The Last Trade E001: The first Last Trade, Bitcoin is Superior to Real Estate

Welcome to the last trade. Welcome to the first episode of the last trade. A new podcast presented. By on-ramp. I'm going to be your host. I'm already bent. And the structure of the show is going to be weekly show dropping every Friday. I'll be hosting, I'll be joined by Jesse Myers and Michael tanguma from on-ramp, we will have a revolving guests each week and we are honored that Dylan Leclair is our first guests for the show. We've got a lot to talk about today. It's going to be very macro focus and tying in Bitcoin to the macro story. And how it fits in to our world. We titled this podcast the last trade because we're big Believers in Bitcoin. We believe it is the biggest trade right now in his last trade, out of the Fiat system, before we jump into the topics, we want to discuss today, I want to throw it up to Jesse and Michael to elaborate on why the show exists what we're doing, and what we're trying to educate our audience on Jesse. Yeah, so I think there's sort of two parts here. There's wise, the Trade a podcast that we're starting and why does on-ramp exist so on-ramp for, for those who haven't heard yet is a new Bitcoin trust. So it is a way for people who are new to bitcoin want to get exposure to bitcoin to send dollars in get Bitcoin exposure via this, the on-ramp Bitcoin trust and this trust is differentiated from previous. Vehicles like this in that it has best-in-class multi-party custody and that's done through Bitcoins native multi signature capabilities. So three different institutions. Each hold one key to control the Assets in the, in, in the vault. And that greatly reduces the counterparty risk inherent in how any assets are custody and Bitcoin in particular that Is one of the major benefits of the on-ramp Bitcoin trust. The other major benefit is that this trust is designed in a way where customers can take in-kind redemptions and take on South custody when they are ready without a taxable event. And that's different, from how any of the other vehicles like this are set up because anybody who withdraws from those has an instant taxable event that can really Take a hit out of your Bitcoin investment that that you didn't realize you were stuck in a, in a roach motel where you're not allowed to leave. So that's why we built on ramp Bitcoin trust and we feel passionately that this is a better vehicle for for customers for people who are trying to get into Bitcoin the right way and looking for a good vehicle that sets them up for the future. and it allows them to unlock the excellent properties of Bitcoin in terms of self custody when they are ready and our hope and aspiration is that that can be a major way that that people get exposure to bitcoin and get started the right way so that we can encourage the the proper distribution of Bitcoin overtime and and Empower people to take self custody which is how Bitcoin an should be done when people are ready. So part of that is then how do we talk about the issues of how Bitcoin fits into your portfolio? Why it's an important asset for the 21st century? Why we believe that this is the last trade that portfolios, need to be making, should be making should be considering making right now. There's nine hundred trillion dollars of asset value. The world. And Bitcoin is just 500 billion dollars of that. So, that is 1/2000 of the world's value. 300 trillion is sitting in bonds, another 300 trillion sitting in real estate. 120 trillion is sitting in Fiat money, meaning dollars and other things like that and we believe that Bitcoin will outperform all of these categories over the coming decade and it's the trade that everyone should be thinking about and being aware of and understanding how it fits into their portfolio from a macro point of view. And so that's those are the topics that we want to cover with last trade and bring to you on a weekly basis. Yeah, I think that's excellent recap. In just the one thing to add or to really summarize. We think about the on-ramp, very similar to how we thought about the format for the last trade and that on the, on the margins, the products have existed when, you know, of the gbt sees, on the right side of the spectrum of somebody that's just interested in, you know, quote-unquote, digital assets are getting exposure to something like Bitcoin but didn't necessarily know, What they're buying why they're buying? It is evident in the past, six months with different products that have been purchased by institutional investors or high. Net worth individuals, or just individuals, but they don't the other side. The market has been taken care of on really thinking about, you know, self custody. How do you hold your keys in the similar way that the education and the podcast? The, the landscape on how to inform individuals on what is happening here, with Bitcoin in a global macro sense. It's existed where, you know, you have very hardcore format focus on bitcoin only and then you have the general you know, macro landscape on the education that focuses dedicated to that but is missing that one piece of like what is bitcoin fit in the middle and it's our view that the middle is actually the largest to Jesse's core point total addressable Market leaders. Quote-unquote, you know, close to nine hundred trillion dollars of value. That we think, get repricing this new world and this is meant to be, you know, a piece to share for All that are either learning more or have, you know, folks in their Network that they want to help get a better understanding and really meet them in the middle, whether it's on the education side or similarly, with the custody model, the idea is this for this custody model to be something that improves upon the Legacy, past 10 years of Bitcoin, to hacks. The Exchange in Sullivan, sees the rehypothecation with a very transparent way. But then also adds to it by educating, Via on-ramp and the last trade. So, when individuals are ready for self custody or the next step, in their Bitcoin Journey, we can help support them. We think there's been a big gap in the market for that and we're still so early that we're excited about being able to embark on both of these. Yeah, the core reason that the show exist is to number one, gather with friends, once a week to talk about the topics in the markets and number two to educate anybody out there particularly High net worth individuals institutions, who understand that there's something here with Bitcoin. And I should probably be paying attention and we're here to help put it in your world view in the macro landscape. And with that being said, I guess we have a list of topics that we want to talk about. In this first episode we're going to start with real estate. Real estate is obviously a massive market and something that people use as a store of wealth. And right now we're seeing massive dislocations in the real estate market due to the feds interest rate policy fed has been raising rates for almost two years. Now that has caused some negative externalities in real estate markets, particularly with the interest rates, interest rates are at seven percent right now. I believe on average for new homes and the chart we're looking at right now is the cost of buying a house versus renting in America. And as you can see, if you're if you're watching on YouTube or on Spotify, there is a massive Divergence in the cost to buy home right now versus rent and so to pull Dillon, in here to discuss this topic. What are you like? How would you contextualize real estate versus Bitcoin at this? The point in time. Well yeah, I mean I think why I get so excited about Bitcoin is is I think, regardless of if even if Bitcoin didn't exist, I think the story of the 2020s is from like an investment landscape perspective would be that. The 60/40 portfolio is essentially cooked. The secular Bond bull market in real terms is more or less over regardless like it, you know, it stopped secularly. It's peaked. And regardless, you know, even if rates go lower and bonds and, and you No longer, duration, asses long, duration asset. See a bit of appreciation and purchasing power that in real terms. It's peaked, right? So so everyone that's been a, you know, a real estate investor over the last 40 years, who thinks, you know, that there some genius really was just you know piling in on Leverage in an analytic, it liquid fashion and they got rewarded tremendously for doing so. And so we're still seeing in nominal terms real estate and you know a lot of maybe not in the commercial side but residential real estate. Continuing to appreciate in in nominal terms but there's you know, there's a certain threshold where this can no longer be sustained. I think we're maybe not there yet but we're reaching that point especially with you know interest rates at 7%. It's not the ticking time bomb that it wasn't 08 or 09, there's not you know at least in the u.s. there's not as many variable rate mortgages but that you know price for any assets set at the margin, the marginal buyer marginal seller and just you know for it's going from to 3% to 7% that marginal Fire eventually gets exhausted real real fast. So I think we're in the middle of all that right now and this tightening cycle, you know, historically leads to, you know, bust and this is the fastest tightening cycle ever. But the most amount of debt ever. So I don't really expect a happy ending here but I don't know exactly how the The Dominoes will fall. Yeah. If you juxtapose this chart with a stat that Michael, it's ruin the slacker up earlier this morning, which we can throw up on the screen to, which is that As of right now, 30% of your average American consumers, total income is spent on rent. So we have a chart here, showing the change in the cost of rent since 2000, I believe and the change in income. And so incomes only grown 76.8% on average while the cost of branch has grown almost double that at a hundred thirty, four point nine percent. So if you compare it to the previous chart, we had that large Divergence in the cost to buy a home versus the cost of rent right now. Now it seems like something's got to give because if that were to sort of converge the price of rent versus the price of by, you would imagine that the the average overall percentage of someone's income that's going towards rent is go, well above 50% which is seems untenable. And we're talking about an American economy where your average consumer is pretty tapped out here. So I guess just to Riff on this, get through to the QuadBoss, X. Yeah, I think that it's also interconnected this to me, all goes back to 1971. It really two things, two drivers here going back to 1971 when we went off the gold standard and what happened at that point in time, if you track the income, if you track wages at that point in time versus productivity, they diverge they were lockstep together workers. Who were paid more as they produce more for ever until 1971 when suddenly becomes possible to print money to create inflation. And then there's a lag effect of dragging, your heels on paying your workers more and raising the minimum wage and whatever wage. So workers started to earn less relative to Are there production as the measuring stick? The dollar shifted in its purchasing power in this new era of money Printing. And then you combine combine that Force, which has been has been happening since 1971 as we've been able to print money and and change what the, what a dollar means more easily. You combine that force with what has been happening since 1981, which is falling, interest rates. I think it's very easy to forget that, in 1981, interest rates, were the FED interest rate was 15%. So a mortgage was 18%. So the cost of a home had to be a pretty low because you couldn't, you couldn't carry that kind of interest expense and have it be a high price home. So homes back then were 2.5 times the home price was 2.5 x. The Average annual income and today it is seven times. So, you know, over these last 40 years, interest rates have been driven down in a pretty straight line from 15 percent 20 percent where they've stayed for the last 10 years and only now are they coming up off this bottom? But we've normalized 0 /. Sent interest rates we've normalized real estate goes up in value, and that's actually because interest rates are being driven down. So when you play with the, the discounted cash flow valuation models for any Financial assets as interest rates, go down the value of that asset skyrockets and that's what's been happening for real estate. And everybody thinks they've been a genius for building a real estate portfolio. Really. It's been a story of falling interest rates and and and what that does to financial asset valuations. And so those two Trends have been interrelated and have produced the moment that we're in now, where it's completely unaffordable for for a millennial or or gen Z person to buy a home and now we're starting to see 30% of your income go to Rent just to try to keep your head above water. Something's got to give in that, and it's already starting to give and that's zero percent interest rates. You can't have that for a decade, plus that changes and it's already happening, but, of course, in real estate and then Society, there's a major lag between Financial reality and how people think about the value of certain assets, real estate, being the most close to our hearts and Terms of the American way of life. Yeah, there's a lot of societal implications that we know from the past. Let's call it 10 to 30 years when it comes to birth rates, home ownership that are really fascinating. And I think while we know something has to give the next, you know, few years to decade or going to really, I think the exacerbated by what we just saw on both ends of it for individuals that have to rent, 30%, will continue to increase. We've seen like the defaults on Car loans, credit card debt increase and then on the other side, you know we know the mass Exodus is out of these, large cities are happening but at the same time, if you're not able to sell your home, if you're underwater a lot of purchases just like Venture in twenty. Twenty one, twenty two people are under water and their allocation. When they purchase when rates were whatever to 3% and the thought that now you're stuck in that home, you cannot sell. You cannot afford the same amount of highwomen. Because of the interest rate. And your second me cities that we know Sark things are happening in southern coastal cities, other markets. I think there's a lot of second and third order. Like, societal effects of will come from this over the course of the next few years. Yeah, no, I think it's important particularly in this higher interest rate, environment touch on the liquidity profile, real estate compared to something like Bitcoin. Hey guys, we're seeing right now. Jesse talked about that lagging effect. It seems like it's topping out. He had data come out earlier this week. Pending home sales. Sales in April disappointed, unchanged from March but down, 22.6 percent year-on-year so people are finding themselves stuck in their homes. Like Michael said, rates are high really hard to get buyers enticed to purchase Homes at these prices with these rates. And so you can imagine when shit does hit the fan when people are actually forced to sell because they have to go cover expenses somewhere else, you could have a cascading bust due to the relative illiquidity that State has compared to other assets like Bitcoin. And so that's that's one thing to keep an eye on moving forward. Dylan. Anything to add to this? Yeah, I just, I just think it's interesting. You know, a lot of people said, well, no one's going to sell because, you know, everyone's locked into a 30-year mortgages at low rates. But again, like price is set at the margin. And when you see these economic Cycles, we've seen this, you know, this kind of oscillating business cycle. Time and time again, this time is not different, you know, bonds through down 20-30 percent last year. They recovered a little bit since then. But when you see wealth this, you know, wealth destructions of this size, I know the NASDAQ is trying to send to all-time highs again, which is, which is some craziness with, with rates at 5, instead of 0. But when you start to see, you know, some of the unemployment data, we're still at, you know, the unemployment rate is still very, very low, three and a half percent, but, you know, job openings per person total job openings, initial jobless claims, they're all starting to kind of turn in in the wrong direction in terms of a robust. Economy and this is literally what the FED is attempting to do. They're telling you this we want more people unemployed to lower inflation and so when you start to see this you see you know there's this kind of a funny term excess savings like savings is some bad thing and there's some threshold that there is too much savings in the economy but you know there's still actually some some powder in Americans savings accounts. Checking accounts from the covid stimulus. There was a you know, a massive monetary stimulus, fiscal monetary stimulus in Tandem and there's still some Powder left. But that's but those who know the savings rate is very, very low and that aggregate level of savings is drawing down. So I think we're going to enter a really interesting period where you know, maybe the third fourth quarter of this year, maybe even q1 of 2024 where unemployment starts to take higher, you know, you're gonna have more people seeking jobs at the same time where, you know, there's a very, very illiquid real estate market and and never mind the stock market or bond market. But where, you know, if there's any for sellers There's not many people stepping in to kind of plug that Gap and I think that's where things get interesting. So, I mean, I'm not like, you know, a real estate expert by any means, but just just kind of being familiar with the history of these boom-and-bust Cycles history of fed tightening Cycles. You know, that first time they cut interest rates, it's actually not even a bullish. Bullish interest rate cut, right? They cut when things go bad and we're still not even there yet. So it's gonna be an interesting, you know, 12 to 18 months had in my opinion. Yeah. Oh god Jessie. Oh, I was just Gonna add that, I think Dylan's completely right that this time is not different. The only thing that I see as possibly different is how quickly the FED will have to step in to save, you know, a 2008 scenario. But even bigger and so I think we are probably heading towards a deflationary crunch. Like Dylan was teeing up there as the economic climate kind of Snowballs a bit further in the wrong direction, but then the FED will have to step in to save the bond market in a big way. It would be, you know, the same sort of mechanics. They've already shown they're willing to do with be tfp program to the backstop banks who are underwater. And so, I think we might in the next year or two or to see them turn on the printer in the the same kind of way that they did with the covid stimulus and create 10 trillion dollars of stimulus over the next few years, which could send real estate prices and everything else. Go way higher the same way that it happened in the covid era. You know, why did we have a bull market in a pandemic years because they printed a bunch of money and everything gets repriced because of how much money they were there is now. And so I kind of have this tension internally I think everything is looking kind of bearish, but then, I think they're going to be forced to print a bunch of money and nominally, everything will rip hard Assets in particular. That means real estate but it also especially means Bitcoin and I think an interesting topic we're top touching on here is like a lot of these asset classes. Particular equities don't necessarily represent the the economy and so there's two other topics we have on the list that we want to talk about the tie into this. This one of which is that Germany is now officially in a recession, they had two quarters of negative GDP growth, but the Dax is sitting at all-time highs. So you have that dislocation between what's actually going on in the economy and the German equities markets. And then on top of that you had Stan druckenmiller come out a couple weeks ago, I believe or maybe last week and say what he staring at right now is not only the biggest asset bubble he's ever experienced in his life, but the biggest asset bubble he's ever studied in. In his life. And so, yeah, we're whether it's real estate, equities. It seems like we have a massive bubble building up despite and feds interest rates. And another thing he said, as part of that, was that historically in these moments, gold and silver will underperform. And yet, that's something that he currently has exposure to. Because he thinks that when the FED steps in, they're going to have to step in really fast and then those assets will do well. So even though he's described the current moment as the hardest macro-environment, he's ever seen to forecast and he's also, you know, acknowledging that it looks really ugly, but he thinks that the result of this is going to be a Fed that has to inject a lot of money pretty quickly and he's willing to sit in hard assets. That historically have done what poorly in a moment like this, but do well in the stimulus that follows and that brings up. Like the entry interesting question like pulling Bitcoin into this now and you can just riffing on that real estate conversation it's relatively illiquid hard to sell your house. If somebody doesn't want to buy it you can't just exchange it willy-nilly where Bitcoin comes in so many people viewed. Real estate has long-term store of value since the 70s due to the fact that the fed and governments are injecting a bunch of liquidity into the markets. The one of the safest places to go has been a hard That like real estate, but real estate comes with cost, comes with depreciation. Comes with a lot of upkeep and then obviously had this interest payments on top of it. And so as we go through this massive bubble and maybe a bust and the FED is forced to step in you guys. See institutional investors people with a lot of money recognizing Bitcoin as a much preferable store of value when it when compared to real estate or maybe Not answer. Maybe we don't have to answer that question but maybe we can put forth the value prop of Bitcoin as a better store of value when compared to real estate. Yeah, I think I like to take just kind of like the maybe, like, the left bell curve side of the left side of the bell curve approach where it's like, you know, a lot of like a macro guys will get kind of really in the weeds and be like, it's not money printing, it's an asset, it's an asset swap. It's not it's not yield curve control, it's only the fed, you know. Valuing bonds at par value and lending against them right like well, you know it's like no it's all just balance sheet expansion or not. Right. So the last you know, what is it 18 months of the last 15 months of quantitative tightening from the FED has been somewhat just offset by the treasury, general account, draining 20? And now we're at a point where they can't really kick that can the debt limit is where I mean where they're right. And so if when the debt limit gets past, I mean, right now, it's just all political theater. Let's be A real martyr, you had a great piece on on this week or two back about the debt ceiling. But, you know, they're going to have to at some point. Raise the debt limit like they always do what's going up forever and then you know, yelling and the treasury of probably going to have to go out and issue 500, 600 billion dollars, maybe a trillion dollars worth of debt and whether they go on the short end, you know, at five percent five and a half percent rates or they go in the long end. There's gonna be some implications there. If they go in the short end, it's higher financing costs. Probably can pull some of that Capital, the two trillion dollars and reverse repo, they go in the long end that money's gonna have to flood out of equities and and other kind of inferior credit instruments, right? So there's going to be somewhat of a liquidity drag there, but I think the real thing, the real value prop for Bitcoin is that the we're going to see, probably we have to see and this is kind of borrowing from the Luke Roman thesis. There's going to be negative real rates, right. Your fixed income instruments. Yeah. Maybe maybe long bonds. Is good for a trade, right? If yields, you know, yank lower because there's somewhat of a deflation area, jolt in the economy, bonds might be a good trade, but this podcast is called the last trade because we're thinking about not the next three months, not the next three years. But way way longer out we have we have a really long time Horizon here. So like there's no way in hell that I'm going to buy or I think anybody on this podcast. I mean, hopefully, any of the listeners is going to buy a 30-year Treasury and hold to Raishin, right? Because you're going to get absolutely wrecked in purchasing power terms, right? Anybody that's measuring nominal yields in the bond market over the last few years has gotten smoked, right? Even if you have gotten your interest payment, your coupon payment. So I think that that's the the story here and, you know, Bitcoin kind of shines as something where there's no counterparty risk. There's no debasement risk. And like we keep coming back to this and we keep hammering the same story because the story still true. Like nothing. Fundamentally has changed about the thesis there. And you know, whether macro, you know, the macro story next week is the debt ceiling or, you know, in two months. It's the feds new word, salad facility, that patches up some obscure section of the banking sector. Like, we like to follow it, it's good to analyze it but like it's all just noise, right? Because the fed's balance sheet is going to continue to go up. The national debt is going to continue to go up. The purchasing power of the dollar is going to continue to go down. So like what is as you as an investor listening to this? What is your long-term solution to that or what is your long-term insurance? See against I don't even like to call it a hedge, right? Like it's just like this is happening. There's not it's not at a low risk that the dollar debases, it's 100% certainty. So you need to think about that and how to position yourself. Otherwise you're probably you know it's probably the The Da me at the table you probably you probably the one that's that's going to be you know paying for that. Yeah. In to tie your question mark into what Dylan just said, this is something me and Jesse have talked about and you know For the past five years onboarding High net worth individuals investors into Bitcoin. You would think there would be this divergent or there's this Divergence from thinking about Bitcoin versus like Real Estate Investors that have started to allocate the Bitcoin, they still don't see that like the trades, the same in the sense that they're scarce. But one you know obviously is more scarce and has a different liquidity profile and so to your point like I think over time is information disseminates into the market on the margins, people will decide and what illness Opportunity cost to putting the down payment versus buying the BTC and what is the net monthly charge and liquidity, but they're still the black rocks. They're still, you know, the real estate investor that owned. The 10 airbnb's is probably going to get wrecked but you know, the hundred you know houses versus just buying the BTC, it has all the different custody, you know, all the different properties that are better than owning the real estate. And I thought for years that would be recognized by people that understand Bitcoin, that have heavy allocations. But for whatever reason, I haven't seen it yet. Yet in the market. And I think it's just going to be a function of time because that 2.5 times annual earnings that Jesse reference. That's now seven and a half. That's a function of, again, the monitor up removing loose monetary policy, it's not because it's a, it was a better investment. It's like, people didn't know where to park their, you know, their wealth and then there's also the other side of it which is just the average consumer. The average, you know, American majority of their wealth is tied into their home. So yeah, to the point of like the recognition of Bitcoin versus Real Estate. I think on the margins it's starting to but it'll be a 10 year plus process from an individual the way to an institution that recognize us. Like why am I buying a portfolio? A thousand, you know, homes in Detroit. Michigan versus just buying a thousand BTW. See if there's one of those Airbnb guys went semi viral this week, he's like throwing his hands in the air like I bought all this real estate and the Up key like the late payments, all this stuff, it's not worth it, I can't wait to liquidate this portfolio, it reminds me of The Big Short. It's like, it's like that on steroids where they go and visit all the shippers out of the houses. But this is like that times 100, because everybody did it, everybody was traveling preak over. There was all the conference's result, think we live in Austin. We see what we see it on the market and then all of that, just moves away, people do not travel as much anymore. Just by definition of like the way the landscape that we all work and operate, we're all in different places right now. This pond And now you're sitting there with all the real estate. It had you know 90% occupancy month-over-month is like probably you know, cut in half if not less in Euro and you own that know it's a mess. Well that brings up another. We're talking about residential, real estate for the first half hour of the show. We haven't even touched on Commercial Real Estate pitch. When you references occupancy numbers, it's stunning. Well, before I presented Jesse was seasonal, I was talking to a friend, my previous life was at, we work back in the Heyday and and we we were still trading like 20 cents right now on the public markets and he's just like it's just it's absolutely like mess when you think about commercial real estate and we all know the bank you know the banking crisis on that side is Logan as well. Yep. Yeah I was just going to kind of try to combine something that Michael said with something that Dylan said Mike was talking about how these calculations these portfolio. Allocation decisions happen on an individual basis at the margin. Marty, you also had a great piece about how Bitcoin wins at the margin. And that means people having that light switch having that recognition of, oh, this is an asset that stands to do better than the other assets in my portfolio. So I should have some of it. I should start increasing that allocation as I get more comfortable with that conclusion. So that that's the marginal calculation happening for everyone constantly. And then what Dylan was teeing up was this is happening to everyone. This is math, this is playing out, this is reality so you can ignore it. And most people are ignoring it or you can lean into it and try to connect the dots, put up, put out all the information on the table and try try to bring that into Focus to make you You know, these little data points turn into a bigger picture about where things are headed because the debt ceiling, it's the debate of the moment. Are we going to raise it? We're at thirty one and a half trillion dollars. Our national debt. Will we be allowed to take on more? We're already on track to have a two point. Two two, two point nine trillion dollar deficit in the US this year that means we're spending two point, two, two, two point nine trillion dollars of money that we're not bringing in in tax receipts and that money has to come from somewhere it. From issuing new debt. So we're going to raise that because we've already planned on spending a bunch of money that we don't have, so that's happening. And the math of that keeps going in one direction, we haven't had a balanced budget in 22 years. We've normalized trillion plus dollar deficits every every year in this country because there's no political will or awareness of what that does on cumulative basis and how that sends a country in Good Financial standing in, to a position of Ruin. We are now at a hundred and thirty percent debt to GDP and 51 out of 52 times, that a country has had that high of debt to GDP ratio since 1800. They eventually defaulted, whether that soft default or hard, default, the one exception being present day Japan and they are in the process of solving soft defaulting. So that's that's our future, that's our fate. We are on the road to Ruin for specifically, for the dollar, because how do you get out of national debt? Burden that great? The only way out is to print to inflate away the debt. So you're going to print a bunch of money and that means specifically that bonds or dollars will underperform because they have to. They have to be their purchasing power has to be siphoned away robbed from those holders in order to to get away from this national debt burden. So you know, three hundred trillion out of nine hundred trillion dollars of value in the world is sitting in bonds. And those bonds are all in, few are all priced in fiat currency or they're all contracts for future yield in. Paid out in fiat currency which necessarily has to deliver - real returns over the coming decade or two in order to get out of the national debt. In that we've accumulated over the last 40 years. So that's the math. That's happening to everyone's portfolio, whether you want it to or not. And the question is, when will you be a marginr? Marginv 0. Réaliser of these facts. When will you put two and two together? And then, what do you do? As a result of that? Yeah. In Jesse's point is, like, everybody's either upside down or starting to become upside down, and their purchasing power and that to that pain, how cute does it happen and you know, where do you find the information? But this reminds me of like this title of the last trade. It's so perfect because we're thinking about, you know, No, who's the marginal or who's the cellar, like you'd want to be left holding the bag and so you buy the real estate. If you have the 10 you know you know portfolio or whatever. There is at some point that the recognition happens and everybody's trying to get through the door unseld the real estate or whatever the asset is and this reminds me of something Parker Lewis to get a friend. Will ideally have them on the pot at some point it's just like Bitcoin is a greatest asymmetry and it's not just an asymmetry to the upside. It's an asymmetry to the downside as well because the opportunity costs if you still hold that real estate. What is going to happen to its purchasing power relative to other goods are going to go the other way versus if you are holding BTC and so that's why it's so important. This is for the purpose of spotting and walking through these like just different assets and what that, you know, how they've actually retained or why they have a purchase dinner value. Now that I think over time as its recognized and I think the pain is a big example. The the example in was it 2020 or 2019 with Hong Kong. You know, Matt will bring up a signal, nobody knew who said what signal was or used it and then you have, you know, whatever happened in Hong Kong and the protest and then, at some point you needed the tool you needed the thing. The asset that could get you out of the position that you were put in. So it's really about getting the education, along with the right, you know, products out in the market. So when individual start to make that recognition, find that piece of content that resonates they are ready to actually get out of you know, whatever current you know asset. Allocation are in and start to at least think about Bitcoin as a as an asset. They can protect them. Yeah, another way to explain that opportunity cost is you get in to bitcoin at the price that you deserve and so you could deserve it now getting in at 26 8, whatever it's at right now real estate still high or you can wait till real estate collapse has Bitcoin shut up to six figures and you get in then Jesse's you will say something. Yeah and part of that is You get you buy Bitcoin at the price when you realize that you were wrong about Bitcoin because everybody writes it off at first, it doesn't make sense. It's it's internet, funny, money, it's Monopoly. Money for nerds and then you live your life as if it is going to go to zero and you keep your head in the sand for as many years as it takes for you to have some other thing happen. In your life that forces you to realize that we are heading down a path that is a little bit scary and then you start to look at the problem with a new lens of okay, what won't be debased? What won't deliver - real returns over the coming decade and then you're then you're asking questions about what is money in a sideways kind of approach. Which is all it takes to get into the right line of questioning what is going to preserve your purchasing power and what can possibly grow your purchasing power, this decade. And next decade. And something that is scarce. In fact, has absolute scarcity which has never existed before in human history because it's never been possible to have a finite number of Supply in anything in the physical world. And not only that it has Has increasing scarcity because there's a certain amount is created every day week month from Bitcoin mining. And that amount drops gets cut in half every four years and in that next event is 11 months from now. So, 11 months from now, this asset will get twice as scarce. And the same process will happen. Five years from now and nine years from now. And what that does to the value of this asset. Historically, three out of three times has been a major upwards revaluation price Discovery to the upside. For the market to figure out what is this asset worth now that it has Superior store value properties reduced annual debasement from inflation. And then that, you know, when you're asking those questions, then the picture becomes very clear and it's just about getting the right line of questioning into how you're thinking about your portfolio, allocation, because Because everybody starts from that starting point of Bitcoin is silly. It's a fad, it's tulips, it's eventually going to go to zero and yet you're simultaneously living in the tail. End of a monetary experiment that can sustain itself because it's based in infinite debt and you at some point have to rationalize and settle the dissonance between those two. Missions. And my experience and everybody here their experience has been that the, the only thing that makes sense is that dollars will keep decreasing in purchasing power and hard assets. Gold, for example, will preserve your purchase, preserve your purchasing power over time. You will survive with gold but you will Thrive with Bitcoin. Yeah. I think I think we'd be remiss. One note to add to that is there's you know, we're focusing on goal macro the asset but there is for the, you know, uninitiated or individuals learning or coming up the curve that the other side of this, it has importance and increasing. Importance is the Reliance or the counterparty risk and what Bitcoin is probably. I would say, the first will block, steal it from Balaji. That is, it has never existed in history where somebody could actually be a billionaire until Becca way that they Secure a billion dollars with by themselves or with in some kind of, you know, individual or multi-party version and very similar to what we've witnessed. Whether it's with, you know, Silicon Valley Bank and the dollars that were held there or if you go to all the way down to the, you know, the crypto side and Ledger and finding out the past week that you somebody you can upload or however they want to articulate that. You can charge your keys. The reality is you don't have to trust a single institution or individual with your asset, or your home real. State because, you know, if they decide that they're going to allow riots and now your kids are walking past some craziness and sometimes coastal city or whatever the case may be. It's like, there's an asset here that has a different look counterparty risk profile as well. Then traditional assets that you're used to looking at. And that is a part of why the value accrues and will continue to accrue it. Yeah, I think it's also like if someone's listening to this podcast maybe and Afton, you know, you'll see like critics of Bitcoin especially when we're talking with the macro lens. It's like Well yeah, you're talking your own book, right? Like oh you know it's just a big Corner saying that, you know, the USD is doomed, and bonds are doomed, you know what what credibility do you guys have and it's like no it's not the Bitcoin or set of saying this like the IMF was coming out in 2011 right I am a published a report I think there's some MIT researchers who in tandem with IMF released a paper called the liquidation of government debt in 2011 after the great financial crisis and they said like there's really actually no way out of This other than we have to steal implicitly from essentially, the pensioners, and the people that hold government bonds. So like, you know, Putin's, no, idiot jeez, no idiot. They the people, the nation's a sovereign Nations that they can't fully abandon the dollar. It's still the currently, the global Reserve currency. But every, every actor, every Sovereign Nation, that's slowly. Trying to step away from sovereign debt, you know, G7 sovereign debt. All, you know, Eurozone sovereign debt is somewhat of a derivative of the treasury market, right? All really sovereign debt is but it's because they know that they're screwed. It's not just like the conspiracy theorist TM bitcoiners that are saying this stuff. It's it's the guys in the know. That's a yeah. This this system is doomed right. Here's here's some good stats for you, just like to contextualize the actual, you know, debt problem. And this one this doesn't account for the the compounding effect of of high interest rates. So instead of you know, zero interest rate policy, it's now five percent, right? Like that, that Pounds quickly. But just if the national debt compounds at the rate, it has for the last 20 years in 2033, the debts going to be 57 trillion in 2043 Of the Deads, going to be 110 trillion 2053, it's going to be around 200 trillion in 2083. I know that's a while but it'll be one quadrillion dollars, right? So so, and that's again, this is not accounting for the compounding effects of interest expense, right? Where, you know the interest expense is I think it's annualized at one trillion dollars now and so Going to continue to compound, right? Because we're going to continue to run deficits. That's not accounting for off-balance-sheet entitlements. Social spending. That's that I mean which is already, you know, 100 trillion, 150 trillion dollar, figure 80. Yeah. So like these these are, you know, these are not just like bitcoiners that are saying this and I think the last thing that I would add is that I think the big realization maybe, you know, the thing that we want to drive home, the most on this podcast is for the for the macro people that maybe do get. At it or they're the people in general and the investing world that dismiss Bitcoin or think it's, you know, it's a it's a nice speculation, it's a beta on the NASDAQ, you know, I'll have it as a trade. It's I think the big realization when you do a deep deep study, a deep dive into Bitcoin, as well as the macro system and come to the conclusion that there is no long-term solution and it's just a bunch of people kind of trying to keep this system duct-taped together and kick. The can down the road. It's you can insulate yourself from Bitcoins Ascension. If we're right. Which the last, you know, 12 years or 14 years have continued to reiterate, the fact that bitcoiners directionally are correct about where their world is headed. You can't insulate yourself from its rise from its Ascension from it bootstrapping as you know predominant monetary assets around the world and so that may sound far-fetched that may sound super you know, outrageous or hyperbolic to someone that's saying this is just you know, It'll casinos right. Bitcoin is just this crypto thing that you know the internet and ons trade but you know anybody that saying that hasn't done the work and and as a result, if you don't, if you don't take the time, if you don't actually dig into what this is, you cannot insulate yourself from it. Yeah, piggybacking on something. You said earlier, like the IMF and MIT wrote that piece in 2011 saying, liquidation of this government debt is not going to be pretty. I mean, we have another signal of that. Year of the treasury came out. Today, we're going to open up this buyback program in 2024. So they're forecasting, a lack of demand for treasuries themselves and so they're signaling like, hey, we will buy them to be a buyer of Last Resort in this particular Market, which is Japan affectation that that is what Japan has had to start doing 10 years ago. And and luckily, they had the support of the G7 sort of propping them up for the last decade. So it's been kind of a slow. Slow-moving circling the drain, but we won't have that luxury because nobody can can back stop us. So once we once we cross that Rubicon, we already have, we already crossed the Rubicon in 2008 when we establish the precedent of bailing out, too big to fail banks in my opinion. So it's just a matter of time now and that matter of time is going to be this decade you know. It might bleed into the next Decade. But this is why it's the last trade because currently Bitcoin is a tiny, little blueberry sitting out there on the global asset value landscape. I think that chart that I made with. Yeah, let's pull it. Let's pull up that chart. Logan just to contextualize this visually for people out there, not this one, it's the chart of Bitcoins relative Market. There it is. Yeah, so I put this together to take stock of, where is the value in the global asset landscaping? And for people who can't see, there are visual buckets here of, for Real Estate. Bonds money, equities art, gold Bitcoin, and a little Collectibles bucket as well. They all total up to nine hundred trillion dollars of total asset value. Just stored in these different buckets right in. Everybody, this is the product of everybody's bottom bottom up individual calculations of how they want to allocate their portfolio because what is your portfolio? It's how you're storing your wealth. It's how you're investing your wealth. But that's really storing your wealth because you know, that inflation will eat away or well. So you can't just put it under a mattress and sit on it. You have to invest it in and the way the world works now and Bitcoin is that tiny little 400 500 billion dollar. Blueberry in a notion of value and everything else, in that ocean of value or at least half of that ocean of value are assets that are contracts for future dollars or future Fiat. Money in a climate where we know though that there's going to be massive debasement. So those contracts for future money will deliver - real returns. And Bitcoin is the only thing that has this increasing scarcity. Mechanic built into it, that will reliably deliver value appreciation. Every four years. It's volatile, it's uncertain. But that appears to be the mechanics and then it's just a function of the marginal individual waking up to the reality of that math. I think that's what Dylan keeps hammering here is, this is all math. This is what Greg Faust talks about. There's no, there's no way or out of math. We have to pay interest expense on our national debt for last 10 years that interest rate has been zero percent. Now it's 5% and so we're quickly and 5% on 15 on 31 trillion dollars of national debt is 1.5 trillion dollars per year. Purely an interest expense that doesn't buy you anything and that's coming online now. When we haven't had that, for the last ten years, and our political Arena has sort of gotten accustomed to there. Being no cost to racking up additional national debt and now that that bill is starting to creep in it doesn't immediately show up. It is contracts are priced over time but they roll over at the current rate whenever they do come do and about half of them. I don't remember the exact numbers but it matter of a couple years, we will be paying one point five trillion dollars in interest expense at the current rates which we weren't paying a year ago at all. So, you know, that's just one one piece of how the math works here, and it all points to everything getting rekt while Bitcoins mechanics, keep causing it to appreciate in value because of its increasing scarcity. Yeah. And I do I think God, like I was you say it like Dylan says and that's that's really fascinating interesting that and if you've guys have thought about the past few months as like the trade on the, the like, the bookends are really the same when you think about an individual or on the geopolitical landscape and like Russia, for example like their next Port, net exporter of you know proof-of-work Oil, we're an individual net, exporter of whatever our time is whatever. Produce and if we lose purchasing power, we you know we're insolvent similar as a country, they can't, you know, export oil taken dollars in those reducing value, then they have to feed their, you know, for greater, whatever they need for Russian citizens. And so you either making the same trade as like, trading oil for hard assets and they were making a very similar trade as individuals for making a tradie whatever we're doing for hard assets, Bitcoin going back to the Paul Tudor Jones quote, you know, we're picking the fastest horse, but similar trade hard asset, but the Easy thing is and this is like to take us back from. Okay we're not the crazy Bitcoin. We talk about Bitcoin like they're attempting to make Bitcoin over there right now like they're literally trying to set up a like system outside of the dollar that has different commodity hard bait heart. You know whether it's you know, gold silver, whatever they're going to put underlying this basket of currencies so they can transfer for next. It's going to have all the crazy counterparty risk and all the things. We're just gonna have a 10 years of them, trying to go into the system. Well, Bitcoins being built in parallel and one day, Years from now, whatever the time is and each country we're starting to really see countries do this, where they're all mine or they'll start accumulate on their balance sheet because they're just going to realize. It's like it was Bitcoin the whole time. This is this was the asset. So it's just it's interesting to see like it's they're already doing it. They're not saying it's Bitcoin. Well they're probably in Russia. Probably is accumulating Bitcoin but just fascinating to watch Good. Yep. Russia definitely is their mining Bitcoin. This essentially nationalized a lot of the American mind. Miners that were hosting in Russia when the sanctions came in the Russian government, essentially confiscated, those Asics, kept them turn on and who knows where they're actually accumulating those SATs on their National balance sheet. But I think it's pretty obvious and it is a fact that Russia Is Mining and accumulating Bitcoin. But on top of that I want I wanted to add the we're focusing on the asset part of Bitcoin, there were only ever be 21 million, it's a scarce assassin. On the planet comes with significantly reduced counterparty risk, but another thing to really drive the value prop a Bitcoin home is that it runs on this peer-to-peer Network this layered system that supercharges the digital age. We have native payments in the digital age that are run via this extremely scarce asset for the digital world so we can sit here and talk about the fact that you can pour your wealth into X Out of the 21 million that will ever exist but on top of that you get Get the value add that running on a layered peer-to-peer Network that really makes trade more fluent. So Michaels example where you have the brics countries of the world try to create these commodity baskets to back their currency still at the end of the day of the counterparty risk at the physical Commodities that need to be held in V. You need to be assured that they're the actual Commodities that they're portrayed to be and it comes with a lot of added cost on that. And then if you ever need to transfer to settle internationally obviously at the move that It's a lot of weight, it's a lot of costs. It's a lot of fuel, it's a lot of protection Bitcoin completely different. You send it over the Internet over this peer-to-peer Network. And so not only do you have the value of the scarcest thing we've ever come into contact with, as a species, you have the added benefit of being able to send it over the Internet instantly? Yes, the money that is, I always always anchor to a quote that never was picked up and shout out to because we haven't heard from him in a while that Murad is Bitcoin at the end of the day, when it's all said, and done will be geopolitical. Monetary nuclear weapons. Like if you need to settle on, you know, whatever the tanker of oil and gas or whatever is being shipped well what are you going to do? That doesn't have the counterparty risk profile. Like did you just alluded to because we've already seen what happens on that settlement of gold trade and how it centralizes. But we're going to redo it for Next ten years. And then we're going to go back and like it was Bitcoin the whole time. Yeah. Bitcoin is this incredible convergence of megatrends because we talked about we spend most of the time talking about the great monetary inflation that were were embarking on now. But then there's a couple other megatrends here to of Commodities. And and I think that's what the brics nations are landing on is, in an era of the gray monetary inflation, you want to own, come on. These and so yeah gold and oil try to set up your value system based on that. And and for that matter in 1980, the total value of all the gold in the world was 2.5 trillion and the total value of all the equities. All stock markets in the world was 2.5 trillion fast forward to today. Total value of all the gold in the world is ten to twelve trillion total value of all. The equities in the world is 120 trillion. So over the last 40 years in this era of decreasing interest rates Financial assets, equities in particular here, out performed Commodities by 10x and now all those conditions are reversing, so the brics countries nations are smart to be recognizing that seeing okay? The era of financial asset bull market is over and now it's time for A reversion to the mean and we're going to bet on Commodities there, right? They just haven't gotten that extra step to recognize that Bitcoin is the perfect commodity. So there's that as another Mega Trend and then there's finally this this last and possibly the biggest Mega trend of free and open source. Software is eating the world. And we saw that with the internet, the internet, if information is built on TCP IP, just a protocol for how information is exchanged. And Wanted to create the internet and now we have the free and open source protocol for value. And that is how the world is digitizing value with Bitcoin. So now we have the set of rules for how to store and transmit, and represent value in the digital realm, and that's Bitcoin, and those free and open-source systems, always win. That's what software even the world is, and that's, you know, probably the biggest megatrend play, Hang out right now. Jesse Duke to contextualize like what you said. I think you nailed it there, like comparing Gold's like as a lot of people say. Yeah. I mean gold. Protected your purchasing power, right? Especially when you talk to someone, that's a gold proponent or gold bug or, you know, a gold salesman, they'll say like yeah well you know it's fine Man suit, right? It's done a fine job. It's it's going to it's going to outperform really, really well but it contrasting it to the growth and equities to the growth. And and you know, debt markets is really, really important. Right? Because at one point, gold was the Dominator for all of the world's wealth. Right? At one point, it was a measuring stick and then you know, obviously in 71 they defaulted and we what we saw was essentially debt markets became quasi money, right? Quasi money supply was the debt markets. So Sovereign sovereign debt became sort of money like substitute and then you know as rates continue to hammer lower and lower and lower equities in a way through passive indexation And 401ks pensions have become quasi money. Like right? Especially in a zero interest rate cost of capital World post, great financial crisis bonds. You know, there wasn't really much juice left to squeeze there wasn't much yield. So okay, we're going to, we're going to plow into equities, right? No one. No one even makes an economic calculation or not, whether to buy a business anymore, just plow it into the US Stock Market plummeted into the NASDAQ and get your return, right? Like that's that's almost the money now and so, and now, We're seeing it right with commodities where, like, where they're trying to monetize in a way Commodities and not to use the Commodities but like, oh we're you know, we're going to make a currency basket based on oil or based on energy or based on this hard commodity. But the reality is all these Commodities will be reduced to their marginal production costs will produce more Commodities. Right? You know to an extent gold may be the best because it's the hardest to produce its atomically scarce. But yeah we I mean we have a absolutely scarce synthetic commodity and so the bed is It's just that, it's marginal production cost, which is only going up forever. If you understand hash rate, if you understand the incentives to mine Bitcoin and you understand the difficulty adjustment, it's it's just, you know, it's the best, it's explicitly, the best, and there's not really any, any debate there, the debate is just, you know, when there is a debate, it's because that person on the other side, just doesn't understand what they're debating. Yeah. And it's easy to it's you know you have sympathy for those folks because because this is new this is new to The Human Experience. There's no comparison to anything. You can create your analogies and I try you know I write about the metaphors that I think helped explain how Bitcoin is a digital Frontier. Whether it's talking about land in the American West or comparing it to the development of the internet, But really there's no there's no way to compare what's happening with Bitcoin to all of human history and you know, we've been using hard money in some capacity for 70,000 years. It is how we as a species emerged as the dominant Homo Sapien subspecies, over neanderthals. It's because of our use of money, neanderthals didn't use money and that allowed for ten times. Later population density. And so appreciating scarce hard money is is ingrained in our DNA, but that has only existed in the physical world, the tangible world that's seashells that's that's gold coins. That is what has made sense to us as a species and now you have to abstract that to understand that it's it's about scarcity itself and unforgeable. All costliness, and that is removed from the physical token that the item that you have, your brain has learned to covet, the trinkets, because sea shells were money. And now you have to, you know, go beyond your DNA, which was this great operating system for, for thriving, in a world of hard money, and understand that it's about the actual scarcity itself and not just the shiny thing in your hand. Yeah. I think one of the things that will expand on as this podcast, you know, week over week is, like, not only the asset but just like, what are the like, how do you navigate this new world? Because we, a lot of the stuff right now, especially we're talking about, you know, the past three months and heading into the next. Let's call it three to 12. 18 months is, you know, Rising interest rates, deflation area. That means a lot of people losing jobs, a lot of businesses. There's all there's going to be a A lot of pain, but at the same time, everybody's starting to think. Well, you know, we seem like, you know, depreciating or lower amount of venture capital raised amount of exits. The reality is, we should all start getting used to that world because the cost of capital is going to only get greater as more and more people recognize Bitcoin as an asset because then you have to think about the opportunity cost to give up that Bitcoin. And so, it's really thinking, what what are you doing? What are you building? What are you contributing to actually have a Positive cash flow in this current environment, that is been so far removed from individuals from investors from startups in this space or just in general because of loose monetary policy in zero interest rate, environment that it's just growth growth and we'll get there realizing that it was all Bs. And we're going to see the 80% of like these companies that are started the past X number of years because it's just corrupted at the foundation. When you don't you're not concerned about building a solid foundation. On of like Revenue positive. And what does that look like? So I just think that's a key point that we'll talk about more, but when Dylan brings up that we just, like, just gave it to the 401 k, or the mutual fund or the bond, and we're just like there. It's like that's that's all over now like people are gonna have to think and they're going to have to realize like how do you actually protect their wealth and that that is Bitcoin but then independent of Bitcoin it's just like well what are you producing that either produces Bitcoin on you know as a business or you would take those cash flow and be able to, you know, store it in a purchasing in a Form of money that increases in purchasing power to. It's just a very interesting landscape because well, it is, there's a lot of - right now, it's also we should get used to it because that's the world were heading in Roots. Going to change her it, we have to change how we think about what a productive assets or how do we like use our time to create productivity in the new world. Yeah, I mean that's not necessarily a bad thing. There may be some short to medium term pain but in the long run you said Michael bringing back opportunity cost to the economy will be extremely beneficial Shal, that is what the fed and the federal government have taken away from us. Is the ability to properly price opportunity costs in the market. Via a natural forming interest rate their ability to manipulate and set the interest rate, completely corrupts true opportunity cost and the true cost of allocating Capital throughout the economy. So yes, we are at the beginning of this Paradigm Shift where you're going, to check your priors and adjust accordingly moving forward and Will be a bit turbulent in a bit unnerving for many people, but in the long run, this is massively beneficial for Society for an actual productive economy that is producing goods and services that people actually want and need and will provide a better quality of life over time. Yeah, we've been we've been talking about that the macroeconomic house fire around us today but I think that's this is Michael's talking about is exactly what the value of the last trade, will be you know, in your, in your podcast, line up your rotation for all the listeners out there of we're going to be able to dig into what are the exciting businesses who are generating Bitcoin cash flow. Why why? They have an edge over zombie companies who, you know, are believe that their hurdle rate is is 3%, when really it should be 23 percent because that's what Bitcoins returning, this four-year cycle, you know, on an annualized basis and and nobody's really talking about that, you know? So that's what I'm excited to dig into with with you guys and Dylan when we have him and other guests when we have you know, Our whole rotation. And I think that there's a ton a ton to dig into about the business reality of the present and future on a Bitcoin standard. As we watch the house fire around us. Turn into an inferno in the Fiat world. Yeah. Speaking of the house fire, we do have more things in the listen. I think we're we're we're going to be able to hit everything. But one thing that you mentioned earlier, Dylan, we do have is Is the sort of predicament. The treasure is going to be put in when we hit the debt ceiling and they're forced to raise it. What do they do? Do, they allocate to the short end or longer end of the curve and you posted something in your Weekly Newsletter. Highlighting, the six-month UST bill, which is hit five point, three, six, one percent, which is the highest it's been since around 2001 2002. What does that signaling to markets right now? Yeah, I mean I think that the short end of the curve is essentially just a blended average of the expected fed funds rate with you know we saw I think it was it was yesterday or earlier this week. We saw UK inflation come in super hot core inflation come in super hot you know the inflation is transitory Camp. I mean obviously they got blown out of the water but I think it's still somewhat entrenched write this this. We had 30 30 years of disinflation because of all, you know, all the factors. Globalization a unipolar world order, deflationary dead Dynamics. I think that you need someone out of the bottle. So even if on a year-over-year basis, inflation is coming down, rates rates are higher and I think one of the funny things and not funny things but maybe sad things and we shouldn't really expect any competence out of out of, you know, bureaucratic government officials and branches. But while inflation or while, you know, long and 30 or 20 year yields for debt for treasuries, Security's was that 1% 120 basis points? 150 basis points. The government was actually just punting short end bills because the yields were you know, 20 basis points 0% there's a. Yeah. Why why not? Why not, instead of, instead of taking you know 30 years of dead out at 1% to finance our operations. Let's just, you know, let's just do one percent or one year two years because it's cheaper, right? And now they're faced with the task of I think 500 600 billion dollars of debt, I believe I think. Yeah, 50 percent of debt matures, the next few years and a laughably small percent is over is actually do longer than 10 years away. They're going to have to they're gonna have to roll it over at a much higher cost and so you know the debt markets will certainly react to that. If they if they try to go to the longer end because yields are lower now because yield curve is inverted. So they're in a pickle, you know, there's there about two trillion dollars of of money parked in that reverse repo fee. Scylla T. So if they issue short end short end bills at, you know, five percent well they'll have to they'll have to finance at that cost but they can they can access that liquidity and if they want to get a little bit of a lower coupon, then they're going to have to pull it out of debt, markets on the long end, and it's gonna, it's gonna impact the stock market valuations, and it's going to Impact Credit markets. And I think that could get a little bit ugly especially if the timeline, you know, somewhat lines up with with unemployment rising. And you know, consumer savings really being tapped out. Beware beware, we're about an hour and 10 minutes in. So the first fret. How do you guys think? I mean, I do have one more topic I want to talk about, but let's do a little little game tape introspective. We did a lot of like, digging into Bitcoin fundamentals. We're probably not going to do that week in week out, probably touch and weave, it in and out, but I think this is been a very good rip. So far. First, the first, The last trade. Yeah, I can't I can't help getting into that the fundamentals especially, you know, and inaugural rip like this because I think that paints everything, you know. Like I talked about earlier, everybody is in this position of they have to pull together the little data points in order to start to form a picture and then zoom out enough to make that picture makes sense about about what's happening in the world and what they need to do with their portfolios in order to Adjust to that changing world and and nobody's doing. It is the reality of it, because we're all, we're all living Our Lives. We're all doing our jobs running businesses, you know, paying attention to our families, paying attention to our golf game. Not necessarily focused on how am I about to get screwed by my portfolio allocations. And how should I be? Be proactively changing where my money is pointed. In order to survive. What could be a turbulent 10 years when we haven't had a truly turbulent 10 years in 80 years, nobody's thinking about it and it's going to Blindside. Most people, I was a result of that. So I like I end up getting on my soapbox about about that big picture view very quickly but I am excited about This format for for talking about all things Bitcoin, as a relates to business and, you know, not just portfolio. Allocation, but what are people doing in Bitcoin? What are how our businesses adjusting to and taking advantage of the properties of Bitcoin? And, and you know, what does it mean from a business sense to adjust to this new Bitcoin standard? There's so much to talk about today. Just happened to be the soap box of the big picture. No, yeah. Think I got to get back to basics. You gotta you gotta paint the picture. Yeah, I think, will naturally because of Bitcoin. So multidisciplinary will continue to weave week after week of Basics, that how they tie in to the new world. And then we're the world's headed, or our thoughts on it. It would Jesse mentioned anchors back to. I think about a year over year. The the signal, the Fidelity gets tighter as this kind of medium increase with the conversation the writings and it is anchored Back to early at Unchained. We did the consultations and and there was a common theme, it was a good hundreds of them where everybody pointed back or not everybody. But 0 to 80 to 90% of individual said, the during the lockdowns of covid, where the point and there was the trillions printed. But more than that it was that they were just basically locked in a box. And so like they had time to like listen and think and read and everybody stuck on the hamster wheel. And so, ideally this, we this hour long, however, long goes weekly can Provide a lot of that information that would have taken, you know, weeks if not months to come together and just still there and then as far as work goes, you have definitely excited about talking about a lot of stuff we talked about behind closed doors but bring it to a public forum in the sense of where's the puck going? What are we seeing? What are the trends? We didn't get to jump into it maybe next week wolf did their accelerator, there are some interesting projects there. What is the landscape mean for you know new Bitcoin native companies and then you know incumbents that are going to adopt Bitcoin in stay relevant. So a lot of Will be interesting along with the global macro environment. Yeah, to both your points, met Odell wrote a great piece of Blues last week or the week before, but we really shouldn't have to worry about all these portfolio allocations, just to preserve our purchasing power throughout time. You should be able to focus on your golf game. You should be able to focus on your job and your family, and just living your life. You shouldn't have to think about portfolio construction. Just to save your well, so that you can someday Retire. It is insane that we live in a world where that is completely necessary just to be able to have some integrity at the end of your life, it's pretty insane. And that's what Bitcoin fixes me. That is a vehicle that allows you to Simply work hard. Making hurting be productive. Save the excess of what you don't spend in an asset that will respect your purchasing power over time. Marty, I got to get quote here. I posted this on Twitter like I think last week it's from Jim Grant says, you know, if Baseball umpires were on the front page of the sports section every week, you'd know, something was desperately wrong with the game and that's and that's investing, right? It's like what did Christine Lagarde say and what tone what a drone, Paulo drone Powell blink, the wrong way. And wore a red tie, it's really hawkish news news, presser and so, and like and and again, like I'm being a little Critical because like, you know, some of the macro analysis, I put out is on like you know what the FED speakers are saying. And what the, you know, the fomc probabilities are saying about the state of the, the tightening cycle or, you know, whatever it may be right? But because because the macro does matter. But right if you like the reason, I think that a lot of people on the younger, end of the spectrum. Myself included, why Bitcoin clicked for me right away as I studied the Keynesian system and Bitcoin, not right away. But with a little bit of I work was because objectively just makes much more sense like oh yeah, programmatic monetary policy that no one can change and is as open source like Oh yeah, duh like that makes sense. Like what doesn't really make sense to me is? If you know, learning the two system from scratch is like, you know, this this six-year-old private Equity, bureaucrat lawyer that comes out and make monetary policy decisions for 7 billion. People that like doesn't make too much sense. So obviously, you know, we're all in the system. A lot of the investing world is grown up in the system has never known anything other other than but if you're just from a first principle standpoint and and not that like this is all about Mara and what's better and you know, you know, how the world should be right because a lot of bitcoiners like Wax poetic about that but we can't we can't change that just by wanting something. It's like, oh my opinion. But the bitcoiners are putting their money where their mouth is. Right. It's like no, this is the world. This is what I wanted to be. This is where I think the world is going. And I'm not just a About it. I'm actually putting my Blood Sweat and Tears. Mm the fruits of my labor. I'm actually pouring it into this thing I believe in so that's why I like it's like the whole you know oh do you want to be Occupy Wall Street? Or do you want to be Bitcoin if you wanted to? You know, go protests in the street and you know, makes cute signs or do you want actually like allocate Capital to change to change the world in your vision? And I think that's why Bitcoin is so powerful. And there's a knock economic reality. At the end of the day, we're either right or wrong. It's very darwinistic. In the sense you You quoted earlier in so you can insulate yourself from of money that's harder than yours. And So eventually somebody pays for it, either you have a money that increase in purchasing power and you end up on the other side of it or you don't. So yeah, there's a lot of narrative going on right now is like the crazy guy's in the Bitcoin side was just the reality is it's just like you either, hold one or the other and over the past, you know, 12 14 years, whatever. The number is, if you're holding it and you're securing it because that's the hard part, right? The easy part is to buy. The longer the hard part is to hold it through the volatility, through the exchange facts and that's some of the things we want to support. Whether it's here at the potter on-ramp but you can do those two things and you're setting yourself your family up for better economic reality than what's currently happening across the world, Marty tear tear Point earlier of you know, not meeting to focus on. We shouldn't have to focus on portfolio, allocation in order to live our lives, you know, traveling. Miami back back here to LA from the Bitcoin conference. I was in the airport and one of those you know, conveyor belt walkways, helped me get somewhere a lot faster and I was thinking about how when it comes to our money and how we're living Our Lives when you're on an inflationary monetary unit, you have to work harder to keep where you in the same place because Cuz your conveyor belt that you're standing on is actually moving against you. So you're trying, you're running to to make a little bit of Headway because your money buys you less and less over time, it is acting against you and then the flip side of that is being on a conveyor belt, going in the same direction as you where your money grows in purchasing power over time. It helps you get where you're trying to go faster, get to a comfortable retirement fast. Aster. And so your efforts of moving in One Direction are aligned with the money that's helping you move in that direction faster and we've normalized over the last 50 years being on a treadmill. That's that's going against you. It's getting tender and it's getting faster and we're all running trying to make a little bit of Headway in real terms, running our heads off in nominal terms. And we don't have to be on that treadmill. You can switch to the other treadmill. The deflationary treadmill that that is going in the same direction as you. They're rising at Marty's. A, it was a treat thread within also the newsletter. Maybe we link to in the show notes of the shrink flesh and chewy. Yeah, like it's just like everything you buy is just got like progressively worse, no matter what it is, whether it's the home or just the package of Twinkies. Yeah, I mean, shrink relations is somewhat visible form of inflation, but then there's other things. Like, there's some things out there in the economy and no matter how much you pay, you can't get any more just because the cost of capital has been jacked up so high, it's nobody's incentivized. Produce it and bring it to Market. And so that's another negative effect of consistent and persistent inflation over time. Is that eventually? Like not only are your goods raising and price and falling in quality and quantity. Some goods are just falling out of the market because nobody's incentivized to bring them to Market anymore because it's it's not worth it. And that's the story of craftsmanship in the u.s. from the end of the American Revolution to the beginning of Central Banking and was in 1913. 150 years of the gold standard and economic stability, and rule of law, which culminated in the Gilded Age. And if you walk around in any big city and you look at all the most impressive pieces of architecture or you go into the foyer as. And Around at glorious craftsmanship and and all the woodworking details and stained glass windows. All of that was was constructed after at the culmination of 150 years of deflationary forces because we were on a gold standard and Craftsmen had to improve the quality of their work. In order to keep their prices flat. You had to get more for the same amount of money generation after generation after generation for 150 years. To a point where the quality of work that you could get was incredible. And that's all gone now because those forces don't exist anymore it's hard to find Craftsman who can deliver great quality without an arm and a leg. And you know that it's just like a it's a forgotten piece of what we had and what we can and we'll go back to just by embracing the money that that is working with you. Rather than against you. Yeah, I think that's a beautiful note to end it on for the first of the last trade gentlemen, it's been a pleasure Dylan, thank you for being our first guest. Thanks for having me on guys. It's a great team. As I think was a great podcast. Great overview to start covered a lot of ground but yeah, real good primer for those initiated or not on to what what all this means for the future. Yeah. Jesse Michael want to set it off with anything? Yeah. If people enjoy Dylan's. Now houses here, Dylan has started doing a Weekly News Digest for on-ramp and that is available for free to anyone who subscribes to the on-ramp newsletter. And you can find that at on-ramp, Bitcoin.com newsletter and sign up and get Dylan's insights on a weekly basis. About the biggest things to know about going on in the macro and Bitcoin markets. You also get a weekly piece for me, ranging from Bitcoin and macro analysis to bitcoin, educational content, whatever, whatever, fits the moment, best the that. All right, about on a weekly basis as well. So go sign up for that. If you enjoyed the content here and check out on ramp Bitcoin.com in general to see to learn more a little bit more about the on-ramp Bitcoin trust the product we've built. And and how it could fit into either, how you're approaching your Bitcoin allocation, and custody, or force or for a lot of you who are listening to bitcoin podcast, you've already done this but it could matter for somebody in your world, someone in your network, whether that's a friend, or family or an institution, you work for Yep. Yeah, we want to be a resource whether it's on the product side and supporting on a better form of custody, the trust and getting exposure. But then, you know, ultimately were the biggest bridge we see and is really supporting via this pod, the content we put out, we're discussing with other really prominent content, producers to be able to leverage some of the material to help in the education as well as us. You know, we're bitcoiners. So if you email us, if you send us a note, that there was something that came up that you want more information on Nan or would like us to go further or jump on a call. We're happy to support. There's a lot of stuff we're working on the background to bring to the market. That we think there's a big gap on the Bitcoin, only focus with this area of the market and being able to help educate. And so we're really going to be focusing on that for the rest of this year and heading into 2024. So anything that you have thoughts, feedback questions, please reach out, you know whether your client or not, we're going to be in the market educating for now and to, you know, as long as we exist. Well, gentlemen, it was a pleasure. The first trip is in the books. We'll see you guys next week for the second. Rip, enjoy it. Awesome. Thanks guys.