The federal reserve chairman says that he watches or at least what we're really.
Expecting or what i'm expecting is a is a crash in the morning,
big economic news today yeah today's song goes out to jerome powell if you missed
the story well where have you been all day the federal reserve as expected cut
interest rates today but rather Rather than playing it safe with a quarter point cut,
the Fed came on big with a half point cut.
That's a very, very aggressive move. And this is the first rate cut in four
years since the Fed started tackling high inflation by deliberately cooling
the economy with the highest interest rates in 23 years.
Music.
Welcome in to This Week in Bitcoin, episode 27. My name is Chris,
and welcome to the start of a new business cycle.
What we've just witnessed, to put it in perspective, it's like the halvening
for the Western financial markets.
We had a 50 basis point cut. Now, for those of you that were wondering.
105 out of 114 economists that were betting on which way this would go, bet wrong.
105 out of 114 thought we were going to get a 25 basis point cut.
This is only the third time in recent history that the Federal Reserve has started
with a 50 basis point cut.
The previous two times, the economy crashed. So we are kind of in this wait
and see period. This could be the calm before the storm.
Today, as I record, the Bank of England is likely to announce a rate cut.
And then on Friday, the Bank of Japan will likely announce a rate hike.
So let's step back just a moment, because if you ever wanted to see a bunch
of financial wonks get giddy, just get them on television the day or hours before
a rate cut. And it's like Christmas for them.
Let's talk about the Fed's two-day policy meeting. Of course,
if you haven't heard, it kicks off today and a lot of debate on the street.
What's the debate about? Oh, yeah, Yeah. Twenty five or 50. Let's get over to
Steve Leisman. He's got the results of CNBC's latest Fed survey.
What do they tell us, Steve?
So we were doing all these surveys, doing all these. What is it going to be?
What is it going to be? And they even had countdowns going on the screens.
We are just hours away from the Federal Reserve's September policy decision.
With more on what to expect today is Yahoo Finance Fed correspondent Jennifer
Schoenberger. This is this is like your Super Bowl, Jennifer.
Yes. It was the day we've been waiting for since late last year, Brad. Yeah.
So, OK, see, this is just a little sample of the things I watch.
So you don't have to. OK, but let's fast forward to the actual news.
We'll just bypass all of the gassing, the hours of television spent just predicting
what might happen. And let's go to Jay Powell himself.
He comes out after the FOMC meeting and he announces the 50 basis point cut. Thank you.
Good afternoon. My colleagues and I remain squarely focused on achieving our
dual mandate goals of maximum employment and stable prices for the benefit of the American people.
Our economy is strong overall and
has made significant progress toward our goals over the past two years.
The labor market has cooled from its formerly overheated state.
Inflation has eased substantially from a peak of 7 percent to an estimated 2.2 percent as of August.
We're committed to maintaining our economy's strength by supporting maximum
employment and returning inflation to our 2% goal.
Today, the Federal Open Market Committee decided to reduce the degree of policy
restraint by lowering our policy interest rate by a half percentage point.
So the reason why a half percentage point or 50 basis points is such a big deal
is because it's traditionally followed by a recession.
It's an admission that the Fed is late. They're saying this time around it's not the case.
But I think regardless of what Jerome Powell jawbones about,
you just can't ignore the fact that we can't cut defense and we can't cut entitlements
and we have massive, massive amounts of debt.
And we had that super, super bad jobs report.
So what you get is the market bracing itself for a bad recession when you start
with a 50 basis point cut. My next guest says, welcome to the pivot party.
And while she wasn't, isn't a soft landing camp, rather history has shown that
initial rate cuts almost always coincide with recessions. I want to bring a
UBS private wealth management managing director, Allie McCartney.
Allie, let me just share this with the audience for a second, right?
So the initial rate cut, the first time when they go into these rate cutting
cycles, it always seems to be with the gray lines right around recession, right?
I mean, it's, it's happened time after time, a little bit early there.
It's just, It's always happened. Right. And so why is why wouldn't it happen this time?
What's so different about now than than all these other times?
Well, that is why I didn't think he was going to go 50 basis points,
because the other stat that you can quote is that every time they've gone 50
basis points, it has been followed by recession.
So I thought simply from a marketing perspective, a series of 25 would have
been much more palatable.
So we have a couple of things that are showing recessionary trends.
We have the spread between the two-year and the Fed funds rate,
which is extremely negative.
At the end of the day, whether you believe the specific data,
we have earnings growing at 11%. We have that earnings growth broadening out.
We still have... But we're coming out of an earnings recession,
though. I mean, is that really a good tell for the overall economy?
Or is it just saying, hey, it was so awful the last couple of years, we can only do better?
So we've been out of an earnings recession for a number of quarters now,
probably for the majority of the year. There are a number of different trends
now, a materially different cost of capital, so private and public spending
going up, that we have the Kambui.
We have a consumer who, yes, the savings has been depleted, but now their interest
payments on everything from a car, the housing market, which has been in recession
for a number of years, is going to pivot.
We're going to get more housing starts, more mortgage applications.
So she says she's overall bullish. I think what's interesting about it is you
can't really get any two people to agree.
They can look at the same data and say, oh, yeah, we're going to go into recession now.
And another group of people say, no, it's it's going to pump.
The reality is we likely saw the Fed act a little late on the bad July jobs correction.
That's my theory is if they had that data in July, they would have had a cut then.
Then but they had to they
they don't meet they don't meet in august so they had to wait
till the september meeting and the the insight there
is in the q a portion of jerome
powell's session his little meeting there he was
asked if they had the date in july would they have cut and his
answer essentially was yes about july and i
guess if you if you ask you know
if we'd gotten the July report before the meeting would we have cut we might
well have we didn't make that decision but you know we might well have I think
that's not you know that doesn't really answer the question that we ask ourselves
which is let's look you know when at this meeting we're looking back to,
the July employment report the August employment report the two CPI reports
one of which came of course during blackout and all the other things that I
mentioned we're looking at all All of those things.
And we're asking ourselves, what's the right what's our what's the policy stance we need to move to?
We knew it's clear that we clearly,
literally everyone on the committee agreed that it's time to move.
It's just how big, how fast do you go and what do you think about the path forward?
So this decision we made today had had broad support on the committee and I've
discussed the path ahead.
In other words, jobs are a problem. And I think if we continue to see weakening
jobs, you're going to see the market.
Basically bully the Fed into lowering rates again and again.
And the way they'll do that is by poor performance.
And I think the signal is right there.
If they had that information in July, they likely would have cut.
Well, what does that mean? That means the September cut was too late.
So the question is whether they're going to do 25 basis points or 50 basis points.
This is Arthur Hayes, and I think he has a pretty brilliant macro mind.
And this is just before the the announcement, but I think it still holds true.
So going now with the 50 basis point scenario.
I, at a high level, think that they should not be raising rates.
I believe that the U.S. economy is quite strong.
If you've seen the GDP prints over the last eight or nine quarters,
it's been consistent growth.
The U.S. government... The growth, I will argue, is mostly coming from the government
and military spending in the war in Ukraine.
But I agree with his overall premise that I'm not so sure we should be raising rates at all.
We'll come back to that. In growth, the US government continues to spend an
insane amount of money, which is keeping economic growth at a very fast pace.
And obviously that helps the re-election chances or election chances of Kamala
Harris and her running mate, which I think is the goal of the current democratic administration.
So the Fed cutting rates when you have massive government spending,
you have inflation that's above their target. I think it's a mistake.
I think that inflation is going to accelerate into the fourth quarter if they
decide to continue cutting rates.
And I think that the response is going to be if the markets start to falter,
they're just going to do more of it and they're going to make the problem even worse.
Yeah. This is my theory as well. So if they do 25 or 50 and the markets react
opposite of what they believe, so I think everyone believes that the markets are going to go up.
The more they cut, the more the markets go up, whether that's stocks,
bonds, cryptos, all that kind of stuff.
I actually take a contrarian view that the more they cut, the more the markets
are going to dislike that maybe one or two trading days after the fact,
but they're not going to learn their lesson.
They're just going to keep doing more of it. So we're going to get a very quick cutting cycle.
So that's sort of my view. I think one thing you can always count on is if things
don't quite go the way they want, they're going to manage even harder.
And they're already signaling that they're going to have more rate cuts.
They're already telling us we're not done cutting. And so there was a lot of
discussion back and forth, good diversity of division, excellent discussion today.
I think there was also broad support for the decision that the committee voted on.
So I would add, though, look at the SEP. All 19 of the participants wrote down
multiple cuts this year, all 19.
That's a big change from June, right?
Seven of them wrote down three or more, and, sorry, 17 of the 19 wrote down
three or more cuts, and 10 of the 19 wrote down four or more cuts.
So, you know, there is a dissent, and there's a range of views,
but there's actually a lot of common ground as well.
There's going to be more cuts is the common ground. How many more cuts and into
how far into next year, that's where they don't have common ground.
But more cuts this year, they have common ground.
And you wonder why then, why now? Is it because of the election? No.
I'm actually going to say I don't think it is.
I mean, maybe it's a factor, and just stabilizing the economy during an election is a factor.
But I think they're truly trying to pull this one out before it's too late.
And you have to remember, they have this kind of small window of time that they
can actually operate in.
I think his name is Gart. He's an IBM vice chair and former NEC director.
He laid this out pretty well. Do either one of you gentlemen agree with and
understand the move yesterday, Gary? So let me start.
Sorry, it's Gary. I wrote down Gart.
Sorry, Gary. And the move yesterday, Gary. So let me start and say yes.
I think you have to understand we're in a really unique position in terms of
the Fed. We have this 90 day or three month window where the Fed only meets
once in the middle of this window.
So literally August was was Jackson Hole.
We meet in September and then there's no October meeting.
So there's this large window where the Fed sort of had to compress their activity into one window.
And in a way, like the Jackson Hole announcement where he said,
oh, yeah, it's time to reevaluate policy.
That was kind of a kind of a rate cut, like a signal to the market.
It was a it was a proverbial rate cut.
And then we have another proverbial rate, real rate cut now, I suppose.
Either way, I think we do have long term, either if we have chop,
you know, up until the election, maybe through October, or if things really
pop, there is long term support for a bull run.
You know, this this bull market has been such narrow participation.
And I think it's because this is the only bull market we've had in postwar history
where the it's lived under Fed tightening its entire existence.
I think it's incredible, too, that Bitcoin has performed as well as it has during
a rate tightening cycle.
There were critics out there that said that Bitcoin was a low rate phenomenon
and that it would die once the rates were raised.
Well, that wasn't true at all. Bitcoin thrived.
Also, big tech thrived, right? Like our speaker here, whose name is Jim Paulson,
like he's saying, there was a narrow band participation.
There was a massive consolidation. Some folks made a lot of money.
But it wasn't a true bull run. We've never had that.
And the thing I'm a little excited about is we're finally going to change that
now, where the Fed's going to finally start to ease.
And I think it's going to feel a little bit like the start of a bull when they
usually are easing rather than two years in.
And normally at this point, the Fed would have been easing to come out of the
recession and get the bull going.
And then two years in, we'd be talking about the Fed should tighten now.
But we're doing it just backwards and so I think the Bulls going to act differently
to where you're going to see finally broader participation and,
going on and probably the mega cap stocks lag, but other parts of the market
sort of pick up. We finally get full support.
We get Fed easing, bond yields decline, money growth is going up.
We still got disinflation.
And I think the big thing yet is we finally restore confidence a little bit.
Another missing element since the pandemic has been just constant pessimism.
And if that picks up, the impact on the stock market historically from rising
Raising private sector consumer and business confidence is huge.
I agree that we've been in this funk since the pandemic when it comes to the
market, especially for the average folks.
However, I'm not quite as bullish because I think we're going to see inflation
get agitated as a result of this.
Now, I think it's going to take a little bit. People are tight.
We've seen M2 supply going up now for a couple of months, but we really haven't
seen asset inflation as a result yet.
But what's going to happen is the middle class is going to get squeezed more
by inflation as it begins to restock, I would imagine, next year.
That's why owning an asset like Bitcoin is going to become more and more self-evident.
And BlackRock is really bullish.
BlackRock put out a presentation, a link to their PDF that they clearly created with PowerPoint.
But it's still, it's well done. And they say it's a unique asset diversifier.
This is BlackRock. It's a unique asset, they say. it has low long-term correlation.
They'll say, and I love this because they address, yeah, there's short-term
volatility and occasional co-movements, they say, but Bitcoin has shown over
the long-term, it doesn't correlate with stocks and bonds. It is its own thing.
It has its own distinct set of risks and return drivers aside from the rest
of the market. It has historical performance.
It's outperformed major asset classes in seven out of the last 10 years.
It's achieved 100% annualized return over the last decade.
It's experienced major drawdowns, and still it comes back.
They also say it's a potential hedge against global monetary instability in this report.
They say also, specifically, it's a hedge against U.S. fiscal sustainability
concerns and political instability in countries in the West.
This is a BlackRock report. I just find that interesting. Also,
they call it a flight to safety, and they say it is a portfolio diversifier as well.
And it kind of, I guess, put some stink behind this report, right?
BlackRock CEO Larry Fink was out on the interview circuit once again,
admitting that he got it wrong when he said that Bitcoin was a measure of financial
scams and that it was a scam itself.
He says he got it wrong and he wants everybody to know it.
Now, I know that you have been a leader in willing to embrace crypto.
You have made it so that people can be in Bitcoin.
We hear that you are thinking about Ethereum. These are incredible things.
Now, BlackRock is not known as a gunslinger by any means. So you obviously must
believe that this may be as an alternative.
Is this an alternative in order to be able because of the deficit,
maybe something long term people should have? Absolutely.
As you know, I was a skeptic. Yes.
I was a proud skeptic. And I studied it. I don't like this guy.
I don't think he's a particularly intelligent individual.
But this is the boss of the U.S. financial market, and the U.S.
Financial market is the liquidity engine of the world.
This is a worldwide podcast, and yet I'm focusing on rate cuts happening here
in the U.S., and I'm focusing on U.S.
ETFs, and I'm focusing on a U.S. bank. Why?
Because they are the global liquidity driver. And when you understand the size
and scale of markets, you understand the impact that the U.S.
Has. And so to have sort of the kingmaker of that industry say that Bitcoin
is a good thing and that he was wrong and he re-evaluated his opinion,
it makes it politically untenable to disagree with him if you are in the sector.
It is massive for the reputation of Bitcoin amongst the bankers.
Why we care is because we're looking for mainstream adoption.
We need the network to be healthy.
We want users to make miners profits, et cetera. Yes.
You know, I was a proud skeptic.
And I studied it, learned about it, and I came away saying, okay.
My opinion five years ago was wrong. Here's my opinion today.
This is what I believe in today. I believe the opportunity today.
I believe Bitcoin is legitimate.
I'm not trying to say there's not misuses like everything else.
Like cash. But it is a legitimate financial instrument that allows you to have
maybe uncorrelated, non-correlated type of returns.
That's a big deal in the financial world when you're worried about the U.S.
Debt and the fact that the banks are all about to start lowering rates,
even though inflation is going to take off.
This is the language of the investor class.
He's telling them that this is a safe haven for all of these headwinds.
That allows you to have maybe uncorrelated, non-correlated type of returns.
I believe it is an instrument that you invest in when you're more frightened,
though. It is an instrument when you believe that countries are debasing their
currency, debasing their currency by excess.
You know, it's interesting. He's changed his language a little bit.
He clearly got a talking to from somebody. Maybe it's just his PR people.
But you might recall he used to say, in fact, I played the clip.
Bitcoin is hope. He doesn't say that anymore. Deficits and some countries are.
I believe we have countries where you're frightened of your everyday existence.
And if you have an opportunity to invest in something that is outside your country's
control, then you can have more financial control.
And so I'm a major believer that there is a role for Bitcoin in portfolios.
I believe you're gonna see that as one of the asset classes that we all look at.
I look at it as digital gold, as I said before, and I do believe there's a real need.
For everyone to look at it as one alternative to, I would say,
the optimism that I have in the world.
You see what he's doing here. So first of all, just wait till they figure out
it's so much more than digital gold, so much more.
It's going to be, once they've made that click, and maybe some of the boomers
that have been investing for a long time, you know, that have been fortunate
enough to do this for 30 plus years, maybe they'll never make that shift.
But there is going to be a class of investor that begins to realize that Bitcoin
is also the network, right?
It is the miners. It's so much more than just digital gold.
But what I notice, and it's got to be some sort of hedge he's doing here now,
is he's trying to portray it as for people that are paranoid. Not me. I'm hopeful.
I used to talk about Bitcoin as hope. No, I'm optimistic.
I'm optimistic that the world governments are going to figure all of this out.
I mean, that's why I've backed this ETF launch and we're going all out on this
Bitcoin ETF, because I'm so positive and hopeful.
The Western governments are going to figure this out. And he's such a BS-er,
and he's not even good at it. So this is where he does a little spin.
As one alternative to, I would say, the optimism that I have in the world,
if you want to hedge hope, Bitcoin is not an instrument for hope,
unless you're hopeful you're going to make a lot of money on it.
But I look at it as a vehicle in which you're expressing your financial acumen
in something that you're more frightened of the world, you're more frightened
of your existence. And I believe there's a great industrial use for it.
And I think a lot of people are missing that.
I couldn't agree more. I changed my mind about what you did.
Oh, funny how that works, huh, Kramer?
Idiot. What a solid investor you are. So one has to wonder, why now?
You know, these ETFs are still new. They're doing terrific.
They're back to taking in a whole bunch of money and sucking up a whole bunch
of Bitcoin out of the system, making the asset even more scarce. But why now?
Right as this cycle is beginning, I mean, if you look at things on a financial
timeline, those ETFs launched just right at the moment before the halvening
and before a new business cycle starts with rates going down.
And the Winklevoss twins tried for 10 years to get an ETF.
Grayscale tried for 10 years to get an ETF going. So why now?
Well, Arthur Hayes, going back to Arthur Hayes, who I think has a pretty good
handle on these types of topics, he has a theory as to why BlackRock's ETFs
were approved when, say, the Winklevoss twins were denied.
So I think at the end of the day, ETFs are for people who want the price performance of Bitcoin.
They don't want to own Bitcoin. They They don't want to be their own financial institution.
They want to outsource that to Larry Fink, BlackRock, and all these other major
institutions, which is fine. Bitcoin, you can do whatever you want with it.
What does that mean? You're a passive investor and you're not actually using the protocol.
So if we take this to the extreme and every single Bitcoin is owned by BlackRock
or a similar sort of institution, then the network goes to zero because no one's actually using it.
So the reason why Bitcoin has value is because we use it. It's not like gold.
I can hold gold in a vault for eternity and it's still gold.
It's still a chemical property of being gold.
If I don't do anything with the Bitcoin, then the miners don't get paid and
the network dies. And that's a fundamental, very nuanced difference between
Bitcoin and gold, which I think is not a problem today. It could be a problem in the future.
But at the end of the day, if you're thinking about why now,
why did BlackRock get in their ETF approval in six months and the Winkle Clowns
couldn't get one in 10 years, right?
They both live in New York. They're both billionaires, both very rich.
Why weren't they given one and BlackRock was given one in six months?
Well, at the end of the day, you want the same financial institutions to control
the wealth that can ultimately be appropriated by the government at the flick of a switch.
BlackRock is just another arm of the US government, just the same as any other
large Chinese asset managers and arm of the Chinese government.
And so if you're thinking about, I need to make sure that the wealth doesn't
escape into this Bitcoin thing, because it actually is very,
very useful for the average person.
Well, most people are lazy. They don't actually want to deal with being their
own financial institution. So let me give them a very easy product that they
can two clicks, have the Bitcoin price appreciation, but not actually be able
to move their money outside of the system. And so that's why these ETFs are around.
That's where they're very successful because it's very easy to do.
And the government likes them because all the money is staged at the same institutions.
And if they need to go and they say BlackRock, now the tax is 50% on AUM.
Here you go, government. And there goes your Bitcoin.
So what do you think? Is that a long term risk to these ETFs?
And also, his notes in there about the Bitcoin network dies if we don't use
it for day to day transactions, which is his ultimate logic for being an ordinals
guy. Do you think that's true?
I would love you to boost in your thoughts on future risks to the Bitcoin network
in general with the ETFs or what might happen with mining revenue.
I'm optimistic when it comes to all of that, but I'd like to hear your take
on it. Maybe I'll either reevaluate and then I'll share mine as well.
Moving right along, though, there's still a lot of show. Your boosts,
Trump's crypto project, a killer final clip of the week, and some project updates
that I'm very excited about. So stick around.
But first, I want to mention the Bitcoin Company. The BitcoinCompany.com,
use my promo code jupiter you get some sats i
get some sats if you've got some sats sitting around
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We've got the sats. And then, you know, throw that into Instacart or DoorDash
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Also, if you want to buy some sats, you want to stack those sats,
check out River.com. I have an affiliate link in the show notes.
It's just a little way to give a kickback to the show. No official relationship with them.
I just think if you're in the U.S., they're the best way to stack sats.
And I have a little bit more on River coming up in a bit. I think they're just a terrific company.
So the Bitcoin company and And using river as well as boosting are some ways
you can support this here show.
Music.
All right. And we do have some boosts this week.
And Hank Hoddle comes in as our baller booster this week with 66,333 sats.
Hank, you got it on sale this week. He says, FUD busting champ here.
Your pod's my secret weapon against the mainstream media madness with my orange-pilled crew.
Ah, so it's a vote for keeping the FUD busting then. And it's a baller boost
too, so the vote carries some extra weight there.
Thank you, Hank. That's good to hear. I can imagine, too, that if you've been
the person that introduced Bitcoin to friends or family and then they hear about
some sort of wild scam on the mainstream media, they come to you with questions.
I'm glad I could help. I'm glad I could help you answer those questions.
Thank you for the boost, Hank. Pizza Chief comes in with 40,000 sats.
I hoard that which your kind covets. Okay.
You know what? These are really great boost usernames.
Pizza Chief writes, Chris, I appreciate your hard work bringing us the information
in the Bitcoin space. I look forward to every new show.
Pizza Chief, thank you. Thank you for returning the value there.
I really appreciate it. These boosts are going the extra mile this week.
Lazy Locks comes in with 20,000 sats. You shall all bombard.
Here's some sats for your efforts, good man. Thank you, LazyLocks. Appreciate that.
Oppie1984 came in with 4,000 sats. O-O-S-T. And he just says, boost!
Boost! Thank you, Oppie. It's always nice to hear from you.
Spectris comes in with a row of ducks, 2,222 sats.
I'm doing mental exercises to try to understand what will happen when the full
amount of coins are finally mined.
The show keeps referring to all the unbanked and lower middle class stuck out
there out of investments. What happens to those that miss the train when all the coins are gone?
Won't we see the same issue with housing where it's astronomically expensive
to get into the market late due to supply limits? I'm interested in your thoughts.
You know, Spectris, this is something I'll probably maybe talk about more in
the newbie section of the show.
But the reality is, is that people always have life expenses.
There's, you know, I always want to show somebody how you can buy a steak with
sats to we need to buy a car.
We need to get, you know, medical procedure done. We want to buy a house,
a boat, you know, fix an RV.
Not that I have an experience there. But you know what? There's always a life
expense. There's always things changing. There's always coins moving hands.
But also, you know, we could get to a point where 37 sats is generational wealth.
I'm not saying that's going to happen in our lifetime. Yeah.
The divisibility of Bitcoin is it means that it means that the price of Bitcoin
could get astronomical because we can be we can especially with things like
lightning and fentanyl, we can just do a few sats.
There's no reason why a loaf of bread should be more than three sats, for example.
So it's just kind of don't look at the don't look at the big price on Bitcoin.
Coin, I actually think the more interesting price to track is SAT to US dollar,
which, you know, slowly but surely becomes closer and closer to parity.
That's a great question, though. Let me know if I answered it or if you have
any further questions. And thank you for the boost.
Ace Ackerman comes in with a row of ducks.
Hello, Ace. I grew up near Bethlehem, where a town was It was built around a
steel manufacturer that ran blast furnaces 24 hours a day for over 100 years.
It's home to two universities and a regional hospital. And I never heard anyone
complain about bleeding eardrums or hair loss from pets or getting hit in the gut, too.
It's total propaganda. You must continue to bust the FUD, Chris.
Yeah, I think Marathon, you know, probably should have been more aware of the
noise they were making going into a residential area.
We had a booster right in, too. They could have built an industrial-only zone.
And I think they're making the right steps. But yeah, somehow the fan noise gave the guy a gut punch.
It made a pet lose its hair. And another gal was bleeding just from the ears.
It doesn't really add up. And it makes me wonder if there's some other military
experiment going on there.
Not to put on the tinfoil hat, but what's really happening there?
Gene Bean comes in with 2,048 sats. Coming in hot with the booms.
Yes, on the FUD busting. It helps me speak educated to non-Bitcoin people.
Oh, that makes sense, Gene.
Yeah, I guess, too, like when you're talking, when Bitcoin comes up,
a lot of times, whatever the latest FUD of the cycle is will get thrown at you. So I follow you there.
Open source accountant comes in with 2,000 cents.
You realize I'm an accountant and I do work in Bitcoin and I am, quote, near you.
At least it's a good reason to come back on the east side of the mountains.
So open source account, when I said that, I was thinking of you,
but I wasn't sure if you've actually delve into like companies that have Bitcoin on the balance sheet.
We really, if you have, and that's something you're comfortable working with, we really should talk.
Because obviously that's the direction I'm taking JB, right?
I mean, it's not the micro strategy, but it is a podcast stacking strategy, my hope, right?
For example, 2,000 sats isn't going to make or break JB today,
but as you guys continue to support the show and we stack the vast, vast majority,
if not all of those sats, I'm hoping over time it makes JB immune to the ups
and downs of the economy, which we document how crazy it is on this show.
I don't want the success and sustainability of the content tied to that wacky system.
So, yeah, open source account, we should talk. And thank you for the boost.
It is always really great to hear from you.
Todd from Northern Virginia comes in with 11,111 sats. Put some macaroni and cheese on there, too.
You know, that's a zesty drink. It's a zesty drink.
Speaking of the housing market, a commercial real estate investor in Texas has
discovered evidence of countrywide systemic fraud in property tax assessments, costing U.S.
Homeowners billions each year in inflated taxes.
Any homeowner should be aware of this, and I encourage them to listen to Mitch
Vexler's interview on the Real Estate Guys podcast.
Go search for Real Estate Guys on the index.
There are all kinds of scams that will continue to occur as the fiat dollar
implodes, ripping off the American public.
That's super insightful, Todd. Thank you, too. So again, it's Mitch Vexler,
V-E-X-L-E-R, and he's on the Real Estate Guys podcast if you want to hear more
about this property tax scam.
I also am a believer that as the fiat system crumbles and we get into late stage
fiat, you're just going to see more and more people grabbing for money.
From government programs you know taking from
people's retirement accounts just more and more
scams more and more people that are essentially grifting
off of financialization and not actually producing for
the economy because as rates come down and money supply goes up that's like
becomes the most efficient way to like net big bags of fiat it's horrible and
i think it's something that people need to be vigilant about thank you for the
boost bob b comes in with 5 000 sats a Jar Jar Boost. You suppose.
Chris, regarding the FUD busting during the episodes, I'd say keep it.
It's helpful when I'm discussing Bitcoin with non-Bitcoiners that use FUD-inspired
points to dismiss Bitcoin.
Man, Bob. Oh, man, do I know what you mean. I find I'm better able to give counterpoints
after I hear the bigger picture from you. Oh, I'm glad to hear that.
So that's universal with Bob there. I think that's universal.
Keep the FUD busting. I won't go crazy with it.
But I think the bigger ones that kind of get out there should probably be talked about.
Thank you for that insight, Bob. Appreciate it. User 61 comes in with $2,100.
Well, Germans actually save in cash a lot.
They are the worst suckers in broken money. That's why the average wealth in
Italy is higher than Germany.
Ah, that's some great insight, user 61. So perhaps what I read about them...
Well, I guess I'm wondering if the point that I brought up on the show that
they don't traditionally use their house as a savings vehicle,
is that true? Because that's what.
That's what the internet told me when I was doing my research.
I've also heard that about Japan.
So if anybody has insights about how those markets use housing for savings or not,
I'd be really curious because I'm thinking as the markets get just more and
more wild, people just need something that they don't have to constantly think
and watch over like a Tamagotchi pet, which is what the stock markets become, right?
But you DC into Bitcoin or you buy a house, you hope that you don't really have
to watch or perhaps gold, right? But the returns on houses and gold and all
of that are just so complicated, especially when you consider money play expansion.
Thank you for the boost. BitCryptic comes in with 2,048 sats.
That's not possible. Nothing can do that. Another vote to keep the FUD busting.
Equally, call out organizations in the Bitcoin ecosystem that are doing the wrong thing.
They don't help the cause. And in some cases, they just need guidance rather
than deliberately doing it wrong.
Interesting. I will keep an eye out for that. I haven't really given that much thought.
But yeah and i could see also just sending these some of these some of these
organizations a little note hey man what you doing come on you don't want to
do that thanks bit cryptic appreciate the boost,
coffee or death oh i'm feeling that one today comes in with one two three four
five sets the space balls boost so the culmination is one two three four five
nice to hear from you coffee team Team Toronto and Matrix is rocking,
and here's a plus one for taking some time off.
You know, from time to time, perhaps.
I came in a little late this week so that way I could kind of watch what the
market reacted to, to the 50 basis point cut and how everything's going down,
but it's still so early to tell.
It seems like right now is pretty historical times. We're just at the beginning.
Thank you, Coffee. Appreciate that. Thank you, everybody who boosted in.
We had some good streamers this week, 33 individual folks. just streaming sats
as they listen, and we stacked 33,261 sats from the streamers.
Bringing it together with those of you who also sent boosts,
That brought our total to 208,000 sats.
Not going to complain about that at all. Not a barn burner, but not going to
complain about that at all.
And we had 50 individual people participate in the Value for Value system.
Thank you, everybody who does boost in. We have the 2,000 sat cutoff,
but I read all of them and keep them all in the show notes.
And of course, appreciate those of you who stream those sats.
If you haven't tried out Fountain yet, the Nostra integration is pretty wicked. it.
I'm seeing some strong Cast-O-Matic love these days, as well as some Breeze. Oh, and Podcast Index.
So Breeze and Podcast Index are two options if you don't want to change podcast apps.
You love your podcast app, but you want to boost, you might try out the Breeze
app. It supports lightning. You can go throw our RSS feed in there,
or you can find our podcast.
It'll give you a basic playback, but the idea is to just give you a mechanism to boost,
to send a message without having to switch podcast app so that's breeze b-r-e-e-z-e
i guess you'll find them all listed at podcastapps.com thank you everybody so
much who participates in that it really means a lot this show is a value for
value podcast and that means that your support is what keeps it going.
Music.
Trump decided to shitcoin this week. The whole Trump family,
really, they started the World Liberty Financial Project.
It includes a mix of the Trump family members, including 18-year-old Barron,
who's listed as the chief DeFi visionary for the group, and some other folks in there.
I'll play this clip. They'll give us a rundown of what's going on.
I think it's like a stablecoin DeFi lending platform.
You know, I'm not your guy for DeFi, but here's the deets that we have.
The Trump family released details of its new crypto project,
World Liberty Financial, during a launch event last night on X.
And Mackenzie Segalis joins us now with more. Good morning.
Hey, good morning, Joe. So last night, World Liberty Financial had a big announcement,
still isn't live, and we don't yet have an activation date.
But we did find out who's on the exec team for the Trump crypto enterprise,
some details of the official token launch, and roughly what the platform aims to do.
Now, in terms of the org chart, Donald Trump, his sons, his close friend Steve
Witkoff, and Steve's two sons are all founding members.
They're describing World Liberty Financial as a decentralized crypto banking
platform where users will be able to borrow, lend, and earn interest on cryptocurrencies.
But really, the headline of Monday's more than two-hour livestream is that,
yes, the Trump family is helping to launch a token.
But no, the founders are not taking the widely reported 70% of total tokens
issued. a figure that was based on what's believed to be a leaked internal memo
from the World Liberty team.
Instead, the equity structure is very much in line with other DeFi projects. Which is horrible.
Over 20% goes to the founding team, right? I think like 37% is a pre-mine and
63%, something like that goes to the public.
I don't really, you know, I just thought this was interesting.
This is probably the most brazen time to do this as well, right?
Right before the election, and also right as the rate cuts start. Just start, right? Wow.
Quite the thing. I don't really have much to comment on it. I'd like to know
what you think, though. Go ahead and boost it in and tell me.
I'll cover them next week.
I had a little newbie corner thing I wanted to cover for you,
too, just a short one this week, because I'm trying to keep it under an hour.
For God's sakes, I'm trying to keep it shorter than it is right now.
And like that was going to happen this week. So you'll often hear that you need a little inflation.
It's considered necessary for a healthy economy.
And that is absolute propaganda.
That is just a built in grift to design to steal from you.
And I could rant about this forever. But I found this great clip from Saifedean,
who is the author of The Bitcoin Standard.
And he was in an interview with Lex Friedman. And he actually was talking to
this point. And I thought we'd play that.
I'm going to focus for this on the money idea, the idea that a little bit of inflation is good.
The idea here, I mean, the criticism is that without inflation, people wouldn't spend.
And then the economy would come to a grinding halt. And that's nonsensical because
people spend not because they want to keep this magical monster called the economy going.
People spend because they need to consume because, you know,
that's how we live. That's how we survive.
You need to eat. You need shelter. You need clothes to keep you warm.
And as technology advances, the capabilities of the things that we can do with
our time increases. And so we want to buy more things.
So people buy things because people want to consume. There's a limitless desire to consume.
There's no shortage of reasons for people to consume, whether it's food or Ferraris or private jets.
People just always want to buy more. And this is why you don't need built-in
inflation to keep things going.
And this is why I don't think you have to worry about the Bitcoin network going
stagnant once everybody hodls their coins.
You're always going to have these life moments that come up.
Maybe you need to sell some of your Bitcoin stats so you can get a sweet deal
on that Trump coin, that World Liberty coin.
I'm kidding. I am totally kidding. That's just a joke. All right, some project updates.
The best wallet for Bitcoin, Sparrow 2.0, is released.
There's a lot here in new hardware support, like the Trezor Safe 5 and the Ledger
Stacks. They also updated Java and JavaFX 22.
And there's Slip39 share recovery in here. It's a major release.
I mean, when you begin with an update to like the Java underlying stuff,
but also it's been upgraded to support macOS 11 and newer, GTK3 and newer.
So that means if you're on macOS 10.5 or 10.15, I'm sorry, you're no longer
going to be able to run this.
And if you're on a Linux box that can't do GTK3, you won't be able to run this.
But those are pretty old systems. and it does take care of problems that we're
cropping up on more modern operating systems and it sets the project up for
some really nice future capabilities that we'll get into.
Sparrow combined with a cold wallet or cold card or whatever hardware wallet
you want to use is a great combination and I initially will admit that I had bounced off of Sparrow.
It just seemed too complicated and there was too much.
I felt like maybe I could shoot myself in the foot. But the opposite is actually true.
When these Bitcoin wallets hide information from you, inevitably it can cost you money.
It can cost you privacy. It can reveal things you don't intend to.
Sparrow is a top-notch wallet that gives you all of the information you need
to fully participate in your Bitcoin network, in your Bitcoin lifestyle.
And additionally, lean into hosting your own node and really kind of embracing
the entire sovereignty of it. I just love Sparrow. To see 2.0 come out is really fantastic.
And then another company, well, I guess Sparrow's not really a company,
but a company that you guys hear me talk about, River, really,
really set the bar this week.
River announced proof of reserves that sets a new standard for any Bitcoin exchange
out there because their proof of reserve make it possible for you to verify your reserve.
So not just that they have the Bitcoin they claim to have, but they have created
tools so that all of their clients can verify their reserve in River.
So you always know they actually are holding the coins they say they're holding,
and they have a video that walks you through how to do it.
They say, quote, you'll be able to do this regardless of technical ability while
providing a more advanced users the tools they need to run in-depth local verification.
And they've posted the code up on GitHub.
River is such a great company, and I got to meet these people.
I'm just so impressed by everything they do.
And Alexander put out a nice long blog post where there's a video in there that
walks you through this and links you to the tools to get all of this.
Again, we have the affiliate link in the show notes. No official relationship
with them, but I'm just very impressed as I've watched them over the years.
They've continued to go from strength to strength. And making this tool available
so you can verify that the SATs you're holding on River right now as you stack are there –,
That gives me a lot of trust. That is, that's some solid stuff.
It's time for our final clip of the week. And this one was sent to me on Noster.
Shout out to a proto-Zan Nubness on Noster who linked this to me.
This is Natalie Samulski and she's at the Cato Institute. They had an event
where they're talking about CBDCs and she articulates the financial privacy,
and risks with CBDCs in a way that I've never really heard before.
And so I just had to play this as a clip for you. Natalie.
So when we talk about rights, we're not talking about balance.
Rights are absolutes. They are, as one of the panelists earlier today was saying,
they are limits to state power.
What people do when they exercise their rights is remind powerful actors that they hold those rights.
And the problem is that we, the people, haven't been exercising our rights to financial freedom.
We have a constitutional right
to transact financially, just as we have a constitutional right to speech.
We have a constitutional right against warrantless search and seizure.
We have a constitutional right to not incriminate ourselves,
because everything we say can and will be used against us in a court of law.
So what is the Fifth Amendment remedy to this? You don't have to speak.
You can stay silent.
Anonymity is the financial, transactional version of silence.
It is us choosing not to engage with a law enforcement agent.
That is a sovereign right that we as American citizens have.
Are people going to do bad things with this right? Yes, they are.
And there is some degree of criminality that is indispensable and inescapable for a free society.
And so the choice that we have now before us, as Americans is,
will we continue to be a free society?
Or will we simply default to the state using the power that's already available to it?
Power acts not because it wants to, but because it can.
So what limits are we putting on that power?
Technologically, judicially, politically? That is our question as a people.
That is the conversation we should be having. So well put.
If you made it this far, I want to thank you very much. You are on board the
show at just the right time. We are about to watch history go down.
And this show is uniquely positioned to capture the signal every single week
right here. Here, links to what I talked about are this week in Bitcoin.show.
Please do boost in with what you'd like to hear or see from the show if you
have any questions. And do consider sharing it with a friend who might be Bitcoin curious.
Now, I leave you with a value for value track. This is Don't Be Curious.
Music.