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Once you get above the tipping point, and then you get that flipping of sentiment, people

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start buying dips rather than selling rips, it's not hard to construct a million dollar

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price tag.

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Do you think this signifies that something's going to break and they're going to need to

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print a load of money?

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The trend of yields is higher.

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Literally, the value of the collateral that backs the whole system goes down in price.

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It's the market saying that something's wrong with the bedrock.

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But what does Bitcoin do in that environment, do you think?

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There is a price or a value where your obligations are larger than your assets.

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You want to have assets outside the system because everything else is going to be debased.

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We're in an era where the monetary system is changing.

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The world is going to look very different on the other side of this thing.

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I believe this is a trial balloon where they're trying to see how willing are people to accept changes of this magnitude.

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There's an exit route.

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We've got a period of time here where you've got to fight back.

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You ready?

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Let's go.

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Let's get into it, checkmate.

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Good to see you, man.

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Likewise, man. Thanks for coming down.

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You were pretty dejected when I saw you outside,

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but we're going to save that bit for later.

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There's good reason for it.

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Let's start with Bitcoin, though.

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Are we in a bull or a bear market?

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Because the way I look at this is,

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I think the bear market,

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sorry, the bull market starts

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the day after the bear market bottom.

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The worst day of the bear is the start of the bull.

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I'm not this believer that you have to get past all-time high

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to go into a bull market.

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But like, is it too early to say we're in a bull market

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or do you think we are?

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So this is the right framework to think about it.

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So the way I've been describing it,

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you don't know when the bottom is in

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until months and months and months after

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and then you look back and go,

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oh, okay, it was obvious.

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We spoke very soon after we hit 60K in February.

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My view was, and I've been calling it

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the price pain capitulation.

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This is the point where everyone who's price sensitive

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just gave up and they all gave up at the same time.

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You can see it in just the amount of loss,

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the amount of coins that moved, the amount of fear.

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My inbox got slammed.

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There's a ton of different anecdotes and reasons.

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That was a point in time where if you've been through a capitulation before,

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your alarm went off and you go, ah, that felt different.

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That felt like June 2022.

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Yeah.

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Right, 17.6.

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We went to 15.6, but no one really, price-wise, no one cares,

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but the eight months have separated them.

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So there is a very good case to be made that that was the price pain capitulation.

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Now, if you go back and look at previous bear markets,

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2015, we kind of revisited the low.

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I figured it was $250 or whatever it was.

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We didn't go below it.

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In 2018, we didn't.

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We basically bottomed and there was just like slow,

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multi-month grind higher and then April away we went.

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In FTX, we had June, kind of eight months of grinding

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with FTX in the middle of it.

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That one we did go lower.

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We did go lower than the previous,

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than the price paying capitulation.

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That's actually the only example we have where it went lower.

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And I think a lot of people, because recency bias is a real thing,

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look at 2022 and say it must be lower lows.

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May not be.

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We may pull back to 65 and bounce higher from there.

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We may pull back to 75 and set a higher low.

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So from my perspective,

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I've been saying there's about an 80% chance

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that we've actually got the bottom is in.

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That's my base case.

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So that is like we're in a bull market.

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We'll look back at it.

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But my view is that you build confidence.

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So we know unless Bitcoin goes to zero,

85
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we can all say that at some point in time,

86
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we're going to be back in a bull.

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so what we're trying to do is work backwards and say well at what threshold do you go from 50%

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to 60 to 70 to 80 and depends who you are like for me i spend all day in the data and i trust my

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own gut more than anything else and my own instinct on studying this stuff i've got about an 80% view

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that it's the bull is in play but it's going to take a long time like all like 2016 2023 2023 took

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us the whole year to get above 30,000. The whole year of just boring grinding and everyone was

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afraid that every cell was another lower high. But ultimately, the thing just wanted to keep

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moving higher. So my view is that if you want to go back and say, is it a bull? I would say yes.

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80% odds. 20% is still very meaningful, one in five. However, I would also say that once we get

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through the 80s, right? 78K is quite important. Short-term cost basis, true market mean, a bunch

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of on-chain levels, that's kind of the middle.

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That's the middle of everyone's cost basis

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where they feel if you get above to 85,

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people felt a brief sigh of relief.

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If you go to 85, you break through what I call

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the second line of defense, 200-day moving average.

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Suddenly, you're momentum, guys, with a Bloomberg terminal.

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Bitcoin shows up as a not-red asset.

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There's a bunch of things that just we get above

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a big supply cluster, people's cost base are there.

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Getting above 85, the bear case, in my view, is in trouble.

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The bears are also going to defend that level very, very hard.

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The last line of defense is ironically the same

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as the bull's last line of defense.

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We spoke about this again when we had Alec on...

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95K.

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Yeah, 80K in November.

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Okay.

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95.

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So the 50-week moving average, just super simple stuff, right?

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The classic Bitcoin bear is you break below the 50-week moving average,

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you visit the 200-week.

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We got to within 3% of the 200-week.

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The 200-week is now higher than where the bottom was.

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It's like 60.5 now.

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So even if we revisit the 200 week, it's not going to be a low, a low.

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But the other thing is once you get to 95,

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the bears are kind of in trouble, right?

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And you've already given up the 60 to 95.

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So by the time we get above 95,

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every man and his dog is going to agree it's a bull.

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I try to work backwards and say, well, if we get through 78,

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and by the way, I don't expect we'll do this the first time ever.

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It's always going to take a series of whacking our head against the ceiling.

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Get through it at 78.

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the odds of us going to 85 go up a lot.

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Once you get above 85,

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the odds of us going to 95 go up a lot.

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So it's almost like an exponential increase in the odds.

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And I'm looking at the way market structure looks at the moment.

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To my instinct, to my gut feel,

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I think that 60K was sufficiently bad

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that it scared a lot of people.

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Smart money's radars go up and go,

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okay, I need to accumulate.

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And something that I think happened on this rally,

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and I know this because I've received tons of these messages,

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people who go,

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So it turns out I didn't buy as much

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as I would have liked below 70.

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Where do you think the next dip's going to go down to?

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I'm like, ah.

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That's a signal.

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That's me in 2019.

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We got to 4K, 5K, 6K.

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I bought way too much at 14

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and then I got slammed in the second bear.

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But I kept buying through that process.

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I'm like, I think the tide has now changed.

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So that's my current view.

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But if you're 80%,

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what are the metrics that have hit

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that make you 80% sure?

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There's a bunch of things.

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I mean, let's just start technical, right?

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Let's just start with the technical models.

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Now, I'm no technical analyst, but I understand how it works.

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And the reason why I like to look at technical stuff on very big picture,

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I know that every man and his dog with an ETF, right?

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The TradFi guys aren't looking at the stuff that I look at.

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Yeah.

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But they're going to look at the weekly RSI, which got to 26,

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which is the lowest level it's been ever.

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And every time it's been below 30, it's been the bottom, like the bottom.

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So from a technical level, and even if we sell off again...

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Is that what these institutional people are really looking at?

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Oh, hell yeah.

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I mean, again, a lot of these guys, they just have filters, right?

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Their quant is in there doing all the weird numbers.

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But a lot of these guys have got a Bloomberg terminal.

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They see Bitcoin.

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Where is it relative to its 200-day moving average?

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When it flips, it goes from red to green.

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Suddenly, they've just got their eye on it.

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They don't care about stuff on the daily chop

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because they know, as everybody should learn eventually,

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some people don't, but as you should learn eventually,

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the daily chop just drives you mad.

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It doesn't mean anything.

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And everyone applies.

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I've got this like I guess a human psychology thing I use as an anchor.

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People love to take big macro stuff, the debasement trade,

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and they apply it to the next candle.

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They go, why isn't it going up?

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I don't get it.

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And they also take big picture things and they expect it to happen

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on a micro timeframe.

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We do the opposite as well.

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We look at the next red daily candle and go, oh, man,

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just another lower high.

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It's all over.

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The bears were right.

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and they compress and they extend small stuff to be very big.

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And the big guys, they've done this enough times.

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They just zoom out and they go, look, things massively oversold.

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Probably no longer expensive.

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00:08:04,500 --> 00:08:07,060
If you just really zoom out and go like at 60K,

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I've got a mean reversion model that looks at on-chain, technical, trend.

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All of those models, if you put them together and aggregate them,

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I don't want to have bias for technical, bias for on-chain,

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bias for fast models, slow models.

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I use nine of them, take an average, right,

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work out where we are because I don't know

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00:08:24,460 --> 00:08:25,440
which one's going to be perfect.

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None of them are.

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Going down to 60K was what I call Q10 event,

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10th quantile.

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00:08:32,200 --> 00:08:33,740
10% of all days have been lower.

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In history, if you look at where Bitcoin was relative

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00:08:36,240 --> 00:08:38,160
to all these things it oscillates around,

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00:08:38,820 --> 00:08:40,100
10% of days were lower.

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00:08:40,480 --> 00:08:42,160
Now, that means that 90% of the time it's higher.

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00:08:42,860 --> 00:08:44,980
So that's a pretty good gauge.

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00:08:45,120 --> 00:08:48,100
Like we've bottomed at Q4, Q5 in previous bears.

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That's 54K.

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00:08:49,760 --> 00:08:51,240
That's the realized price right now.

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00:08:51,620 --> 00:08:54,460
I see a lot of bears posting like,

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00:08:54,500 --> 00:08:56,260
you know, this bear flag is going to break down to 45.

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Maybe.

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00:08:57,260 --> 00:08:58,400
And I'll learn a lot if that's true

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00:08:58,400 --> 00:08:59,660
because it's certainly not my base case.

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My model says that's a Q1 event.

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Now, can it happen?

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00:09:02,940 --> 00:09:04,260
Yes, nothing's a zero probability,

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00:09:04,400 --> 00:09:05,900
but am I going to make a base case

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00:09:05,900 --> 00:09:08,520
on something that has only ever happened in 2011

232
00:09:08,520 --> 00:09:09,540
at $2 Bitcoin?

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00:09:09,900 --> 00:09:12,280
I can't in my right mind do that.

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00:09:12,360 --> 00:09:15,880
So I have satisfied myself that I'm not worried about 45K.

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00:09:16,020 --> 00:09:17,780
If it happens, I'll learn from that experience,

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00:09:17,780 --> 00:09:20,320
but it's not something that phases me at this point.

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If you already self-custody Bitcoin,

238
00:09:23,020 --> 00:09:24,580
you know the deal with hardware wallets.

239
00:09:24,980 --> 00:09:26,720
Complex setups, clumsy interfaces,

240
00:09:27,040 --> 00:09:29,480
and a seed phrase that can be lost, stolen, or forgotten.

241
00:09:30,240 --> 00:09:31,320
Well, BitKey fixes that.

242
00:09:31,860 --> 00:09:33,320
BitKey is a multi-sig hardware wallet

243
00:09:33,320 --> 00:09:35,360
built by the team behind Square and Cash App.

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00:09:35,700 --> 00:09:37,440
It packs a cryptographic recovery system

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00:09:37,440 --> 00:09:38,860
and built-in inheritance feature

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00:09:38,860 --> 00:09:41,080
into an intuitive, easy-to-use wallet

247
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with no seed phrase to sweat over.

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It's simple, secure self-custody without the stress.

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and time named Bitkey one of the best inventions of 2024.

250
00:09:50,560 --> 00:09:54,220
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276
00:11:36,860 --> 00:11:40,960
You talk about realized price a lot. Why is that like one of the most important metrics?

277
00:11:40,960 --> 00:11:43,120
Right now, it's actually a very interesting metric.

278
00:11:43,120 --> 00:11:45,680
So the realized price, there's two on-chain models,

279
00:11:45,680 --> 00:11:47,360
three that I think everyone should understand.

280
00:11:47,360 --> 00:11:48,560
They're all the same idea.

281
00:11:48,560 --> 00:11:50,320
So let's start with the big boy.

282
00:11:50,320 --> 00:11:53,920
The realized price, rather than looking at every...

283
00:11:53,920 --> 00:11:56,000
So the spot price is every coin in the supply

284
00:11:56,000 --> 00:11:57,120
valued at the spot price.

285
00:11:57,120 --> 00:11:58,480
That's the market cap.

286
00:11:58,480 --> 00:12:01,040
The realized cap is every coin in the supply

287
00:12:01,040 --> 00:12:02,080
valued when it last moved.

288
00:12:02,080 --> 00:12:05,440
So Satoshi's million coins are big in Bitcoin terms,

289
00:12:05,440 --> 00:12:07,120
zero in realized terms.

290
00:12:07,120 --> 00:12:08,000
Now, that's an important...

291
00:12:08,000 --> 00:12:08,880
Hold that idea.

292
00:12:08,880 --> 00:12:12,560
Old lost coins, big in Bitcoin, small in USD.

293
00:12:13,380 --> 00:12:15,380
Someone who bought yesterday, his coins are worth 78.

294
00:12:15,560 --> 00:12:16,740
Someone who bought the top, 126.

295
00:12:17,200 --> 00:12:19,720
So the idea is that when coins move around the system,

296
00:12:19,840 --> 00:12:21,460
they're signaling they're not lost.

297
00:12:22,200 --> 00:12:25,540
And as they're revalued, some of them are cost basis changes,

298
00:12:25,760 --> 00:12:27,800
some of them are inflows, ETFs, all of that stuff.

299
00:12:28,560 --> 00:12:31,600
We can also then measure, so every coin has a cost basis

300
00:12:31,600 --> 00:12:33,280
based on when the UTXO was created.

301
00:12:34,120 --> 00:12:34,940
Aggregate them all together.

302
00:12:34,940 --> 00:12:37,880
What is the average purchase or acquisition price,

303
00:12:38,000 --> 00:12:38,760
in inverted commas?

304
00:12:38,880 --> 00:12:41,040
and this is where it starts to get funky and interesting

305
00:12:41,040 --> 00:12:44,380
from my perspective, it's not really an acquisition price

306
00:12:44,380 --> 00:12:48,840
because Satoshi's coins, they're valued at zero,

307
00:12:48,960 --> 00:12:52,980
but at 60K at the low, they hold $110 billion

308
00:12:52,980 --> 00:12:54,220
of unrealized profit.

309
00:12:55,100 --> 00:12:57,080
Now, in order to get to break even,

310
00:12:57,320 --> 00:12:59,120
which means we hit the realized price,

311
00:12:59,320 --> 00:13:02,020
every previous bear we've gone below the realized price.

312
00:13:02,360 --> 00:13:03,800
So tons of people are looking and saying,

313
00:13:03,940 --> 00:13:05,300
we haven't hit the bottom of the bear

314
00:13:05,300 --> 00:13:06,400
because we haven't gone below the realized price.

315
00:13:06,400 --> 00:13:14,060
the problem with that is satoshi can't take those one point uh 110 billion in profit but the guys

316
00:13:14,060 --> 00:13:18,060
who bought the top to get to break even you need 110 billion dollars worth of people who buy the top

317
00:13:18,060 --> 00:13:25,060
and hodl through it now the challenge with that is they do lock in the losses they reduce their

318
00:13:25,060 --> 00:13:28,500
unrealized loss because they go oh shit get me out of this thing right i don't want to hold it

319
00:13:28,500 --> 00:13:34,440
anymore so they panic so in order to over time as bitcoin gets bigger those locked unrealized

320
00:13:34,440 --> 00:13:40,700
profits, they actually create this like lowering effect because you've got all these coins that

321
00:13:40,700 --> 00:13:45,840
never contributed to the numerator, the realized cap, the value of every coin when they moved,

322
00:13:46,140 --> 00:13:50,740
but they will always have a big weight in the denominator. And if you know how a fraction works,

323
00:13:50,740 --> 00:13:54,380
if you've got a bigger denominator and a smaller numerator, you're going to have an underestimate,

324
00:13:54,760 --> 00:13:59,820
always going to be underestimating. And the bigger Bitcoin gets, the bigger that underestimation

325
00:13:59,820 --> 00:14:05,700
will be. Now, the model that I believe is when everyone says the realized price is the cost basis

326
00:14:05,700 --> 00:14:12,160
of everyone, it's the cost basis of every coin. But everyone is a human thing. That's a person

327
00:14:12,160 --> 00:14:16,420
behind the coin, a person behind the screen metric. That's what I call the true market mean.

328
00:14:17,100 --> 00:14:20,300
Now, Dave Puel and I developed this as part of our coin time economics framework.

329
00:14:21,080 --> 00:14:26,520
And what we try to do is we have this formula. Think about every coin of all of the coin days,

330
00:14:26,880 --> 00:14:29,280
One Bitcoin generates one coin day per day.

331
00:14:30,200 --> 00:14:33,140
If Satoshi's coins, they've only ever accumulated coin days.

332
00:14:33,200 --> 00:14:34,000
They've never destroyed them.

333
00:14:34,460 --> 00:14:37,140
The guy who spent yesterday has destroyed all of his coin days

334
00:14:37,140 --> 00:14:39,000
and he's only just starting to reaccumulate them.

335
00:14:39,360 --> 00:14:40,760
So that's the two ends of the spectrum.

336
00:14:41,300 --> 00:14:43,000
This guy's coin is much more active.

337
00:14:43,200 --> 00:14:44,120
Satoshi's is dead.

338
00:14:44,760 --> 00:14:47,640
So we literally use that health bar across the whole system

339
00:14:47,640 --> 00:14:49,720
and work out, well, where are the active investors?

340
00:14:49,820 --> 00:14:53,800
Let's get rid of all the lost coins and the early investors

341
00:14:53,800 --> 00:14:55,080
who have no cost basis.

342
00:14:55,080 --> 00:14:57,260
and we're arguing over where they're going to move with quantum.

343
00:14:58,120 --> 00:15:01,740
Let's look at what the average cost base is for active investors, 78K.

344
00:15:02,100 --> 00:15:03,400
What's Saylor's cost basis?

345
00:15:03,720 --> 00:15:05,360
Who's, I would say, a DCA-er.

346
00:15:05,520 --> 00:15:06,420
This is about 78K, right?

347
00:15:06,420 --> 00:15:06,660
75.

348
00:15:06,980 --> 00:15:07,200
Okay.

349
00:15:07,360 --> 00:15:09,760
What's the average for the ETFs in terms of the inflows?

350
00:15:09,860 --> 00:15:10,160
82.

351
00:15:10,900 --> 00:15:11,880
What's the average?

352
00:15:12,260 --> 00:15:14,540
I've got this model where I do like a difficulty regression

353
00:15:14,540 --> 00:15:17,760
between a regression model between difficulty and market cap.

354
00:15:18,460 --> 00:15:22,960
In the ASIC era, average cost all in to mine, about 82.

355
00:15:22,960 --> 00:15:27,580
So you're getting 82, 82, 78, 75, that zone.

356
00:15:28,120 --> 00:15:29,720
And then when you look at the supply distribution,

357
00:15:29,840 --> 00:15:32,400
there's a ton of coins in that 85 area,

358
00:15:33,020 --> 00:15:35,400
both from the tariff tantrum back in 25,

359
00:15:35,720 --> 00:15:37,520
but then also on the first sell-off that we had

360
00:15:37,520 --> 00:15:38,240
at the start of this year.

361
00:15:39,200 --> 00:15:39,840
It's the middle.

362
00:15:40,140 --> 00:15:40,920
That's the centroid.

363
00:15:41,180 --> 00:15:43,840
So all that is the reason that 85K is such an important level

364
00:15:43,840 --> 00:15:44,800
because we're getting above that.

365
00:15:44,980 --> 00:15:45,260
Correct.

366
00:15:45,540 --> 00:15:48,380
And then if you think about it, on the way down,

367
00:15:49,080 --> 00:15:50,640
and here's some fun facts for you.

368
00:15:50,940 --> 00:15:52,460
People worry about buying the top

369
00:15:52,460 --> 00:15:54,100
because they're worried about their losses going up.

370
00:15:55,540 --> 00:15:57,540
We had about $270 billion.

371
00:15:57,680 --> 00:16:01,400
At 60K, $270 billion of unrealized loss.

372
00:16:02,140 --> 00:16:02,960
Sounds like a big number.

373
00:16:03,080 --> 00:16:04,120
It's a quarter of a trillion dollars.

374
00:16:04,900 --> 00:16:07,360
Until you factor in that we had $900 billion,

375
00:16:07,860 --> 00:16:11,540
almost a trillion of unrealized profit evaporate.

376
00:16:11,540 --> 00:16:14,240
So people's portfolio that they didn't sell

377
00:16:14,240 --> 00:16:16,420
got smashed by almost a trillion.

378
00:16:17,200 --> 00:16:18,580
That's the painful part.

379
00:16:18,580 --> 00:16:23,140
So if you think about that centroid at 85, 70, 85,

380
00:16:24,020 --> 00:16:26,180
as price gets closer to that level,

381
00:16:26,540 --> 00:16:29,320
people who were previously counting out their bills

382
00:16:29,320 --> 00:16:31,520
and thinking, look at all this stuff I can buy,

383
00:16:31,920 --> 00:16:34,460
suddenly go, now I'm in winter.

384
00:16:34,720 --> 00:16:35,380
I've got to wait.

385
00:16:35,700 --> 00:16:37,380
I hate this thing, right?

386
00:16:37,440 --> 00:16:38,680
I can't believe I'm down 50%.

387
00:16:38,680 --> 00:16:40,920
Oh, shit, I've got to clear my leverage loan

388
00:16:40,920 --> 00:16:41,780
before I get liquidated.

389
00:16:41,860 --> 00:16:44,080
Like, people start feeling negative.

390
00:16:44,320 --> 00:16:46,540
The more cost basis levels you drop below,

391
00:16:46,540 --> 00:16:49,760
the more people start to compound and go, I think it's over.

392
00:16:50,020 --> 00:16:51,120
Now I'm in pain.

393
00:16:51,320 --> 00:16:52,240
Now I'm going to capitulate.

394
00:16:52,380 --> 00:16:53,100
Oh, shit, it's all over.

395
00:16:53,140 --> 00:16:53,700
I'm selling everything.

396
00:16:54,400 --> 00:16:57,420
So what you're doing is on the way back up,

397
00:16:58,320 --> 00:17:01,680
first line of defense, 78, second line, 85, third line, 95.

398
00:17:02,520 --> 00:17:05,080
As you get through those levels, there's technical models there

399
00:17:05,080 --> 00:17:07,280
that the dude with the Bloomberg terminal will see

400
00:17:07,280 --> 00:17:09,040
and the traders, the momentum guys.

401
00:17:09,480 --> 00:17:12,200
There's also levels that very often on-chain models

402
00:17:12,200 --> 00:17:15,120
that describe human behavior, where they feel.

403
00:17:15,680 --> 00:17:16,980
Once you get above the tipping point,

404
00:17:17,400 --> 00:17:19,400
you've now got a bunch of people who bought the bottom

405
00:17:19,400 --> 00:17:21,900
who now go, hey, I just got rewarded for that.

406
00:17:22,540 --> 00:17:24,000
And then the people who bought at 80K,

407
00:17:24,160 --> 00:17:26,600
they might take profits here and say, give me my money back.

408
00:17:27,000 --> 00:17:28,560
But if you get to 85, they go, ooh,

409
00:17:29,100 --> 00:17:30,580
maybe I should actually just haul through this now.

410
00:17:31,140 --> 00:17:32,740
And then you get that flipping of sentiment.

411
00:17:32,900 --> 00:17:34,680
People start buying dips rather than selling rips.

412
00:17:35,120 --> 00:17:36,740
So it's a process.

413
00:17:37,780 --> 00:17:39,800
Getting out the ass end of a bear market is a process.

414
00:17:39,800 --> 00:17:41,800
It usually takes the best part of a year.

415
00:17:42,480 --> 00:17:45,020
But everyone fantasizes over this bottom wick.

416
00:17:45,120 --> 00:17:46,640
and they won't do anything

417
00:17:46,640 --> 00:17:47,800
until getting to the bottom wick.

418
00:17:48,180 --> 00:17:49,420
Go back to my mean reversion model.

419
00:17:49,920 --> 00:17:51,860
I was beating the drum at 60K.

420
00:17:52,020 --> 00:17:53,160
I put out a piece called,

421
00:17:53,260 --> 00:17:54,360
literally at 60K,

422
00:17:54,620 --> 00:17:55,740
called Welcome to Deep Value.

423
00:17:56,140 --> 00:17:56,880
And my point was,

424
00:17:57,140 --> 00:17:57,920
I can't tell the future.

425
00:17:58,020 --> 00:17:58,860
I don't know if we go lower.

426
00:17:59,420 --> 00:18:00,580
But what I do know is that

427
00:18:00,580 --> 00:18:03,140
I don't have a single metric on hand right now

428
00:18:03,140 --> 00:18:05,200
that is in the bottom 20% of the cycle.

429
00:18:06,020 --> 00:18:09,160
If you just start DCAing over that last 20%,

430
00:18:09,160 --> 00:18:11,360
it means you've got an 80% chance of winning.

431
00:18:12,120 --> 00:18:13,160
Don't worry about the price.

432
00:18:13,160 --> 00:18:15,640
just be there for that bottom 80%.

433
00:18:15,640 --> 00:18:17,500
Even if we pull back to 75%,

434
00:18:17,500 --> 00:18:19,200
all of those folks are going to be very, very happy

435
00:18:19,200 --> 00:18:19,760
with their decision.

436
00:18:20,100 --> 00:18:22,640
So it's just about putting the odds in your favor,

437
00:18:22,700 --> 00:18:23,500
not worrying about this.

438
00:18:24,380 --> 00:18:25,260
Delete bears.

439
00:18:25,420 --> 00:18:27,700
Bears have no ambition

440
00:18:27,700 --> 00:18:29,020
because the problem with bears

441
00:18:29,020 --> 00:18:31,560
is that the best they can win is 100%.

442
00:18:31,560 --> 00:18:33,220
You can only short something to zero.

443
00:18:33,720 --> 00:18:35,360
And even then, we know that that's constrained.

444
00:18:35,620 --> 00:18:36,480
The upside is unlimited.

445
00:18:36,480 --> 00:18:39,400
So if you spend too much time listening to bears

446
00:18:39,400 --> 00:18:41,700
after most of the damage has been done,

447
00:18:41,700 --> 00:18:45,280
RSI getting to 26 on a weekly basis, sorry,

448
00:18:45,360 --> 00:18:46,200
that's a momentum sign.

449
00:18:46,960 --> 00:18:49,900
The downside momentum is no longer in their favor.

450
00:18:49,980 --> 00:18:51,300
It's just a bad short.

451
00:18:51,480 --> 00:18:52,160
Delete bears.

452
00:18:52,360 --> 00:18:53,520
Yeah, no, don't delete bears.

453
00:18:53,560 --> 00:18:54,240
Just ignore them.

454
00:18:54,640 --> 00:18:55,720
Ignore them, laugh at them.

455
00:18:55,900 --> 00:18:57,660
When we last did the show,

456
00:18:57,760 --> 00:18:59,140
I think Bitcoin was about 60K.

457
00:18:59,220 --> 00:19:00,080
It was pretty much the bottom.

458
00:19:00,160 --> 00:19:01,140
And I remember we were saying,

459
00:19:01,260 --> 00:19:02,520
this feels like deep value.

460
00:19:02,620 --> 00:19:03,900
And I'm not in the data like you are,

461
00:19:03,980 --> 00:19:06,140
but I've been looking at the Bitcoin chart

462
00:19:06,140 --> 00:19:07,300
for 10 years now.

463
00:19:07,420 --> 00:19:09,520
And so I just get gut checks every now and again.

464
00:19:09,960 --> 00:19:12,860
And at 80K, it doesn't feel like deep value anymore.

465
00:19:13,480 --> 00:19:15,380
But it does feel like things are sort of swinging.

466
00:19:15,520 --> 00:19:17,560
Like, I was desperately stacking as much as I could.

467
00:19:17,600 --> 00:19:19,140
I was doing anything I could to stack at 60K.

468
00:19:19,240 --> 00:19:20,480
That's kind of stopped for me right now.

469
00:19:20,540 --> 00:19:20,820
Yes, agree.

470
00:19:21,060 --> 00:19:23,900
But, like, if 85 is the next number that we need to get past,

471
00:19:23,940 --> 00:19:26,220
and then 95, like, how quickly do you think that can happen?

472
00:19:26,280 --> 00:19:29,260
And this is why the recovery from a bear takes ages.

473
00:19:29,660 --> 00:19:31,920
Because people like you and I, I'm the same, right?

474
00:19:31,920 --> 00:19:35,300
We're still, like, again, my main reversion index, it's 33.

475
00:19:35,500 --> 00:19:36,240
We're in the bottom third.

476
00:19:36,820 --> 00:19:38,760
Do you care if you got, like, if you walk into a casino,

477
00:19:38,760 --> 00:19:40,120
You know, let's say two thirds of the time you're going to win.

478
00:19:40,580 --> 00:19:41,700
Are you going to like not play?

479
00:19:41,820 --> 00:19:42,500
No, of course you're going to play.

480
00:19:42,560 --> 00:19:43,600
So it's still a good price,

481
00:19:43,640 --> 00:19:47,260
but it's no longer that I'm going to just like sell chairs mode.

482
00:19:47,420 --> 00:19:48,740
I'm not going to find what I can do.

483
00:19:49,700 --> 00:19:52,280
Leave your daily DCA plug in away because it's still good value.

484
00:19:52,280 --> 00:19:54,460
But like, am I putting big slugs in?

485
00:19:54,520 --> 00:19:56,480
No, I'm just letting the DCA just tap away.

486
00:19:57,500 --> 00:19:59,960
If we see anything with a seven handle again,

487
00:20:00,040 --> 00:20:03,220
right down to like a 75 or a 70 or a 60, anything.

488
00:20:03,300 --> 00:20:03,980
I mean, what are we at now?

489
00:20:04,120 --> 00:20:06,160
Like 76, five, I think.

490
00:20:06,940 --> 00:20:08,180
But that's the idea, right?

491
00:20:08,180 --> 00:20:12,440
There's a lot of people who are now expecting 40

492
00:20:12,440 --> 00:20:15,440
and they're now going, maybe I'll take 50.

493
00:20:15,440 --> 00:20:18,740
And if it comes to 65, then they might just take that as well.

494
00:20:18,740 --> 00:20:31,952
So what we really looking for is do we get the transition into a full buy the dip regime Now there a lot of things starting to inflect But to my view we more or less hit our ceiling at this like 80K zone

495
00:20:32,632 --> 00:20:34,053
You need to pull back.

496
00:20:34,132 --> 00:20:35,592
This is something that in like in markets,

497
00:20:36,293 --> 00:20:39,672
the bears at this point in time are going to get super excited on every red candle.

498
00:20:40,592 --> 00:20:43,912
Sometimes you must go down to go up because you generate,

499
00:20:44,273 --> 00:20:47,092
like we had, by the way, all of April, pretty sure it was April,

500
00:20:47,773 --> 00:20:49,553
we had a massive amount of short interest.

501
00:20:49,553 --> 00:20:52,533
People were just shorting this thing all the way from 65 up to 80.

502
00:20:53,352 --> 00:20:54,492
That's cooled off a bit now.

503
00:20:54,572 --> 00:20:56,293
They finally realized, oh, maybe I should go long.

504
00:20:56,412 --> 00:20:58,252
And you're starting to get this like degenerate traders

505
00:20:58,252 --> 00:21:00,692
just like going long at the top, going short at the bottom.

506
00:21:01,912 --> 00:21:05,293
But there's more and more people that realize I got too cute.

507
00:21:05,952 --> 00:21:06,652
It was at 60.

508
00:21:06,952 --> 00:21:08,293
I thought it was going to 58.

509
00:21:08,632 --> 00:21:10,132
I wanted my 58K gang.

510
00:21:10,392 --> 00:21:11,432
I wanted that just for the memes.

511
00:21:11,533 --> 00:21:13,692
Now it's at 80 and I didn't buy as much as I wanted.

512
00:21:13,793 --> 00:21:16,392
And those people, there's just a ton of them who are going to go, okay.

513
00:21:16,832 --> 00:21:18,172
I got too cute with the problem.

514
00:21:18,692 --> 00:21:19,992
I probably should have just DCA'd.

515
00:21:20,092 --> 00:21:21,092
Now I'm going to have to.

516
00:21:21,352 --> 00:21:24,852
And that's a hard feeling as well because that's me in 2019.

517
00:21:25,392 --> 00:21:27,672
I didn't buy anywhere as much as I would have liked

518
00:21:27,672 --> 00:21:29,773
in the 2018 bottom between 3 and 5K.

519
00:21:30,432 --> 00:21:32,452
I bought way too much at 14K.

520
00:21:32,752 --> 00:21:34,952
And then we had another bear market that ended in COVID.

521
00:21:35,852 --> 00:21:37,952
But, you know, really we chopped around 8K.

522
00:21:38,013 --> 00:21:39,273
It was kind of the average for that year.

523
00:21:40,132 --> 00:21:41,793
You know, 14K was not a good price.

524
00:21:42,252 --> 00:21:43,692
But now I look back and it's a great price.

525
00:21:43,992 --> 00:21:46,212
So, you know, it's just a game of timeframes.

526
00:21:46,212 --> 00:21:49,832
just don't get caught up in all the micro daily stuff

527
00:21:49,832 --> 00:21:51,692
and, you know, just unfollow bears.

528
00:21:51,872 --> 00:21:53,112
But how long do you think it takes?

529
00:21:53,172 --> 00:21:56,672
Because October 7th was pretty much the top, right?

530
00:21:56,932 --> 00:22:00,412
Which means it was October 6th at 6 p.m. UTC.

531
00:22:00,632 --> 00:22:03,033
I measured this because that's when all the four-year cyclers

532
00:22:03,033 --> 00:22:04,232
have their bids, right?

533
00:22:04,252 --> 00:22:06,412
Whatever the price will be on October 6th.

534
00:22:06,412 --> 00:22:06,872
That's the top.

535
00:22:06,992 --> 00:22:09,013
That's the bottom at 6 p.m.

536
00:22:09,652 --> 00:22:11,852
But so that's like eight months, seven months.

537
00:22:12,892 --> 00:22:13,972
You said it takes a year.

538
00:22:14,152 --> 00:22:16,053
Like, do you think we're close to getting out of this?

539
00:22:16,212 --> 00:22:18,752
Well, it depends because if the bull market's in play now,

540
00:22:18,832 --> 00:22:20,592
if 60K was the bottom, if we look back in six months

541
00:22:20,592 --> 00:22:22,293
and it was the bottom, then the bull market started in February.

542
00:22:23,053 --> 00:22:25,053
And by many metrics, we talked about this,

543
00:22:25,332 --> 00:22:26,813
the bull author is the bear that follows.

544
00:22:27,712 --> 00:22:30,513
If that thesis is correct, and again, all of this is a thesis,

545
00:22:30,592 --> 00:22:33,013
I can't predict the future, but that's my current working model.

546
00:22:33,572 --> 00:22:36,212
If that is the bottom, then this bear market has a lot of similarities.

547
00:22:36,813 --> 00:22:38,672
And this is the part that I think a lot of people miss.

548
00:22:39,412 --> 00:22:44,293
A lot of the under-the-hood damage, the realized loss, the fear,

549
00:22:44,432 --> 00:22:46,112
the losses that actually came into the system,

550
00:22:46,212 --> 00:22:48,152
the pain people experienced.

551
00:22:49,112 --> 00:22:51,832
I can tell you my inbox on that day told me

552
00:22:51,832 --> 00:22:53,972
from very serious Bitcoiners,

553
00:22:53,992 --> 00:22:55,773
I've heard this from other very serious Bitcoiners,

554
00:22:56,212 --> 00:22:59,513
I just had a message from people who were tenured

555
00:22:59,513 --> 00:23:02,672
and they were terrified, thinking it's all over.

556
00:23:02,752 --> 00:23:04,652
I'm like, that is the signal.

557
00:23:04,832 --> 00:23:06,592
That is the feeling that people just go,

558
00:23:07,232 --> 00:23:09,513
I'm so long this thing, I don't know, I think it's over.

559
00:23:09,672 --> 00:23:10,533
Like, oh, shit.

560
00:23:11,252 --> 00:23:13,972
That's the kind of event that really flushes out

561
00:23:13,972 --> 00:23:15,112
everyone who is price sensitive.

562
00:23:15,112 --> 00:23:17,072
If you're a tourist, you're gone. You're done.

563
00:23:17,652 --> 00:23:19,952
But it's crazy to me that tenured people would think like that.

564
00:23:20,053 --> 00:23:21,992
If you've been through the COVID crash

565
00:23:21,992 --> 00:23:24,212
and you've been through the FTX crash, this one was nothing.

566
00:23:24,293 --> 00:23:26,072
No, but I think this is where...

567
00:23:26,072 --> 00:23:28,832
This is why I like the psychological angle of all this stuff.

568
00:23:29,572 --> 00:23:33,572
Bitcoin was in a bear market versus other assets from January 2025.

569
00:23:34,053 --> 00:23:38,132
We topped versus bonds and fiat in October 2025.

570
00:23:39,352 --> 00:23:42,352
By the way, let's zoom out a little bit

571
00:23:42,352 --> 00:23:44,152
because Bitcoin's a long-duration asset.

572
00:23:44,152 --> 00:23:47,972
If we zoom out a little bit and look at Bitcoin's performance since the end of the 22 bear market,

573
00:23:48,192 --> 00:23:51,793
because that's a key point because everything went through a bear market, bonds included,

574
00:23:52,033 --> 00:23:56,313
and we suddenly move into a bonds are heading higher, rates are heading higher regime,

575
00:23:56,592 --> 00:23:59,192
a bond bear after a 40-year bond bull.

576
00:23:59,492 --> 00:24:02,313
The end of 2022 was a regime shift for the world.

577
00:24:02,773 --> 00:24:05,892
Not only that, you've got the US freezing Russia's reserves, gold, all that stuff.

578
00:24:06,533 --> 00:24:10,252
So end of 22 is a very good anchoring point to say what changed since then.

579
00:24:10,252 --> 00:24:17,392
Now, if you measure Bitcoin's performance, even up till today, including the bear, Bitcoin kicked ass.

580
00:24:17,832 --> 00:24:22,192
2023 all the way through the end of 24, January 25, it topped out.

581
00:24:22,793 --> 00:24:24,572
Everything else started running.

582
00:24:24,773 --> 00:24:27,053
Gold, silver, equities, AI trade.

583
00:24:27,172 --> 00:24:28,773
They started outperforming Bitcoin.

584
00:24:28,992 --> 00:24:32,132
So people's emotions was this parabola envy.

585
00:24:32,712 --> 00:24:37,432
Yes, Bitcoin up versus fiat, but you don't think about your past gains.

586
00:24:37,652 --> 00:24:39,852
You only think about what you're not getting today, right?

587
00:24:39,852 --> 00:24:43,952
people live in the moment. So versus everything else, Bitcoin was in a bear market through all of

588
00:24:43,952 --> 00:24:48,553
2025. And that's why I think November at 80k, we had a very, I think we did a pop then as well.

589
00:24:48,813 --> 00:24:52,852
That felt like another very meaningful flush out because we just had this like,

590
00:24:53,572 --> 00:24:56,672
this thing sucks. I might as well go and buy Nvidia, right? Get me out of this thing.

591
00:24:57,092 --> 00:25:00,932
So you've got this pent up frustration. And then February is just the final nail in the coffin.

592
00:25:01,033 --> 00:25:04,773
People are just like, I'm totally done. Now, everyone was talking about, everyone turned

593
00:25:04,773 --> 00:25:06,192
into a silver bug for a period of time.

594
00:25:06,952 --> 00:25:07,793
Very short period of time.

595
00:25:07,793 --> 00:25:11,992
That silver parabola matched Bitcoin's post-2023 performance.

596
00:25:12,412 --> 00:25:12,852
Yep.

597
00:25:13,152 --> 00:25:15,492
So in a way, silver kind of caught up.

598
00:25:15,912 --> 00:25:19,352
Also a speculative long tail, precious metal, sound money,

599
00:25:20,053 --> 00:25:22,572
caught up with Bitcoin's performance, including its bear market.

600
00:25:22,572 --> 00:25:26,592
So that just puts into perspective that, yes, silver went vertical

601
00:25:26,592 --> 00:25:29,872
to match Bitcoin after it went down 50%, you know,

602
00:25:29,872 --> 00:25:31,232
since that time period.

603
00:25:31,232 --> 00:25:33,332
if you zoom really in

604
00:25:33,332 --> 00:25:34,712
Operation Epic Fury

605
00:25:34,712 --> 00:25:37,472
Bitcoin is up 50% versus silver

606
00:25:37,472 --> 00:25:39,712
since then, it's up 20% versus equities

607
00:25:39,712 --> 00:25:41,572
it's actually doing like, if you drill down

608
00:25:41,572 --> 00:25:43,732
and say well Nvidia specifically, yeah once you get down

609
00:25:43,732 --> 00:25:45,852
to individuals, but you've got to look at these things

610
00:25:45,852 --> 00:25:47,793
in terms of like, what is a reasonable comparison

611
00:25:47,793 --> 00:25:48,832
over what time frame

612
00:25:48,832 --> 00:25:51,872
people love to measure, oh Bitcoin's the same

613
00:25:51,872 --> 00:25:53,273
price it was at the 2021 top

614
00:25:53,273 --> 00:25:55,533
it's like yeah what happened the last time it was the same

615
00:25:55,533 --> 00:25:57,952
cycle top price in a bear, it's kind of a good place

616
00:25:57,952 --> 00:25:58,672
to actually buy

617
00:25:58,672 --> 00:26:04,372
you know and by the way pro tip don't buy the top and then not buy the bottom because if you buy the

618
00:26:04,372 --> 00:26:09,912
top yeah your performance is going to suck in the bear but if you buy the bottom and you stop worrying

619
00:26:09,912 --> 00:26:14,252
about all these you know oh it didn't go up top to top bottom to bottom is what matters yeah the

620
00:26:14,252 --> 00:26:20,092
CAGR of the 200 week moving average is like 40 percent 35 percent the floor is increasing in 35

621
00:26:20,092 --> 00:26:25,192
everything else is just noise up and above that do you think we'll have the psychological level

622
00:26:25,192 --> 00:26:26,033
at 100K again?

623
00:26:26,112 --> 00:26:26,773
Because that was obviously

624
00:26:26,773 --> 00:26:27,732
a big thing on the way up.

625
00:26:27,793 --> 00:26:28,952
But now we've passed 100K.

626
00:26:29,033 --> 00:26:29,932
Do you think it'll still be something

627
00:26:29,932 --> 00:26:30,152
that plays a bit more?

628
00:26:30,152 --> 00:26:31,192
I don't think it'll be as meaningful.

629
00:26:31,513 --> 00:26:31,773
No.

630
00:26:31,952 --> 00:26:33,313
And, you know, look,

631
00:26:33,492 --> 00:26:36,013
I'm yet to find a satisfactory reason

632
00:26:36,013 --> 00:26:38,412
for why we just had so much selling

633
00:26:38,412 --> 00:26:39,172
above 100K.

634
00:26:39,632 --> 00:26:41,152
Truly, I've just settled on the,

635
00:26:41,232 --> 00:26:42,212
I've satisfied myself

636
00:26:42,212 --> 00:26:43,892
that 100K was a very special number

637
00:26:43,892 --> 00:26:44,412
for a lot of people.

638
00:26:44,533 --> 00:26:45,132
It was just stretches

639
00:26:45,132 --> 00:26:45,872
of all stretch targets.

640
00:26:45,872 --> 00:26:46,492
And we hit it.

641
00:26:46,972 --> 00:26:48,293
I remember when I first got into Bitcoin,

642
00:26:48,412 --> 00:26:49,392
people talked about 100K

643
00:26:49,392 --> 00:26:50,592
like they talk about a million now.

644
00:26:50,732 --> 00:26:52,372
Like it was this long shot thing

645
00:26:52,372 --> 00:26:53,592
that seemed like,

646
00:26:54,432 --> 00:26:55,053
don't get me wrong,

647
00:26:55,053 --> 00:26:56,352
I can see how a million dollars happens.

648
00:26:56,612 --> 00:26:58,632
But it still seems pretty far-fetched.

649
00:26:59,053 --> 00:27:01,212
And it was 100K when I first came into Bitcoin.

650
00:27:01,273 --> 00:27:04,092
I think there was people who had been holding from 2013, 2012.

651
00:27:04,432 --> 00:27:05,652
And that's just a huge number.

652
00:27:05,892 --> 00:27:06,572
It is a huge number.

653
00:27:06,692 --> 00:27:09,912
It is the point where further gains actually don't improve your life that much.

654
00:27:09,952 --> 00:27:10,132
Yeah.

655
00:27:10,533 --> 00:27:10,972
You know what I mean?

656
00:27:11,332 --> 00:27:13,092
And by the way, if Bitcoin goes to a million dollars,

657
00:27:13,132 --> 00:27:14,392
there's a lot of people listening to this

658
00:27:14,392 --> 00:27:17,852
who if you put yourself two cycles before yourself,

659
00:27:18,712 --> 00:27:20,672
and you'd be there now, right?

660
00:27:20,672 --> 00:27:22,553
That aspirational target a lot of people have,

661
00:27:22,592 --> 00:27:23,752
it's like now it's actually meaningful.

662
00:27:23,752 --> 00:27:27,352
And again, none of this is because we assume that Bitcoin must go to these levels.

663
00:27:27,352 --> 00:27:33,752
It's just a rational view of where fiat's going, the whole world, the whole Bitcoin case.

664
00:27:33,752 --> 00:27:36,752
It's not hard to construct a million dollar price target.

665
00:27:36,752 --> 00:27:39,752
It's kind of a base case of use it versus gold.

666
00:27:39,752 --> 00:27:40,752
It's just better.

667
00:27:40,752 --> 00:27:43,752
Is my son going to find Bitcoin more useful than gold?

668
00:27:43,752 --> 00:27:44,752
Of course he is.

669
00:27:44,752 --> 00:27:46,752
I mean, I found Bitcoin more useful than gold.

670
00:27:46,752 --> 00:27:49,752
It's a pain in the ass to move metals, which is a feature.

671
00:27:49,752 --> 00:27:51,752
It's also a massive bug.

672
00:27:51,752 --> 00:27:54,033
You know, the internet's a thing, guys.

673
00:27:54,112 --> 00:27:54,632
It's a real thing.

674
00:27:56,132 --> 00:27:57,412
Who's moving the price now?

675
00:27:57,612 --> 00:27:59,033
Because, like, people always talk about

676
00:27:59,033 --> 00:28:01,352
sailor buys not really affecting spot Bitcoin price.

677
00:28:01,432 --> 00:28:04,092
Like, who is going to take us from here to 85 to 95K?

678
00:28:04,592 --> 00:28:06,612
Yeah, I mean, I think people overthink this.

679
00:28:06,972 --> 00:28:09,192
A lot of institutions have, you know,

680
00:28:09,293 --> 00:28:10,273
I ran this study a lot.

681
00:28:10,352 --> 00:28:11,732
I'm well overdue redoing it,

682
00:28:11,752 --> 00:28:13,912
just looking at the ETFs and who their owners are,

683
00:28:14,013 --> 00:28:15,152
13F filings and the like.

684
00:28:15,712 --> 00:28:18,212
I did this way back in 2024, so it's long out of date.

685
00:28:19,592 --> 00:28:21,632
But the stats were like 20, 25%,

686
00:28:21,632 --> 00:28:26,432
was institutions and then when you look at the breakdown of those institutions disproportionately

687
00:28:26,432 --> 00:28:31,852
the most amount was held by like very very small firms you know some of them running like 100%

688
00:28:31,852 --> 00:28:36,332
their bitcoin hedge fund yeah um or they've got a five percent allocation once you go up to like

689
00:28:36,332 --> 00:28:40,592
the trillion dollar the multi-trillion dollar asset manager they're like 0.0001 percent

690
00:28:40,592 --> 00:28:47,072
guys going to 0.002 percent is like hundreds and hundreds of millions of dollars like you just need

691
00:28:47,072 --> 00:28:51,612
the incremental accumulation and i think people fall into the trap of being like oh i was into

692
00:28:51,612 --> 00:28:55,092
individuals and it was companies it's got to be sovereigns next it's like it could also just be

693
00:28:55,092 --> 00:29:00,972
companies getting bigger you know like individuals for me i'm later in my life i'm later in my

694
00:29:00,972 --> 00:29:06,452
earnings career as you get older you tend to earn more money i'm buying more bitcoin i can't my

695
00:29:06,452 --> 00:29:10,252
capacity to buy bitcoin is significantly better than it was yeah the prices are higher i'm putting

696
00:29:10,252 --> 00:29:15,033
more dollars in and getting less bitcoin well that is also well yes there's also a component of like

697
00:29:15,033 --> 00:29:19,732
do you buy more because you understand this thing more and you know and that's why bear markets like

698
00:29:19,732 --> 00:29:23,852
this, you can actually ramp things up because you've got that conviction. But, you know,

699
00:29:24,033 --> 00:29:27,752
institutions do the same thing. Once you get through 100K, and here's the other story.

700
00:29:28,252 --> 00:29:33,092
Once you get through 100K, the institutions that don't have the nuts to step in now will step in,

701
00:29:33,212 --> 00:29:36,852
back in. Do you think risk adjusted, this is like the best Bitcoins I've ever been?

702
00:29:37,252 --> 00:29:43,452
Well, again, if we go down to 45K, it's a 2011 $2 Bitcoin. Based on my mean reversion study,

703
00:29:44,692 --> 00:29:47,832
you know, of course, it's not the same as $2 Bitcoin. But if you think about it,

704
00:29:47,832 --> 00:29:50,053
in order to go lower than where we are now,

705
00:29:50,152 --> 00:29:52,852
you needed catastrophic fraud

706
00:29:52,852 --> 00:29:55,793
and a complete evisceration of the whole lending market.

707
00:29:56,313 --> 00:29:59,192
Now, there's two things that I can see that could genuinely,

708
00:29:59,352 --> 00:30:00,232
let's say three things,

709
00:30:00,273 --> 00:30:03,033
that could genuinely be that risk factor that I can see.

710
00:30:03,992 --> 00:30:07,013
There's a fourth that's just macro, you know, world implode.

711
00:30:07,172 --> 00:30:08,013
Okay, fine.

712
00:30:08,132 --> 00:30:08,793
We're going to get to that.

713
00:30:08,932 --> 00:30:10,172
Yeah, down, go up.

714
00:30:11,053 --> 00:30:13,273
The other one is quantum turns out to be a real thing.

715
00:30:13,372 --> 00:30:13,553
Yeah.

716
00:30:13,632 --> 00:30:13,813
Right?

717
00:30:14,192 --> 00:30:15,392
I don't think there's anyone serious

718
00:30:15,392 --> 00:30:16,813
who thinks that's coming in the next couple of years.

719
00:30:16,813 --> 00:30:19,672
So at a minimum, we'll probably be higher should that ever show up.

720
00:30:21,172 --> 00:30:22,712
There's two others I was going to say there.

721
00:30:25,212 --> 00:30:26,472
Coinbase has a major hack.

722
00:30:27,632 --> 00:30:30,053
Major loss of custody failure.

723
00:30:30,513 --> 00:30:31,273
Huge black swan.

724
00:30:31,672 --> 00:30:33,632
I would say the most catastrophic thing that could happen.

725
00:30:33,732 --> 00:30:34,033
Treasuries.

726
00:30:34,872 --> 00:30:37,092
And then the other one is just Saylor has a problem.

727
00:30:38,072 --> 00:30:42,252
There is a game here where price goes down,

728
00:30:42,712 --> 00:30:44,533
the equity value goes to zero,

729
00:30:44,533 --> 00:30:46,492
and your preferreds.

730
00:30:46,592 --> 00:30:47,652
Because if you think about it,

731
00:30:47,652 --> 00:30:48,372
you've got the Bitcoin stack,

732
00:30:48,452 --> 00:30:49,352
you've got to subtract the debt,

733
00:30:49,773 --> 00:30:51,172
you've got to then subtract the preferreds.

734
00:30:51,472 --> 00:30:53,232
That's what's left in the equity stack, right?

735
00:30:53,273 --> 00:30:54,072
The MSTR share.

736
00:30:54,252 --> 00:30:55,053
There is a point in time

737
00:30:55,053 --> 00:30:56,132
where the equity does go to zero.

738
00:30:56,592 --> 00:30:57,793
And it's not when the price goes,

739
00:30:57,912 --> 00:30:59,712
when Bitcoin goes to 10K,

740
00:31:00,293 --> 00:31:02,232
the equity goes to zero much, much higher

741
00:31:02,232 --> 00:31:04,313
than where that is.

742
00:31:04,832 --> 00:31:05,392
And then stretch,

743
00:31:05,533 --> 00:31:06,152
sorry, not stretch,

744
00:31:06,252 --> 00:31:07,553
stride starts to get eaten into

745
00:31:07,553 --> 00:31:08,273
and then strike.

746
00:31:08,672 --> 00:31:11,692
There is a level where things go pear-shaped there, right?

747
00:31:12,112 --> 00:31:13,352
People don't like to talk about,

748
00:31:13,432 --> 00:31:14,232
but there is a real risk.

749
00:31:14,533 --> 00:31:17,212
If you subtract away and look where the equity value is zero,

750
00:31:17,412 --> 00:31:20,152
it is not where Saylor says price could go

751
00:31:20,152 --> 00:31:20,932
and the company would be fine.

752
00:31:21,132 --> 00:31:22,192
It's a lot higher than that.

753
00:31:22,293 --> 00:31:24,672
But what percentage would you put on that happening?

754
00:31:24,752 --> 00:31:25,892
Because it's got to be pretty low, right?

755
00:31:26,313 --> 00:31:28,372
I think it's low.

756
00:31:28,832 --> 00:31:31,172
Of the four risks I just illustrated,

757
00:31:31,492 --> 00:31:34,112
let's leave macro, of the three Bitcoin-specific ones,

758
00:31:34,152 --> 00:31:35,692
I think it's the most likely of the three.

759
00:31:36,412 --> 00:31:37,672
Quantum being the least likely.

760
00:31:37,912 --> 00:31:40,092
Coinbase, just because something can go very wrong there.

761
00:31:40,232 --> 00:31:41,472
That's another big risk.

762
00:31:42,053 --> 00:31:43,472
But yeah, Saylor having a real problem

763
00:31:43,472 --> 00:31:47,912
is, I would argue, the most prescient or most near term thing.

764
00:31:47,912 --> 00:31:50,092
But you're talking like a 2% risk or less?

765
00:31:50,092 --> 00:31:51,152
Yes, 2%, 5%.

766
00:31:51,152 --> 00:31:52,612
But again, it depends where the price is.

767
00:31:52,692 --> 00:31:54,392
And I think when you run the analysis

768
00:31:54,392 --> 00:31:57,392
and actually look at where that equity value is,

769
00:31:58,112 --> 00:31:59,152
I forget the actual number.

770
00:31:59,252 --> 00:32:00,752
I think from memory it's like in the 50s,

771
00:32:01,152 --> 00:32:04,672
in the 50Ks, like MSTR is like quite literally worth,

772
00:32:04,932 --> 00:32:07,033
well, it's worth zero because there's no equity left.

773
00:32:07,252 --> 00:32:08,513
If you went to liquidation,

774
00:32:08,632 --> 00:32:10,752
now people can put a premium in there

775
00:32:10,752 --> 00:32:12,732
because they're like, well, the company probably won't liquidate.

776
00:32:12,732 --> 00:32:15,572
They would actually just sell the Bitcoin to deal with it.

777
00:32:15,652 --> 00:32:18,632
But there is a world where MSTR had a pure,

778
00:32:19,072 --> 00:32:22,813
I'm going to do an equity analysis of what is left after obligations.

779
00:32:23,412 --> 00:32:24,952
The answer is zero.

780
00:32:25,472 --> 00:32:26,832
And it's as high as 50s.

781
00:32:26,892 --> 00:32:28,033
I need to check the numbers.

782
00:32:28,112 --> 00:32:31,033
And to be fair, I'm actually leveraging someone else's analysis here,

783
00:32:31,053 --> 00:32:32,793
which I won't take credit for.

784
00:32:32,872 --> 00:32:35,712
But having read their paper, I forget the exact number.

785
00:32:36,172 --> 00:32:37,632
But it is higher.

786
00:32:37,832 --> 00:32:38,852
Wow. That's kind of scary.

787
00:32:39,013 --> 00:32:39,992
It is. It is.

788
00:32:39,992 --> 00:32:42,793
so ETFs

789
00:32:42,793 --> 00:32:43,572
like how

790
00:32:43,572 --> 00:32:44,932
when we last spoke

791
00:32:44,932 --> 00:32:45,432
you were saying

792
00:32:45,432 --> 00:32:46,652
how strong they've been

793
00:32:46,652 --> 00:32:47,372
through this bear market

794
00:32:47,372 --> 00:32:48,132
is that still the case?

795
00:32:48,152 --> 00:32:49,352
we're about 3% off

796
00:32:49,352 --> 00:32:50,352
AUM all time high

797
00:32:50,352 --> 00:32:52,412
and Eric Balthunis

798
00:32:52,412 --> 00:32:53,033
was on

799
00:32:53,033 --> 00:32:53,813
Marty's pod

800
00:32:53,813 --> 00:32:54,332
the other day

801
00:32:54,332 --> 00:32:55,352
and he was saying

802
00:32:55,352 --> 00:32:56,252
cumulative flows

803
00:32:56,252 --> 00:32:56,793
I've been tracking

804
00:32:56,793 --> 00:32:57,592
cumulative flows

805
00:32:57,592 --> 00:32:58,412
and he was saying

806
00:32:58,412 --> 00:32:59,432
that is the metric

807
00:32:59,432 --> 00:33:00,432
because it's dollars in

808
00:33:00,432 --> 00:33:01,212
versus dollars out

809
00:33:01,212 --> 00:33:02,672
it got down

810
00:33:02,672 --> 00:33:03,652
at the all time high

811
00:33:03,652 --> 00:33:05,192
like at 50% down in price

812
00:33:05,192 --> 00:33:06,612
we were down 12%

813
00:33:06,612 --> 00:33:07,513
12 and a bit percent

814
00:33:07,513 --> 00:33:08,432
from the all time high

815
00:33:08,432 --> 00:33:09,932
of like 63 billion

816
00:33:09,932 --> 00:33:12,392
I think we're like 5% off all-time highs now.

817
00:33:12,572 --> 00:33:13,912
I would not put my money on ETFs

818
00:33:13,912 --> 00:33:14,632
being the best holders.

819
00:33:14,793 --> 00:33:15,972
The hodlers.

820
00:33:16,313 --> 00:33:18,572
The hodlers of this cycle, unquestionably.

821
00:33:18,972 --> 00:33:20,372
You just need to add a load of friction

822
00:33:20,372 --> 00:33:21,112
and people won't sell.

823
00:33:21,852 --> 00:33:23,892
No, I actually think that Eric's got a good point

824
00:33:23,892 --> 00:33:24,972
that a lot of these people are,

825
00:33:25,112 --> 00:33:26,053
either it's a very small position,

826
00:33:26,132 --> 00:33:26,813
they just don't care,

827
00:33:27,332 --> 00:33:29,932
or just the characteristic of people who buy ETFs

828
00:33:29,932 --> 00:33:32,252
is that they buy and hold it.

829
00:33:32,332 --> 00:33:33,392
It's a small part of their portfolio.

830
00:33:33,612 --> 00:33:34,533
They're willing to take the risk.

831
00:33:34,592 --> 00:33:35,972
Potentially going in retirement accounts.

832
00:33:36,313 --> 00:33:36,952
All the rest of it.

833
00:33:36,992 --> 00:33:38,053
Yeah, that's cool though.

834
00:33:38,053 --> 00:33:41,712
So are they the biggest buyer on the market at the moment?

835
00:33:41,932 --> 00:33:43,492
They're about equal with Saylor at the moment.

836
00:33:43,692 --> 00:33:50,273
So when you look at total capital flows, generally speaking, through all of the bull and all of the bear until very recently,

837
00:33:51,033 --> 00:33:56,513
when you look at spot sell side, it's been five times bigger than your ETF inflows on net.

838
00:33:57,513 --> 00:33:59,172
More than five times bigger than Saylor.

839
00:33:59,672 --> 00:34:06,813
Right now, Saylor, just in terms of the amount of money that strategy is pulling in, and the ETFs, they're approximately equal.

840
00:34:07,332 --> 00:34:09,573
they're about as large as in terms of the on-chain world

841
00:34:09,573 --> 00:34:10,432
in terms of the amount of flows.

842
00:34:10,612 --> 00:34:12,273
So they are very serious buyers

843
00:34:12,273 --> 00:34:13,752
relative to the amount of sell-side.

844
00:34:14,252 --> 00:34:16,632
We're seeing a massive decline in sell-side.

845
00:34:16,732 --> 00:34:19,172
From an on-chain perspective, there's two components.

846
00:34:19,332 --> 00:34:20,712
There's realized profit and realized loss.

847
00:34:21,432 --> 00:34:22,593
You can look at them as individuals.

848
00:34:22,752 --> 00:34:23,712
You can combine them together

849
00:34:23,712 --> 00:34:24,873
because they both take you with signal.

850
00:34:25,573 --> 00:34:27,532
A lot of on-chain metrics come from the perspective

851
00:34:27,532 --> 00:34:29,273
of holders or sellers

852
00:34:29,273 --> 00:34:31,313
because in order to print something

853
00:34:31,313 --> 00:34:32,632
on the on-chain perspective,

854
00:34:32,712 --> 00:34:33,692
you have to own the Bitcoin.

855
00:34:34,492 --> 00:34:36,052
So if you're realizing a profit,

856
00:34:36,052 --> 00:34:37,932
it means you think Bitcoin's going lower.

857
00:34:38,452 --> 00:34:39,873
If you are realizing a loss,

858
00:34:39,912 --> 00:34:41,313
it also means you think Bitcoin's going lower.

859
00:34:41,393 --> 00:34:42,793
It's a signal from the sellers,

860
00:34:42,972 --> 00:34:43,893
the seller side metric.

861
00:34:44,612 --> 00:34:46,212
So the amount of profit and loss

862
00:34:46,212 --> 00:34:48,172
being locked in right now is very, very small.

863
00:34:48,672 --> 00:34:50,152
Just comparatively speaking,

864
00:34:50,852 --> 00:34:53,373
we see this in not just late bears,

865
00:34:53,492 --> 00:34:54,573
very late bears,

866
00:34:55,112 --> 00:34:56,752
and all through early bulls,

867
00:34:56,873 --> 00:35:00,313
2023s, 2016, some of 2019.

868
00:35:00,752 --> 00:35:02,532
Like the period where it goes nowhere

869
00:35:02,532 --> 00:35:03,552
and drives you mad,

870
00:35:04,192 --> 00:35:04,813
but the bottom's in.

871
00:35:05,373 --> 00:35:06,412
That's the kind of environment

872
00:35:06,412 --> 00:35:07,612
where it's just like no one cares.

873
00:35:07,832 --> 00:35:08,412
Peak apathy.

874
00:35:09,532 --> 00:35:11,793
Our free subscriber list for the newsletter, right?

875
00:35:11,912 --> 00:35:13,073
We've got paid and freeze.

876
00:35:13,593 --> 00:35:15,172
Freeze has just been like a straight lineup

877
00:35:15,172 --> 00:35:16,152
since we started the newsletter.

878
00:35:16,332 --> 00:35:17,532
There's always flows coming in.

879
00:35:18,132 --> 00:35:20,293
It's gone dead flat since February.

880
00:35:20,472 --> 00:35:21,612
No matter how hard we push,

881
00:35:21,852 --> 00:35:22,612
it's gone dead flat.

882
00:35:23,012 --> 00:35:24,393
Great sign, apathy.

883
00:35:25,472 --> 00:35:27,412
That's probably similar to the podcast.

884
00:35:27,573 --> 00:35:28,773
I would say the growth,

885
00:35:28,893 --> 00:35:30,472
apart from like standout guests,

886
00:35:30,593 --> 00:35:31,612
like this show will probably do quite well

887
00:35:31,612 --> 00:35:32,972
because we're here talking about the Bitcoin price

888
00:35:32,972 --> 00:35:33,612
and people want to know.

889
00:35:33,612 --> 00:35:36,452
but I think the amount of subscribers

890
00:35:36,452 --> 00:35:37,432
has definitely slowed

891
00:35:37,432 --> 00:35:38,332
because I think it gets to the point

892
00:35:38,332 --> 00:35:39,073
where people are just like,

893
00:35:39,232 --> 00:35:40,632
I'm not interested to hear about Bitcoin for now.

894
00:35:40,752 --> 00:35:41,692
I'll come back at 100K.

895
00:35:42,752 --> 00:35:43,912
On the Saylor thing,

896
00:35:44,692 --> 00:35:47,012
do you think there's an additional risk

897
00:35:47,012 --> 00:35:48,612
where he's actually custing

898
00:35:48,612 --> 00:35:50,273
some of his Bitcoin at Coinbase?

899
00:35:50,573 --> 00:35:52,112
I think they do custing some of it.

900
00:35:52,232 --> 00:35:53,232
Yeah, no, I think they do.

901
00:35:53,332 --> 00:35:54,712
But it compounds those two risks

902
00:35:54,712 --> 00:35:57,073
because the Coinbase one can also affect Saylor.

903
00:35:57,492 --> 00:35:59,912
I'm not worried about Saylor losing the coins

904
00:35:59,912 --> 00:36:01,452
in like a theft perspective.

905
00:36:01,773 --> 00:36:03,373
I'm just thinking from a capital stack perspective

906
00:36:03,373 --> 00:36:05,393
that they may have to sell literally

907
00:36:05,393 --> 00:36:06,832
to make the equity not zero anymore.

908
00:36:06,932 --> 00:36:07,813
Sure, but they can domino.

909
00:36:07,972 --> 00:36:09,593
Like if the Coinbase hack happens,

910
00:36:09,732 --> 00:36:10,573
that is one of your risks,

911
00:36:10,593 --> 00:36:11,873
even if it's very, very small percentage,

912
00:36:11,992 --> 00:36:13,032
that is going to affect Saylor

913
00:36:13,032 --> 00:36:13,932
and then what happens to them?

914
00:36:13,952 --> 00:36:14,692
Oh, yeah, I know.

915
00:36:14,873 --> 00:36:16,012
Do you think he should hold his own coin?

916
00:36:16,132 --> 00:36:18,712
No, look, I think there's reasons why they don't.

917
00:36:18,813 --> 00:36:19,832
I'm not going to speculate on why.

918
00:36:19,873 --> 00:36:20,712
I'm sure they've got their reasons.

919
00:36:21,452 --> 00:36:22,712
That's one of those things where like

920
00:36:22,712 --> 00:36:25,112
if you're betting on anything to do with strategy,

921
00:36:25,752 --> 00:36:27,712
it's inherently a long bet on Bitcoin.

922
00:36:28,032 --> 00:36:29,552
If anything goes wrong with Coinbase,

923
00:36:29,552 --> 00:36:31,472
that's just like everything's affected.

924
00:36:31,472 --> 00:36:33,672
Like, literally, it's the asteroid.

925
00:36:33,852 --> 00:36:36,692
So it's like, honestly, if it happens, what do you do?

926
00:36:36,712 --> 00:36:37,112
You go long.

927
00:36:37,273 --> 00:36:40,472
You go long because, like, it's complete and total disaster.

928
00:36:40,752 --> 00:36:42,692
It really can't get that much worse from that point onwards.

929
00:36:42,873 --> 00:36:46,293
It'll take a long time to recover, but, like, you know, asteroids here go long.

930
00:36:47,393 --> 00:36:50,432
If you hold Bitcoin, your phone number is one of your biggest vulnerabilities.

931
00:36:51,172 --> 00:36:54,452
SimSwap attacks are one of the most common attack vectors targeting Bitcoiners.

932
00:36:54,873 --> 00:36:57,093
Somebody socially engineers an employee at your carrier,

933
00:36:57,512 --> 00:36:59,752
moves your number to a new device, and they're into your account.

934
00:37:00,432 --> 00:37:03,793
It happens because traditional carriers put a human in control of your phone number,

935
00:37:04,132 --> 00:37:05,532
someone who can be bribed or tricked.

936
00:37:06,073 --> 00:37:10,952
But Cape is a US mobile carrier built from the ground up with privacy and security at the core.

937
00:37:11,492 --> 00:37:14,212
They don't ask for your name or social security number when you sign up.

938
00:37:14,212 --> 00:37:18,373
They collect the minimum data required, delete it as fast as possible and never sell it.

939
00:37:18,712 --> 00:37:22,232
When you sign up, you receive a 24-word passphrase, just like a Bitcoin wallet.

940
00:37:22,692 --> 00:37:24,192
That's the only way to move your number.

941
00:37:24,652 --> 00:37:27,572
Not a customer service rep, not even Cape's own staff can do it.

942
00:37:27,793 --> 00:37:29,592
You're the only person who controls your number.

943
00:37:29,752 --> 00:37:32,712
If you hold your own keys, you should hold your own phone number too.

944
00:37:33,032 --> 00:37:39,793
So head over to cape.co forward slash WBD and use code WBD at checkout for 33% off your first six months.

945
00:37:40,212 --> 00:37:44,433
That's cape.co forward slash WBD and use code WBD.

946
00:37:44,972 --> 00:37:47,512
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947
00:37:48,072 --> 00:37:49,212
Well, Ledin makes that possible.

948
00:37:49,773 --> 00:37:51,732
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949
00:37:52,052 --> 00:37:57,293
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950
00:37:57,293 --> 00:38:01,952
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951
00:38:01,952 --> 00:38:05,332
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952
00:38:05,332 --> 00:38:08,052
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953
00:38:08,052 --> 00:38:11,332
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954
00:38:11,332 --> 00:38:13,712
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955
00:38:13,712 --> 00:38:15,972
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956
00:38:15,972 --> 00:38:17,732
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957
00:38:17,732 --> 00:38:19,972
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958
00:38:19,972 --> 00:38:22,572
And in a few hours I had the dollars in my account

959
00:38:22,572 --> 00:38:23,852
It was super smooth

960
00:38:23,852 --> 00:38:26,612
So if you need cash but you don't want to sell Bitcoin

961
00:38:26,612 --> 00:38:32,132
head over to leden.io forward slash WBD and you'll get 0.25% off your first loan.

962
00:38:32,612 --> 00:38:36,293
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963
00:38:36,832 --> 00:38:39,132
Do you want to pay less in taxes and stack more Bitcoin?

964
00:38:39,552 --> 00:38:40,273
Of course you do.

965
00:38:40,632 --> 00:38:42,712
Well, by mining Bitcoin with Blockware, you can.

966
00:38:43,293 --> 00:38:45,592
Under section 168k of the US tax code,

967
00:38:45,913 --> 00:38:48,933
Bitcoin mining servers qualify for 100% bonus depreciation.

968
00:38:49,433 --> 00:38:53,393
This means every dollar you spend on miners can directly offset your income in a single year.

969
00:38:53,393 --> 00:38:56,352
And that's true for both business owners and W-2 earners.

970
00:38:56,612 --> 00:39:01,732
If you have $100,000 in ordinary income, you can purchase $100,000 in miners and potentially

971
00:39:01,732 --> 00:39:03,793
offset your tax liability entirely.

972
00:39:04,692 --> 00:39:06,652
Blockware's mining as a service does all the heavy lifting.

973
00:39:06,913 --> 00:39:10,112
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974
00:39:10,112 --> 00:39:10,532
maintenance.

975
00:39:11,052 --> 00:39:14,852
So you get to stack Bitcoin every single day while drastically shrinking your tax bill.

976
00:39:15,352 --> 00:39:21,373
Get started today at blockwaresolutions.com forward slash WBD and use code WBD for $100

977
00:39:21,373 --> 00:39:22,552
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978
00:39:23,092 --> 00:39:26,332
That's blockwaresolutions.com forward slash WBD.

979
00:39:26,612 --> 00:39:28,373
Should we get into the macro risks?

980
00:39:28,472 --> 00:39:28,773
Yeah, yeah.

981
00:39:28,893 --> 00:39:31,012
Because macro is interesting at the moment.

982
00:39:31,092 --> 00:39:31,813
Macro is very interesting.

983
00:39:32,232 --> 00:39:33,652
The one that's crazy to me,

984
00:39:33,732 --> 00:39:35,232
I think people when you talk about bonds

985
00:39:35,232 --> 00:39:35,813
think it's boring,

986
00:39:35,972 --> 00:39:37,232
but it seems to be like,

987
00:39:37,293 --> 00:39:38,212
it's the signal for everything.

988
00:39:38,413 --> 00:39:38,773
It's the bedrock.

989
00:39:39,992 --> 00:39:42,373
And 30-year yields in the US,

990
00:39:42,512 --> 00:39:43,512
the UK, Australia,

991
00:39:43,773 --> 00:39:44,672
I'm sure other places,

992
00:39:44,793 --> 00:39:45,972
are now above 5%.

993
00:39:45,972 --> 00:39:47,992
The trend of yields is higher,

994
00:39:48,132 --> 00:39:49,232
and why that matters

995
00:39:49,232 --> 00:39:51,732
is yields are inversely related to price.

996
00:39:52,293 --> 00:39:53,352
So if the price,

997
00:39:53,692 --> 00:39:56,492
or literally the value of the collateral

998
00:39:56,492 --> 00:39:57,873
that backs the whole system,

999
00:39:58,373 --> 00:40:00,972
goes down in price, higher in yields.

1000
00:40:01,433 --> 00:40:03,112
It's the market saying that something's wrong

1001
00:40:03,112 --> 00:40:04,152
with the bedrock.

1002
00:40:04,793 --> 00:40:07,532
And so I think the UK is actually pushing 6%.

1003
00:40:07,532 --> 00:40:09,433
It's like, is that the market saying,

1004
00:40:09,572 --> 00:40:11,652
well, we actually, we saw inflation come back in the US.

1005
00:40:12,032 --> 00:40:13,972
Is it the market saying they're scared about inflation?

1006
00:40:14,293 --> 00:40:17,472
Is it them saying we think the debt is out of control,

1007
00:40:17,612 --> 00:40:19,032
deficit spending is out of control?

1008
00:40:19,712 --> 00:40:20,692
Is it all of these things?

1009
00:40:20,852 --> 00:40:21,913
It's all of the above, yeah.

1010
00:40:22,273 --> 00:40:24,112
It's basically the market saying

1011
00:40:24,112 --> 00:40:24,893
we don't trust you anymore.

1012
00:40:24,992 --> 00:40:25,373
Pretty much.

1013
00:40:25,532 --> 00:40:26,352
I mean, if you think about it,

1014
00:40:26,352 --> 00:40:29,492
at the highest level, there's obviously nuances,

1015
00:40:29,492 --> 00:40:31,532
especially when you talk about the global reserve currency

1016
00:40:31,532 --> 00:40:33,132
versus Japan.

1017
00:40:33,132 --> 00:40:34,752
There's going to be certain nuances here,

1018
00:40:34,752 --> 00:40:38,893
but higher yield means they can't attract enough buyers

1019
00:40:38,893 --> 00:40:40,893
at that price.

1020
00:40:40,893 --> 00:40:43,913
So the price must go down to find buyers,

1021
00:40:43,913 --> 00:40:45,072
which means yield must go up.

1022
00:40:45,072 --> 00:40:55,505
If you can lend if you can get financing at 5 someone might lend to you because you riskier at 6 And if you can get financing at 6 you might have to go to 7 You know and that lifts

1023
00:40:55,505 --> 00:40:56,505
This is the thing.

1024
00:40:56,505 --> 00:41:02,505
If the sovereign, the Aussie government needs to borrow at 5.5% for 30 a year,

1025
00:41:02,505 --> 00:41:04,505
who's more likely to pay back the Australian dollars?

1026
00:41:04,505 --> 00:41:08,505
The government with a printer or you, mister, with a job and a 30-year mortgage?

1027
00:41:08,505 --> 00:41:11,505
You know what I mean? Like, it's...

1028
00:41:11,505 --> 00:41:16,365
But do you think this signifies that something's going to break

1029
00:41:16,365 --> 00:41:17,545
and they're going to need to print a load of money?

1030
00:41:17,725 --> 00:41:20,165
It's a funny one because, and I'm talking to Nick Barty,

1031
00:41:20,305 --> 00:41:23,065
honestly I rely a lot on Nick to process a load of this stuff.

1032
00:41:23,205 --> 00:41:26,865
But my general framework, I think this whole,

1033
00:41:27,385 --> 00:41:30,125
the way macro is traded, again, I'm a macro tourist, right?

1034
00:41:30,125 --> 00:41:32,445
I try to puzzle things together as best I can.

1035
00:41:33,265 --> 00:41:36,405
The thing I found very interesting is how assets haven't traded

1036
00:41:36,405 --> 00:41:37,565
the way people expected them to.

1037
00:41:38,745 --> 00:41:41,385
Oil, for example, should be much higher.

1038
00:41:41,505 --> 00:41:43,065
Everyone's mental model should be much higher.

1039
00:41:43,065 --> 00:41:46,145
Now, there's an argument to say that we're drawing down on inventories.

1040
00:41:46,145 --> 00:41:47,585
I've listened to it.

1041
00:41:47,585 --> 00:41:49,145
I think Doenberg's got a good perspective,

1042
00:41:49,145 --> 00:41:51,505
which is that China's got a ton that they bought

1043
00:41:51,505 --> 00:41:53,625
in the years leading up to this

1044
00:41:53,625 --> 00:41:55,545
that they're now releasing back into the market.

1045
00:41:55,545 --> 00:41:57,425
There's all sorts of like supply dynamics.

1046
00:41:57,425 --> 00:41:58,985
Also, life just finds a way.

1047
00:41:58,985 --> 00:42:01,385
You know, I've been using that line a lot from Jurassic Park.

1048
00:42:01,385 --> 00:42:02,425
Life just finds a way.

1049
00:42:02,425 --> 00:42:05,025
You know, when they sanctioned Russia,

1050
00:42:05,025 --> 00:42:06,905
do you think Russian oil didn't leave Russia?

1051
00:42:06,905 --> 00:42:07,825
Of course it did.

1052
00:42:07,825 --> 00:42:10,025
They found ways to turn it Norwegian.

1053
00:42:10,025 --> 00:42:10,705
You know what I mean?

1054
00:42:10,705 --> 00:42:12,125
they fill it up in the middle of the ocean.

1055
00:42:12,565 --> 00:42:13,465
Life finds a way.

1056
00:42:14,005 --> 00:42:15,945
So I think oil prices have surprised people.

1057
00:42:16,285 --> 00:42:19,045
There's still certainly risk that this war gets worse

1058
00:42:19,045 --> 00:42:21,545
and then prices go up and then infrastructure gets damaged.

1059
00:42:21,765 --> 00:42:24,305
Like, we're in no way in happy days.

1060
00:42:25,025 --> 00:42:26,585
I think oil prices have surprised people.

1061
00:42:27,325 --> 00:42:28,945
The geopolitical hedge, which is gold,

1062
00:42:29,165 --> 00:42:31,225
has done terribly in this process.

1063
00:42:31,885 --> 00:42:32,325
Why?

1064
00:42:32,525 --> 00:42:34,005
Because it did really well leading up to it.

1065
00:42:34,305 --> 00:42:35,005
It's just-

1066
00:42:35,005 --> 00:42:35,825
Same reason Bitcoin-

1067
00:42:35,825 --> 00:42:37,805
Or the inverse reason to why Bitcoin's done well.

1068
00:42:37,865 --> 00:42:39,445
Go listen to a big gold podcast

1069
00:42:39,445 --> 00:42:41,705
and replace the word gold with Bitcoin

1070
00:42:41,705 --> 00:42:44,005
and they say, oh, yeah, gold's always the first thing people sell

1071
00:42:44,005 --> 00:42:44,805
because it's highly liquid.

1072
00:42:45,625 --> 00:42:46,465
Yeah, of course.

1073
00:42:46,565 --> 00:42:49,545
It's also just like it got to an RSI on the monthly at 95

1074
00:42:49,545 --> 00:42:50,865
because it's overbought.

1075
00:42:51,085 --> 00:42:52,785
Like last time it was there was 1979

1076
00:42:52,785 --> 00:42:54,225
and then it had a 20-year bear market.

1077
00:42:54,385 --> 00:42:55,985
So, you know, I'm not expecting that,

1078
00:42:56,065 --> 00:42:58,005
but someone's got to pull back.

1079
00:42:58,565 --> 00:42:59,705
Equities, all-time high.

1080
00:42:59,985 --> 00:43:00,785
But then you've got to break down

1081
00:43:00,785 --> 00:43:02,705
which sectors of equities are doing well.

1082
00:43:02,785 --> 00:43:03,845
Some sectors are doing terribly.

1083
00:43:04,265 --> 00:43:05,005
Some are doing really well.

1084
00:43:05,005 --> 00:43:07,985
So I think the market's trading in a very strange way,

1085
00:43:08,985 --> 00:43:11,465
But also when you look at it's on low volatility.

1086
00:43:11,965 --> 00:43:13,665
Bonds are going higher, but the move index,

1087
00:43:13,765 --> 00:43:17,105
which is the bond volatility index, surprisingly subdued.

1088
00:43:17,525 --> 00:43:20,005
It was very high after the 2022 bear market.

1089
00:43:20,145 --> 00:43:22,325
It took really three years to cool back down.

1090
00:43:22,985 --> 00:43:24,345
Yeah, it's spiking here or there.

1091
00:43:24,405 --> 00:43:25,245
It spiked in March.

1092
00:43:25,325 --> 00:43:26,265
It spiked a little bit recently.

1093
00:43:26,265 --> 00:43:29,665
But a lot of this is happening on low volatility.

1094
00:43:30,245 --> 00:43:34,825
The dollar, the US dollar, you give the kind of set of facts

1095
00:43:34,825 --> 00:43:37,265
in front of us, you would expect the safe haven bid

1096
00:43:37,265 --> 00:43:39,705
for the dollar to be pushing DXY well above 100,

1097
00:43:39,825 --> 00:43:41,085
which is where things start to get painful

1098
00:43:41,085 --> 00:43:41,845
for the rest of the world.

1099
00:43:42,625 --> 00:43:44,825
It's floating around 99, 98,

1100
00:43:45,005 --> 00:43:46,725
going to go below 98, back to 99.

1101
00:43:47,165 --> 00:43:48,065
But why is this happening?

1102
00:43:48,205 --> 00:43:50,385
Why is it not reacting the way you'd expect it?

1103
00:43:50,385 --> 00:43:51,125
It's a good question.

1104
00:43:51,265 --> 00:43:52,225
And this is where you start to put,

1105
00:43:52,505 --> 00:43:54,145
this is why I don't believe all this,

1106
00:43:54,365 --> 00:43:55,765
like, oh, they're manipulating markets.

1107
00:43:55,945 --> 00:43:57,785
All markets manipulate on certain levels.

1108
00:43:57,865 --> 00:43:58,885
When you've got the bond market

1109
00:43:58,885 --> 00:44:01,245
telling you a similar story to the oil market,

1110
00:44:01,585 --> 00:44:02,545
similar story to the dollar,

1111
00:44:03,245 --> 00:44:05,625
to me, a lot of the macro trends are still in play.

1112
00:44:05,625 --> 00:44:07,625
There's bigger things that outweigh it.

1113
00:44:08,985 --> 00:44:11,965
Could it be that the world can actually handle $100 oil

1114
00:44:11,965 --> 00:44:13,305
better than the world thinks?

1115
00:44:13,705 --> 00:44:16,125
Could it be that there actually is the capacity to,

1116
00:44:16,205 --> 00:44:18,685
maybe the loss of barrels isn't as big in there.

1117
00:44:18,805 --> 00:44:20,065
You know, Saudi's got pipelines.

1118
00:44:20,345 --> 00:44:23,245
And when you piece it all together, yes, it's a problem,

1119
00:44:23,245 --> 00:44:25,965
but it may not be the end of world problem that's been pitched.

1120
00:44:27,425 --> 00:44:30,185
Bond yields going up is no doubt a risk factor.

1121
00:44:30,845 --> 00:44:32,505
I mean, if I look at it from Australia's perspective,

1122
00:44:33,205 --> 00:44:34,765
Australia's got to, we have no energy.

1123
00:44:34,765 --> 00:44:37,865
You know, like there's petrol stations that ran out of diesel

1124
00:44:37,865 --> 00:44:39,105
and we're a very big country.

1125
00:44:39,225 --> 00:44:40,725
It takes a lot of diesel to move stuff around.

1126
00:44:40,965 --> 00:44:42,165
We consume a ton of it.

1127
00:44:42,265 --> 00:44:44,445
And it got to the point where the Prime Minister is saying,

1128
00:44:44,645 --> 00:44:47,645
you know, we're glad we secured X million litres,

1129
00:44:47,905 --> 00:44:49,865
not barrels, litres of diesel.

1130
00:44:50,305 --> 00:44:52,125
And you run on the back of a napkin, you're like,

1131
00:44:52,305 --> 00:44:52,965
That's three days.

1132
00:44:53,165 --> 00:44:53,865
One day.

1133
00:44:54,205 --> 00:44:56,845
So you're telling me that it is so bad

1134
00:44:56,845 --> 00:44:57,965
that you're willing to get on television

1135
00:44:57,965 --> 00:44:59,725
and tell people you bought one day worth of diesel.

1136
00:45:00,585 --> 00:45:00,945
That's crazy.

1137
00:45:00,965 --> 00:45:03,165
No wonder your bonds are going higher because you're bankrupt.

1138
00:45:03,165 --> 00:45:05,605
Australia's in a strange position at the moment

1139
00:45:05,605 --> 00:45:08,045
we are and I'm hoping but I'm not

1140
00:45:08,045 --> 00:45:10,245
hopeful that it's the

1141
00:45:10,245 --> 00:45:12,065
kick in the nuts we need to go

1142
00:45:12,065 --> 00:45:14,185
hey we should probably we dig a lot

1143
00:45:14,185 --> 00:45:16,125
of stuff out of the ground we process none

1144
00:45:16,125 --> 00:45:18,185
of it we are totally reliant on other countries

1145
00:45:18,185 --> 00:45:20,205
to survive which is not really

1146
00:45:20,205 --> 00:45:21,305
a good spot to be in

1147
00:45:21,305 --> 00:45:22,345
that's cope

1148
00:45:22,345 --> 00:45:23,925
that's cope

1149
00:45:23,925 --> 00:45:27,345
explain the fact that you're saying you're hopeful

1150
00:45:27,345 --> 00:45:28,725
I am hopeful

1151
00:45:28,725 --> 00:45:30,845
I'm the optimist

1152
00:45:30,845 --> 00:45:32,845
I think being a pessimist I think the bears

1153
00:45:32,845 --> 00:45:33,685
have no ambition.

1154
00:45:34,045 --> 00:45:34,665
Delete the bears.

1155
00:45:35,105 --> 00:45:35,925
Ignore the bears.

1156
00:45:36,045 --> 00:45:36,825
I think bears have no ambition.

1157
00:45:37,105 --> 00:45:38,385
I mean, I'm hopeful.

1158
00:45:38,745 --> 00:45:40,425
Sorry, I'm not hopeful it will happen,

1159
00:45:41,325 --> 00:45:42,805
but I do hope that there's enough people.

1160
00:45:42,885 --> 00:45:44,365
And I've had enough conversations

1161
00:45:44,365 --> 00:45:46,245
with people who have no interest

1162
00:45:46,245 --> 00:45:47,145
in any of this stuff,

1163
00:45:47,665 --> 00:45:48,585
who have suddenly gone,

1164
00:45:49,545 --> 00:45:51,805
really, we had no fuel on land?

1165
00:45:52,165 --> 00:45:54,965
And like even the storage capacity, right?

1166
00:45:55,325 --> 00:45:56,305
I think it's the IEA,

1167
00:45:56,665 --> 00:45:58,245
requires you have 90 days worth of fuel.

1168
00:45:58,445 --> 00:45:59,965
That's not on your shores.

1169
00:46:00,225 --> 00:46:01,545
That's just on someone's shores.

1170
00:46:01,545 --> 00:46:02,945
I think Australia's was in the US.

1171
00:46:02,945 --> 00:46:05,345
That's purely just to flood the market with oil.

1172
00:46:05,345 --> 00:46:08,345
It's a price thing. It's not a you have your supplies thing.

1173
00:46:09,345 --> 00:46:11,865
I believe that we will now go through a process of saying

1174
00:46:11,865 --> 00:46:15,065
we probably should have some reserves on land.

1175
00:46:15,065 --> 00:46:16,385
Obviously.

1176
00:46:16,385 --> 00:46:18,065
No shit.

1177
00:46:18,865 --> 00:46:21,705
What do you think this is going to mean for Walsh coming in as Fed chair?

1178
00:46:21,705 --> 00:46:24,305
Because everyone expected him to come in and cut rates,

1179
00:46:24,305 --> 00:46:26,465
but that seems like he can't really do that right now.

1180
00:46:26,465 --> 00:46:29,505
Yeah, look, I mean, I've never been a Fed watcher.

1181
00:46:29,505 --> 00:46:30,865
I'm a civil engineer.

1182
00:46:30,865 --> 00:46:32,765
I don't think the Fed matters, honestly.

1183
00:46:32,925 --> 00:46:35,105
I think the Fed follows what the bond market does.

1184
00:46:35,625 --> 00:46:36,965
I think they just follow the market.

1185
00:46:37,685 --> 00:46:40,385
I think we're in a world, if you just take Lin's perspective,

1186
00:46:41,125 --> 00:46:43,645
what they do with interest rates is kind of irrelevant.

1187
00:46:43,925 --> 00:46:45,145
It's all in the short-term end.

1188
00:46:46,585 --> 00:46:49,025
Honestly, who cares when the government's the one spending the money

1189
00:46:49,025 --> 00:46:49,745
in fiscal dominance?

1190
00:46:49,905 --> 00:46:51,005
It just doesn't matter, right?

1191
00:46:51,005 --> 00:46:52,985
If banks were lending a ton of money, it would matter.

1192
00:46:53,305 --> 00:46:55,525
I just don't think the Fed and central banks matter that much.

1193
00:46:55,685 --> 00:46:57,525
But what do you think this means then for normal people?

1194
00:46:57,525 --> 00:47:01,105
Do you think people can expect inflation to go higher over the next few years?

1195
00:47:01,485 --> 00:47:02,225
And rates to go higher.

1196
00:47:02,265 --> 00:47:02,965
And rates to go higher.

1197
00:47:02,965 --> 00:47:03,925
I think it's going to punch.

1198
00:47:04,485 --> 00:47:05,265
It's painful.

1199
00:47:05,605 --> 00:47:05,765
Yeah.

1200
00:47:05,865 --> 00:47:06,265
No, it is.

1201
00:47:06,405 --> 00:47:09,425
And that's kind of the world I think we're moving towards.

1202
00:47:09,825 --> 00:47:12,085
And it's one of those things for you to think about it.

1203
00:47:12,185 --> 00:47:15,105
Bitcoin has thought about this stuff for a long time, but then to live it and feel it

1204
00:47:15,105 --> 00:47:17,485
and experience it, it's a whole different thing.

1205
00:47:17,765 --> 00:47:20,225
But what does Bitcoin do in that environment, do you think?

1206
00:47:20,485 --> 00:47:25,165
So at the end of the day, what we're looking at is liabilities or obligations, getting

1207
00:47:25,165 --> 00:47:32,685
two big, say, sailors set up, not that I'm saying it's equivalent, there is a price or a value where

1208
00:47:32,685 --> 00:47:39,065
your obligations are larger than your assets. And the more people, this is why you want out of the

1209
00:47:39,065 --> 00:47:44,425
system, gold, Bitcoin, this is why sound money, what sound money advocates always talk about,

1210
00:47:44,685 --> 00:47:49,565
you want to have assets outside the system that are underbaseable because everything else is

1211
00:47:49,565 --> 00:47:57,365
going to be debased. When the times get tough, go to Satmojo's thing. What is the problem? That

1212
00:47:57,365 --> 00:48:00,145
the button exists and they're going to push the button. They're going to push the button because

1213
00:48:00,145 --> 00:48:04,045
it's the only way they can do it. Now, ironically, Australia right now is attempting austerity

1214
00:48:04,045 --> 00:48:09,705
by raising taxes. They're trying to not push the button, to be fair. But the problem is it's made

1215
00:48:09,705 --> 00:48:13,845
everyone significantly poorer, will make everyone significantly poorer. We will see how much

1216
00:48:13,845 --> 00:48:17,265
stomach they have for austerity because I think they're going to end up just reverting back to

1217
00:48:17,265 --> 00:48:20,405
the printer. The worst scenario is they go austerity and the printer, because then you're

1218
00:48:20,405 --> 00:48:26,085
just royally fucked. Because like with bond rates, so in the UK, I think it's the highest

1219
00:48:26,085 --> 00:48:33,245
since the late 90s. US, higher since just before the financial crisis. If bond yields are like

1220
00:48:33,245 --> 00:48:37,345
risk-free rate is five and a half percent or whatever, what does that mean for risk assets?

1221
00:48:37,345 --> 00:48:42,225
Because they've got to really perform to be attractive. Well, gold has always traded inversely

1222
00:48:42,225 --> 00:48:46,305
to the real yield on the 10-year until they froze Russia's reserves.

1223
00:48:47,205 --> 00:48:50,165
We're in an era where the monetary system is changing, as we know.

1224
00:48:50,545 --> 00:48:53,425
This is the period of tumultuous change.

1225
00:48:53,545 --> 00:48:55,725
The world is going to look very different on the other side of this thing.

1226
00:48:56,445 --> 00:48:58,805
If we're going through all of these structural reforms

1227
00:48:58,805 --> 00:49:01,165
of what the savings currency is.

1228
00:49:01,245 --> 00:49:04,265
Now, I'm very much in the world where you have to separate

1229
00:49:04,265 --> 00:49:06,745
the global reserve currency, global reserve asset.

1230
00:49:07,225 --> 00:49:08,665
One is medium of exchange, one is savings.

1231
00:49:09,045 --> 00:49:12,085
We've actually seen this in a microcosm in just the Bitcoin crypto world.

1232
00:49:12,225 --> 00:49:14,765
stable coins are the medium of exchange, Bitcoin's been the store of value.

1233
00:49:15,485 --> 00:49:18,845
This breaking apart of those two components of money, I think,

1234
00:49:19,005 --> 00:49:21,345
is we're separating the treasury from the dollar.

1235
00:49:21,525 --> 00:49:23,345
The dollar will continue to be the medium of exchange.

1236
00:49:23,625 --> 00:49:24,825
I think that's very, very clear.

1237
00:49:25,545 --> 00:49:28,065
It's why Brent Johnson's, I think Brent Johnson is dead right

1238
00:49:28,065 --> 00:49:29,445
with his milkshake theory.

1239
00:49:30,025 --> 00:49:32,625
If you look back at all the money printing that's happened,

1240
00:49:32,985 --> 00:49:37,645
all of COVID, everything, the wars, everything the US has got into,

1241
00:49:37,645 --> 00:49:42,905
really the DXY hasn't softened in like decades.

1242
00:49:43,325 --> 00:49:44,505
Just been stronger.

1243
00:49:44,845 --> 00:49:45,925
Just staying around 100.

1244
00:49:46,985 --> 00:49:48,305
It goes through ebbs and flows,

1245
00:49:48,405 --> 00:49:49,625
but it really hasn't gone down

1246
00:49:49,625 --> 00:49:51,205
the way a lot of people would have expected.

1247
00:49:51,365 --> 00:49:53,325
Given how much of an exorbitant privilege

1248
00:49:53,325 --> 00:49:54,545
they've exercised,

1249
00:49:55,125 --> 00:49:56,185
the dollar's just not going down.

1250
00:49:57,025 --> 00:49:59,705
Bonds are down 50 odd percent since 2022

1251
00:49:59,705 --> 00:50:01,725
and going lower as rates go higher.

1252
00:50:01,865 --> 00:50:04,045
So the asset is getting crushed

1253
00:50:04,045 --> 00:50:05,085
and gold's up significantly.

1254
00:50:05,665 --> 00:50:07,085
And by the way,

1255
00:50:07,085 --> 00:50:09,925
Bitcoin is also up significantly over that period of time.

1256
00:50:10,245 --> 00:50:12,605
It's down short term, but it is also up significantly.

1257
00:50:12,805 --> 00:50:16,005
So my general view is, are we moving towards a world

1258
00:50:16,005 --> 00:50:17,145
where we trust each other more?

1259
00:50:17,465 --> 00:50:18,585
That we trust governments more?

1260
00:50:18,685 --> 00:50:19,205
Absolutely not.

1261
00:50:19,225 --> 00:50:22,265
Am I going to buy more government bonds in the road ahead?

1262
00:50:22,305 --> 00:50:23,325
Am I going to buy more gold and Bitcoin?

1263
00:50:23,465 --> 00:50:25,045
The answer is very, very clear to me.

1264
00:50:25,845 --> 00:50:29,685
And so do you think that the asset side of that

1265
00:50:29,685 --> 00:50:31,645
will be a mixture of things like gold and Bitcoin

1266
00:50:31,645 --> 00:50:32,605
rather than one dominant?

1267
00:50:33,285 --> 00:50:34,365
I think so, yeah.

1268
00:50:34,525 --> 00:50:36,125
And I've used this example.

1269
00:50:36,125 --> 00:50:38,365
I have gold and Bitcoin as my two primary holdings.

1270
00:50:39,085 --> 00:50:40,445
Gold is the exact same trade.

1271
00:50:41,065 --> 00:50:41,765
It's just slower.

1272
00:50:42,345 --> 00:50:44,525
If it's down 20%, I'm not that fussed.

1273
00:50:44,785 --> 00:50:46,105
Bitcoin being down 50%,

1274
00:50:46,105 --> 00:50:48,705
I'd really hate to have to sell it to do anything.

1275
00:50:48,805 --> 00:50:50,245
Down 50%, couldn't care less

1276
00:50:50,245 --> 00:50:51,425
if I had to sell my gold down 20%.

1277
00:50:51,425 --> 00:50:51,865
It's ballast.

1278
00:50:52,485 --> 00:50:55,085
I'd never fully understand the reason you hold gold.

1279
00:50:55,125 --> 00:50:56,045
Because you always say it's because

1280
00:50:56,045 --> 00:50:57,105
you don't mind selling gold.

1281
00:50:57,265 --> 00:50:59,505
But if you think Bitcoin has more of an upside,

1282
00:50:59,605 --> 00:51:00,725
would you not rather have more Bitcoin

1283
00:51:00,725 --> 00:51:01,685
and sell less Bitcoin in the future?

1284
00:51:01,685 --> 00:51:03,085
No, Bitcoin is a longer duration.

1285
00:51:03,725 --> 00:51:05,525
Even though gold's an infinite duration asset,

1286
00:51:05,525 --> 00:51:07,085
Bitcoin is an even longer duration asset.

1287
00:51:07,305 --> 00:51:11,025
So the way I think about it, I think it is improbable.

1288
00:51:11,665 --> 00:51:15,585
And even if it does happen, gold going to $20,000 an ounce, right?

1289
00:51:15,625 --> 00:51:18,245
Going to $5,000 is a double from its peak, more or less.

1290
00:51:18,845 --> 00:51:20,025
I think that's in the cards.

1291
00:51:20,905 --> 00:51:22,825
Is a double going to change my life?

1292
00:51:23,505 --> 00:51:24,285
Probably not.

1293
00:51:25,005 --> 00:51:25,725
Probably not.

1294
00:51:26,465 --> 00:51:32,845
Bitcoin going from $100,000 to $1,000,000 or from $60,000 to $1,000,000, totally feasible,

1295
00:51:33,265 --> 00:51:34,025
totally practicable.

1296
00:51:34,025 --> 00:51:40,705
is that going to change my life? Yeah, big time. So what do I want to put, what do I save in Bitcoin

1297
00:51:40,705 --> 00:51:45,965
for? My kid's school fees. He's eight months old. That's a long, that's 10 years away, right? So I've

1298
00:51:45,965 --> 00:51:51,345
got 10 years to let Bitcoin do its thing. What about a house deposit? I may want that in the

1299
00:51:51,345 --> 00:51:57,365
next three years, two years, one year. Gold, the right place for that deposit. Clearing my mortgage,

1300
00:51:57,485 --> 00:52:03,185
my 30-year mortgage, Bitcoin. It's about duration, right? Gold simply doesn't have, it's got a lot

1301
00:52:03,185 --> 00:52:08,245
growth in it. It just simply doesn't have the growth multiple that Bitcoin does. So I position

1302
00:52:08,245 --> 00:52:11,825
my savings. That's why I just really don't care what either of them doing truly. But

1303
00:52:11,825 --> 00:52:18,685
that was my general thesis. I don't want to hold cash. If, by the way, I go, okay, now is the time

1304
00:52:18,685 --> 00:52:24,805
I really do want to start looking to buy and I'm going to auctions, it won't be in gold. It'll be

1305
00:52:24,805 --> 00:52:29,645
in cash, in a term deposit somewhere or in a bank account. Because the idea is I now actually need

1306
00:52:29,645 --> 00:52:34,665
the dollars, right? And I can't take the volatility. So it's me peeling back, where is my volatility

1307
00:52:34,665 --> 00:52:40,745
tolerance? I'm willing to take volatility, right? On the correct timeframe. Okay, fair. Because I

1308
00:52:40,745 --> 00:52:44,865
end up postponing my life because Bitcoin is not the price I'm willing to sell. Precisely. Yeah.

1309
00:52:45,085 --> 00:52:48,085
Precisely. What if I don't want to postpone my life? We were talking about this at lunch.

1310
00:52:48,625 --> 00:52:53,505
You may not want to postpone your life. And sometimes parts of life are more important than

1311
00:52:53,505 --> 00:52:57,405
money. Yeah. And the dollars and the numbers and value of your assets. Sometimes you just actually

1312
00:52:57,405 --> 00:52:57,845
You want to live.

1313
00:52:58,305 --> 00:52:59,065
Sometimes you've got a family

1314
00:52:59,065 --> 00:53:00,425
and their needs come before yours

1315
00:53:00,425 --> 00:53:02,185
of saying, hey, I'd love to get to this value,

1316
00:53:02,305 --> 00:53:04,245
but really want a house.

1317
00:53:04,385 --> 00:53:05,045
Really want that holiday.

1318
00:53:05,205 --> 00:53:05,745
Really want whatever

1319
00:53:05,745 --> 00:53:08,805
because I've only got 80, 90 years here.

1320
00:53:09,665 --> 00:53:11,605
And, you know, you get old eventually

1321
00:53:11,605 --> 00:53:12,565
and you can't do those things.

1322
00:53:12,625 --> 00:53:13,345
If you're not going to live it,

1323
00:53:13,405 --> 00:53:14,465
what's the point of being here?

1324
00:53:14,685 --> 00:53:15,745
Yeah, 100%.

1325
00:53:15,745 --> 00:53:18,165
You said before the monetary system is changing.

1326
00:53:18,325 --> 00:53:19,405
Like that's clearer than ever.

1327
00:53:19,885 --> 00:53:21,625
And I think the stuff that's happening

1328
00:53:21,625 --> 00:53:24,245
with Iran taking payment in Bitcoin is huge.

1329
00:53:24,385 --> 00:53:24,865
It's wild, isn't it?

1330
00:53:24,905 --> 00:53:25,485
It's wild.

1331
00:53:25,565 --> 00:53:26,645
Have you seen the thing that came out

1332
00:53:26,645 --> 00:53:28,665
in the last day or two, which is them-

1333
00:53:28,665 --> 00:53:29,825
They've got like an insurance company

1334
00:53:29,825 --> 00:53:31,025
that takes Bitcoin.

1335
00:53:31,305 --> 00:53:33,385
Yeah, because Tether froze their stable coins.

1336
00:53:33,465 --> 00:53:33,705
Exactly.

1337
00:53:33,705 --> 00:53:34,305
Surprise, surprise.

1338
00:53:34,565 --> 00:53:35,725
But do you think this is like,

1339
00:53:35,845 --> 00:53:36,825
that we'll look back at this

1340
00:53:36,825 --> 00:53:38,625
as being a pinnacle moment in the shifting-

1341
00:53:38,625 --> 00:53:40,505
I don't know if this was the pinnacle moment.

1342
00:53:40,605 --> 00:53:43,605
Honestly, this, you know, if we really look back,

1343
00:53:45,105 --> 00:53:48,345
US freezing Russia's reserves in 2022 was the event.

1344
00:53:48,465 --> 00:53:49,045
That was the thing.

1345
00:53:49,865 --> 00:53:52,325
Everything else is just a transition towards sound money

1346
00:53:52,325 --> 00:53:53,405
and then people realizing,

1347
00:53:53,685 --> 00:53:55,825
do I want a piece of metal in my vault

1348
00:53:55,825 --> 00:53:59,585
that I can't sell or do I want something that's liquid and digital,

1349
00:53:59,585 --> 00:54:03,585
that's global and is actually, you know, think about it, it's kind of better.

1350
00:54:03,585 --> 00:54:06,305
Oh, and by the way, I can actually do this multi-sig thing set up

1351
00:54:06,305 --> 00:54:07,985
where I can have security around the world.

1352
00:54:09,425 --> 00:54:13,025
We're in just that process of we're moving towards the sound money backing

1353
00:54:13,025 --> 00:54:17,025
because it has to because of all those people just lose all trust.

1354
00:54:17,825 --> 00:54:21,585
And then it's just a game between, you know, who's younger and who's older, right?

1355
00:54:21,585 --> 00:54:23,585
Bitcoin will progress one funeral at a time.

1356
00:54:23,585 --> 00:54:25,025
That's kind of the framework.

1357
00:54:25,025 --> 00:54:27,605
The reason I do think it's a pivotal change is like,

1358
00:54:27,825 --> 00:54:29,905
I agree it starts with the freezing of the Russian treasuries.

1359
00:54:30,125 --> 00:54:31,905
Like that was, like Luke Graham calls it,

1360
00:54:31,925 --> 00:54:33,065
the shot that was heard across the world.

1361
00:54:33,425 --> 00:54:36,225
And I don't think Iran will be doing this unless that happens.

1362
00:54:36,245 --> 00:54:36,405
Agree.

1363
00:54:36,765 --> 00:54:39,705
But the fact that this is the first time we've seen Bitcoin

1364
00:54:39,705 --> 00:54:42,425
in the wild being used in this way by a nation state,

1365
00:54:43,205 --> 00:54:46,785
in a clear attempt to basically go around sanctions,

1366
00:54:47,125 --> 00:54:47,965
I think is huge.

1367
00:54:48,085 --> 00:54:50,385
I listened to a podcast many years ago.

1368
00:54:50,725 --> 00:54:53,425
I didn't, to be honest, I can't even tell you what podcast it was,

1369
00:54:53,425 --> 00:54:55,805
who the guy was, so whoever it was, good shout.

1370
00:54:56,425 --> 00:54:57,425
He was an oil trader.

1371
00:54:57,805 --> 00:54:59,585
And he was just, I found it amazing.

1372
00:54:59,665 --> 00:55:01,845
He was discussing how oil tankers work.

1373
00:55:01,925 --> 00:55:03,525
And they really are just merchants that just go,

1374
00:55:03,665 --> 00:55:04,865
oh, there's oil over there.

1375
00:55:04,925 --> 00:55:05,505
We'll go and pick it up.

1376
00:55:05,545 --> 00:55:06,105
Here's the price.

1377
00:55:06,225 --> 00:55:07,125
Okay, now we've got a buyer.

1378
00:55:07,905 --> 00:55:08,185
It just-

1379
00:55:08,185 --> 00:55:08,925
They're doing arbitrage.

1380
00:55:09,065 --> 00:55:11,085
Doing arbitrage in physical world, right?

1381
00:55:11,425 --> 00:55:13,225
And the idea is that you pull up somewhere

1382
00:55:13,225 --> 00:55:15,945
on a port in Africa and you need to get the local currency

1383
00:55:15,945 --> 00:55:18,305
and you got forex pairs and the banks freeze it.

1384
00:55:18,705 --> 00:55:20,825
And he's like, Bitcoin's just such an amazing asset.

1385
00:55:20,825 --> 00:55:23,065
When you really think about its use case there,

1386
00:55:23,425 --> 00:55:29,165
head office in New York can wire the Bitcoin straight to someone on country X.

1387
00:55:29,905 --> 00:55:31,525
They can get an exchange rate everywhere.

1388
00:55:31,665 --> 00:55:32,385
And that's the other thing, right?

1389
00:55:32,425 --> 00:55:33,585
Bitcoin's one of the few assets.

1390
00:55:33,765 --> 00:55:36,565
Gold, the dollar, trades everywhere in every currency.

1391
00:55:37,125 --> 00:55:38,365
You have a forex exchange.

1392
00:55:38,545 --> 00:55:41,385
I mean, the Australian dollar does not have an exchange rate in most currencies.

1393
00:55:41,485 --> 00:55:42,345
It's just true, right?

1394
00:55:42,825 --> 00:55:48,585
So it's a kind of example of, yeah, digital is actually a lot better

1395
00:55:48,585 --> 00:55:52,145
than a hunk of metal that you need bolt cutters to chop into.

1396
00:55:52,145 --> 00:55:54,485
And it's highly liquid in most of the world

1397
00:55:54,485 --> 00:55:56,165
and liquid to a degree in all of the world.

1398
00:55:56,165 --> 00:55:58,825
I saw a video the other day.

1399
00:55:58,985 --> 00:56:00,205
I'm not sure who the bloke was,

1400
00:56:00,305 --> 00:56:01,585
but I've seen his face.

1401
00:56:01,685 --> 00:56:04,625
He's, you know, a very renowned gold bug.

1402
00:56:05,125 --> 00:56:07,185
He was standing there in front of a table twice as big as this,

1403
00:56:07,305 --> 00:56:10,085
covered in these, like, 50-ton, you know,

1404
00:56:10,125 --> 00:56:11,285
massive blocks of silver.

1405
00:56:11,625 --> 00:56:13,105
And he's got this big bar of gold, and he goes,

1406
00:56:13,145 --> 00:56:16,385
did you know that all this silver is worth half as much

1407
00:56:16,385 --> 00:56:17,165
as this gold bar?

1408
00:56:17,325 --> 00:56:19,125
And I just retweeted and said, bro, get a cold card.

1409
00:56:19,185 --> 00:56:19,605
What do you do?

1410
00:56:20,785 --> 00:56:21,145
Seriously?

1411
00:56:21,145 --> 00:56:24,145
Like, look at all this metal. What are you going to do with it? Ridiculous.

1412
00:56:24,145 --> 00:56:29,405
So I get it, final settlement. But like, guys, it's time to move on.

1413
00:56:29,405 --> 00:56:31,405
And it'll happen. It's a process.

1414
00:56:31,405 --> 00:56:33,705
Should we get on to the Australia fuckery?

1415
00:56:33,705 --> 00:56:34,485
I think so.

1416
00:56:34,485 --> 00:56:38,045
When I turned up today, you're normally like dead upbeat, super happy.

1417
00:56:38,045 --> 00:56:39,785
I turn up today and you were dejected.

1418
00:56:39,785 --> 00:56:42,145
It's been a shit week. It's been a shit two weeks.

1419
00:56:42,145 --> 00:56:45,345
So loads of people listening won't know exactly what's happened.

1420
00:56:45,345 --> 00:56:47,205
Do you want to just lay out everything that's happened?

1421
00:56:47,205 --> 00:56:50,145
Yeah, sure. So first things first,

1422
00:56:50,145 --> 00:56:52,245
none of this is signed into law yet.

1423
00:56:52,905 --> 00:56:54,805
The odds are it is likely to happen, however.

1424
00:56:55,125 --> 00:56:58,165
So short story is for, I think it's since 1999,

1425
00:56:58,565 --> 00:57:02,065
we've had a capital gains tax set up in Australia

1426
00:57:02,065 --> 00:57:04,225
where whatever your gain is,

1427
00:57:04,265 --> 00:57:05,465
so you've got your cost basis of $100,

1428
00:57:05,865 --> 00:57:07,805
you sell it for $200, if you held it for a year,

1429
00:57:08,445 --> 00:57:10,605
that $100 is not taxable, you halve it,

1430
00:57:10,705 --> 00:57:11,965
$50 is taxable.

1431
00:57:12,125 --> 00:57:15,045
Now, this 50% cap gains accounts for a whole lot of things.

1432
00:57:15,045 --> 00:57:17,845
The holding time, inflation over that period.

1433
00:57:17,845 --> 00:57:22,365
there's also the idea that you kind of accrued the wealth

1434
00:57:22,365 --> 00:57:23,645
over the whole holding time

1435
00:57:23,645 --> 00:57:25,825
but you realize it on the same day that you sell it

1436
00:57:25,825 --> 00:57:27,765
kind of accounts for all of those nuances

1437
00:57:27,765 --> 00:57:29,265
but most importantly

1438
00:57:29,265 --> 00:57:31,685
it allows people to save and grow wealth

1439
00:57:31,685 --> 00:57:32,065
yep

1440
00:57:32,065 --> 00:57:34,845
just to be clear

1441
00:57:34,845 --> 00:57:36,025
so it's 50% cap gains

1442
00:57:36,025 --> 00:57:37,305
if you hold an asset for over a year

1443
00:57:37,305 --> 00:57:38,665
you get a 50% discount

1444
00:57:38,665 --> 00:57:38,985
discount

1445
00:57:38,985 --> 00:57:40,745
so then whatever's left over

1446
00:57:40,745 --> 00:57:43,285
that $50 is times your marginal tax rate

1447
00:57:43,285 --> 00:57:45,705
now we have a tiered tax system

1448
00:57:45,705 --> 00:57:46,525
so the lower you are

1449
00:57:46,525 --> 00:57:47,905
the lower your tax is.

1450
00:57:48,545 --> 00:57:52,145
For very low-income people, this can resolve to less than 12%,

1451
00:57:52,145 --> 00:57:54,565
which kind of is a good idea, right?

1452
00:57:54,585 --> 00:57:56,405
You want people who have less money to be able to save better

1453
00:57:56,405 --> 00:57:57,765
and have a more favorable system.

1454
00:57:57,965 --> 00:58:01,665
The higher up you are, our top marginal tax bracket is $190,000.

1455
00:58:02,525 --> 00:58:06,745
And $190,000, I mean, it's $0.70 to the dollar

1456
00:58:06,745 --> 00:58:07,765
for Americans listening.

1457
00:58:07,845 --> 00:58:09,345
So it's like $135,000.

1458
00:58:10,045 --> 00:58:12,265
That's where you start getting slugged with 45%.

1459
00:58:12,265 --> 00:58:13,585
Then we have the 2% Medicare levy.

1460
00:58:13,585 --> 00:58:18,625
So your tax rate is 47%, marginal, above 135 US.

1461
00:58:19,905 --> 00:58:23,045
Now, the Labor government, as in all their infinite wisdom,

1462
00:58:23,605 --> 00:58:24,585
has come out with a budget.

1463
00:58:24,865 --> 00:58:28,025
Now, the budget is not in effect,

1464
00:58:28,285 --> 00:58:31,065
but Labor can push it through the, alone,

1465
00:58:31,225 --> 00:58:33,885
can push it through the lower house, the House of Reps.

1466
00:58:34,285 --> 00:58:36,725
And then the Senate, if they just pair with the Greens,

1467
00:58:36,905 --> 00:58:39,005
and can anybody point to a situation where the Greens

1468
00:58:39,005 --> 00:58:40,185
haven't supported more tax,

1469
00:58:40,745 --> 00:58:42,365
they have exactly the amount of votes

1470
00:58:42,365 --> 00:58:43,445
that they need to push it through the Senate.

1471
00:58:43,585 --> 00:58:46,065
So this thing has a very clear path straight through.

1472
00:58:46,965 --> 00:58:49,625
Now, Australia has the housing bubble of all housing bubbles.

1473
00:58:49,765 --> 00:58:50,305
There's very few.

1474
00:58:50,465 --> 00:58:52,085
I mean, Canada, you know what this is all about.

1475
00:58:52,585 --> 00:58:55,625
I think Switzerland and New Zealand, we're all looking at each other going,

1476
00:58:55,845 --> 00:58:56,885
who's the bigger idiot here?

1477
00:58:57,645 --> 00:59:02,685
The median Australian house apartment dwelling countrywide is a million Aussie,

1478
00:59:02,885 --> 00:59:03,985
720 US.

1479
00:59:04,585 --> 00:59:05,385
That's the median.

1480
00:59:05,385 --> 00:59:08,285
The median salary is 74K.

1481
00:59:08,845 --> 00:59:09,825
The mean is 82.

1482
00:59:09,825 --> 00:59:18,025
the median worker saving in a 5% bank deposit will take 40 years to save the deposit for a

1483
00:59:18,025 --> 00:59:23,905
median house or apartment dwelling. Insane. Doesn't make sense. Now, there's going to be people saying

1484
00:59:23,905 --> 00:59:27,045
move regional or whatever. It's like, yeah, that's fine. Obviously, we're talking about means and

1485
00:59:27,045 --> 00:59:31,785
medians here. I'm not going to go through every state and country and city. So the idea is they've

1486
00:59:31,785 --> 00:59:37,725
brought in this budget and they're overhauling our tax system. This is effectively a currency

1487
00:59:37,725 --> 00:59:42,465
devaluation, more or less. But it's a very, they've pitched it saying it's going to benefit

1488
00:59:42,465 --> 00:59:46,525
young people trying to buy housing. Now, there's a bunch of things in terms of negative gearing,

1489
00:59:46,625 --> 00:59:50,465
where you can offset your, you know, if you're losing money on the rent, you know, you're kind

1490
00:59:50,465 --> 00:59:53,665
of banking on the capital appreciation of the property. So you'll lose on the rent, offset your

1491
00:59:53,665 --> 00:59:59,145
tax. I'm not going to talk about that. That's its own beast. But they snuck in there. The pitch is,

1492
00:59:59,145 --> 01:00:04,465
we want to make it easier for young people to save for a house. The median young person has a low

1493
01:00:04,465 --> 01:00:08,385
income, it's going to take them 40 years to save in cash for the deposit.

1494
01:00:09,385 --> 01:00:10,905
So they have to save in assets.

1495
01:00:11,885 --> 01:00:15,985
And these bastards snuck in there that they're going to put a, they're removing the 50% cap

1496
01:00:15,985 --> 01:00:19,645
gains discount on all assets, ETFs, shares, Bitcoin, the whole lot.

1497
01:00:20,645 --> 01:00:22,325
And you're going to get an indexation method.

1498
01:00:22,425 --> 01:00:28,205
So that means your $100 cost basis goes up to $103 with CPI, then goes up another 3%,

1499
01:00:28,205 --> 01:00:29,345
then goes up another 3%.

1500
01:00:29,345 --> 01:00:33,585
So if you just think about that, if you hold it for a year in the current system, you would

1501
01:00:33,585 --> 01:00:39,725
get, you make $100, you take off 50%, you've got $50, that's applied to your marginal tax rate.

1502
01:00:40,385 --> 01:00:46,765
Now, you take off 3% and the $97 is added to your income at your marginal tax rate,

1503
01:00:47,085 --> 01:00:50,825
and at a minimum of 30%. So the people who are on the lowest marginal tax bracket

1504
01:00:50,825 --> 01:00:55,485
suddenly have to pay 30% gains, not 12 or 1 or 2 or 5, whatever that works out to.

1505
01:00:56,985 --> 01:01:00,345
If you think about what this has done, and there's this system, they're only doing partial

1506
01:01:00,345 --> 01:01:01,985
grandfathering, which is also a scam.

1507
01:01:02,565 --> 01:01:04,445
As far as I'm aware, almost every tax

1508
01:01:04,445 --> 01:01:05,585
reform in Australia,

1509
01:01:06,585 --> 01:01:08,405
if you held assets under the old

1510
01:01:08,405 --> 01:01:10,265
system, they remain under the old system.

1511
01:01:11,145 --> 01:01:22,558
The problem is that the 1st of July 2027 you move you kind of index your value everything up to that point unrealized is at the 50 current system and everything from that point

1512
01:01:22,558 --> 01:01:24,018
onwards is indexed.

1513
01:01:24,338 --> 01:01:27,998
So here's the thing, they're not indexing your tax bracket, but they are indexing your

1514
01:01:27,998 --> 01:01:28,657
capital gains.

1515
01:01:29,438 --> 01:01:34,318
If you're someone like me who has, we kind of, I will straddle my 10-year goal of saving

1516
01:01:34,318 --> 01:01:38,578
for a house, my 10-year goal of paying for my kids' school fees, my tax goes up by about

1517
01:01:38,578 --> 01:01:39,677
40 to 50%.

1518
01:01:40,238 --> 01:01:41,378
Just like the component.

1519
01:01:41,538 --> 01:01:43,477
So that's effectively, when you look at it,

1520
01:01:43,498 --> 01:01:46,618
they're already taking 25% more or less.

1521
01:01:47,238 --> 01:01:49,618
When you do your marginal tax rate, 50%,

1522
01:01:49,618 --> 01:01:50,918
they're taking about 25%.

1523
01:01:50,918 --> 01:01:52,898
That goes up to about 40%.

1524
01:01:52,898 --> 01:01:53,538
Insane.

1525
01:01:53,618 --> 01:01:55,157
So they're more or less,

1526
01:01:55,338 --> 01:01:56,938
for people who are on full indexation,

1527
01:01:57,018 --> 01:01:58,098
which is young people,

1528
01:01:58,578 --> 01:02:00,038
they've doubled the tax.

1529
01:02:00,518 --> 01:02:03,918
So in order to get on the first rung of the housing ladder,

1530
01:02:03,918 --> 01:02:06,198
you need to climb the principal ladder,

1531
01:02:06,318 --> 01:02:08,218
the primary ladder, which is your asset portfolio.

1532
01:02:08,218 --> 01:02:12,677
So the assets that you're saving in, they're now going to tax it two times as much.

1533
01:02:13,558 --> 01:02:18,977
So for me, someone who straddles that world over the next 10 years, they're going to take about 20% to 30% of my savings.

1534
01:02:19,657 --> 01:02:25,378
For someone who is coming into that system, if you're a startup, you start a successful business.

1535
01:02:25,998 --> 01:02:27,318
It's worth half a million bucks.

1536
01:02:27,977 --> 01:02:29,078
Your cost basis is zero.

1537
01:02:29,498 --> 01:02:31,198
What's 3% CPI on zero?

1538
01:02:31,518 --> 01:02:32,238
Also zero.

1539
01:02:32,718 --> 01:02:36,038
So you owe the government full 47% of your sale price.

1540
01:02:36,038 --> 01:02:41,137
and this is why you'll see a lot of memes of people inserting our prime minister and saying

1541
01:02:41,137 --> 01:02:46,977
welcome to our 47 shareholder you take none of the risk you put none of the capital up front you pay

1542
01:02:46,977 --> 01:02:53,618
none of the expenses but you show up on payday for 47 of the value so the great irony of this

1543
01:02:53,618 --> 01:02:59,438
whole thing is that it locks in people who already own property there's just so many other layers to

1544
01:02:59,438 --> 01:03:04,118
this people who already own property they get to keep all their negative gearing discounts

1545
01:03:04,118 --> 01:03:10,618
and if you buy new homes off the plan, you also get to do the current tax setup.

1546
01:03:11,218 --> 01:03:14,218
So what they've actually done is got all the young people who want to buy a home

1547
01:03:14,218 --> 01:03:18,877
and said, you're now going to compete with 100% of investors all vying for new homes,

1548
01:03:18,938 --> 01:03:19,558
not old builds.

1549
01:03:20,177 --> 01:03:24,177
So the whole setup doesn't help young people save.

1550
01:03:24,618 --> 01:03:27,858
I ran the numbers on depending on the growth of your asset.

1551
01:03:27,858 --> 01:03:32,677
Now, most people, if you're on 5% or 10% or 15%,

1552
01:03:32,677 --> 01:03:36,438
it's adding eight to five years to your savings goal.

1553
01:03:37,918 --> 01:03:40,238
And that's if you're on the full indexation.

1554
01:03:40,638 --> 01:03:42,818
If you're owning an asset that goes up 50% a year,

1555
01:03:42,918 --> 01:03:44,977
which, guys, doesn't happen for a decade,

1556
01:03:45,818 --> 01:03:47,338
then they take about a year.

1557
01:03:47,838 --> 01:03:50,498
I ran another model saying, well, here's the current school fees,

1558
01:03:50,858 --> 01:03:51,838
a typical private school.

1559
01:03:51,977 --> 01:03:54,638
Now, by the way, owning a home and sending a kid to private school,

1560
01:03:54,638 --> 01:03:58,798
These aren't what I would call high net worth, upper high net worth things.

1561
01:03:58,998 --> 01:03:59,278
These are-

1562
01:03:59,278 --> 01:03:59,877
This is middle class.

1563
01:03:59,877 --> 01:04:00,838
This is middle class.

1564
01:04:00,957 --> 01:04:02,977
I literally want to give my kid a good education type stuff.

1565
01:04:03,198 --> 01:04:03,938
Aspirational things.

1566
01:04:04,018 --> 01:04:04,138
Yeah.

1567
01:04:04,898 --> 01:04:10,418
It adds, I worked at how many years, because school fees are 15 to 25 grand a year per kid,

1568
01:04:10,578 --> 01:04:13,238
going up at 8%, the debasement rate pretty typically.

1569
01:04:13,818 --> 01:04:15,877
And I asked the question, how many years of school fees,

1570
01:04:15,918 --> 01:04:19,278
if I just buy one Bitcoin now at 100 grand Australian, it's approximately the price,

1571
01:04:19,278 --> 01:04:24,718
how many years can I peel off to cover all the school fees?

1572
01:04:24,738 --> 01:04:27,138
How many years of school fees is it worth if it goes up at X percent?

1573
01:04:28,177 --> 01:04:30,938
The general framework is that this new tax system

1574
01:04:30,938 --> 01:04:35,157
removes approximately one to two years' worth of school fees per child.

1575
01:04:35,598 --> 01:04:38,718
So you go, how have you benefited me as a young person?

1576
01:04:38,818 --> 01:04:39,758
I'm in my mid-30s.

1577
01:04:39,877 --> 01:04:41,358
I've been saving to buy a house for a decade.

1578
01:04:41,877 --> 01:04:44,657
You've added two to three years to my most optimistic case

1579
01:04:44,657 --> 01:04:46,358
of when I actually step into the market,

1580
01:04:46,518 --> 01:04:49,078
and my boy just lost a year of school fees.

1581
01:04:49,278 --> 01:04:50,738
And by the way, I've got to pick between those two.

1582
01:04:51,078 --> 01:04:53,558
If I buy the house, it's harder to pay for the school fees.

1583
01:04:54,258 --> 01:04:58,938
And you just look at this and go, how have my framework was?

1584
01:04:59,218 --> 01:05:01,498
I'm like, I'm no genius, right?

1585
01:05:01,498 --> 01:05:02,598
I think about a lot of stuff.

1586
01:05:03,098 --> 01:05:04,957
I'm smarter than your average bear, right?

1587
01:05:05,278 --> 01:05:06,718
Enough to be an engineer at least.

1588
01:05:07,338 --> 01:05:08,818
It took me five seconds to go,

1589
01:05:08,877 --> 01:05:10,098
something's fucking wrong with this budget.

1590
01:05:10,677 --> 01:05:12,377
And then it took me about 10 minutes

1591
01:05:12,377 --> 01:05:14,218
to go through just with an LLM and say,

1592
01:05:14,298 --> 01:05:17,098
can you just model this out just to stress test it,

1593
01:05:17,098 --> 01:05:20,977
testing a couple of LLNs to make sure they're not hallucinating anything. Come back with the same

1594
01:05:20,977 --> 01:05:24,258
numbers and go, it took me 10 minutes to work out that this is not going to benefit young people in

1595
01:05:24,258 --> 01:05:28,778
any way, shape or form. In fact, it makes it considerably worse. I'm in the camp where you

1596
01:05:28,778 --> 01:05:33,998
can look at this whole setup and go, for politicians, there's generally two reasons they make bad

1597
01:05:33,998 --> 01:05:39,677
decisions. Incompetence, door number one. Malice, door number two. I fall on the spectrum where I

1598
01:05:39,677 --> 01:05:46,398
think, generally speaking, I like to give them the benefit of the doubt of being morons and just

1599
01:05:46,398 --> 01:05:51,657
being incompetent with a bunch of stakeholders involved, all that, you know. In this case,

1600
01:05:52,098 --> 01:05:57,078
you're telling me not, and here's the kicker. They broke a lot of like, the electric promises

1601
01:05:57,078 --> 01:06:03,238
they made was specifically, we won't do what we just did. Like, when you think about that as a

1602
01:06:03,238 --> 01:06:08,258
business, right? If I was to make a big decision, like, I know, I'm going to start supporting

1603
01:06:08,258 --> 01:06:12,618
Ethereum in my data. That's a huge reputational risk. It's also something I'm not going to do,

1604
01:06:12,618 --> 01:06:17,858
by the way. But I would have gone through countless hours of study and thought. And,

1605
01:06:17,977 --> 01:06:21,998
you know, if I'm going to make a big decision, it's going to change my reputation forever.

1606
01:06:22,558 --> 01:06:26,977
I would think about it. If it took me five seconds of thought, 10 seconds with an LLM,

1607
01:06:27,018 --> 01:06:30,338
you're telling me not a single staffer did this. And if the staffer did do this,

1608
01:06:30,977 --> 01:06:36,118
and they're aware of it, then it's malice. So I just look at this and go, and I know there's

1609
01:06:36,118 --> 01:06:40,177
going to be folks in the audience going, that's always malice. I'm like, yeah, that's fine. But

1610
01:06:40,177 --> 01:06:42,518
In this case, it's really hard to argue against that.

1611
01:06:43,018 --> 01:06:44,798
Do you think it's that they're so out of touch

1612
01:06:44,798 --> 01:06:47,418
that these boomers think that the way people are saving their houses

1613
01:06:47,418 --> 01:06:49,838
is by squirrelling money away in a bank account

1614
01:06:49,838 --> 01:06:50,718
and not investing in assets?

1615
01:06:50,718 --> 01:06:52,438
So this is what I've been puzzling over.

1616
01:06:52,598 --> 01:06:55,038
Who are the people they're interviewing to come to this decision?

1617
01:06:55,438 --> 01:06:57,338
Because I have in my mind's eye what they look like,

1618
01:06:57,338 --> 01:06:58,858
and I'm pretty sure they shouldn't be asking those people

1619
01:06:58,858 --> 01:06:59,977
anything to do with investing.

1620
01:07:01,418 --> 01:07:04,098
It's quite interesting because the media,

1621
01:07:04,618 --> 01:07:06,898
and you look at the propaganda arm, ABC,

1622
01:07:08,298 --> 01:07:10,078
you look at how they're pitching this whole thing.

1623
01:07:10,177 --> 01:07:15,858
you really had to work very hard to find anywhere they talked about the fact that they snuck it in for all assets.

1624
01:07:16,338 --> 01:07:19,418
They did have a three-minute video that I watched where they talk about it.

1625
01:07:19,898 --> 01:07:27,558
And they, and I shit you not, they make the suggestion that this might actually make investing in government bonds a more attractive thing.

1626
01:07:27,838 --> 01:07:30,438
And by the way, to their credit, that is true.

1627
01:07:30,638 --> 01:07:35,438
If you buy an asset that underperforms CPI inflation of 3%, you are correct.

1628
01:07:35,518 --> 01:07:37,718
The current indexation method is much better for your tax.

1629
01:07:38,078 --> 01:07:38,858
You're also poor.

1630
01:07:39,298 --> 01:07:40,718
So you just look at this setup and go,

1631
01:07:40,898 --> 01:07:43,818
they kind of want people to buy shitty government paper.

1632
01:07:44,538 --> 01:07:45,998
And the higher your growth asset,

1633
01:07:46,118 --> 01:07:47,477
the more indexation doesn't help you at all.

1634
01:07:47,677 --> 01:07:49,538
Bitcoin goes up 25%, 20%,

1635
01:07:49,538 --> 01:07:51,938
and you take a 3% indexation, it's irrelevant.

1636
01:07:52,058 --> 01:07:53,438
You're a startup with a zero cost basis.

1637
01:07:53,618 --> 01:07:54,918
Indexation does nothing for you.

1638
01:07:55,398 --> 01:07:56,438
And you just look at this whole thing.

1639
01:07:56,518 --> 01:07:59,078
This is a tax grab of all tax grabs.

1640
01:07:59,638 --> 01:08:01,398
And ironically, people didn't vote for this

1641
01:08:01,398 --> 01:08:02,938
because the election promise was,

1642
01:08:02,938 --> 01:08:04,898
and by the way, I'm not going to pretend

1643
01:08:04,898 --> 01:08:06,558
that I trust politicians in the first place.

1644
01:08:06,598 --> 01:08:07,638
And I certainly didn't vote for Labor.

1645
01:08:08,457 --> 01:08:09,998
But it's kind of interesting to see.

1646
01:08:10,157 --> 01:08:11,398
I know there's been a lot of backlash.

1647
01:08:11,578 --> 01:08:15,138
That's why you'll see a lot of millennials posting photos of Albo, right,

1648
01:08:15,177 --> 01:08:18,558
with a triangle as part of a band saying, you know, good meme, Daz,

1649
01:08:18,977 --> 01:08:23,018
saying welcome to the team for doing jack shit of the work and taking 47%

1650
01:08:23,018 --> 01:08:24,558
because that's effectively what it is.

1651
01:08:24,938 --> 01:08:28,337
It is much the same as a currency devaluation.

1652
01:08:28,877 --> 01:08:32,377
They devalue the savings of all Australians who hold assets.

1653
01:08:33,277 --> 01:08:35,078
There's a bunch of people out there who are gnashing their teeth saying,

1654
01:08:35,178 --> 01:08:35,817
bro, just leave.

1655
01:08:36,138 --> 01:08:37,138
We also have an exit tax.

1656
01:08:37,477 --> 01:08:39,158
The day you get on the plane, you realize everything.

1657
01:08:39,498 --> 01:08:42,917
So basically we've got a period of time here where you've got to fight back

1658
01:08:42,917 --> 01:08:46,458
because if you don't fight back and you don't send an email,

1659
01:08:46,638 --> 01:08:49,058
a politely worded email saying, listen here, dickhead,

1660
01:08:49,438 --> 01:08:50,158
what are you doing?

1661
01:08:50,218 --> 01:08:51,538
You can't support this to your local MP.

1662
01:08:51,857 --> 01:08:53,058
You've got to do what you can.

1663
01:08:53,718 --> 01:08:54,857
Yes, there's an exit route.

1664
01:08:55,158 --> 01:08:56,098
That's one pathway.

1665
01:08:56,098 --> 01:09:00,357
But the vast, vast majority of people simply are not going to pick up,

1666
01:09:00,438 --> 01:09:02,398
leave their family, leave their friends, sell their apartment,

1667
01:09:02,558 --> 01:09:05,218
sell their house, sell their clothes and move overseas

1668
01:09:05,218 --> 01:09:07,658
and then pay an exit tax,

1669
01:09:07,678 --> 01:09:10,058
which will take 30%, 40% of their assets anyway.

1670
01:09:10,678 --> 01:09:12,477
Most people are just simply not going to do that.

1671
01:09:13,038 --> 01:09:14,118
So what do we do in the meantime?

1672
01:09:14,337 --> 01:09:15,938
Because you've got to make an uproar.

1673
01:09:16,098 --> 01:09:17,038
In this instance, you just...

1674
01:09:17,038 --> 01:09:17,698
And I'm not a...

1675
01:09:17,698 --> 01:09:18,618
I don't go to rallies.

1676
01:09:18,698 --> 01:09:19,518
I'm not a political dude.

1677
01:09:19,977 --> 01:09:22,977
It's one of those things where they have truly, truly...

1678
01:09:23,797 --> 01:09:24,898
Yeah, they're fucked over the average Australian.

1679
01:09:24,977 --> 01:09:25,477
You've got to do something.

1680
01:09:25,618 --> 01:09:26,877
But the indexing is a scam as well

1681
01:09:26,877 --> 01:09:29,078
because we know the CPI numbers are caught to be favourable.

1682
01:09:29,238 --> 01:09:29,738
Of course.

1683
01:09:29,797 --> 01:09:30,658
Like, it's all a scam.

1684
01:09:30,658 --> 01:09:33,498
They can raise taxes by fudging the CPI numbers.

1685
01:09:34,398 --> 01:09:36,078
Your asset has a bad year.

1686
01:09:36,317 --> 01:09:41,297
Let's just imagine there's some kind of hit to the AI sector in June 2027

1687
01:09:41,297 --> 01:09:43,638
and all those assets sell off 50%.

1688
01:09:43,638 --> 01:09:45,817
Bang, your index of the 1st of July 2027.

1689
01:09:46,038 --> 01:09:47,218
That's your new cost basis.

1690
01:09:47,417 --> 01:09:49,658
You don't get the 50% cap gains on everything before that.

1691
01:09:50,058 --> 01:09:53,357
The accounting nightmare of the whole thing is just, yeah, it's wild.

1692
01:09:53,498 --> 01:09:55,377
Do you think this will definitely go through?

1693
01:09:56,377 --> 01:09:58,218
I think it's a very good test.

1694
01:09:58,678 --> 01:10:01,118
So the reason why I wrote a piece on this called

1695
01:10:01,118 --> 01:10:03,297
When the Government Pulls the Rug, which is free,

1696
01:10:03,297 --> 01:10:04,438
so people can read it.

1697
01:10:04,917 --> 01:10:06,498
For non-Australians,

1698
01:10:07,258 --> 01:10:09,098
don't believe they're not cooking this stuff

1699
01:10:09,098 --> 01:10:09,917
in your neck of the woods.

1700
01:10:09,938 --> 01:10:10,417
Oh, 100%.

1701
01:10:10,417 --> 01:10:11,877
So this is a warning shot.

1702
01:10:13,317 --> 01:10:14,737
To be very fair to them,

1703
01:10:15,377 --> 01:10:17,297
as much as I oppose it heavily,

1704
01:10:17,377 --> 01:10:18,277
I think it's a terrible idea,

1705
01:10:18,898 --> 01:10:21,038
at least they're levying just a straight tax.

1706
01:10:21,438 --> 01:10:22,417
They're going to inflate the money as well,

1707
01:10:22,498 --> 01:10:23,538
but at least they're saying

1708
01:10:23,538 --> 01:10:24,698
we're going to tax you outright.

1709
01:10:26,398 --> 01:10:27,658
What will be very interesting,

1710
01:10:27,737 --> 01:10:28,598
they're attempting austerity.

1711
01:10:29,698 --> 01:10:30,877
What will be very interesting

1712
01:10:30,877 --> 01:10:32,777
is this is a trial balloon for the rest of the world.

1713
01:10:32,777 --> 01:10:39,377
how willing are the australian people to accept tightening of the belts for somebody else's excess

1714
01:10:39,377 --> 01:10:45,158
and my answer is not not and it's not because it's tightening the belt because you're going to

1715
01:10:45,158 --> 01:10:50,078
the money away anyway 100 if you had of actually and this is the thing if they had have come out

1716
01:10:50,078 --> 01:10:56,898
with a tightening the belt tax policy that wasn't an outright scam and helped young people like i

1717
01:10:56,898 --> 01:11:02,138
don't know all the existing properties you can't negative gear as well and sorry we're not going

1718
01:11:02,138 --> 01:11:06,198
grant like or we just limit it to property they would clearly never do that though because like

1719
01:11:06,198 --> 01:11:09,658
australia runs on the housing market so here well and this is the thing that i think is very

1720
01:11:09,658 --> 01:11:14,578
interesting i think they've just pricked the housing bubble because first of all most we were

1721
01:11:14,578 --> 01:11:20,398
just running out of buyers the numbers were so high you know they talk about median to median

1722
01:11:20,398 --> 01:11:26,337
income to property price um and i think five is where they deem it unaffordable they literally

1723
01:11:26,337 --> 01:11:31,178
invented a new bracket for australia called impossibly unaffordable above 15 right sydney's

1724
01:11:31,178 --> 01:11:33,498
the second most expensive place in the world short of Hong Kong.

1725
01:11:34,078 --> 01:11:35,718
So you look at all these dynamics, you go,

1726
01:11:35,817 --> 01:11:37,118
I think they've pricked the housing bubble.

1727
01:11:37,198 --> 01:11:37,357
Why?

1728
01:11:37,477 --> 01:11:38,797
Because people no longer have certainty.

1729
01:11:39,258 --> 01:11:40,498
They know the rules are going to change.

1730
01:11:40,578 --> 01:11:42,198
So to come back to your original question,

1731
01:11:42,337 --> 01:11:44,917
I believe this is a trial balloon where they're trying to see

1732
01:11:44,917 --> 01:11:48,058
how willing are people to accept changes of this magnitude.

1733
01:11:48,678 --> 01:11:51,337
If they had to come out and put in hard changes

1734
01:11:51,337 --> 01:11:53,938
that would be difficult for the economy to manage

1735
01:11:53,938 --> 01:11:56,058
but were directionally correct,

1736
01:11:56,218 --> 01:11:58,797
that really did give people who were younger an opportunity.

1737
01:11:58,917 --> 01:12:01,038
And I think about this like I'm actually lucky

1738
01:12:01,038 --> 01:12:02,658
that I'm going to straddle this system.

1739
01:12:03,618 --> 01:12:05,297
The poor people who come into this thing

1740
01:12:05,297 --> 01:12:07,538
who are young now have no hope.

1741
01:12:07,638 --> 01:12:08,998
They're going to get hit with a full indexation.

1742
01:12:09,098 --> 01:12:10,218
It's a scam for their whole career.

1743
01:12:10,718 --> 01:12:11,377
It's wrong.

1744
01:12:11,558 --> 01:12:12,998
So if they had have said,

1745
01:12:13,058 --> 01:12:14,758
tighten your belts and done it correctly

1746
01:12:14,758 --> 01:12:15,898
and done a bunch of modeling

1747
01:12:15,898 --> 01:12:17,718
that when I run the numbers,

1748
01:12:17,777 --> 01:12:19,678
I go, look, I may not agree with all of it,

1749
01:12:19,718 --> 01:12:21,658
but directionally, fair enough.

1750
01:12:21,718 --> 01:12:22,297
I'll support it.

1751
01:12:22,737 --> 01:12:23,598
But they came out

1752
01:12:23,598 --> 01:12:25,337
and they just slugged everybody with a true scam

1753
01:12:25,337 --> 01:12:26,277
and it's like, I just can't.

1754
01:12:26,357 --> 01:12:27,598
If you own Bitcoin today,

1755
01:12:27,737 --> 01:12:28,898
after these rules come into effect,

1756
01:12:28,977 --> 01:12:30,357
does the Bitcoin get grandfathered

1757
01:12:30,357 --> 01:12:31,277
into the new system.

1758
01:12:31,337 --> 01:12:32,998
No, so it's partial grandfathering,

1759
01:12:33,038 --> 01:12:34,398
which again is a scam in its own right.

1760
01:12:34,817 --> 01:12:35,797
Whatever the price is,

1761
01:12:35,837 --> 01:12:36,618
let's say you just bought it,

1762
01:12:36,658 --> 01:12:39,098
30 grand Aussie, right?

1763
01:12:39,138 --> 01:12:40,258
Whatever that is in US terms.

1764
01:12:40,718 --> 01:12:43,058
You buy 30 grand and the price is 100 grand

1765
01:12:43,058 --> 01:12:45,678
on the 1st of July, 2027.

1766
01:12:46,237 --> 01:12:49,638
That 70 grand gain times your Bitcoin value,

1767
01:12:50,018 --> 01:12:51,958
that 70 grand gain gets the 50%

1768
01:12:51,958 --> 01:12:54,277
and then your cost basis in the indexation method

1769
01:12:54,277 --> 01:12:55,038
is 100,000.

1770
01:12:55,558 --> 01:12:58,277
So then you tack on 3% or whatever CPI bullshit is.

1771
01:12:58,277 --> 01:12:59,638
So that's why you're saying you straddle it.

1772
01:12:59,777 --> 01:13:00,058
Correct.

1773
01:13:00,357 --> 01:13:07,758
So if you think about it, if I was full indexation, the 97% of every gain every year is fully taxable.

1774
01:13:08,118 --> 01:13:14,938
Whereas for me, the first part of Bitcoin's journey is 50% cap gains and then everything after that,

1775
01:13:14,998 --> 01:13:17,898
which by the way, I don't buy, this is why it's a real scam.

1776
01:13:18,518 --> 01:13:20,438
I didn't buy Bitcoin for one year.

1777
01:13:20,898 --> 01:13:23,618
I bought it for my kid's school fees before I even had a kid.

1778
01:13:23,857 --> 01:13:24,638
You know what I mean?

1779
01:13:24,938 --> 01:13:29,817
I'm thinking more than a decade out, that decade is now going to be under the indexation method.

1780
01:13:29,817 --> 01:13:30,297
Right?

1781
01:13:30,357 --> 01:13:32,797
And sorry, it's actually getting beyond the point.

1782
01:13:33,297 --> 01:13:34,998
The indexation method alone is a scam.

1783
01:13:35,158 --> 01:13:36,198
Index the salary brackets.

1784
01:13:36,538 --> 01:13:39,538
And you listen to the politicians on the news recently

1785
01:13:39,538 --> 01:13:41,998
and they say, are you going to index salary brackets?

1786
01:13:42,098 --> 01:13:43,277
They go, oh, no, I can't do that.

1787
01:13:43,438 --> 01:13:44,558
It's like, what do you mean you can't do that?

1788
01:13:44,578 --> 01:13:45,638
You can index your taxes,

1789
01:13:46,237 --> 01:13:47,578
but you're not going to index people's incomes?

1790
01:13:47,857 --> 01:13:48,718
I mean, malice.

1791
01:13:48,898 --> 01:13:49,058
Yeah.

1792
01:13:50,198 --> 01:13:52,038
What do you think Bitcoiners in Australia

1793
01:13:52,038 --> 01:13:53,337
that aren't going to leave should be doing?

1794
01:13:53,438 --> 01:13:54,618
Is this time to call your accountant?

1795
01:13:54,958 --> 01:13:55,658
Get a good accountant.

1796
01:13:56,078 --> 01:13:56,317
Yeah.

1797
01:13:56,698 --> 01:13:58,377
And not because you're doing anything wrong,

1798
01:13:58,377 --> 01:14:00,178
but because they know how the system works.

1799
01:14:00,357 --> 01:14:03,078
And a wise man once told me that when you squeeze the right-hand side

1800
01:14:03,078 --> 01:14:05,638
of the tax balloon, it creates opportunities on the left-hand side.

1801
01:14:06,218 --> 01:14:07,258
Tax is a complex system.

1802
01:14:08,498 --> 01:14:12,138
When something breaks or they change the rules over here,

1803
01:14:12,417 --> 01:14:14,377
it opens opportunities over here, right?

1804
01:14:14,377 --> 01:14:18,638
So a good accountant will understand the mechanics

1805
01:14:18,638 --> 01:14:21,158
of how this stuff works way more than you and I do

1806
01:14:21,158 --> 01:14:23,477
because it's not our job, you know what I mean?

1807
01:14:23,558 --> 01:14:24,638
So find a good accountant.

1808
01:14:25,118 --> 01:14:27,477
And the other one, the Australian Bitcoin industry body,

1809
01:14:27,658 --> 01:14:30,018
they've got a whole page, click on the link on their site

1810
01:14:30,018 --> 01:14:30,698
for Bitcoiners.

1811
01:14:31,058 --> 01:14:31,977
They've literally got a template

1812
01:14:31,977 --> 01:14:33,098
that you can send to your MP,

1813
01:14:33,598 --> 01:14:34,558
a politely worded letter

1814
01:14:34,558 --> 01:14:35,058
that just says,

1815
01:14:35,118 --> 01:14:36,718
listen, I've run the numbers.

1816
01:14:36,898 --> 01:14:38,158
It really just makes it

1817
01:14:38,158 --> 01:14:39,417
a whole lot worse for young people.

1818
01:14:39,538 --> 01:14:40,518
And if you're supporting it,

1819
01:14:40,977 --> 01:14:41,817
really can't support you.

1820
01:14:42,258 --> 01:14:43,518
I mean, borrowing against your Bitcoin

1821
01:14:43,518 --> 01:14:44,518
has never looked so attractive.

1822
01:14:45,138 --> 01:14:45,898
Yeah, there's also,

1823
01:14:45,998 --> 01:14:46,417
I mean, yes,

1824
01:14:46,458 --> 01:14:47,398
that's certainly an approach.

1825
01:14:47,917 --> 01:14:49,438
There's trade-offs to that as well, right?

1826
01:14:49,477 --> 01:14:50,357
However, it's custody.

1827
01:14:51,118 --> 01:14:52,198
Some people just don't want debt.

1828
01:14:52,638 --> 01:14:54,018
There's a bunch of layers to that.

1829
01:14:54,098 --> 01:14:55,377
But at the end of the day,

1830
01:14:55,438 --> 01:14:57,458
the system is disproportionately,

1831
01:14:57,877 --> 01:14:59,078
I actually think this is more

1832
01:14:59,078 --> 01:14:59,938
of a principled thing.

1833
01:15:00,018 --> 01:15:02,857
you have pitched this as improving housing

1834
01:15:02,857 --> 01:15:04,758
and improving affordability for young people.

1835
01:15:04,998 --> 01:15:08,098
You have kicked the rungs out of the pre-ladder

1836
01:15:08,098 --> 01:15:10,258
just to get on the first rung of the housing ladder

1837
01:15:10,258 --> 01:15:11,598
for young people forever.

1838
01:15:13,237 --> 01:15:14,138
It's just untenable.

1839
01:15:14,438 --> 01:15:16,938
You just got to push back and say it is unacceptable.

1840
01:15:17,337 --> 01:15:18,718
I mean, I guess the hope is that they have

1841
01:15:18,718 --> 01:15:19,398
pricked the housing bubble,

1842
01:15:19,498 --> 01:15:20,357
because if they have,

1843
01:15:20,438 --> 01:15:21,178
the pressure they're going to get

1844
01:15:21,178 --> 01:15:22,797
to not push this through will be unreal.

1845
01:15:23,018 --> 01:15:24,917
Yeah, and that's why I said it's a trial balloon.

1846
01:15:24,917 --> 01:15:28,758
We will see what the consultation process looks like,

1847
01:15:28,758 --> 01:15:31,877
because it would amaze me if they didn't know

1848
01:15:31,877 --> 01:15:33,237
that this pushback was coming,

1849
01:15:33,297 --> 01:15:35,558
but then you get into the world of incompetence, right?

1850
01:15:35,558 --> 01:15:36,958
Where they inflate their egos and say,

1851
01:15:37,018 --> 01:15:37,877
oh, they're going to love it.

1852
01:15:38,078 --> 01:15:39,777
And then it actually comes out and people go,

1853
01:15:39,938 --> 01:15:41,917
nah, mate, this isn't it.

1854
01:15:42,317 --> 01:15:44,458
So it'll be very interesting to see whether they back down.

1855
01:15:44,938 --> 01:15:47,518
So this is a very Australia-specific thing,

1856
01:15:47,598 --> 01:15:49,477
but I think the interesting part of this is,

1857
01:15:49,578 --> 01:15:50,558
like, yes, it's fucked.

1858
01:15:50,817 --> 01:15:51,538
Yes, it's a scam.

1859
01:15:51,837 --> 01:15:53,538
But this isn't going to end in Australia.

1860
01:15:53,558 --> 01:15:54,038
Absolutely not.

1861
01:15:54,078 --> 01:15:55,178
Like, this is the kind of thing

1862
01:15:55,178 --> 01:15:56,398
that will spread throughout the world.

1863
01:15:56,578 --> 01:15:56,737
Correct.

1864
01:15:56,917 --> 01:15:58,357
And I think it's very important

1865
01:15:58,357 --> 01:15:59,317
and we push back hard.

1866
01:15:59,477 --> 01:16:00,158
No, I agree.

1867
01:16:00,317 --> 01:16:01,337
And it's very simple.

1868
01:16:01,538 --> 01:16:03,638
Like, you know, my parents aren't overly politically active.

1869
01:16:04,337 --> 01:16:05,977
I just, and by the way, neither am I.

1870
01:16:06,158 --> 01:16:06,998
Yeah, me neither.

1871
01:16:07,178 --> 01:16:08,578
No, I honestly couldn't care less.

1872
01:16:08,638 --> 01:16:10,558
I wanted as little of the government in my life as possible.

1873
01:16:11,638 --> 01:16:13,198
We're having conversations with them.

1874
01:16:13,658 --> 01:16:15,158
They're saying this just, it can't be.

1875
01:16:15,398 --> 01:16:16,678
Your kids are affected now.

1876
01:16:16,758 --> 01:16:16,938
Yeah.

1877
01:16:16,998 --> 01:16:18,178
And your kids' kids are affected.

1878
01:16:18,178 --> 01:16:21,377
And the truth is, if this continues,

1879
01:16:21,558 --> 01:16:23,817
if this system is put in place and not reverted,

1880
01:16:24,917 --> 01:16:26,578
you roll this ball forward, my son goes,

1881
01:16:26,658 --> 01:16:27,718
hey, how do I build wealth?

1882
01:16:28,357 --> 01:16:30,857
The hard thing I've got to tell him is you probably have to go overseas.

1883
01:16:31,038 --> 01:16:31,198
Yeah.

1884
01:16:32,277 --> 01:16:33,618
That's kind of the point where it's at.

1885
01:16:33,718 --> 01:16:39,158
Now, if that message resonates with you, you've got to speak up.

1886
01:16:39,218 --> 01:16:39,938
Just talk to people.

1887
01:16:40,237 --> 01:16:43,417
Help people understand that this actually doesn't help young people at all.

1888
01:16:43,837 --> 01:16:45,058
It makes it considerably worse.

1889
01:16:45,058 --> 01:16:48,118
And the simple mechanics is you've got to save in assets,

1890
01:16:48,198 --> 01:16:49,277
otherwise it's going to take you 40 years.

1891
01:16:49,857 --> 01:16:50,638
We were talking at lunch.

1892
01:16:51,158 --> 01:16:54,398
You spend money on beer and whatever else up until 25.

1893
01:16:54,797 --> 01:16:56,258
You start saving at 25.

1894
01:16:56,258 --> 01:16:58,377
Okay, what's 40 years from there?

1895
01:16:58,477 --> 01:17:00,598
You're 65 when you take your first mortgage.

1896
01:17:00,777 --> 01:17:01,398
For 30 years.

1897
01:17:01,417 --> 01:17:02,198
For 30 years.

1898
01:17:02,438 --> 01:17:04,438
And at 95, you pay the bastard off.

1899
01:17:05,737 --> 01:17:08,357
If that story doesn't make sense,

1900
01:17:08,737 --> 01:17:10,218
then you've got to save in assets.

1901
01:17:10,877 --> 01:17:12,357
So then you wind back the clock and say,

1902
01:17:12,438 --> 01:17:15,898
you've just doubled the taxation on assets.

1903
01:17:16,218 --> 01:17:18,598
And the high growth assets get hit the most.

1904
01:17:18,938 --> 01:17:20,737
You buy government bonds, you won't have much tax

1905
01:17:20,737 --> 01:17:21,578
because you didn't make much money.

1906
01:17:22,038 --> 01:17:23,998
But what do high growth assets mean?

1907
01:17:23,998 --> 01:17:25,158
growth

1908
01:17:25,158 --> 01:17:26,277
innovation

1909
01:17:26,277 --> 01:17:27,538
like opportunity

1910
01:17:27,538 --> 01:17:28,758
don't you want Australians

1911
01:17:28,758 --> 01:17:29,777
to be doing better

1912
01:17:29,777 --> 01:17:30,917
by owning assets

1913
01:17:30,917 --> 01:17:32,458
that are worth something

1914
01:17:32,458 --> 01:17:33,058
and growing

1915
01:17:33,058 --> 01:17:35,857
and you just look at all the incentives

1916
01:17:35,857 --> 01:17:37,058
this sets up

1917
01:17:37,058 --> 01:17:37,658
and you go

1918
01:17:37,658 --> 01:17:39,518
you're actually going for serfdom

1919
01:17:39,518 --> 01:17:41,718
this is feudalism at its finest

1920
01:17:41,718 --> 01:17:43,477
and you just have to push back

1921
01:17:43,477 --> 01:17:45,337
because it is a permanent thing

1922
01:17:45,337 --> 01:17:45,698
right

1923
01:17:45,698 --> 01:17:46,498
this goes into effect

1924
01:17:46,498 --> 01:17:47,837
yes politicians can change it

1925
01:17:47,837 --> 01:17:49,777
but hoping for some other mob

1926
01:17:49,777 --> 01:17:50,938
to come in and change it

1927
01:17:50,938 --> 01:17:53,178
so I don't pay any attention

1928
01:17:53,178 --> 01:17:53,857
to the politics

1929
01:17:53,857 --> 01:17:55,737
and especially Australian politics, to be fair.

1930
01:17:55,817 --> 01:17:57,578
What has the pushback from the other parties been?

1931
01:17:58,118 --> 01:18:00,198
I mean, they all push back no matter what it is,

1932
01:18:00,237 --> 01:18:02,098
but I'm starting to see One Nation,

1933
01:18:02,158 --> 01:18:05,317
which is your equivalent of your reforms, I would say,

1934
01:18:06,038 --> 01:18:08,758
polling well ahead of the Liberals.

1935
01:18:09,538 --> 01:18:11,178
They'll form a coalition. They'll have to.

1936
01:18:11,297 --> 01:18:12,178
That's just common sense.

1937
01:18:13,198 --> 01:18:15,138
I would say that if this goes...

1938
01:18:15,138 --> 01:18:17,078
Look, I would say there's a decent chance

1939
01:18:17,078 --> 01:18:18,438
that Labour has to wind this back.

1940
01:18:19,237 --> 01:18:21,098
The degree to which they wind it back

1941
01:18:21,098 --> 01:18:23,058
for people who are non-Australian and Australians,

1942
01:18:23,578 --> 01:18:24,417
That is our pain.

1943
01:18:24,498 --> 01:18:26,578
That is how much politicians are willing to take austerity.

1944
01:18:26,798 --> 01:18:29,138
It's like an indication of how much is going to be

1945
01:18:29,138 --> 01:18:31,197
the print versus the austerity factor.

1946
01:18:31,898 --> 01:18:32,998
And then we're going to get a coalition.

1947
01:18:33,118 --> 01:18:34,857
I would say if they push much of this stuff through,

1948
01:18:35,277 --> 01:18:37,598
if it goes through in a lightweight version just for property,

1949
01:18:37,798 --> 01:18:38,678
they probably won't touch it.

1950
01:18:39,118 --> 01:18:40,798
If they push it through in its current format,

1951
01:18:40,917 --> 01:18:43,237
I would hazard a guess that they get slaughtered

1952
01:18:43,237 --> 01:18:45,178
in the next election and they'll pull it back.

1953
01:18:45,178 --> 01:18:47,058
But the thing that's completely fucked about this is,

1954
01:18:47,138 --> 01:18:49,038
like we were talking before, we both have companies

1955
01:18:49,038 --> 01:18:50,317
that both operate in Australia.

1956
01:18:50,518 --> 01:18:51,958
Like, I just made my company overseas.

1957
01:18:51,958 --> 01:18:54,877
Like, there's no way that I stay in that jurisdiction.

1958
01:18:55,038 --> 01:18:55,197
Of course.

1959
01:18:55,438 --> 01:18:57,277
And like, is that what they want from this?

1960
01:18:57,298 --> 01:18:58,237
Is that the outcome they want?

1961
01:18:58,277 --> 01:18:59,118
And that's the thing.

1962
01:18:59,158 --> 01:19:00,058
If you look at the incentives,

1963
01:19:00,458 --> 01:19:01,758
that is the result they're going to get.

1964
01:19:01,917 --> 01:19:03,558
So for you and I, it's harder

1965
01:19:03,558 --> 01:19:07,737
because reincorporating somewhere is a whole lift.

1966
01:19:08,538 --> 01:19:09,638
Everything can be done.

1967
01:19:10,917 --> 01:19:12,158
Reincorporating is a different animal to,

1968
01:19:12,277 --> 01:19:13,218
hey, I want to start a business.

1969
01:19:13,357 --> 01:19:14,298
Start a business somewhere else.

1970
01:19:14,798 --> 01:19:17,598
So my, and this is why the memes

1971
01:19:17,598 --> 01:19:20,298
of sticking elbows head in your business

1972
01:19:20,298 --> 01:19:22,538
and saying, welcome, Mr. 47% shareholder.

1973
01:19:24,138 --> 01:19:26,758
Imagine seeing that from thousands of young people.

1974
01:19:26,877 --> 01:19:27,417
Memes are powerful.

1975
01:19:27,578 --> 01:19:28,337
Memes are very powerful.

1976
01:19:28,518 --> 01:19:29,438
And it distills it.

1977
01:19:30,078 --> 01:19:31,917
And you get the lefties who show up and say,

1978
01:19:31,958 --> 01:19:33,018
it's not really 47%.

1979
01:19:33,018 --> 01:19:33,598
It's like, okay.

1980
01:19:33,697 --> 01:19:34,498
It's 46.5.

1981
01:19:35,058 --> 01:19:36,817
The truth is it's 45, right?

1982
01:19:36,817 --> 01:19:40,038
Because you pay yourself a salary of 150, 160,

1983
01:19:40,777 --> 01:19:42,498
and then you sell your business for half a million.

1984
01:19:42,798 --> 01:19:43,218
Well, okay.

1985
01:19:43,777 --> 01:19:46,417
The 30 grand was at the marginal tax rate of 37%.

1986
01:19:46,417 --> 01:19:47,958
Then everything else is 45 plus Medicare.

1987
01:19:47,958 --> 01:19:54,138
So it's like, okay, it's 45.75 marginal, 47%, right?

1988
01:19:54,298 --> 01:19:56,798
The whole meme is you're taking the whole pie.

1989
01:19:57,438 --> 01:19:58,197
So memes work.

1990
01:19:59,178 --> 01:20:03,098
So if you do see Australians posting some ugly looking bloke

1991
01:20:03,098 --> 01:20:06,718
in their business photo saying 47%, give it a retweet

1992
01:20:06,718 --> 01:20:08,718
because it's meaningful.

1993
01:20:08,817 --> 01:20:09,417
It gets around the world.

1994
01:20:09,638 --> 01:20:11,357
Yeah, it's sad to see.

1995
01:20:11,598 --> 01:20:12,377
Very sad to see.

1996
01:20:12,578 --> 01:20:15,718
And it's one thing to think about these things.

1997
01:20:15,718 --> 01:20:17,798
You know, it's another thing to get punched in the face.

1998
01:20:17,798 --> 01:20:21,357
And again, I think there's a lot of folks who would say, just leave.

1999
01:20:21,578 --> 01:20:23,118
It's like, that's fine.

2000
01:20:23,737 --> 01:20:27,498
The vast majority of people are not going to leave their families and friends.

2001
01:20:27,718 --> 01:20:31,857
So therefore, and frankly, that's really the majority.

2002
01:20:31,977 --> 01:20:33,958
If you're a 24-year-old single person, makes sense.

2003
01:20:34,078 --> 01:20:34,558
Go nuts.

2004
01:20:35,197 --> 01:20:38,998
But once your obligations build and your life changes,

2005
01:20:39,917 --> 01:20:41,518
that is a lifestyle for some people.

2006
01:20:41,618 --> 01:20:43,877
Picking up and moving to Thailand is a lifestyle for some people.

2007
01:20:43,917 --> 01:20:45,317
It might be the correct decision.

2008
01:20:45,958 --> 01:20:47,737
But that's not the decision most people are going to make.

2009
01:20:47,798 --> 01:20:50,678
So my perspective is I want to talk to those people

2010
01:20:50,678 --> 01:20:51,798
because that's the majority.

2011
01:20:51,798 --> 01:20:53,678
I have the means to move.

2012
01:20:53,678 --> 01:20:56,998
I'm probably not going to move because where else are you going to go?

2013
01:20:56,998 --> 01:20:57,837
You know what I mean?

2014
01:20:57,837 --> 01:20:59,558
You can move somewhere else and they'll also change the rules.

2015
01:20:59,558 --> 01:21:01,438
You move to Europe and they run out of energy.

2016
01:21:01,438 --> 01:21:03,718
You move to Thailand, you move somewhere in the third world

2017
01:21:03,718 --> 01:21:05,277
and suddenly we have a food crisis.

2018
01:21:05,277 --> 01:21:09,438
There are trade-offs everywhere you go.

2019
01:21:09,438 --> 01:21:12,398
So yeah, people shouldn't be kicked out of their home.

2020
01:21:12,398 --> 01:21:16,357
They can be, but there's a chapter between here and there

2021
01:21:16,357 --> 01:21:19,618
where you just don't say okay and, you know, push back

2022
01:21:19,618 --> 01:21:21,118
as a first port of call.

2023
01:21:21,118 --> 01:21:23,158
Despite the government, Australia is a pretty good place to live.

2024
01:21:23,158 --> 01:21:24,158
It's a great place to live.

2025
01:21:24,158 --> 01:21:25,917
And the problem is we are the lucky country,

2026
01:21:25,917 --> 01:21:28,118
we're just run by absolute buffoons,

2027
01:21:28,118 --> 01:21:30,417
which much of the Western world is,

2028
01:21:30,417 --> 01:21:34,837
but this is a particularly egregious example of you have

2029
01:21:34,837 --> 01:21:38,337
to understand the mechanics and you did it anyway,

2030
01:21:38,337 --> 01:21:40,977
which, I mean, I don't know what the...

2031
01:21:41,042 --> 01:21:42,462
Politicians are for treason, but it's got to be close.

2032
01:21:42,622 --> 01:21:45,202
I'm going to send a letter to politicians

2033
01:21:45,202 --> 01:21:46,582
for the first time in my life over this.

2034
01:21:46,942 --> 01:21:48,582
I think most Australians should be.

2035
01:21:49,362 --> 01:21:51,302
If you're a Bitcoiner and you're affected, you should do it.

2036
01:21:51,322 --> 01:21:52,702
If you've got kids, you should do it.

2037
01:21:52,742 --> 01:21:54,242
If you're thinking about having kids, you should do it.

2038
01:21:54,562 --> 01:21:55,642
If you're a kid, you should do it.

2039
01:21:55,722 --> 01:21:58,722
Everybody should do it because every email they receive

2040
01:21:58,722 --> 01:22:01,342
is noise until they get 1,000 of them.

2041
01:22:01,542 --> 01:22:04,102
Because every email represents 100 people who didn't say anything

2042
01:22:04,102 --> 01:22:05,262
or 1,000 people who didn't say something.

2043
01:22:05,562 --> 01:22:07,742
You get 5,000 emails, 2,000 emails.

2044
01:22:07,902 --> 01:22:08,682
That's a voter base.

2045
01:22:09,362 --> 01:22:11,162
That's now an issue that people are going,

2046
01:22:11,282 --> 01:22:12,162
oh, hang on a second.

2047
01:22:12,662 --> 01:22:13,762
This is now a problem.

2048
01:22:13,962 --> 01:22:15,322
And it's very, very simple.

2049
01:22:15,842 --> 01:22:17,582
You must climb the asset ladder

2050
01:22:17,582 --> 01:22:19,562
to become the first rung in the housing market.

2051
01:22:19,662 --> 01:22:21,062
They've just doubled the tax on that.

2052
01:22:21,462 --> 01:22:22,922
No way this helps young people.

2053
01:22:23,562 --> 01:22:23,982
Kick it back.

2054
01:22:24,242 --> 01:22:24,422
Yeah.

2055
01:22:24,982 --> 01:22:27,102
What a depressing way to end the podcast.

2056
01:22:27,222 --> 01:22:27,802
It's unfortunate.

2057
01:22:27,902 --> 01:22:29,102
But Bitcoin's back in a bull market.

2058
01:22:29,342 --> 01:22:30,822
Well, that's the theory anyway.

2059
01:22:30,862 --> 01:22:31,502
That's my theory.

2060
01:22:31,502 --> 01:22:33,122
But look, and truthfully,

2061
01:22:33,222 --> 01:22:34,062
I know there's a lot of...

2062
01:22:34,062 --> 01:22:38,662
This event blocked my whole creative process last week.

2063
01:22:38,682 --> 01:22:41,782
And to this week, I'm still working my own way through it.

2064
01:22:42,042 --> 01:22:44,162
There's a lot of Australians out there who feel much the same way.

2065
01:22:44,822 --> 01:22:45,682
It sucks.

2066
01:22:45,962 --> 01:22:46,342
It sucks.

2067
01:22:46,442 --> 01:22:49,442
And the best way to think about it, for savers,

2068
01:22:50,002 --> 01:22:52,062
it's a 20% to 30% currency devaluation.

2069
01:22:52,502 --> 01:22:56,322
And they did it via a very insidious method,

2070
01:22:56,482 --> 01:22:58,862
which they housing young people washed.

2071
01:22:59,482 --> 01:23:14,337
And it just pure evil Housing young people is the Australian equivalent of patriot in America Oh absolutely No it is It is It the equivalent And you know housing is a religion So it interesting that they been they would also know that they going to give

2072
01:23:14,337 --> 01:23:16,257
the housing market a bit of a shakeup.

2073
01:23:16,857 --> 01:23:21,557
And that's the thing, because negative gearing, just not to carry us on, but negative gearing,

2074
01:23:21,677 --> 01:23:25,437
most properties, they're 2%, 3% growth at the moment.

2075
01:23:25,537 --> 01:23:27,937
They've slowed down a lot since the boom after COVID.

2076
01:23:28,537 --> 01:23:30,117
2%, 3% growth capital.

2077
01:23:30,997 --> 01:23:33,337
I've done the run on some yields that you'll see.

2078
01:23:33,477 --> 01:23:35,697
You can just go on websites and see what it's sold for,

2079
01:23:35,737 --> 01:23:36,697
what it's rented out for.

2080
01:23:37,297 --> 01:23:41,057
Yields are 1% to 2.5% from rent.

2081
01:23:41,997 --> 01:23:44,657
If you're not getting and you're paying a 6.5% mortgage

2082
01:23:44,657 --> 01:23:48,237
and yields are going up on a variable rate mortgage,

2083
01:23:49,097 --> 01:23:50,877
there's going to be a lot of people looking at this and going,

2084
01:23:50,877 --> 01:23:53,277
hey, no negative gearing, no bueno.

2085
01:23:53,857 --> 01:23:56,537
And 45% of mortgages are currently being investors.

2086
01:23:56,537 --> 01:24:00,337
So you've just kind of removed half the investors.

2087
01:24:01,197 --> 01:24:04,257
It's funny because we often talk about like the big button

2088
01:24:04,257 --> 01:24:05,117
where they can print the money.

2089
01:24:05,197 --> 01:24:08,077
It has like massive negative consequences on society.

2090
01:24:08,257 --> 01:24:08,417
Yep.

2091
01:24:08,997 --> 01:24:11,417
Is that actually a better solution here than this?

2092
01:24:11,697 --> 01:24:12,677
It's a good question.

2093
01:24:13,217 --> 01:24:14,217
I mean, we don't know.

2094
01:24:14,417 --> 01:24:16,397
This is a movie that you may watch or didn't watch.

2095
01:24:16,497 --> 01:24:18,657
You can't tell what the counterfactual is because you have to live it.

2096
01:24:20,017 --> 01:24:23,257
The correct, and again, to be very fair,

2097
01:24:23,257 --> 01:24:35,352
The correct model here is something to do with austerity The problem is this is not the right setup for that austerity The correct austerity is not a if you already asset rich

2098
01:24:35,352 --> 01:24:38,352
you're in a much better position, and if you're trying

2099
01:24:38,352 --> 01:24:42,352
to grow any wealth whatsoever, you get twice as bad of a deal.

2100
01:24:42,352 --> 01:24:45,352
That's not austerity. That's a scam.

2101
01:24:45,352 --> 01:24:48,352
It isn't equalizing because it makes everyone poorer.

2102
01:24:48,352 --> 01:24:52,352
It's a very communist approach to things, so it is an equalizer.

2103
01:24:52,352 --> 01:24:54,872
the better way to do it would be austerity.

2104
01:24:54,992 --> 01:24:56,092
I don't know what the model is.

2105
01:24:56,132 --> 01:24:57,552
And some people said, hey, you should have come up

2106
01:24:57,552 --> 01:24:58,772
with a better solution in my write-up.

2107
01:24:58,832 --> 01:25:01,292
It's like, bro, it's not my job to come up with a solution,

2108
01:25:01,412 --> 01:25:03,612
but I can tell you that the solution they came up with is dog shit.

2109
01:25:03,972 --> 01:25:07,132
So I think it's about just understanding the boundaries of the problem,

2110
01:25:07,192 --> 01:25:08,652
saying austerity is the thing we should do.

2111
01:25:09,252 --> 01:25:12,492
Going through the deflationary bust is the thing we should do.

2112
01:25:12,572 --> 01:25:13,272
We won't do it.

2113
01:25:13,752 --> 01:25:15,292
They will revert back to the printing.

2114
01:25:15,412 --> 01:25:17,732
This is why I think Australia is an interesting test case.

2115
01:25:18,252 --> 01:25:20,792
We were also a test case of yield curve control in COVID.

2116
01:25:20,792 --> 01:25:25,492
I think they were trying to manage the three-year yield or the seven-year yield

2117
01:25:25,492 --> 01:25:27,412
or some weird bloody esoteric vehicle.

2118
01:25:28,372 --> 01:25:29,912
And they got blown out, right?

2119
01:25:29,972 --> 01:25:31,332
The market just took them to task.

2120
01:25:31,532 --> 01:25:34,892
So that was the trial balloon for the yield curve control.

2121
01:25:35,172 --> 01:25:36,792
Now, eventually they're all going to have to go there,

2122
01:25:36,872 --> 01:25:40,592
but it's this journey of we know the long picture.

2123
01:25:40,852 --> 01:25:42,092
We know the macro trend.

2124
01:25:43,032 --> 01:25:46,272
People then compress all that macro trend into the next daily candle.

2125
01:25:47,212 --> 01:25:57,167
It the journey between here and there that yeah Yeah trial balloons see how it works in Australia see how it works in the UK What the appetite for austerity What the appetite for taxes What the appetite for inflation

2126
01:25:57,987 --> 01:26:00,307
You know, like, it's hard to tell which one's worse.

2127
01:26:00,407 --> 01:26:00,567
Picture poison.

2128
01:26:00,687 --> 01:26:01,367
They're all bad.

2129
01:26:02,207 --> 01:26:02,567
Fuck.

2130
01:26:02,847 --> 01:26:03,067
Yep.

2131
01:26:03,347 --> 01:26:04,487
Welcome to the fourth turning, mate.

2132
01:26:04,827 --> 01:26:06,347
I can't wait for the first turning.

2133
01:26:06,367 --> 01:26:06,627
I know.

2134
01:26:06,767 --> 01:26:07,727
Surely we don't have a long way.

2135
01:26:07,907 --> 01:26:08,627
And that's the thing.

2136
01:26:09,267 --> 01:26:11,907
The first turning is greener shoots, right?

2137
01:26:11,907 --> 01:26:14,207
And it's the thing that you and I, right, millennials,

2138
01:26:14,527 --> 01:26:16,247
generally speaking, we're the ones who are going to have to cop the prime.

2139
01:26:16,247 --> 01:26:19,747
I mean, how many hundred year crises have we gone through

2140
01:26:19,747 --> 01:26:20,787
since we left school, right?

2141
01:26:20,827 --> 01:26:22,327
Every six weeks we've got one coming on.

2142
01:26:22,647 --> 01:26:24,587
So it's one of those things where like it's our job

2143
01:26:24,587 --> 01:26:26,327
to kind of go through the ringer

2144
01:26:26,327 --> 01:26:30,087
and you're supposed to craft a better story for your kids.

2145
01:26:30,587 --> 01:26:32,847
We are the first generation who's worse off than their parents,

2146
01:26:32,847 --> 01:26:33,607
just mathematically.

2147
01:26:34,727 --> 01:26:37,127
Make that the last time that happens, you know?

2148
01:26:37,247 --> 01:26:37,607
Fuck yeah.

2149
01:26:37,647 --> 01:26:40,527
Have some grit, do the right thing, push back,

2150
01:26:40,847 --> 01:26:42,167
get your parents to push back,

2151
01:26:42,387 --> 01:26:43,927
get your parents' friends to push back,

2152
01:26:44,467 --> 01:26:45,367
write the damn letter

2153
01:26:45,367 --> 01:26:46,727
because it'll take you 10 minutes

2154
01:26:46,727 --> 01:26:48,807
and you just never know.

2155
01:26:48,887 --> 01:26:51,167
It might just kick in the nuts that they need

2156
01:26:51,167 --> 01:26:52,887
and then you vote the bastards out anyway.

2157
01:26:53,347 --> 01:26:53,767
Fuck yeah.

2158
01:26:53,907 --> 01:26:54,307
Fire it up.

2159
01:26:54,347 --> 01:26:54,667
There you go.

2160
01:26:54,727 --> 01:26:55,807
That's what we need to end the podcast.

2161
01:26:56,307 --> 01:26:56,507
All right.

2162
01:26:56,587 --> 01:26:57,027
Thank you, man.

2163
01:26:57,127 --> 01:26:57,507
That's been awesome.

2164
01:26:57,507 --> 01:26:57,667
Good on you, man.

2165
01:26:57,767 --> 01:26:58,027
Thanks.

2166
01:27:15,367 --> 01:27:45,347
Thank you.