Transcript+
Gold has been money for a very long time, even though we don't recognize it as such. And now Sovereigns is starting to become more and more apparent with forex reserves, settlement in yuan and ultimately going from an area of abundance to a level of scarcity, right? And we've been talking about this in a unipolar world. There's a high level of trust and you can rely on a dollar system and you can feel confident that the goods and efficiencies will be there. But as that starts to break down, that goes away and it's a completely different world effectively because those who have, it's really like those who have the gold make the rules. It's like those who have the scarce resources make the rules because then you need them and you need to pay them. As you can see, a very similar concept of how most people think that nobody will accept Bitcoin. It's like, well, if you need something from somebody and they demand Bitcoin, you will pay them and Bitcoin or you just won't eat. Like, it's pretty straightforward. What you're telling me is that music is about to stop and we're going to be left holding the biggest bag of odorous extra ever assembled in the history of gutless 1974198792972000. And whatever we want to call this, it's all just the same thing over and over. We can't help ourselves. I say when we sell. Hey, OK. I say when we sell. We are back, ladies and gentlemen, and actually last week I did learn that there were several ladies listening to the podcast. We received a number of comments. All around the world, globally. All around the world. What was said? Like what sparked that? I saw that in the comments but I forget what. What happened? Well, you were. Talking over. You were talking over Jackson when he was saying it, but he was saying, ladies and gentlemen, actually, I don't know if we have any lady listeners sound off in the comments. Turns out we do. Turns out we do. And to Brian's point, all around the world, please leave us comments. I really enjoy reading them. I like responding to them. So always and. Look at Jackson's flow. Look at Jackson's flow. How can we not have ladies tuning in just to just to stare at the flow man? Yeah, sure. Exactly. All right. So another tight RIP. I think we've been, we've really been operating at. A fast pace, Jackson. Jackson's comfortable when we're shooting darts at him, but when we're giving him compliments, he has to just like immediately. We're moving forward and we're moving on, you know? Yeah, I'm not. Used to it. No, I'm just used to just, Michael, just like driving me into the ground, just, you know, degrading me. Sometimes you got to lift him up. You got to lift him up to to let him know you know. Dragging me through the mud every week. People see that too. They say, you know, some people like it. So I guess it's it's a bit at this point, but. Real quick on that, I had a conversation with a client and he was, he had a lot of great feedback and the end of the pod, he's like, hey, let Jackson know he's doing all right. Well. Thank you for never said that. Thanks. This was me letting. Letting you know. Thanks. Well, let's get into it. We we have a very stacked list. We have less than an hour. So we're going to be moving quickly here today. And Michael said he's he's either going to be the best RIP of his life or the worst. So let us know what you think after you have a chance to listen. Brian, you have the giga brain. We like to talk about how smart you are and I'm a little bit envious. That's why I had to put so, you know, get the hair looking right today because I'm just envious of how much signal Brian brings to the show each week. But Brian, could you speak to some of the new developments? We want to talk about Quantum. Some people say Bitcoin's dead, Some people say it's dying. Others say that we're just getting started. So can you talk us through the latest developments? I'll pull up a few of the sources here to help reference the conversation, but talk us through what's going on. Yeah. So there's, there's a lot of a lot of different angles we can take this. I mean, and thank you for the for the kudos. I'm not that smart and I'm definitely not a quantum expert by any means. But like we were talking about the other night, Michael, I like to triangulate information. And so that's what I've been trying to do in the past few days and really the past few months that this quantum stuff has picked up. It kind of was really hot towards the end of last year and then sort of died down and now it's kind of back. And what part of what prompted that is a couple research papers, namely one from Google, they their AI department. And it's, it's really more of the same in my mind, in the sense that whether it's Google or other publicly traded quantum companies or research outfits that effectively need funding to keep trying to make progress on this stuff. They released reports like this, research findings, etcetera, that talks about various elements of progress that they're making in terms of building a quantum computer that could do anything relevant. And so this latest one from Google talks about again, just making progress. And I'm not going to go into the weeds of the details necessarily, but like effectively the problem with all of this stuff is that one, it's, it's genuinely all theoretical in, in a certain sense, in that there are various engineering feats that need to be achieved before any of this stuff is scalable or could do anything relevant. And what I mean by that is like in terms of what a quote UN quote existent quantum computer can do today, it can like factor very small numbers like the number 15, which you can factor in your head. But that's what we're using the the current sort of latest iteration of an actual quote of quote quantum computer. So everything that is being portrayed in in these reports in the development that's happening is theoretical in the sense that there needs to be engineering breakthroughs in terms of the hardware and the scalability of these things. And so a lot of assumptions are baked into any report like this that basically, you know, we will achieve these things into the future. Here's why we think progress will continue to accelerate at XYZ rate, which will allow us to do these things. I and so you have to take all this stuff with a grain of salt, not only because of those assumptions baked in, but also genuinely just because of who it's coming from. It's coming from these research labs. I mean, in this case, Google has plenty of funding so that I'm not entirely skeptical of it. But some of the authors I am skeptical of, like Justin Drake, who's listed as a co-author, he's literally employed by the Etherium Foundation has been sort of a Bitcoin hater for a long time. And it also talks about other coins in this. So Ethereum has mentioned another coins in terms of their sort of quantum readiness. The other thing I'll say about all of this is I don't mean to downplay it entirely. Like I I'm of the camp personally that I think it's sensationalizing, overblown for all those reasons I just described in terms of the urgency of of needing to be ready. But at the same time, I would say it is a non zero risk in the future. And so it makes total sense to be as prepared as possible and to be working on things from a development perspective that could better prepare the protocol for any potential upgrade that would need to happen. Now I guess where I diverge from some of the people that are panicking online about this is that there are people working on this and there are things being released every day in terms of potential pass forward for how we would do some sort of migration if needed. The actual, the, the part that's a little easier is sort of just new address types or basically transaction types to be able to be quantum resistant. The harder part is like what you do with the old coins that are vulnerable. I think there will be a more contentious discussion around that. But in terms of actually an upgrade path, something that's sort of opt in would be a soft fork. There's various ideas and proposals floating around that were being progressed and move forward. So I'm just genuinely not that worried about it from that perspective. Like I think if and when something needs to be done, it will be done. And we're working towards that and moving in that direction. The people that are panicking, nothing you could do or say will placate their panic. And part of that is their own incentives, but part of that is also just like they're, they're, they're not, I guess, understanding the risks that that are entangled in doing anything too quickly. That's the other thing that people don't talk about. This is like, yes, let's, let's get ready, let's be prepared. But there is also risks associated with doing something too quickly, which is totally against sort of bitcoins development ethos historically, which is extremely conservative, slow moving and and well thought out. So that's the other thing. It is just like you. You certainly don't want to do anything too hastily either because there could be risks associated with that. So I'll, I'll stop there. I'm sure Mike, you have thoughts as well. Yeah, I mean, I think I want to separate or like Echo, I think a lot of O'Brien said. Agree with we had a great pod before the end of the year with Matt Odell really breaking through, breaking down delicious game theory and reality. I think let's separate the path and that it should be understood by anybody listening that this is always been all the way to Satoshi in the blog talking about quantum and the movement in the migration. So like full stop. It is something that people are aware of and have been aware of. Now the orchestration process and how does that look? That's actually if you look at if you think about it, it's a feature more of a bug because there will be contentious. It'll sharpen what the process is and there will be time. Now can we just separate from there? I think that a few key things to hit on is yes, like the main point when you go and try to triangulate because it's the same thing as like the protocol before AI. Now with AI you can have somebody, you can have a bot and multiple bots audit, you know, the Bitcoin Core code. You were trusting third parties and you had some level of trust with a level of competency and other things that were associated. And so when you go and listen to a lot of these people that are objective, it ends up going back to this like theoretical notion of what quantum is. And it's hard to like break that down. So it won't try here, but it's it's what Brian alluded to in the sense of like, yes, he can count to X. We already can. But to get it to exponentially go to a state where it's at risk of Bitcoin is there is no real timeline. There is no logical way to get there. But then even further is the pattern recognition. The thing I look at is as we start to go into this world, you will naturally start, you start to see things break. You will see other encryptions, other easier targets. The world would get a lot weirder quicker before this becomes something like it'll, it'll you'll have a fire alarm, there'll be a lot of smoke. But the real thing that I want to bring up and talk about here is we all know and we've seen this. Anybody paying attention to this industry small groups being able to really Dr. narratives and we saw this was E cash and privacy recently we've seen this historically there's like the bit sensor. It's not hard to figure out the monetary incentives and then align enough inertia and momentum to start to galvanized for different reasons. We've seen this across the board. The dats are the best right like that trade everyone ate did do it. So the point is that if somebody as because the person that's like the central figure right now at this point, it feels like is Nick Carter driving a lot of it. And I had this thought this morning that was if Nick Carter genuinely, because he talks about how much he cares about Bitcoin, that's why he's doing this. But if he genuinely cared about Bitcoin, it would help his cause in case to have like taking himself out of the position to have any monetary incentive. Because if these firms that were going to change the trajectory of Bitcoin and help from the encryption, he would have. He has no shortage of peers to make introductions to. Because anybody with any level of self-awareness, if you're going to go out there and have to bang this drum, you would just naturally know, well, maybe I don't want to sit right in the center of it with the investment and all the things associated if I want to make this case, because it is that existential for Bitcoin. And this is somebody, if this is coming from somebody who cares deeply about Bitcoin, founded his business. Because I saw a problem with custody that I've always said this to the team here. And in general, like when there's a time for somebody else to run the ship, because we've hit our level, like I'll be the first person to make that case because I just care deeply about it's, it's the business. But it's really, how do you get out to the notion that there's a different way to custody his assets so we don't end up in the, in the way that gold failed. So the point in sharing that is if somebody deeply cared about it, he would have enough self-awareness because he's very smart to say, OK here, make an intro to pure BC, invest in the firm, and then he can go out and talk about everything he's talking about here and have complete objective analysis of it because he's just explaining the case. And I'm not saying he would be right or wrong, but it would help his cause versus having heavy bags across the sector while going now heavy and then calling out everyone that effectively is going against it that are very smart people. It's not like these are dumb people that are saying that quantum is a risk, it's just what's the time frame and we do have time. Yeah. I mean, the other thing I'll say just on that latter point is like, and you know, he's replied as such around this sort of conflict of interest point that you raised, is that like, oh, because he cares, that's why he invested in this thing. That could be, you know, this company, I think it's called Project 11, that could be some sort of mitigation path for quantum readiness. Now, I agree with you that that's not the best explanation. And like you should probably know that there's going to be the perception that you're doing this because you have bags tied to a solution. I guess where I would come from it is, is like, if you really do care about Bitcoin, then like engage with people in a better way online. Like people are coming back to him and being like, hey, here's XY thing, that's XYZ thing that is being worked on proposed VIP 360, the Shrimps thing that was released like this week. And he just dismisses it all anyway and says like, they don't care enough. And it's like, well, what, what would you need to see short of implementing a VIP tomorrow that would like get you to say like, OK, they're they're actually thinking about this stuff. So I would say he's just not engaging in the right way about it. Because to your point, there are smart people on both sides of this sort of divide in terms of how soon, like what the timeline is, how prepared we need to be, what's the right path, all these different sort of discussion points. And it would behoove everyone, I think, to just be like more, more actually on the same team other than just like saying, Oh yeah, I really care about Bitcoin, but you guys are completely complacent and Bitcoin's going to fail because of everything I'm screaming about. I'll be eager to hear his rebuttal to your takes. Brian and Michael, I have nothing of value to add to this topic, and I'm also cognizant that we need to move quickly here. So let's move on. If something happened to you tomorrow, could your family access your Bitcoin? Not, probably not. They would figure it out with certainty. I thought about this a lot. You may feel confident managing your own keys, but are your loved ones? Billions of Bitcoin have been lost already because someone died without a plan. With On Ramp, inheritance planning is built in directly into your custody setup. Your Bitcoin stays segregated and in your control, insured through Lloyd's of London and accessible to the people you choose when they need it. Get started in 15 minutes. Book a free consultation at on rampbitcoin.com On ramp secured by three controlled by me. Michael, I know there was something that caught your attention. You had that interview or you didn't have an interview, but you caught the interview. I believe Jay Martin with Luke Roman and Grant Williams. Grant Williams, by the way, people should take a look at his podcast and his his newsletter. He I think has slept on. He has never been an advocate for Bitcoin. So I think that's why the Bitcoin community doesn't know him as much. But I really enjoy listening to him and Luke at the start of that interview talks specifically about everything in the Middle East. Could kind of be could, could come down to one question. Is the Strait of Hormuz open or closed? And pretty much everything else is noise at this point. And so as far as I'm concerned, it's still closed. It's not operating at its normal capacity. And so for for the, for me, what that means is things are still going to be incredibly turbulent. Now, I did see this other this other take that I think complements what we'll be talking about next year, where this individual, Nakul Sardra, he runs an India focused equity fund and he pretty much talks about all the noise. You know, you have Trump saying one thing one day, then another thing another day. You have different things coming out of Iran, Israel, etcetera. Everyone has a different narrative floating around, but he calls out four different signals that I think are pretty interesting to pay attention to. The first is the ship insurance premiums through the Hormuz. And so he was talking about how all these all these carriers have insurance and typically it's about 25 basis points of the value of the ship. Today it's closer to 3 1/2 to 10%. And so $100 million tanker used to cost 250K to insure, now could be upwards of 10 million. So he's paying attention to insurance premiums to really know and see if we're going to get back to any sort of normality in the near term. And then I don't need to talk through all these in detail. But the other three data points would be how many ships are actually crossing right now? It's about 90% collapse in terms of volume going through and then paper oil versus real oil looking at the prices there and then the mid-april Cliff. So Michael, I want to hand it over to you quickly because I know that that podcast in particular caught your attention. I wasn't sure if there's any key points that you wanted to distill on the show today just for listeners to be paying attention to as well. Yeah, I mean, I think I would encourage it's probably one of the best pods breaking down the implications of the street being closed. And Jackson summarized it right. It's just binary. Is it closed or is it not? And there's already going to be ramifications even if it opened up tomorrow. But the longer it stays closed, the more the greater the, the, the, the momentum of the the negative ramifications. I think the the key things that they broke down were really outlining how gold is been money for a very long time, even though we don't recognize it as such. And now sovereigns is starting to become more and more apparent with forex reserves settlement and you and ultimately going from an area of abundance to a level of scarcity, right. And we've been talking about this in a unipolar world, there's a high level of trust and you can rely on a dollar system and you can feel confident that the goods inefficiencies will be there. But as that starts to break down, that goes away. And it's a completely different world effectively because those who have, it's really like those who have the gold make the rules. It's like those who have the scarce resources make the rules because then you need them and you need to pay them. As you can see, a very similar concept of how most people think that nobody will accept Bitcoin. It's like, well, if you need something from somebody and they demand Bitcoin, you will pay them and Bitcoin or you just won't eat. Like it's pretty straightforward. And so the example is from an insular perspective, if you are a sovereign and oil and other byproducts are not coming to you. You've seen this in Australia, it's starting in Europe, different levels of, I don't want to call it rationing, but it's kind of rationing on energy expenditures. You will naturally take care of your people before you're taking care of everyone else. So that means that maybe you're not exporting raw materials, maybe you're not doing XY or Z and that starts to halt everything effectively globally. And it's just the, the what I've gotten the eerie feeling of is I was talking to a bitcoiner for, for a long time earlier and I was explaining to him, and I hope to be wrong, but I want to be on record. It's like I get that feeling of. Two to three weeks before March 2020 and you started to see this wave crossing globally, you know, obviously in Wuhan. And then it was like, I don't know, Italy seemed like a big note. And then maybe it was another place in like Western Europe and then UK. But the point being is you could feel once this hit financial markets in the real like mainstream, it was, it was, you know, dead on arrival, like people were going to panic. And I always remember there was like the basketball game that was cancelled and some other stuff that day. And I think it was probably the next day after when you got like this huge deleveraging and, and it, and it feels very eerily similar that there's this stuff happening. Everyone knows it's binary that these, these outputs are not being shipped or they're being reduced when it comes to fertilizer, the, the inputs, the nitrogen, like just helium, all this stuff that's required to go through that. And independent of if he gets open or not, there's just a reality of abundance that world is coming to an end. And you see this across the cracks. Yesterday was 30,000 people got roughly 30,000 people got laid off at Oracle. Like it's, it's a, it's a crazy world we're going to. And the reality is counterparty risk is going to matter. Where and how you work is going to matter. And then how you save your capital and what you save it in is going to matter. Yeah, I mean, in terms of the the narratives, it seems to be the the short term pain for long term gain, which is eerily similar to the the two week lockdown to to save everyone. And, you know, I don't know what comes after that, but I just had this thought for the three of us. And then for the listeners. I remember early days of COVID, I was listening to the Macro Voices podcast hosted by Eric Townsend, who sits out in Hong Kong. And he's a he's a pretty renowned fund manager, specifically in oil and commodity space. And he was really early and he had the kind of that seat over being in Hong Kong and much closer to, you know, the origins of everything. But he was incredibly early to start calling out that this is going to be incredibly problematic for the markets, for the economy. And I actually remember I was working in New York at Stifel at the time, and I was listening to this podcast and it was like a totally different narrative and, and line of thinking that I was hearing through the mainstream media in the US. And I was talking to some of my team members about it. And it was the next and everyone was like, oh, no, I don't think it's really that big of a deal. And then the next week, the entire world just just shut down. And then I never went back into that office. I resigned, I think, later that year. But, yeah, I mean, it's crazy, like how quickly the narratives are going to flip. And Michael, to your point, I don't fully know what that means for us at the moment, but I just know that there's a lot of uncertainty. And I think TFTC was the one who published that chart. Excuse my dog, who published the chart earlier about the global uncertainty kind of peaking relative to other points like 9/11, 2008, financial crisis, 2020. There's a lot of uncertainty happening in the markets and there's very, very little, let's say, alignment on where this all goes. There's there's very little consensus, but that consensus can flip on a dime. Like once the narrative is out there that what we're talking about and what others are talking about, if this is a serious thing, people are going to change their tune almost like, you know, in an instant, like it happened with COVID. Yeah, and I think it's worth calling out like you don't necessarily know what to believe. I don't, I don't it, it makes logical sense that if you add friction to global trade, then you're going to have shortages. But you see things where ships are moving. What what I would call out and where pattern recognition and triangulation comes from is you see Sovereigns. I think it's a today like for the first time and I don't know how long, there's three countries, you know, leaders going to speak. I haven't been on Twitter. I've been stuck meeting. So I don't know what happened to UK earlier and then or Australia. I think UK is like maybe right now or shortly. And then there's going to be Trump tonight. Point being is they're already setting this up. This is a conspiratorial, this is literally like coming out about energy shortages and what are we going to do? And he's like perilous times. I think that was the Australian Prime Minister or senator that came out. I saw it early this morning. I think the thing to kick the key in here is this was already happening. This is the scary part. This wasn't, we talked about it last week. This was already happening with COVID, pre COVID that there was already inflation. There was all the things associated. He gave a reason to print more money in the same way we already understood that inflation was closer to 711%. There was already, you know, growing cost in energy with Russia and everything else going on. Point being is like this was already happening. This just accelerates and intensifies it. And so I think like that's really the angle is it's this isn't even I don't know there there's there's a level of like managing and there's a level seen what the market's telling you and reality, however, information distributes is like these pods and Twitter are always at this like tip of the spear for a number of reasons. Maybe that's by design because you can kind of see what works, but point being is like it there this will, if it keeps going and persists, hit the mainstream. And when that happens, we've seen how that plays out. Yeah, couple thoughts. I mean, just one on the we just referenced there in terms of like the market response and price signals. I mean, I would say up until this point, you know, it's actually been pretty difficult to try and trust trust market signals in the sense that like the market is still reacting to the next thing that Trump says, even though he's sort of waffled back and forth on. It's going to be 3 or 4 days, It's going to be two weeks, might be a few months. We've already won. The war's still going on. We need help. We don't need help. Like, and maybe part of that is purposeful in terms of just like distraction and and sort of misdirection. But Jackson, if you could pull up that chart from JP Morgan, which sort of just details like the. So if you think about oil coming out and this chart specifically talks about oil, but you know, obviously this applies to all the other resources that Michael sort of alluded to, but basically it takes a while. For once, something leaves the Strait of Hormuz to actually get to its destination. So like there's a lag period in terms of like how long it's been closed versus like when different areas start to actually run out of resources. And so I thought this was pretty interesting just in the context of so on, on this map here, it says around the United States, it says most deliverables stop around April 15th. So that's two weeks from now. And that lines up with exactly like what Trump's most recent sort of timeline is, is like we need to, to wrap this up in two weeks. So it's, it's very telling that those things line up in my mind. And yeah, it, it is very binary in the sense that is it open or is it's closed even if they open it tomorrow. To your point, my goal, like there's going to be lasting impacts from what's already occurred in terms of the stuff being delayed and stopped for, you know, a month now. And so, yeah, I mean, this pot unfortunately going to come out tomorrow. So maybe we learn more tonight around what Trump says. I mean, I think there's a few different camps in terms of what he could say. Maybe it's, it's sort of just like around, you know, we're in a crisis XYZ around like different energy constraints. Or maybe it's like some sort of declaration of victory, which would allow us to like sort of pull out, even though like we've clearly sort of bundled this from the start in the sense that the straight's still closed. So how can you really declare victory unless there is some agreement in place, which doesn't seem like there is or the the sort of third option that people are speculating is like we're going to put boots on the ground and, and escalate this thing. So could go a number of different ways and and you know it, we keep saying this, but it's like it's very hard to actually discern what's going on. And my gut says like the administration itself doesn't even know necessarily know which direction this goes tomorrow. Who does? Who's running the shot? I'm just kidding. This was a conversation we had the other day. I will say, you know, I hope to be wrong here. But like everything signals an extension of all this because how do you put the genie back in the bottle or, you know, independent of the Hormuz stuff, you've seen these manufacturing facilities blow up across the the world at this point. And so it's just an interesting time we find ourselves in because I think people listen to this podcast and there's always this notion of discernment when somebody can grok Bitcoin in some respect, because it just gets you back to first principles of like, let me just look at the world objectively. That's where I like, I never like the term the Bitcoin or stuff is just rationalist, right? Like maybe I don't want people debasing my money. That's pretty rational, logical thing to go. So whatever logic comes with that, you start to see like this looks exactly like COVID. And it's in the, in the sense of the, the, the conversation, the discourse, the, the momentum and the coordination from a lot of different parties across the world. And so if that's even remotely true, you know, it's, it's probably the ramifications are much greater simply because when you think about production and all the things that you need, like example pharmaceuticals, if you or anybody that is tied to medicine, that might be hard to get. And as long as it's not perishable, I would encourage like you probably should be stocking up on that. You should probably always be stocking up on that. But like, this is like a time where abundance and this is what that POD reference, but this is how people should have always been living is abundance is there until it's not the modern miracle of the grocery store, right? And and it only takes a few things for it to turn off. And this just has all those feelings like if we're wrong, then we're we're really wrong. But if we're not, it's probably good just to have some level of preparation. Yeah, for sure. And that's why best comment gets that free consultation with Michael on the preparedness. So you know, leave your best comment down there, we'll make it happen. The other thing counter to kind of all that we're saying currently is this tells a different story in terms of the short term fear. I will caveat and say that this data is looking from 2010 to present. And so we've been in kind of a different market regime where there's just been endless liquidity 0 interest rate policy. It's just been a different market the past almost 2 decades at this point. But what this chart shows is if you invested in the S&P 500 every time that CNBC had a markets and turmoil special, your average return after one year would be about 40% with 100% success rate. So I, I throw this out there just because we don't know what will happen in the next year. But what we do know for certain is the system is faltering on credit and it needs more and more dollars, more Fiat currencies pumped into it to keep it from collapsing. So even it, it's kind of a weird paradoxical thing now where you know they're good. The good news is good news and it is good for the markets, but also bad news is good for the markets too, because we all know that ends up being more more liquidity, more printing, lower rates, etcetera. So I just call this out like, you know, if you're sidelined because of the quantum quantum FUD might be a good time to buy Bitcoin. If you just have cash sitting around and you don't have any plan for it for you know, emergency or what not and you're not invested and you're generally speaking fear is a good headline to buy. I don't know if you guys have any thoughts, but I. I think the main thing just to call out is this is really where there's a paradigm shift happening between what are assets and and liabilities and effectively what's credit, right? Because whether it's equity, bonds, cash and in the bank account, you've lent that to somebody in your their future promises. And where Bitcoin and gold step in is they have the properties of money. And I think that there's different levels of of missing that. One of the big ones is you'll hear, I think it was on that pod. I don't know if it was actually that one. But others that are on to this like market forces, they'll talk about like lithium or a good example is copper. They'll reference how much copper is needed for rebuilding the fires and X place that's happened the past, call it 24 months. But the point is they're looking at them like trades because of their commodities. And yes, that's correct. But the point is you can't eat your copper like it. You go back to barter And so you're looking at scarce assets that there's a reason why gold and Bitcoin are money. And so I think that's still like another shoe to drop with most people's not recognizing that like the, and this goes back to the stretch situation of like you're just getting the counterparty risk of stretch, but also the dollar versus you could just go, if you want some counterparty risk of the dollar, go get treasuries and then put the rest in cold storage Bitcoin, you end up with less counterparty risk and a better blended rate. That's something we're going to be talking about more, at least I am, because I don't think the market explains that enough versus going into that. And there's different levels of where people are trying to play a trade for what's happening. And I don't think there's it's actually that complex. All right, let's get into some signal versus noise we got, we don't have that much time left. So we're going to we're going to get into quick here, Michael you Jackson. 'S getting his hair done. So sorry, we're we're moving so we're moving so fast. You know those those long hair appointments? My wife. I know I really I should reschedule them not to be right after the podcast. That would be a good move. But you did jump the gun, but I don't think you knew that. So yesterday. And by the way, if if I never show up to the podcast one week, we know that Michael sent me an e-mail or probably a text message at 6:00 AM, just like cutting all access and and firing me. So just so you know, but that's what Oracle did to about 20% of their workforce this week. About 30,000 people just received an e-mail believe yesterday morning, Tuesday morning. You're done. Yeah, thank you for all the work. Really appreciate it. But yeah, you're fired and good luck with whatever comes next. And the stock price went up and Michael hates this take, I think. But I think we're going to see a whole lot more of this. And it is a mix of both AI and it also is a mix of just Zerp and all the distortion of the past two decades and people just over hiring, really not producing a lot of value for companies, just a ton of bloat. I mean, I see this, I see this so much in my circles. Like, I have just a ton of friends that don't actually work jobs. And you know, if you're listening to this, maybe it's a good time to to start working or actually building or, or joining a smaller company because this is inevitably what happens to a lot of people. But the, the take that Michael doesn't like is I think we're going to see a lot of this is just the new financial engineering. I mean, it's incredibly accretive to companies long term. Headcount is the biggest line item for most businesses. And if your biggest line item in many cases is actually not doing anything or working like 50% of a full time week, and you're able to just have the air cover of saying it's AI investment or it's AI productivity, then why not do it right? And so I think this is signal just for more people to pay attention to like 20% of 1 of the bigger companies in the US gone in one morning. And so it's not it's not a small layoff and it is indicative I think of what is going to happen more and more frequently with, you know, block being the first one to provide that air cover just about a month ago. Yeah, I think, yeah, I don't, I don't necessarily know like if there's incentives or in the future people will get rewarded for the headcount from a stock perspective. I think that's just a we talked about on final settlement with like the Dat and Mara trade and accumulating Bitcoin and then they sold it all. It's just the stock market's finicky. So I can't tell you what will be rewarded or not. But what I, what I can say is there's also really good podcast. It came out this morning. It was only about 25 minutes with Owens, Jenny, Owen Jennings, who believe has been at from the outside market without any inside knowledge. Square have these different sectors or areas and cash up was one of them. And Jack was closest to that. And it ran the flattest like a startup. And I believe it went from like sub 1% to like 60% of like gross profit for their for their firm. And because they, they obviously had different things to have tailwind, but also the way that the business was built. And so in this podcast they're outlining, it's kind of juxtaposing what we're talking about with Oracle and that they came from a position of strength. They started looking in 24 and building these tools internally and then ultimately looked at their business from the ground up and said, what are the things that we can effectively get rid of A lot of the fat when it comes to like the best example is product managers, engineers and then designers and how you can collapse that. And you hear a lot of these terms around, you know, organizations exist. And I think Jack had this tweet or somebody did about startups that are remote or are naturally going to be better suited for a lot of this because they have to document a lot of things because you're naturally remote and see that is a is great subtext or pretext for the models and, and how you can, you know, manage like your firm and build the right documentation. So pointing all that is you have these two sides of our bell where the publicly traded company don't have rationalists or bitcoiners running their firms that think from first principles and also have courage. So you will see more of the slow bleed knife cuts into the business versus like one strong one from a position of strength forecasting what's happening. I think you're going to get more of a reaction versus being proactive in this. And so I don't think it's stopping and I don't actually even think necessarily it's AII think AI supports it because you can justify getting rid of a bunch of people when historically you couldn't if you needed them. But I think it is all ends up with Zerp era going back to scarcity and the reality that you're going to have to cut them or the market's going to cut them because your margins going to get impacted because of inflation. Yeah, I I agree with all that. I think it's the AI sort of narrative is a nice cover for it. But the reality on the ground is like a lot of these, at least on the sort of larger public equity side, like an Oracle that bloats existed for a long time and so probably needed to be cut, you know, even before there were is to leverage AI tools to replace some of those people and their productivity. So it makes sense. And I, I agree with you, Jackson that I think we're likely to see a lot more of this because there's now a, a pretty clean data set of like their this stock market reacting well to these announcements. Yeah, you need to be Droid Maxine, if you're not already. Your future depends on it. Your children, your grandchildren, everyone is going to be overtaken by the droids. So next one we have here is again, this is signal or noise. I didn't hear either one of you say it on the on the last one. So I'll just say unanimous signal, unanimous. This one I think is interesting. Just to call out. So Peter Malux, I forget, is he the CIO or CEO of creative planning massive RIA 300 billion or so I, I believe assets under management and interesting data point here. So the S&P 500 is down about 9% from January high, but six of the seven members of the Magnificent 7 are already in bear markets, meaning greater than 20% drawdown. And I think this is just something to pay attention to because it's counter to what's been driving the markets for the past several years. You've had so much concentration, you've had the index of 500 companies being driven by probably the top 10 performers and now you're starting to see that trend reverse. So something to pay attention to. I think it's signal. I think it has downstream consequences because at the end of the day, it ties into what we were just talking about, but it also ties into the fact that a lot of these companies are are bloated and they have valuations that can't be supported anymore. They were growing, I'm not going to say across the board, but like they were growing for the most part. But more so the valuations are stretched and their software companies and now software is undergoing a big tectonic shift with everything that's being introduced. You know, you see Claude, you see Anthropic just shipping new product updates every single day. And it's just going to be this period of uncertainty. Where are these incumbents going to lead in the AI era or they going to lag. And so I think that's what the market's digesting. And then Brian's been perceptive to pointed it out in previous weeks just how this ties into the private credit debacle, because a lot of these software companies are tied in with lending from the private markets. And that has, you know, a whole whole thing going on now with redemptions and illiquidity. And and it's just something to monitor, no doubt about it. I mean, yeah, I think it's noise. I don't necessarily. I think it's noise in a sense that a lot of these companies are focused on AI. They're leading like Tesla for a robotics perspective, but also like when you listen to that podcast, they glossed over it, but they asked about like every number in metric that you would expect from a business has gone up at block. But their their stock has been relatively flat for six years post 21. And then also you look at like meta in the amount of free cash flow they had versus now they started to invest in AI and data centers. Like it's an insane amount and there's no like real recipe outside of it feels like, and I'm less closer to this. I've never been an equity researcher or an investor in the stock market, but it feels less built on fundamentals and solely best on vibes and what is the latest trends and what is the most interesting thing. So when I see something like this where they're down, you know, I don't necessarily know what to tie it to outside of just liquidity. And when liquidity is tight, these assets all correlate to 1. And then when liquidity is running, they all kind of move. And then the momentum goes with whoever's, you know, vibing up the latest app or whatever. SpaceX, a great example. There's a lot of inertia momentum. It probably does very well in the IPO. You see this also with a lot of the companies that have traded, like Figma as an example, and like, where are they trading today? So I just think we're so far away from fundamentals. It's really hard. It's more of a subjective game to pinpoint why they're trading down than an objective like the fundamentals of the business and its strategy. Yeah, that that's very well said. I was going to say something similar and that it's it's noise to me for a number of reasons. One, it's kind of it's still is a pretty short term metric like drawdown from all time high, which was a few months ago to to where it is today. And it's not super fundamentals driven in the sense that what's really driving equity markets today is much more macro related. It's literally that we're at we're, you know, partially due to the fact that we're at war, partially due to the fact that there's an energy crisis going on, partially due to the fact to the AI disruption side of things. But again, to Michael's point, like these companies are on top of that. It's not that they're missing out on. It's just that because they are so concentrated as a percentage of the S&P, anything that from a macro perspective that is going to draw down the S&P, just generally that people are, you know, getting in and out of index funds is going to hit these companies as well because they're the top weights in them. So I think for, you know, the reasons cited, like it's one, it's short term, but two, it's also like, you know, equity markets for the past, you know, several years have not been driven by fundamentals and in any and in any real respect. And so it's much more related to what's going on in the macro landscape, general uncertainty, what the Fed is going to do, all that kind of stuff, as opposed to what's actually going on at these companies at a fundamental level. That's all right. That's that's why we have this segment. If the Bitcoin price doubled tomorrow, would you feel good about how it's being secured right now? Most people have not really pressure tested that and I get it. I have talked to people who have self custody for over a decade and others who've stayed on exchanges because they could never get comfortable managing their own keys. Both camps have real concerns. That is why we built on ramp multi institution custody so no single company can lose it, move it or use it. Lloyd's of London insurance inheritance planning built in and a team that can walk you through the entire setup. Get started in 15 minutes. Book a free consultation at on rampbitcoin.com on ramp secured by three controlled by me. All right so then we got what do we call him Uncle Warren or would he be like grand Uncle Warren? But either way, Granddad Warren, he's still kicking, man, and he's still pretty sharp, he says. So Warren Buffett says the Federal Reserve should have an inflation target of 0%. He is sounding more like a bitcoiner. Well, I guess Michael would say rationalist every day. And this is from Pomp. I'll play this quick 42nd clip and then we can talk about it. Keep rates low for for too long I mean, I think that's as they didn't worry about inflation as they said it was going to be transitory because I, I, I think even Powell himself said that he might wish he'd turned it sooner. Well, I, I wish they had a 0 inflation target right. But I mean, once you start saying you're going to tolerate 2%, that compounds pretty dramatically over time. And you're, you're saying to people that you're getting less than 2% on your money, You're going backwards. And actually, if you pay tax, you may pay tax on the 2%. You know, I mean, I, I don't like, I don't like that particular goal. So keep rates. I don't like that particular goal either. So at least we can agree there. Brian, what are we going to say? Yeah. I mean, I think there's a few things. One is sort of like, we've kind of talked about this in the past. It's sort of like people's incentives to talk about certain things. Like I don't think this is a new thought in Warren Bolton's head, but I think he is older in his life. And, you know, I think earlier in his career he wasn't incentivized to say something like that because he was massively benefiting from the Fiat system and how it functioned and how it worked. And he was smart enough to figure out the right games to play in order to benefit from that. And you know, objectively was one of the more successful investors of all time. And so it's interesting to me that now like, you know, as we mentioned much later in his life, a little less salute. And you you kind of hear this with older folks in general as well that like they'll just say whatever they actually think at this point. And so I think that's kind of what's going on. What is going on here? I mean, he's also a guy who has historically had some varying exposures to coal miners. So like he, he understands this stuff. I think he's just never been super incentivized to say it in terms of sort of the, the peril and the ills of the Federal Reserve and the, and sort of broader Fiat monetary system. But it is refreshing to hear it from him because I think people still do respect his voice, generally speaking. And so maybe a clip like this opens some people's eyes to it because what he calls out specifically, there is great this in the past around like when I try to draw parallels to sort of traditional value investing, which Buffett is, is clearly sort of a figurehead of and draw parallels to the the Bitcoin investment thesis. One of the big things I talk about is the compounding effect. Like people typically think about the power of compounding when things are going up, whether it's the S&P returning seven, 8% a year or something else like that. But where it really is is pretty important to to recognize is on the way down or in terms of debasement. And that's exactly what he calls out there is like, yeah, even if it's 2%, which we all know it's higher than 2% in terms of actual inflation, But even if it's just 2%, like that compounds rapidly over longer time frames. And so I think it's refreshing to hear a guy like that sort of call that out plainly. Yeah. I mean signal signals. Yeah, signal. I think the biggest take away and we just get so lost because this is the water we've been swimming in is the fact that we, we fixed the price on money, right? Because I think anybody would just be like, it's crazy. And this is what you hear a lot about with these shortages is any experts, you're like, just do not subsidized or, or do anything. Just let the market play out because the more you try to insert yourself in the cost of goods and services are subsidizing and you're just exacerbating these problems and then inefficiencies. And so the notion that we play with interest rates and we play with the money supply and the fact that it's debatable is the real kind of interesting component. We just forget, you know, that there's no free market on money and that's effectively how you end up in the situation we are now. Yeah, there's no free, there's no free market for anything. If it's all manipulated, it's like The Wizard of Oz. It's a it's a Great American classic. Michael probably has some reason why it's like some sort of like demonic movie, but it's like Jerome Powell or whatever the city Fed chair is is literally just the Wizard of Oz and there's where do we get 2% from? Wasn't it Australia or is like some central banker in Australia or yeah, New Zealand just came up with it one day. It's like, yeah, 2% sounds sounds right. So but. The funny part is it's like I think on globally, the amount of money supply is like in emerging markets, it's like double digits. In the US, it's whatever, but it's like on average 7%. It's not even 2%. It's just what they tell us, what people have said. Yeah, it's a huge problem. This one near and dear to Michael's heart ground beef, although he's more of a steak guy. But I myself eat ground beef and it's a problem. I thought, you know, I thought ground beef was supposed to be an affordable food here, but here we are. Ground beef prices are almost $7.00 a pound. And if you look at the chart here pre COVID back in 2019 was less than $4.00. So we're talking about nearly 100% increase in the price of ground beef in called six years or so. This is, yeah, this isn't 2% inflation, unfortunately. So this is far higher than that. And it is definitely hitting people's pockets. Like this kind of ties into everything we've been talking about on the show for a while now. But even today as well, if things do not get straightened out in the Middle East, then we're not only going to be talking about ground beef prices, we'll be talking about electricity prices. We'll be talking about all sorts of things that are becoming increasingly out of reach for people. And so, you know, used, used to be like the rib eye or the filet was the, the premium, the premium cut and the ground beef is the scraps. But look, I like ground beef. I eat it all the time. You know, when it becomes $7.00 a pound and probably not too long from now $10 a pound, it's you have to kind of start thinking about where's the breaking point for, for most households? What can I actually sustain? And, and this is really, I think a big problem. It's not solely for monetary reasons, that's a big part, but there's a number of things also going on with American agriculture and, you know, like livestock herds. So there's always the more things at play here. But Michael, I'm curious, being a native Texan, what what are your thoughts here? Yeah, I mean, I think this is easily the best and most fundamental heuristic for inflation and the status of the economy is when you look at meat, we talked about it before with the amount of physical inputs that go into the production and the life of a cow from its, you know, inception to grazing to you have to manage it, water, food supply to then butchering. You have to work through a plant, you have to get it shipped to the store and then has to have the sticker put on it. So there's a lot of physical inputs you can't manipulate with deflation. And the sad part is that's the shitty kind of ground beef, like ground beef, wonderful has a lot of nutrients. But when you go and like study or not get to study, just if you go to a locally sourced butcher or a a meat market, you will generally get one beef input for that ground beef. So you know exactly where it's coming from. Where you go to a grocery store can be some of the best ones. We have some of the best in Texas. Don't like to feel like Trump. And so we have some of the best grocery stores in Texas. We do the HEB, but point being is there's roughly 20 to 35 different cows that go into that level of ground beef and that's like at six, whatever 87 or what you're talking about. I remember buying like the HEB grass fed ground beef, which probably still not a single cow, but it was like 599 four 9924 months ago. It's now 999. It's probably 1099 at this point based on that. And yeah, I mean, this is like the the reason I think where we get it or I personally get animated and and where all this is about is at the end of the day, like when somebody asked about Bitcoin, it's like, well, Bitcoin on a lot of time horizon just allows you to buy more groceries or more eggs than less the next week, where the dollar allows you to buy less and the food hits everyone at home. And this is where the restaurants are completely, you know, either the products and certain offerings are being degraded or they just close up shop. It first starts the degradation, right? Like the quality is not there, the service isn't there. You getting older meat and then eventually you have to write, still raise the price and the consumer doesn't have infinite amount of expendable income, so they just can't go and buy. And so you ultimately have these places going out of business. So it's it's a huge travesty and it's only going to increase, especially with independent if the street opens tomorrow, it's still binary that we have ramifications coming. Yeah, Marty was on it back in the day, right? Shake, shake a rancher's hand. I think it's a great, it's a great thing to do, not even only in times of uncertainty or preparing for uncertainty, but you're you're supporting local business agriculture and you're getting to Michael's point, you're getting a much more premium product. So nothing to lose doing that. Brian, anything to add signal? All right, all right, we're wrapping up here in a few minutes. The last take I Michael destroyed me last week, at least for mine. So actually I had one. You came prepared. I don't know if you guys will like it or not, but you may you may not care at all. But I just I see stuff like this all the time and it infuriates me because so this is what let's see what firm Chief market strategist at Carson Group. But this what this tweet says here, this is the 16th 1000 point gain ever for the Dow. President Trump has 14 of them. And it's not really a political post, but you can see this chart is showing thousand point, thousand point advances for the Dow from 1896 to current. And I was curious well, like, OK, when did the Dow even hit 1000 as an index for the first time? And it was in 1972. And so I just hate nonsense like this because all this chart is actually showing is the debasement of currency. We're looking at nominal prices for an index that just goes up because the money goes down. And so I wish more people could understand that in traditional finance, we're not even in the industry, but people who are just managing their personal assets. We shouldn't be celebrating Dow 40K because it's not like anything's actually getting better. The dollar is just getting worse over time. So it's just a a little bit frustrating to me to see stuff like this, which is typically what's published out of the the larger financial industry firms. Yeah. It's absolute slop data. Slop Slop post. Slop, I'll go real quick because I do have to jump in Brian, I I can leave for a SEC so you. Don't want to hear Brian's OK. No, I do, but I'll if I if I can say I will. I just wanted to highlight a little self-serving, but a little also reality because it ties into everything we talked about here. It was a tweet about the largest crypto exchange in America is sending sports gambling notifications while most of Americans are trying to figure out how to pay off their credit card debt. And it was a screenshot from somebody from Asari, I guessed. And I guess and he, he received like 3 push notifications about trading or gambling on I guess it's March Madness. And I thought this was worthy of calling out for two, two big reasons. 1 Is that a, in his tweet above it, he referenced how this was like the most engaged tweet he's ever had. And it was his version of saying like, the market doesn't want this and they want better solutions, but they just don't really exist. And then the other side of it was the conversation we just had around publicly traded companies and the momentum and incentives that they have so their stock can get that lift that they need. And part of that is where Coinbase going public is you need to go and push people further out on the risk curve. You need to look like a casino, you need to have velocity, all the things associated with, you know, the, the way that they can tie back to revenue and their narrative. And so I thought that was just important to call out because there is a huge wand in need for counterparties that were to preserve and help individuals preserve and accumulate wealth. That's what we're ultimately trying to build here. And so anybody that's interested, I would encourage you to reach out, but then also even just subscribe if you're not ready to sign up yet, even for trade because we have no shortage of exciting announcements coming through the newsletter and you'll be some of the 1st to get access basically the counter Coinbase we're ultimately trying to build here. Very well said. I do have a last take. It's it's kind of more related to yours, Jackson in the sense of like sort of high level. Just be wary of like data in general. I remember I took various statistics courses back in college and like data can be manipulated to basically say anything anyone wants to. And so I thought this was a pretty interesting chart from our buddy Tyler Neville. Golf versus data centers in terms of how much water they use. So you can see, and I think some of this data for the data centers is pretty outdated. So yeah, it says 2023 here. So this number is probably a lot larger and it's accelerating point being is like golf courses also use a ton of water. And it reminded me of a few things. One like going back to sort of all the climate hysteria around Bitcoin miners and comparing the the energy usage to nation States and basically, you know, people using data in a distorted or misleading way. And so, you know, the point that Tyler's making here is like, you know, people just criticize this lower number because they don't like AI and and no one has a problem with golf courses using a ton of water. So I thought that was kind of interesting. And then it also kind of relates to how we started the discussion around quantum stuff. And that, like, just be wary of people panicking online about things because, one, they have incentives, they have different opinions about different things, and they're going to use data and different reporting to try to convince you of their side of the argument. So yeah, that's where we go. Yeah, I like that one a lot. And Speaking of golf, we both play. We should can't commit ourselves to hosting and outing, but how about what if we got some foursomes together this summer for for people who listen to the show? Let's do it. Michael will not be included the guy. Doesn't know how to close. We would not want to see him try to hit the ball off the tee. That would be. That would be ugly. That would be bad. So let us know in the comments or reach out to me directly, Jackson at on rampbitcoin.com if you would be interested in playing some golf this summer and just enjoying some time out in the sun. Golf's a great sport for a number of reasons. So Brian, it's a pleasure wrapping this week's episode with you and I will see you next week. God, William. Thanks everyone. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that On Ramp Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com/contact to schedule a consultation with one of our private Client Advisors.
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