The Last Trade E047: The Dollar Endgame with Peruvian Bull

Brian Cubellis (00:01.998) Woo, doh, yee, gentlemen. We're in epoch number five. First rip of epoch number five. How are we feeling? Feeling good. Feels like nothing's changed. Feels like the having didn't do anything, guys. We're in the death spiral right now. This is a funeral episode. Death spiraling. Yeah, I don't know. I heard the fees are, you know, the block reward's so low now that... Everything is going to die, right? Bitcoin's over. It's canceled. Yeah, we should all go home. The overlords have up. Yeah. All those people who are excited about the having, they really have egg on their face because nothing happened and nothing will happen as a result of this having. I will say that death spiral FUD was not as pronounced as it has been. That's true. Last cycle was really loud, like, you know, they were. Serious people were concerned that mining would you know be unsustainable and that we didn't have that at all this time They're they're perceived to be serious until they start talking about the spiral phone Ari Paul Gentlemen we're joined by Peruvian bull the infamous Peruvian bull founder of the dollar endgame sub stack Welcome to the show. How have you been? It's been like a year since I caught up with you Yeah, I've been good. I've been good. I've been busy. I quit my job in fintech and I started doing this full time doing research and writing. Yeah, went to the adopting Bitcoin conference in El Salvador spoke there. I've been living in MIDI in Columbia meeting a ton of Bitcoiners making a lot of great connections. So a lot of huge changes, but I'm bullish on the future of Bitcoin. I'm bullish on my future. I'm excited to be here. I'm bullish on ramp, everything. You weren't just a fintech, you were in like fintech PE, right? Yeah, yeah. I was doing like valuations for early stage startups, mostly software companies and some biotech for a couple of years. And then I was, I was so interested in macro, I was diving deep down the rabbit hole and I started writing on Reddit. I wrote this series called dollar end game. Brian Cubellis (02:26.606) which was about the monetary system and changes of reserve currencies and why the dollar and trip and Silema would eventually cause things to run up. And this is just, this is just a camera switch. Okay. Okay. Yeah. This, uh, I thought you guys dropped me. Um, yeah. So I wrote this series and it's funny cause I, I didn't even, I think I told Marty this, I didn't, anticipate it being anything bigger than what it was. I wrote the first post and then it went to like 500 ,000 views on Reddit. And I was like, Whoa, like this is huge. And so a lot of people said, we want to hear part two, what happens after Nixon goes off the gold standard and Trifton's dilemma starts kicking in. And so then I wrote part two, part three, we're the whole series. And then just started going on Twitter, started writing Twitter threads. Those started blowing up and I was like, wow, there's enough demand for this content that I'll quit my job and do this full time. And so. That's what I've been, what I've been doing for the past six months or so. Yeah, it's awesome. And, and I just love how the people like you, you know, come from a background of, of like doing macro analysis, doing like evaluation analysis, and then things aren't adding up and you know, it's not like you're uninformed. In fact, you're too informed and then you figure out, you know, this, this doesn't make sense. Something's wrong here. And then you go down the rabbit hole. And I think that that's very telling that people who know too much end up Bitcoiners. Yeah, we all get we all get orange -pilled eventually, right? Like that's that's the thing. I actually, unfortunately, in about 2018, I was futted out of Bitcoin because I read a book written by a software engineer and hedge fund manager, Eric Townsend, that basically said, hey, the blocks, the block space is too small to challenge or to allow enough transactions for global output. This is seven transactions a second, we need 60 ,000, so it'll never work. And so don't buy Bitcoin. And so I was a gold bug up until about 2021 and the GameStop situation occurred. And then after that happened, a bunch of... I blew up, that's when I started really exploding and going viral. And a bunch of Bitcoiners started messaging me and saying, hey, you should look into this again and arguing with me. And I was like, you know what? Brian Cubellis (04:49.358) Maybe I should. And then once I read Safedeen's book and I read Block Wars, Block Size Wars, I was like, okay, I'm in. Eric Eric if you're out there I've emailed with Eric before being like hey, let's talk about Bitcoin. He's like no, it's not gonna work It's a shame macro voices podcast is a great podcast. Actually. It's one of the few that I still listen to from time to time But yeah, they The macro some of the macro guys particularly the gold bugs not that Eric's a gold bug or anything Really misunderstand Bitcoin It's a fascinating dynamic because don't think natural or like Every couple months will have somebody that's a quote -unquote Bitcoin expert come on and talk about it and like they're just consistently getting peppered with like different versions of The value prop and where it sits like it's almost like the Peter Schiff Side of it like do they get it? They just do they just like are building up that persona that they're not they'll never get Bitcoin, but they have a bag Once you read a book about it. It's hard to uh, yeah out there is publicly accessible. It's hard to save face. Yeah, the gold bugs really suffer from escalation of commitment. You know, as like a psychological trap where they've invested so much of literal money, but also time and energy and and ego in being right about gold that they don't want to be wrong. It's a financial and psychological sunk cost fallacy that they're stuck in. Where was this? Well, I was going full time. I couldn't imagine a better time to go full time in the space from like, you know, geopolitical perspective, what's happening, all the craziness that we saw going on the past two weeks in the Middle East. And there's a lot of discussions around Bitcoin being the first kind of alarm when stuff goes a little hairy. So yeah, I'm sure you have a lot you're writing about right now. Oh, yeah, no, that's it. It's. Brian Cubellis (06:54.926) Well, also, I mean, it's not only that, but the Fed's tools and ability to, you know, stealthily add liquidity into the system is expanding. You know, things that I wouldn't have found two years ago happening, I'm finding that are I'm finding today. Like one example is I was doing a recent piece, I wrote it called Stealth QE, it was about different ways that the Fed can add liquidity back into the banking system without actually technically expanding the balance sheet. And I did a breakdown of the Fed's balance sheet since the taper week over week changes. And I did it by maturity of their treasury debt. And I found out they actually haven't been selling any of their long bonds, like none. Anything past 10 year maturity, they haven't been selling. They've only been buying. And so what they've been laying off for the taper is just the T -bills, the two year notes, the five year notes and the seven year notes and some tips. And so that was pretty shocking to me because again, like this isn't stuff that's that's advertised in the financial media, even though you can find it if you know how to use Fred charts well enough to break down what's happening. But yeah, this is a really interesting time to be in global macro. It's a really interesting time to be in Bitcoin. I think the FUD that came out that weekend was hilarious because I ran it, did that drone attack within 10 minutes, Bitcoin price begins plummeting. And then you have people, I think Nick Timoreos from the Wall Street Journal or whatever coming online and saying, hey, how is this a store of value? It's falling. Oh my God. This isn't a store of value. It's falling during a conflict. How can you claim this Bitcoin thesis dead? Bulls are ended. I just had to laugh so hard at that because I was like, either you're just ignorant to the point of stupidity or you're willingly trying to. spread FUD and spread disinformation because that kind of talk is ridiculous. I mean, even treasury bonds were fire sold during March 2020 and that's a high quality, you know, liquid asset. So it's ridiculous to make that assumption. I mean, it's important to understand the context that Nick is essentially the Fed whisper is what he's referred to from the Wall Street Journal. So he's got a position of access to the Fed. Brian Cubellis (09:18.126) and loves that position of access because he gets a beat on all the stories and so it's not surprising that he would bad talk Bitcoin which is a big competitor to the thing he has access to and makes his career as successful as it has been relatively speaking. But with that in mind, just like the macro outlook, I'd be interested to get your thoughts on a few of the things going on right now whether it's that sneaky liquidity, operations that the Fed is running. A couple of things in the headlines this week. Japanese yen at 155 seems to be, Bank of Japan seems to be losing control of the yen. You had China and Russia come out and announce that they haven't done trades between each other, settling in dollars for some time now. And then we had the BTFP end last month and it looks like the reverse repo market is draining as well. So there's a lot of things happening both geopolitically on the global macro level and then here at the United States level, particularly at the Fed, it seems like there's a ticking time bomb going off in terms of liquidity that will probably need to be dealt with at some point. Yeah. I mean, inflation's... Yeah, it's accelerating, right? The last three months have seen increasing prints, which is interesting given that we thought that inflation was canceled if the Fed hikes rates to 5%, right? Yeah, they already defeated inflation. So they're not going to remark on how it's going up right now. That was how war won. It's already over. Exactly. Yeah, so there's a lot of threads to pick apart there. I can start wherever you want me to but let's start with Japan because Japan is notoriously for a long time been considered the canary in the coal mine a lot of people in the macrosphere saying if something's wrong in Japan that is the leading indicator that something's wrong systemically throughout the global financial system Yeah, I actually think that that's an apt metaphor I've written a lot about the Bank of Japan actually in my newsletter probably more than any other country except for the US and Brian Cubellis (11:42.03) Japan was at the forefront of monetary innovation. They're the ones who started QE in 2002. They're the ones who created yield curve control in 2016. They've pioneered a lot of novel ways to add liquidity to the system without trying to cause inflation. And then eventually they tried to cause inflation and for years it wasn't working until now it's actually working and causing them a crisis. I have this saying of the Bank of Japan is caught in a black hole of their own design. And the reason why I say that is because, you know, for years, I mean, Japan has been farther along the curve in terms of debt creation than any other country for years, just because of the demographics and because of their extremely low monetary velocity. And so they've been able to create massive amounts of credit without causing inflation in the traditional sense. because of those underlying factors. And to save the slowly deflating economy, the Bank of Japan in 2016 started yield curve control. They brought rates down to zero and actually negative in some senses, like on the very, very short end is negative 0 .1%, I believe. And even on the 10 years, negative 0 .1 % was part of the ban for yield curve control. And they kept it there for basically a decade. And what happens when you have ZERP for a long, long period of time is the debt creation just continues and just expands and there's no natural break on lending because there's no cost to lend and there's no cost to borrow. Like, why would you care about your debt levels as a company or as an individual when it costs nothing to roll over and you're not paying any interest? And so by doing this, the Bank of Japan piled more and more debt. And this creates this financial gravity of more and more debt means that if you raise rates, the interest expense will go up. So now you have even more reason not to raise rates. And so rates have stayed lower for longer. And so you just keep, you keep adding to the argument of why you should stay in this trap. And that works until your currency starts to blow up, right? Because this is the issue that the bank of Japan has been having for like the last two years. I keep saying that they're, Brian Cubellis (14:05.006) They're on a train and they they're slamming the gas and the brakes at the same time. And the reason I say that is because on one hand, like in September of 2022, when they began intervening in their bond or in their currency market by selling bonds, they were selling U .S. Treasuries to get dollars to buy yen. But at the same time, they were still continuing their yield curve control program to control their own bond market and keep yield suppressed. So they were printing yen on one hand and then they had they were selling Treasuries to get dollars to buy yen. the Forex markets. And so it's a nonsensical monetary policy that's self -defeating. You're burning the candle at both ends. You can't keep doing two opposite things at the same time and expect both to work out. And so they did this for months in September 2022. They began doing this again in December and then in July of last year. They kept, they started moving the bands of yield curve control because what they were trying to do was they were trying to alleviate this pressure building on their currency, you know, with this massive debt level and with inflation beginning to reappear in Japan, it printed, I think, 2 .2 % in February, which again, for us doesn't seem that bad, but for Japan, that's like a 30, 40 year high. Their currency is just getting weaker and weaker and the yen shorts continue to pile up. And as the delta between the Japanese interest rates and the American interest rates, domestic interest rates rise, the carry traders can come in, borrow yen at 1 % and buy treasury at five and profit from it. And essentially what that is, is that's like a synthetic yen short. And so the bank of Japan is stuck with this choice, right? Like, what are they going to do if they raise rates to stop the carry trade and stop their currency from blowing out, then their entire economy starts to run into severe depression and deflation because it can't, at 263 % debt to GDP, you can't support 5 % rates, like it's impossible. And if you're, I think I did the math, I think it was like for every 1 % they raise, they would spend 13 % more or something like that of their GDP on interest alone. Like it's. Brian Cubellis (16:25.55) It's ridiculous. I mean, this is of course in the long run, like over 20 or 30 years, but it's just they can't raise it that much higher. And so they have this choice of letting the yen blow out or raising rates and trying to stop the yen blowing out, but at the risk of basically pulling their own government into a severe fiscal crisis and pulling their economy into deflation. And so they've been stuck in this trap. And, you know, I, when yen was at 150, I wrote this piece and I said, You know, the banks Japan hadn't imagined a line. I said, this is their line of no return. If they, if this gets crossed, they're probably not going to ever go back. Well, we may not see again at 150 again. And that was last August. And then in March it crosses 153 and now it's at 154 .8 and it just keeps, it keeps going. And their only real recourse, which can buy them time is selling their $1 .1 trillion of US treasuries and using that to. get dollars and using the dollars to buy yen to strengthen their currency. And they can do that, but it'll run that will, they maybe have about, you know, 10 to 12 months of capital to do that based on their prior run rate of 80 billion or so that they were spending in September and October of 2022 to intervening as their currency. So they're kind of trapped, you know, or not kind of, they are trapped. And so I think the only choice is to either, let the yen blow out or let their economy suffer deflation. And we know central bankers and government officials hate the idea of the government defaulting and them losing control and losing funding. And so I think what's going to happen is the yen is just going to have to blow out and they're going to have to suffer currency depreciation for the next 10 years. Wow. Yeah, that's a great summary of the situation. But what do you say to people? You know, I used to spend more time paying attention to that part of macro. And when I talk about it, everyone, a common rebuttal would be, well, Japan's been in trouble for 20 years. You know, the numbers have looked bad for 20 years, and yet they've made it work. And I have my. Brian Cubellis (18:40.781) opinions on why that is. But what do you say to that? I would say like, yeah, yeah, they have been able to kick the can, they have been able to delay the problem. But when it comes to a problem, like a fiscal situation, this dire, you can't escape it forever. Right? Like math eventually catches up to you. And especially for a country that's not a reserve currency, you have the issue of the currency trilemma, you have to either hold You have to have an open capital account, independent monetary policy. You have to choose two of these three, independent monetary policy, open capital account, and freely voting or or pegged exchange rate. And so if you pick, you want the pegged exchange rate and you want independent monetary policy, then you have to close your capital account. And if you want an open capital account, which you need for global trade, then you need to give up either the exchange rate or you need to give up the monetary policy. And so what that means is that you basically become like a vassal of the Fed. You have to say, okay, if the Fed raises rates, I raise rates in synchronicity. If they lower, I lower. I have to follow whatever the Fed does just so that I don't attract capital flows or capital outflows to destroy my currency. And these processes, as we're seeing with the debt crisis, these processes are exponential. And so what happens is nothing happens, nothing happens, nothing happens, a little bit happens, then everything happens. at the end. So for the last 20 years, they've been able to kick the can because nothing was happening and they were able to keep rolling the debt at 0%. And then once the Fed raised rates in 2022, their currency started to weaken substantially and now they're stuck. And unless they can give us the Fed to cut to zero again, which may happen, they're going to be trapped. Yeah. But in what you said earlier about the Fed, choosing to roll over the choosing to hold the long term bonds that they're holding. Doesn't that imply if anything, they expect inflation rates to remain higher than the coupon rate on those bonds. And so those are the attractive ones to keep holding. Brian Cubellis (21:01.549) I think personally, I think it's less of a, you know, like profit motive play and trying to make money off of which bonds are going to make money or which bonds are going to, you know, be returning real returns versus nominal and more of a liquidity and overall market structure play. Because from what we've been seeing, you know, the treasury itself also has been switching its issuance from the long end of the curve to the short end. So last November, they put out a press release saying, you know, hey, we're reducing the amount of 30 year and 20 year bonds and we're increasing the amount of two, five and seven year notes we're issuing. And we're doing that on a go forward basis. And this is like a permanent change. And if you look at like the chart of T -bill issuance, which I can maybe throw up on a tweet or something, you can see this exponential rise since COVID of how many T -bills they're issuing this quarter in Q1 of this year. Yeah, I guess last quarter. Michael Howell pointed out that 71 % of the treasury's funding was coming from bills. And I think this is because there's a structural shift away from the long end of the curve in terms of demand towards the short end. And so when you have that happen, you can't keep off laying and trying to sell long bonds because the interest rates are just going to blow out. Exactly. So I think the Fed did that more of as a strategic play than a financial one. More that there's a market for the higher rate. short end of the curve bonds. And so that's what they're going to go offer up. And they probably don't want to refinance longer and longer duration bonds at these interest rates. So it makes sense. But it's a Frankenstein response. Try to derail you derail you from from Japan there because that was you know, an awesome amount about what's going on there right now. And I mean, so to bring it all back together, though, like what your The picture you're painting feels like a G7 nation that is circling the drain and will be the first domino to fall in our debt -based fiat era. Is that your sense? Yeah, I would agree with that sentiment. I just think that's a slow motion train crash, right? And ironically, which is this has also been pointed out, ironically, everything that Japan does will make the problem worse. Brian Cubellis (23:28.845) We already covered raising rates will cause them a fiscal crisis immediately. They can't afford 13 % of their GDP every year spent on interest. And they can't really cut without causing more inflation, although that's probably the choice they're going to make. But more than that, if they sell US Treasuries, there's another hidden feedback loop where when they sell US Treasuries, interest rates rise in the US, obviously, because bond prices and rates are inversely correlated. And then... The carry trade just opens up even further and more people pile into the carry trade and their currency blows out even more in the long run, right? In the short run, they can tamp the price down. They can use those dollars to buy back yen. But in the long run, it just widens the delta between the rates and then more and more, it's more and more profitable for hedge funds and institutions to pile in on the yen carry trade. So they're trapped. It's rockin' hard. Does this scare the shit out of the treasury? Because you consider the fact that they had a weak 10 -year auction. couple weeks ago and then the Treasury just recently opened up the buyback window. They announced it last year, officially opened back up a couple weeks ago as well. So many people, this is the first time they've opened it up since post 9 -11 2001. They opened it up during the chaos of that era and interestingly enough they opened it again, not as much chaos. One could argue. So with the looming specter of Japan losing control of their currency and trying to maintain control by dumping treasuries. You couple that with like weak auctions that have been trickling in over the last six months and this buyback window. I think it seems like the treasury is scared. And what would lead me to believe they are is the fact that they opened up the buyback window because they're going to need somebody to buy these treasuries as Japan's dumping them. Nobody else wants to buy them. due to the fracturing in the multipolar world that we seem to be moving into. Brian Cubellis (25:31.373) Yeah, I think that that's broadly accurate. There's one headline you guys might have missed a few weeks ago in early March. The International Securities Derivatives Association, which is essentially all the large banks, wrote a letter to the Fed and the OCC and the CFTC, I believe, and basically said, hey, look, you granted us an SLR exemption for treasuries in March 2020 for a year. And that was massively helpful in absorbing treasury issuance. And we want you to grant that again, and we want it to be permanent. And basically what they were saying behind the curtain is, look, like the treasury issuance is starting to grow exponentially. We can't, we don't have the balance sheet capacity to hold all this. And if, if you grant us an SLR exemption, which is basically in like bank capital terms means that they won't have to hold capital against their, uh, against any Treasury holdings because what the SLR is, is basically, it's called the Supplementary Leverage Ratio. It's basically a ratio that they use to calculate how much capital they need to hold against an asset losing value. So if they have reserves or cash to the Fed, they don't need to have any. If it's an MBS or an agency MBS, they need to have a little bit. If it's a Treasury, they need to have a little bit. If it's obviously a higher risk loan or some other investment, they need to have a lot more. And so By doing this, it would basically free up a bunch of bank capital and allow banks to acquire almost infinite treasuries. I mean, this is basically like QE for the banks. And so Luke Groman has pointed this out and it's very telling that we're not in any sort of conventional crisis, but what I would say is the debt is the crisis and this is what's causing these moves to be made behind the scenes of the treasury's shifting issuance and the banks. requesting SLR exemptions so that they can just absorb this massive wave. Yeah, I think we talked about this a few weeks ago, but it's hilarious that they're doing this, particularly on the backend of last year because they were able to take the treasuries out of the leverage ratio last year during the banking crisis. It's arguable that I guess VB first Republic Silvergate signature would not have gone down. It highlights the the not the ambiguity, the Brian Cubellis (27:56.397) the arbitrariness of all the rules. It's like, oh, we'll just change them on the go. What was a rule last year and forced many banks to fail, it's not there anymore. It's convenient. They're changing everything on the go, which is not confidence inducing in any way. Yeah. There was one more headline that people might have missed from Japan recently. about a month ago, I forget what the exact, you know, who said this or what it, but it amounted to Japan pushing hard to open up immigration and bring a lot of immigrants to Japan. And that to me sounds like a bit of a desperate attempt to try to stave off deflation. and bolster their economy and spread out that financial pain that they're going to have to digest at some point. And in doing so kind of turns its back on thousands of years of Japanese heritage and pride in their social setup in that country. homogenous as it may be. That approach to culture has resulted in a country they're very proud of and a culture they're very proud of. And they're trying now to change that all of a sudden. And that's remarkable to me because it is potentially the early death rattles of Fiat trying to... sterilize the world by well an outcome of Fiat trying to protect itself or propagate itself and survive and is willing to pull a desperate lever to change the social composition of a country that prides itself on its history and composition. Yeah, I would agree with that. I mean, they an interesting fact, fun fact for you guys is for the last, I think it's been like 17 years, Brian Cubellis (30:16.877) more adult diapers for seniors have been sold in Japan than baby diapers. There you go. There's a stat. Holy shit. That is a stat. They have a demographic crisis and if they're going to try to grow their way out of this problem at all, which it's too late, but they're going to try now to grow their way out of it. A way you can do that is bring in people who have more babies than the Japanese now do. They seem like the They're not going to do that though. There's a huge resistance from the people of Japan to, you know, what they would, what they would view as, uh, you know, casting out the homogeneity that they are proud of and, and historically have maintained in their country. Um, and that's going to be a major source of friction if, if the, you know, government and the G7 basically pushes that angle for how Japan might be able to shore itself up for a little bit longer. And there might be a lot of pushback from the public, I think. I think it's actively happening, right? Like I think if you're referring to, I think Peter St. Onge, they said they're shipping like some crazy amount of numbers. Maybe that's where I got it from. From external countries to Japan. And this is like, This is kind of like fringe, but I've heard from multiple people, this is their thesis on what's happening to the states from a border perspective of why so many people are coming in to the U .S. and it's allowed from all over the world. I don't know how true it is, but what Jesse just described is like what some people will look at from the border crisis here. You look at the jobs numbers, it seems to be playing out whether it's explicit or implicit in the Biden administration's efforts and their end goal. But you just look at the jobs. the amount of foreign -born individuals who are taking most of the jobs these days. I mean, that is an attempt to tamper wage inflation so that people don't have more money to spend to bid up the price of goods. Peruvian hit us with a stat. I heard one today. One out of three 18 -year -old high school diploma males don't have a job. Brian Cubellis (32:37.485) So two thirds of people that went to high school are working. One third of all males aren't working right now currently. Wow. That's unreal. Like in what age bracket? That's incredible. That's a good question. Like age bracket in the, from like 20 to 40. Yeah. Yeah. The employment numbers are all just like absolutely insane on how, and that's with 2 trillion deficits. Like that's getting Jews. And this is like, what we're talking about here is such an outcome of Keynesian policy. deciding that the important metrics are these certain growth metrics. And, you know, and, oh, we can continue printing money and running up the deficit and whatnot, so long as we deliver GDP growth, so long as we have job growth. That's what matters. And, you know, that's such a shame because in my opinion, and I think all of our opinions, that's the wrong metric, you know, a better metric. would be purchasing power of the median citizen growing over time, which is diametrically opposed to what fiat can do because fiat is designed to debase. And whereas Bitcoin delivers on that kind of metric and allows the average person to grow their purchasing power over time by saving in Bitcoin and utilizing its increasing scarcity, it's saving technology properties that allows for that metric. But since Fiat doesn't allow, doesn't optimize for, you know, the growth of the median net worth basically, or purchasing power, then you better not pay attention to that and hold that up as an important metric. Instead, you should find other metrics that you can make look good, like jobs growth or GDP growth. Because in that Brian Cubellis (34:45.741) you know, in the nominal world where you're printing more money, those things end up looking good. And like that's the source of all this bad policy is that we have because of fiat, because of our monetary system, we have spotlighted the wrong metrics because those are the metrics that we can make look good. And, and I think to a large extent, people at the top have convinced themselves those are the metrics that matter when, you know, if you take any sort of. rational reasonable approach to thinking about what actually matters to the average American It's it's their life getting better over time not how many jobs they have to hold to make ends meet And the funny thing is if you look below the surface to like the jobs numbers aren't even as good as they claim They are right back to do rising them down Yeah, well, so that's the first thing I'm doing a research piece right now on you know government manipulating jobs numbers and The more I dig into it, the more and more suspect it gets. Yeah, last November, the BLS came out and said they had to erase 400, backwardly erase 439 ,000 jobs from their numbers for the year, because they overestimated how many full -time and part -time workers there were. Did they do that loudly or quietly after the fact? They did it quietly after the fact. Their policies basically, they'll put out a really great jobs number. And two months later, there's a quiet revision where they drop about 30 or 40%, even sometimes 50 % of the number from the official stat and then just never mention it. And only people who are journalists or statisticians find the changes in the data. But even if you believe the headline numbers, if you look below like the surface, it's not great. It's the entire rise is coming from part -time workers. Full -time workers has actually been falling since 2022. And so we're in a kind of a quiet recession where all these full -time workers are getting laid off and people getting hired for part -time gigs for Uber, for Lyft, that kind of thing, but they're not getting, software engineers and lawyers are losing employment. And so that's not a sign of a healthy economy. And the fact that they keep putting this stuff out there is ludicrous. One other last thing I'll mention is a few days ago, Jim Bianco pointed this out. Brian Cubellis (37:07.565) there's an unemployment filings number that the government releases every week. And he said for five of the last six weeks, the number has been exactly the same. It was 212 ,000. I saw that. And that's like, that's impossible. Statistically impossible. Yeah. They ran like the stand, like the, you know, the probability of it. It's literally some crazy infinitesimal probability where it's literally impossible. This is also why it's been important the past year as folks have come on and we talk about the Fed speak, just calling it out because anecdotally, we all have to live in the real world and we know this is happening and nobody goes and talks about it. They just talk about inflation being reduced and employment coming back and reality is like the economy is fucked. We keep getting laid off. Yeah, we do fall for, we talk about the numbers that the headlines talk about and that's like jobs numbers and GDP growth and... And we don't talk about the metrics that matter to real people because it's kind of, as Peruvian Bullets pointed out, it's kind of hard to find those numbers and reliable numbers for metrics that matter more. Yeah, completely. It's a disconnection. So I've actually wrote a piece about this and it's a disconnection of the financial and the real economy, right? What the Fed has done is essentially financialized the entire market to the point where now stocks can just keep rising due to liquidity programs without any fundamentals because the correlation between central bank assets and broad equity indexes is nearly one. And so everyone on Wall Street... And just go above the risk -earnings ratios. Yeah. Exactly. Everyone on Wall Street can think that everything's great just because the spy keeps rising and because QQQ is rallying hard. And in reality, the amount of homeless, the amount of drug addicts, the amount of people without full -time employment keeps dropping. And so it's this complete disconnection between the economies. And it's really sad to see because the market should be driven from fundamental growth, not the other way around. We shouldn't be saying, oh, the market's rallying. What's the fundamental justification? We should say, oh, look, we had a great Brian Cubellis (39:20.685) quarter of economic growth and therefore the markets will rally because now there are people with more investments, more savings. They can buy a home, they can pay for college, they can go do something. Business owners can create more productive uses for their capital, et cetera. And instead it's the opposite. You see this anecdotally, I'm sure. We've all seen the TikTok videos on Twitter of people complaining about inflation, whether it's here or in Canada. I think it's at the point where I think I see 10 or 11 of them a day where it's not It doesn't seem to be people clout chasing for views these people seem genuinely in distress And it's the same story. It's like I go to work. I work multiple jobs and I can't afford my life and it's That's where we have to break out of the mirage of the fake data that all these Institutions are putting out there and like you said Michael just got to call it out. It's complete bullshit I'm like bringing this back to Japan and thinking of like how do you fix this like I actually wouldn't be surprised at Japan considering all the pride that they have and their strive to preserve their culture if they're one of the first g7s to throw the Hail Mary and so, you know what we're dumping our treasuries and putting a big portion in a Bitcoin because I if Bitcoin succeeds and we have that asset on our country's balance sheet, maybe we can solve some of these systemic demographic problems that we have throughout the economy. Wild claim. Yeah, I think that that's accurate. I mean, last year I read, I think it was a history of money in banking in the United States by Rothbard. And one of the things that surprised me is - I've been reading that recently too. It's a great, it's a great read. It's a long read. So I'll just warning to anyone who wants to, to dive in. It's a, it's very dense and he's very technical and has a lot of like, you know, key data and source data that he gets. But one of the things that's fascinating is like in the period from 1883 to like 1903, 1904, um, there was compounding 5%, 6 % real wage growth every year for 20 years. And. Brian Cubellis (41:45.357) There was almost no inflation. There was extreme growth in productivity, in overall capital growth and capital management, the ability of one dollar of new capital to create X amount of dollars of GDP. Like in every single metric, right, the US was just booming. And in 20 years, we experienced probably one of the first large periods of great innovation that propelled us into the 21st century, what we are now, the digital age. ever because we had the internal combustion engine, we had the cotton gin, we had telegrams, telegraph wires being invented, you know, the car at the early stages of what would become planes. So it was just a massive period of innovation. And that period was marked by basically no inflation, sound money, minimal government and minimal intervention in the economy. And so I think people don't realize like on the one hand, it is easy to get blackpilled, right? Of saying, Hey, look, things are so horrible. Like the fiat has fucked everything up so badly. And that is true. But it's also good to know, like on the plus side, things will become so much better under a Bitcoin standard or under a sound money standard than anyone can ever believe. Yeah. Go ahead. Go ahead. No, just to say we're right there. That's the funny part. It's like the the futures here is just not evenly distributed. It's like, how do we get there? That's what we're all trying to do is like accelerate it. But like what you just referenced between the Internet, Bitcoin, you know, let's call it AI. Like somebody with a laptop can create so much value to increase that, you know, one dollar one Bitcoin spent year over year. It's just we need to get there. And that's the whole part. It's like everybody else catching up. But you can see it. Yeah, it's interesting that that time period that you referenced that 20 years or the end of turn of the century back then. It had such tremendous economic productivity, and yet there's like a dual narrative about it, about that time period that it's referred to as the Gilded Age and the Progressive Era, which really speaks to the two sides of the coin there of like Gilded Age because so much wealth was created. Brian Cubellis (43:58.829) but progressive era because there was these advancements of social causes and trying to reign in the robber barons. You had that famous photographer go take photos of child labor and then push for child labor laws, Lewis Hines, I think. And it's kind of which side of the coin do you look at, do you focus on? And I think the narrative that has. perpetuated from that time period is that the robber barons were like evil and grabbing power and money and wealth and while building railroads, you know, that like that that was somehow a bad thing. But the you know, if you look at the data there like you have, it sounds like. Pretty pretty darn good for the average worker if you're going to have five percent CAGR in real wages through that 20 year period, that's incredible and. So I think that it's also probably a bit of a premonition about what we'll be dealing with from a narrative point of view about Bitcoin as the Bitcoin standard instates and amplifies the sort of deflationary advantages that the Gilded Age and Progressive Era enjoyed with the gold standard. But we will have the same dynamics of like massive productivity and wealth creation. centralizing to some extent in a few hands, but also being passed down to the average person. But the spotlight will be on the wealth creation and we'll have sort of our new Bitcoin robber barons that will get terrible press from the public and we'll see what the narrative is about an age of prosperity. Is it going to be a Gilded Age? Is it going to be Progressive Era Sins? It'll probably be both. Yeah, that's a really good point to bring up because, you know, a lot of people point out that, yeah, wealth is on a paraded distribution, right? Like wealth is unfortunately an exponential function where a few people have a lot of wealth. And a lot of people view that as an outcome of the system being unfair or the system being rigged in some way. And of course there are, you know, obvious ways in which the wealthy can manipulate things and... Brian Cubellis (46:20.781) use government subsidies for their own benefit. But broadly speaking, Pareto distributions are found everywhere in nature. I mean, it's the size of it's found in the size of stars and the size of holes in the height of trees in the Amazon rainforest. It's found in the number of plays on Spotify per artist. And so or the amount of paintings or the value of paintings sold. Right. And nobody would claim that, you know, Vincent van Gogh or Beyonce. was taking advantage of other artists just by them being so great. And so I think it's more of a function of, you know, once you become successful, success becomes more easy to you. And so as wealth is built and accrued, the people who built it first get the lion's share of the benefits, but the benefits still do rise, you know, rise the tide for everyone else. And that's the thing that is missed about the 1800s. Yes, there were robber barons, you know, yeah, there were massive, railroad railroads built and there were problems obviously with child labor. There were problems with overall, you know, I guess humane treatment of employees is definitely true. But we probably had to go through that to evolve from an agrarian economy to an industrialized one. We just had to make some sacrifices along the way to get there and we did get there eventually. And so I think... Yeah, I think under Bitcoin standard, what will happen is probably what you're saying. A lot of people will be jealous of the whole coiners and saying it's not fair. They all have all the money. You know, you got one Bitcoin, you're rich. What the hell? And yeah, it is unfair, but then you can work to try to get there. Completely agree. Life isn't fair. It's the lesson my mother taught me. But it's something that people... are gonna have to come to Greifswet this like, yes, you didn't get in early, but it's still advantageous for you to use this monetary standard because it'll, even if you're on the lower end of the economic stratum, it increases your quality of life. Like compared to the lower rungs of the economic ladder today, you'd much prefer to be on the lower end of the economic ladder under a Bitcoin standard than a fiat monetary standard. Brian Cubellis (48:41.293) It just creates an even playing field. I had a mentor growing up, he used to say, fair is a place where you go throw darts at a balloon. That's good. Classic Texas witticism there. He was an old guy. He was actually from Jersey, but he was in Texas when he shared that wit. Marty, you said something earlier that's really positive in the sense of we always talk about incentives. and Japan and whether it's Japan or somebody else, like at the end of the day, people have to worry about their constituents, like the people that they serve. And this idea of a country putting Bitcoin on their balance sheet to protect their capital and their currency is also on the, I thought of the other side of that, which is we're talking about the Gilded Age and having to wait for a Bitcoin standard for some of this like productive, productiveness or productive use of capital to return. And I think, part of it is just a bureaucracy that exists from the state and taxes and all the things associated with it. And from a game theory perspective, we're seeing this right with the UAE, but there's other countries, El Salvador, I don't know what their tax policies are, but you can imagine a world where maybe even before it's a proxy or putting Bitcoin on the balance sheets, you have a favorable tax climate so you can bring more business growth or business formation to your. local region, and then you start to have that favorable tax accepted and put Bitcoin and balance sheet in that way as well. You can see how this actually smooths another one of these versions of transitions where we don't have to have, obviously it's still going to be bumpy, but you can see a version of how this can play out and then becomes, I don't know if uniform, but accepted by others and looked at as a playbook versus we just have to see what we saw in the White House Republic and other places with hyperinflation. you can start to get ahead of that. And I think, again, the UAE, El Salvador, probably some of the first, but there's going to be others. And it isn't even necessarily have to be putting Bitcoin on the balance sheet. It can be also with just having entrepreneurs go there and making it favorable and then starting to stack or accumulate the human capital there to help with that transition. Brian Cubellis (50:54.445) Yeah. Which ideally we see this more in the States, right? Yeah. So we can like not have to leave. Well, that's what I was at an event last night in Dallas and that was one of the questions that was asked, like, are you worried about an executive order 6102 in the context of Bitcoin? Like the government is an insane amount of debt. It's losing control. Yeah, it's something everybody should be worried about and have top of mind, but maybe I'm too much of an idealist or an optimist, but you have to imagine. There has to be people in the government looking at the situation and be like, we're fucked. There's nothing we can do to fix this. Like if the government wanted to create a path of least resistance, they would just let it flourish. Like no capital gains on Bitcoin. People can use it as money, build industry around it. Let the mining industry go, go nuts and just let the market fix the problem. We're here. We're already fixing it despite... efforts by the government to make it as hard as possible in some respects. Imagine if they just opened up the floodgates and let us run wild to fix these problems. I imagine we'd look back in a decade and be like, wow, we fixed a lot of these problems rather quickly. I think one way of sorry, one way and I've been having this this talk a lot with with Bitcoiners. When I was in Santa Marta, Colombia, I met up with a Bitcoiner who was trying to he's trying to start a business creating lightning channels for for small companies and then, you know, custody and taking a portion of the fees that they're receiving. And the issue he was finding is that especially in these rural areas, you know, in Latam was that there wasn't Brian Cubellis (52:40.333) there wasn't enough demand for Bitcoin. The companies might say, okay, I get the thesis of holding a little bit of Bitcoin as an investment, but what can I actually do as a business owner? How can this actually work towards my working capital? How can I actually utilize this on a day -to -day basis to pay my bills? And so he's actually a chemical engineer. And so we started talking and realized that probably the best and quickest path towards hyper Bitcoinization is Bitcoinizing the energy and utility industries because The main thing that these restaurants needed was the ability, if they received Bitcoin, they wanted to pay someone else in that Bitcoin as well. They didn't want to just hold it, even though they might, some of them might be Bitcoin bulls and say, I'll take some of it. I want it to have 5 % of my treasury in Bitcoin. But more than that, they would, they got uncomfortable and they wanted to have some ability to pay. And so I think what I'm really interested in seeing is getting some energy companies to accept Bitcoin as payment for oil and gas or for some utility company for water or electricity. And allowing that to kind of percolate through the base chain of the production system and allowing now that electricity, water, gas can be paid for in Bitcoin, now restaurants, now manufacturers, now service providers can all start receiving Bitcoin because now they have obviously have bills that they can pay for it. And you can start creating that circular economy. Yeah, we're starting to see this form at the base layer and Where it makes most sense right now, which is between miners and the utilities companies that are selling them the electricity. You have companies like Satoshi Energy and Sonoda, which are creating lightning enabled payment channels between miners and the utilities companies that provide them the electricity where you can literally mine a block, get a reward payout from the pool, and then disperse a payment to the utilities company to pay for your electricity on the go. As you're consuming the electricity and so I think that is very encouraging In a sense that that's where you need to start to get to the point that you just described proving bull where's like you start at the lowest layer of that stratum, which is Where the miners are actually consuming the electricity from the utilities and then you build up there once the utility gets comfortable receiving Bitcoin payments at that layer, they would be more open to Brian Cubellis (55:07.053) receiving it from a retail consumer, a business that's paying for electricity. And so I think we're taking the first steps toward that path that ends up at that place that you just described. Yeah, that's great to see because again, I think that that's what's going to accelerate adoption faster than anything else, right? If you can pay for your gas in Bitcoin and can pay for your electricity in Bitcoin, now suddenly millions of businesses will want Bitcoin. Because now they can pay and especially if you get a discount, right? If they can say, hey, I'll offer you 10 % discounted electricity bill if you pay in Bitcoin, then now there's this huge reason for all these companies to onboard. And so that'll be, that'll be huge. I'm excited to hear that. And that's, that's long been my thesis since I've been in the mining space for about six years now is while many people are understandably and righteously focused on getting large institutions. Allocated to Bitcoin whether it's corporations Pension funds countries for that matter. I think that's all well and good and something that we should strive for but I've been thoroughly convinced that we just need to get the energy sector because Energy is arguably more important than money It is what allows us to do everything that we do throughout the economy so that we can go spend money To buy goods and services and if you get the energy sector, which is the most important sector? of the global economy bought in on Bitcoin. I don't think there's any turning back. They're going to be like, no, we need this to provide you reliable electricity. So you can't take it from us. Interesting. I agree. And but I think that the one thing that in there that I think that, you know, money matters to all industries and all people, all entities and energy is the most important industry of all. But, you know, money is that base layer that touches absolutely everything. I know. And I actually at PubKey last week, Pierre Rochard. Brian Cubellis (57:13.933) Was in New York right at an event and so that was that was the pub discussion late at night Late into the night on Thursdays. What's more important energy or money? And if you get back to like first principles It's like literally humans when they're agrarians just like needed to eat to get energy. Yeah things I haven't been able to dig as deep by this book still looking that it's the What's the fuck what is a I'm sitting over here and it's upside down. It's the, it's what is Daniel Juergen, the prize. I'm convinced like all of the geopolitical setup that exists specifically right going on right now, but for the past hundred plus years ties back to what Marty's alluded to. It's, it all goes to the middle East, the energy, how it dictates all of, you know, economics from, uh, recessions to growth and the price of oil and. the intermediary step that they had to go from oil to dollars. And so it's like that base level, if that changes, then everything else is a derivative of that. And so by proxy, if you can have a different form of currency or value required for the thing that everything's a derivative of, like petroleum, across everything globally, you can actually influence downstream everything else and how you value the currency. There's... There's a thread there I haven't been able to fully tie because I need to finish reading this book. But to Marty's point, all of the oil sitting in the Middle East has historically had to go into dollar before it can actually get turned into anything else. And that idea goes back to like 50%. And in a future state, in a Bitcoin world, half energy that goes to Bitcoin and half goes into economies to serve whatever is needed of that energy. That's how this ends up and it solves for a lot of that geopolitical strife that happens. Yeah, and we're, you know, we're seeing the early stages of that play out, right? Like I, I've done a lot of research on what's been happening with the BRICS. And this year, this last year, BRICS went further than ever before in expanding. They added like six new members. The Chinese central bank signed a swap line agreement with the Saudis to the tuna oil transports in Yuan. Brian Cubellis (59:35.661) And so that's a huge development. And Egypt as well issued a Panda bond, which are bonds denominated in Yuan. And so there's been a move across the Middle East to start to de -dollarize and to remove dollar exposure from their oil trade. And it's been really interesting to see because that move alone has started to flow funds back into China. And now these companies can use Yuan to buy gold. on the Shanghai exchange, which is physically settled. And that can push the price of gold up, which has been pulling up Western gold prices as well. It looks like my internet's a little slow, so apologies if any of that cut out. But it's all good. I think the one stat was the the amount that the swap line was. Was it 10 billion? What was it? 58 billion. Yeah. 58 billion. Pretty substantial. Yeah. And that's, and now you mentioned all that, it really makes the mainstream media narrative, which has become very anti -China with the TikTok ban. Brian Cubellis (01:00:50.765) conversations about Chinese meddling in the US are picking up steam. And I wonder if that's just an externality of the situation you're describing between the BRICS, where the American government and the intelligence apparatus and the military industrial apparatus sees these economic moves that China's making and is lately retaliating in other ways, whether it's the TikTok ban or... I saw that they're looking to sanction some banks as well, which is just like, hey, don't do that. Cut your companies out of the U .S. What was it? It's kind of on the thread of like I forgot who shared with Russia in like they took the top 10 company like assets. It was an American company. It was like a tit for tat for the Treasury. for the treasury sanctions or taking their bonds. It was in, I don't know if Marty, you shared it, but there was a top 10, I want to say like wheat producer, US based firm in Russia that the Russian government effectively like sees and said like, hey, this is ours now. I forgot where it was, but from a geopolitical perspective, this whole notion of like the idea that, you know, with global politics and having a country's assets set in a different foreign region like China, and it's the US base or like TikTok now, this whole thing is like up for grabs for like what is actually owned, i .e. you know, treasury bonds. Brian Cubellis (01:02:34.125) It's really sad too. Just think about it. I mean, I don't want to come off like an idealist hippie, but like we should live in a world where Russia can produce their gas, their wheat, whatever. China can produce their cheap goods. And we're able to trade freely. We shouldn't have all this xenophobic posturing in terms of like, we need to cut this company out of this country and that company out of that country. We should be able to trade. Division of labor globally produce your own good sell to the world Again, I'm sorry if I'm coming off like a hippie, but I think the governments have Have really and they're in this dick measuring contest for control over the global monetary system and it leads to all this strife and Potentially unnecessary conflict. Yeah, is that in the Bitcoin mining industry we work? Just naturally, there's a lot of Chinese people. And from what I've observed, the Chinese miners are arguably the most capitalistic individuals within the Bitcoin space, bar none. And it's extremely impressive what they've been able to do over the last 15 years. And I don't know, I personally admire what they've been able to do and how they operate. It's just weird that the American government wants me to hate these people. Yeah, I think that a lot of this comes from, you know, the outcome of their being centralized global reserve currencies that are fiat based, right? Because this is, and Triven pointed this out, Robert Triven, an economist pointed this out in 1960, and in an address to Congress that, you know, we had a dilemma where we could either continue to run current account deficits and they got more money into the world to fund global trade, but that would bury us in debt and cause a an eventual crisis and eventually cause us to lose our global reserve currency and break the gold peg. Or we could not fund those deficits. We could not send out money to the global economy on net. And then that would mean that the global economy would stop because there wouldn't be enough dollars to fund global trade and to settle debt for currency reserves for foreign central banks. And so the US obviously has a huge incentive to maintain the hegemony. Brian Cubellis (01:05:02.029) and to maintain the dollar system working as it does today. And BRICS obviously now is making moves to try to counteract that and to create a BRICS currency. But, you know, Brent and Johnson points this out wonderfully. Like, if you don't trust the dollar, how much less can you trust China and Russia and India? It's never going to work out. Yeah, it's ridiculous. And that's why it's so funny to me that they don't see Bitcoin as a solution yet because... Bitcoin as a non -centrally issued currency, right? A decentralized currency. It doesn't, Trifid's dilemma doesn't apply. It solves the dilemma. It doesn't have the issue of external demand versus internal supply. And so once you adopt Bitcoin as the neutral global monetary asset, you don't have to worry about these issues about, you know, currency blowout or, you know, one country having too much of a current account deficit because all of it becomes self -settling, just like it was in the 1800s, when if a country has too much deficits and too much inflation, their currency will devalue and gold will flow out of that country until they raise rates and have enough deflation to pull it back in. And so the same thing could happen on a Bitcoin standard. And so I'm excited to see which country will start being the first one to stack Bitcoin on their balance sheet. I know it sounds like El Salvador already has some. You know, I think is it the central African Republic of the Congo or central? There's a small question after that as it does as well. Bhutan has it in their sovereign wealth fund. The Central African Republic kind of went down the shit coin path real quick after they embraced Bitcoin. In any such cases. I think that's not reliable anymore. No, but it's, I mean, it makes sense that the BRICS would do this. I mean, they've just watched the United States dominate the world over the last 50 years because they had control over the global reserve currency. And you can see why they would want to have similar control moving forward. Brian Cubellis (01:07:06.413) I mean, it's very alluring being able to control the levers of the global monetary system. But as you mentioned, like to think they're going to be able to confidently manage a fiat monetary system is laughable. They should all just stop the Bitcoin standard as quick as possible. Marty, to your point earlier, everyone's searching for a reliable neutral reserve asset they can they can trust. And the BRICS just won't be able to offer that. the reliability portion of it being insufficient, I think. But everyone's searching for a neutral reserve asset and the energy industry more than anyone. And, you know, that there's there's a give and take where the energy industry blesses a certain currency as like, OK, we're going to do trade in this currency. And then that becomes the single biggest like like. weight on the scale of what's going to become the global reserve currency for that period, that era. And obviously the US, the thing that can, the feedback loop is force, right? So if you have the strongest military, you can impose that, all right, we're going to use our currency to settle energy trade. And then that helps that currency become the reserve currency for the world. And that's what we saw over the last half century. But the energy industry is constantly searching for the best currency for them to use, a neutral reserve currency that they can settle in. And the way that Bitcoin integrates with the energy industry makes it sort of inevitable. It's energy money. It's rooted in the energy industry. And that eventually will mean the energy industry increasingly putting their chips on that. currency, this new upstart currency. And eventually the weight that they have on the scales on the side of the US dollar will shift to Bitcoin. And you've got the vote of confidence of the biggest industry in the world. That's going to move the needle more than anything else could towards global reserve currency status for Bitcoin. Brian Cubellis (01:09:32.813) I completely agree. It's like a flywheel effect, right? Like once you get, and I think I talked to... Brian Cubellis (01:09:43.341) was on. Oh no, did I cut out again? We just lost you for the last five seconds. Okay. You talked to somebody? Dang, sorry about this internet problem. It's a Wi -Fi here in Columbia spot, even though I'm in a coworking spot and paying for premium. But yeah, no, I think I was talking to you about this, Marty, on our podcast last year that it's a flywheel effect where once you get a few countries accepting Bitcoin, especially like what you said, Jesse, accepting Bitcoin as payment for energy, then other countries will suddenly have a need to have it in their treasury. and other businesses will need to have in their treasury and they'll have to all scramble to Russian buy Bitcoin. And it'll just drag in more and more countries and a super majority of countries needing and owning and trading Bitcoin for their energy and their financial needs, right? To settle energy trade. Yeah. So I was just saying, you know what's so exciting is that like thought or that... notion would seem so insane, but it's going to happen in just by what we just saw with Hong Kong and the ETFs in the West. That idea would have been crazy years ago, and it's about to have a global competition for the asset. And so it's already there. It's just how, and I don't even think it's years from now. It's just a few, whether it's six, 12, 18, 24 months for this all to start happening. What it really is is a liquidity problem. So I've talked to... And Nas Al -Haji, a lot about this over the years, who's an oil and gas expert, really understands the international oil and gas markets intuitively. And I brought this up to him because it makes a lot of sense. It's this apolitical settlement layer that people should be doing trades in. And he brought up a good point. It's just the liquidity problem at this point. If you wanted to do large international oil trades using Bitcoin, the liquidity profile simply isn't up to snuff yet. So. Brian Cubellis (01:11:45.997) Maybe when we get to a five, $10 trillion market, it makes a lot more sense. But I think that will come, whether or not it's in two, five, 10 years, whatever it may be. It's just the timing of how quickly can Bitcoin develop the liquidity profile that would be necessary to facilitate these trades. And this apolitical settlement layer is just like the first part of that. Like when you think of the asset, like it's a great asset to do these trades in, but then you think of the tech of it, like again, on ramps working on like multi sig escrow like you can really innovate when it comes to credit lines for these large trades. You put Bitcoin in a multi sig with three different parties that have different incentives within that trade, two counterparties in the trade and an impartial third party to release the funds when the goods have been delivered. Like that creates capital efficiencies that simply don't exist or impossible today. So the benefits of doing this over bitcoin are multifaceted. Yeah, I mean, that's the thing that from the miners hearing about how people bought miners for years and just somebody sends a wire and they hope to go or Bitcoin and they hope to God they show up. I've been thinking about it about like this idea of multi -sig and escrow and it's actually think about it's a problem that exists in everything specifically even in Bitcoin buys right now. Somebody has to send the dollars and somebody has to send the Bitcoin. And as we if we're in a bull market for trust breaking down, you're going to have to have other. trust -minimized ways to deliver goods and services, i .e. a billion dollar oil tanker or a billion dollars of Bitcoin for whatever unit you're buying, whether it's gold and so the natural like multi -six properties. We're just in the first early innings of that. I think Marty, I think the liquidity is like one aspect of it. I think it's the education as well, right? Like the idea is because you can set up a ten -year -old. Education begets liquidity, right? People become more educated. They go, I need Bitcoin. They dump their money into it and liquidity comes. Well, Brian Cubellis (01:13:45.613) I guess the other side is because you could settle $10 million or $100 million for oil or even potentially a billion with what we know at Tesla coming in and the liquidity was there. I mean, more of like just the fact that you can trust a multi -sig and understand it. Because the other side of this is like everything BlackRock and all the tokenized and all the crap that's coming. It's like the game is not going to be as easy as convincing everybody Bitcoin is the thing because everybody else is going to go shill everything else under the sun that's crypto or blockchain related. And it's going to just like obfuscate what's actually happening. It's gonna be a cat and mouse game of like just people getting rugged on a geopolitical scale. This panel I was on last Thursday, unfortunately leads me to believe we're not getting away from this stuff anytime soon. But if you're out there and you're in the international energy trading markets, don't fall for the token. You don't need to tokenize your barrels of oil or your units of natural gas or your LNG. You simply... You do your work, you extract the energy, you package it up, you put it on a ship, you deliver it. You don't need to tokenize, you just put Bitcoin into multi -SIG escrow, you deliver the goods. Your counterparty puts Bitcoin into multi -SIG escrow, you deliver the goods and you get the money. It's very simple, don't complicate it. You don't need to tokenize everything. You don't need to take on all that compliance and tech costs that come with trying to tokenize the world. It's simple. Do your thing in the physical world, deliver your goods and you'll get the Bitcoin. You don't need to do anything else. We're going to like five years of rugging. If you think about the past five years of FTX, it's going to be that like 10x in what you're describing. Because it's just not how do you extract rent from that system? You got to build a bunch of wallets and, you know, smart contracts. And you had a tweet yesterday about like the fire in India. What is it like? What are the carbon credits to offset that fire? They're literally I think it's emitting. It's very ironic too. I found out today that that fire was started by a lithium -ion battery and and Yeah, I think that thing's emitting more methane than in like an hour than the UK does in a year right now and Apparently, it's not gonna stop burning anytime soon. So Yeah, this is why the whole black rock thing was always more ism for me. It's like Brian Cubellis (01:16:13.581) You know more than we've been talking for over a year. It's like this Slow drumbeat of securitization and digitization of all assets is like permeating Traditional finance and it's only going to continue and black rocks gonna lead the charge and it's just gonna completely obfuscate like what is Bitcoin? What's exposure to Bitcoin? What are all the things around it? It's coming from all sides. That's the TradFi Thesis this cycle and then this panel I was on somebody was seriously shilling meme coins replacing social media. This is the future of social media is meme coins. Attach it to a monitor. And there's a conf, they conflate like the bureaucracy and the muckiness that exists in the traditional world. And so they believe like a blockchain fixes it. It's like they're just missing like the forest to the trees, like what's actually fucked up. Cause like, they're actually, they know something's wrong. So they're assuming like you need a blockchain to fix this stuff. And again, anybody listening? What what's been fucked up is capital markets they fucked up capital markets because the capital underlying those markets is not real It's fake money. You just need to fix the capital markets with good money and then you keep doing what you're doing in the physical world You don't need to tokenize and digitize everything The thread or narrative we have to hammer on is Bitcoin is money and everything else is credit So if you want the money and you hold the Bitcoin if you want to claim on some other crap Then you can have the token or whatever It's very simple. Don't overthink this. Don't overthink this. It's simple. Bitcoin is the great definancialization. Yeah, and that's actually what we want, right? We don't want things to be overfinancialized. We don't want things to be overly, overly leveraged, overly traded, right? We don't want 200 times the gold mining production in the world being traded every year. We want markets to be real and to be based in reality. And so... by going back to the Bitcoin standard or sound money standard that will fix this underlying issue. And it's not even to mention, right, like on the blockchain point, blockchains, people think that blockchains are like the silver bullet that will solve every single problem. You could throw it at anything and it will make it better, right? Oh, if I have cancer, if I have a blockchain token, it'll cure me, right? And that's completely ridiculous because blockchains, you know, it's kind of like a tank, right? It's a really specialized tool. Brian Cubellis (01:18:36.461) that can do one thing really well, but you wouldn't want to drive a tank, you know, to work every day and you wouldn't want to use it to do a road trip or to pick up your grandma. And so if you're going to use a blockchain, you have to know that you're giving off, you have massive trade -offs and you're optimizing for, you know, one or two things, which is decentralization and security. And so if you want to optimize for that, then you can use a blockchain, but all these tokens that claim that they can do everything right, they have. more throughput than Visa and they have more faster finality than Bitcoin and better throughput than ETH. And, you know, it's just, it's just ludicrous. Like Solana is a good example. Solana I think has, I think I remember reading this, Solana had like a block time of like 200 milliseconds. And they said basically like that means no, but like 85 % of the world doesn't have an internet speed fast enough to finalize. transactions in the salon of blockchain. And the only ones who can do it are software engineers sitting at data centers in at Google or Facebook or Amazon, right? You have to have like a super fast internet speed to do it. And so you're giving off those trade -offs. Yeah. Brian Cubellis (01:19:52.845) Yeah, it's a blockchains only. I mean, we can get into a blockchain. Blockchains only work to their slow dumb. I mean, the ones that matter slow dumb and specialized and they're only incentivized via hard money. It can only works block production. The blockchain only grows if miners are incentivized to keep it growing and to validate and process transactions. And you need a scarce token, a good money to incentivize that in this Bitcoin. Once you have that, everything else is competing with Bitcoin as far as far inferior monetary properties compared to Bitcoin. So it doesn't even make sense trying to spin up another blockchain. And yet. We're going to have to live through it. Yeah, you need the implicit link to the real world, which Bitcoin has through its connection to energy production. But you need you. You need there to not be an explicit link to the real world, like all these tokenized real world asset bullshit that fundamentally like you can't put a real world asset on the blockchain because at the end of the day, there's a link between that blockchain and the real world that is just enforced by law. Yeah. Yeah. Put a Pepsi on the blockchain and you go to the vending machine, you buy your Pepsi. You own it on the blockchain. But if I come and I rip it out of your hand and drink it, that was my Pepsi. You need to not have an explicit link, but you also need to have the implicit link. So it's a funny thing that people have not yet wrapped their heads around. Gentlemen, this has been great. I know you gotta run, Michael. Michael's gotta go take the tank to pick up Grandma. Brian Cubellis (01:21:45.773) Prove me and boy any any final thoughts before we wrap up here? No, nothing nothing huge. Thanks for inviting me on I'm pretty active on Twitter and at my sub stack. So if you want to read more about macro stuff, you can go and sub there I'm gonna try to make it to the Bitcoin conference. And so if you guys are gonna be there, let me know I'll definitely be down to meet up And talk and hopefully I can squeeze in to have a speech We'll see. I was able to do that at the Adopting Bitcoin Conference, which was a great time and hopefully I'll be able to do that again. So we'll see. It sounds like Marty's having a big event at the conference. Do you want to show the event? Just heard about that. Well, PubKey and Rabbit Hole Recap had teamed up to do a live event Thursday, I believe the 25th of July. The name of the venue is Escaping Me, but we're going to do a live show, 600 tickets, not on sale yet. We'll keep you guys updated. Is it on a rooftop or? No, not this time. So it's a new venue. Upgraded. Less or more than 100k by conference. I'm not doing multiples by conference. That meme has haunted... ...Rabbit will recap. Matt specifically, in the past. I'm not gonna make the same mistake that he made. But 150k. Brian Cubellis (01:23:13.165) Awesome. We appreciate you coming on, Pruvi. And hopefully we'll see you in the States at some point this year. Absolutely. Thanks for inviting me on. Yeah, thanks for coming. Thanks, guys. See you guys next week.