The only thing more limited than Bitcoin is your time, and so Bitcoin gives it back to you.
I look at Bitcoin as a primary business without me having an HR department when I get successful.
The artists and creative types see Bitcoin quicker than the average person.
I think it's because they think outside the box.
There was the expedient and more profitable thing to do, and then there was the more honest thing to do.
What has this allowed me? It has allowed me the freedom to not attend dumb meetings about dumb subjects.
Once you have free time, then you can kind of explore who you are and what you want to be and the things that you get fulfillment from.
You see, that's so important because that's never sold. This is never sold on Bitcoin this way.
All right. Welcome to Episode 3 of the Bitcoin Boomers. We have Mr. Gary Cardone. Thank you so much for joining us, Gary.
Thanks for being here. Thanks for asking.
For those of you who aren't familiar with Gary, we're going to ask him to expand on this, but veteran of the energy markets, financial services.
One thing I admire, it's actually very interesting, is those of you viewing, you can see some of Gary's art in the background.
He does a phenomenal job.
I don't know if I've ever expressed that, but I really appreciate it.
I find it actually very interesting, Gary, that so many Bitcoiners have this other side.
Like you have this artistic side.
Our first guest, George Bodine, also an artist.
Bob Murphy, who was our second guest, he's actually a singer.
I love to write.
I'm kind of a creative writer.
um uh you know we have the the satoshi rakamoto band you know uh samson mao and uh knut svenholm
and like these sort of guys that i i wonder if there's something there i don't know but but i
think maybe maybe it's just that we have some well-rounded people well or maybe well or maybe
bitcoin uh like i look at bitcoin as a primary business that has no human era exposure to
I don't know why more people, as soon as I saw Bitcoin, I'm like, oh, wow, this is a private equity business without me having an HR department when I get successful.
So what has this allowed me?
It has allowed me the freedom to not attend dumb meetings about dumb subjects when the most primary meetings and most primary decisions are made by one or two people, even if the company's 4,000.
and the 4,000 show up to meetings about nothing, just to stroke everyone's wokeness.
It has given me time to get bored and then to go, hey, what am I? Who am I?
What is, is there more?
Look, I proved in my career that I can be in four industries,
not like dedicate to one and get buried by one and it cycles.
and it's really given me a lot of freedom to discover myself
and do things that I was told were impossible to do for a guy like me.
And to me, that's really living a great life,
even though now, because I'm not so busy with dumb stuff,
I'm having to find how much time I actually have.
Into your comment there,
I've said for a while that creatives, artists and creative types,
see Bitcoin quicker than the average person. And I think it's because they think outside the box,
you know, and that's why they're creative because they think outside the box. I'm like Gary, I saw
it immediately when someone sat down and gave me half an hour of time, you know, so, but I think
it's because I think outside the box, which I think most creative people do. I think that's an
interesting observation. You know, I'm an engineer and kind of a math guy. So I have to admit, I
missed it the first time, although I wasn't in 2017. So I think it would still be, you know,
relatively early. Although I guess I would also say that I'm maybe unlike a lot of engineers in
a lot of ways. Well, and that's why I said once it was explained to me, because the first time I
said, oh, it was like online stocks. That was my whole explanation. So I said, I'm not interested,
you know, so I don't consider that really getting information to make a decision on.
But I think what Gary's saying is insightful, though, because just about freedom, like what does it give you, you know, kind of even helping you define who you are, right?
You know, once you have free time, then you can kind of explore who you are and what you want to be and the things that you get fulfillment from and like all those sort of things.
But because most people spend their life pursuing money.
Yeah, I think that's the huge thing that we all talk about so much, but it's really important. I've noticed it too in my life is that it allows you to get off of the Fiat treadmill. And Fiat really is a treadmill. You know, you're always kind of figuring and it's like the treadmill is speeding up and you're getting older and more tired. We're all boomers.
And so, you know, the notion that you've got this this compounding machine that you don't have a manager, as Gary points out, you don't have a management team to worry about.
You don't have to go to meetings to talk about it.
You can just sit back and watch it do its thing.
Suddenly you've got your life back.
And that's just incredibly valuable because your time is really, you know, I mean, the only thing more limited than Bitcoin is your time.
And so Bitcoin gives it back to you.
And I've observed that over the past five years.
And it's really been fabulous.
Well, if I could just add the cool thing to this is that you can decide what you do with your time.
If you wanted to amplify your time into look, I think a lot of people chase success.
And then when they get it, they have to chase something else, which seems to be relevance.
And depending on the state of your ego, you can up or down amplify how much activity you do and where you place your energy.
That's simply like I want to put my energy in really cool places that I enjoy.
Now, the problem with this, I think for many, many, many people, they will not use Bitcoin like the way I'm using it because they're still thriving for some kind of dopamine or relevance hit.
And that's cool. We need builders, right?
Like if I was 40, I'd be building these SBRs and I'd be doing a lot of crazy shit.
I wouldn't be building them the way they're building them, but I would be building them
most certainly. But for me, you know, doing a piece of art like this for me is more valuable.
And wow, what freedom. And by the way, I'm a 2020 Bitcoiner. So I don't think you're late,
dude. I think you're so early. It's crazy. I sure hope that's right. Because I'm, you know,
my average cost is 57 and I'm buying $90,000 Bitcoin and very happy to do it.
I'm stunned. I'm still able to buy five, five digit Bitcoin stunned.
And I think I'm going to have a chance to do it all year.
Maybe, maybe not.
Before the Lawrence, you know, it's, it's,
it's given us more opportunities than anyone told me. Right.
I mean, we all know it's going to do what it's going to do one day, but it's,
I see this as a real gift, but it's a frustrating gift.
That's where I'm frustrated at.
Well, I get that.
I get that.
And, you know, I think also that, like Larry, you mentioned the fiat thing.
It sucks on you.
It tries to pull you back in.
And, you know, I've had to resist that.
So, like, Gary, you've said, you know,
I would probably still fit into the builder category
because I'm still creating companies and building money.
But that's what I've done.
I've spent my career designing laptops and servers
and MP3 players and TVs.
That's kind of where maybe most of my creative energy
goes into that while you put it into painting as an example.
Like I've just done the math, okay?
And I'm cool building a business
if it's going to give me a 500, 800% return over six years.
I have yet to do that, exit six years.
if I do get everything going I get attacked legally or whatever and doing the math quite
frankly even if all I did was read books or there's a lot of things I could not do that would
be not good but or do that would not be good but the math to me says spend less money on doing
inefficient things like going to dumb meetings and having to push human beings to be motivated
I can't motivate any human being except myself.
So the math is like, wow, keep my costs down, pour everything into Bitcoin, and I will be able to exit one of the greatest returns in less than eight years.
And that's my point about the exit.
Whether I exit or not, I've never been able to build a big company and exit with certainty and have liquidity without a bunch of hooks.
Right?
Every company you've sold, man, you get hooks everywhere.
and you know so this thing about like meetings um you may or may not know it's about my background
gary but i i was at uh gateway we were fortune 200 company i was the chief technical officer there
so i had a staff of about 5 000 people at one time you want to talk about meetings like shit just
every freaking day you know the the and then we'd look you know i probably had maybe six or seven
layers beneath me at that point. And then you look at the efficiency of the organization and say,
how many minutes are we losing a day, man hours, because of these meetings and what meetings are
working and trying to stop them is really difficult. Or to keep the spread, right? A meeting that
should be three people is 13. And they sit there for an hour. And it's horrible. But what also
happens is I was talking about kind of like fiat trying to suck you as a as a miner one of the
things that I I made a decision in 2021 when all the a lot of the mining companies went public in
that period and I didn't and probably to be to be completely transparent if you measure it in
I made a bad decision. I made a very bad decision because guys like Fred Teal are sitting on tens
of millions of dollars in cash and a whole bunch more in equity that I don't have that I didn't
generate. But I would be subservient to that system. My freedom is more important to me.
And by the way, my ability to even serve Bitcoin, I view myself as a citizen of Bitcoin.
I can't serve Bitcoin and be the CEO of a public company.
Those are mutually exclusive.
But that fiat system sucks at you.
Like it's tantalizing to want to go there.
I agree, man.
You got to decide what you're going to chase, though.
You know, for me, money has never been a difficult thing,
whether it's a million or 10 million or 100 million.
And after some point, it really doesn't do anything for me.
I have no real, oh, wow, I'm going to make another.
Okay, well, what am I going to spend it on?
I'm not controlled by remaining relevant.
See, I think that's where I get back to, like, this is what people work their whole life for, right?
It's to get some freedom to do what they want.
yet very few people ever obtain it very few like less than a percent even the billionaires man i
don't want it it comes with shit and i got i got a boat out here that i would i would literally pay
somebody just to take away from because i don't want the headache on it it's noise it's a cool
thing about you know going through becoming successful if you're just clear about what's
happening, you realize, oh, wow, this stuff is not making me happy. It is not creating value for the
world or for myself. What I think is really sage about what you're saying, though, is
at no point when you were defining success to you, did you say it's $5 million or $100 million
or whatever the number is.
Success was expressed by your freedom,
by your lifestyle that you aspire to.
And I think that's one of the things is like,
I'm actually slightly different,
but I don't define my success in my life and my career
by money either, I never have.
I've measured it by more of the things I've produced.
and, you know, output of my work is kind of how I've defined my success.
I've been fortunate in that money has followed because of that.
Not necessarily obscene wealth, but good enough.
I'm very, very fortunate financially in my life
and probably could have done better if I chased dollars.
But that's my advice when I talk to younger people too,
is like, you know, define, define success for you, but chasing a dollar figure is really dangerous.
And it probably will not get you what you want. It's probably not going to be,
give you the life fulfillment, you know, um, you know, pick, pick, pick a great partner. Like,
you know, uh, like I've been married to the wrong person. I've been married to the right person.
And like, like that's, that's like really important.
You know, be happy in what you pursue.
And, and then just like you said, Gary, I mean, I'm sure you have a list of these sort
of things.
Maybe it's not a list, but you have these things like, these are my minimum standards in life.
And, and I'm not going to dip below that and, and I'll pay what I have to pay for that.
Yeah, that, that, that's right.
And one of those things was, you know, I decided a long time in my career, I would not become a prostitute.
And there are different levels of prostitution along the corporate ladder.
I don't know anybody that, right, the more you go into the fiat system.
For instance, this last company that I was involved with, the fraud company in the payments industry,
my partner was like, dude, you're really bitching on Visa and MasterCard.
You know, we cannot have that much exposure.
I'm like, sorry, but the truth is the truth.
And you can't start.
Well, I can't really say that because people aren't going to do business with me.
And that that is another reason that I come back to Bitcoin.
Bitcoin does not require me to prostitute myself at any level to anyone for any reason whatsoever.
I can say I hate Lawrence Leppard.
He's an idiot.
He's a bad author and his skin color is wrong.
I mean, I could just be obnoxious and nothing changes my position.
Nobody can hurt me.
That's impressive.
When you have a loud mouth like me and actually a belief system that people like me should stand up and say, this is wrong, period.
Okay.
And anything else is prostitution in my opinion.
That's right.
I mean, I did observe in my career many, many times where, you know, there was the expedient and more profitable thing to do.
And then there was the more honest thing to do.
And, you know, and I was shocked at how early it appears.
I think everybody in the fiat world probably is confronted with these decisions.
And, you know, you just you have to start realizing.
And I did. I was in the private equity firm world with some guys who were, you know, like typical private equity guys. Right.
I mean, they knew how to cut corners and they were all about making as much money as possible, as fast as possible.
And, you know, even if it involved, you know, some deception and so forth.
And, you know, I tried to walk a thin line there as long as I could until I couldn't take it anymore.
And then I got out because I just realized that to be really successful in that world, you know, you had to be willing to, you know, more or less lie, cheat and steal, particularly with respect to your investors.
I mean, they were never giving their investors what they said they were giving them.
They were just, you know, shaving them in every single way possible.
And so, you know, you just, I mean, I thought at the end of the day, I'll probably end up comfortable, not as rich as some of these other guys.
But I want to, you know, do it in a way that I know, you know, I did it in an ethical manner.
And I don't know, you know, and I think it just came from my father who basically said, look, you know, you know, you got to look at yourself in the mirror and feel like you did it in the right way.
And he also said, you know, that you just can't put a price.
I think you probably did this, Gary.
I know, Bob, you've done it since you left Gateway.
And Gary, I think you did it as well.
I mean, you can't put a dollar value on working for yourself.
I mean, the notion of not having a boss, of not having an asshole, you know, that sets
the ethical standards, it tells you what to do.
That's priceless, even if you make less money.
So, you know, I went out on my own at a certain point in time.
And I never, you know, looking back, I never regret it.
I think, you know, it's not unusual for young people, I think, to have to start out working for other people because you don't really know the system.
You don't really know the game. You got to learn. You got to get into the whole system, no matter what you're doing.
But I think pretty quickly over time, you can sort out what's real, what's not, who's good, who's not, where you want to be, where you don't.
And I think it leads many, many people, it leads them to say, all right, I'm out of here.
This is not what I this is not what I want to become.
I don't care about that money, and I'm going to do it in a way that I think is sustainable and I feel comfortable with.
I joined Gateway about three years before Gateway went public.
And still, by those standards, I think it was maybe a $300 million or $400 million company at the time, but growing 100% a year.
and so and the team that I was part of that eventually took gateway public was phenomenal
every one of those guys is still a friend and high integrity hard working uh very bright
and we went public and and became by external measurements very very successful but we never
recaptured the magic of being pre-public. We lost it. There was a seminal moment when that happened
and didn't realize until three, four years later that the magic was gone. Part of that was because
I view it as a fiat infection, called an infection, an infection of the system because
the pressure of working toward 90-day cycles. We always made great long-term decisions.
And now the pressure of producing a report every 90 days that people on the outside would judge us by was ridiculous.
And then like new hires, if we had a choice of hiring a new person, and I know you went to the Ivy League, Larry, for instance.
But we got our success by, I'm from the University of Wisconsin.
And we had guys from Iowa State and little community colleges all across the Midwest.
That was the spirit of it.
And we started hiring guys from Brown and Princeton and Duke and Kellogg School of Business and all this other stuff.
And bright people, but not our culture.
Like, changed the company.
And we lost it.
You know, 2004, we lost the company.
And by the way, Bitcoiners, this is their Achilles heel.
You guys study Bitcoin but you do not study the legacy markets They have weaknesses and the Achilles heel for fiat companies public companies is the quarterly earnings Stop spending money with the enemy You will see these companies retract
and retrace so fast. Budweiser, Cracker Barrel, soon to be Audi, BMW, Mercedes. These guys are
going to get crushed because of quarterly earnings and they're going to have to lie now.
So if you stop spending money with Netflix, their quarterly earnings will go down.
They will not be able to merge with other companies.
They'll just say no to these people and buy Bitcoin with and buy Bitcoin, man.
Don't spend money with Netflix, buy Bitcoin.
Fifteen bucks at Bitcoin is worth a lot more a month than Netflix.
You know, Bob, I learned something some time ago, and that was these industries are not or they are different, but they're only different in nomenclature.
And it's a very common thread of them is five freaking consulting firms with a single playbook that they roll from industry to industry to industry.
And it's literally an eight year cycles, eight to 12 year cycles.
And you see the steel industry go through and the oil industry goes through it.
Funny enough, the oil industry is still the best commodity market in the world, the least fucked with and controlled.
It's hilarious how it's all turning out.
that deregulation policy in the 90s and 80s is really taking bite across the world.
What was so disillusioning to me was it was my first real exposure.
Like you talked about these analysts.
And so we were doing our road show and then we started doing our earnings calls
and meeting with these analysts.
Almost all fucking idiots.
Like they don't know shit.
and if you're out there working with a broker or somebody telling you who to invest in
and they're reading these reports and making decisions they don't know jack shit um i was
so disillusioned by it because i thought oh these must be really smart people um no they're not and
And they're making ungodly sums of money for writing reports that have absolutely no value.
They have no insight.
They're just worms.
Well, I mean, this just takes us back to the prostitution.
Once you know there's problems, like I've had an investment banker before, I'm like, hey, why didn't you tell me this was a problem?
Like a year ago.
and oh well they weren't really ready to sell me anyway because they had already met their quota
for the year okay so they roll me into the next year well the next year hits the recession i can't
get out so anybody that's building companies whether you're public or private you're trying
to go public or you're trying to liquidate and you've got a an investment banker in the middle
of it assume he is a prostitute yeah i'm glad you're saying this because i i think one of the
things, you know, I kind of sit at the junction point of the Bitcoin technical community and the
Bitcoin business community. I think that's part of the role I play in this community.
And the, I would say largely the technical side comes with the cypherpunk mentality.
You have a lot of the libertarians, a lot of the anti-state kind of folks, and they're trying to
they have this dichotomy that they haven't resolved yet,
which is Bitcoin can't rule the world
and not have financial institutions and nation states
and corporations who are heavy users
and heavy influencers of what happens with it.
Those are, you know, you can either be this tiny little thing
that's a niche and, you know, that's what Monero
or something like that is, or you can be this monster monetary asset and system that disables
the existing system, but only with those guys participating.
And, you know, that's the camp I'm in.
Like, hey, I want this thing to be successful at a global level, and I want in every boardroom,
even though I hate the boardrooms. I want every boardroom for that to be a discussion
every quarter. Like, how much Bitcoin do we have? Like, that should be part of all those discussions.
And maybe the single most important discussion is how big is the balance sheet? How much Bitcoin
do we have? Well, the good news is that, you know, I mean, even though they adopt it, use it,
invest in it, believe in it, support it, they can't really alter it. And that's the key,
right? I mean, the rules are the rules. And, you know, we're going to make TradFi bend to our rules,
not the other way around. And to the degree they think they can alter it, and they decide to,
you know, create paper Bitcoin, which they've been doing some more of that recently. If you
see, if you look at the futures volumes, you know, they're going to get their asses handed
to them when, you know, we ramp like we're doing this morning. So, you know, it has to be adopted
at the institutional and the TradFi level.
But the good news is that they have to adopt it on our terms, not vice versa.
You know, we don't have to adopt their terms.
That is true.
And I don't want to take us down into a technical rabbit hole, but there are things that, you
know, for instance, how the mempool works, how relay policies work, how blocks are constructed
that the development community does have a say in.
And they can either make it harder.
they can't stop it they can't stop this but they can either say hey we're going to embrace this
and bitcoin is for everybody and we're gonna we're gonna make sure life is easier um for these folks
or we're gonna make it harder and that's part of the battle i fight with these guys is on the
development side is like hey guys you're missing this like um the simplest example by the way i
I don't want to take us into the brevetal is if, if,
if you are a corporation based on a Bitcoin standard,
then you need to have some mechanism to know that you can get access to the
base layer at a reasonable cost at some point in the future.
Like you, you, and right now, the way that the, the market works, which says,
Hey, when you're ready to do your transaction, go,
go see what's out there are there a hundred thousand transactions or a million transactions
in the mempool and we'll tell you what the price is when you need it as opposed to you know and
and we're working on solutions to that but we're fighting we're fighting the development community
instead of them this is you know big issue for the wallet while while it's a wallet business hey
when i want to move 10 million dollars of bitcoin or a thousand dollars of bitcoin what's my exit
Well, yeah, and that's the one that's really critical.
It's the key.
And the only way I have been able to get around it, because I'm a commodities, like my whole business, everything I've ever done was built on supply and demand.
I get comfortable that the market in 20 years will be the free market.
Like if it's not intervening with them.
If you intervene with it, I'm worried, oh, shit, I could pay a million dollars to get a million dollars of Bitcoin off into the system.
Exactly. And the mentalities have to change.
And Bitcoin's decentralization, which you mentioned earlier, is a little bit of a hampering point, just like it was in the marketing.
It's also in the technical development.
It's the least efficient method of doing anything, man.
It is the least efficient.
If we all trusted Lawrence was the angel of all angels and perfect, we would centralize it through Lawrence.
Right.
But nobody can be trusted that way.
And that's why it works.
Exactly.
Yeah.
Benevolent.
I think a benevolent dictator is the ultimate form of organizational management.
But it's not what we have.
And there's a good reason that we don't have it.
But we also have to figure out, and it's part of what I think my role is, especially trying to bang on the development community, is trying to get them ready because the past is not prologue.
The Bitcoin that they perceive as being the way that it worked.
Who was doing transactions?
What was the nature of the transactions?
how much urgency was tied to the transactions um like those sort of things are are very important
and you know gary like you said you're a commodities guy well i view even more than bitcoin itself the
ultimate commodity will be block space which means um how do you get access to a transaction in the
future and part of the reason i'm a miner is i don't mean this in a bad way i get to decide i own
a certain percentage of the hash rate, I get to decide. And, you know, I can use whatever method
I want to make that decision. It's a powerful position. Well, and as the block reward goes down,
the fees will become a larger and larger percentage. Today, Bob, you're so close to this,
you would know. Of minor revenue today, what percentage of that is the reward and what
percentage of the fees today? I just ran these numbers for a paper I'm writing.
all time it's uh 98.51 percent of all revenue was from the subsidy and currently it's way way over
99 we're very very low right now is is subsidy so fees are 1.51 they're still quite small wow
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first year. Because Bitcoin isn't just for life, it's for generations. You know, maybe we should
shift over into a little bit of what's going on in the market right now, what's going on with the
Fed and stuff, which I'm happy to kind of take the lead on, because I think there's a lot happening
that maybe is subtle, or maybe not.
But I think a lot of the community is probably pretty depressed
with what's going on in the price.
And I'm just completely sanguine, not worried.
I mean, I'd almost like to see it go down so I could buy some more.
But as you guys know, I wrote this book, The Big Print,
and I do believe print is coming.
In fact, they've already started it gradually.
Paul himself, all said that they have to grow the balance sheet in order to support the bank
reserves because they were getting too skinny. They were looking at a situation like the repo
blowout of 2019, which was the precursor to the last big print. And they're saying growing their
balance sheet, i.e. buying bonds, is not QE, but of course it really is. And they're just lying
about that. They're just trying to rebrand it. And then this week you saw Caruso and then somebody
over at the Bank of America come out saying that they think there might be some discussion this
week. And this is perhaps why we're saying that we're recording this on the Tuesday before Fed
Day. Fed Day is tomorrow, Wednesday. And both of these guys came out. And it would be reasonable
to think they might have gotten some leaked information suggesting that the Fed was going
to kind of aim towards something like a $40 billion a month purchase of Treasury securities
to keep these reserves. And they're going to call it reserve management, not QE. And I think that
thought leaking into the market might be why we see silver going through 60 and Bitcoin
catching a bid off of 90. It's now 93, almost 94 this morning. And so I've often maintained that
it's just a matter of time until they have to start printing again. It's really just kind of
a mathematical certainty. And I've got a chart that I'd like to share that I think shows that.
But what this is, I use this in a presentation that we just made to our investors. It's a
A chart done by a guy named Dan Oliver at Mermican Capital,
a gold investor, a good friend of mine.
So what this is, is the exponential growth curve
is just kind of a compound interest growth curve.
It shows what happens when you compound something at 7% over time.
And the black line, that's the lighter gray line
that kind of goes up smoothly in an arc.
And the black line is the Fed balance sheet,
which is a good proxy for the money supplier,
the money, the reserves that they put into the system
that the banks then lend against and create M2.
And what you can see here that I think
is fascinating is that every time the Fed balance sheet or the money in the system, because we've got
debt growing more rapidly than we have underlying money supply, you know, or GDP, you get to these
points at which there's not enough money in the system to service the interest rate and the debt.
And so you can see what happened. The black line slipped below the growth curve in 2008. And bingo,
you had the panic of 2008 and the GFC. And of course, they fixed that very quickly. And they
had what I call the first big print. And they took the Fed balance sheet from $800 billion to
$3 trillion. But then, of course, they realized that was a problem and there was some inflation
and other issues. And so they came in and they started to tighten it again. And Yellen started
the process and then Powell added to it. And that took you into 2019 when in the fall of 2019,
the repo market blew out and went to 10% and they realized bank reserves were too low.
And he did a pivot and he turned around and started printing money again.
And then three months later, COVID hit and they really hit the money printer accelerator. And
Up we went from a Fed balance sheet of $3 trillion to, I think at its peak, it was close to $9 trillion, maybe a little over $9 trillion.
And of course, that led to the 9% inflation that wasn't transitory because Powell lied about that and brought us back down to now $6.5 trillion.
Look at what's the most interesting thing about this chart to me is look at where the two lines are right now.
We're back to the point at which the liabilities are below the parabolic growth curve.
And the last two times that occurred, it led to a quote unquote big print. And so to me, you know, I that's why I say this this big print is imminent. I mean, it's it's going to happen. It's got to happen. And I think, you know, Luke Roman says six months. You know, Lynn is a little more little is a little more thoughtful about it. She says, well, we could just have a gradual print. And she may be right.
But I tend to think that more likely what will happen is once the floodgates open, they're going to really open.
You kind of see the indicators of all that going on because, you know, you've got Kevin Hassett is going to be probably appointed as Fed chairman.
He's talked about much lower rates. You've got Powell attacking Fed governors.
I mean, they threw out Bostick for insider trading. They threw out Krugler for the same thing.
They're going after the woman who lied about her mortgages.
You know, and he's basically trying to get control of the Fed board.
And, you know, you've got the Treasury Secretary Bessent out there trolling, you know, the whole Fed board saying, what is what's the Federal Reserve?
It's a it's universal basic income for Ph.D. economists.
I thought that comment was hilarious. And, you know, he said he said they always get it wrong.
If you know, if the Federal Reserve was the, you know, the FAA, nobody would fly in airplanes because these people don't know what the hell they're doing.
and he's right. And so, you know, basically it's clear to me that, you know, with an election
coming up next fall and, you know, Powell's term expiring in May, Hassett's going to get in there
and they're going to run this thing hot. And, you know, the good news is the economy will probably
hold together and the stock market might even go higher nominally. But the bad news is that's going
to be massively inflationary. And gold has already smelled it, which is why gold took off, you know,
starting in September and went from $2,600 to $4,400. Silver is smelling it. I mean, it's doubled
in the last year, more than doubled, actually. And Bitcoin, you know, Bitcoin has been a little
bit of a laggard and a little bit sensitive to this tighter liquidity. It's got a more sensitive
liquidity-driven price to it. But my sense is that, you know, if you look historically,
another chart, I'm not going to show it, but I've shown it plenty of times on my Twitter feed.
What we see is that gold, because it's more widely distributed, tends to move first, and then Bitcoin follows.
And so to me, gold has already sniffed out the monetary debasement.
It's moved heavily.
And what's going on right now is Bitcoin is in the process of starting to follow.
And so I fully expect it.
I said I've been wrong about it.
Earlier this year, my prediction was end of the year, silver would be 50 or over.
I'm right about that.
I said gold would be 4,000 over.
I've been right about that.
I said Bitcoin would be 140.
I've been wrong about that.
But I think that 140, 150 is coming sometime pretty early next year as these Fed changes take place.
So just some kind of context on what I see going on in the market right now.
And I know a lot of people are very, very impatient.
But I started buying this stuff in 2013 or 14.
I almost actually kind of forgot about it for a while.
I was like, oh, yeah.
One day I opened up my wallet at Coinbase.
I was like, holy shit.
There's actually some real money here.
I paid $300 or $400 for it and got up a few thousand.
So, yeah, it's and so I think, you know, people just got to become more patient here.
I mean, we we are winning. We're going to continue to win.
The power law is in full effect. We're right. We're below the power law right now.
This is a good time to be buying. If I had a lump sum distribution, I'd do it right now.
You know, there will be there will become a time when it's less good to be buying.
I mean, we will go to one and a half times standard deviation above the power law.
And that might be 200 and it won't be quite as good a time to be buying.
But, you know, I just think everybody needs to relax and realize that we are in the right place at the right time and we're lucky to be here.
So that was kind of long winded, but I thought I'd give you my perspective on where we are now in the markets.
Two things struck me.
The first was that.
As as you dipped below the curve.
The violent reaction.
like it and um so but but but maybe that's indicative of the fact that the fed is always
just guessing right so when they see trouble they don't really know how much trouble they're in
and so the reaction is violent because the ramifications of of going further the other
side are so terrible in their mind. That's right. And I mean, yeah, one could argue, I mean,
and this is why we've seen interest rates that ping pong between, you know, back in the Volcker
days, 20% and 0%. And I mean, one could argue that, you know, you could almost AI the Fed and
just set interest rates at three or 4% and leave them alone. And we'd have better economic outcomes
because you get these crazy swings Yeah you get these crazy swings And the issue really becomes The Fed was originally created as a backstop to the banks And the issue is that in the system we got the leverage is ever growing and ever increasing at all levels of society
And, you know, in a normally functioning society, we would have a corrective phase where all the leverage would get weeded out.
You know, and frankly, that would be very painful.
But that's what they that's what kind of happened in 1929 to, you know, 1935 or six.
but we've decided we can't have that anymore. That's not one of the options. It's become an
unacceptable thing for politicians because they know that if we go into another depression,
we squeeze all the leverage out, there's going to be enormous pain. And so basically,
the third Fed mandate has become printing, coming with fire hoses and printing as necessary to keep
the system functioning. And sadly, as with anything else that compounds, Bob, as you know,
the numbers just have to keep getting bigger and bigger and bigger. And ultimately, I mean,
I think there's going to, as my book says, I mean, I ultimately think the fiat currencies are going
to fail because people are just going to lose faith in them. I mean, most Bitcoiners have already
lost faith in them, but we're still a minority. All gold people have certainly lost faith in them.
and they're still a minority too. But our ranks are growing. I mean, a lot of things have happened
in the last six months. One of the things I thought was most interesting was Morgan Stanley,
who traditionally, I think they advised like $7 or $8 trillion of customer wealth. I mean,
a lot of money. And they used to be 60% stocks, 40% bonds was kind of their model.
And they revised it to 60% stocks, 20% bonds, 20% gold. I was like, what? I fell out of my chair
when I read that. And then somebody on Twitter did the math and said, you know, if they took,
if all their customers listened to them and put 20% of their money in gold, price of gold would
double tomorrow. And that's probably close to correct. So, you know, I think this whole monetary
debasement trade that gold, silver, and Bitcoin are reflecting, it's a big deal. And the other big
deal about it is, you know, you've got this whole unit bias thing going on where everyone, I have
all my friends like, well, yeah, I get gold, but I can't pay for you bought it for a thousand.
Yeah, I get Bitcoin. I can't pay 100. You bought it for 10. And I'm just kind of like, well, yeah, except let's look at it the other way. Let's look at total available market. There's a trillion dollars of financial assets. There's, you know, 150 million of bonds, 150 million of equities. There's a bunch of cash. There's a bunch of real estate. All of this. And Bitcoin's 2 trillion and gold is 24 or 26, something like that.
And actually of that gold, only about half of it is really actually easily saleable because half of it's around, you know, female necks in, you know, all over the world in the form of jewelry.
And maybe 20% of it's actually in museums and antiquities that, you know, nobody's going to go run, you know, melting down the Pharaoh's mask to get the gold.
So, yeah, I mean, and so my sense is, you know, this debasement trade, we were just this presentation I just gave to my investors, and that was the chart I took it from that presentation, is that, you know, we're in the second inning here.
You know, we've got a ways to go.
So, you know, and I've used this, I've said this in a lot of podcasts, but I'll re-say it just one more time.
I mean, yeah, okay, so if the financial system, the fiat financial system, the dollar is Titanic,
and you can argue whether it is or it's not, that's maybe a little bit extreme, but I think it could be.
And silver and gold and Bitcoin are seats in the lifeboat.
Yeah, you're right, I bought my seat cheaper.
I was smart.
I saw it five years ago, I bought a cheap seat.
But you're still on that Titanic.
I mean, I know a lot of people are very wealthy, have all their money in stocks.
And I'm like, is that really what you want to do?
I mean, yeah, the seats are more expensive now, but don't you want to at least buy one seat?
You know, another perspective on that, Larry, I appreciate you sharing with us and with everybody, you know, your investor presentation.
I'll share something that I do.
I write a monthly newsletter for subscribers through Financial Advisor Magazine and goes to 400,000 wealth and financial advisors in North America.
And I have a hypothesis, especially Gary and Larry as guys that are very familiar with commodity markets.
You can tell me if you agree with this hypothesis.
But my hypothesis is that the lower bound of a commodity, lower bound of the price of a commodity,
is somewhat set by the cost of production of that commodity.
And so certainly in short windows, market supply and demand issues can play with that a little bit, but nothing sustainable.
So I, for years, have been tracking the average cost of Bitcoin production across the industry, and I found that it sets the lower bound pretty well for the price of Bitcoin.
So in Q1 in my newsletter, I said that the cost of production was $75,000.
And in April, Q1 of 2025, in Q1, at the end of Q1, I think it was like April 9th, we bottomed at $75,000 and bounced off of that.
Right?
And in September, I did my revised number, and I set it in the high 80s.
And I said, average cost of production now is in the high 80s.
And, you know, I was more optimistic, Larry, and maybe we'll still see a big number before the end of it.
But I said, my bottom floor is in the high 80s.
And obviously, we had like a week or so we went below that.
But roughly that same number, we're bouncing off of the same number.
So I think to your friends, like part of the reason I'm bringing this up is to your friends say, well, you know, you bought Bitcoin.
when the cost of production was 10,000.
Well, cost of production now is 90.
We'll call it 90 for right now.
So it's no different than anything else, right?
What was the cost of production at the time that you bought it?
It's not that the cost of production changed.
Now, in a market like gold or in a commodity market like grains
or something like that, the cost of production doesn't vary as much.
But in Bitcoin, cost of production changes quite a bit in short windows.
Bob, let me ask you a question.
You're 75 and 90 for Q4.
Does it take all the mining into account?
Because there's a huge spread between the way you mine it and the way Fred Teal mines it.
Right.
Yeah, it's the industry average.
So I can mine Bitcoin for 50.
See, I think this is a problem.
This is the problem with your math, if I may.
Yeah, oh, it's okay.
Because, you know, I hear this in the oil complex all the time.
I heard some guy with 3000 listeners last night hoodwinking the audience that they see a hundred dollar crude oil again.
And if that happens, the whole world follows parts like, yeah, no shit, Dave, hundred dollar crude oil.
And you get a treasury 10 year at seven.
OK, good. The whole world's falling apart.
But you can't base a premise of super inflation in the future.
See, I don't see inflation coming.
I see a massive deflationary event the next 10 years, maybe five, maybe three.
I think we're seeing it right now. You remove 12 million immigrants from this country, whether they go voluntarily or you remove them.
I think there's four million houses that are going to be on the market.
By the way, I use 12 million people, assuming four are living in a house.
It's a staggering amount of homes, a staggering amount of rentals, a staggering amount of jobs that have been underpriced and taken from Americans.
Great companies are going to be built in America if we get rid of the immigration issue.
But people are going to have to understand, the retailers in particular, you're not going to be selling $80,000 automobiles.
It's not happening.
I think there could be two worlds.
Fred Teal is not making money mining Bitcoin the way he's mining it.
He's at $135,000.
And then you have you sitting down here making a big old chunky margin.
Crude oil producers in the United States produce for $45 a barrel.
This was my point.
And they're selling it for $65.
And the word dry hole has been completely removed from Petit.
There is no dry hole.
This is now science, dude.
It is not an art form.
It is LiDAR.
Oh, my God, look at the size of that fucking fuel. Let's go drill it fast.
So we're not going to. I think all these prices come down, including electricity.
You've just got the United States government took an 18 percent stake in the Westinghouse.
This is to Lawrence's view of comments on QE.
I think QE is on steroids right now under a different name.
The U.S. government just told Westinghouse, dude, we're going to support the fuck out of you.
And we're going to build a nuclear.
It's the best tenant you could get.
Okay.
They did the same thing with Intel.
10% stake.
They're bragging now.
Look at that.
$40 billion.
Hey, I'll give you some contracts and I'm going to take an investment in your company.
The pure Bitcoiners will hate that.
And I say, no, no, no.
This is good.
This is much better than QE.
This isn't just handing money to people. This is taking an investment back for contracts. And I guarantee you those contracts are going to have to be lived up to if we're monitoring what we're entering into. Right.
and all everyone that the United States government is competing with their sovereigns invest in their primary companies.
So this has to happen and you're not going to fight the global polymarket gig that's going on now that we're going to do for the next 20 years and not support your biggest industries.
It's just not going to happen when you can't when you can Europe can't.
Well, yeah, they've completely blown it.
You know, the Asians got it right, though.
So the Asians got it right because if you go back to the 70s and the 80s, and I think you said something about this earlier, we can learn a lot from the roads we've already traveled, right?
Well, why is there chip dominance, LCD production dominance, for instance, in Asia?
It's because Japan, Taiwan, China, South Korea all recognized way back in the 80s that these were the industries that would dominate the future.
and the governments worked in kind of public-private cooperations and funded these massive
developments that became Samsung, TSMC, LG, Foxconn, like all of these powerhouses of technology.
And they kicked our ass and even took companies like Intel. I mean, maybe we can save Intel
through something like this but intel's dying and they were the king i mean they were the absolute
king at that point um but but um you know if we're gonna if we're gonna win in ai if we're
gonna win in energy if we're gonna win in bitcoin like these sort of things when i say we i mean the
us it's gonna be a major player has to do this shit yeah where i was trying to get to though
was the point on the mining is if there's two markets really, right?
And that I think there's a lot of opportunity if the Bitcoin miners,
or the Bitcoin miners without intervention are going to be forced to the source.
Like I still maintain zero cost.
And this is what my question to you is,
if you're maintaining that the high price, the $75.90 is the floor,
I actually challenge that because I think the floor is somewhere between remove all the threads of the world, the $137,000 cost.
Those guys are not going to survive this.
They're going to be replaced with miners in Alaska, in Russia, Saudi Arabia with zero input cost.
As I said, that's been my hypothesis, but that's what I do.
I mean, my company, we produce our own energy now.
We own our own hydro.
we use anaerobic digestion from cow manure we own our own gas wells and you know we you know we we
can't get zero i mean because we have to run engines and we have maintenance on the engines
and things like that but we can see cost of electricity down even under two cents per kilowatt
hour so by building it ourselves and and managing that but you might even say i'm less a miner than
I am an energy producer, you know, and I'm just a low cost energy producer is maybe another
way to say it. You're just using Bitcoin as a sink for the energy that you're zero. You're
getting nothing for right now. That's why I say your input cost is zero because without the Bitcoin,
you don't exist. There is zero for the hydro. That is correct. Okay. So like that's new energy
that's showing up to the market. It's not displacing the electric grid. It's not displacing
ARCOT, but it's fucking competing with anybody buying energy at ARCOT.
Absolutely.
Yeah.
To mine Bitcoin, you're going to get your head ripped off because this is what decentralization
is going to work because decentralization isn't going to work at ARCOT.
It's going to work because you have 10,000 mining guys going, dude, I have cheap energy.
I have cheap energy.
And it doesn't really matter where you are.
You just might be sitting on some cheap energy because where you were born.
my job is to go find those spots.
Now, the only thing is...
You see, that's so important
because that's never sold.
This is never sold by Bitcoin this way.
Hey, we're a sinkhole for vacant energy.
Unmonetized energy, dude.
I'm a sinkhole.
Yeah, no, it's one of the beautiful parts of it all.
Most people don't understand it.
I mean, look, a guy like Howard Hamm
is going to spend 30 cents MMBTU,
which is a unit of natural gas a month to store a $4.50 product.
These energy markets, they kind of behave like this,
where in the winter they're supposed to be really high,
in the summer they're supposed to be low.
So you then hide the gas in the summertime at $0.30 a decatherm or a MMBTU,
and then you sell it into the winter,
which then of course brings the winter prices down.
But that's $1.50, man.
You have to see $6, $1.50 and $4.50.
You have to have $6 to make a margin on that when Howard Hamm could be spending, getting paid to stick his natural gas into Bitcoin and reserve it and go, dude, I'll let you guys know when I want to sell it.
While it's making money.
Oh, my God.
And Howard Hamm gave that 30 cents a month to Columbia.
It's not even the same company.
So we know this is going to happen.
This is, you're going to make, help make the markets much, much, much more efficient.
Yeah.
We, like I said, we, I think this is the future.
It's the path we started pursuing in 2021 because I could see where this is going.
Now, a lot of times, at least right now, it has to happen on a smaller scale.
So it's, you know, we can find these opportunities for a megawatt or five megawatts or 10 megawatts, but not for 300 megawatts.
And you almost have a moat, by the way, that's a reverse moat because the big public companies can't chase these opportunities.
Yeah, you're exactly right. They are the immune.
And, you know, I think the only the thing with the public mining companies, which I am, as you probably can gather, I am not a fan of.
I think they've done a huge disservice to Bitcoin and the community.
but they might get saved because they can get taken over by some of the AI guys who are willing
to pay for their energy assets right now. If the demand for AI keeps going up, I think they can
get bailed out, but I think they'll go away. Their future is either death or acquisition by
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com slash btc sessions to sign up today and you can share your own personalized referral link to
earn commissions so um maybe a different uh tack here and um is you know we haven't really talked
about maybe some of the younger people like if you're a younger person and i'd love to get your
advice, Gary? You're a younger person. You're that 30-year-old, 35-year-old professional. You're
starting to, for the first time in your life, maybe make more money than you're consuming.
What advice would you give to them? The world's pushing them toward 401ks and index funds and
things like that. What would you tell them? Well, look, the first thing I would do is if you're 12,
22, 42, you cannot spend more than you have. You have to fix that. Everyone on this call should be
going, oh yeah, I'm good to go. You have to fix that whether Bitcoin's around or not.
So when I was growing up, and this is going to be harsh to the young people, but nobody
fucking guaranteed me the right to buy a house. They didn't guarantee me a salary that was going
allow me to buy a Rolls Royce. I've never owned a Rolls Royce. I never will. Gosh, you know,
the zip code I was growing in did not offer me the opportunities that I wanted to be. I needed
to leave my zip code and go get a career and go build value. So the first thing I need to do is
figure out who I am. Like, I don't, I need to invest in myself. That's where the real investment
Come read a book, find out who you are, write yourself a note. Hey,
I am not a prostitute. If you are a prostitute,
get to know it early on, dude,
embrace it and fucking become a trillionaire.
But at least decide what you're doing.
This is a huge mistake for somebody to start investing $500.
You invest $500, not in Bitcoin, go invest $500 in some books, man.
Okay. Follow Lawrence, follow Bob Burnett, follow whoever,
pay them a dollar a week get a mentor man your your dad and mom did not teach you how to be
successful so i i just think that that you know your your teachers are not successful people that
they're not they did not teach you how to compete in the the world um and teachers are getting ready
be replaced by robots that do a much better job.
So to me, that's the first thing you do.
The second thing you do is once you start asking yourself who the hell you're
going to be when you grow up, you have to get a great platform.
Don't worry about being your own guy.
Go learn something from a master or do what I did and make every mistake imaginable I don know man You don have to make the mistakes I made
I'll probably sell them to you for 10 bucks a month.
You know, today, and the point I'm making about that,
I actually give all my stuff away for free.
The access to information,
I am so sick and tired of hearing you guys say
you don't have an opportunity.
You have the greatest opportunity in the history of mankind.
Your MBAs cost you zero today, okay?
I can't get an MBA.
Dude, you guys can get an MBA.
Harvard's offering free classes right now.
MIT is doing the same.
And not to mention, you get to access Gary, Lawrence, Bob, anytime you want.
And there are more and more people coming like us.
This is the mistake the young people are making.
Your egos are completely out of connection with reality.
No, I think everything you say is right.
I would emphasize a couple of points.
Go buy The Richest Man in Babylon by Claussen.
And it's a really simple book, but basically the message or don't buy it and just remember this.
Pay yourself first. You know, 10 percent of everything you make has to go into savings.
Then go buy yourself an HP 12C financial calculator and fiddle around with whatever kind of IRR you want to use.
And, you know, the thing that young people have is an advantage that the four of us do not have is you've got years, decades, literally of compounding ahead of you.
And so really small acorns grow into really big oak trees.
And so, you know, if you're in your teens or your 20s, your 30s, and you start saving 10% of your income and you put it someplace that grows north of 7%, and of course, in Bitcoin recently, it's been growing at 30 or 40% a year.
It's virtually impossible that you won't end up in your later years rich.
It's literally impossible.
And so, you know, to me, that's probably the one habit that's more important than anything else that you can adopt.
and that is to live within your means and pay yourself first and then be learn how to be an
investor and make your money make money for you so that eventually you won't have to work anymore
and you'll have nothing but passive income and uh you know that's how you know gary did it that's
how we all have done it that's how your brother did it with real estate everyone's done it i mean
kiyosaki is a guy robert kiyosaki wrote rich dad poor dad has become a personal friend and he's a
big supporter of my book and i'm grateful for that and he wrote the the ultimate book on how
to do this. I mean, he grew up, you know, with a father who was an academic and was, didn't
understand what to do. And then, but his neighbor was a very smart entrepreneur. And he went and
said, Hey, you're rich. I want to be rich too. How do I do that? And so then he took the lesson
and he wrote it all down in this book. It's that book. It's, it blew my mind when he told me this,
they've sold 50 million copies of that book since 1993. So yeah. Right. And that's something
best all time selling finance book in the history of the world. So, so I think young people,
you know you got to get the basics right and you've got to understand the value of compound
compounding i mean buffett and others have said like einstein even said it compound interest is
one of the seven wonders of the world it really is kind of amazing the trick is how do you get out
how do you get out i just like to use an analogy okay i need to escape friction and gravity okay
and like this has always been my problem i always felt even in school like oh man there's so much
gravity. Why don't you let me go and do my deal? So what does a rocket do? You know, when Elon,
if these are actually real, they launch a rocket or maybe NASA is a better example.
As soon as it hits outside of atmosphere into space, what does it do? The first thing it does,
at least this is what we're told by these, because I've never seen one of these rockets
actually do this, is they jettison all the material that got them there.
people should question at 18 years old what baggage am I carrying into the world
that I think is right but is actually I'm either just so clueless I've put some stuff in there
which is to Lawrence's point he said hey pay yourself first you know what he really means is
hey you're going to take all your income and pay yourself for what you spend your car on everything
But then you need to invest 10% into yourself.
Like, and he's saying, do that first.
Like, that's an investment into the future, whether it's in Intel or Bitcoin or whatever.
You can't go broke if you're investing money first and then spending it, right?
This is a huge discipline.
It sets you up at 18 to realize that at 26, you're like, it's no longer suffering.
and you're going to look at your friends and go, wow, what's wrong with you guys?
Your job should be to think about leaving your group of friends, not staying with them.
Like, just go check it out, man. Anybody that stayed in their local area for too long, I mean,
could they have done more? This is not true for every, every case, okay? But
just getting rid of all the stuff that's in your baggage, and I have to do this as
is someone that thinks he's a professional. I have to get rid of my thought process.
Sometimes I have Bitcoin taught me that. Oh, wow. What do I not know about finance?
And I have learned a lot that I thought I knew that I did not.
So get yourself around a great coach, great teachers and great lessons. And you're not
it's going to be very, very hard to, you know, destroy yourself and not do well.
I just don't know anybody with a bunch of mentors and learnings that have done poorly.
Somebody is, and we've got an internal chat going.
Somebody asks, is it too late to start at 30, 35, 40?
Absolutely not.
Particularly when you consider the average lifespan now is 70, 80, 90 years old.
You know, starting at 30, 40 years old, it's fine.
You know, and, you know, if you can, if you're lucky, I mean, obviously saving 10% is kind of the minimum.
You know, you get some bonuses, you do particularly well, you have a hit.
Well, then you do a catch up.
You know, you take that bonus instead of buying a Porsche, you put it into your savings account.
You know, I mean, the fact is we can all live with a lot less.
You know, we're very we're all in the West in the Western world.
We all have food on the table.
Thank God.
And when you consider if you read about human history, you know, for millennia, that was a real issue.
And, you know, and we can all do with without the latest gadget.
And, you know, so savings is a is a key.
In my view, it's a long-time preference item, and it's a key part of ensuring this mental and physical peace that we all seek to achieve.
And then the beauty of it all, as you all know, is a Bitcoin broadcast is that here you've got this turbocharged form of savings.
There's a great chart that shows what the ARR on Bitcoin is right now.
It's in the mid-40s now.
And over time, as it gets adopted, it is going down.
But even 10, I think even when we hit a million dollars, the power law of 2030 theory, it's still in the 20 percent range.
I mean, get that financial calculator, plug in 20 percent over a couple of decades and look at what happens.
Oh, my God. I mean, it's just it's impossible not to end up rich.
And so with that knowledge, you know, suddenly I think, you know, a lot of the fear that people have felt for so many years, it's beaten into all of us.
I'm not going to make it. I'm going to run out of money.
You know, the world's unfair. Everything sucks. You know, once you have this knowledge, your perspective changes. And, you know, is it simple? No. Is it doable? Yes. And once you do it, you know, then you can suddenly say, all right, you know, I've solved for that problem. Now, what do I want to do with my valuable time?
Seems to me that a lot of young people live for the here and now rather than for the later.
You know, I mean, I see him and maybe this make a hell of a lot more money than I do.
I'm not sure. But we'll go out to go find dining and maybe we're spending three hundred dollars, four hundred dollars on dinner at a really nice restaurant.
And I'll see all these people there in their 30s.
Where in the hell are these kids getting this money at?
I mean, I know I certainly did that. I know I drove the same car forever until it was like, I got to get a new car because I didn't want to like buy a new car.
That's the one that blows me away. I see these young people driving these cars that are just insanely expensive. I'm like, what?
Yeah. I mean, I'm going, where's the money coming from? So to me, they're obviously not. Maybe some of them, you know, are doing great, but they're all, all those people in that restaurant are not doing great.
all those people I see with those cars.
No, there's a lot of debt being used.
Hey guys, I got a conflict with an investor call,
but I super enjoyed talking to all of you.
I'm just going to mute and sign off for a bit
and we'll do it again soon.
See you later.
Thanks, guys.
Okay, good.
See you.
I'm perplexed by that too, Gary.
It blows me away
because you know that this is just credit card debt piling on.
That's the reality is it's too easy.
and and cars cars just suck money like gary uh you said you'd never own a rolls um i won't either
um no to be fair i own some nice cars but they're not like super extravagant and i haven't bought a
new car for decades you know i'll buy one that's a couple years old in good shape and it might be
a bmw or a mercedes or something like that but i'm at a stage in my life where i can i can handle
that same thing i drove my last car mercedes for 20 something years yeah but but you know by the
way nobody cares like nobody cares what car you drive and if they do who cares yeah fuck them right
fuck them if you care what car i drive or what watch is on my hand like you you you guys in the
audience letting your women make 500 and 700,000, $2 million investment decisions on a house. Like
this is not an investment. So the worst investment you could possibly make in your life. And at 22
to get talked into buying a house, like, dude, you're, you're buying into someone else's made
up dream it's not even your dream it's someone else's made up bullshit story about a trap you on
a zip code and on a mortgage a long-term rental rate you do not own that home gary i saw your uh
your your video um of you in front of your house that you just sold doing the math on why you got
rid of that house and that was pretty i mean people should find that that was pretty enlightening
Yeah, I mean, listen, I own my primary home here when I bought it relative to Bitcoin.
By the way, to Bob's point, I would assume a 12% interest rate, a 12% annualized return over 10 years.
Every 10 years, it's 120% return.
You know what?
For Bitcoin, I don't need 40 and 30.
this is double the side this is double the position of the real estate i do with my brother
who is a fucking baller okay he has given me unbelievable returns on the real estate
and i still get paid i don't know 50 60 grand a month and but that was at six or seven percent
uh this is i'm just assuming 12 uh you will end up stupidly rich at 12 percent if you're
discipline. Even at 32, somebody said, hey, is it too late to start? The only business I would
consider starting is Bitcoin business, where you actually hold Bitcoin and you learn about Bitcoin
and all your assets are in Bitcoin. And not every asset, you're going to have to live in this
world for a while, but you don't consider buying homes and stupid cars. I own a Range Rover,
cost me $230,000. You can't afford these vehicles right now. You're actually doing the world of
service. If you pull back your demand, okay, stop consuming everything because you're now chasing
me. I don't need anything else. You're no longer chasing rich people, dude. We're peaked out on
consumption. We are now going to be peak investors. I guarantee we have peak consumption
has been achieved four or five years ago.
There is not a sheik on the planet
that can handle another chick
or villa or airplane or yacht.
We're really at peak consumption.
I really, really believe that.
You people are getting ready to see
a deflationary environment
and an event that you should capture massively.
Because like what I said to Bob,
I don't think anybody's ever told that to Bob.
Hey, Bob, you have a moat.
Your moat is an inverted moat because Fred Teal at Marathon can't even go after the kind of money he's going after.
It's too small, man.
It won't even ring the bell.
No one will even listen to Fred.
They won't have an analyst call over that deal.
But there'll be a thousand bobs that go, dude, I can get rich doing this.
And listen to what the gap is.
Fred's at $130,000 Bitcoin producing.
And Bob, you said you were at what?
About 50.
We can do it about 50.
dude, the spread there, who's going to win? That is a mode.
So if you don't think that's a good business, I would immediately go, Hey, Bob, you got any jobs?
Dude, if I'm 32 years old, Hey, can I come work for you?
I'll get you coffee.
I'll get you. No, I'll get your coffee. Let me hang around with you.
Cause I'm going to bring zero value to you. I'm going to be a headache for you.
You're going to have to take time to teach me.
And if you don't take time to teach me, I'm going to become a liability.
So let me get you some coffee and I'll just hang around.
You won't even know I'm here.
I'll clean up the trash cans.
I would.
And no one does that today.
Why?
You got no competition whatsoever.
You don't need to go to school.
You need to figure out how to knock on somebody's door and get their attention.
You know, it's funny you say that, too, because like I think you guys are probably the same.
My DMs are open on Twitter, for instance.
I'm easy to find.
And I would say maybe once a month or so, somebody will reach out and ask me a question or ask for advice or something like that.
And I try to always respond and give a thoughtful response to it.
Now, if it was 50 a day, I'd probably have an issue.
But and I've had that in my life, too.
As you said, mentors and coaches and people that took me under their wing taught me a lot.
And most of the time, people are pretty flattered that you ask them, and they're happy to share that.
Because, you know, I think there's a, for me, it's like a good karma, right, that just comes from it.
I feel good helping somebody.
And that's all I need.
I don't need anything else.
Just feel like I help somebody is good enough.
Yeah.
The truth is, you know, I'm not preaching to you.
I'm preaching to the guy that needs it.
his parents should be calling Bob up going, hey, Bob, instead of me sending my kids to a four-year
program, then it costs me $250. How about if I pay you $50,000 to take this kid under his wing
and mentor him? See, there has to be an exchange of both pieces of information, right? Otherwise,
the guy's not even going to consume it properly. And you know what they are? They got to be willing
to go throw on a pair of work boots and help us drag a trench for a gas line or load servers
that weigh 80 pounds in 20 degree weather into a container.
Like if you want to do, if you want to get involved, like you're going to have to do
the dirty work.
But by the way, I did the dirty work too.
Even at my events, I've been on our sites and I've dug the trenches and ran the jackhammers
and got on the cranes and did all this shit.
Because I want to.
Because if I don't do that,
I don't know how my business operates.
And that's what you have to do.
You have to learn how to do all that sort of shit.
And eventually, you'll either go like,
hey, I think I got it.
Maybe you'll go off on your own.
Or maybe you say, hey, can I be a partner on a project?
Can I, you know, and then you start out on your own.
And whether that's in mining or whatever the hell, it doesn't really matter, right?
If you want to go work in a restaurant, you got to do the same thing.
You got to wash the dishes and cut the onions before you're the chef or own the restaurant, right?
Yeah, the Bitcoin industry is a very interesting industry in that, I mean, people do have options.
They go work for a restaurant.
You could probably reach out to SpaceX, maybe reach out to the AI guys, but no one's going to respond to you.
Unlike Bitcoin community, it's extremely, this is one of the things I was like, wow, everyone's willing to meet with me.
Zero people in five years said no.
That is unheard of.
OK, if you've ever been in another industry, I mean, it takes months, years to get meetings with certain people.
In two years, this will be done.
There won't be any jobs in the Bitcoin industry for newbies.
For people with no experience, we won't need you.
There'll be so much experience around the hoop that you're going to be competing with MBAs by then.
but if you're in and near the hoop right now you're going to be assumed to be an nba you're
going to be called an og and uh don't bitch in two years when this is gone man like guys like me
have been telling you like i know an opportunity when i see it and people should be going why is
that guy like painting and only doing bitcoin and not even going to any of the big meetings
like i've stopped going to the conventions and shit i'm like they're just selling shit
I can meet with everybody and have a dinner that I need to.
And when I need to, this will not always be available, man.
Yeah, it's funny you say that.
Not funny, it's sage.
Because I was blessed to enter the personal computer industry in the 80s, early to mid-80s.
And that's exactly how it was.
And I had an engineering degree and I had something, at least something to offer.
But I didn't know jack shit about designing a computer.
Um, but I was able to get somebody to take a chance on me because frankly, there were no other people willing to enter the industry.
Um, they were, they were dying to attract people.
10 years later, that was all.
How many people tell you you were making a mistake?
Oh, all kinds of people told me I was making a mistake because I had other job offers.
I had other places I could have gone.
I don't know.
Something felt right to me about, about that.
And, uh, I, I saw, I saw something that was world changing too.
It wasn't a money thing.
it was like, this is where the future is. And I was right, right? You know, the personal computer
ended up being, in my opinion, one of the most important technological developments of all time.
But Bitcoin is maturing rapidly. And we're very close to, as you said, the cusp, where
the kids with big educations coming from prestigious schools, or even the guys that are
on Wall Street today or they're going to want to come work in Bitcoin soon. We're already seeing
some of them come. So this period of opportunity is just about over. It is a small window left.
Yeah, Bob, the same thing. Since I was e-commerce in the mid-90s, everybody told me I was an idiot.
first of all people wouldn't buy stuff on the internet and then people i had no idea who they
were i was getting emails every time i messed up telling me what i did here was an error here's how
to correct it and i still don't know who these people were but they were so helpful you know and
i think that is the way when something new is coming out like you said you both you know someone
contacts you a dm you answer them you know that's the way something is when it's new that's the way
podcasting was when it was new.
You know, I got into that one of the first 15 podcasters all helped each other.
It was like, you know, let me help you.
Let me tell you what to do.
But that stuff ends, you know, in every niche as it gets developed.
More and more people get into it, it's over and it goes and it goes away.
You know, and that's where we're at right now in Bitcoin for sure.
But I agree with you, Gary, that's going to disappear.
You know, there's a I think there's a very telling sign as to when you reach that point, too.
I'll tell you guys a story about the personal computer industry.
So in I think it would have been 86, I went to my very first personal computer conference.
It was called Comdex held in Vegas every year or maybe four or five thousand people there.
um a few years later same conference held in november every year 25 000 people in 1998
225 000 people showed up for one conference like an unimaginable number right um it took over all
of vegas it wasn't just like at the las vegas convention center every single casino that had a
showroom had a section for exhibitors. Six years later, the conference was dead. It was defunct.
So what happened? How does something go from being 225,000 people to nothing? It's not that
the personal computer became irrelevant. It just became ubiquitous. It had become part of everyday
life, it was no longer exciting, I guess, to a certain degree, right? And I know this sounds
kind of funny, given where we are at Bitcoin. At some point, that will happen. Like at this year
in Las Vegas, Bitcoin was like 25,000 people. It'll probably be bigger this year. It may even
be bigger the year after. I bet we'll see it reverse. And we're probably a handful of years
away from it going away now i think there will be a a spot for gary runs a conference called bit
block boom um but it's a focused conference what do you have normally like 400 people gary yeah
four to five hundred i think the biggest has been seven i think those kind of things will still exist
but just like they do in the computing industry you still have these pockets but they're the real
enthusiasts, the real diehards.
But everybody else moves on.
And these conferences, like the ones in Vegas, they cost a lot of money, spend a lot of time.
You really don't see anybody.
If you're going to go, go to ones like Gary's, the small ones, where you can actually network
and interface with people.
Yeah, I think you're right.
And the same thing happened in podcasting, for the most part.
You know, I'm going back to something I mentioned this a minute ago, but when they started, they got huge.
You know I had a podcasting conference which I had sold off and now it just a mediocre size compared to what it was at one time Cause everybody is knows what a podcast is or everybody that to be into it can get into it easily It not something you really have to go to a conference
all the way on the other side of the country to learn how to do.
The tools are so easy.
It's the same thing.
Gary, I think maybe this is a good point to kind of maybe wrap things up.
Do you have any final words you'd like to say?
When we started this, I talked about a little –
You know, I think a lot of people in Bitcoin are frustrated.
And I think I'm frustrated over what I have assumed to be true, but may not be.
And that is the four-year cycle that everyone relies upon that is this kind of, it's a flag in the sand, man, that everybody looks to.
I actually just need to challenge the community.
is there a possibility that this was made up post facto?
And that it's never really been a thing.
And that it suited a really cool story.
But it doesn't really make a lot of sense for the way Satoshi set up the issuance of Bitcoin,
front loading the volume into the market.
And then restricting what could be lifted or created out of the market.
I think this is a very, I understand how you could assume that this narrative makes sense, but in fact, it looks something very different for me.
Most certainly going forward, I don't see any relevance whatsoever to this so-called four-year cycle.
And so there's two challenges.
One, did it really ever exist?
And two, if you're betting on it in the future, I think that's why you're frustrated.
right now because you're like hey it didn't do what it was supposed to do and if it did it
poo-pooed all over itself like it did not do good dude it lost gas lost air boom it's at 92
you have i think you have to get your head wrapped around that four-year cycle is a narrative
just like santa claus it's a story man i agree with you i i think i don't think it ever existed
that would be my
belief just like Santa never existed
right I don't think it ever
existed
and you know I'm a
math guy like
even to the degree we saw
some reaction three
times is not
a relevant pattern I mean that's
not a pattern that's
irrelevant
you at least have to remove the first two cycles
come on there was no liquidity
there, man. So I agree. The only relevance of the having is to the guys in my business,
because as long as we are relying on the subsidy then you better be ready Right So why why do I produce Bitcoin produce Bitcoin Well part of it is I can make more money at it now but I also have to make sure that the
operation I've set up can survive the next having. If the price of Bitcoin doesn't go up,
I know the having's coming. So I go, well, I can survive. So beyond that, I don't think it's
relevant to anybody but just one thing though if you're a miner um you really just care about the
first four years you're not really like you can shut your mining down and do something else with
your time and your energy no because i i don't build that way gary i i build because my mentality
is not bitcoin mining my my mentality is energy production and so i'm building i just want to
I'll bring that back though.
See, it's a different driver.
That's why Bitcoin is going to be so cool
because you need to find energy producers
that are going,
hey, I want to produce into that sinkhole.
Yeah.
That's the way you're looking at this.
You're looking at it differently than a Bitcoin miner.
Bitcoin miner is going,
I produce corn.
All my inputs are fucked up.
I need to be able to sell corn
for more than I had all my inputs
while Bob Burnett's producing at 50 cents on the dollar.
And by the way, my $50,000...
That includes engine maintenance, cost of engine rebuilds, and a reserve to replace the servers on a four-year cycle.
So you're at $30,020.
Well, you can measure it how you wish.
I'm saying this is the money I have to put away, right?
By the way, those reserves are all in Bitcoin, too.
So if things go well, I don't need all the reserves, right?
Yeah, of course.
And then that's a big bonus on the backside.
But, you know, I need to be careful and make sure that I'm handling that right.
You're a smart man, Bob.
Well, I'm just doing my best.
I think just making hopefully logical decisions about how to construct the business.
But I see, like I said, I was very critical earlier, and I have been for years, of the public miners because I see very poorly run organizations with massive overheads.
They've done massive destruction to the ecosystem.
system um what they have done well is leverage a fiat system that was willing to pour massive
amounts of capital probably by stupid analysts that we talked about before who really didn't
know what the fuck they were doing and encourage people to put money into these organizations and
it caused caused an overbuild of hash rate um and it actually flushed out in in hard times like in the bear of 2022 and 2023 it flushed out some guys who were well pretty good business people who just didn have
the capital resources to sustain through the difficult period. So anyway, I have a lot of
angst toward them. But, you know, I said, it'll all flush out. I think the future, as you've said,
Gary, and it's, you know, the way my business is, is there will be tens of thousands of these. I
call them horse class sites. I have a name for it, which you're going to see half a megawatt,
one megawatt, three megawatt, five megawatt sites all over the world. Anywhere there's energy,
a lot of gas, a lot of oil, there's wind, there's cow manure, there's all kinds of things that we can
utilize. And that is, I think, the greatest hope for a decentralized mining network, by the way,
too. Oh, it's the only hope. See, if you didn't have that, you would never get there. You'd only
get to what we have with AI and Visa, MasterCard, and with social media. 72% of all three of those
industries are controlled by two companies. Whereas this will never happen the way we're,
see, this is very, very different because you can't EQT can only control EQT is a very large
player in Pennsylvania, in the Marcella shell. They can only control so many of these free units
of energy that are floating around. It's a very, it's like a puzzle, massive puzzle. And if the
Energy isn't in the right place.
It has no home.
Yeah.
And that's what Bob's looking for.
Well, I think it's a great time to wrap.
Thank you, guys.
Thank you, Gary.
Nice talking with you, Gary.
Thank you, man.
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