prove in his favor.

and so, you know, because he was, like, not only was the bet unlikely to prove in his favor.

33:09

It was a perfect bet for mister, yeah, James Medlock over here, the social the Democrat and the streets and the socialist and the sheets. All he had to do was buy two Bitcoin.

It was a perfect bet for mister, yeah, James Medlock over here, the social the Democrat and the streets and the socialist and the sheets. All he had to do was buy two Bitcoin.

33:18

Right? He could buy one that he's putting up for the bet. And if he's wrong and and the dollar does hyperinflate, Bitcoin becomes worth a million dollars. All he had to do was buy a second one. So if he could for fifty two thousand dollars, he could guarantee himself a million dollar payday. So it was like,

Right? He could buy one that he's putting up for the bet. And if he's wrong and and the dollar does hyperinflate, Bitcoin becomes worth a million dollars. All he had to do was buy a second one. So if he could for fifty two thousand dollars, he could guarantee himself a million dollar payday. So it was like,

33:32

an absolute no brainer and and, you know, the poker player in me was like, apology. What are you doing? That's a you've given this guy like a, you know, a no lose bet. And so I messaged him. And I was like, you know, hey, apologies. This is crazy. What are you what are you thinking? I mean, here's what he here's what he replied. I I think I could share this because not, not anything that he's not tweeting out. He's tweeting all this stuff out anyways. So it's not it's not overly crazy, but here's what he said.

an absolute no brainer and and, you know, the poker player in me was like, apology. What are you doing? That's a you've given this guy like a, you know, a no lose bet. And so I messaged him. And I was like, you know, hey, apologies. This is crazy. What are you what are you thinking? I mean, here's what he here's what he replied. I I think I could share this because not, not anything that he's not tweeting out. He's tweeting all this stuff out anyways. So it's not it's not overly crazy, but here's what he said.

33:57

So he goes,

So he goes,

33:59

He just replies, all the banks are insolvent.

He just replies, all the banks are insolvent.

34:02

That was the first first reply.

That was the first first reply.

34:04

He goes, have you seen the big short where one guy figured something out early and everybody else thinks he's crazy,

He goes, have you seen the big short where one guy figured something out early and everybody else thinks he's crazy,

34:11

that's what that's what's happening here. He goes,

that's what that's what's happening here. He goes,

34:14

people think this was a single bank issue. Like, so Valibank. It was a central bank issue.

people think this was a single bank issue. Like, so Valibank. It was a central bank issue.

34:19

All the banks are dead. Ten day days ago, there were no dead banks. Today, there are five And if people realize this and they'll put they'll start to pull their money out, they'll realize that the banks don't have it. It's uncle Sam Bankman free, not uncle Sam.

All the banks are dead. Ten day days ago, there were no dead banks. Today, there are five And if people realize this and they'll put they'll start to pull their money out, they'll realize that the banks don't have it. It's uncle Sam Bankman free, not uncle Sam.

34:33

Which is what basically what happened with FTX, so people realized the money's not in the the money's not in the in the bank with with FTX, and then that caused, you know, the the extreme crash.

Which is what basically what happened with FTX, so people realized the money's not in the the money's not in the in the bank with with FTX, and then that caused, you know, the the extreme crash.

34:42

And then he tweeted out a bunch of stuff and he goes,

And then he tweeted out a bunch of stuff and he goes,

34:45

he goes, I'm not doing he goes, yes. I'm not doing this to make money because I pointed out that the guy could just hedge and win the bet. He goes, Yes. I'm not doing this to make money. He goes if I had the beliefs that I do and I was just purely selfish, I would simply just take the million dollars and buy forty Bitcoin. I'll take, you know, another million dollars by another forty Bitcoin, and I do it quietly because I believe that the US the that the million dollars is gonna be worth zero in ninety days. I'm doing this to alert innocent people and to send a message, get to the exits.

he goes, I'm not doing he goes, yes. I'm not doing this to make money because I pointed out that the guy could just hedge and win the bet. He goes, Yes. I'm not doing this to make money. He goes if I had the beliefs that I do and I was just purely selfish, I would simply just take the million dollars and buy forty Bitcoin. I'll take, you know, another million dollars by another forty Bitcoin, and I do it quietly because I believe that the US the that the million dollars is gonna be worth zero in ninety days. I'm doing this to alert innocent people and to send a message, get to the exits.

35:12

And so I wanna bring up a couple of, like, cases here. So that that's the bad. Hold on. Really, really quick. There was also this other thing. Apparently, right around this time, it there's a picture of him. So this guy He's like, has this, like,

And so I wanna bring up a couple of, like, cases here. So that that's the bad. Hold on. Really, really quick. There was also this other thing. Apparently, right around this time, it there's a picture of him. So this guy He's like, has this, like,

35:25

stereotype? Picture. On the YouTube video, gotta throw the picture. So he's got this stereotype of being, like, you know, like the forgetful scientist of, like, he's just this guy who only cares about being brilliant. And oftentimes he's right, and he's eloquent, whatever,

stereotype? Picture. On the YouTube video, gotta throw the picture. So he's got this stereotype of being, like, you know, like the forgetful scientist of, like, he's just this guy who only cares about being brilliant. And oftentimes he's right, and he's eloquent, whatever,

35:38

There's a picture of him. It looks like he's giving a seminar at, like, a university.

There's a picture of him. It looks like he's giving a seminar at, like, a university.

35:43

And the someone tweeted he goes, apologies,

And the someone tweeted he goes, apologies,

35:46

saying, get the f out of the US, and it's and it's very scary. And he's sitting there giving this presentation in front of, like, a class, and he's wearing

saying, get the f out of the US, and it's and it's very scary. And he's sitting there giving this presentation in front of, like, a class, and he's wearing

35:54

pajamas,

pajamas,

35:54

like, a pajama looking hoodie

like, a pajama looking hoodie

35:57

basketball shorts

basketball shorts

35:59

and Nike Air Jordan flip flops with his laptop sitting on top of like two cardboard boxes.

and Nike Air Jordan flip flops with his laptop sitting on top of like two cardboard boxes.

36:07

if you needed, like, this

if you needed, like, this

36:09

this

this

36:11

anymore of the stereotype of this, like, brilliant, like, you

anymore of the stereotype of this, like, brilliant, like, you

36:14

know, of this, the the the image that we have of Mark Zuckerberg, you know, just sitting in a hoodie, coding, eating pizza, and drinking red bull. Biology's going all in on that image.

know, of this, the the the image that we have of Mark Zuckerberg, you know, just sitting in a hoodie, coding, eating pizza, and drinking red bull. Biology's going all in on that image.

36:24

And it that it almost makes it worse when I see this picture. But but I think a lot of,

And it that it almost makes it worse when I see this picture. But but I think a lot of,

36:30

why he has so much credibility is that he has been able to identify a number of these like exponential,

why he has so much credibility is that he has been able to identify a number of these like exponential,

36:37

situations. And if you really think about

situations. And if you really think about

36:40

what he's saying here, it's almost an exact overlay

what he's saying here, it's almost an exact overlay

36:43

to COVID. Right? He saw very early on, a couple of data points, and he was able to extrapolate from a couple of those data points. Hey, this isn't a linear line. Like, this is literally an exponential curve.

to COVID. Right? He saw very early on, a couple of data points, and he was able to extrapolate from a couple of those data points. Hey, this isn't a linear line. Like, this is literally an exponential curve.

36:55

the top of the exponential curve, is really scary. Like, let me go yell scream and, like, call attention to it. He's doing the exact same thing here. And I think that's, what Sean was reading about, like, hey, ten days ago, there was no dead banks. Now there's five. Like, he's just trying to put a couple of data points and be like, if this goes exponential,

the top of the exponential curve, is really scary. Like, let me go yell scream and, like, call attention to it. He's doing the exact same thing here. And I think that's, what Sean was reading about, like, hey, ten days ago, there was no dead banks. Now there's five. Like, he's just trying to put a couple of data points and be like, if this goes exponential,

37:12

like, this is really bad, And I think that one of the the components,

like, this is really bad, And I think that one of the the components,

37:17

that's important to call out is, like, I don't know what the percentages of Americans

that's important to call out is, like, I don't know what the percentages of Americans

37:21

But most Americans don't know that if you go and you deposit your money in the bank, it's not your money anymore.

But most Americans don't know that if you go and you deposit your money in the bank, it's not your money anymore.

37:26

Right? Like, just that alone, like, the the lack of financial education of the average American

Right? Like, just that alone, like, the the lack of financial education of the average American

37:31

is astonishing.

is astonishing.

37:32

And so, yes, there's FDIC insurance that covers up to two hundred and fifty k. Like, there's all these different things. But if you go look right now, Like, the FDIC does not have enough money to backstop every bank in America. I think you said one million or something. I think that the twenty percent of it was used to help Silicon Valley Bank. That's like The Silicon Valley Bank. Yeah. Silicon Valley Bank is like the twentieth largest bank in America. Yeah. So it's like not not very big compared to the big, big ones. One other thing that I think is important to understand about these situations,

And so, yes, there's FDIC insurance that covers up to two hundred and fifty k. Like, there's all these different things. But if you go look right now, Like, the FDIC does not have enough money to backstop every bank in America. I think you said one million or something. I think that the twenty percent of it was used to help Silicon Valley Bank. That's like The Silicon Valley Bank. Yeah. Silicon Valley Bank is like the twentieth largest bank in America. Yeah. So it's like not not very big compared to the big, big ones. One other thing that I think is important to understand about these situations,

38:00

is this idea of like a digital catastrophe.

is this idea of like a digital catastrophe.

38:02

And this is a concept that, Frank, I struggled a little bit to come up with like a good name for it, but I think digital catastrophe kinda really articulates it, as best as I can. Which is you need to understand this concept because it is going to become very, very common in our lives over the next, you know, twenty, thirty, forty years But the way that I define a digital catastrophe is it's an event that occurs that is negative.

And this is a concept that, Frank, I struggled a little bit to come up with like a good name for it, but I think digital catastrophe kinda really articulates it, as best as I can. Which is you need to understand this concept because it is going to become very, very common in our lives over the next, you know, twenty, thirty, forty years But the way that I define a digital catastrophe is it's an event that occurs that is negative.

38:24

Usually plays out in the analog world, kind of the real world. But it is drastically accelerated

Usually plays out in the analog world, kind of the real world. But it is drastically accelerated

38:30

by the speed of communication and action online. And so Silicon Valley Bank is like the prime example. Right? If you think about what happened there

by the speed of communication and action online. And so Silicon Valley Bank is like the prime example. Right? If you think about what happened there

38:39

on Wednesday afternoon, they made an announcement by Thursday morning, people were scared by Thursday afternoon, forty two billion dollars had been withdrawn from the bank, and by Friday morning, the bank was dead. Right? So, like, in forty eight hours, it was the second largest banking failure in the United States history.

on Wednesday afternoon, they made an announcement by Thursday morning, people were scared by Thursday afternoon, forty two billion dollars had been withdrawn from the bank, and by Friday morning, the bank was dead. Right? So, like, in forty eight hours, it was the second largest banking failure in the United States history.

38:53

But in the old days, what you would have to do in order to have a bank run is like

But in the old days, what you would have to do in order to have a bank run is like

38:59

Sean would walk over to Sam's house and be like, yo, Sam, did you hear, like, the bank's probably not doing so hot? And then, like, Sam, be like, that's kinda crazy. And you would walk ride your horse, maybe get in the car and, like, show up to the bank physically,

Sean would walk over to Sam's house and be like, yo, Sam, did you hear, like, the bank's probably not doing so hot? And then, like, Sam, be like, that's kinda crazy. And you would walk ride your horse, maybe get in the car and, like, show up to the bank physically,

39:13

wait in line and be like, when you get to the teller window, can I have my money back? Like, that takes a lot of time, effort, energy, all that type of stuff.

wait in line and be like, when you get to the teller window, can I have my money back? Like, that takes a lot of time, effort, energy, all that type of stuff.

39:23

you can literally open a new tab on your browser

you can literally open a new tab on your browser

39:26

Click a couple buttons and move your money. And so when the speed of information occurs

Click a couple buttons and move your money. And so when the speed of information occurs

39:31

that it does on the internet,

that it does on the internet,

39:34

millions of people, whether you were a customer of Silicon Valley Bank or not, like Twitter

millions of people, whether you were a customer of Silicon Valley Bank or not, like Twitter

39:38

knew that the bank was insolvent by like noon on Thursday.

knew that the bank was insolvent by like noon on Thursday.

39:42

Right? And so if that happens,

Right? And so if that happens,

39:44

that's how you get forty two billion dollars withdrawn from a bank. That is a digital catastrophe It's the speed of information, the speed of action online has real world consequences.

that's how you get forty two billion dollars withdrawn from a bank. That is a digital catastrophe It's the speed of information, the speed of action online has real world consequences.

39:54

And so another way to think about it is, like, the internet was weaponized

And so another way to think about it is, like, the internet was weaponized

39:58

to create the second largest bank failure in history,

to create the second largest bank failure in history,

40:02

but it was in response

but it was in response

40:04

to the knowledge of an insolvent bank that was caused by a fractional reserve banking system and an increasing of interest rates that basically left the bat the bag holders as the banks. And so people were just operating out of personal incentive

to the knowledge of an insolvent bank that was caused by a fractional reserve banking system and an increasing of interest rates that basically left the bat the bag holders as the banks. And so people were just operating out of personal incentive

40:18

to get out of the way.

to get out of the way.

40:20

Yeah. The there's a

Yeah. The there's a

40:22

there's

there's

40:24

it was kind of amazing. Like, a Thursday morning, I remember waking up and in our group chat, Sam, there was, like, somebody posted Silicon Valley Bank stock was going down.

it was kind of amazing. Like, a Thursday morning, I remember waking up and in our group chat, Sam, there was, like, somebody posted Silicon Valley Bank stock was going down.

40:32

It was down, like, thirty or forty percent. It was, like, oh, wow. Must have had a bad earnings call. Right? Or, you know, that was kind of my assumption. It wasn't anything too too bad.

It was down, like, thirty or forty percent. It was, like, oh, wow. Must have had a bad earnings call. Right? Or, you know, that was kind of my assumption. It wasn't anything too too bad.

40:41

You know, by eleven or noon, I'm scrolling Twitter and I start to see, you know, if you scroll, this is just a general truism. If you scroll social media,

You know, by eleven or noon, I'm scrolling Twitter and I start to see, you know, if you scroll, this is just a general truism. If you scroll social media,

40:49

And you see four or five different sources talking about the same thing.

And you see four or five different sources talking about the same thing.

40:53

Your brain is just like wired to be like, this is now a b this is a big deal. Topic x is a big deal. Marketers use this to their advantage when they want you to, like, bunco buy a product or know about a movie that's coming out or whatever, they do the same thing. That's why they get why influencer marketing is a big deal. But it also works just organically. Five people say the same thing on in one Twitter scroll,

Your brain is just like wired to be like, this is now a b this is a big deal. Topic x is a big deal. Marketers use this to their advantage when they want you to, like, bunco buy a product or know about a movie that's coming out or whatever, they do the same thing. That's why they get why influencer marketing is a big deal. But it also works just organically. Five people say the same thing on in one Twitter scroll,

41:12

I know that something's up. And so I remember being on the phone And basically, in the manner of, like, fifteen minutes, it was like, I'm on the phone. We're not even really sure what to do. It's like, let's just be safe. Take it out. Sent an emails to, you know, sent an email saying, hey, we're taking it out,

I know that something's up. And so I remember being on the phone And basically, in the manner of, like, fifteen minutes, it was like, I'm on the phone. We're not even really sure what to do. It's like, let's just be safe. Take it out. Sent an emails to, you know, sent an email saying, hey, we're taking it out,

41:28

opened up a new tab, clicked wire the money,

opened up a new tab, clicked wire the money,

41:31

took a screenshot of the wire, sent it back into six group chats, then went ahead and tweeted out a a thing.

took a screenshot of the wire, sent it back into six group chats, then went ahead and tweeted out a a thing.

41:37

It's like, wow. Like, in fifteen minutes, I just, like, propagated this more than I could have done if I if it had been my full time job, you know, twenty years ago, which is kinda what to to your point.

It's like, wow. Like, in fifteen minutes, I just, like, propagated this more than I could have done if I if it had been my full time job, you know, twenty years ago, which is kinda what to to your point.

41:47

And, and the funny thing is people are mad that like, they're like, well, if there wasn't a bank run, there would have never been a problem.

And, and the funny thing is people are mad that like, they're like, well, if there wasn't a bank run, there would have never been a problem.

41:54

And it's sort of like, it's a, you know, they use this example of, like, what it what's it called, like, screaming fire in a movie theater or something like that? It's like then everybody runs the exits.

And it's sort of like, it's a, you know, they use this example of, like, what it what's it called, like, screaming fire in a movie theater or something like that? It's like then everybody runs the exits.

42:02

Well, the reality is if there's no fire in the theater,

Well, the reality is if there's no fire in the theater,

42:06

every run of the exits and getting stuck there, then, you know, trying to get out. Like, It's not that big of a deal. There was actually a fire. And so, like, you know, I don't know how the blame gets shifted to the people who successfully got a got out of the fire. Versus,

every run of the exits and getting stuck there, then, you know, trying to get out. Like, It's not that big of a deal. There was actually a fire. And so, like, you know, I don't know how the blame gets shifted to the people who successfully got a got out of the fire. Versus,

42:20

pointing out that, hey, somebody caused this thing to catch fire, which is kind of Bology's point. Bology, he tweets out this graph of

pointing out that, hey, somebody caused this thing to catch fire, which is kind of Bology's point. Bology, he tweets out this graph of

42:28

the, like, the the balance sheet or whatever. It's basically, like, goes up, up, up, up, up, which is, like, during the money printing era, then the last year year or so. It's been trying to tighten. So it's been going down. It's been contracting.

the, like, the the balance sheet or whatever. It's basically, like, goes up, up, up, up, up, which is, like, during the money printing era, then the last year year or so. It's been trying to tighten. So it's been going down. It's been contracting.

42:40

And then, like, overnight, it just goes trade up vertical. Like, no graph you've ever seen because it's two trillion dollars was basically of liquidity was added to the market. Now some people say

And then, like, overnight, it just goes trade up vertical. Like, no graph you've ever seen because it's two trillion dollars was basically of liquidity was added to the market. Now some people say

42:52

No. It wasn't really,

No. It wasn't really,

42:54

like, put into the supply. Like, Poppy might have an idea about this. Some people say, well, that two trillion dollars is not really being given out. It's not going into the supply. It's kinda just there as a borrowing facility in case the banks need it in order to, like, prevent any panic.

like, put into the supply. Like, Poppy might have an idea about this. Some people say, well, that two trillion dollars is not really being given out. It's not going into the supply. It's kinda just there as a borrowing facility in case the banks need it in order to, like, prevent any panic.

43:09

And other people say,

And other people say,

43:11

money per to go by. This is the same thing. So, you know, what what are you talking about here? I don't know. Do you have an opinion on that?

money per to go by. This is the same thing. So, you know, what what are you talking about here? I don't know. Do you have an opinion on that?

43:16

You know, when you're in, like, high school, And, there's the, like, but actually kid in class

You know, when you're in, like, high school, And, there's the, like, but actually kid in class

43:22

who, like, sits in the corner and no matter what anyone says, like, but actually,

who, like, sits in the corner and no matter what anyone says, like, but actually,

43:25

And they try to tell you about something they read or this or that or whatever? It's actually called

And they try to tell you about something they read or this or that or whatever? It's actually called

43:30

Barcelona.

Barcelona.

43:34

Exactly.

Exactly.

43:34

Right? Oh, you mean bruschetta?

Right? Oh, you mean bruschetta?

43:36

No. I mean bruschetta Karen.

No. I mean bruschetta Karen.

43:39

Like, that is those people on the internet. Right? These people who they're the same people during COVID that were like,

Like, that is those people on the internet. Right? These people who they're the same people during COVID that were like,

43:45

but actually,

but actually,

43:46

and then they would go on some rant. Right? Like, no. The government locked us in our home and literally printed trillions of dollars and created forty year high inflation and absolutely screwed millions of people. I don't care what, but actually, you have to say. And then you look at the same situation as, like, they're like, but actually inflation will be transitory and it will come back down. Right? And then you're like, no. That's not how this works. And so Ultimately, what you end up having, which makes markets so that this is a part of capitalism

and then they would go on some rant. Right? Like, no. The government locked us in our home and literally printed trillions of dollars and created forty year high inflation and absolutely screwed millions of people. I don't care what, but actually, you have to say. And then you look at the same situation as, like, they're like, but actually inflation will be transitory and it will come back down. Right? And then you're like, no. That's not how this works. And so Ultimately, what you end up having, which makes markets so that this is a part of capitalism

44:12

is you have theory

is you have theory

44:14

meat reality.

meat reality.

44:16

Sometimes theory is a great primer and overlay on reality, and other times it's not. And what I've learned over time is that the more complex

Sometimes theory is a great primer and overlay on reality, and other times it's not. And what I've learned over time is that the more complex

44:26

the system,

the system,

44:27

the less likely it is that the theory overlays perfectly on reality. And, like, there is no more complex system than the economic

the less likely it is that the theory overlays perfectly on reality. And, like, there is no more complex system than the economic

44:35

system of America, let alone the world. And so all these people who are like, oh, inflation will come down because the Fed will do this or that. Well, like, the Fed isn't the only thing that contributes to inflation. There's supply chain disruptions. There's geopolitical war. There's like all these different components to it. And so I think that you've gotta be very careful just looking at theory and trying to impose theory onto reality.

system of America, let alone the world. And so all these people who are like, oh, inflation will come down because the Fed will do this or that. Well, like, the Fed isn't the only thing that contributes to inflation. There's supply chain disruptions. There's geopolitical war. There's like all these different components to it. And so I think that you've gotta be very careful just looking at theory and trying to impose theory onto reality.

44:59

But the other thing that I would say throughout this entire,

But the other thing that I would say throughout this entire,

45:02

kind of cycle or, or, you know, kind of news development,

kind of cycle or, or, you know, kind of news development,

45:07

Man are we lucky we have the internet? Like, the internet is the greatest place in the world. And, like, Sean did a great job explaining, you know, you can propagate some of this information.

Man are we lucky we have the internet? Like, the internet is the greatest place in the world. And, like, Sean did a great job explaining, you know, you can propagate some of this information.

45:15

But imagine being in the nineteen fifties or sixties and, like, you basically could read the newspaper

But imagine being in the nineteen fifties or sixties and, like, you basically could read the newspaper

45:22

and maybe you watch, like, the nighttime news.

and maybe you watch, like, the nighttime news.

45:25

And you have to listen to the talking points

And you have to listen to the talking points

45:27

from the, like, public narrative or, like, the, you know, the the government or,

from the, like, public narrative or, like, the, you know, the the government or,

45:32

the fed or whatever.

the fed or whatever.

45:34

On a daily basis, there are things that are said

On a daily basis, there are things that are said

45:37

by, those who who kind of set the public narrative. And within seconds,

by, those who who kind of set the public narrative. And within seconds,

45:43

people on the internet destroy the narrative. And they're like, nope, that's not true. Here's these five points. And, like,

people on the internet destroy the narrative. And they're like, nope, that's not true. Here's these five points. And, like,

45:49

I don't care who's right or wrong every single time as much as it's like I want both sides. I want what the people in charge are saying, and then I want the people who, like, think the people in charger idiots are saying. And then I'll kinda like think for myself,

I don't care who's right or wrong every single time as much as it's like I want both sides. I want what the people in charge are saying, and then I want the people who, like, think the people in charger idiots are saying. And then I'll kinda like think for myself,

46:01

but the internet is what has empowered that. And so, like, Wow. What an amazing time for us to be alive to have that ability because literally two generations ago, they didn't have we can do go to the encyclopedia and look up, like, what does a bank run, right, or, like, how does central banking work? It's just amazing that we now have this capability.

but the internet is what has empowered that. And so, like, Wow. What an amazing time for us to be alive to have that ability because literally two generations ago, they didn't have we can do go to the encyclopedia and look up, like, what does a bank run, right, or, like, how does central banking work? It's just amazing that we now have this capability.

46:20

So to I think we should wrap this segment up, and I wanna wrap it up by each of you in just a couple sentences

So to I think we should wrap this segment up, and I wanna wrap it up by each of you in just a couple sentences

46:26

saying, what do you think is gonna happen in the next ninety days, and what do you you guys doing anything?

saying, what do you think is gonna happen in the next ninety days, and what do you you guys doing anything?

46:32

Sean, you go first.

Sean, you go first.

46:34

Okay. So I'm gonna say,

Okay. So I'm gonna say,

46:37

two things. I think in the next ninety days,

two things. I think in the next ninety days,

46:41

I basically, I think biology is actually correct on everything except for his ninety day point because I think that's too hard to know.

I basically, I think biology is actually correct on everything except for his ninety day point because I think that's too hard to know.

46:49

And he might end up being correct that if something happens in the next ninety days or it might take nine hundred days. And I think either way, the important part is he's right. It's just the time fact the time window, I think, makes things impossible. But the good news is you don't actually need to know the time window.

And he might end up being correct that if something happens in the next ninety days or it might take nine hundred days. And I think either way, the important part is he's right. It's just the time fact the time window, I think, makes things impossible. But the good news is you don't actually need to know the time window.

47:06

To act accordingly.

To act accordingly.

47:08

I've said this for a very long time, and I think

I've said this for a very long time, and I think

47:11

what Ballaj is saying is a much louder, better version of that, which is for a long time, people thought,

what Ballaj is saying is a much louder, better version of that, which is for a long time, people thought,

47:17

if you're buying Bitcoin, you're trying to make a buck.

if you're buying Bitcoin, you're trying to make a buck.

47:20

And from the beginning, once I started to understand what is this, I was like, oh, this is not about making money. It's about saving money. It's a savings technology,

And from the beginning, once I started to understand what is this, I was like, oh, this is not about making money. It's about saving money. It's a savings technology,

47:28

which is basically to say, even when inflation was only two or three percent, If you just look at two or three percent over a forty or fifty year period,

which is basically to say, even when inflation was only two or three percent, If you just look at two or three percent over a forty or fifty year period,

47:37

the money that you have in the bank will still if you put a hundred thousand dollars in the bank, it'll still look like a hundred thousand dollars.

the money that you have in the bank will still if you put a hundred thousand dollars in the bank, it'll still look like a hundred thousand dollars.

47:43

But it will only have the buying power of something that's sixty thousand dollars, for example.

But it will only have the buying power of something that's sixty thousand dollars, for example.

47:48

And so why would you ever save your money in something that is designed

And so why would you ever save your money in something that is designed

47:53

to lose purchasing power. You wouldn't, like, you wouldn't do that. And so I don't think that it's a, as I've always thought, Bitcoin's the core value of it is it's a savings technology. It's a currency whose one big feature is, it doesn't inflate.

to lose purchasing power. You wouldn't, like, you wouldn't do that. And so I don't think that it's a, as I've always thought, Bitcoin's the core value of it is it's a savings technology. It's a currency whose one big feature is, it doesn't inflate.

48:07

And so, you know, if you wanted to save your money, you'd rather your money and something that doesn't inflate cannot inflate versus something that either inflate slowly

And so, you know, if you wanted to save your money, you'd rather your money and something that doesn't inflate cannot inflate versus something that either inflate slowly

48:15

or quickly.

or quickly.

48:16

Right? Low inflation or high inflation. I don't want any if I'm saving my money. And so anyways, I think that he is correct about

Right? Low inflation or high inflation. I don't want any if I'm saving my money. And so anyways, I think that he is correct about

48:24

if you're going to save money, you should do it in a hard currency that's not gonna inflate. I've already been on this bandwagon, obviously been the kind of crypto

if you're going to save money, you should do it in a hard currency that's not gonna inflate. I've already been on this bandwagon, obviously been the kind of crypto

48:31

person that's, you know, obviously, I believe in crypto

person that's, you know, obviously, I believe in crypto

48:34

created a milk road because I believe in crypto. Still believe in crypto. And so nothing has really changed there. In the next ninety days, I would guess that biology looks like a fool because people are gonna point out that it didn't happen in that time period. But in the next nine hundred days, think that he will be proven correct. In thirty seconds, pop, what do you think? Or sixty seconds?

created a milk road because I believe in crypto. Still believe in crypto. And so nothing has really changed there. In the next ninety days, I would guess that biology looks like a fool because people are gonna point out that it didn't happen in that time period. But in the next nine hundred days, think that he will be proven correct. In thirty seconds, pop, what do you think? Or sixty seconds?

48:52

I think that Balaji

I think that Balaji

48:54

is correct. Somewhere to Sean, the timeline is hard to get there. I will put a higher probability

is correct. Somewhere to Sean, the timeline is hard to get there. I will put a higher probability

49:00

on the ninety day timeline than most. Because I do think that there's tail risk, and mainly it's because when hyperinflation happens, it happens very fast. Like, in episodes of hyperinflation,

on the ninety day timeline than most. Because I do think that there's tail risk, and mainly it's because when hyperinflation happens, it happens very fast. Like, in episodes of hyperinflation,

49:12

everything's fine. Ninety days later, there is hyperinflation.

everything's fine. Ninety days later, there is hyperinflation.

49:15

So it's less about, like, has this ever happened? And it's more about, like, is it going to happen?

So it's less about, like, has this ever happened? And it's more about, like, is it going to happen?

49:21

Again, I'm like, maybe five percent because I do think there's very systematic,

Again, I'm like, maybe five percent because I do think there's very systematic,

49:26

problems and issues currently in the global financial system. I do think that the banks or or the central banks when faced with save the bank, save the dollar. We'll save the banks, which will lead to inflationary pressures.

problems and issues currently in the global financial system. I do think that the banks or or the central banks when faced with save the bank, save the dollar. We'll save the banks, which will lead to inflationary pressures.

49:36

But I would not bet a million dollars that Bitcoin will be a million dollars in ninety days.

But I would not bet a million dollars that Bitcoin will be a million dollars in ninety days.

49:42

Whoa. Are you guys hyped up or what? I'm ready to go get a fight. We should say you say one thing is the the the the the other take that people have on this, which is that if Biology has like a hundred million dollars of Bitcoin,

Whoa. Are you guys hyped up or what? I'm ready to go get a fight. We should say you say one thing is the the the the the other take that people have on this, which is that if Biology has like a hundred million dollars of Bitcoin,

49:54

he doesn't need to be right for this to be a profitable bet for him. So if he's got a hundred million dollars of Bitcoin already, bitcoins, bitcoins up like twenty percent last week or something like that, but it's up, like, you know, four or five percent right now.

he doesn't need to be right for this to be a profitable bet for him. So if he's got a hundred million dollars of Bitcoin already, bitcoins, bitcoins up like twenty percent last week or something like that, but it's up, like, you know, four or five percent right now.

50:08

You know, he basically would only need to move it by like three percent or it only need to move up by three percent in order for him to be profitable losing two million USD if he's got a hundred million dollars at Bitcoin. Which I suspect that he does have a hundred million dollars of Bitcoin. I I think he now has moved nine I think he said this. He's moved ninety nine percent of his net worth into crypto.

You know, he basically would only need to move it by like three percent or it only need to move up by three percent in order for him to be profitable losing two million USD if he's got a hundred million dollars at Bitcoin. Which I suspect that he does have a hundred million dollars of Bitcoin. I I think he now has moved nine I think he said this. He's moved ninety nine percent of his net worth into crypto.

50:28

And so so I I I don't think I think he can be directionally. I think he can lose the bet and still make money and be doing the thing that's, you know, to his beliefs, the right thing to do, which is alert people

And so so I I I don't think I think he can be directionally. I think he can lose the bet and still make money and be doing the thing that's, you know, to his beliefs, the right thing to do, which is alert people

50:40

that the that the banking system is, is currently broken. And, and, you know, he is the Michael Burry of of our industry. So we'll see if he's correct. Dude, I just feel like I drank just drank like a liter mountain dew. I'm just, like, drinking buckets of do. I'm just like hype up right now. When Pompe tweeted out that he's coming on, people wanted to know how you're gonna sit in the room with the two of us and still

that the that the banking system is, is currently broken. And, and, you know, he is the Michael Burry of of our industry. So we'll see if he's correct. Dude, I just feel like I drank just drank like a liter mountain dew. I'm just, like, drinking buckets of do. I'm just like hype up right now. When Pompe tweeted out that he's coming on, people wanted to know how you're gonna sit in the room with the two of us and still

51:03

be sitting there in cash, ETFs, and not own any crypto. At the end of this segment -- Well, hold on. Hold on. -- fifty one minutes of hell. Are you in on are you gonna go buy Bitcoin or what?

be sitting there in cash, ETFs, and not own any crypto. At the end of this segment -- Well, hold on. Hold on. -- fifty one minutes of hell. Are you in on are you gonna go buy Bitcoin or what?

51:14

I own Bitcoin. I own,

I own Bitcoin. I own,

51:16

Not that. I own it from twenty tea, the No. No. No. No. No. No. No. I I've made purchases.

Not that. I own it from twenty tea, the No. No. No. No. No. No. No. I I've made purchases.

51:25

I don't have cash. I have real estate, and I have but here's the thing though, which is in hyperinflation periods,

I don't have cash. I have real estate, and I have but here's the thing though, which is in hyperinflation periods,

51:31

I own equities,

I own equities,

51:33

those also go up. I don't, you know, to get to a million dollars. Bitcoin right now is at twenty seven thousand. You know, that's like,

those also go up. I don't, you know, to get to a million dollars. Bitcoin right now is at twenty seven thousand. You know, that's like,

51:40

what's that? Like fifty x or something? I don't know if equities will fifty x but I I mean, they they will go up. Yeah. Maybe. But also all those businesses run-in dollars and all their earnings are in dollars. If dollars are not useful anymore. Right? Like, the the whole system, that's that's the thing.

what's that? Like fifty x or something? I don't know if equities will fifty x but I I mean, they they will go up. Yeah. Maybe. But also all those businesses run-in dollars and all their earnings are in dollars. If dollars are not useful anymore. Right? Like, the the whole system, that's that's the thing.

51:55

I'm a Bitcoin bull, and you don't wanna see this happen because the world will will be chaotic.

I'm a Bitcoin bull, and you don't wanna see this happen because the world will will be chaotic.

52:01

Absolutely chaotic. It will be bad for a lot of people. I think everybody, even who's the biggest Bitcoin Bulls, you said this would be yourself pump.

Absolutely chaotic. It will be bad for a lot of people. I think everybody, even who's the biggest Bitcoin Bulls, you said this would be yourself pump.

52:08

You're not rooting for for it to happen this way. A slow transition is really the only thing you want. A fast transition would create a lot of damage. And so you you don't really want that to happen.

You're not rooting for for it to happen this way. A slow transition is really the only thing you want. A fast transition would create a lot of damage. And so you you don't really want that to happen.

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