1 00:00:00,837 --> 00:00:04,417 Welcome in to This Week in Bitcoin, episode 16. My name is Chris. 2 00:00:04,837 --> 00:00:09,877 If you're listening to this episode around release time, I think we're watching 3 00:00:09,877 --> 00:00:14,337 in real time Bitcoin price in a bunch of historical stuff that we're about to talk about. 4 00:00:14,497 --> 00:00:17,077 And if you're listening to this on a more long-term horizon, 5 00:00:17,317 --> 00:00:23,237 a year from now or more, I think you might look back at this as a mile marker week for 2004. 6 00:00:23,517 --> 00:00:26,397 I did that last week, too. 7 00:00:26,877 --> 00:00:29,437 It's going to fundamentally change things on the ground for Bitcoin. 8 00:00:30,017 --> 00:00:34,597 Also, we got some data this week that shows that maybe those ETF purchasers 9 00:00:34,597 --> 00:00:36,837 don't have such paper hands after all. 10 00:00:36,877 --> 00:00:41,157 They've seen some of the first major price shakeouts since ETFs launched and 11 00:00:41,157 --> 00:00:44,277 on scale, they're holding. So welcome to the class of 2024. 12 00:00:45,717 --> 00:00:48,797 It has been a wild weekend change. 13 00:00:49,157 --> 00:00:53,857 All at the same time, the U.S. government is selling seized Bitcoin from multiple 14 00:00:53,857 --> 00:00:58,797 different legal cases, one of them being Silk Road. So is the German government. 15 00:00:59,077 --> 00:01:01,777 Tons of Bitcoin from one of their movie 2K cases. 16 00:01:02,197 --> 00:01:07,297 And Mt. Gox announced it's distributing its Bitcoin after a decade. 17 00:01:07,577 --> 00:01:10,477 Now, the governments are going right to spot market. 18 00:01:10,777 --> 00:01:15,957 Mt. Gox ought to be returning the funds to users. We'll be talking about that in a little bit. 19 00:01:16,037 --> 00:01:21,077 But that's just the small stuff. The bigger thing happening that's finally really 20 00:01:21,077 --> 00:01:25,137 taking place is the post-halving minor capitulation. 21 00:01:25,417 --> 00:01:27,297 It's happening later than expected. 22 00:01:27,657 --> 00:01:31,697 Typically, if you look at past cycles, it happens roughly 30 days after the halving. 23 00:01:32,375 --> 00:01:38,455 But this cycle, we're just about 70 days post halving, and it does seem to be happening now. 24 00:01:38,615 --> 00:01:41,875 And I'll give you some of the data we have around that. But I wanted to back 25 00:01:41,875 --> 00:01:48,855 up a second, not get into this too fast, and maybe explain what this miner capitulation event is about. 26 00:01:49,435 --> 00:01:53,815 And Joe Burnett from Unchained Capital and on YouTube has a pretty solid explanation. 27 00:01:54,195 --> 00:01:58,895 What does this mean? Well, weak miners have mostly finished shutting off the 28 00:01:58,895 --> 00:02:01,535 energy-hungry machines used to mine Bitcoin. 29 00:02:01,535 --> 00:02:07,555 In my view, once these miner capitulations occur and then end, 30 00:02:07,775 --> 00:02:10,455 they are incredibly bullish for bitcoin. 31 00:02:10,695 --> 00:02:16,635 The only natural seller of real spot bitcoin is miners. 32 00:02:16,915 --> 00:02:21,655 They are the only entities naturally selling billions of dollars worth of bitcoin 33 00:02:21,655 --> 00:02:24,755 every year to pay for their electricity expenses. 34 00:02:25,175 --> 00:02:29,555 The end of a miner capitulation has historically marked bottoms in the price 35 00:02:29,555 --> 00:02:30,815 of bitcoin. Bitcoin. Why? 36 00:02:31,235 --> 00:02:34,515 Miner capitulations are intense and real. 37 00:02:34,735 --> 00:02:40,115 This means Bitcoin ASICs plugged into hundreds of megawatts worth of power are 38 00:02:40,115 --> 00:02:41,655 actively being turned off. 39 00:02:41,875 --> 00:02:47,395 Just so you know, only 100 megawatts worth of power is roughly equal to 100,000 40 00:02:47,395 --> 00:02:49,735 homes no longer paying their power bill. 41 00:02:49,915 --> 00:02:55,195 And these miners that are actively turning off are the least efficient miners on the network. 42 00:02:55,455 --> 00:03:01,555 They're using the oldest Bitcoin ASICs and they have the most expensive electricity rates. 43 00:03:01,815 --> 00:03:06,075 These miners are effectively going out of business, defaulting on energy contracts, 44 00:03:06,435 --> 00:03:11,715 breaking land leases, and selling any spare Bitcoin they might have just to 45 00:03:11,715 --> 00:03:13,155 attempt to stay in business. 46 00:03:13,635 --> 00:03:18,655 At the end of these miner capitulations, only the strongest miners remain. main. 47 00:03:18,735 --> 00:03:23,575 And these are the miners that have less Bitcoin to sell on a daily or monthly 48 00:03:23,575 --> 00:03:28,255 basis because their expenses are less than the inefficient miners. 49 00:03:28,535 --> 00:03:30,315 As Joe puts it, I'll link to his video. 50 00:03:31,007 --> 00:03:32,787 It's a brutal event. I mean, it 51 00:03:32,787 --> 00:03:37,247 is sometimes the death of a business or sometimes the sale of a business. 52 00:03:37,967 --> 00:03:39,907 CleanSpark announced that they're buying Grid. 53 00:03:41,507 --> 00:03:45,547 So if you're familiar with, I think it's Harry Strutt or something, 54 00:03:45,667 --> 00:03:49,227 if you've seen him on some of the other podcasts out there, his company, 55 00:03:49,327 --> 00:03:52,967 Grid Infrastructure, is going to be owned now by CleanSpark. 56 00:03:53,047 --> 00:03:56,567 And at $155 million purchase of all stock. 57 00:03:57,387 --> 00:04:01,067 So you have these kind of actual business changing things happening. 58 00:04:01,147 --> 00:04:02,167 But why did it take this long? 59 00:04:02,687 --> 00:04:07,707 Why did it take 70 days? Why did it take almost more than double the time that it typically does? 60 00:04:08,407 --> 00:04:11,507 Well, I've got a hypothesis. And it goes something like this. 61 00:04:11,567 --> 00:04:13,207 And I'd like to know what you think of this. 62 00:04:13,687 --> 00:04:19,007 The ETF funds, of course, let's start there. They're buying Bitcoin OTC over 63 00:04:19,007 --> 00:04:22,747 the counter like crazy from the miners. They've built out relationships with the miners. 64 00:04:23,407 --> 00:04:27,727 And the miners are happy to sell around 70,000. right? They're making a nice, tidy profit. 65 00:04:28,287 --> 00:04:31,847 So that's obviously one of them. But I think the other thing that hasn't gotten 66 00:04:31,847 --> 00:04:36,847 as much attention but was different this having was ordinals. 67 00:04:37,627 --> 00:04:43,567 Ordinals gave miners a nice injection of fee profits. So it gave them more runway. 68 00:04:44,347 --> 00:04:47,147 I think that made a difference too, for better or for worse. 69 00:04:47,727 --> 00:04:51,127 It's really hard to measure this kind of stuff while you're inside the storm. 70 00:04:51,227 --> 00:04:54,607 But as the storm begins to clear, you start to get a better picture than once the storm's passed. 71 00:04:55,087 --> 00:04:57,707 You know, you can survey the damage, and I think that's kind of where we're 72 00:04:57,707 --> 00:05:00,327 at. The storm's clearing. We're not through it yet, I suspect. 73 00:05:01,247 --> 00:05:05,807 Bob Burnett, he's the founder and CEO at Barefoot Mining. This is what he said this week. 74 00:05:06,207 --> 00:05:12,507 When Bitcoin drops to $62,000, it means miners enter limbo and the first circle of Dante's hell. 75 00:05:13,067 --> 00:05:17,067 At $61,000, they descend another level into hell. The heat turns up, 76 00:05:17,087 --> 00:05:19,007 and the profuse sweating commences. 77 00:05:20,240 --> 00:05:25,220 At 60,000, they descend to a level three, and the mashing of teeth occurs. 78 00:05:25,500 --> 00:05:29,800 At 59,000, you'll hear them whimper and cry for mommy. 79 00:05:29,940 --> 00:05:35,540 At 58,000, they reach level five, and the stench you smell is their hair on fire. 80 00:05:35,800 --> 00:05:39,560 At 57, they reach level six, and their flesh begins to bubble. 81 00:05:39,700 --> 00:05:44,340 At 56,000, they plead for mercy, mercy killing, he says. 82 00:05:45,180 --> 00:05:49,620 And at 55, their flesh is turned black, and eerie silence ensues. 83 00:05:49,620 --> 00:05:53,420 At $54,000, they reach the full depths of hell and turn to ashes. 84 00:05:54,100 --> 00:05:57,820 So that's what he's trying to get to is even these, you know, 85 00:05:57,820 --> 00:06:02,840 couple thousand dollar price movements right now are just life and death for these miners. 86 00:06:03,260 --> 00:06:08,480 And Matt Kimmel from CoinShares, he kind of thinks we're probably in a standard cycle. 87 00:06:08,640 --> 00:06:11,900 He has this theory, kind of like I do, that we go through this every time. 88 00:06:11,960 --> 00:06:16,700 And he's talked about this before. And so miners are the laborers that are sort 89 00:06:16,700 --> 00:06:20,160 of adding transactions to the Bitcoin blockchain. 90 00:06:20,620 --> 00:06:24,540 And we're in the middle of a minor capitulation stage. 91 00:06:24,780 --> 00:06:30,600 And once we reach full capitulation amongst Bitcoin miners, the sort of excess 92 00:06:30,600 --> 00:06:34,740 supply that they have currently been releasing and selling into the Bitcoin 93 00:06:34,740 --> 00:06:36,960 market could soon dry up. 94 00:06:36,960 --> 00:06:43,720 And that means they could again begin sort of accumulating Bitcoin as they have done historically. 95 00:07:06,960 --> 00:07:09,580 Maybe it's a million dollar Bitcoin, but there might be a price point where 96 00:07:09,580 --> 00:07:12,200 you're actually willing to sell and take a little profit. 97 00:07:13,597 --> 00:07:19,337 But these government agencies or like the Mt. Gox stuff, that's not their angle at all with their stash. 98 00:07:19,477 --> 00:07:22,497 They're just going through a process, a legal process. 99 00:07:22,997 --> 00:07:26,597 And when they reach the end of that process, they're going to put them on the spot market. 100 00:07:27,317 --> 00:07:31,437 So you can kind of think of these Satoshis that these institutions own as kind 101 00:07:31,437 --> 00:07:32,717 of hanging over the market. 102 00:07:33,437 --> 00:07:38,057 Kind of like widow makers in the forest that could fall down and knock out a 103 00:07:38,057 --> 00:07:39,257 great bull run at any moment. 104 00:07:40,137 --> 00:07:44,157 So in a way, it's like Bitcoin's healing at the perfect time. 105 00:07:44,257 --> 00:07:45,537 The minor capitulation's happening. 106 00:07:45,957 --> 00:07:48,297 These government coins are getting dumped on the market. 107 00:07:48,977 --> 00:07:52,877 It's all kind of lining up really well and kind of tidy. You know, 108 00:07:52,877 --> 00:07:55,577 these Mt. Gox coins have been in bankruptcy process for 10 years. 109 00:07:57,157 --> 00:08:00,017 I would have been, I just didn't want to go through it. 110 00:08:00,737 --> 00:08:05,137 I estimate I lost somewhere between 15 and 30 Bitcoin, at least on Mt. 111 00:08:05,197 --> 00:08:06,357 Gox. It might have been more than that. 112 00:08:06,777 --> 00:08:09,397 But I just couldn't bring myself to go through the process. 113 00:08:10,077 --> 00:08:13,737 But beginning in July, they're going to start redistributing those coins back, 114 00:08:13,977 --> 00:08:19,697 Bitcoin and Bitcoin Cash, back to the original owners that participated in this process. 115 00:08:20,777 --> 00:08:23,977 And when they do that, those owners will then have the choice to sell or not. 116 00:08:24,057 --> 00:08:26,317 We just don't really know. And it's going to kind of go between July and October. 117 00:08:26,637 --> 00:08:29,037 Some of them may choose to sell. Some of them may choose not to. 118 00:08:29,197 --> 00:08:31,357 I kind of suspect a lot of them are just going to keep hodling. 119 00:08:31,417 --> 00:08:36,077 Why not? So I don't think we're quite out of all of it yet, but things do seem 120 00:08:36,077 --> 00:08:39,417 to be moving right along and we do kind of seem to be on our way, at least. 121 00:08:40,560 --> 00:08:50,160 Music. 122 00:08:49,957 --> 00:08:52,137 Thanks for watching. Of course, that could always be taken out at its knees 123 00:08:52,137 --> 00:08:55,457 if the U.S. economy were to crash. And I want to make it clear, 124 00:08:55,537 --> 00:08:56,797 I think this really matters for Bitcoin. 125 00:08:57,397 --> 00:09:02,277 U.S. liquidity is driving the Bitcoin price performance and also driving the 126 00:09:02,277 --> 00:09:03,677 adoption of traditional finance. 127 00:09:04,197 --> 00:09:08,557 All of this is kind of like the next stage of Bitcoin scale and user adoption. 128 00:09:08,977 --> 00:09:13,117 And I think a good portion of it, from where I'm sitting, seems to be dramatically 129 00:09:13,117 --> 00:09:15,477 impacted by what happens in the U.S. right now. 130 00:09:15,877 --> 00:09:18,777 And so if the U.S. economy were to dramatically crash or slow, 131 00:09:18,977 --> 00:09:21,617 it's likely Bitcoin would dramatically crash or slow in terms of adoption, 132 00:09:21,817 --> 00:09:25,877 deployment, in both the sense of ownership and in the sense of like platforms. 133 00:09:26,797 --> 00:09:31,597 And we got some data today as I record. The first quarter GDP grew softer than 134 00:09:31,597 --> 00:09:37,097 expected at 1.4%. And if you dig into that 1.4% growth, you're likely going 135 00:09:37,097 --> 00:09:40,417 to find it's mostly military contractors and anybody related to the war in Ukraine. 136 00:09:41,756 --> 00:09:45,776 Thing is, when you look at the numbers for people, it's not so good. 137 00:09:47,316 --> 00:09:49,736 So consumer spending, which is the main driver of the economy, 138 00:09:49,896 --> 00:09:51,936 rose at the slowest rate in a year and a half. 139 00:09:52,576 --> 00:09:55,576 It's a big markdown. First numbers came out, looked okay. 140 00:09:56,216 --> 00:09:59,976 But then the second set of numbers that were revised came out and we saw a big 141 00:09:59,976 --> 00:10:02,836 markdown. Now, I want to put all this in perspective. 142 00:10:03,616 --> 00:10:05,756 We're not talking about anything that's just like next week, 143 00:10:05,836 --> 00:10:07,876 right? This is stuff that is slow moving. 144 00:10:08,016 --> 00:10:11,816 It takes a while for it to hit. It's stuff that is headwinds that are way out 145 00:10:11,816 --> 00:10:13,816 there right now, at least seemingly. 146 00:10:14,316 --> 00:10:17,956 But I watched this interview with this big money manager gal. 147 00:10:17,996 --> 00:10:21,236 She works for like private billionaires and she manages their wealth for them. 148 00:10:21,276 --> 00:10:23,916 And she does seem to know her stuff. I've seen her interviewed several times. 149 00:10:24,296 --> 00:10:27,656 And she thinks it's a lock that there's no crash at all this year, 150 00:10:27,736 --> 00:10:30,376 that we're probably going to have the Treasury step in. 151 00:10:30,436 --> 00:10:34,096 We're going to have the Fed step in. We're probably set to go for the rest of 2024. 152 00:10:34,476 --> 00:10:37,936 Well, we're not concerned about the market. Right. And Carl, 153 00:10:38,056 --> 00:10:41,136 we've talked about this every time I'm on. It's an election year. 154 00:10:41,316 --> 00:10:47,856 The Fed is pumping so much money into the system, far outweighing any impacts of tightening. 155 00:10:48,116 --> 00:10:49,956 And that's going to continue. 156 00:10:50,296 --> 00:10:54,776 You know, Yellen is an appointed position. The president has a lot of tools 157 00:10:54,776 --> 00:10:59,776 at his disposal to support the market and the economy so that a negative market 158 00:10:59,776 --> 00:11:03,656 or economy is not going to be something that's going to influence the reelection campaign. 159 00:11:03,656 --> 00:11:05,716 In a presidential year, right? Yeah, and a presidential year, 160 00:11:05,776 --> 00:11:08,416 which this is a double presidential re-election year. 161 00:11:08,616 --> 00:11:12,716 She just openly says the quiet part out loud, and that is that Jerome Powell 162 00:11:12,716 --> 00:11:16,776 and Janet Yellen are political players that respond to political pressure. 163 00:11:16,816 --> 00:11:20,896 And she's so confident she's going to bet her clients money on that. 164 00:11:21,036 --> 00:11:25,696 And then on top of that, she's going to go on CNBC television and state her 165 00:11:25,696 --> 00:11:28,896 reputation, which matters in this industry, on this. 166 00:11:29,536 --> 00:11:32,696 She's convinced they're political actors. And I think she's right. 167 00:11:32,696 --> 00:11:35,516 In part you could just see their internal logic. 168 00:11:36,310 --> 00:11:38,350 Well, they don't want to disrupt anything during the election, 169 00:11:38,510 --> 00:11:43,010 right? The best way to maintain the election is to just keep everything smooth in the economy. 170 00:11:43,370 --> 00:11:48,810 When in reality, what they're kind of implicitly not saying is things would 171 00:11:48,810 --> 00:11:53,890 be falling apart if we didn't step in, and that would be bad for the candidate, 172 00:11:54,070 --> 00:11:56,230 right? So that's what they're implicitly not saying. 173 00:11:56,370 --> 00:11:59,830 But you could see how they self-internalize it as well in order to keep things 174 00:11:59,830 --> 00:12:03,970 smooth, keep things humming along so people can focus on the election. 175 00:12:03,970 --> 00:12:08,230 And so the election can go fairly and smoothly, we're going to step in and make 176 00:12:08,230 --> 00:12:09,690 sure the economy doesn't have any bumps. 177 00:12:09,950 --> 00:12:13,510 So that a negative market or economy is not going to be something that's going 178 00:12:13,510 --> 00:12:15,210 to influence the re-election campaign. 179 00:12:15,430 --> 00:12:17,190 In a presidential year, right? Yeah, in a presidential year, 180 00:12:17,230 --> 00:12:19,870 which this is a double presidential re-election year. 181 00:12:19,990 --> 00:12:23,790 So we just think that this market is supported for the year. 182 00:12:23,850 --> 00:12:28,410 It doesn't mean we don't have concerns next year after the election. 183 00:12:28,570 --> 00:12:32,650 And it doesn't mean that we don't have concerns globally. globally and, 184 00:12:32,730 --> 00:12:34,830 you know, what does that mean for other asset classes. 185 00:12:35,070 --> 00:12:40,130 But we are confident that in the U.S. large cap space that the market will continue 186 00:12:40,130 --> 00:12:41,190 its run through the year. 187 00:12:41,290 --> 00:12:45,070 As the Fed is tightening in higher for longer rates, you're also focused on 188 00:12:45,070 --> 00:12:48,670 consumer spending and the changing patterns therein, looking at, 189 00:12:48,770 --> 00:12:55,870 you know, the increasingly prevalent pattern of the needs outcrowding the wants 190 00:12:55,870 --> 00:12:59,270 in terms of how consumers are thinking about what they're buying right now. 191 00:12:59,270 --> 00:13:03,150 Now, does that suggest to you that there are cracks forming in the economy that 192 00:13:03,150 --> 00:13:08,710 may not be as indicated by some of the data that we're conventionally watching? 193 00:13:08,730 --> 00:13:13,750 There are definitely cracks in the system, and I think those will come to play probably next year. 194 00:13:13,890 --> 00:13:18,630 But we're seeing a big dispersion between high-income households and low-income households. 195 00:13:18,830 --> 00:13:20,850 You notice she said this twice now, next year. 196 00:13:21,150 --> 00:13:25,570 Next year. Like, she's not quite saying what she expects, but she expects something 197 00:13:25,570 --> 00:13:27,430 bad to happen next year. We'll come back to that. 198 00:13:27,690 --> 00:13:31,610 She's about to talk about the dispersion between high income households and 199 00:13:31,610 --> 00:13:34,970 low income households and how high income households are hardly even feeling 200 00:13:34,970 --> 00:13:37,610 it. Low income households are really feeling the pinch. 201 00:13:38,651 --> 00:13:43,131 That's no doubt true. But I don't think it's as black and white as that, right? 202 00:13:43,211 --> 00:13:46,611 I think it's, there's also people that are kind of caught in the middle that 203 00:13:46,611 --> 00:13:49,551 maybe you're going on one less trip that year. 204 00:13:49,851 --> 00:13:52,851 You know, maybe you're not buying the good stuff at the grocery store anymore, 205 00:13:52,951 --> 00:13:54,571 but you're still doing grocery store trips. 206 00:13:55,051 --> 00:13:59,191 You know, you're cutting back in areas, but you're still buying in other areas. 207 00:13:59,291 --> 00:14:03,631 And I think that is probably happening across the board, even for the wealthy. 208 00:14:03,631 --> 00:14:08,311 You know, I have a conversation with a family member who's well off and they 209 00:14:08,311 --> 00:14:10,511 clearly are trying to make cuts as well. 210 00:14:10,791 --> 00:14:13,891 You know, they don't get rich by spending a bunch of money. So I don't necessarily 211 00:14:13,891 --> 00:14:15,271 agree with her next take completely. 212 00:14:15,631 --> 00:14:19,751 But if you were just going by the data, it does seem to indicate this is true. 213 00:14:19,871 --> 00:14:24,651 But we're seeing a big dispersion between high income households and low income households. 214 00:14:24,911 --> 00:14:29,311 We're seeing credit card debt tick up. We're seeing credit card delinquencies. 215 00:14:29,551 --> 00:14:33,271 And that's all in the lower income earners. You know, high income, 216 00:14:33,471 --> 00:14:37,151 they're continuing to spend on food and travel and experiences. 217 00:14:37,771 --> 00:14:43,991 And so there is this dispersion that we're seeing and that's going to have to come to play. 218 00:14:44,031 --> 00:14:48,891 I think once the government stops spending or stop spending as much, 219 00:14:49,031 --> 00:14:52,831 the tightening will take hold and that will play through the system. 220 00:14:52,891 --> 00:14:56,911 It's certainly going to be more of a delayed effect than we've seen thus far. 221 00:14:57,091 --> 00:15:01,511 This is why the people need Bitcoin. When I met my wife, the average house price 222 00:15:01,511 --> 00:15:05,671 in the United States was going for about 400 Bitcoin. 223 00:15:06,918 --> 00:15:11,118 Now, the price of houses has skyrocketed since then, because this was well before 224 00:15:11,118 --> 00:15:12,298 the pandemic and all of that. 225 00:15:13,198 --> 00:15:16,338 Now, depending on where you're shopping, it's four or five Bitcoin, 226 00:15:16,578 --> 00:15:19,618 sometimes seven Bitcoin, you know, here in the Pacific Northwest. 227 00:15:20,378 --> 00:15:26,618 But we go from hundreds of Bitcoin to just a couple of Bitcoin in a few years. 228 00:15:27,318 --> 00:15:29,998 While that very thing, that commodity or that whatever you want to call the 229 00:15:29,998 --> 00:15:31,658 house, is exploding in price. 230 00:15:32,378 --> 00:15:35,878 And people's credit card debt is exploding. The only thing that saves us from 231 00:15:35,878 --> 00:15:37,818 this is Bitcoin. People need Bitcoin. 232 00:15:38,198 --> 00:15:39,998 They're going to need to be able to take loans on their Bitcoin. 233 00:15:40,138 --> 00:15:41,358 They're going to need to spend their Bitcoin. 234 00:15:41,578 --> 00:15:44,498 They're going to need to be able to pay their taxes in Bitcoin because some 235 00:15:44,498 --> 00:15:48,318 of us sometimes just get our faces kicked in by the IRS. 236 00:15:49,238 --> 00:15:52,178 People need the solution. And if we zoom into the state level, 237 00:15:52,298 --> 00:15:56,458 the story gets even worse. California this week, for example, 238 00:15:56,638 --> 00:16:00,098 and I suspect this is true probably for some other states out there as well, 239 00:16:00,238 --> 00:16:02,478 has revised their job numbers. 240 00:16:02,938 --> 00:16:07,718 Now, we're looking at 2023 right now, but their gains in 2023 were initially 241 00:16:07,718 --> 00:16:09,178 reported as very substantial. 242 00:16:09,718 --> 00:16:13,578 But a recent report from the California Legislative Analyst Office, 243 00:16:13,718 --> 00:16:20,338 the LAO, reveals that all of the gains were illusionary. In fact, 244 00:16:20,418 --> 00:16:24,078 there was no net job growth for the whole year. 245 00:16:24,998 --> 00:16:30,518 California actually lost 32,000 jobs from September to December of 2023. 246 00:16:30,818 --> 00:16:39,138 For the entire year of 2023, California essentially saw no net job growth. 247 00:16:40,078 --> 00:16:46,818 Only 9,000 jobs added after all the revisions total for the whole state. Huge state. 248 00:16:47,778 --> 00:16:51,298 Huge state. Now, we don't have this number for 2024 yet, obviously, 249 00:16:51,318 --> 00:16:55,058 but what it shows us is there's two different systems at work here. 250 00:16:55,518 --> 00:16:59,098 There's the real-time employment counting system that we kind of go on month 251 00:16:59,098 --> 00:17:04,678 to month that has been completely broken at the state level and at the federal level. 252 00:17:04,698 --> 00:17:07,218 The federal numbers get revised every month as well, downward. 253 00:17:08,449 --> 00:17:13,909 There's a massive discrepancy between the early and the revised data every single time. It's a trend. 254 00:17:14,569 --> 00:17:18,969 And I think this situation in California probably reflects a broader issue in 255 00:17:18,969 --> 00:17:22,949 the U.S. labor market reporting system, suggesting we probably have inflated 256 00:17:22,949 --> 00:17:24,289 job growth figures nationwide. 257 00:17:25,289 --> 00:17:30,649 And we may discover around this time or maybe a little earlier in 2025 that 258 00:17:30,649 --> 00:17:32,129 the very same was true for 2024. 259 00:17:32,249 --> 00:17:36,729 In fact, would you be surprised at all if there was maybe a little more pressure 260 00:17:36,729 --> 00:17:40,849 during election year to have the numbers be juiced even more to make it just look a little better. 261 00:17:41,389 --> 00:17:43,669 And then you have the accounting office come back, oh, wait a minute, 262 00:17:43,789 --> 00:17:45,209 you triple counted here. 263 00:17:46,029 --> 00:17:49,949 So employment numbers matter because they've played a major role in the Fed's 264 00:17:49,949 --> 00:17:51,769 rate decisions since they started cutting. 265 00:17:52,529 --> 00:17:57,029 So they've been a huge factor, as well as the CPI and the core PCE numbers. 266 00:17:57,809 --> 00:18:02,429 And now we have ample evidence that shows us that all of these numbers are cooked. 267 00:18:02,429 --> 00:18:05,249 Cooked potentially the employment numbers we know they've been 268 00:18:05,249 --> 00:18:08,189 at least inaccurate consistently but they may be completely cooked 269 00:18:08,189 --> 00:18:11,069 if california is correct the cpi and. 270 00:18:11,069 --> 00:18:14,169 Core pce numbers are ridiculous i could 271 00:18:14,169 --> 00:18:18,269 do a whole episode on how ridiculous and completely unworthy they are of being 272 00:18:18,269 --> 00:18:22,889 cited by anyone let alone the federal reserve so we're working off all of this 273 00:18:22,889 --> 00:18:29,889 fake data it seems entirely possible to me that in 2025 the bottom could fall 274 00:18:29,889 --> 00:18:32,389 out of this thing so boost in and tell Tell me what you think. 275 00:18:32,829 --> 00:18:37,089 Do you think we could see the bottom drop out after the election or maybe they 276 00:18:37,089 --> 00:18:38,249 time the rates just right? 277 00:18:38,849 --> 00:18:41,489 They could paper over these issues for a little bit. What do you think? 278 00:18:42,069 --> 00:18:43,969 Does the Fed juice it just right? 279 00:18:44,009 --> 00:18:48,689 Hit the hit the veins of the market with them sweet rates and walk it down and 280 00:18:48,689 --> 00:18:50,969 the money starts flowing in and just papers over all this? 281 00:18:51,529 --> 00:18:53,549 Or does the bottom drop out after the election? 282 00:18:54,309 --> 00:18:57,869 Where does this go? Or, you know, the only thing that has been on my mind, 283 00:18:57,929 --> 00:18:59,829 and I'd love to know your insights on this as well, listener. 284 00:19:00,649 --> 00:19:04,489 Doesn't it feel like since COVID, every month we've been talking about a recession 285 00:19:04,489 --> 00:19:07,989 and it just doesn't arrive? It just doesn't show up. 286 00:19:08,649 --> 00:19:13,029 So maybe my take is wrong, but I look at this and I see we have all these fake 287 00:19:13,029 --> 00:19:15,289 numbers and now we have these employment revisions. 288 00:19:15,969 --> 00:19:20,589 We have this $35 trillion debt. It just doesn't seem sustainable. 289 00:19:21,229 --> 00:19:24,509 But the one thing they've been able to prove my whole life is they can kick 290 00:19:24,509 --> 00:19:27,129 that can much longer than I ever thought possible. 291 00:19:27,769 --> 00:19:30,009 So boost in, tell Tell me what you think. 292 00:19:30,960 --> 00:19:38,800 Music. 293 00:19:38,642 --> 00:19:42,602 All right, coming up next, my take on why we are in some of this mess to begin 294 00:19:42,602 --> 00:19:46,502 with, some important project updates big time, and your boosts. 295 00:19:46,502 --> 00:19:49,362 But first, I want to thank Podhome.fm. 296 00:19:49,402 --> 00:19:54,582 Go use my promo code TWIB and get three months free at Podhome.fm. 297 00:19:54,962 --> 00:20:00,182 The premier podcasting 2.0 hosting platform, my hosting platform of choice with 298 00:20:00,182 --> 00:20:03,022 unlimited shows and episodes powered by unlimited Podhome AI. 299 00:20:03,262 --> 00:20:06,182 Yeah, its tools will balance your audio and transcribe your podcast. 300 00:20:06,642 --> 00:20:11,082 It'll automatically create chapters and even suggest episode and title suggestions and all that. 301 00:20:11,342 --> 00:20:14,982 But you can go in and then curate it as well. The UI makes it really easy to do that. 302 00:20:15,062 --> 00:20:18,442 And Podhome has brilliant live streaming. If you'd like to do that, 303 00:20:18,482 --> 00:20:21,622 it supports value for value. If you want to take boosts and do value for value music. 304 00:20:22,742 --> 00:20:27,122 And it's fast. Podhome focuses on solving problems of come around publishing 305 00:20:27,122 --> 00:20:31,042 to just make it a pain after years. 306 00:20:31,162 --> 00:20:34,682 Podhome comes in and smooth Moves that stuff out. It's like you got a team in your back pocket. 307 00:20:34,882 --> 00:20:37,022 It's my hosting platform of choice. 308 00:20:37,442 --> 00:20:41,202 Go check it out. Unlimited shows, unlimited episodes with unlimited Podhome AI. 309 00:20:41,542 --> 00:20:47,142 Use the promo code TWIB and get three months for free. And go treat yourself 310 00:20:47,142 --> 00:20:49,362 right. Get yourself some features that make you stand out. 311 00:20:50,382 --> 00:20:53,662 That's the thing. The podcasting 2.0 stuff makes you stand out. 312 00:20:55,122 --> 00:20:58,842 And if you want to spend some sass on the Lightning Network and you use the 313 00:20:58,842 --> 00:21:03,102 Bitcoin company, You can use my promo code Jupiter to take a little bit off 314 00:21:03,102 --> 00:21:04,762 and it sends some sats towards the show. 315 00:21:05,142 --> 00:21:09,102 The Bitcoin Company on the app or on the web and use the promo code Jupiter 316 00:21:09,102 --> 00:21:13,162 and send some sats towards the show when you spend sats over the Lightning Network. 317 00:21:13,562 --> 00:21:16,362 It's pretty slick. It's one of my favorite ways to grab stuff, 318 00:21:16,502 --> 00:21:18,322 you know, if I was going to spend some sats. 319 00:21:18,742 --> 00:21:22,462 That's how I do it. The Bitcoin Company dot com and Pothome dot FM. 320 00:21:24,662 --> 00:21:28,742 Lazy Locks comes in with 10,000 sats. You're not going to believe this. 321 00:21:29,602 --> 00:21:32,842 I hate to say it, but you are our baller. That's the reality. 322 00:21:32,922 --> 00:21:36,002 You are our baller this week, so thank you, Lazy Locks. Oh, what? 323 00:21:36,482 --> 00:21:38,442 What, you want your clip? 324 00:21:38,942 --> 00:21:40,422 Fine. Here. 325 00:21:41,882 --> 00:21:46,222 You got your lobster. I kid. I really appreciate it, Lazy Locks. 326 00:21:46,242 --> 00:21:48,282 He says, time for another boost. You know what? 327 00:21:48,942 --> 00:21:52,842 You nailed that timing, didn't you? I think that might be the cheapest baller 328 00:21:52,842 --> 00:21:54,822 boost in the history of the show so far. 329 00:21:55,422 --> 00:21:59,262 Oppie 1984 comes in with 4,000 sats. Make it so. 330 00:21:59,722 --> 00:22:04,302 Symbol X is cool, though I have yet to get anyone to actually use it in my orbit, 331 00:22:04,402 --> 00:22:05,642 but I still love the idea. 332 00:22:06,182 --> 00:22:09,922 Another thing that you should look into is Meshtastic. It uses LoRa, 333 00:22:10,042 --> 00:22:14,982 or L-O-R-A standard, to create a local mesh network for basic text messaging. 334 00:22:15,842 --> 00:22:19,582 The boards are cheap and easy to set up, and if you want to expand your coverage, 335 00:22:19,642 --> 00:22:20,662 you can just connect to a node. 336 00:22:21,162 --> 00:22:24,122 You connect a node to MQTT, get it on the internet. 337 00:22:24,502 --> 00:22:26,962 It might not be the most practical thing for day-to-day messaging, 338 00:22:27,122 --> 00:22:31,482 but fun, low-cost, no-license radio hobby. like GRMS and amateur radio. 339 00:22:32,998 --> 00:22:36,418 Okay, so Appi, I've heard a couple of people mention Meshtastic to me. 340 00:22:36,518 --> 00:22:38,478 And so my question is, what's the range like? 341 00:22:39,138 --> 00:22:42,938 Could I be like 40 miles away and message the kids? 342 00:22:43,278 --> 00:22:47,958 Because there's kind of like this stretch on the I-5 corridor where the family's kind of spread out. 343 00:22:48,318 --> 00:22:51,538 And we're very prone to earthquakes and heck, even volcanoes. 344 00:22:52,058 --> 00:22:55,298 So I thought if there's ever a disaster, I'd really like something outside the 345 00:22:55,298 --> 00:22:58,378 cellular network, outside the data networks to get a hold of them. 346 00:22:59,138 --> 00:23:02,238 Maybe Meshtastic would be right for that. I honestly don't know. 347 00:23:02,238 --> 00:23:04,218 So if you have an opinion, please let me know. 348 00:23:04,838 --> 00:23:08,418 Jordan Bravo comes in with 5,555 sats. 349 00:23:08,458 --> 00:23:15,558 Maybe mining should be called unlocking Bitcoin because arguably all 21 million Bitcoin already exist. 350 00:23:16,338 --> 00:23:19,418 It's just that they haven't all been unlocked yet. Here's another idea. 351 00:23:19,698 --> 00:23:23,038 My wife suggested mining should be called something that relates to its function, 352 00:23:23,158 --> 00:23:24,818 such as verifying transactions. 353 00:23:25,678 --> 00:23:29,938 Those are all really good. Time releasing Bitcoin could be another one. 354 00:23:29,938 --> 00:23:33,678 One, verifying transactions I think I like the best, you know, 355 00:23:33,678 --> 00:23:37,098 because you could argue the Visa network and the MasterCard network and the 356 00:23:37,098 --> 00:23:40,758 banks take tons and tons of electricity that they're not public about, 357 00:23:40,898 --> 00:23:43,278 like Bitcoin is, to verify transactions. 358 00:23:44,158 --> 00:23:48,198 And so we already pay an enormous electrical cost for that. And it seems like 359 00:23:48,198 --> 00:23:49,458 everybody's OK with that. It's a good one. 360 00:23:49,998 --> 00:23:52,278 Jordan Bravo, you got a keeper there. Thank you for the boost. 361 00:23:52,618 --> 00:23:55,998 The golden dragon comes in with a classic row of ducks. 362 00:23:57,698 --> 00:24:01,178 Number go up. It seems to me that the number does go up when they're having 363 00:24:01,178 --> 00:24:02,378 in general market pressures. 364 00:24:02,938 --> 00:24:07,038 But for a hardware wallet, if you can get a Pi Zero, SeedSigner is amazing. 365 00:24:07,878 --> 00:24:11,418 You know, I really like the idea of SeedSigner. I have heard a couple of people 366 00:24:11,418 --> 00:24:13,618 articulate arguments against SeedSigner. 367 00:24:13,718 --> 00:24:18,358 So I have been particularly hoping somebody would boost in with an opinion on SeedSigner. 368 00:24:18,978 --> 00:24:21,698 And I think this is the second SeedSigner mention we've gotten. 369 00:24:21,718 --> 00:24:24,678 I'm still looking to collect information because I've heard that they're not 370 00:24:24,678 --> 00:24:27,878 maybe as secure as some of the other device options. 371 00:24:27,878 --> 00:24:32,598 But that could be fun and it's nice to be able to build your own and you know 372 00:24:32,598 --> 00:24:36,378 you could use something that doesn't look like a bitcoin wallet you know it 373 00:24:36,378 --> 00:24:39,558 just looks like a stupid raspberry pi or something I got plenty of those, 374 00:24:41,038 --> 00:24:44,278 just pull it out of the drawer look this guy's got a raspberry pi no big deal 375 00:24:44,278 --> 00:24:47,838 you know but you pull out something like a cold card or a trezor you know immediately 376 00:24:47,838 --> 00:24:48,978 oh this is a crypto wallet, 377 00:24:50,166 --> 00:24:53,626 So that's something to think about. Thank you. 378 00:24:53,986 --> 00:24:58,646 Appreciate it, Dragon. The tone record comes in with 3,333 cents. 379 00:24:58,806 --> 00:25:01,286 The traders love the vol. Great episode again, he says. 380 00:25:01,666 --> 00:25:05,386 Concerning the term mining as a point of confusion with the production activity, 381 00:25:05,706 --> 00:25:07,226 I found the following helpful. 382 00:25:07,686 --> 00:25:12,426 All 21 million Bitcoin already exist, but they are inaccessible and locked or 383 00:25:12,426 --> 00:25:16,286 frozen in time until future blocks are found and they're made available or unlocked 384 00:25:16,286 --> 00:25:18,166 from the block they reside within. in. 385 00:25:18,446 --> 00:25:20,586 So another pitch for unlocking Bitcoin. 386 00:25:22,146 --> 00:25:26,106 Yeah, I don't mind it. I think the only problem besides, so verifying transactions, 387 00:25:26,486 --> 00:25:28,326 you know, kind of makes sense. People get that. 388 00:25:28,746 --> 00:25:32,146 It's not as accurate. I think unlocking Bitcoin is probably more accurate. 389 00:25:32,626 --> 00:25:36,046 I do have an episode that gets into the Bitcoin time chain. If you're wondering 390 00:25:36,046 --> 00:25:38,446 what the heck we're talking about, go look at the back catalog. 391 00:25:39,006 --> 00:25:42,466 We dig into that. It's kind of a mind blower, but I think it's a great way to 392 00:25:42,466 --> 00:25:43,146 think about the blockchain. 393 00:25:43,986 --> 00:25:48,946 VCP comes in with 3,000 sats. That's not possible. Nothing can do that. 394 00:25:49,146 --> 00:25:51,986 It's obviously possible. He says your breakdown of the NVIDIA price pump and 395 00:25:51,986 --> 00:25:53,886 the Texas energy grid were so good. 396 00:25:54,186 --> 00:25:57,386 I'm going back to listen to the whole episode again. All signal, no noise. 397 00:25:58,126 --> 00:26:00,186 Thanks, VCP. I appreciate the 398 00:26:00,186 --> 00:26:03,746 return of value. It keeps this little thing going. Thank you very much. 399 00:26:04,346 --> 00:26:06,746 Gene Bean comes in with 2,048 sats. 400 00:26:07,666 --> 00:26:11,246 Hell no. No one other than my family is adjusting my thermostat. 401 00:26:11,406 --> 00:26:13,706 That's one reason I have I have a Z-Wave thermostat now. Yeah. 402 00:26:14,306 --> 00:26:17,166 Although you still haven't told me which Z-Wave thermostat, Gene Bean, 403 00:26:17,286 --> 00:26:18,466 because I really am looking. 404 00:26:18,926 --> 00:26:22,906 My Wi-Fi thermostat, which is some weird brand that you'll never find, 405 00:26:23,086 --> 00:26:25,306 just completely factory reset itself. 406 00:26:25,626 --> 00:26:28,426 And now it's no longer on the Wi-Fi. And I can't be bothered. 407 00:26:28,786 --> 00:26:32,446 Z-Wave would be preferable. But I'd asked you guys last week if you'd be down 408 00:26:32,446 --> 00:26:37,046 for the energy grid coming in and turning your AC essentially from, 409 00:26:37,106 --> 00:26:39,806 like, say, 72 degrees to 84 degrees. 410 00:26:40,266 --> 00:26:43,486 Gene Bean's the only one that took me up on the question, though. 411 00:26:43,486 --> 00:26:47,106 I guess the rest of you are all okay with it. That's the conclusion, obviously. 412 00:26:48,046 --> 00:26:52,206 Shout out to Gene Bean. Appreciate the thoughts. 413 00:26:52,586 --> 00:26:56,386 All right. Next boost comes from BHH32. 414 00:26:56,906 --> 00:26:57,846 I wonder if that stands. 415 00:26:58,446 --> 00:27:02,366 BHH32. I feel like I almost know what that stands for. With 5,000 sats. 416 00:27:06,505 --> 00:27:09,505 Oh, okay. He also has a thermostat response. I would never allow someone to 417 00:27:09,505 --> 00:27:12,825 install a thermostat or device in my home that can reach and dictate what goes on. 418 00:27:12,845 --> 00:27:16,285 This is beyond invasion of privacy and getting into the realm of dictatorship. 419 00:27:16,425 --> 00:27:19,125 My military service was for the land of the free. 420 00:27:19,745 --> 00:27:22,165 Free as in freedom. Not free as in beer. 421 00:27:23,165 --> 00:27:26,885 BHH, thank you. I appreciate you also jumping in on that. I was curious. 422 00:27:27,825 --> 00:27:32,525 You know, you never know, man. I live in Seattle. You never believe what people would be down with. 423 00:27:32,785 --> 00:27:36,025 Ace Ackerman comes in with, look, a double production. Look at that. 424 00:27:37,685 --> 00:27:41,825 And he says, value for value, episode 14. Thank you, Ace. Always good to hear 425 00:27:41,825 --> 00:27:43,065 from you. Appreciate it very much. 426 00:27:44,145 --> 00:27:47,305 DPG comes in with 3,333 sats. 427 00:27:48,065 --> 00:27:52,365 A pro tip for Americans looking to turn cash into Bitcoin. You can deposit up 428 00:27:52,365 --> 00:27:58,405 to $1,000 into the Cash app at many retailers like Kroger and Walgreens for a flat fee of $1. 429 00:27:58,585 --> 00:28:01,705 From there, you can swap to Bitcoin and even Lightning in-app. 430 00:28:02,185 --> 00:28:06,165 This is very KYC granted, but it sure beats those outrageous Bitcoin ATMs. 431 00:28:07,307 --> 00:28:11,587 I had no idea you could deposit into the Cash App at retailers like Kroger and 432 00:28:11,587 --> 00:28:15,027 Walgreens. I had no idea. That's really cool. 433 00:28:15,647 --> 00:28:20,127 I know Swan right now has like no fees on your first 10,000 Bitcoin. 434 00:28:21,007 --> 00:28:24,207 I don't know what, I guess 10,000 in USD. I'm not quite sure. 435 00:28:24,787 --> 00:28:26,347 So that's something to keep in mind too. 436 00:28:27,727 --> 00:28:30,947 I still think River is probably the way to go because it has lightning. 437 00:28:31,287 --> 00:28:34,427 Cash App has lightning too though. So the nice thing about Lightning is you 438 00:28:34,427 --> 00:28:37,307 can at least then peg into liquid, peg out really easily and cheap, 439 00:28:37,447 --> 00:28:40,067 and you can break some of that on-chain analysis. 440 00:28:40,187 --> 00:28:42,507 You won't break the fact that you KYC'd. They'll still have a record. 441 00:28:42,987 --> 00:28:45,967 So you're not getting away with anything other than people being able to track 442 00:28:45,967 --> 00:28:46,907 what you spend your money on. 443 00:28:47,147 --> 00:28:49,227 And the Lightning network lets you move it around real cheap. 444 00:28:49,307 --> 00:28:54,167 So if you do stack with a KYC app, just my advice is try to have the requirement 445 00:28:54,167 --> 00:28:57,647 that you have yourself Lightning at least. 446 00:28:58,247 --> 00:29:01,567 And then I think you'll be all right. Thank you, everybody, who did boost in. 447 00:29:02,267 --> 00:29:08,487 That's kind of it. We had 15 boosters, not a bad amount, but we only stacked 42,434 sats. 448 00:29:11,407 --> 00:29:13,627 It's kind of getting rough, and I think maybe people are just getting a little 449 00:29:13,627 --> 00:29:14,967 exhausted out there, and I understand. 450 00:29:15,527 --> 00:29:18,687 You know, it's a tricky thing, and to kind of make value for value sustainable, 451 00:29:19,067 --> 00:29:21,767 there's kind of a reciprocation on both ends, right? 452 00:29:21,927 --> 00:29:26,367 My proof of work here is the show, and then I hope that you validate that proof 453 00:29:26,367 --> 00:29:29,227 of work by boosting in and keeping things going. 454 00:29:29,887 --> 00:29:33,407 And I understand, you know, week after week, it does get tricky. 455 00:29:33,687 --> 00:29:37,967 But it is essential to the ongoing production. And if you'd like to boost in, 456 00:29:38,007 --> 00:29:39,107 just get a new podcast app. 457 00:29:39,247 --> 00:29:42,247 If you haven't tried out Fountain yet, it's one of the good ones at Podverse. 458 00:29:42,347 --> 00:29:43,967 It's open source and it's cross-platform. 459 00:29:44,347 --> 00:29:47,207 You can also boost from the Fountain FM website. You can just search for This 460 00:29:47,207 --> 00:29:51,167 Week in Bitcoin over there and then send it in right through the web. 461 00:29:51,247 --> 00:29:55,587 Even if you don't have the Fountain app, you actually don't have to switch, but you might want to. 462 00:29:56,427 --> 00:30:01,547 All right. So why are we in this mess we are in today? And so few people seem 463 00:30:01,547 --> 00:30:03,447 to have any kind of financial literacy. 464 00:30:04,087 --> 00:30:07,747 I mean, I've been trying to understand this as I talk about Bitcoin to other 465 00:30:07,747 --> 00:30:11,067 audiences that just seem to really struggle to understand. 466 00:30:12,501 --> 00:30:17,561 I think it really comes down to people don't really understand how broken the 467 00:30:17,561 --> 00:30:21,401 fiat system is until they start to look at something like Bitcoin that's done right. 468 00:30:22,001 --> 00:30:26,361 And so many people now have grown up within the system, trying to measure the 469 00:30:26,361 --> 00:30:29,001 system from within the system, and it's all they've ever known. 470 00:30:29,421 --> 00:30:33,101 And even our supposed experts are idiots. 471 00:30:33,761 --> 00:30:38,701 This is Yahoo Finance. And Yahoo Finance is one of the more respected online 472 00:30:38,701 --> 00:30:40,901 financial analyst firms. 473 00:30:40,901 --> 00:30:45,041 And their Yahoo Finance website is very popular and their lead anchor, 474 00:30:45,241 --> 00:30:52,081 who runs much of their most primetime television, seems to not understand the very basics of finance. 475 00:30:52,601 --> 00:30:57,101 You know, if you look at a world of full unpredictability, just once we have 476 00:30:57,101 --> 00:31:01,781 an unpredictability increasing, Bitcoin, I think it's a beacon of predictability 477 00:31:01,781 --> 00:31:04,521 in a world where you can predict anything pretty much. 478 00:31:04,781 --> 00:31:08,081 This is her guest from Swan, and she's about to jump in now. 479 00:31:08,161 --> 00:31:11,061 I don't think if you look at a price chart of Bitcoin, you would say it's a 480 00:31:11,061 --> 00:31:12,321 beacon of predictability. 481 00:31:12,701 --> 00:31:14,761 And 2% inflation means growth. 482 00:31:15,261 --> 00:31:18,901 Let's stop there before we get to the... If you look at the price chart of Bitcoin, 483 00:31:19,181 --> 00:31:21,041 I don't think it means a beacon of predictability. 484 00:31:21,221 --> 00:31:24,261 I don't think if you look at a price chart of Bitcoin, you would say it's a 485 00:31:24,261 --> 00:31:25,481 beacon of predictability. 486 00:31:25,721 --> 00:31:29,761 The first failure of somebody who's supposed to be a financial expert would 487 00:31:29,761 --> 00:31:33,801 be to look at the hourly price chart. You got to be an idiot. 488 00:31:34,321 --> 00:31:38,221 Maybe you look at the 200 moving average. Maybe you zoom out and look how it's 489 00:31:38,221 --> 00:31:39,461 performed over the last decade. 490 00:31:39,941 --> 00:31:43,681 You know, then you start to better understand the kind of returns you see from this asset. 491 00:31:43,961 --> 00:31:49,401 But more of a sin, a fundamental understanding is missing here. 492 00:31:49,861 --> 00:31:52,061 How does price go up without volatility? 493 00:31:52,921 --> 00:31:58,961 Somebody tell me that. And I'd like her to answer that. Number only go up if number also go down. 494 00:31:59,401 --> 00:32:01,841 That's how you shake things out. That's how you establish prices. 495 00:32:02,041 --> 00:32:05,821 This is the nature of any volatile asset in its infancy. 496 00:32:06,081 --> 00:32:10,341 Always has been, always will be if it's a fair market. The only time it doesn't 497 00:32:10,341 --> 00:32:13,041 work like this is when it's a manipulated market. 498 00:32:13,541 --> 00:32:18,681 And perhaps we're just so used to that that these supposed experts don't actually 499 00:32:18,681 --> 00:32:21,681 know what a free open market actually looks like for price discovery. 500 00:32:22,241 --> 00:32:25,541 Build, you know, in a world where you can predict anything pretty much. 501 00:32:25,721 --> 00:32:28,641 I don't think if you look at a price chart of Bitcoin, you would say it's a 502 00:32:28,641 --> 00:32:29,861 beacon of predictability. 503 00:32:30,201 --> 00:32:34,061 And 2% inflation means growth. So with growth comes inflation. 504 00:32:34,601 --> 00:32:39,401 Usually that's the way economics works. Although, yes, we've had very low inflation 505 00:32:39,401 --> 00:32:43,021 before this current regime, but I don't even know where to start here. 506 00:32:44,045 --> 00:32:46,945 The breath is literally taken away from me when I hear this. 507 00:32:47,165 --> 00:32:51,265 Usually we need 2% inflation for growth. The beacon of predictability. 508 00:32:51,645 --> 00:32:55,445 And 2% inflation means growth. So with growth comes inflation. 509 00:32:56,065 --> 00:33:00,705 Usually that's the way economics works. Although, yes, we've had very low inflation 510 00:33:00,705 --> 00:33:01,865 before this current regime. 511 00:33:02,045 --> 00:33:07,385 I'd invite you to go tell me anywhere where it's cited where that 2% inflation target comes from. 512 00:33:07,845 --> 00:33:11,045 It's just something that the banks have agreed on because it lets them quietly 513 00:33:11,045 --> 00:33:14,165 steal from you. A healthy market doesn't need inflation. 514 00:33:14,465 --> 00:33:17,285 This is Stockholm syndrome. 515 00:33:18,005 --> 00:33:20,565 And she's considered an expert. And she cuts the swan guy off. 516 00:33:20,605 --> 00:33:23,485 He never gets a chance to correct her. But this is Yahoo Finance. 517 00:33:24,045 --> 00:33:25,985 And they're considered one of the respectable ones. 518 00:33:26,565 --> 00:33:29,885 It's embarrassing. Their understanding is like inverse. 519 00:33:30,325 --> 00:33:35,125 They think volatility is bad for price discovery. And they think inflation is good. 520 00:33:36,285 --> 00:33:43,025 It's fiat education. And it's not just the news actors. it goes all the way 521 00:33:43,025 --> 00:33:47,185 to the people inside the Treasury and the FDIC and the Federal Reserve. 522 00:33:47,785 --> 00:33:50,685 They are all low quality thinkers. 523 00:33:51,405 --> 00:33:55,645 I'm going to go a little bit back in time here. So get in the Wayback Machine with me. 524 00:33:57,845 --> 00:34:02,445 We're going to 2009, my friends, just after the big 2008 collapse, 525 00:34:02,645 --> 00:34:07,005 the finance market was just wrecked. But more importantly, I think in the context 526 00:34:07,005 --> 00:34:09,665 of this clip, The housing market was also wrecked. 527 00:34:09,845 --> 00:34:16,165 And the FDIC chair at the time, and she's well-respected, you could kind of see the way she thinks. 528 00:34:16,225 --> 00:34:20,385 And the way they think is this sort of set-in-stone thing. 529 00:34:21,693 --> 00:34:25,013 Never going to change, the U.S. government will always be the reserve currency 530 00:34:25,013 --> 00:34:26,573 of the world kind of mindset. 531 00:34:26,753 --> 00:34:30,273 And so then they can act and plan based on that. And it's just without question. 532 00:34:30,373 --> 00:34:34,213 And this clip kind of demonstrates the way they think, which I think is low quality. 533 00:34:35,053 --> 00:34:39,833 FDIC Chairman Sheila Baer is a former treasury official and professor of finance 534 00:34:39,833 --> 00:34:43,793 who's written children's books on the wisdom of saving. 535 00:34:44,013 --> 00:34:47,853 Maybe some of the CEOs on Wall Street should Should have read the children's books. Maybe so. 536 00:34:49,253 --> 00:34:52,493 Maybe so. I already don't like her. 537 00:34:52,573 --> 00:34:58,693 I mean, it's so smug to assume that this bureaucrat is smarter than the CEOs on Wall Street. 538 00:34:58,873 --> 00:35:03,533 So much smarter that they should have read her children's book. That's how smart she is. 539 00:35:03,933 --> 00:35:07,393 Some of the CEOs on Wall Street should have read the children's books. Maybe so. 540 00:35:08,853 --> 00:35:15,273 Maybe so. Bear warned two years ago that bad mortgages threatened the financial system. 541 00:35:15,273 --> 00:35:19,993 Now she's managing the biggest bank failures in years, including the collapse 542 00:35:19,993 --> 00:35:25,173 of Washington Mutual and last summer's sudden failure of IndyMac in California. 543 00:35:25,173 --> 00:35:30,093 I like that these dramatic failures that are equivalent to like an absolute 544 00:35:30,093 --> 00:35:34,793 collapse are talked about like, well, she's on top of it. She's managing it. 545 00:35:35,193 --> 00:35:40,733 This destruction that's happening to middle class wealth and to jobs and entire 546 00:35:40,733 --> 00:35:45,253 companies and this inability to get your money. It's all being managed by this woman. 547 00:35:45,353 --> 00:35:48,573 She's on top of it. Don't worry about it. We were told we would get in. 548 00:35:48,733 --> 00:35:54,573 Stay open an extra hour. When IndyMac failed, you were watching these scenes 549 00:35:54,573 --> 00:35:58,973 on television of people lining up outside the bank like it was 1932. 550 00:35:59,213 --> 00:36:01,233 Yes, it was. It was amazing. What did you think of that? 551 00:36:01,493 --> 00:36:04,753 I think people just forgot that banks do fail and how the FDIC works. 552 00:36:05,133 --> 00:36:08,573 Their money was safe. It was probably the safest place in the world to have 553 00:36:08,573 --> 00:36:11,173 your money because we were an operating institution at that point. 554 00:36:11,393 --> 00:36:13,173 What sort of hit was that on your balance sheet? 555 00:36:13,473 --> 00:36:17,313 I think we ended up to, it was over $9 billion for a $33 billion, 556 00:36:17,473 --> 00:36:20,093 yes, it was very stiff. The question becomes. 557 00:36:21,180 --> 00:36:26,000 How many times can the FDIC do that? At what point is the FDIC broke? 558 00:36:26,140 --> 00:36:29,120 The FDIC is backed by the full faith and credit of the United States government. 559 00:36:29,320 --> 00:36:32,260 So if we need to, we try not to and don't want to, but if we need to, 560 00:36:32,300 --> 00:36:36,960 we can borrow from Treasury to make up for any shortfall. So the FDIC never goes broke? 561 00:36:37,180 --> 00:36:39,960 We don't go broke. No, we are the government. We're backed by the full faith 562 00:36:39,960 --> 00:36:41,100 and credit of the United States government. 563 00:36:41,300 --> 00:36:46,720 Oh, I'm sorry to say, unfortunately, the FDIC seems to be broke. 564 00:36:46,720 --> 00:36:52,060 Now, fast forward back to current time, and Carl Lewis has a fantastic thread 565 00:36:52,060 --> 00:36:55,360 that I'll link you to in the show notes, and he writes, although the designated 566 00:36:55,360 --> 00:37:00,140 reserves managed by the FDIC were intended to be at least 2% of actual, 567 00:37:00,360 --> 00:37:07,300 or I'm sorry, although were intended to be at least 2%, actual was closer to 1%, he writes. 568 00:37:07,300 --> 00:37:14,160 In other words, the FDIC only has 1.15% of its total insured deposits in reserves. 569 00:37:14,460 --> 00:37:16,660 So since I botched that a little bit, I'll just make it clear. 570 00:37:16,900 --> 00:37:24,860 Right now, at the end of June in 2024, the FDIC only has 1.15% of total insured 571 00:37:24,860 --> 00:37:26,120 deposits in its reserves. 572 00:37:26,120 --> 00:37:33,800 If other banks, he goes on to write, have similar FDIC insured ratios as the top 30 banks, 573 00:37:33,940 --> 00:37:41,460 then there are at least up to $16 trillion of deposits not insured or having any reserves. 574 00:37:41,820 --> 00:37:45,380 It's like the money doesn't exist and isn't backed by anything. 575 00:37:45,700 --> 00:37:50,980 Quote, what is the money would be the greatest question of the century if we 576 00:37:50,980 --> 00:37:52,220 were to have a major banking crisis. 577 00:37:52,680 --> 00:37:54,940 The thread has charts and data. 578 00:37:55,060 --> 00:37:57,440 I mean, it's great. That's just one of the many things it touches on. 579 00:37:57,820 --> 00:38:01,800 So in 2009, she said it three times, the FDIC could never go broke. 580 00:38:02,120 --> 00:38:08,460 In 2004, well, the full faith and credit of the U.S. government is $35 trillion in debt. 581 00:38:08,700 --> 00:38:13,400 And the FDIC has 1.15% of total insured deposits and reserves. 582 00:38:14,240 --> 00:38:18,240 Doesn't seem like that's a great position to be in. Again, again, 583 00:38:18,320 --> 00:38:22,920 I don't really necessarily even say this with any delight, but Bitcoin does fix this. 584 00:38:28,720 --> 00:38:32,580 Some important project updates I'd like you to know about. I love the Mutiny 585 00:38:32,580 --> 00:38:35,760 wallet, and it was a little unfortunate to see that they had to put out a PSA 586 00:38:35,760 --> 00:38:40,180 about some of the functionality of Fedements being degraded due to DNS issues. 587 00:38:40,360 --> 00:38:42,300 And they've been providing updates really reliable. 588 00:38:42,920 --> 00:38:45,320 I do think some people have been having trouble getting their funds. 589 00:38:45,680 --> 00:38:48,460 You know, the Fedements system is still kind of new. It's rough. 590 00:38:48,580 --> 00:38:50,820 It's one of the reasons why I haven't really talked about it much on the show. 591 00:38:50,820 --> 00:38:56,420 So I am very hopeful and I remain just a pretty happy liquid user for this type 592 00:38:56,420 --> 00:39:02,380 of task, but I would love to replace liquid one day with a Fetament and something I could trust. 593 00:39:03,020 --> 00:39:05,300 It just seems like some of the stuff needs to be worked out. 594 00:39:05,360 --> 00:39:07,860 So if you've used this functionality of Mutiny Wallet, I'd love to hear from you. 595 00:39:08,505 --> 00:39:10,845 Really encourage you to check the links in the show notes because there are 596 00:39:10,845 --> 00:39:13,005 some steps you might be able to follow to get funds out. 597 00:39:13,565 --> 00:39:16,545 It does seem like maybe some folks lost some money. I'm not sure. 598 00:39:17,185 --> 00:39:20,205 Not a great situation, but it is early days there. 599 00:39:20,285 --> 00:39:23,385 The Mutiny Wallet remains really great, and the team was really on top of this, 600 00:39:23,505 --> 00:39:27,065 disabling functionality that would get people in trouble and kind of cleaning 601 00:39:27,065 --> 00:39:28,565 things up as fast as they could. 602 00:39:29,345 --> 00:39:34,305 So that was really good to see. And then there's a really good bit of news for 603 00:39:34,305 --> 00:39:38,605 the UK this week. Strike has launched in the UK following their European rollout. 604 00:39:39,085 --> 00:39:43,725 Strike's a really solid Bitcoin-only app, and it's a good tight team that's 605 00:39:43,725 --> 00:39:46,565 working on making the experience the best possible. 606 00:39:46,845 --> 00:39:49,805 Strike also integrates with Fountain to make boosts really easy. 607 00:39:49,945 --> 00:39:54,325 And Strike's on the Lightning Network with, I think, free withdrawals too, 608 00:39:54,525 --> 00:40:00,245 on-chain or Lightning, which is a great deal, especially during high transaction fees. 609 00:40:00,685 --> 00:40:03,965 So Strikes really focused, they're really honed in on Bitcoin and Lightning 610 00:40:03,965 --> 00:40:07,165 and trying to give you a good wallet and something you can purchase your sats 611 00:40:07,165 --> 00:40:10,945 with and then send it around wherever you want. And it's so fantastic to see it come to the UK. 612 00:40:11,565 --> 00:40:14,225 I think this is one of those apps that's a little misunderstood in our community. 613 00:40:14,445 --> 00:40:18,865 And I think people should give it a second look because it's pretty good. All right. 614 00:40:19,965 --> 00:40:21,665 Are we ready for our final clip of the week? 615 00:40:24,105 --> 00:40:28,325 Bitcoiners should always be thinking with a long time, time preference, right? Right. 616 00:40:28,605 --> 00:40:32,965 Thinking for the like 30 years out, you want your health to be good. Right. 617 00:40:33,425 --> 00:40:36,385 You want your family to be good. You want to be planning to be able to get access 618 00:40:36,385 --> 00:40:37,385 to your generational wealth. 619 00:40:37,985 --> 00:40:41,225 And you need to take care and note of your information diet, 620 00:40:41,345 --> 00:40:43,645 which I think is a critical aspect to your mental health. 621 00:40:43,685 --> 00:40:47,025 But really how you think about the world and how you make decisions, 622 00:40:47,205 --> 00:40:51,325 how this stuff lands in your brain and it kind of soaks in and you kind of make 623 00:40:51,325 --> 00:40:54,465 your world decisions and views based off that information you take in. 624 00:40:54,985 --> 00:40:56,605 Something I think a lot about with this show. 625 00:40:57,496 --> 00:41:00,916 Try to make it high signal. And it's something Jack Dorsey and Lynn Alden were 626 00:41:00,916 --> 00:41:03,056 discussing recently at the also Freedom Forum. 627 00:41:03,596 --> 00:41:08,796 And Lynn asked Jack on his thoughts on open source algorithms and how these 628 00:41:08,796 --> 00:41:12,176 closed black box algorithms could be impacting society. 629 00:41:12,376 --> 00:41:16,216 You'll recall Jack Dorsey, of course, former CEO of Twitter, 630 00:41:16,816 --> 00:41:18,416 probably has a little bit of insight here. 631 00:41:18,856 --> 00:41:22,156 This is going to sound a little bit crazy, but I think the free speech debate 632 00:41:22,156 --> 00:41:23,836 is a complete distraction right now. 633 00:41:24,356 --> 00:41:27,056 I think the real debate should be about free will. 634 00:41:27,776 --> 00:41:31,396 And we feel it right now, because we are being programmed. 635 00:41:31,856 --> 00:41:36,036 We're being programmed based on what we say we're interested in, 636 00:41:36,116 --> 00:41:41,636 and we are told through these discovery mechanisms what is interesting, 637 00:41:41,816 --> 00:41:45,216 and as we engage and interact with this content, 638 00:41:45,476 --> 00:41:48,436 the algorithm continues to build more and more of this bias. 639 00:41:48,656 --> 00:41:53,036 But the algorithm, even if it's open source, is effectively a black box. 640 00:41:53,036 --> 00:41:58,556 You cannot predict 100% of the time how it's going to work, what it's going to show you. 641 00:41:58,996 --> 00:42:04,036 And it can be moved and changed at any time. And because people become so dependent 642 00:42:04,036 --> 00:42:09,416 upon it, it's actually changing and impacting the agency we have, the free agency we have. 643 00:42:09,796 --> 00:42:14,436 And I think the only answer to this is not to work harder at open source in 644 00:42:14,436 --> 00:42:18,616 algorithms or making them more explainable about what they're doing and why 645 00:42:18,616 --> 00:42:20,676 they're doing it, but to give people choice. 646 00:42:20,676 --> 00:42:25,316 Give people choice of what algorithm they want to use from a party that they trust. 647 00:42:25,596 --> 00:42:30,216 Give people choice to build their own algorithm that they can plug in on top of these networks. 648 00:42:30,736 --> 00:42:36,356 And that's really the biggest problem and why these corporations became so large 649 00:42:36,356 --> 00:42:41,456 and so valuable is because they solved the discovery problem on the internet. 650 00:42:41,756 --> 00:42:43,616 We talk a lot about the public square. 651 00:42:44,676 --> 00:42:47,416 But the public square cannot be owned by one company. 652 00:42:48,359 --> 00:42:52,279 The public square, by default, is the internet. But the problem with the public 653 00:42:52,279 --> 00:42:57,219 square is it's very hard to discover and to be matched with the things that 654 00:42:57,219 --> 00:42:58,199 you're truly interested in. 655 00:42:58,439 --> 00:43:02,219 And that's where the value of a Google came in. It helps you discover. 656 00:43:02,439 --> 00:43:04,919 That's where the value of a Facebook, it helps you discover your friends. 657 00:43:05,139 --> 00:43:09,699 The value of a Twitter helps you discover news and interesting content of the day. 658 00:43:10,559 --> 00:43:13,999 But if we can solve the discovery problem in an open source way, 659 00:43:14,119 --> 00:43:16,719 in a free agency way, that you get to choose, 660 00:43:17,299 --> 00:43:21,259 how you see the world and what algorithms you're using and you know more or 661 00:43:21,259 --> 00:43:25,079 less how they're how they're working and that you can turn them off and see 662 00:43:25,079 --> 00:43:29,739 everything otherwise it really is attacking, 663 00:43:30,339 --> 00:43:35,659 free will it's it's programming how we think and we can resist it all we want 664 00:43:35,659 --> 00:43:42,199 but it knows us better than we know us because we tell it our preferences implicitly 665 00:43:42,199 --> 00:43:47,499 and explicitly all the time and it just It just feels super dangerous to continue 666 00:43:47,499 --> 00:43:49,359 to rely upon that without choice. 667 00:43:51,659 --> 00:43:54,999 That was actually a really great talk. It was The Power of Open Source, 668 00:43:55,059 --> 00:43:56,039 and I think it's under 30 minutes. 669 00:43:56,699 --> 00:43:59,739 So I'll link to the whole thing in the show notes if you'd like to watch it. I recommend it. 670 00:44:00,159 --> 00:44:03,259 I think he's absolutely right, and that's why I've gotten more and more serious 671 00:44:03,259 --> 00:44:07,419 about Noster. If you'd like to find my public key, it's chrislass.com. I have it over there. 672 00:44:07,819 --> 00:44:11,539 But the reason why I think about this is you can see it even with legacy media. 673 00:44:11,539 --> 00:44:16,699 You know, if you think about what the legacy media chooses to show you, 674 00:44:16,739 --> 00:44:19,539 it's kind of like they're running their own algorithm, if you will. 675 00:44:20,019 --> 00:44:24,059 And if you look up stats of Bitcoin acceptance and adoption, 676 00:44:24,379 --> 00:44:27,679 you'll notice it's really bad in the UK. 677 00:44:28,539 --> 00:44:34,219 Very unfavorable poll results, whereas, you know, 30, 40 percent favorable here in the States. 678 00:44:34,779 --> 00:44:39,759 And it's generally considered much less well-received when you do polling around 679 00:44:39,759 --> 00:44:41,839 Bitcoin and cryptocurrency in the UK. 680 00:44:42,519 --> 00:44:45,839 I've always wondered why that is, because they need Bitcoin just as badly, 681 00:44:45,839 --> 00:44:47,759 if not worse, than we do here in the States. 682 00:44:48,917 --> 00:44:52,897 And their inflation has been horrendous. And even years of horrendous inflation 683 00:44:52,897 --> 00:44:55,197 didn't shake them out of their opinion. 684 00:44:55,717 --> 00:44:58,017 Now, again, you'll have to go look these up online. 685 00:44:58,997 --> 00:45:05,477 But there's been surveys. And just recently, on June 19th, there was surveys 686 00:45:05,477 --> 00:45:09,217 conducted of the BBC's coverage of Bitcoin since 2013. 687 00:45:10,157 --> 00:45:16,497 And when you go back through it, what you realize is that with three or four 688 00:45:16,497 --> 00:45:23,977 exceptions, all of the BBC's coverage since 2020-2013 has been negative or neutral. 689 00:45:25,077 --> 00:45:28,317 Only like four stories or so have been positive since 2013. 690 00:45:29,157 --> 00:45:31,117 And you might be wondering, well, how many times did they cover it? 691 00:45:31,157 --> 00:45:35,437 A lot. This chart, I'll put a link in the show notes, it shows you. A lot. 692 00:45:36,517 --> 00:45:39,637 Starting on April 12th, 2013, their first story, which was neutral. 693 00:45:40,257 --> 00:45:44,237 But by 2014, 2015, they were getting pretty negative. And if you look at the 694 00:45:44,237 --> 00:45:48,677 last few years, really since May of 2020, all negative. 695 00:45:49,197 --> 00:45:54,277 But there's a lot of negative in between too. But it's just been consistently negative. 696 00:45:55,097 --> 00:45:59,017 And that's programming the population. And they're getting all warmed up over 697 00:45:59,017 --> 00:46:01,697 there with their CBDC too. They're going to be one of the first to get one. 698 00:46:01,857 --> 00:46:05,297 So they're all going to end up being crypto users. That's the irony of it. 699 00:46:06,097 --> 00:46:10,657 They're all going to end up being crypto users, even though when they're surveyed, they hate it. 700 00:46:10,757 --> 00:46:14,577 I just think that's so funny. And they're going to have the worst shit coin 701 00:46:14,577 --> 00:46:16,797 of them all, a CBDC, right? 702 00:46:17,697 --> 00:46:21,417 So, you know, I mean, there's an irony in that. I laugh at it, I guess. 703 00:46:21,477 --> 00:46:24,517 But I'll put a link to that in the show notes because I think that data is just 704 00:46:24,517 --> 00:46:28,537 absolutely fascinating when you analyze the coverage of the BBC. 705 00:46:28,957 --> 00:46:32,517 Like I mentioned, chrislast.com for that Noster public key. 706 00:46:33,077 --> 00:46:36,677 Links to what I talked about today are thisweekinbitcoin.show. 707 00:46:37,257 --> 00:46:40,517 This is episode 16, so you can find episode 16 over there. 708 00:46:40,877 --> 00:46:44,557 Get the transcript, get the chapters, get the links to what we talked about today. 709 00:46:44,557 --> 00:46:47,917 Day i sure would appreciate a boost or if you shared this show with somebody 710 00:46:47,917 --> 00:46:52,017 who might be a little bitcoin curious and if you have a podcasting 2.0 show 711 00:46:52,017 --> 00:46:55,677 that you love send it in i'm trying to build out the community i really i really 712 00:46:55,677 --> 00:46:58,817 want this to be like the bitcoin news podcast for podcasting 2.0 so i'm trying 713 00:46:58,817 --> 00:47:01,777 to do reaching out to like different podcasters and just saying hello, 714 00:47:02,577 --> 00:47:06,277 so if you've got a favorite show out there boost in the name of it or send it 715 00:47:06,277 --> 00:47:09,517 through my contact page so i can reach out and say hello to them and we're gonna 716 00:47:09,517 --> 00:47:12,637 we're gonna wrap it up with a value for Value song like I love to do. 717 00:47:12,677 --> 00:47:15,797 There's so many great ones these days. 718 00:47:17,200 --> 00:52:24,565 Music.