Dave Smith hosts Robbie Bernstein, Guy Swann, and Clint Russell to dissect the Federal Reserve's inability to curb malinvestment without triggering recession or stagflation. They warn that political pressure will force inflationary printing rather than deflation, potentially escalating global conflict. While algorithmic stablecoins collapse, Bernstein argues Bitcoin remains superior to gold as an unseizable insurance policy against state overreach and dollar hegemony. The group advocates for contrarian dollar-cost averaging into hard assets to hedge against the U.S. losing its reserve currency status amid shifting geopolitical alliances and inevitable real estate corrections. [Automatically generated summary]
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Deflation and Credit Market Collapse00:15:17
Fill her up.
You're listening to the Gash Digital Network.
We need to roll back the state.
We spy on all of our own citizens.
Our prisons are flooded with nonviolent drug offenders.
If you want to know who America's next enemy is, look at who we're funding right now.
Every single one of these problems are a result of government being way too big.
You're listening to part of the problem on the Gash Digital Network.
Here's your host, Dave Smith.
What's up, everybody?
Welcome to a very special episode of Part of the Problem.
Something we don't normally do this, but I felt that it called for this.
I summoned some of the best guys that I know.
Of course, I am Dave Smith.
I'm joined as always by Robbie the Fire Bernstein, the king of the caulks.
For today's show, we have, in addition to Robbie, two wonderful guests.
We have Guy Swan, the man responsible for orange pilling me.
I believe that's what they call it, right?
Yes.
Did I get that right?
That's the correct term, right?
I'm new.
I'm new in this world.
But anyway, he's the host of the Bitcoin Audible podcast and has been called the Scott Horton of Bitcoin.
So that's thank you for joining us, Guy.
Good to see you again, my brother.
Hell yeah, man.
I would say you're back by popular demand, but I don't think it's more like you're back by violent threats if I do not have you back on the podcast from your psychotic Bitcoin maximalist fan base.
They are too many of those pills, man.
Yeah, if you've ever wrangled with those people, they really have no quid in them, but they're happy.
They're happy with me lately.
Lately, they are happy with me.
I'd like to point out that if we took Guy's hair and Clint's face, we could have Hitler on the podcast.
Oh, that's not far off.
There we go.
And my spirit.
This is a good start, bro.
This is a good start.
I like where we're going with this.
Okay.
And of course, our rounding out the foursome here is the man, the myth, the legend, the host of the Liberty Lockdown podcast.
My brother, Clint Russell.
How are you doing, Clint?
I am good, man.
My investment's not so good, but I'm doing great.
Well, there you go.
Well, Clint, for people who don't know, Clint was a money mortgage broker for years.
And so he kind of has a lot of background in finance and in housing as well, in real estate as well.
And so Guy's kind of the Bitcoin guy.
Clint's more of the economics guy.
Robbie shockingly has a sound understanding of economics, which for a sandwich guy is really weird.
But so we're all, we can all kind of like get in on this, but I want to talk a bunch about the economy, about Bitcoin.
So let's start with the biggest, I think, of all issues, which is what's going on with the Federal Reserve and the markets right now.
So it looks like maybe, just maybe the Fed put is actually coming to an end.
There's talk of, obviously, we saw the quarter of a point Fed hike of the Fed fund rate earlier this year.
Now there's talk of another half a point or maybe even three quarters of a point hike, and the markets are going nuts over this threat.
So I'll go to you first, Clint.
What do you think about what's going on here?
What the market response is going to be?
Big picture.
How are you feeling?
Man, it's rough.
So there was, I think it was actually a half point increase.
It was rumored it was going to be three quarters.
And now they're promising three more half point increases through the remainder of 2022, which would bring the Fed funds rate north of 2%, which would be historically doesn't sound that bad.
But when you have bred the entire investment world, the entire business world to, you know, they expect basically free capital.
That's what everyone expects right now.
And we have tremendous amount of malinvestment that is throughout the economy.
And that has obviously touched the crypto sphere, which I'll allow Guy to cover.
But, you know, they needed to hike rates about a decade ago.
And they didn't.
And they kept them hyper low, even while the economy was quote unquote doing well.
And then they just brought them down to zero for the past 12 years almost.
It's historic anomaly type stuff.
And I think that we have a historic malinvestment bubble of all asset classes across the board.
So I am currently building six houses right now.
I'm praying to God that the knockdown effects from what I believe is already a recession.
We won't actually know that until July because they can only evaluate that in hindsight.
But I think that we are looking at a recession.
It's just a matter of if the Fed has the chutzpah to take it as hard as they claim they're going to to try and slow inflation.
I don't know if they have that will, but we'll hash that out.
We'll talk about that, I'm sure.
Yeah.
So just for people following along, because this stuff I think sometimes can seem kind of daunting, but it's really not.
Once you get past a little bit of like the kind of inside lingo and stuff, this is something that everyone can wrap their head around.
I mean, look, when you think about the Fed fund rate, basically what this is, is the price of money from the Fed to big banks.
So what their interest is when they print the money out of thin air or really just, you know, type it into a computer these days, and then they lend it out to banks at whatever interest rate.
And they've been giving it to them for free.
And when you think, and this, of course, has effects on every interest rate because the banks then lend that money out to the rest of us.
So it's always going to be above what the Fed fund rate is for them to make money.
And in a sense, if you think about, okay, if you had a credit card, if you're in a lot of debt and you had a credit card with like, you know, a million dollars of debt on it, but there's 0% interest on it, you might be able to handle that for a while.
But as soon as that goes up to 1%, you're like, whoa, this is a whole different ballgame.
Goes up to 5%, you're done.
Like there's no way you can make these payments.
This is kind of the situation we're in now.
And of course, the reasoning here, the justification is that they have to rein in inflation.
And just so people understand these basic kind of ideas, it's really kind of straightforward.
If interest rates are higher, more people are likely to save their money because they're getting interest on their money.
Less people are likely to borrow money and put it into the economy because it costs more to borrow the money.
So it has an effect of taking money out of the system and reigning in inflation.
However, to put in perspective what we're dealing with now, you know, when they say we have the highest inflation we've had since the 70s, well, if you measure the CPI the way they did in the 70s, it's actually higher than the 70s.
But either way, let's just say that the highest since the 70s, around then.
It took a Fed fund rate of 20% to rein in the inflation from the 70s.
We're talking about getting up to north of 2%.
And they're like, this is going to crash the economy.
And there's no chance that could rein in this inflation.
So the Fed has, as many people have been saying for years, they've painted themselves into this corner where they have one of two very bad options, which is to just not control inflation and let it get worse and worse.
And it can get much worse than this, or to tank the whole economy in the name of controlling inflation.
That to me seems to be basically the place we're at.
And I don't know.
And by the way, I don't see any throughout this whole thing.
Anyone jump in anytime when you have something to say, but go ahead, Rob.
I don't see any Paul Volcker in the wings, by the way.
So I don't think that they're going to be hacking to 20%, even if that's what's necessary.
Yeah.
And Just to put a little perspective on the malinvestment, you've got a lot of zombie companies in the S ⁇ P who are only able to service their debt to basically remain solvent because the debt was free.
You also have the reason why stock evaluations have been as high as they've been over the last couple of years is that people have been taking free money and essentially just buying their own shares.
Companies have been buying, basically buying back their stock and inflating their values.
You basically, I mean, if you look at a lot of these charts, like a lot, like a lot of people have come back down.
I mean, companies come back down from like where they were at the start of basically when Fed started dumping money into the economy with the coronavirus.
But like they're not back down from the start of quantitative easing.
They're still kind of at their highs from pricing in QE1, QE2, QE3.
I think all the way to QE4.
And even just with the little bit of a raise that we've had, which I think we're up a half a percent or whatever, already home demand has come down 25 or 30% because of the jump in mortgage prices.
So like, even though we're talking about minuscule raises, the impact could be quite catastrophic.
Yeah.
Yeah.
No, I think that's a that's a very good point.
So guy, why don't you jump in here?
I mean, we're going to, we'll talk about Bitcoin in a second, but do you have any like any comments on just this general situation with the Fed flirting with tanking the economy?
Yes.
So I'm seriously curious as to what is going to be the major signal to get them to turn course because I don't see them letting this collapse.
I think what they're doing right now is they have the political pressure to appear as if they're being hard on inflation.
And it kind of feels like a probably until November sort of situation.
But right now, the credit markets haven't imploded yet.
They haven't, they didn't like they have not like actually seized up like they did in March of 2020.
And I think that will be the indication that will force the Fed to come in and start adding to its balance sheet again, is that credit will literally just stop moving.
The repo markets will freeze up completely and they won't have a choice.
Because really what we're looking, I mean, it's so akin to the situation that we had just before the Great Depression, except worse.
We've built this up rather than like a 10, 15 year buildup that happened during the Great Depression, where there were a lot of different avenues to pull back, to cause pressure in the opposite direction.
We've let this go on for about 50 years and we've reinflated it and reinflated it.
And basically after the end of the Great Depression and during like the 50s and 60s and 70s, we put on all these new mechanisms and went full on fiat so that we have all the reins to cook the books 10 times longer than we did in the 20s.
And we did.
And we did.
We did.
We've stretched it as far as we can.
So, and then on top of this, to make it all worse, we're doing this on top of the pandemic, like on top of the government economic pandemic and the lockdowns that have been caused.
So we're having supply shortages all over the place.
So we have inflationary pressures just from a supply shock, solely from a supply shock while we're watching trillions of dollars still seep their way into the consumer markets.
And they just the last, God, the last inflation numbers that they just gave, they changed how they measure inflation again.
They, they, it's, oh, we got to change.
We got to change the way we do this again.
And this, it's going to be a mess.
I mean, we have, we're going to have stagflation one way or the other.
Like we're going into an economy that is going to be, that is, it has been shrinking for two years.
They've just been able to cook the books so that the paper doesn't look like we've been shrinking, but we've been shrinking.
The economy is not growing anymore.
And that's going to accelerate because prices and supply shocks are going to cause all sorts of cascading problems because everybody's leveraged on the other guy's leverage.
Like we have so much cascading risk in the market right now.
It's fucking retarded.
And like as this starts to unravel, the only thing, the only option they have is to let the credit markets pay the price and the entire thing collapses, or you let the money pay the price.
You let the money inflate.
And I'm inclined to think they're going to let the money inflate.
Yeah, this is basically.
So this has been the bet that Peter Schiff has been making.
Now, I know you and Peter Schiff probably disagree very strongly on Bitcoin, but Peter Schiff.
But yeah, well, but the thing that he's been ringing the alarm bell about since, I mean, really, he came on the scene, you know, like got kind of famous around like 2005, 2006, but he was talking about it well before that.
But he's basically been saying this: that we were going to get to this point.
And there would be people who were the people who were like arguing with him before Bitcoin was even big in the conversation.
It was just kind of gold versus paper money and other hard assets.
And they would say, well, no, look, ultimately, this has to end in deflation, not inflation, because what's going to happen is that when all of that, you realize there's all this credit that's all basically bullshit.
And when that all evaporates, you're going to have massive deflation.
But the point Peter Schiff would make, which is kind of what you're saying, and I find myself in that camp more or less, is that you go, look, it's going to ultimately be a political decision which one you want to allow to happen.
And how politically feasible is it ever going to be to say, I'm going to tank the economy, even though that is the correct move in a lot of senses.
That would be like what would kind of be the cure for the problem.
But politically speaking, I mean, come on, look, inflation really doesn't hurt the elite.
In fact, you could argue it really helps them.
Now, maybe when it gets to a certain point, it hurts them as well.
But up to that point, they do quite well with an inflationary economy.
But deflation really hurts the elite.
So it's like, I don't know, if we're counting on the Fed chairman to make these decisions, yeah, probably they're going to err on the other side.
And they can't.
There's no limit to how much money they can print.
They don't, they're not even restrained by the amount of paper.
They can just put it on a computer.
It's not, there's literally no treasury can do it.
Even like they can, they can completely change how they're doing it.
And I really feel like the question is: does the U.S. government say we default publicly, or do they say, look what Putin did to our currency?
Like, that's what it feels like the choice is going to be.
And it seems like a very obvious answer.
I don't know how bad and how shitty the credit markets and the deflation is going to be until we get to that point, but it just seems too obvious.
Well, and if they go that route, if they allow Putin to take the blame for the obvious monetary malfeasance that was propagated over my entire lifetime, but really starkly over the past two years since the lockdowns began, well, then you're going to have a popular will for war.
Investing with iTrust Capital00:04:10
And that's my biggest concern is that it's a natural kind of like scapegoat.
And it also externalizes our anger when it should be focused on the Federal Reserve and the politicians that put us in this position.
It's very probable if they are good enough at their propaganda push to get the American people to go, okay, yes, just go kill someone that's making it impossible for me to feed my baby.
I mean, we have shortages already and it's just, it's going to be really bad, man.
I've, you know, as someone who is one of the, you know, financial, I wouldn't say elite, but well-to-do, and I did it because I understood Austrian economics and I understood that we weren't operating under an Austrian system.
I basically just leveraged that knowledge, going with eyes wide open into investing in the real estate market and first mortgages on real estate.
And I shut my business down two years ago.
I mean, and it was a multi-million dollar company and I did it like May of 2020, you know, right after the lockdown started because I could no longer evaluate risk.
And what I wanted to, you know, the reason I'm bringing this up is just to express to people, any money manager that didn't do what I did for the most part was not, in my opinion, acting as a fiduciary for their investors' capital.
I mean, you have a responsibility to put your investors' capital in front of your own financial gain.
I could no longer do so because I am actually, you know, liable for these funds that are going into these loans to people to purchase real estate.
I can't evaluate real estate when the economy's locked down, when you have soaring unemployment.
I have no idea how much money the Fed or Congress or whoever is going to print and flood the system with to try and cover up the bullet wound that they put into us needlessly with the lockdowns.
And yet, hardly anybody did it.
I'm like one of the only people I know that actually shut down their investment firm during this period.
And now you're going to see the price that has to be paid.
All right, guys, let's take a moment and thank our sponsor for today's show, which is iTrust Capital.
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Bitcoin as a Risk Asset00:14:10
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All right, let's get back into the show.
Yeah, it does seem like that's about where we're at right now and what's coming up.
And I think, you know, it is, it's interesting.
One of the things you touch on there is the idea that the thirst for war can be increased in times of serious economic hardship.
And that's for sure true.
I think that, look, if you look at this country and so much, I think, of the last, you know, what, 14 years or so of how radical the political landscape has become has to do with how severe the economic crash in 2008 was.
And, you know, not to use the tired old example that everyone goes to, but look, the Nazi party in Germany got absolutely hammered in the elections of 28.
No one was buying this radical thing.
It was like, okay, yeah, things are bad, but like, come on, get out of here with all this stuff.
You know, we're not like rounding up the Jews and doing all this crazy shit, which they weren't quite so upfront about in 28.
But then there was the Great Depression, and then all the loans got called into Germany and the economy like completely crashed.
And then all of a sudden, people were like, hey, yeah, all right, what do these Nazis got to say?
You know, and like the Nazi Party ended up like doing great in the special election they had right after the Great Depression.
And that's how the that was the beginning of the Nazis' seize of power.
And that's another thing that concerns me a lot is you see how radical the populist left and the populist right have gotten.
And if you want to see, you know, like people were like, so like, oh my God, Trump's literally Hitler or something.
You're like, just wait, just wait to see what a real, you know, like fascistic authoritarian right winger or a real socialist authoritarian left winger looks like and how popular they might be.
Like Bernie Sanders ain't your fear.
Your fear is like the next Shea Guevara or something like that, who's really going to rise up.
And that's another big concern that I have is that if the economy really does tank, the political landscape is going to get much, much uglier.
I think people have no idea how, you know, it's like right now people are just starting to feel this like this formula like a thing, which I've noticed, by the way, for a month and a half, at least now, that like, oh, yeah, the formula on the shelves is not what it once was.
And luckily for me, I, you know, I'm prepared for that stuff.
But like, you know, it's like, oh, watch, wait till when people actually can't feed their babies.
Is it you want to see men who are really desperate and will do crazy shit that you wouldn't imagine before, let their babies be hungry.
That's a recipe for some real political turmoil.
Well, and look at the current political environment.
We have only 70 congressmen that are willing to not vote to give 40 plus billion more to, you know, what amounts to a proxy war with a nuclear power.
I mean, we already are represented by people that are so, so ready for war.
I mean, they don't care at all.
And if you can get the American people in a position of starvation or even shortages, given how luxurious our lifestyles have been our entire lives, yeah, I mean, you could, you could absolutely leverage that into really catastrophic events.
Isn't it pretty insane the idea to think about this?
You know, because we could look at examples throughout history.
I mean, Guy, you know, talked about the Great Depression, and I just invoked, you know, Nazi Germany after the Great Depression.
And like, oh, it wasn't Nazi Germany, Weimar Republic after the Great Depression.
But the idea of thinking about America, you know, these kind of like where we're at right now, these soy latte drinking, like kind of like woke, you know, like gender studies majors and the idea of them going through like a truly harsh economic depression is really something to fathom.
You know, like, what, what are these people going to be like?
It's honestly unimaginable.
It makes me rethink like what all of those other countries were just before.
Right.
You know, like I'm more intrigued now, like looking back, like, what was it?
What were all of these countries like that were like these huge examples in history of just like utter collapse, the Bolsheviks, the like, like all this, all these situations, especially the like the cultural rot that happened.
What was it like to live there three years before the shit hit the fan?
You know, what were the people like?
What was the culture like?
Like, I can't help but think it would be pretty similar because I'll tell you one thing.
They didn't have Uber Eats and they didn't have the internet, so they can't possibly be as soft as we are today.
Oh, there's true.
There's high degrees of softness, but you think about it, like some of the worst atrocities in the world are, and the worst atrocities of like the individual are built of insecurity, of like personal weakness.
It's when violence is the answer of not being able to deal with some sort of internal struggle.
We have a lot of that.
We have a lot of that shit in this country.
And I think.
I looked at the Bitcoin chart this morning and I was ready for violence.
Okay, well, that's a good transition.
So, guy, what do you, what do you think about that?
I mean, Bitcoin has been taking a beating lately.
I was, look, I got a lot of props because I said on Patrick Bett David's show, I don't know, I said some real good shit about Bitcoin.
The Bitcoin people were loving me.
I was getting tweeted out by all the Bitcoin gazillionaires with fucking millions of followers on Twitter and stuff.
Michael Saylor, man, that was huge.
Yeah, that was cool.
But I meant what I said.
I've really, I've come around on being a big believer in Bitcoin.
And I'm actually very optimistic about the future of Bitcoin, despite them getting clobbered.
But you're my guy.
You're my Bitcoin guru.
So I'm curious, what's going on here?
Why is Bitcoin getting clobbered?
And what do you think the cause for that is?
And what's the future?
Well, when you have like a huge deleveraging event, Bitcoin has historically been clobbered.
Like it's, it's not uncommon.
Like this is, this is fully in line with Bitcoin's history.
If you look at all the big moves, like, holy shit, there are 50%, 60%, upwards of 90% drawdowns.
This is actually kind of a, this is a much calmer of a bear market than Bitcoin is used to be.
So I should be buying a lot of Bitcoin right now.
I bought, I bought as much as I could scrounge up yesterday.
I pulled in a little bit, a little bit of fiat today, and I'm trying to finish up a couple of audio books, but I've been kind of like snotty and stuff.
Like I'm, I am stacking just as hard as I can.
This is a great opportunity.
And it might still, I still think we, like when the credit markets freeze, we might get another really pretty red candle to stack on.
So like I am, I am still holding out that maybe there's even a better buying opportunity, but I'm not like waiting to buy.
I'm just, I'm just stacking what I can.
Like Bitcoin is because when you have a deleveraging event, like Bitcoin is very liquid now.
It's also something that a lot of people in now that crypto is so crypto is such a great like little microcosm of like all the shit that is wrong with finance.
Like DeFi leveraged, I've leveraged a token to get another token that I can stake, that I can lock up into some DeFi contract so I can arbitrage this other thing and get this governance token, which gives me 10% rewards.
Like, I mean, it's such a fucking shit show.
And it's, it's all built on air.
And that's what we've seen in like the last little bit, like this week, Luna and UST, this, this attempt at an algorithmic stablecoin, which was by default, like which they explicitly, you knew that it wasn't backed.
You knew that it was not actually fully collateralized.
Like the thing was a Ponzi scheme from the very get-go.
And they purchased like 50,000 Bitcoin or whatever to try to shore this thing up.
And then subsequently, when the peg broke and the way the like Luna algorithm works, so dumb.
It's so dumb.
The way the Luna algorithm work is it literally prints Luna to keep the peg.
So they were literally trying to inflate the shit coin out of their dollar deep pegging.
And in the process, they tried to back it up with this like centralized entity that's got like 50,000 or 60,000 Bitcoin, like billions of dollars in Bitcoin.
And so they're dumping that on the market to buy their own shitcoin to try to keep it alive.
And so this calls this massive deleveraging of DeFi of one of the major stable coins just de-pegged.
It was just the thing that was supposed to be a dollar for collateral is now not a dollar anymore.
So that started to cascade and unroll.
And it just causes a huge selling in the market.
There's one thing I like about these moments is that for the past two years, I've had friends coming to me going, man, you know, that you can just like, if you purchase, you know, XYZ coin and you allow it to stay on, you know, the custodial side, you can, you can get like 15% risk-free return on your money.
And without even looking at it, I just tell them that's bullshit and you're going to lose everything.
And they all, and they all, the reaction is always the same.
They go, no, They are able to use this and they leverage that.
I'm like, look, save your fucking words.
There is no such thing as 15% return on investment annually risk-free.
It doesn't fucking exist.
And they're lying to you.
Do you know what?
Do you know what Luna and UST was promising?
They're staking on Anchor Protocol for 20% APY.
They were promising 20%.
20%.
20%.
And these people thought it was a risk-free.
And now it's down 99%.
I'm stunned.
That's only 10% more than the iBonds right now.
In like three days, it's gone from $90 to like point.
I think there's like 20 zeros now for the price.
Like, I mean, so like, like literally, if you had like a million bucks in it, it's worth like a dime.
Like, like, I do, uh, I do want to hop in here with a little bit of the bear story for guy to respond to.
So before we go into this, I'm playing devil's advocate.
I'm not selling out of my crypto.
I got my crypto.
I love my crypto.
Fuck you, Robbie.
Before we go into this, I want to say fuck you, man.
All right.
Go ahead.
What do you got?
No, I do think that we have a substantial issue.
The first being that the story to Bitcoin is supposed to be, hey, if everything else is failing, this is your flight to safety.
And we're learning, well, that's not a true story because it's a risk asset.
And you got all the people that have been taking on leverage to be in the stock market are doing that with crypto as well.
And so especially if there's yield available in more secure assets, you might see people pulling out.
That's problem one.
Problem two is I do believe, and we talked about this a little bit just on direct messenger, but I do think this is going to open up the opportunity for your regulators that want to regulate crypto to step into the market and go, look, a stablecoin just failed.
This is the danger that existed.
On top of that, most of the actual liquidity in terms of transactions for crypto, I believe, take pace, take place on Coinbase that not to anyone's surprise, we just discovered if they go bankrupt, you don't have your Bitcoin.
Now, you're a person who said, hey, if it's not your keys or, you know, you're not your wallet, it's not your crypto.
And we all understand the problems with fractional reserve banking, which is what we're moving away from.
And you can kind of understand, hey, if you're a website, you're probably engaging in fractional reserve banking with people's crypto.
And I say that as a guy who's too lazy to make a wallet and I have all my money on Coinbase.
But I hand it back to you to say that the developments of this past week, well, I'm not saying I'm not selling my Bitcoin and I'm not saying it can't rally, but I do think this has been some really bad, this has been a bad news week for Bitcoin.
There's an, I mean, there's, there's certainly an argument there.
There's what you're what we're looking at is like Bitcoin is being treated as a risk asset and it's also, it's also liquid.
So when like you're trying to shore up a leveraged position, if you're trying to shore up, let's say you have a position in the stock market and you're holding on to Bitcoin, you can dump that quickly to shore up to make sure you don't get margin called on your stock position.
So that absolutely happens over the short term.
And that is not new.
Again, like the March 2020 event, it dumped from like 7,000 to 20 to 2,000 something, like it dumped below three in like a matter of hours.
Like it was real serious.
Then like the next month and a half or something, it climbed all the way back up to like seven or eight thousand.
At the end of the day, the beauty of Bitcoin is that if you're holding Bitcoin, you still have the Bitcoin.
You cannot be diluted of the Bitcoin and it is scarce.
It's scarce.
It's going to keep working.
And the best thing about it is the payment networks and the infrastructure that's growing in the background right now.
Like the, there's, there's basically a small portion of international payments that are happening because of the Lightning Network right now that are actually being settled because of the liquidity in the Bitcoin network.
If you're the people using that, though, you got to be spooked like hell.
Like Sri Lanka just lost like they don't even know.
They wouldn't even know.
They're trading dollars.
They're trading dollars.
They're sending dollars overseas, but the liquidity in Bitcoin is being used to buy Bitcoin on one end and sell it on the other end to move money overseas.
And rather than paying like a 10% fee and waiting three days, they're getting it in a second and they're paying like a pity.
I thought the country took a giant hit today.
Wait, which country are you talking about?
Sri Lanka.
Aren't they the one that have Bitcoin as the national currency?
Do I have this wrong?
No, you're talking about El Salvador.
Quit Smoking Naturally with Fume00:02:57
Oh, my Salvador?
You know, maybe.
This is my education.
I knew in South America there were two people.
If they're holding Bitcoin on their balance sheet, yeah, it looks like shit right now.
Like my balance sheet, I mean, sure, right?
So anyone who's holding, right?
So anyone who's holding any asset on their balance sheet, if that balance, if that asset crashes or has a real bad day, they're going to be in a lot of troubles.
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Escaping the Dollar System00:14:01
All right, let's get back into the show.
I'll tell you that this is what really like kind of sold me on being a Bitcoin guy and why I still believe in it, even after this crash.
So, well, obviously, I give Guy the credit.
He was really the guy who was the guy who Orange killed me, as I said before, and made a lot of compelling arguments.
And of course, obviously the goal, the primary goal of libertarians has always been to find a way to have a separation of money in the state.
That's, as I said on Patrick Beth David's show, that's the most important thing there is.
And I was always somebody who was interested, you know, in crypto and particularly in Bitcoin, but, you know, I just didn't really understand it.
And it's very complicated and all this other shit.
And it's like, I don't know, I focus on other complicated shit that makes more sense to me than this.
So whatever.
I kind of just liked the idea of being like, ah, own gold and silver.
That tends to maintain its value over time.
And so there you go.
That's all you fucking really need to have.
And what's really turned me around on this has been the authoritarianism of the last couple of years, and particularly the Emergency Powers Act in Canada, where they just started seizing people's bank accounts.
And when they start seizing people's bank accounts, and I go, there's already precedent in America under FDR for going around and seizing gold.
They'll go and take people's gold.
And man, we got much more of a police state today than we ever had back then.
Don't think they can't pretty easily go seize your gold.
And especially all of these places who are like, you know, they're holding your gold in some account somewhere.
It doesn't matter.
You could have physical gold if it's held by somebody else.
They can go fucking seize that gold from where it's held.
In fact, that's much easier for them to go seize.
Even if you don't have like a gold derivative of some sense, but you have like, you own gold, but you don't physically have it.
If it's being held somewhere, well, they can just go right there and take it.
But in Canada, what they didn't get was people's Bitcoin.
And so that to me, that makes me go that like, look, the only Bitcoin they seized was the Bitcoin donated own exchanges.
That's right.
Exactly.
And so that to me was like, oh, you know what?
That kind of sold me on like, if we're looking for some escape from this whole system, the only one that seems legitimate to me is Bitcoin.
And there are these other cryptocurrencies, but as you've pointed out, they all just seem so like Bitcoin seems to be the only one who's actually figured out a way to be like, no, this is actually, there's a limit to how many of them there are.
There's a process to like get it.
It's not going to go to zero.
And that, so that's kind of what sold me.
Now, I'm probably the most ignorant here still on the topic of Bitcoin, but that does make me go of all.
Look, you always have to be in the game of compare to what?
Nothing is perfect, but compare to everything else.
To me, that still seems to be the best bet we've got right now.
Well, and then add on to that, it's not just FDR being willing to seize gold, it's also the war on drugs, which allowed them to basically use RICO laws and things like that to go after people and seize their assets.
Now you have the war on terror, which allows them to label you a terrorist, in which case they can seize your assets on any piece of ground across the globe.
They can just take your assets.
They're taking fucking yachts from guys in Russia.
That's an excellent point.
Yes.
You know, so it's like, yeah, they took Putin's rod.
Yeah, they have Putin's yacht.
The Italians just grabbed it.
How fucking crazy is that?
It's nuts.
I mean, I bet it's a dope yacht.
Oh, I bet it's great.
Oh, it's nice.
It's real nice, dude.
So much cocaine on that yacht.
But I mean, when you add all of that in the walls, when you add all of that up, you have a government that has signaled clear as day.
If you are a political enemy and they can just create whatever label they want to put on you, terrorists, white supremacists, Nazi, you know, whatever, drug dealer, they can steal it.
They can take your money.
Trucker who believes in freedom.
Exactly.
The honking terrorists in Ottawa.
How valuable is your Bitcoin going to be if it's outlawed by the United States government?
I mean, if all of a sudden none of the pension funds or banks can operate with it, it's illegal to hold.
Not only is it illegal to hold, I had to declare on my last IRS form that I had bought Bitcoin.
So what happened?
Fine.
So there's no physical gold.
I mean, there is too, but let's just let's not announce that.
There's no gold here.
What are you talking about?
Let's say they come knock on my door and they're like, hey, you know, you told us you had the Bitcoin.
Where is it?
Like, to me, if government wants to make it illegal, which like, and Bitcoin is probably a bigger enemy than gold right now to its actual financial infrastructure.
I mean, you're describing the biggest risk factor.
I don't think it's any less risky than gold in terms of government being like, I actually think it's more risky because it's probably easier for them to kind of at least make illegal.
And we've seen their ability to track even what's been washed.
Like it's pretty easily traced.
It's way more easily traced than physical gold.
Well, as a short-term evaluation, you're absolutely right.
The market would be hammered because all the institutional funds would exit Bitcoin because legally they couldn't continue to do their business if they were operating in a black market.
It would screw everything up.
So you would see tremendous capital flight outside of out of crypto.
But I think simultaneously it would just entrench Bitcoin as a black market transactional currency.
I think its foundation goes stronger if you do that.
Like at the end of the day, on a long enough timeframe, if Bitcoin has to grow in the dark and gray markets, like that's a, that's a, don't get me wrong, that's a messy scenario.
Like that's a very, very messy scenario.
The U.S. is the largest like per capita adoption of Bitcoin, or I guess it's the largest monetary.
I think actually Nigeria is the largest per capita, like 4% capacity.
But regardless, well, actually, that's a funny example.
Nigeria did ban it, and they actually have one of the highest population adoptions of Bitcoin despite the ban.
That's a much weaker government.
That's a much weaker government.
It's a much weaker government, but it's a good example.
It's at least a decent test case to understand the fact that the infrastructure itself, how Bitcoin runs and how you use Bitcoin is irrelevant to the U.S. international banking system, to the dollar banking system.
Their mechanisms of control, their ability to shut Russia off from sanctions does not exist in Bitcoin.
Like Bitcoin still moves across the borders.
Are people like I know people personally that i've had conversations with who said they were freaking out.
They literally put their into bitcoin to get out of the country because they could not access any other type of money.
This is an adversarial money.
This is what it is built for.
It's going to be a mess.
It's not as if the, the markets are not still susceptible to.
I mean, look at all the fiat propping up everything right now, like the entire the.
The amount of misallocation in the markets is unbelievable like.
It's not as if bitcoin's not susceptible to this.
It's still a horrifically volatile market price, but it is a volatile currency for a volatile world and the beauty of bitcoin is that that volatility makes sure that you cannot imbalance the economy.
You cannot sustain leverage over a 50-year timeframe like you can in fiat.
Like when, when bitcoin and that system gets over leveraged, you you see a crash, you see a wipeout and it cleans itself up.
The companies that are not sustainable, they die.
They die in no time.
Fractional reserve does not last in bitcoin because, at the end of the day, bitcoin is a sound money.
It is.
It is an exact money that you can withdraw and you can have and you can know that it is the, the paper, the paper.
Bitcoin is going to disappear again.
I think we are in kind of that age of, or that era of uh, the market cycle where we're back to trading a lot of paper bitcoin.
I don't think Coinbase has everything that they promised they have, I think, a lot of different companies Celsius is looking pretty shitty right now.
I think they were like really wrapped up into this US T LUNA crap um, but it's going to get wiped out um and on a long enough.
You know, bitcoiners are built in the bear markets.
Everybody, everybody loves something that goes up everybody.
The dumbest motherfucker in the world can watch something double in price and be like woohoo, this is the greatest thing ever and then watch it.
Dump 10 that.
That dumbass is out of there.
He's gone.
I bet you there was way more uh new, new entries into bitcoin when it was north of 60k than than it is today.
That's exactly right and and that just goes to show.
You know people, people are trend followers.
They're not trendsetters.
They don't, and this is how.
This is why so few people you know get rich investing is because you have to have somewhat of a contrarian stance.
When, when I see markets tanking, I salivate.
Everyone else gets nervous, you know, and and that's that just, it comes with some experience, it comes with some time um, but you have to have nerves of steel and and that's what i've.
Honestly, I think you'll probably have a lower entry point to get into bitcoin.
But regardless, I would like to see people dollar cost averaging in.
If you have no exposure whatsoever, if you're, if you're a libertarian and you don't have any exposure, you know i'm, i'm a hard money guy, i'm an old money guy, i'm i've come late to bitcoin uh, similar to Dave, but trust me, you want to have some exposure to something other than fiat.
I promise you.
Uh, if it's gold silver whatever, but just make sure you have something, because if, if the whole world really does implode, if the great reset is real, if the, if the plan is to actually allow this, this economy to deleverage, yeah it's going to get really Really bad.
Well, that's, I think that's kind of Clint kind of hit on it right there.
I think what a lot of people are looking for here is an insurance policy.
It's like where you start to look at where we are now and go, I'd like some insurance against the worst case scenario.
And I also think this gets to what Rob was asking you.
So I'm not sure if Rob's question was like satisfact, was answered satisfactory, satisfactory, satisfactorily, satisfactory, satisfactorily, if Rob's question, because really that's, I think, what we're getting to the heart of here.
And that has always been kind of at the heart of at least the libertarian sell of Bitcoin is that this is, you know, kind of like your insurance policy against the absolute worst.
And right now, the absolute worst is starting to seem a lot more real to a lot of people.
Especially, look, me and Rob have been, since we've been doing this podcast, we've been talking about this economic crash that we're about to feel.
And I was talking about it for years before Rob was on the podcast.
And I got to say, I tip my hat to the Federal Reserve.
I can't believe they kept it going this long, but it really seems like we're right on the brink of it now.
And so that's what a lot of people are asking.
So I don't know, Rob, do you have any follow-up for Guy on that?
Like, are you satisfied with that response?
I'll say one thing about the idea of insurance is that one thing that you must insure against as part of that insurance is the fact that you are not in dollar rails.
You know, you could have had a great short position against mortgages custodied with Lehman Brothers.
You know, you could have $20 billion in dollars in Russia thinking that you're hedging against rubles.
But if your infrastructure is dependent on someone else's authority or permission, if you can't move money without your insuring agent being solvent, without your political institution or your jurisdiction being friendly to exactly why you want to use it, it's not insurance.
We're talking about political insurance here.
We're talking about something that needs to be external from the dollar system, which is the everything system.
Sure, when the Titanic sinks and there's massive waves, your dinghy is going to is going to rock like crazy.
Your dinghy is going to be thrown all over the place.
But if that shit floats, you still want to be in it.
You know, do you want to be, do you want to be sitting in fiat and do you want to pay for the $200 trillion fraud that is about to unravel?
Or do you want to be in the dinghy and deal with the waves?
You know, like, like right now, that seems like the two options.
And that's why I'm just Bitcoin only.
Let me add one thing too.
I just came up with this saying.
I have no idea if someone said it before, but it's really easy to make money in a bull market.
It's very hard to make money in a bear market, but it's very hard to make life-changing money in a bull market.
It's very easy to make life-changing money in a bear market if you play it right.
So, like, while it's going to be really tumultuous in the near term, you have opportunities that will present themselves to you over the next few years that you did not have over the past, you know, 10, that the market was just consistently going up, you know, 10% year after year.
And that just goes to show that you have to go against the crowd sometimes to really make outsized gains.
So, I don't want people like lose hope just because you've seen maybe your net worth drop by 40% over the past week.
Like, I can understand why that would be jarring and daunting to look at, but these are opportunities.
And we haven't even seen the knock-on effects that could potentially be hitting real estate.
If the Fed continues to hike interest rates, you're going to see major, major upheaval in the real estate market.
We haven't even discussed that yet.
So I don't know if we want to go there, Dave.
Affordable Therapy via BetterHelp00:02:31
I can, but okay.
No, sure.
Actually, that's a really interesting topic.
But before we go there, Rob, is there anything else you wanted to add on the Bitcoin discussion?
No, I love Guy, man.
I'm holding on to my Bitcoin.
I'm not selling it.
Oh, wow.
I feel like wow, guy just bitched you out, Rob.
I'm just going to let him do that to you right here.
You're supposed to be my fucking my all right, fine.
God damn.
Look at that.
Hey, guy, you want to co-host this show with me?
Going forward?
I got it.
All right.
Fuck that king of the college.
No, I'm just, I'm just kidding.
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Okay, let's move into.
Rising Mortgage Rates Explained00:15:39
Okay, so yeah, look, what real estate's that this is a really interesting topic as well is that these rates going up.
And of course, the Fed fund rate is only going up slightly.
Me and you talked briefly right before we started recording about how mortgage rates have been increasing even a little bit ahead of the Fed fund increase, which in itself is kind of interesting.
And I wanted to get your take on that on recording, not just off the show.
But look, what we've seen in the last, say, year and a half, really in the last year, I guess, has been like pretty incredible all around the country.
Unbelievable price inflation in the real estate market.
And that certainly seems to be unsustainable.
And, you know, when you look at the fact that the American people are getting poorer, the price of housing is shooting through the roof.
Now you have mortgage rates going up.
You kind of, you know, like sometimes you can just look at a situation.
You know, it's like the cost of college, or you look at it going up and up and up and a degree being worth less and less and less.
And you're like, hmm, this can't go on forever like this.
So what do you see going forward with the real estate market?
Well, probably the biggest mistake I made in my prediction career was thinking that the lockdowns themselves would create a cascading default in the real estate market.
So I want to couch my opinion in saying I was wrong in 2020.
I didn't think that they would have the political will or insanity necessary to print.
Uh, you know seven trillion dollars to keep this going.
So you know they can.
They can delay the day of reckoning longer than we sometimes expect.
You also didn't expect the ongoing eviction moratorium.
I mean, your big theory was, around evictions yes yeah and, and really, what happened there is, I didn't take into consideration the, the supply chain breakdown when it came to material costs to create additional inventory.
That was like that was the big miss that I had in that calculation because uh, what happened was the cost of material goods to build new inventory.
As the prices were going up, you weren't able to, you know, create the amount of inventory necessary because the costs were so high to get material goods.
Uh, not to mention, you have city and local ordinances that make it a nightmare to build and it takes years to get through planning.
So they, they can't adjust, really they can't do it fast enough.
So there was a I mean, every step of the way, it's government interference, which is what makes this so complicated when I when I try to evaluate these things, but I will say it is very simple to evaluate.
When it comes to interest rates, interest rates go up for an extended period of time and they go up hard enough, you will see a major adjustment in the price of real estate.
That is just, that's an inevitability, because you cannot, you cannot continue like the.
Your purchasing power decreases uh, not exponentially, but very rapidly as the as the interest rate goes up.
So that that's my expectation is that, if they are serious, if they're committed to getting the fed funds rate over two percent, we already have mortgage rates, 30-year mortgage rates, at five and a half to six percent.
Uh, that that you know, assuming that that trend stays, that would put us at probably seven percent in 30 year mortgages by the end of this year.
That that is a huge shift from three, three and a quarter percent just three, six months ago.
Yeah, that's a 50 haircut in prices.
Like that's just.
Yeah, I wouldn't go that hard, but it's going to be big.
Yeah well, we'll go into for anyone you could.
If you literally just googage uh google uh, mortgage gougage, if you, that's the Googage mortgages.
If you, if you uh, if you google the mortgage calculator and you just look at it more and just enter in your your, the interest rate there and enter in three percent and then enter in seven percent and look at what your monthly payments are going to be.
It's going to be a drastically different number, and this is how people buy houses, like what they can afford per month to pay, and so what you're just naturally going to have is a huge swath of people who maybe could have afforded that house at a three percent rate, who now have no chance at affording this house.
So there's no chance, there's no way that that doesn't have a major impact on the market of who can buy houses and who can't.
And an important addition to to make to my prognosis with this is that inventory has been at historic.
There has been no inventory, like less than two months.
A normal turn time when you have an equilibrium in housing is about six months.
We had two months of inventory nationwide where, you know, you could all the houses that were listed for sale within two months, they would be gone, like as in bought by someone else.
So, in order to get to an equilibrium price where prices stop going up and they start to flatten out, you have to have about six months of inventory.
I think we're approaching three months around right around now.
So, I still think we actually have some runway on housing.
I don't think that it's going to be this precipitous collapse unless obviously the mortgage rates snap up even further and faster than the Fed moves, in which case, God knows what happens.
But I want to explain what I was talking about with you, pre-show when it comes to the interest rates.
What's fascinating is that the 30-year mortgage rate started to not just inch up, but go up pretty significantly in percentage terms prior to the Fed announcing their decision to increase rates.
And what my dad and I have been theorizing, he is also an old school money manager like myself.
And we're thinking that it's probably a sign that central banks across the world have started to divest themselves of treasuries, U.S. treasuries.
And if that's the case, I mean, I don't know if I can actually look that up.
I need to figure it out if it's true, but I wouldn't be surprised at all given the treatment that we've given to a country like Russia, where we're just saying, hey, all your savings in U.S. dollars, there are now.
If I was a foreign country who's running a central bank, a central banker for whatever, Ethiopia or something, I'd be like, we're not buying treasuries from the U.S. anymore because if they decide that we're an enemy combatant, they're just going to seize our fucking money.
So, this is, I think that's what's actually happening is that you're starting to see more and more countries, because we are so out of control, they're starting to divest of saving their central bank funds, you know, the funds of the government in U.S. treasuries, which historically have been the like the triple A, like the quadruple A safest investment you can have.
Like you can always count on U.S. treasuries.
If foreign governments start to doubt that, which they should, and they should have for a very long time, mind you, but they hadn't until recently, that is a title shift that everyone needs to be paying attention to because that is the sign the dollar is dying if it happens.
That is something happening.
There's something to note with that.
So, once again, just to be clear, I agree with you.
I'm going to play Devil's advocate.
I agree with you here.
And what we've done with Russia, particularly in that if people are divesting from the U.S. dollar and they're not buying our debt, I mean, you're talking about end games in terms of our economy.
Like, forget sanctions.
If people start transacting in other currencies, we're in big trouble.
Also, to speak to your point, there's a website, Wolf Street, which he's had charts showcasing how we've been buying more of our own debt over the last couple of years.
That's particularly to try and manipulate the interest rates and kind of pretend like there's more demand for the dollar and keep the interest rates down.
This is where it starts getting above me and it's a little bit too complicated, but you start looking at the Euro dollar, which essentially is the theory that there's so much debt denominated in U.S. dollars that there's too much demand essentially for our treasuries because that is collateral for like debt that's owed.
So, like the idea that there's going to be a quick unwind of that or that there isn't like just so much demand for both dollars and treasury at this current juncture in time because of the debt that needs to be serviced in, that's priced in dollars.
You know what I mean?
So, like, I'm not saying that these risk factors are not on the table, but it seems like it's not a very quick unwind and there's not like a quick other currency that exists to kind of move away, you know, to make a quick conversion to.
Well, I think that's, I think Rob's right about that.
And I think that's what's kept this going for so long is that people are kind of like, well, okay, look, even if they are very like skeptical about the dollar, it's like, well, where the hell else do you go?
Exactly.
And that's kind of been that's for a long time.
To let 100%, well, yes, but most people aren't looking.
Most, most powerful people aren't looking.
No, no, Bitcoin is not there yet.
Bitcoin is not there yet.
I know, I know.
The political sphere is not interested in that scope.
They don't see that as being in that playing field.
I think it will.
Well, they're also an interested party.
They also kind of have their own reasons to want the dollar, you know, hegemony to continue.
So go ahead, Rob, finish.
And then I've got something to add to that, but go ahead.
But just conceptually, the idea that you can just ruin your own currency and no one can come in with a competing product just doesn't make sense.
And I read Rothbard's, it's that giant green book, I think the history of money and banking in the United States.
And now here's where I turn to retarded.
It's amazing the information I can recall and then the stuff that I can't.
But he had one very specific law there that's essentially that everyone will kind of dump their money into the better currency.
So like if someone's overprinting, what am I smart?
I think you're talking man economy and state.
No, yeah, the green one is big green one.
So his law was basically that like if there's a stronger currency, that more people are going to inevitably be drawn to the stronger currency.
Yes.
Okay.
What's that law?
I don't remember.
There's a Thiers law, which is basically the opposite of Gresham's law, but that's that the like, so Gresham's.
What's Gresham's law?
I think I think it's Gresham's law.
It's bad money drives out good money.
It's that if you have, if you're using a really shitty money, everybody hoards the good money.
Right.
Yes.
Well, so I don't understand how that doesn't inevitably happen to the U.S. dollar as they continue to print and devalue.
I don't understand how you don't end up at some point in time where there's a better currency and people just go, all right, well, I prefer that one.
Well, because I think the short answer to that is that it's not just a matter of the better currency.
It's also a matter of who's got the better guns.
And for a very long time, the United States of America has had the guns.
And these things are very, you know, interrelated.
Now, I think that for what a lot of people in the kind of in the libertarian world who have been kind of talking about the inevitable crash have been talking about is this moment.
It's not so much that we would get to a point where the Fed finally decides, listen, we've just, we've got to do the responsible thing here and clean up this malinvestment and raise interest rates.
But the point is that if you live in a system that's debt, that's debt financed, that eventually this pressure doesn't have to come from within.
It can come from the outside.
And that at a certain point, people can say, well, no, we're not buying this debt at such a low interest rate.
And that if it, because it's risky enough, and they can kind of see the writing on the wall, that like, no, we're not going to do it.
This just won't sell unless it's at a higher and higher interest rate, because that's, that's what you'd have to do to lure people in.
Now, there are some signs that we might be approaching this time and some really major signs.
And this is very related to people getting off of the dollar reserve standard.
It's also, but just to my point that it's related to the guns, look, when Saudi Arabia, there was this big story out a few months ago about Saudi Arabia not answering Joe Biden's phone call.
And now, you know, you never know exactly what the truth is with these stories, but what was definitely true is that they were looking for his pants.
Yeah, that might have been Joe Biden pocket dialed Saudi Arabia.
Yeah.
There's no idea.
But what was true is that they were talking with the Chinese.
That's absolutely no.
There's no question about that, that they were talking with the Chinese.
And there's been a lot of plotting before about getting off of the dollar reserve standard.
The problem is that those leaders always end up assassinated or having a war on their hands or something like that.
So that's again, just to make the point that that's a big factor in whether people stay with the dollar or not.
The fact that, like, well, the last three people who got off the dollar all ended up dead or their country was invaded.
But, you know, this all ties together with like, you know, you know that line that Scott Horton, not the Scott Horton of Bitcoin, but the real Scott Horton likes to use a lot with the go Google, placate the Saudis.
I mentioned this on every big podcast I'm on because you go Google it.
This is why Obama said he wanted to fight the war.
He would support the war in Yemen was because we had to placate these Saudis.
So anyway, he launched a war of genocide to placate the Saudis and he's the most evil piece of shit in the history of the world and should burn in hell for eternity for that.
But the point of that is that we really pissed the Saudis off with the war in Iraq and the deal with Iran.
This infuriated them.
Like they were like, what are these maniacs doing?
And whether or not the neocons and the Israel lobby and all the people involved really believed this, Scott really believes they did.
My guess is that they did not.
This is one of the few areas where I disagree with Scott, that he says they really bought into their own bullshit that fighting the war in Iraq was going to like, you know, spread democracy around the region and shit like that.
And I just, I don't really buy that.
But Scott knows more about this shit than me.
But either way, from the Saudi perspective, they were like, these maniacs actually thought that overthrowing Saddam Hussein would hurt Iran.
Like, that's how fucking crazy they are, that they didn't even realize that taking out their biggest enemy next to them would hurt them.
And then they turned around and made a deal with Iran after that.
And they're like, okay, so we were.
So the point is that we became so belligerent and insane that they were like, we, they're almost scared in a way of how reckless we are.
And there's a lot of people around, a lot of governments around the country who are looking at America that way.
Like, holy shit, this is not, this is no longer the respected superpower.
This is like the fucking crazy drunk guy with a bunch of guns who they're like, wow, we really need to do anything we can.
And there's been more talk since this war in Ukraine broke out.
There's been more talk on a global scale about moving away from the dollar as a reserve currency than I've ever seen in my entire life by major players.
And that also is very related to the idea of buying U.S. debt at ridiculously low interest rates.
Like if people are moving away from the dollar, they're also moving away from U.S. debt.
So I think all of this is just a very interesting little storm that we have going on here.
That's why.
And I don't know if it's political posturing, but Saudi Arabia, like I feel like they are the cornerstone.
They're the canary in the coal mine for OPEC.
And they have been openly talking.
I don't know if it's a political posturing and they're just trying to basically flex their guns, but they have been openly discussing trading oil with China with Yuan.
And that is not like, like it just kind of like went through the news, like, oh, that's no big deal.
It's like, no, that's a big fucking deal.
Global Power Shifts and Debt00:04:32
And Russia is basically flexing their guns by saying they're not going to provide like the U.S. is flexing their guns by saying you're not going to be able to use our paper currency and we're going to steal your paper debt.
And that is essentially because the US owns the international banking infrastructure, they can cut people off like that.
Russia is flexing their guns by saying, well, you don't get oil.
You don't get energy.
We're going to cut your electricity off.
They just they just said, was it today that they're going to cut off, they're going to stop feeding electricity to Finland.
Um, like and if you want the energy, you have to pay for it in rubles.
You have to pay you're trying to bring, you're trying to break our currency.
Well, we're going to make you buoy it, we're going to make you bolster it.
I mean, it's absolutely genius what they're doing.
And what it's up 11% this year.
Yeah, it's the only strong, it's the strongest currency in the currency and it's the strongest, yeah, which is really by the way.
And I want to hear your point there, Clint, but that's something that's worth like really driving home that point that Biden was bragging about crashing the ruble.
And now look at this.
It's the while while our dollar is crashing, the Russian currency is surging.
And this is really something that's pretty unbelievable.
Like that, talk about something I would not have predicted and seen coming.
This is really something I would not, I would not have been betting on the ruble a month ago.
Well, this is why I'm so concerned about Russia, you know, not Russia and what they're doing in Ukraine, but us ending up in a hot conflict with Russia, because I think that what Russia is doing is not just going to win this war in Ukraine, which basically breaks the back of the NATO defense regime.
It breaks the U.S. hegemonic rule when it comes to which countries are allowed to be invaded and taken over.
It's like, only we can do it.
No one else can.
Well, if they can do it under our nose and they can basically say, we're not buying your mutually assured destruction pact anymore, we think you're a paper tiger.
And your only power that you have over us other than nukes is sanctions.
And we can fucking beat you there too.
If that's the case, the game is up.
That signals.
And what Robbie's point earlier was, I don't think that it can happen in a blink.
It can happen in a blink because as soon as the control mechanism that the U.S. government has held over the world for the past 50 years is shown to be ending, then you will see all of these countries that we have treated like shit for millennia start to say, okay, we're done.
We're not buying your treasuries.
We now know that the game is over.
The regime, you know, the empire is ending.
And this is the moment.
This is the moment.
If Russia can prevail in Ukraine, it could be the death knell for the American empire.
And that's a fascinating connection that I don't think a lot of people make.
Like it's so much bigger than just Ukraine.
Like this could actually be the end of the US dollar's global reserve status, as well as our militaristic hegemonic rule on the planet.
And that, when you frame it like that, it's a really positive thing from a libertarian anti-war perspective.
But when you, when you have one power that has controlled basically the entire geopolitical sphere for our entire lives, and all of a sudden they're not going to be that unipolar moment anymore, it can be very tumultuous.
So it's going to be interesting to see how it plays out.
And along those lines, it's particularly bad when both China and India, which are the largest growth markets, are like, yeah, we'll still work with Russia and Saudi Arabia also.
It just doesn't work that well when Saudi Arabia is like, yeah, we'll just trade with China and India and Russia are like, well, we'll still buy your gas.
I think they're actually building direct lines now.
And especially when they're being listed as like unfriendly, like they're in like the threat zone when it comes to the U.S. is that like, you know, China has been trying to devolve, divest itself from U.S. treasuries for a long time.
And they have been slowly doing this.
And when I think the curtain falls, I think we're looking at every political opportunity that a major power has been looking for, but been holding off on because of the U.S., the perceived U.S. resistance to it will kind of crack all at once.
Like, I think we'll be able to count in hours until Taiwan is under China's control.
Part One Wrap Up00:04:26
I do think we have to wrap part one.
So, just put a button on this: kill Asian people, right?
That's what that's going up to.
That's well, listen, that's we're getting there, but that's you're talking part two stuff here, Robbie.
So, let's get to that.
Well, listen, this has been we're doing a two-part episode here, as Robbie alluded to.
So, this is going to wrap up part one, but we're going to come right back with this great panel and we're going to continue for another hour or so.
So, let's wrap here and then make sure you check out the next episode, which will you'll have some familiar faces on that.
So, thanks everybody for listening, and we'll catch you soon.
Peace.
Okay, so as my brilliant producer, Brian, just pointed out, we should do a round of plugs before we end episode one.
So, let's go around.
Clint, where can people find you?
You can just search Liberty Lockdown on YouTube, Spotify, Apple Podcasts, everywhere else at Liberty Lockpod on Twitter.
I'm about to break 40,000.
Incredible.
And also, I will be breaking down ESG on Tinfoil Hat with Sam Tripoli in like two weeks.
I'll be in Reno.
I'll be at Porkfest.
I'm actually giving two hour-long speeches at Porkfest where I'll be breaking down ESG again for one of them.
So, I'll be everywhere.
So, just catch me, catch me on the road.
Hell yeah, dude.
Can't wait to see you in Reno and at Porkfest.
Very good.
Guy, where can people find you?
You're on me, buddy.
I'm so sad because I'm probably going to miss Porkfest and Reno.
But in the meantime, if you want to find me, I am the Guy Swan, and that's Swan with two N's, the way you're the real way to spell it on Twitter.
And my show is Bitcoin Audible.
It is literally, if there is anything, anything around economics, the philosophy, the cryptography, the history, like the cypherpunk origins, the predecessors of Bitcoin, like everything from top to bottom.
We're like just shy of 800 episodes in.
Anything that you could possibly want to learn about Bitcoin, we've covered it on the show.
That's what the show is.
I'm the guy that's read more about Bitcoin than anybody else you know.
If you are, if you're into Bitcoin or if you're interested in getting into it, go check out Guy's work, man.
He's, he's, I'll tell you, he's the man for this fucking job.
He's, he's the one who got me into this shit.
So go check it out.
And by the way, I've worked very hard there to not say Guy again.
He's the one.
He's the man.
He's the guy.
He's all that.
And so other noun non-guy.
Yeah.
So, Rob, on your final episode, before Guy takes over for you, since he bitched you out so hard today, where can people find you?
He didn't bitch me out.
I own Bitcoin.
I like Bitcoin.
I was playing Devil's Advocate.
Geez.
Because Guy made you.
I was first on ESG, but a good thing that Clint's, you know, picking up the reins, explaining the actual logistics behind it.
Big week coming up.
California show up.
I got my resident run-your-mouth non-scientist who's going to be doing a breakdown of all the latest in COVID news.
I'm going to be doing Childerberg doing stand-up comedy and running a ceremony to try and get rid of the demon Fauci.
You and I, we got Chicago and Reno, still a couple tickets left for the late show.
So more stand-up coming your way.
Yeah, that's right.
I think we have like a total of five tickets left for Reno and five tickets left for Chicago.
And I just plugged them earlier today on Skanks.
So if you're listening to this right now, this is really it.
If you want to come see us, go grab those tickets.
This is going to be a lot of fun.
So looking forward to those ones.
Also, me and Robbie were setting up shows in Philly and in Brooklyn.
So that'll be coming up in the next few months.
Once again, a reminder that my episode with Patrick Bett David is up.
If you guys want to go check that out, it was a fun libertarian panel with Spike Cohen and Larry Sharp.
It was incredible.
Oh, thank you very much.
Allegedly, Jessica Vaughan was there, but no one knows if the rumors are true or not.
No, she was there as well.
She was great.
And I just recorded a four and a half hour or somewhere in that ballpark state of the union with the great Ari Shafir on Skeptic Tank.
A lot of people really love that podcast.
That should be out in the next week or so.
So go check that out.
Just talking about everything that's been going on over the last year and a half, two years in this country.