Michael Saylor SLAMS The FED For Trying To Destroy The Crypto Market | PBD Podcast | Ep. 267
PBD Podcast Episode 267. In this episode, Patrick Bet-David is joined by Michael Saylor and Adam Sosnick and Tom Ellsworth.
0:00 - Start
1:40 - Warren Buffet Reveals His Steps To Success
6:40 - Low-Income Earners Being Priced Out of New Car Market
22:30 - Will CBDC Destroy Bitcoin?
39:12 - The IRS Is After Your Bank Records
46:07 - Michael Saylor Explains How Gold Is Getting Demonetized
54:42 - Michael Saylor Reveals Why Storing Money In Banks Is a Mistake
1:21:03 - Inside the mind of Michael Saylor
1:25:59 - Billionaire Michael Saylor Spills The Tea On What He Reads To Become Rich!
1:49:19 - Billionaire Michael Saylor Reacts To Joe Biden Running For President
FaceTime or Ask Patrick any questions on https://minnect.com/
Speaking at Bitcoin 2023 on Friday, May 19th. For tickets go to https://bit.ly/41khgT6
Visit Michael's website: https://bit.ly/3nLW22Q
Follow Michael on Twitter: https://bit.ly/3LIRtyt
Learn more about Microstrategy: https://bit.ly/3MbLG61
Want to get clear on your next 5 business moves? https://valuetainment.com/academy/
Join the channel to get exclusive access to perks: https://bit.ly/3Q9rSQL
Download the podcasts on all your favorite platforms https://bit.ly/3sFAW4N
Text: PODCAST to 310.340.1132 to get added to the distribution list
Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal bestseller Your Next Five Moves (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.
Why would you fed on Joliet when we got bet daven?
Value payment, giving values contagious.
This world of entrepreneurs, we can't no value to hated.
Ideally, running, homie, look what I become.
I'm the one.
I got to tell you, you guys are funny in the chat, going back and forth with the nicknames about the podcast starting on time.
Anyways, today we're starting without Michael Saylor and Adam because they're stuck in traffic coming up from Miami.
Apparently, there's a bunch of accidents, but Tom, it's you and I, until they come in, at any point, they can come in.
Good morning.
So when they do come in, here's what we want to talk about.
We want to talk about the fact that Michael Saylor and MicroStrategy spent $179 million on Bitcoin last quarter.
Michael Saylor says banking crisis is driving Bitcoin adoption.
We'll talk about Binance.
We'll talk about worse than 2008, how Ethereum co-founder says Bitcoin and crypto now braced for a $540 billion crisis.
We'll talk about RFP.
We'll talk about crypto price warning.
China, Biden, and the Fed could be about to destroy all value of Bitcoin.
This is a Forbes story.
And Biden is pushing a huge tax on crypto.
It could backfire spectacularly.
Washington Examiner.
But before those guys come in, Tom, two stories Rob found here that I really like.
First one, Warren Buffett, formula for success.
One good decision every five years.
What a great way to manage decision-making process, right?
This is a guy that's been at it with his company for 58 years, and he credits roughly 12 decisions.
So here we go.
Warren Buffett's annual letter to shareholders reflects that in the last 58 years of investing and identifies only a dozen good decisions they've made, averaging one every five years as a source of Berkshire Hathaway's 3,784,464% return over that period.
Buffett believes that fewer than 20 decisions made a difference for him.
And it's not about getting every decision right, but getting the important decisions phenomenally right.
His successful investment strategy involved investing in insensibly priced opportunities at big companies with honest people, competitive advantage, and understandable, enduring, and mouthwatering economics and partnering with the right people such as Charlie Munger and Ajit Jain.
Tom, what do you have to say about this?
Well, I think if you look back at it, this kind of goes to, and folks could Google this.
And the S ⁇ P 500, the longer you look at it, the harder it is to beat, right?
You've been in financial services for a long time.
The longer you look at it, like five years, 10 years, 15 years, you make a little chart, the harder the S ⁇ P is to beat.
And if you look deeper into that, you can find these stories that tell you that there were 30 days in the history of the S ⁇ P that if you miss those 30 days, you really miss something.
Like the 2009 had two days where there was like these 5% bounce turnarounds.
Remember that?
Yep.
You know, 2009, everybody said, what's going to happen in 2009?
All of a sudden, boing, 5% one day, another 5% one day.
And all of a sudden, you're 10% for the year.
And so what Warren Buffett is coming back and basically saying is, hey, we've made 12 good decisions and we could probably you're saying that.
Let me tell you what I just found.
According to Hartford Fund, if you missed the market's 10 best days over the last 30 years, this is SP 500, your returns would be cut in half.
There it is.
That's it.
And that's why the S ⁇ P 500 index, like a cash index held for a long time, is usually a good idea.
And that's why a lot of the life insurance products, like PHP sold, you built this monstrous life insurance agency on a nationwide basis, Pat.
And a lot of those IUL index universal lives were tied to S ⁇ P indexes.
So it showed that something that's stable like life insurance.
So back to Buffett.
You asked me about Buffett.
I think if we decode this, we're going to find Buffett is saying, like, the day I invested it, the day I went all in on Coke, the day at Coca-Cola, the day I went all in on Geico, I'd be willing to bet that his 12 big decisions is probably those days.
Because remember, there were days where Buffett decided to go all in on some companies that have come back for him in spectacular fashion.
So it sounds to me like he's saying the same thing, like the story you just read and what the common knowledge among the investment community has been about long-term buy and hold on the S ⁇ P 500.
Don't miss those days.
Yeah.
And by the way, Tom, if there are certain decisions, like when you think about creating wealth, right?
Too many people put this pressure on themselves, I believe, of getting it right every single time, right?
It's a different story with investments and things you invest into specifically than it is with other things you do in your life.
With investments, if you get one thing right, that could make you a household name.
You could have failed in 18 different businesses.
None of them worked out.
And then all of a sudden, boom, one thing you get right.
You sell it for $50 million.
You sell it for a couple hundred million.
You sell it for a billion dollars.
Now everybody goes back and talks about that one success story, right?
So Buffett's story validates and hopefully encourages a lot of people to be a little bit more patient.
He's selling long-term thinking with how to make your investment decision.
I think it's a great philosophy, especially to learn from a guy like him.
I heard a statement.
It's really short.
And it's this.
If you're going to invest, remember it's a cornfield, not a sports book.
You go in sports book, oh, maybe I'll bet on this Laker game.
And then 20 minutes later, there's another game starting.
Maybe I'll bet on this one.
So if you're bouncing in and out, if you get a Robinhood account, you're bouncing in and out.
That's a recipe for, you know, you never beat the sports book.
You may get a one big hit once in a while.
Maybe the super professional gamblers get it.
But the average guy going into a sports book, around the Super Bowl or March Madness, they never get it.
We see that.
Whereas you treat it like a cornfield, what do you do once a year?
You harvest some corn and you have patience in between.
Agree.
Very good lesson there from Buffett.
Here's another one.
New cars, once part of the American dream, now out of reach for many.
This is a Washington Post story.
Low-income earners in America are being priced out of new cars market while high earners are buying more than ever before.
Spending on new cars by the lowest 20% of earners reached its lowest in 11 years, while spending by the top 20% reached its highest on the record, according to 2021 Consumer Expenditure Survey.
So by the way, what they're saying is the rich are getting richer and the poor are getting poor, which I'll have my point on this one here in a minute.
The average price of a new car in the U.S. hit $48,800 in March, up 30% from March of 2020.
And the demand for cheaper models have been shrinking for years.
The problem preventing many Americans from buying new cars are twofold.
One, rising interest rates have made car loans far more expensive with the average monthly payment reaching $7.30 in April of 2020.
Second, the supply of cheaper cars have been shrinking as manufacturers focus on more expensive high-end models.
The global chip shortage caused by the pandemic has forced automakers to ration their components, reserving them from more profitable vehicles.
Tom, what are your thoughts on this?
I got some thoughts, but I want to hear from you first.
Well, this is what's, you know, when money is no longer free and you can no longer get, you know, that two-year lease with those teaser rates, You know, and let's face it, a lot of people are aspirational about their cars.
And what I mean by that is they run to the payment that they think they can afford to get the glitzier vehicle.
Very few people are thinking like, you know, Dave Ramsey and other people that says, hey, be very practical about your personal budget and the car you get.
Think about safety, think about what you can get.
But right now, what I see, I see this.
A friend of mine turns in a Mercedes-GL SUV.
Now, remember, this is, we're not talking a G-Wagon, just Mercedes-GL.
And he had it on a three-year lease in the name of his company.
He goes into the dealer and he says, What's my buyout on this?
Because the vehicles are expensive.
I'm just going to buy the vehicle.
And says, give me the number.
And he said, well, we'll give you two numbers.
Here's the buyout number that's in your contract.
And here's $15,000.
He said, what's the $15,000?
We will buy that vehicle from you right now for $15,000.
And he said, yeah, but if I walk back in the door to get another new one on lease, what's that going to be?
And so the economics didn't add up.
And so he paid about $48,000, bought out the Mercedes-GL, had very low miles on it after three years.
And then it's like, oh my gosh, the high-end cars, the demand is there to the point that that was a local Mercedes dealership wanted to do that.
The average person can't do that, though.
No, the average person can't do that.
But that's the point they're making about what's happening in the high-end.
Now, on the low end, what's happening is the American public has been a payment-based public, right?
The average person is payment-based.
Oh, I can afford that payment so I can get something a little bit more.
Financing everything.
Financing everything.
And they do the payment to lifestyle.
I can afford that payment, so I want to step up so I can get the lifestyle out of it.
And what's happening is the interest rates are up and the little mini lease and the cheap lease, two-year, three-year lease, the party's over.
And now they're having to go in and look at, wow, that's $48,000 plus 10% and everything.
So it's 53 out the door.
And I'll put, you know, five grand down if they've got that.
So 45,000 over five years.
Bingo, 700 bucks.
You know, and it's, and there's the pinch point.
And I think the pinch point is the reality.
And the average American doesn't want to go in and get the base model, you know, Toyota Corolla.
That's not what they want.
You don't have a choice, though.
But here's what I will tell you.
Here's what I will tell you.
To the people who talk about the rich get rich and the poor get poor, and they complain about it.
You have to realize every one of these things that you're seeing happen that's destroying middle America.
Folks, the concept of, well, you see, what about the middle American income?
They can't afford a car like this.
Well, let's talk about what's causing this.
What is causing this to destroy middle America that they can't afford something like this?
Because the guys in the middle that are working their tails off for 22 bucks an hour, 28 bucks an hour, trying to do what they can for their kids, their families.
They're sitting there saying, I cannot get a new car.
I can't get a new car.
I have to go finance to use one.
And it's backfiring on me.
Bad policies have consequences.
Many policies seem noble.
Today I'm reading a book.
It's called Toxic Charity.
I don't know if you've read this book, Toxic Charity.
And I'm going through it.
And he starts off the book, Tom, by saying the following.
He says, I have to read this to you.
He says, oh man, I got to find this to tell you.
There it is.
Okay.
He says, over a trillion dollars of charity was given to Africa.
Do you know what percentage of the money that was given to Africa was actually used and went to the people?
15%.
85% of the trillion dollars that was given to Africa to help.
Everybody was like, we're going to help Africa.
We are the world.
We are the children.
What a great cause.
Let's keep raising money.
Dude, only $150 billion out of the trillion dollars went to the people.
What happened to the other $85 trillion?
And then he continues, talks about never do for the poor what they're capable of doing for themselves.
This is a guy that's been doing charity for 40 years.
And he says, I'm here to tell you more churches and charities are destroying communities coming from a good place, but they're hurting them.
So I'm listening to this recording.
It has nothing to do with politics.
All he's doing is calling our churches and he's calling our charities.
And I said, I'm like, what is this guy's point?
You know, look at the sub title right there, Tom.
How the church hurts those they help and how to reverse it.
This is a guy that's a Christian guy that's been raising money for 40 years.
And he's saying this.
The more you read the book, the premise is you think you're helping people by giving them money.
You're actually not.
You're hurting these people.
So when these guys were talking about, let's send money to people, let's do another trillion dollars.
Let's do another trillion dollars.
Let's take care of these people.
Let's do, what's Andrew Yang's plan about $1,000 every month being given to people?
What did he call that?
UBI, universal basic income.
Let's send people money.
We can afford it.
They need a living wage.
Wait, who determines what the living wage is?
And the government starts turning the dial on what a living.
You know what?
A living wage should be a Ford pickup.
So I'm going to turn the dial up.
Oh, is it election year?
We're giving everybody a truck now.
They send them the money.
And then all of a sudden, you know what they did with all this money they sent to help the poor?
You know what they really helped?
The rich.
Because what they don't realize, poor people's problems is their habits.
Listen, when I was broke, and if it was $50 in my bank account, all I knew what to do with the $50 was what?
To spend it.
If I had $500, guys, let's go out.
It's on me.
If I had $400, I had such a poor, broke mentality with money.
Until that changed, nothing was going to change.
So rather than trying to help these folks with the money you send to them that they don't know what to do with it, first thing we got to do is teach them about how money works.
But nobody wants to teach people how money works.
It's all the other stuff that people want to talk about.
This book, Psycho Cybernetics, this guy, Tom, who becomes a surgeon, he does cosmetic surgery for 15, 20 years.
They ask him, they said, why did you become a cosmetic surgeon?
He says, because I wanted to make people happy.
And he says, every time I would do surgery, this book sold by the way, 35, 40 million copies.
He said, every time we would do surgery, I would look at their faces.
They were so happy.
And I'm like, man, I made somebody happy today.
Breast augmentation or face or whatever he was doing.
He says, you know what happened six months later?
They went back to the same depressed, miserable people they were.
He says, I realize after doing this for 15, 20 years, you can't make people happy from the inside, from the outside.
You can only make them happy from the inside.
So he went and got away from that business and started becoming a psychologist, working with people on the mindset, writes a book called Psycho Cybernetics, sells 35 million copies.
What we're trying to solve all these poor people's problems from the outside by sending money to them.
Why don't we work from the brain?
Why don't we work from teaching them mentally on how to deal with their finances and other areas of their lives?
So the next time it comes to vote for sending more free money to people, just remember this.
The more free money you send to the market, all you're doing is making the rich richer.
And the rich keep getting richer and the poor keep getting poor because your policies that sound noble on the outside actually destroys middle America.
Tom.
I completely agree.
And Pat, you know where my charitable heart is, but you also know that my charitable heart changed about 12 years ago because I was part of American mega churches.
And, you know, I was a person attending there.
But then I would look around and say, no, wait a minute.
You know, where can the church have the highest impact during a disaster?
Karina, there's not people down there.
You know, it didn't rain four foot of water and then, you know, Lake Poncatrain flood because of their habits.
It is because of Hurricane Katrina.
And you can go down and provide relief and you can meet certain basic needs.
You and I both know of a church in Dallas where we used to go, and they operated a medical clinic for people who did not have medical insurance.
But they didn't come in there to get a gift.
They came in there to get, you know, an antibiotic when they had bronchitis and they had no, you know, medical insurance or it was a single mom that had inadequate insurance.
That is where charities can stand in the gap where 90% of that dollar is providing a bridge on something that is not lifestyle related.
And what you're talking about, there are organizations out there and they hate them.
You remember what the auto industry thought of JD Power the first time they were putting out those awards?
They were like, who is this SOB that's doing this?
And they hated it because the lists were real and they couldn't just put million dollar marketing around the list.
Sorry, dude, your SUV is not reliable and therefore you don't get the JD Power Quality Award.
Now people, you know, that kind of forced them.
What's happening in charities, Pat, is there are organizations out there that are looking at the two taxes.
Tax number one, you give a dollar to a charity.
How much of that dollar gets used up by the local administration, the people in America collecting the dollar, operating the office.
And if it's more than about 8% to 12%, that's an inefficient charity.
The second is how much of the dollar.
So now let's just say 10%.
Now we have 90 cents or 90 cents.
We're going to feed the children in Africa.
Okay.
How much gets to them and what was it doing?
And then you find out that there's a government tax in there, that the government actually snatched 50% of that.
Or that you do the most terrible thing is you buy commodity like flour and things like this.
That's a tradable commodity.
Guess who takes it?
Half of it gets taken by the government.
And the government then sells it.
So the average American doesn't know, I gave a dollar.
Wait a minute.
A dime went to these guys' administration in the U.S.
And then the rest of them got to Africa.
And that's exactly what he's talking about.
This guy, let me tell you what he says.
He's so right about toxic charity.
Here's what he talks about in the book.
He says, Lupton's Oath offers six basic guidelines.
Never do for the poor what they can do for themselves.
Two, limit one-way giving to emergencies.
Three, empower the poor through employment, lending, and investing using grants sparingly to reinforce achievements.
Four, subordinate self-interest to the needs of those being served.
Five, listen closely to those you seek to help and in particular, listen to what is not said, be apparently felt, and above them all, do no harm.
And then he talks about the five cycle.
Okay.
This is very powerful.
The ever-descending life cycle of charity, one-way charity.
Give once and you elicit, give once and you elicit appreciation.
Give twice and you create anticipation.
You're going to give it to me again.
I anticipate.
Give three times and you create expectation.
Where's my money?
Give four times and it becomes entitlement.
Give five times and you establish dependency.
Okay.
Very interesting when you think about this.
Give once, you elicit appreciation.
Give twice, you create anticipation.
Give three times, you create expectation.
Give four times, it becomes entitlement.
And give five times, you establish dependence.
Well, you know what this means?
And I'm not going to make enemies here, but I'm going to upset some people.
So those of you that are Christian churches preaching from the pulpit about what has welfare done?
Look how welfare has messed up our city.
They've created the dependency of these people.
Look in the mirror because some of the stuff you're doing is causing the same thing.
Yeah, and it's happening.
I mean, you know.
And by the way, I learned this the hard way in my third year in business.
I was 24, 25 years old, 26 years old.
I put on my own sales office and I had a good friend of mine who was one of my sales guys.
And he starts making money, but he starts dating this girl.
And he buys her like a $3,000, $4,000, $5,000 rank.
And he takes her on this place, and he's spending all this money.
And he says, I can't afford to pay rent this month.
And he says, but you make money off me.
So give me a break for one month.
I said, no problem.
Give me a break for a second month.
No problem.
Give me a break for a third month.
No problem.
You know what happened by the fourth month?
By the fourth month, it was expected that he doesn't need to pay rent.
By the eighth month, when I asked for rent of the previous eight months that I was paying myself, he became an enemy.
Relationship changed from that day on.
So as much as you're thinking you're doing good, you're hurting them when you go out of your way.
By the way, we got the great Michael Saylor in the house.
Hell, just in I-95 is broken free.
They let Adam and Michael Saylor in.
What's up?
Adam?
Hello, sir.
Michael Saylor, how are you, sir?
How you doing?
Doing good?
Awesome.
Good to see you, man.
Good timing.
We got 90 minutes to get as much we can out of your brain as possible.
Michael, they say great minds think alike.
So you and I arrive at the same time.
How bad was it?
It must have been pretty bad if it wasn't.
It was very bad.
It was horrible in Miami and even worse in Fort Lauderdale.
What do you think, Michael?
I think people aren't working from home anymore.
There we go.
And by the way, at least not in Florida.
Well said, Michael.
Well said.
Although it is the first week of May, and it's supposed to be now that over the last three weeks, from Easter and May 1st, the snowbirds are supposed to have driven north.
So we used to see these Canadian license plates, these New York and Pennsylvania license plates.
I've seen fewer of them, and you would think that we would have a little traffic break as the snowbirds migrate back north.
Well, thank you for that update.
Weather update, Tom.
We're very happy about that weather update.
Tom's update.
Weather's going to be okay.
That's what Tom is trying to say.
Michael, I got a handful of things I want to go with you.
My goal is to try to get it done in 90 minutes.
There's this guy in this street.
He lives on, what's the street called?
Pennsylvania.
And he lives in this city.
He lives in this city, D.C., and he's a pretty important guy.
Now, they just call him Joe, but he's a pretty important guy.
And there's a few things that's formulating that I kind of want to run by you.
This is a Forbes article, okay?
Crypto price warning.
China, Biden, and the Fed could be about to destroy all value of Bitcoin.
Okay.
So let's see if this is just a propaganda, if there's any credibility to this story with CBDC.
Bitcoin price has doubled since November, reaching around $30,000 per Bitcoin.
Despite criticism and negative declarations, Texas Senator Ted Cruz has warned that central bank digital currencies inspired by Bitcoin and digital currencies could destroy all value of Bitcoin and undermine its anonymity and decentralization.
China is currently leading the way with the digital wand, which some see as giving governments unprecedented power to surveil and control citizens.
Cruz introduced legislation to prevent the creation of a digital dollar, saying the U.S. government has no authority to unilaterally establish a central bank currency.
He added that those who want a CBDC dislike cash because it is not subjected to centralized control and constant surveillance, which is a key feature of digital currencies, despite his concerns about CBDC, Cruz remains incredibly bullish on Bitcoin, calling it clearly the alpha in the current crypto sphere.
Are you just as concerned about this as Senator Cruz is?
You know, every time a politician wants to ban guns, there's an explosion in demand to buy guns.
Right.
And so talk about CBDCs really is a marketing event that causes everyone to think about a world where they don't own their own money.
And that makes them think, well, what kind of money could I acquire that I would own?
And the most censorship resistant monetary network in the world is Bitcoin.
So interest in CBDCs is just going to drive more feverish interest in Bitcoin.
It's actually driving awareness.
And Bitcoin is growing as people become more aware that they need something which is non-sovereign store of value, nation-state resistant.
So if there's hyperinflation, people want Bitcoin.
That's why they are thinking about Bitcoin in Argentina or in Nigeria or anywhere in Africa right now.
If there's moderate inflation, people that are sensitive to it will go for Bitcoin.
And then the people that think the inflation will go away will look at it as an oddity.
But, you know, money is a store of value, a unit of account, a medium of exchange.
And then there's a fourth characteristic that we don't talk about.
It's the thing that's not said.
It's a system of control.
So certain monies are easier to control than others.
For example, we talk about gold as money, but you ever try to carry a gold bar through an airport?
Very heavy.
Try it next time.
They won't let you through, right?
In fact, if you tried to carry $100,000 of gold to an airport, not only would you not get through, but the assumption would be you're a criminal, you stole the gold, and they would just take it and keep it without a court order.
Now, try to carry $100,000 of cash through the airport.
You ever try that?
Put it in a bag and just, you can put it in a bag, and as you're walking through the TSA check or the x-ray machine, just nonchalantly say to the officer, yeah, I'm carrying $100,000 of money onto the airplane, right?
You won't get through.
Now, not only will you not get through, they'll just take your money, right?
They'll just take it, and the assumption will be you stole it, okay?
So cash is a unit of control.
Now, put $100,000 in a bank and try to wire it to someone, or just take it out, and they're going to ask you why.
Tell them it's none of their business.
Try to send it to someone privately.
Tell them you just want to send it to a numbered Swiss bank account, right?
See how that works.
That won't work, right?
That's a system of control.
A couple of stable coins have been getting shut down.
Paxos' BUSD got a Wells notice.
They got shut down.
And Custodia tried to launch a bank and they wanted to issue AVITs.
AVITs were digital dollars.
And they were digital dollars that were going to circulate on crypto networks.
And the regulators denied that banking license.
And it's about a 70-page denial letter, very articulate.
And I read it all.
I read thousands.
I read all of the crypto legislation and all of the crypto litigation.
So if you dig into that denial letter, which is very well written and articulate, what is very clear is the regulators say, we're not going to allow the bank to form because We don't want someone to issue digital dollars that will circulate on crypto networks non-KYC, evading our anti-money laundering rules, our anti-terrorism rules, our know-your-customer rules.
So it's clear that the regulators reject with prejudice the idea that you can circulate large sums of dollars without reporting that.
Now, that's a political football, right?
Because a lot of people in this country think that you should own your own money and you should have financial privacy and you ought to be able to do what you want with your money.
There's another group of people that don't agree, right?
Ted Cruz is on the side of freedom.
You ought to own your own money.
Now, it turns out that if your money's in a bank, you're not going to be able to circulate it freely.
It's controlled.
And on the other hand, Bitcoin is the one network you can't control.
Ted Cruz's famous line is, I like Bitcoin for the same reason the Chinese don't like it.
They can't control it.
Nobody can control Bitcoin.
So if you're insecure about being able to own your own money, do you own it?
And can you actually use it without asking somebody's permission, then the solution is not gold, is not silver coins, it's not stacks of cash.
It's not money in a bank in the U.S.
It's certainly not money in a bank in Lebanon, Argentina, anywhere in Africa.
Those banks won't let you, they won't let you take your money out of the bank.
Go look at Nigeria, $42 a day, that's how much you can take out of the bank.
They're keeping your money.
So the one network that you have that gives you a decent chance of owning your own money and then being able to spend it the way you want is Bitcoin.
So I'm not worried about Bitcoin.
I do think that there'll be a massive political fight over CBDCs.
There's a technical challenge.
Our government doesn't know how to issue a CBDC.
We don't know how to issue digital currency.
The people that are issuing digital dollars are the cryptocurrency people, right?
You know, Paxos knows how to issue a digital dollar, right?
And the regulators sent him a Wells notice saying, shut it down.
So the private market knows how to issue digital dollars.
The government doesn't.
The EU doesn't.
The feds don't.
And so even if they wanted to, they can't technically right now without somebody else's help.
But as long as Congress is split, right, it seems to me quite clear there's a large faction.
By the way, on the Democratic and the Republican side, I mean, Robert F. Kennedy, I don't think is in favor of a CBDC, nor is Ron DeSantis in favor of a CBDC.
So there are a lot of free thinking politicians in both parties that are adamantly against having a system of control where the government can decide how you, you know, it used to be $10,000 was the cutoff of the report, right?
It used to be you had to report when you wired $10,000, and that was back when $10,000 was worth something, right?
It used to be, I think it dates back, what, 30, 50 years or something?
So it used to be $10,000 was a lot of money, and then they kept the $10,000 limit, and inflation creeped up, and pretty soon $10,000 is not nearly so much money.
And what we're seeing is an encroachment of that where now people are starting to lobby for the government to get a report on everything spent more than $600, and they lower the number.
Who is supportive of that?
I mean, right now, if you look at Federal Reserve, here's a tweet from Ron DeSantis you were talking about.
April 7, the Federal Reserve has made no decision on issuing a central bank digital currency and would not do so without clear support from Congress and executive branch, ideally in a form of a specific authorizing law.
A CBDC would not replace cash or other payment options.
And then DeSantis at the top says, it is not merely ideal that major changes in policy receive specific authorization from Congress.
It is constitutionally required.
Unaccountable institutions cannot impose a CBDC on Americans.
They will tell CBDC, won't be abused, but we are wise enough to know better.
This wolf comes as a wolf.
Michael, the question I'm asking is: this whole thing with 600, forget about the politicians that want it.
We understand why they would want it.
You can control and see what people are doing.
What average voter wants to vote for this?
Who, the average American that would say, I'm okay with this?
I'm sure the overwhelming majority of the population is adamantly against it.
And I would say a decent majority of politicians are against it.
But there is a fringe wing that wants to impose control over everybody and they don't trust anybody.
And, you know, heck, at some point, they would probably like to see how you spend 50 bucks.
And that's the control freaks in the political sphere.
You know, if politicians have shown themselves quite capable of interfering in your private affairs, and the last three years have shown anything, they've shown that people can come up with some justification to tell you how many people can sit at your dinner table on Thanksgiving, right?
And so there'll be some of them.
I don't think that politically it's going to fly in the near term.
And in the next two to four years, I don't see consensus at the political level to impose a CBDC.
But I think it's like that persistent boogeyman where people say, oh, it's coming, and the result is more interest in the antidote to it.
So I don't think it's bad for Bitcoin.
I think it's good for Bitcoin.
I do think we ought to be concerned about money being used as a system of control.
It's very disturbing.
Yeah, I think you bring up an interesting point there.
And Rob, I just flipped you something.
Can you grab that?
Speaking of systems of control, I want you to look at this picture of the two diplomats from India and Russia.
And I think you know what I'm talking about.
It went down in the last 24 hours.
I just sent you the link to it, Rob.
Take a look at that.
The Russian guys on the left, the Indian guys here, Russia has got billions of dollars trapped in India that is in rupees.
And India is saying you can't move them.
But if you want to use them to pay for labor to build things, we're happy to do things.
What do you need built?
And so this is a system of control here.
This is two governments together.
And India, look at the posture of the guy from India and look at the posture of the guy from Russia.
So when we talk about systems of control, this goes all the way up to the way governments control each other.
This is India sitting on billions of dollars and won't let Russia take back.
India bullying Russia.
What would you have thought that would happen?
That just doesn't make any sense.
But good for them.
Good for the Indians.
I have a question for Michael, just on the heels of basically what Pat read about the DeSantis.
You know, there's a story here.
I think it's SB 7054.
It's a question basically regarding Florida.
We're here in Miami.
We dealt with the traffic.
DeSantis, the CFO of Florida is Jimmy Petronas.
He had some very harsh words on CBDCs.
He called it government surveillance.
He said it could lead to financial slavery and political tyranny.
So you said that if they were going to have some agenda to push through CBDCs, they would have to essentially have some sort of public-private partnership, right?
The government's not going to do it on their own.
Who would lead that charge?
And what would they, how would they sell that to the people?
Is it Gary Gensler of the SEC in partnership with certain Congress people?
Like, walk me through how it would even happen and get approved via Congress.
Well, I don't, I mean, to be clear, I don't expect it to happen.
I don't think that there is consensus in the Democratic Party or the Republican Party to implement a CBDC.
I don't think they know how to do it.
I think there's resistance to it.
I think that what's going on right now is there's a regulatory crackdown on crypto.
And so what is happening is the administration is cracking down on crypto exchanges.
It's cracking down on crypto securities.
It's cracking down on some of the crypto tokens and is cracking down on cryptocurrencies.
And by currency, I mean a stable coin, like a dollar circulating.
And I think that that's creating quite a lot of sound and fury and friction and anxiety in the industry.
I think it'll continue.
There is no coherent digital asset framework that's been offered by any regulator.
There isn't any coherent digital assets framework offered by any legislator.
We're nowhere near that, like there's not a bill we're debating that if it gets voted on will solve the problem.
There is no bill.
Got it.
Okay.
And so, you know, the talk about CBDCs gets people, you know, quite spun up, rightfully so.
But I think the story here is CBDCs are going to be a non-starter in the free world.
And even in the place that's closest to it is China, I suppose.
And so I really think that it's a Chinese concept.
And I don't really think in the free world we want to be like the Chinese.
And I think ultimately both sides of the aisle will agree on that.
They won't agree on other things.
They won't agree on private money.
Like, for example, probably the Republicans and the conservatives would be in favor of private companies issuing digital currency and letting it circulate.
And on the other side of the aisle, they're a bit more conservative.
And they would say, well, we only want banks to issue currency that report to us on every material transaction.
But none of the banks were able to issue a stablecoin either.
Signature Bank was unable to issue a stable coin.
Silvergate Bank was unable to issue a stable coin.
And Custodia wanted to be an FDIC approved bank.
They were unable to issue a stable coin.
And when you ask those banking executives, they said, well, the regulators wouldn't let us.
You sound very confident, though, with saying that.
Confident about what?
The fact that the regulators won't let you issue a stablecoin?
Confident about the fact that both sides are going to agree on not wanting to do anything with CBDC.
I mean, you're talking about a direction we're going to where over-regulation is a popular thing.
Censorship is being sold as a no, that makes sense.
I understand what they're doing.
They should be silencing that person.
He shouldn't be saying anything.
To the point where a guy named Elon Musk, who was on track for being a trillionaire, if he would have just driven Tesla, he decides to go out there and take money and buy a nonprofit organization at the time that he called it, an organization called Twitter, right?
And this story comes out.
Supreme Court to decide if IRS can secretly obtain bank records.
Okay.
This is CPA practice advisor.
Again, this is not Congress.
This is Supreme Court to decide if IRS can secretly obtain bank records.
They're set to decide Paul Selly versus IRS, whatever the IRS, whether the IRS can obtain bank records from taxpayers' relatives without notice to help the agency tax collection, agency's tax collection efforts, and its decision is expected early this summer.
The case raises questions about taxpayer privacy and IRS authority amid the agency's $80 billion in funding over the next decade.
And I can continue, in this case, Remo Paul Selli owed more than $2 million in taxes to the IRS, and the agency issued summons to his wife's bank and two other banks where Paul Selli's law firm had accounts without notifying his wife or firm that the IRS was trying to obtain the banking information.
His wife and the law firm argued that the IRS should have to notify them if they're going to send a summons for their information for the banks.
The point here is they're more and more and more figuring out ways to control the decisions people are making.
And the way they sell it is in the following way, saying, look, to the average person, do you want to see these guys that are money laundering through Bitcoin?
Do you know what's happened with all the pedophilia, the fear of all the things that Bitcoin and crypto is used for?
This is one way for us to prevent from illegal purchase of weapons or money, you know, money laundering.
This is why we need a CBDC because we can catch the criminals easy if we have that.
And to the average person who's only got $6,000 in the bank and has got a regular job, let's just say, it's a regular person who says, you know what?
That does make sense.
These rich people have been laundering money for such a long time, and it's about time we find out what they're doing.
And a CBDC is something we should do.
Being too confident kind of gives those guys strength because they can play their manipulative games until eventually one day you're waking up saying, shit, now we do have CBDC.
Well, I mean, I agree with you.
If you're a voter, you ought to not, it should be an acid test.
I don't think anybody should vote for a politician in favor of a CBDC.
I mean, this is the struggle, you know, control versus freedom that's as old as time, right?
And every society, you know, in the history of the human race, every society, there's always people that want to impose control on the people.
And there's another group that want freedom.
I've been reading Conceived in Liberty, which is Mary Rothbard's history of the American colonies before the Revolutionary War.
And it's hundreds of chapters, non-stop struggle.
Someone wants to control a colony.
They want to tell you what to think.
They want to tell you, you know, who God is.
They want to define religion.
They want to impose taxes.
They want to seize your property.
They want to tax your property.
They want to impose monopolies.
And then there's another group fighting for freedom.
And it was going on for hundreds of years before the Revolutionary War.
I mean, there were monopolies in New York on who could bake.
There were tariffs on using the Hudson River to go up and down the river.
There were monopolies on who could trade with the Indians.
They would give you land.
They would steal your land.
They would tax the land.
People wouldn't pay the tax.
There were rebellions.
It's hundreds and hundreds of struggles.
So it's been going on before the revolution.
It's going on in every country in the world.
Today, it's certainly going on.
And if you have any political power, I think the best way to use it is to support those that trust people, are in favor of freedom, because there tends to be, or seems to be, this never-ending tendency of governmental organizations to get stronger.
And as they get stronger, they raise taxes.
They funnel the taxes into the police state and the control state.
And pretty soon, it's illegal to bake bread.
It's illegal to row up a river.
It's illegal to cross the river.
If you have land, you have to pay tax.
If you pay tax, it has to double.
The taxes were used.
It used to be we paid tax to pay ministers to preach religious beliefs that you disagreed with.
And if you actually laughed or kissed your wife on a Sunday, they whipped you.
you know, fined you and steeze your property because you were disrespectful to the Almighty Lord.
And I'd like to say it was unique and a one-time thing, but it wasn't.
It's kind of the history of humanity.
So it's going on today.
It's reprehensible.
And you can't see politicians that will articulate that message that the people cannot be trusted and the government needs to control everything.
Luckily, we're in Florida where we have a number of politicians that believe differently.
I'm hopeful that we'll see a backlash to the control tendencies in the political sphere that have manifested themselves over the past few years.
And CBDC is just one of those touchstones.
It's not the only one.
It won't be the last one.
It wasn't the first one.
So, you know, there's an article that just came out a couple of days ago, May 3rd, saying Michael Saylor, I don't know if you know that guy, pretty big deal of a guy.
We like him a lot.
Michael Saylor says banking crisis is driving Bitcoin adoption.
This is coin edition story.
And in the story, you're talking about, you know, you talked about this briefly earlier as well.
MicroStrategy Microsoft believes that the fiat and banking crisis is driving the adoption of Bitcoin, stating that Bitcoin adoption is being driven by the progressive global loss of confidence in fiat currencies, conventional banking, and competing assets.
Bitcoin's recent rally has led to a significant reduction in MicroStrategy's BTC impairment loss, allowing the firm to strengthen its capital structure.
Saylor indicated that MicroStrategy will continue to accumulate Bitcoins as investors' confidence and fiat continues to erode, stating that the real key with Bitcoin is just to be able to hold on to it and stomach the volatility.
Just to be able to hold on to it, stomach the volatility, which, by the way, very, very hard to do.
Just earlier, we read an article by Warren Buffett that they asked him what's the key to success.
He says it's making one great decision every five years.
They were shown his 3.4 million percent return in the last 50 years.
And he says that's a byproduct of us making 12 great decisions to make what we've done today.
It's hard to kind of make a decision and stick to it in good and bad times.
Reason why I ask this question is the following.
Gold, on the other hand, there were certain markers you looked at.
Hey, inflation is up.
Hey, interest rates are going up.
Hey, we're printing money.
Hey, they're printing more money.
Hey, they're sending more money out.
Gold would typically, there would be a reaction to it, right?
Now, that is more of a reaction towards crypto and Bitcoin, where it's no longer the reaction towards gold.
Why do you think that's happened to gold?
I think gold's getting demonetized by Bitcoin right now.
If you look at the past three years, since MicroStrategy bought $250 million worth of Bitcoin in August of 2020, since that time, Bitcoin's up about 140%.
The S ⁇ P is up about 20%.
NASDAQ's up 10%.
Gold's up 1%.
Silver's down about 8%.
Bonds are down 18%.
Conclusion, right?
If you buy debt, government debt, you're going to be bankrupt.
That's why those banks are going bankrupt.
All the banks had debt when the interest rates went through the roof.
The debt traded down and they all were technically insolvent.
The problem with gold is, first of all, if you have, if I bought $250 million worth of gold, I can't carry it around in my pocket.
I can't take self-custody of it.
I can't move it anywhere.
I can't transfer it to a counterparty.
And so that means I have to put it in a bank.
There's only a handful of banks in the world that custody it.
And the banks rehypothecate the gold.
So that means that if you wanted to sell $250 million of gold, the bank will sell your gold.
If you want to buy it, they'll sell you paper.
And the paper gold isn't backed by the actual gold.
So you have fractional reserve banking of gold, right?
You don't want to own an asset where the bank can sell 100x more of that asset than they own.
The whole problem with fiat currency, right?
If you look at the history of banking, it was, you know, goldsmiths.
You know, goldsmiths have gold when gold was money, and they gave you a note.
So you give me a million dollars of gold.
I give you a million-dollar note.
You trade the notes back and forth.
That's your paper money.
That works fine as long as it's a one-to-one.
But then the guy that's the goldsmith says, holy crap, I actually can give him a million-dollar note, and he thinks that I've got a million dollars of gold backing it, and now there's two million in the system.
And then I give him a million dollars, and now there's three million in the system.
Now there's three times as much money.
There's one stack of gold worth a million bucks.
Prices go through the roof.
That's inflation.
And eventually you come back and you try to redeem your paper for the stack.
I give you your gold back and you try to redeem and the gold's gone and you try to redeem and the gold's gone.
Okay, I'm bankrupt.
Oops.
Okay, so when did this idea of over-issuing paper money start?
Didn't start, you know, when Nixon defaulted on the gold standard, he wasn't the first.
He was just the most famous, right?
People have been defaulting on paper money probably for thousands of years.
And Nixon just made it official.
Yeah, so the issue is if gold is money and it goes into a bank, the bankers issue 10x more paper than there is gold.
You have inflation.
Eventually, right, when the French tried to redeem their paper dollars for gold, the U.S. basically closed the gold window.
We defaulted on that obligation.
And we started a cycle of inflation from 1971 on that's been running 50 years.
Now, when FTX failed, it was no different.
The issue is people put Bitcoin on FTX, and then Sam turned around and issued 3x as much paper obligations.
And when people try to withdraw the Bitcoin, he doesn't have it.
He fails.
When Silicon Valley Bank failed, or when any of these other banks fails, they had a certain amount of money, and then they turned around and they invested it.
And their investment was in government securities.
The securities traded down.
Now they were insolvent.
When people try to withdraw their money, they don't actually have the money to pay them off.
The banks fail.
So when you look at this banking crisis, what's going on?
What you've got is a bunch of banks everywhere in the world that have shaky assets, right?
What's really shaky?
Well, if you actually hold Argentine pesos or a Nigerian Nayara and then you triple the supply of them every year, the value goes to zero, right?
If that's your currency base or your asset base, you're going to be insolvent.
When people put $10 billion into a bank backed by pesos, the peso goes to zero.
The bank turns around and reloans out $20 billion.
Now there's $30 billion circulating on $10 billion in the bank.
When you try to withdraw the money, the bank collapses, the entire economy collapses.
That's going on everywhere in the world.
It's much worse in Lebanon or Nigeria or in Argentina than it is in the U.S.
It's bad in the U.S., and it's cracking on the seams with, you know, First Republic Bank and Silicon Valley Bank and Signature Bank and the like.
But what do you conclude if you're an individual?
If you're just, if you're a company or if you're a family or if you're an individual and you live in Zimbabwe, what would you do?
Well, you can't, you're not going to buy gold and put it in the bank.
The bank's just going to seize your gold.
You're not even going to buy dollars and put it in the bank.
The bank is going to seize your dollars.
You're not going to buy local Zimbabwe dollars.
They're going to zero as you stare at them.
They're going to lose 10% of their value a month, right?
They're just melting in your hand.
So you got to buy something you can custody.
So before Bitcoin, you would have bought bars of soap, crates of toilet paper.
You would have bought motorcycles.
You would have bought a Humvee.
You would have bought barrels of oil.
You would have bought anything.
You would have bought food.
You would have bought bullets.
You would have bought guns.
Anything tangible that you can self-custody, you would have held.
Now, after Bitcoin, you now have for the first time in human history the ability to buy not a barrel of oil, but $80 worth of Bitcoin.
And you put it on your phone.
And now you can go through an airport with the Bitcoin.
You can't go through the airport with a barrel of oil.
Right?
And you don't, what's the big difference?
The difference between gold and Bitcoin, and the reason Bitcoin is up 140% and gold is up 1% is the middle-class family can custody their own Bitcoin and a wealthy person can either hold $10 million of Bitcoin in self-custody or if I live in Africa,
I can move the $10 million of Bitcoin to Monaco, Singapore, London, Paris, New York, or Miami Beach.
And that is not an option you have with your gold.
It's not an option you have with your dollars.
When you're an Argentine citizen and you actually call up the bank and say, hey, move my million dollars out of Argentina and send it to Switzerland, they're like, I got us.
No, they have capital controls.
They have banking controls.
The people in Lebanon with millions of dollars in Lebanese banks, they wanted to get their money out of Lebanon.
It was like, well, sorry, your funds are frozen.
Why?
Because the bank never had the million dollars.
As soon as you put the million dollars in the bank in Lebanon, they turned around and loaned it to the government.
It's gone.
The government spent the million dollars.
You try to get the money out.
The bank closes its doors.
Is that illegal?
No, because the guy that runs the government passed a law declaring a bank holiday for the good of the country, saying that we can't allow you to redeem your dollars.
So the bottom line is, if you're trying to use money that requires banks, you can't trust the banks, right?
You certainly can't trust the banks in Africa, in South America, in most of Asia.
It used to be Americans thought they could trust American banks.
Now they're realizing that they can't trust American banks.
So the first order impact of the banking crisis is people think, well, maybe the money I had in the bank's going away.
And so I ought to put it in a bank and cyberspace that isn't controlled by the government or by the bankers.
And that's Bitcoin.
The second order impact is the solution to the banking crisis is print more dollars.
And if you print more dollars, the actual monetary inflation rate goes 10%, 15%, 20%.
So you think, why do you think those bonds crashed?
You know, because they're actually claims on dollars.
Do you really want to hold a billion dollars of Zimbabwe dollars?
What if I offered you 10 billion Zimbabwe dollars?
I mean, the answer is it's going to a nickel.
Okay.
So if the paper currency keeps crashing, then you can't own anything that's currency related.
You can't own a currency derivative.
You need to own something that politicians can't print more of.
Okay, well, that's oil.
That's land.
But the problem is, try hauling 100,000 barrels of oil from where you are to London, where you want to be.
How are you going to do that?
I'll give you a billion dollars of land in Central Africa, and then someone takes over with machine guns and declares that everyone with large amounts of land now loses it.
That happened in Zimbabwe.
You're going to pick up the land on your back and carry it to France?
So it's kind of, it's simple.
If people lose faith in the banks, they lose faith in the currency.
When they lose faith in the currency, they lose faith in the government.
When you lose faith in the bank, the currency, and the government, and someone says, what can you trust?
The answer is you can trust Bitcoin because you can custody your own asset.
You can run your own node.
And at the end of the day, even if the Chinese want to shut it down, they can't.
If the Russians want to shut it down, they can't.
If any nation state wants to shut it down, they can't.
If the U.S. wanted to shut it down, they can't.
And so everybody wants something that they can trust that is beyond the reach of a corrupt politician, a corrupt corporate executive, or they don't have to be corrupt.
They can just be well-meaning, trying to do the right thing in a misguided fashion and meddling with your economic life.
If there's ever been a time for you to make that argument and make it aggressively and scream it off the top of your lungs is right now, especially the fact that three out of the four largest banks that ever gone out of business in the history of America were done in the last 90 days.
You got Wambu was the biggest, which was September of 2008, $307 billion.
First Republic was $212 billion.
That was May 1st.
Silicon Valley Bank, March 10th, $209 billion.
Signature Bank, March 12th, $110 billion.
And the next one, closest one to it, is IndyMac.
If you remember, IndyMac was only a $31 billion company back then in 08.
So someone may be listening to this and say, oh, my God, man, this guy's right.
Maybe I ought to start moving my money out of my bank as soon as possible.
Jamie Dimon, I know these guys are trying to get people not to take their money out of the bank and have too many bank runs because if they do that and some are taking their money out of their bank and putting it in the money market, is Michael saying take my money out and put it in Bitcoin?
Or are you saying maybe take it and put it in a bigger bank?
I'm a little concerned, Michael.
You sound smarter than me.
What should I do?
The average person is thinking that right now.
So are you saying that these three out of four largest banks that went out of business that happened last 90 days, there's more to come and things are going to get uglier than what it's been last 90 days?
Or are you just saying the fact that if you keep your money in the bank, at any point they can make that decision and control your money?
I'm saying that money is a store of value, and there are multiple monies and they're not created equal.
So let me give you the world's worst money.
The worst money in the world is like Argentine pesos or Venezuelan bolivars or Zimbabwe dollars or Nigerian NIAR.
Weak money.
The official inflation rate in Argentina is 105%.
But that's the official rate, which is that understates it.
The actual inflation rate would be higher.
And if the inflation rate is running 100%, that means your money is losing half of its value every 12 months.
That means that within 10 years, you have nothing.
Okay.
So bad money, bad currency or bad money loses all of its value over the course of a few years.
In Venezuela, you lose all your value in 36 months.
In Argentina, in 10 to 20 years, the Argentine peso was one to the dollar 21 years ago.
If you had a million dollars 21 years ago, the Argentine peso right now is about 480 to the dollar.
So that's not a 99% loss.
That's a 99.8% loss, right?
In how many years?
21 years.
Okay.
So what I'm saying is you don't have money if you have weak currency.
Now let's take strong currency.
Well, the strongest currency in the world is the dollar.
That's not money.
You're losing 99% of your wealth over the course of 90 years in the U.S. dollar, maybe more.
The only difference between the U.S. dollar and the peso is whereas it takes 20 years to lose your family's fortune in the peso, it takes about 90 years to lose your family's fortune in the dollar, right?
My house in Miami Beach was $100,000 in 1930.
It was appraised at $46 million a few years ago.
Do the calculation.
It's on a path to be worth $100 million, which means that the U.S. dollar will have lost 99.9% of its value over 100 years.
Warren Buffett knows this.
Charlie Munger knows this.
Basically, the bottom line there is your money in the bank isn't money.
Okay, so the answer is you shouldn't have any money in a bank, right?
You're basically losing 7% of all your wealth every year in a good year if it's the dollar.
You're losing 15% of your wealth in a not good year if it's the dollar.
You're absolutely losing all your money over the course of a decade.
So that's kind of weak money.
Awful money is developing world money, the Lebanese pound.
The Lebanese pound got devalued.
I mean, you would have lost all your money in five years if you had the pound.
The strongest money, decent money, okay money was gold, but not great.
The strongest money in the world is Bitcoin because Bitcoin is absolutely capped at 21 million.
It is global money.
You could take a billion dollars of Bitcoin across a border.
You can transfer it to a counterparty.
And no government can interdict that and nobody can inflate that.
And so my answer there would be you can't trust any bank.
You certainly can't trust a bank in Lebanon.
Read about Lebanese banks.
You can't trust a bank in Africa.
You can't trust a bank in Asia.
Michael, but if you call Chase, their customer service is amazing.
How was the customer service with Bitcoin when you called the 1-800 number?
There's nobody working at the Bank of Bitcoin to steal your money.
Right?
Thanks for calling Bitcoin.
This is John DuCollin.
I can't do nothing for you.
You got to make the decision yourself.
But I just want to say hi to you.
But, you know, Bitcoin is a bank in cyberspace run by incorruptible software.
It's going to keep your money.
If you are incompetent, then you're going to suffer the consequences.
But let's think about what banking executives in the U.S. do.
The U.S. banking system is the best in the world.
Here's what they do.
You put $100 billion into the bank.
They have the deposits.
They turn around the Federal Reserve interest rate, short-term rate, was zero.
And these guys went and invested $100 billion of those deposits in mid-dated, long-dated sovereign debt that was yielding 1.8% interest.
The Federal Reserve took the interest.
By the way, would you loan me money for 30 years at 3% interest rate?
Like, can you imagine that?
If the inflation rate was 8 or 10%, would you loan money out at 3% interest rate for the rest of your life?
Not in a million years.
Okay.
That's what the banking executives in the U.S. did.
At the point when the Silicon Valley Bank.
All of them, right?
Pretty much.
Not just the ones that went bankrupt, right?
There's a host of banks.
I think they had what was like $800 billion of unrealized losses or something.
A host of banks went and anybody that bought mid-dated or long-dated bonds at the bottom of the market when interest rates were zero, they were loaning out money forever at 2% interest or 3% interest or 1.5% interest.
And as soon as you redeem, what happened, of course, is the Fed raised interest rates from 25 basis points.
Actually, the rates went from zero to 500 basis points in 12 months about.
That's the sharpest increase in interest rates and memory.
That in itself is, I'm not going to say what it is.
It's just horrific, terrifying to think that any public servant would do that.
But it's equally terrifying to think that if I was your money manager and if you had given me all your money when interest rates were zero and I said, well, I guess interest rates will stay zero for the next 30 years.
And so I'm going to loan it out as a bond and lock in a price of 2%.
You would have thought I was crazy.
There is no individual, no rational corporation, no economic actor that would loan money forever for 3% interest when inflation is running double or triple that.
Who approves that?
Who would?
And the answer is a bureaucrat, either a governmental bureaucrat, someone that is coerced by regulatory policy where they're forced to.
For example, a bank can't buy Bitcoin, but a bank is almost obligated to buy treasuries.
So the politicians create a set of rules that strongly encourage you to do certain things and strongly discourage you to do other things.
And generally, they encourage you to do the thing which is probably least economically viable.
There are probably local organizations and banks in foreign countries that own their own local currency, right?
Like, would you buy an African currency with an inflation rate of 200% a year?
No, but people do.
Why?
Because the government controls or owns the entity, and so they force that.
Just to finish this topic before we move on, when you said all these guys that are given their money for 3% over 30 years or whatever, there's a lot of them.
Silicon Valley Bank's not the only one.
Signature's not the only one.
There's a lot of these guys that are the best.
Most of the banks.
Most of the banks are doing the only chart.
Remember that chart?
Exactly.
64% who was above it.
And then J.P. Morgan was the only one.
14% at the bank.
So the point is, don't trust your money in any bank that's basically betting it on investment.
You say something like that as a guy that's a billionaire.
The average guy's not a billionaire.
The only thing they know what to do is walk up to the bank.
So it's a different scenario.
You're in.
But the question I'm going to ask you is the following.
Are you saying there's going to be bigger banks that are on the line right now that we could see popping up that they're in the same situation?
Because if most of them are doing it, you know, Powell's not lowering rates.
And they're saying he's not going to do it until December.
So how much longer can these guys handle these types of conditions?
Yeah, so let me just answer two questions.
What do I think will happen to the banking system?
And what do I think a person should do?
What I think happens to the banking system is all of the regional banks, the small, mid-sized banks are at a massive disadvantage right now because the government is showing that they're not going to bail out those equity holders.
So there's a migration of deposits from the small banks to the big banks.
I think the JP Morgans, the Bank of Americas, the mega banks will continue.
They'll be just fine.
They'll be supported by the government.
The small banks are going to struggle, and that's what you see going on right now.
If you're a depositor, I mean, you'll probably get bailed out by the government.
If you're a bondholder in the bank or an equity holder of the bank, you won't get bailed out, right?
And so there's a crisis for investors.
Whereas everybody that's a depositor doesn't want to sit around and take the risk, right?
I mean, who wants any anxiety?
So I think that to the extent that you rely on banks, clearly the world is waking up and the U.S. is waking up and they're thinking, I want to be with big banks.
I wouldn't have my money in a bank anywhere outside the U.S. in a weak country, right?
You need to be in a rich, strong country with a rich, strong bank.
With regard to what individuals should do, I think the logical answer is for expenses, if you have expenses in the next three months, you have your expenses in the local currency, which is the peso, the NIAR, the whatever, because it's legally obligated for you to pay in the local currency.
For the next three years of expenses or one to three years of expenses, you put your wealth in the strongest world currency in the world.
That's the dollar right now, but you make sure that you have that currency either self-custodied or you have it in a bank that you trust.
That's hard.
If you can't find a bank, if you were in Lebanon right now.
Can we trust you, banks?
If you're in Lebanon right now, you wouldn't put your money in any bank.
You would actually put it on the Bitcoin blockchain.
For any amount of money you want to keep the rest of your life, if you want to give it to your kids, if you want to actually retire on it, anything that's investable asset, you would put it in Bitcoin.
You would put it in the strongest possible world currency, the global money, and that's Bitcoin.
You're not going to get rich investing in dollars.
And you'll lose all your money if your dollars are in a weak bank.
And if your dollars are in a strong bank, you'll just get poor slowly.
And you're going to get poor rapidly if your money is in not the dollar, but a weaker currency.
And you're going to get completely bankrupt if you trust a weak bank.
And so MicroStrategy, by the way, has we had like $90 million.
We had $4 plus billion dollars worth of Bitcoin.
So go figure, right?
98% of our assets are actually in the strong money.
2% is in the world's strongest currency in a good bank in one of the big four banks, right?
And that's about as much exposure as I want to a currency.
You're obviously a true, true, true believer when it comes to Bitcoin, no doubt.
How much of it, the fact that we live in Miami and we see people fleeing Venezuela, Argentina, moving their money here, getting out of Brazil, getting out of Cuba.
You know, it's all South America moving to Miami as well as all around the world.
But how much of that helps, I guess, codify your ideology on Bitcoin?
Or you're 100% anyway, and this just sort of reaffirms everything you believe when you see these people moving here.
You know, you need this near-death experience, this mortality event, before you will open your mind to embrace a new idea.
You know, and if you live in Argentina, when you talk to Argentines, they say, my family has been completely bankrupted twice in the past 30 years.
Okay, so in South America, if you live in Venezuela, well, they've all been bankrupted twice in 10 to 15 years.
If you live in Brazil right now, I think the interest rates getting approaching 14%, right?
Money is hard to come by.
And if you live in Africa, the Africans live under the CFA, colonial franc, where they lose half their money every time they change currencies and it's not convertible.
And if you lived in Nigeria, you know, you just wake up one day and the bank says you're only allowed to have $42 a day.
And if you live in India, you wake up one day, this press release that says all rupee notes of 10,000 rupees or whatever above are now illegal and you have to turn them all in in the next 48 hours or else they're null and void and someone just invalidates the currency.
If you lived in Russia in 1998, all the banks failed and the rubble went to zero and everybody lost everything.
So I think that people that live in other jurisdictions, if they've ever been completely bankrupt or seen their economy completely collapse, Sri Lanka, another good example, when that happens, then when someone says, okay, well, here's a bank in cyberspace and an asset that no one can meddle with and no one can corrupt or tamper with, you think, well, tell me more about that.
But if you're a wealthy American, if you're Warren Buffett, you know, we have a very famous example, a video that's going viral on Twitter.
A 13-year-old girl says to Warren Buffett, I'm really worried about the U.S. dollar as the reserve currency of the world.
We're printing lots and lots of dollars.
And if we're not the reserve currency, the value of the dollar is going to collapse.
We're going to have hyperinflation.
What should I do, Mr. Buffett?
You know, and I wouldn't normally criticize a respected, successful business person of his age.
But he and Charlie Munger did choose to go up on stage and answer questions and give financial guidance and advice and investment advice, and they are looked up to.
And so you watch Warren Buffett answer the question, and his answer is, well, yeah, I mean, I guess the Fed inflated the money, but they needed to.
And, you know, it's really difficult, you know, and politics are a difficult problem.
And yeah, you're right.
It is a problem.
And Munger will say, you know, the dollar's going to zero.
It's going to zero.
They know it's a problem.
And then he kind of meanders through it with an end advice, which is, well, you know, I don't know, but, you know, America is a great country.
Don't bet against America.
But the blood-curdling, terrifying, depressing takeaway from the clip is the 13-year-old girl knows what the problem is.
The country's full of people that can articulate the problem and write thousand-page books on the problem.
If you're rich in America, you don't have the answer because you're too comfortable.
Right?
And so what you've got is a bunch of mega-billionaires that are very successful in America, but they don't have an answer or solution to the 13-year-old girl.
The solution to that question was Bitcoin, right?
And Warren Buffett and Charlie Munger can't allow themselves to understand that because they're so successful, they don't need to open their mind and embrace a new idea.
If Warren Buffett woke up tomorrow and his bank seized all of his assets and they were devalued to zero, and he was a pauper, and his neighbor, the Uber driver, was walking around with $100,000 worth of Bitcoin on a hardware wallet, Warren would say, what is that again?
Explain that to me?
What do you mean?
My government, my bank can't steal all my money?
That's a pretty good idea.
Right?
And so I think that when you're a refugee from fleeing Iraq or you're crossing the border, when you try to go through an airport and a hostile regime steals all your money and seizes all your gold, when you have to flee your thousand acre or 10,000 acre farm in Africa because a hostile regime decided it was illegal for people like you to own land.
When that happens, you become a believer in a non-sovereign store of value crypto asset network, which is what Bitcoin is.
The people that came to this country, the Huguenots, you know, the settlers, the colonists, I think they understood it.
I mean, they had all their property seized from them from wherever they came from.
And their idea was, here's a place where I can own something and people might not steal it from me.
As soon as they got here, people started trying to steal it from them again, right?
That's the human condition.
Just slower.
Just slower.
But that's why they kept going west.
It's like, I got to go west where there's no politicians to steal it from me.
Right?
And that's a pretty powerful driver.
So I think that the conclusion is people that are comfortable, they're fat, dumb, and happy in the United States are going to continue to reject new ideas like crypto assets like Bitcoin because they don't have to.
If I don't have to embrace a new idea, when I get to a certain age, I won't.
And that is as old as the, it's the Thomas Kuhn's structure of scientific revolution.
He said paradigm shifts only get embraced in times of war or when the old guard dies.
If you want to introduce a new idea, you need a war.
Wars kind of work because if we're fighting a war and I introduce an airplane and I drop a nuclear bomb on your head, then you stop rejecting air power and you stop rejecting atomic weapons.
You embrace the reality that, yeah, they do work and maybe you need to figure it out.
Wars work.
But absent a war, people just have to, you know, they just have to pass on because they're not going to embrace the new idea.
So you talked about Charlie Munger, and Charlie Munger gave the famous rat poison speech, right?
He actually gave two speeches.
In the second one, he said, no, I didn't say it was poison.
I said it was rat poison.
So you're saying that he's in the middle of the system.
Was he disingenuous?
Was he dishonest?
Or was he mistaken?
If you don't spend, first you have to have an open mind and say, is it possible that this works?
And then second, you have to spend somewhere around 10 hours to understand it.
I just don't think he has an open mind.
And I don't think he spent 10 hours, right?
I mean, it's not uncommon, right?
People in their 80s and their 90s don't generally embrace the wonder that is the unreal engine or TikTok or Olib.
I wouldn't, again, if they were private citizens, I don't criticize private 80 and 90 year olds, octogenarians and the like for not embracing the new cool thing, right?
They don't have to like you don't have to like drone races, you know.
You know, my father doesn't have to like drone races in his 80s.
That's fine.
But the point is, if you're going to tell people how to invest hundreds of billions of dollars or trillions of dollars and you're going to give advice to a 13-year-old about how she can not be poor or not or not starve to death, I think that then you have to actually study these things.
And the elephant in the room is everybody in the world is facing inflation.
Everyone in the world is facing counterparty risk.
Everywhere in the world, we're losing faith in governments, banks, and currencies.
The solution is a bank that isn't run by people, that isn't subject to the whim of a government, that is incorruptible, that allows you to be your own bank, right?
And that is a message that's getting out.
We just need to keep beating the drum on that.
It is, I think, the most important economic opportunity/slash issue/slash technology of our time.
I got a question for you.
A guy here asked a question, but for me, I kind of want to go through this and then I'll go to this super chat.
What percentage, if we were to break down the amount of content you consume, okay, percentage-wise in the last 12 months, okay?
What percentage of your research and reading is the market, like the whole market?
What percentage is purely crypto?
What percentage is politics?
If you were to break that down, you know, 40% of what I consume is this, 20% is this, 10% is this.
I would say something like a quarter is politics and a quarter is macroeconomics, and a quarter is the crypto economy and Bitcoin-related things in the crypto economy.
And the last 25% is micro strategy, business activity, you know, our capital operations, capital market structures, and our strategic initiatives.
So there's nothing that is more than the other.
You're evenly split amongst the four.
Very interesting how you do that.
I would say I'm evenly split amongst the four.
I'm quite aware that my impact is at the micro strategy level.
I get to decide whether we're going to pay off a $205 million loan or not, right?
I get to decide whether we're going to issue a billion dollars of equity or not.
And I get, you know, so I have an impact over what MicroStrategy is doing as the chairman of MicroStrategy.
And I have a responsibility to my employees, my shareholders, and the like.
So a lot of my work is there.
And then I have the ability to have an impact and a need to be engaged in the crypto economy.
So I'm spending a lot of time on Bitcoin, Bitcoin education, Lightning, development of Bitcoin applications and Lightning Network, those sort of things, right?
That's where I can have an impact.
In the macroeconomy, I study it because I want to know what's going on with China and Russia and interest rates and hyperinflation in Argentina.
But I don't, you know, I have no belief that I'm going to be able to control that, right?
Like, I don't pretend to be able to direct Argentine macroeconomic policy.
And with regard to politics in general, you got to pay attention to what's going on with the Tucker Carlsons of the world.
And you got to pay attention to the presidential race and the politics, the Senate and Congress and the regulatory activities.
But it's above my pay grade, right?
There's a hundred things that are going on in the political sphere.
When you say above my pay grade, I don't have control over it is what you mean.
A, you know, I don't have control over it.
B, my opinion is not welcomed, right?
C, I don't have credibility, right?
I'm not going to express strongly held opinions on medical policy or interest rate policy or the like because it is distracting.
And so I think you have to study it.
Yeah.
And, you know, I have to know where the wind is going, right?
For example, there are some countries I would not live in right now.
I'm not going to tell you which ones.
I'm just not going.
There are some places I would not go.
You mean countries that people you would assume are safe to live in?
Why wouldn't you traditionally?
Look, there's a war going on in the Ukraine, right?
So I mean, do you pay attention?
You pay attention, right?
There are places I wouldn't make an investment.
Sure.
There are places I would not go.
There are places I would not live, right?
But if you look at my Twitter profile, I have laser eyes.
And the significance of laser eyes is if you want to make progress in this world, you have to focus and channel all of the energy you have behind a very, very particular objective.
And I have one laser-like focus, right?
Bitcoin is good money, right?
Bitcoin is good for the world.
Bitcoin is global freedom, global property rights.
Interesting.
I have a hundred other opinions, but if I actually filled my feed with here's what I think about bicycles, and here's what I think about diets, and here's what I think about health and here's what I think about, you know, labor policy, and here's what I think about states' rights, and here's what I think about this country, at some point you just dilute your focus and you just you don't have that much energy in this life.
Well, we really brought you today to talk about what your thoughts were on a plant-based diet, because I know you've been researching that for a long time.
I understand my point.
I could talk for an hour about it but, but the point is I'm not going to change anybody else's deeply held opinion on plant-based diets.
What sources do you go to?
When you say you're researching, what do you read?
Are you a zero-hedge guy?
Are you a Wall Street Journal?
What do you read?
You know, I'm scanning everything on Bloomberg News.
I'm scanning everything on the Wall Street Journal homepage.
I'm scanning the news feeds on anything related to Bitcoin.
I'm scanning the major papers, the New York Times, to see what they're thinking.
I'm scanning Twitter.
What they're thinking?
It's useful to know what they print, right?
York Times thinking like they do a lot of choke.
All right.
Yeah, we could go there.
Yeah.
But you don't.
I think you could use it.
I'm not speaking in the New York Times.
The point is, what's on the front page?
Like, what is the narrative on the front page?
What is on the front page of the Wall Street?
What's a paper you read that's not a common paper?
Like, is there a site or a journalist you trust, somebody that writes that you follow?
I don't think you could, in good faith, endorse any one news outlet in the modern world.
I think you have to scan everything and you have to consider what's statistically significant.
And of course, what you find in the news media is oftentimes if 92% of the people are dying of natural causes, 95% of the bandwidth, it bleeds at least.
95% of the bandwidth is the most colorful way to die, right?
It's not the most likely way to die.
It's the most colorful way to die.
And so I think that all media is distorted and they're all edited and they're all focused to a certain agenda.
The only thing you can reasonably do is you can scan a bunch of them.
You can scan, you know, your own Twitter feed will also be distorted.
So you have to scan other feeds.
And then you have to be continually going through this exercise in your head of saying, that happened.
Is it true?
And then how significant is it?
For example, Argentine inflation, 105%.
Is it true?
No, because the actual inflation rate is higher.
It's indicative of a truth.
How significant is it?
Well, how many people live in Argentina?
That's one level of significance.
The second is how much money is in Argentina.
And the third level of significance is how symbolic or how indicative or catalytic is it to other activity that will happen in the rest of the world, right?
How symbolic is it?
So I think that I'm in my 50s.
I'm 58.
February 4th, by the way.
February 4th.
Same birthday is me.
That's why I like it.
If you roll the clock back and you read the same newspaper in your teens, you'll interpret something different.
If you read news in your 20s, it's different.
In your 30s, it's different.
In your 40s, it's different.
When you get to your 50s, if you read the same, like you read the same history book and you're reading it in your 50s, like, wow, I totally interpreted this differently when I was a ninth grader, right?
When I was in college, I interpreted this differently.
So you have to have real-world experience.
Oftentimes, you'll read a story and they'll state something.
And the truth is the exact opposite of what the story is.
But you have to have lived life.
Like, for example, you read a headline.
We found 500 stone axes in a cave in Africa.
They're between 1.2 and 1.7 million years old.
Well, a school kid will say, oh, yeah, so I guess they found some stone axes.
I look at that and I say, well, there was a factory that made stone axes in Africa 1.7 million years ago.
That meant that there was demand for thousands of stone axes a year.
That meant that there was an entire civilization that existed, right?
In fact, there was money.
There was a government.
There was a furniture factory.
There was a clothing factory.
There was agriculture.
There was an entire society.
You had to have 10,000 people all working together in coordination to justify having an inventory of 500 stone axes, right?
And the only reason you actually read about the stone axes is stone axes is the only thing that's going to last a million years from now, right?
And so what was there was a thousand acts more interesting.
The fact is, there was an interesting higher level civilization with agriculture one and a half million years ago.
They're not writing that in the history book because the literal historian only wants to report the bare minimum.
But the reason that I could actually tell you a thousand other things is that I actually read books on Austrian economics.
I, you know, I ran a business.
I traded.
I saw the meltdown and the creation of dozens of industries.
And I understand human nature.
Right.
And so if you understand, you know, and you live the life, you're like, well, if I, you know, if I drink cartons of orange juice every day for months in a row, I know what's going to happen to me.
It's not good.
You can reverse that.
And you can figure out what people ate 100,000 years ago.
You know, they didn't do the things that we don't really think are good ideas today because they wouldn't have procreated through 100,000 generations.
So I think that when you read the news in your 50s, if you've lived the life, and by the way, like a lot of things I interpret are because I ran a company for 30 years.
You know, like, for example, you know, like a teenager, if you look at movies created by people in their 20s, they have this view of business people.
Like the badass billionaire business guy walks in and he tells everybody what to think and they, you know, and he's the, you know, he's the evil Dr. Evil genius.
But if you've actually run a business, you know, I remember back last time I told somebody what to think and they told me to go F myself.
Right.
And then, you know, you are dressing up.
You know, you're.
And now I have a meeting and I'm very polite, you know, like, and the more talented you are, the more polite I am, you know, because I realize that the world will go on without me.
Like those people think, oh, yeah, well, I got to work for the man.
Well, no, you don't.
I have 2,000 people in my company right now.
I have hired 30,000 people.
They don't have to work for the man, right?
The truth is.
Unbelievable point.
You know, you hire people, you realize that they will quit if they don't like.
The CEO gets fired more often than employees do.
Yeah.
Yeah.
I lost 27,500 employees, right?
So you think I take them for granted?
Yeah.
But you have, but I, but I didn't, when I was 24.
What a perspective.
The time when you are most confident, when you have the most amount of formal education and the least amount of real world experience, like in your early 20s, right?
Because you think you can do it better than everybody else and you haven't failed.
And when you get another 25 years out, you're like, oh, I tried that.
That didn't work.
I tried that.
That didn't work.
I tried that.
That didn't work.
Oh, yeah, that was a really good employee, but they quit because I was rude to them.
Oops, I wish I hadn't done that.
Oops, took that for granted.
So I guess I'm coming back to your question.
What do I think about the news?
It's like...
Can you give us one name, one source?
Yeah.
Do you go to something that's not the traditional one everybody else goes to?
Any person, I know it's not 100% accuracy you trust, but give us one source.
I think to give a boost to Twitter and Elon Musk, the boost is there are analysts and there are domain experts on Twitter that don't have corporations that don't have lawyers to tell them they're not allowed to say that thing, and they actually say the truth.
Can you give us their names?
A couple of them.
Michael, I'm going to hold you to give us one name.
No, no.
Give us one name.
Follow me on Twitter.
I mean, you can look at all the people.
I follow about 600 people.
Okay, so then follow the people you're following.
There are honest analysts and there are people that are domain experts and they publish their unadulterated thoughts.
And if you actually put together a mosaic of all those things with your own real-world experience, you'll start to synthesize a view of reality, which is, I think, probably more reliable than any one edited traditional media source.
Somebody just gave a $500 super chat and asked this question.
It said, have more people been hacked owning Bitcoin than banks have failed?
Bitcoin's never been hacked.
This is John Coaster.
Bitcoin's never been hacked.
So the only people that suffer with Bitcoin are people that trust their Bitcoin to the Sandbank Manfreds of the world.
If you put your Bitcoin in Celsius or BlockFi or FTX, if you put it in a Wildcat bank and the bank steals your money, right?
The real message of Bitcoiners is don't trust Verify and be your own bank and not your keys, not your coin.
So the message of Bitcoin is you can't trust anybody.
If I actually told you the world is made up of imperfect people and let's say there's 100 families and we all have money and none of us trust each other and we all know we have idiot kids that are going to take over the family business and time and we want to create a community bank where we can collectively put our money.
The answer would be, well, you don't put anybody in charge of it.
You don't put any one family in charge of it.
You know, you might be the smartest amongst us and your son's going to have an idiot.
And eventually three generations down the road, it's not going to work anymore.
So you write a piece of software.
Everybody checks the software.
We all agree the software is honest.
We put the software on a computer.
Nobody trusts your computer.
We create 100 computers.
Everybody runs their own computer with the software.
We all agree collectively not to change the software.
And anybody that tries to change the software gets kicked out of the network.
That's what Bitcoin is.
It's an honest approach to solve a problem when you can't rely on a person.
You can't rely on a family.
You can't rely on an institution.
You can't rely on a government.
What we rely on is the collective self-interest of rational people over time with regard to that one thing.
And it really is a beautiful invention.
How monumental would the Bitcoin halving be?
I think it's expected in April of 2024.
So in a little less than a year.
How big of a deal is that?
I think it's a catalyst to the upside.
Clearly, I mean, the amount of Bitcoin that the miners receive in a reward that they might sell will be cut in half.
So that's a good thing.
But I would say that any rational person that studied Bitcoin for 10 hours knows that there will never be more than 21 million Bitcoin.
And so you know there's less than that because some millions of Bitcoin have been lost and they'll never be spent.
And so you're buying Bitcoin because you know it's capped and you know that gold and silver and oil and soybeans and paper currency and land and apartments are not capped.
Everything else on earth is going to keep increasing in supply forever.
Bitcoin is not.
So once you figure that out, then the only question is, is there anything better?
And you sift through the other 20,000 cryptos.
And if they're not better and they're not better, then this is the one.
Now, every intelligent person with money has put their money on Bitcoin.
So what are you going to bet on?
You're going to bet on the networks that were invested in by people without money that aren't intelligent?
Right.
So Bitcoin is the winner because the smart money has chosen it.
There are a lot of other catalysts, right?
Every time there's hyperinflation in a place like Argentina, it's a catalyst.
Every time a bank fails, it's a catalyst.
Every time someone builds an application that's cool on Bitcoin, right?
Like all the ordinals and inscriptions and whatever they're driving up transaction fees, it's catalyst.
Every time a company like MicroStrategy buys another $100 million worth of Bitcoin, it's catalyst.
Every time a regulator actually clarifies the fact that Bitcoin is a commodity, an asset without an issuer, and it's special, that's catalyst.
So lots of catalysts.
They're all going to continue.
The result will be Bitcoin will chop its way up with volatility forever.
Just going to keep grinding up.
For you to believe Bitcoin is going to grind up, all you got to believe is that human beings have a natural tendency to want to improve their life and protect their property and benefit their friends and family.
Somebody gave $2 billion.
It's actually $540.
Two nickels.
It's actually $540 that they gave.
Michael, can you give us your take on ordinals?
TXN fees on Bitcoin are BTC are currently higher than any point in the last three years, and we are seeing use cases like NFTs on BTC main chain.
Will this shift developers from Ethereum to Bitcoin?
Is Sailor pro or anti-Ordinal?
This is from an Assyrian brother, Ninos Eninor.
So what are your thoughts on this?
Ah, my boys.
Saynos.
Okay, so Saylor is pro-freedom and pro-markets.
And Saylor, he's an Austrian economist.
So all value is subjective.
So here's what I think.
I think everybody should be able to launch whatever business they want to launch.
And I think everybody should be able to pursue their happiness however they want.
And I think that lots of people will create lots of things that won't work.
So I'm not going to give you a recommendation of stocks because some businesses will work, some won't.
And some stocks you will buy too high and some you will not.
And I don't want to be on the hook for 10,000 stocks.
I'm not going to tell you how to gamble, but I'm not going to tell you not to.
I'm not going to give you a recommendation for a private business.
You want to collect art?
I'm not going to tell you not to.
I'm just not going to tell you which piece of art to buy to make money.
I don't know which thing is going to work.
And I know that over time, all fiat currencies will fail.
And over time, I believe most businesses, in fact, all businesses will not be as good as investing in Bitcoin because Bitcoin is the low-risk asset.
I do think that what happened over the past five months is pretty interesting.
If you go to New Year's Eve, the average fee on the Bitcoin blockchain was like three sats per V byte.
There were blocks every 10 minutes that had $600 of transaction fees in them, right?
And so the miners were getting a reward of $100,000 with $600 or $300 of fees.
So the fees were 1% of the reward.
They were nothing de minimis.
And what happened over five months is Bitcoin had a massive rally.
All of a sudden the miners were getting $150,000 or $200,000 reward.
But then we saw fees, transaction fees that got to more than six Bitcoin, which was $180,000 in fees.
So we went from $1,000 in fees to $100,000 in fees, a factor of $100,000 increase.
And the fees started to approach parity with the reward.
If you're an investor in Bitcoin mining, if you're a Bitcoin miner and you want a bullish thesis, in order to have a bullish thesis, you want to see that fees, transaction fees are at parity with the rewards.
And then you want to have a belief that transaction fees will increase at a rate faster than the hash rate.
So if the hash rate's going up 20% a year and transaction fees are going up 30% a year, then that's a good business, a really good business.
And so in a world where transaction fees are 1%, they're irrelevant.
You don't have parity and then the growth rate doesn't matter.
And then all you see is the rewards are decreasing 18% a year.
And that's a bearish scenario.
So I think that what happened with ordinals and NFTs is we crossed this chasm from what was a bearish scenario to a bullish scenario.
If I was a miner, I would be ecstatic.
I think that long term, there are a lot of implications.
Long term, the implication is there's going to be a lot of applications on the Bitcoin base layer.
If I can inscribe a piece of art, right, an NFT is kind of an art, but I could also inscribe my last will and testament.
And if my last will and testament is moving a billion dollars from me to you, how much is it worth to you to have that burned onto the blockchain and cryptographically verified?
Yeah, at least a billion dollars for me, Michael.
Would you pay 20 bucks?
Yeah, 100%.
Yeah.
Would you pay $100?
Of course.
There you go.
So there are interesting applications.
If I have a corporate resolution to make a billion-dollar investment and I docuSign it and I'm worried about getting sued for hundreds of millions of dollars in the future, would I pay $100 to burn that on the blockchain?
Maybe, probably.
If I have a message I want to send around the world and I don't want a hostile nation state to interfere with that message, is that worth $20 or $50?
Sure, it is.
So what people are realizing is the transactions on the blockchain, they are the ability to send a message that a nation state can't stop.
Their ability to put a document on a network for 100 years that no one can actually tamper, an immutable blockchain.
I mean, if I can store a billion dollars for 100 years, that's valuable.
But, you know, if you wanted to move $10 million of oil from New York to London, it would cost you about $350,000.
So what if I want to move $10 million of Bitcoin from New York to London?
What if I want to move $10 million worth of a document of something of, if you wanted to sell a $10 million work of art, that's $500,000 to a million or more in auction fees?
So people have thought, well, transactions, man, there's no future for them.
But I actually am of the opinion that transactions at $1 or $2 transaction, they're very undervalued.
This is the most valuable, most tamper-proof, immutable, secure transaction network in the world.
If I gave you $100 billion and I said attack the network, you couldn't do it.
If you were a nation with $100 billion in four years, you could slow it down, but you couldn't stop it.
So I think that the real significance of ordinals and NFTs and inscriptions is people used to take the transactions for granted and they undervalued the Bitcoin mining network.
And now I think what you have is a lot of speculation.
And you also have a migration of crypto development energy from the other cryptos to Bitcoin.
That's a good thing, I think.
It's inevitable because Bitcoin is the low-risk crypto network and the high-security crypto network.
So you're going to see speculation move.
You're going to see development move.
But long term, what's really significant here is that people are going to see Bitcoin as the most secure cyber network or the most secure computer network in the world.
And if I told you I'm going to burn a document and I want it to stay immutable for 100 years and I don't want any hostile corporation or nation state or actor to be able to tamper with it or stop it.
And in 100 years, I want to prove that that's my document.
You know, Satoshi could sign a digital document.
He could sign a message today and prove that he owns $30 billion of Bitcoin and he could do it in a split second.
That's the power of the Bitcoin network.
And that has been underrealized.
It's underestimated.
So I think that what's going to go right now is it's going to be a lot of excitement.
But ultimately, the ethically sound, technically sound, economically sound future is for people to realize that Bitcoin is this immutable, you know, incorruptible, non-sovereign computer network.
And it's going to protect your money, but it's also going to protect your integrity.
And people are going to pay money for truth on that network.
And that's what's going to finance those miners.
And when you look at all those miners running in Texas, you're saying, what are they doing?
They're protecting the integrity of Western civilization, maybe of all, they're protecting the integrity of the human race for the next thousand years.
Michael Ramsay.
That's worth something.
That's powerful.
We got five minutes, and I want to go through two things with you.
One, you said Satoshi, how often do you guys text each other?
Are you guys like in communication regularly?
I think about Satoshi every day.
Really?
Does he think about you?
Is there like a direct line of communication?
Because you're becoming gradually the billy gram of Bitcoin.
Like, you know, you went from a non-believer to a believer.
It was a one-way gift.
The reason that Bitcoin is ethical is Satoshi made a one-way gift to the human race, asking nothing in return.
And that is an extraordinary thing.
So as a guy that you said you hired 30,000 employees, 2,000 are still with you.
You've been operating for 30 years.
Okay.
You've been a billionaire for a minute.
You were a billionaire in the late 90s, and you've been in that talk.
For you, it's probably not a big deal because you've been that for a while.
But to the average person to see that category where there's only 700 to 900 of you in America, it's a pretty big deal to get to a place like that.
There's a guy right now that could be potentially looking for another job.
And he was being interviewed on MSNBC by this lady named Stephanie Ruhl.
And he was asked the question, I'm curious to know if you would hire somebody like this.
This is a phenomenal question here.
There's not a Fortune 500 company in the world looking to hire a CEO in his 80s.
So why would an 82-year-old Joe Biden be the right person for the most important job in the world?
Because I've acquired a hell of a lot of wisdom.
I know more than the vast majority of people.
I'm more experienced than anybody who's ever run for the office.
And I think I've proven myself to be honorable as well as also effective.
Would you hire somebody like that to run a, I don't know, like a $40 or $5 trillion year company, whatever the number is, $32 trillion company, give or take.
I could be off on the GDP.
You think that would be a good CEO for a company that size?
Now you're asking me a question that's somewhat above my pay grade.
I think that...
Wait, wait, wait.
You're a voter.
Tom, let's see what he's got to say.
I think that the number one criteria to run an organization is humility combined with a bit of wisdom from life experience, but combined with an extraordinary amount of energy.
You have to eat, sleep, and breathe the thing.
And I think that organizations that have people with too much confidence, they tend to go off the rails.
And so it's good to know what you don't know.
Got it.
So to understand what you meant, we have to speak sign language.
So he left it to you guys.
You decide what our friend here meant by that.
Just for your own company, if you were getting to a point where you would be replacing yourself as a CEO, would you look at somebody and value a person with, you know, who's 82 years old wanting to be the CEO of MicroStrategy, or would you look for somebody younger?
Or would it even matter to you age-wise?
Well, I mean, I did have the opportunity to replace myself last year, and I'm the executive chairman, and we appointed a new CEO, and the CEO is Fong Lee, and he's in his 40s.
Okay, he's in his 40s.
Early 40s.
So you weren't going on like seniorceos.com and looking for recruiters to find like, I mean, that's not even seniors, right?
Because baby boomers, what, 1946 to 64?
So you weren't interested in experience?
You know, I'm not going to say the perfect age to be CEO because there are a lot of examples.
I mean, I myself appointed myself CEO at age 24, but then again, I was only responsible for myself.
And I couldn't mess much up.
That's different.
Because I inherited, you know, and it took me many, many years to get to the point where I could break something.
Well, I think that the bigger the organization, the more careful one needs to be.
This is a pretty big organization we're talking about.
And this guy's applying for that job.
300 million.
Anyway, so Michael, every time you come, by the time you're done talking, my brain feels like has had a four-hour workout, even though it was only 90 minutes today.
Because you make me think.
And I love the way you explain.
And you're always gathering information from different places.
And the audience loves this.
So this is, I think you're one of only three or four names that we've had on three times.
So if you've never felt like maybe if you recently have not been getting enough love, we just want to make sure you know we love Michael Saylor, the Billy Graham of Bitcoin.
That's going to be the new nickname, by the way.
The evangelist.
The evangelist, the Billy Graham of Bitcoin, baptizing folks in Bitcoin around the world.
Okay, if you don't remember anything else I said today, just remember Bitcoin is hope.
And go to hope.com.
That's where all the information is.
Brilliant.
Bitcoin, good.
Laser eyes.
Bitcoin, good.
You can boil it all down to that.
Everything else is complicated.
And big week next week.
The Miami Bitcoin conference is going to be.
Yeah, 15,000 cyber hornets coming to my.
So I'll be right here.
It's going to be awesome.
You're going to baptize all of them and name them Satoshi, Bitcoin, and what would be the third?
You know, there's got to be the technology, right?
Anyways, Michael, once again, thank you, gang.
All this stuff is below.
Links, Rob.
Let's put it there for people to be able to find Michael.
I asked him a question earlier about Michael.
Who do you follow on social?
What do you read their articles?
If you go follow his Twitter account, you'll be able to know who he follows.
And that's where you'll see where he gets his intel from.
Okay, maybe that's one way to find out where those 590 people are that Mr. Saylor follows.
Anyways, gang, we're about to announce the next live podcast.
If you want to be one of the first to know about it, text award podcast to 310-340-1132.
