Raoul vs. Peter Schiff: An Impact Theory Debate

27:32Well, it can't be on a 3-year basis because it's about unchanged. Right? It was at 6. It was over. It's record high. You're taking the all-time high as the yardstick, right? Three years ago was March 2021.

27:50It was much lower. Well, when did it hit 65 ,000, 69 ,000? When was that? Like November 2021. All right. So from that point. But yeah, it just made a big rally. Bitcoin is up 40 % in the last few weeks. So obviously, everything looks like a valley when you're up on this hill. Question is, has Bitcoin performed very well over its lifetime? The answer is provably, mathematically, yes. That's okay. Doesn't mean you have to like it. It doesn't mean you have to like it, but it's provenly gone up more than any other asset. Look, let's see what happens when the people who own it want to get rid of it and do something with it.

28:34It's been around 14 years. We've gone through four cycles where it's gone down 90 % and it still is the best performing asset. So your, oh my God scenario goes down 90%. Again, I've gone through three of those myself. It still doesn't stop there. All right, well, you're going to go through another one, and it may not come back next time. But the point, I want to make a couple of points that address what you said. So I agree that it is easier to store Bitcoin. I don't know. Obviously, we don't need these ETFs. That's just the manufacturer to try to pump up demand. But yes, it's easy to store your Bitcoin relative to gold.

29:20But the difference is when you're storing gold, you're storing something. And so since you have something, it takes some effort to store it. When you're storing Bitcoin, you're storing nothing. So what good is the fact that it's easy to store nothing? Yes, I've got a very safe, secure supply of nothing. And Bitcoin, though, as long as people think it's going to go up, as long as they maintain that delusion and more people want to buy it, sure, it will have a price. And if enough people don't sell it, then some people can't. There are always going to be some people who need to get out. But that is the nature of all investments.

30:04No, it's not. No, it's not. When you talk about gold, gold is an actual commodity that is used in industry. It's used. It has properties that are important. What share of gold usage, of gold that's mined, is actually used in manufacturing? No, about half of it is used in jewelry. That's jewelry. That's just storing of gold on your physical body. How much is actually used? No, that's used. I got a gold watch here. I didn't buy a tin watch. And why did you buy a gold watch? Because you want to wear gold. Because it's, no, I can go swimming with the watch. It doesn't rust. It looks beautiful. It lasts.

30:48It scratches. It scratches because it's gold. Guys, let me jump in here. I want to ask a very pointed question on that fact. So gold, if half of it is being used for jewelry, I think that's a very valid point. My question is, how would you feel if somebody were wearing their CryptoPunk as a piece of jewelry? But they're not wearing their Bitcoin. They're wearing something that has Bitcoin written on it. You don't need the Bitcoin. If you want a gold watch, you've got to have gold. Actually, it's not true, Peter, because if you have an inscription on Bitcoin, like a Bitcoin ordinal, which is an NFT.

31:24Yes, I know what those are. I created some myself. And they are stored on the blockchain. You actually need Bitcoin for it to exist. Yes, you need a Satoshi. When you look on Twitter, I have my CryptoPunk. That actually is also a claim on Ethereum. Yeah, all right. But it's all part of the speculation of Bitcoin. It's not about wearing your jewelry. But again, gold is a conductor of electricity. It is the best conductor we know. It's the best conductor we have. It's used for all sorts of things in electronics. It's used in medicine. It's used in dentistry. It would be used more if the price was lower, but the price is high.

32:08But the reason that the price is high is when you own gold, you are storing the future use of that gold a thousand years from now. Somebody could use that gold to conduct electricity. You don't know what they're going to use it for. I talked about this telescope that we sent into space, this Hubble telescope, and they had to coat these huge mirrors with gold. Now, that was very expensive. They didn't want to coat it with gold, but that was the only metal that was going to work. So they had to buy gold to coat these mirrors. So when you own gold, you own all those properties. Those properties are not going to go away over time, and you're storing them for future use.

32:52Bitcoin doesn't have anything that anybody uses for anything. I mean, as long as people want to gamble on it, there's a price. But people don't have to buy gold for money. There's always going to be people who need gold in industry who are going to be buying it. And central banks, yes, central banks buy it as a monetary asset because they need something to back up their fiat. They can't just back up one currency with another currency. They need something real. So central banks have been buying more and more gold. They have a lot more that they need to buy because their reserves are still too low.

33:26But you don't have that with Bitcoin. You don't have industrial demand. You don't have central bank demand. You don't have jewelry demand. You just have speculative demand. And that's very fickle. Yeah, if the market's going up, the speculators will buy. Starts going down, they're going to want to get out. But eventually, the story blows up. People stop believing in the fairy tale. You talk about all these young kids that think they've reinvented the wheel and think that they know more than their parents or their grandparents. It's like, look, little kids believe in all sorts of things. They believe in the tooth fairy.

33:57They believe in the Easter bunny and Santa Claus. But they don't believe in these things for their whole lives. As they get older, they start to see the truth. And I think the same thing is going to happen with Bitcoin. People are going to grow up and they're going to learn from the mistakes of their youth. Really fast, I want to jump in here. I don't want to just move past this idea of that gold would be used more if the price were lower, but the price isn't lower. Why is the price lower? Because it's really thought of as a store of value as a flex. So store of value and flex seem to be the thing that actually drive the value of gold.

34:32And I think I have a hypothesis that the core thing that drives the difference between you two as archetypes is a belief that either digital things are real or digital things are not real. and if you believe, like I do, that the future of the world is more digital where people will spend more of their lives in the digital world where I heard the story of a kid, their parent came to them and said, why do you want a Fortnite skin? Those aren't real. And the kid was befuddled. They had no idea what the parent meant by it's not real. Yeah, but that argument is really a straw man because I believe in digital things.

35:09Like, you know, music. I don't have to go out and buy a record. I can listen to music digitally. There are a lot of things that I can do digitally. But just because I believe in digital, that doesn't mean that I can eat digital food, right? Food can't be digital because I'll die. If the only thing I eat is digital food, I'm not going to get enough calories and I'm going to die. I need actual food. I can't replace food with a digital image. And that's the same thing with gold. Gold is a real metal. Digital gold is not gold. It's nothing. Now, yes, if I want to, you know, have a character and I want him to have all kinds of gold, fake gold jewelry in some video game, sure.

35:56But I mean, it's not worth that much because you could replicate it indefinitely. You don't need actual gold to have an image of gold on a computer screen. You know, that's why, you know, for a while they had people that were buying digital real estate. Oh, I got beachfront property. Well, who cares about beachfront property in a computer game? There's an unlimited supply of that. I mean, if you want an actual beachfront property in the physical world, that's more scarce than a digital beach that your avatar can lie on. So it's very different. It's not like I'm not into technology. Sure, I can appreciate it, but I can't live in a digital house.

36:37I can't eat digital food. And we can't have digital gold. Gold's got to be real in order for it to be gold and do the things that gold does. So here's an interesting thing, Tom, is in a digital world we talked about, and rightly, as you rightly say, every day is more digital than the last, right? That is a endless trend that we are seeing. And in a digital world, we can make infinite amounts of anything digital. And we've seen that. So stuff like email has gone from being something we paid for to something that's free. Cloud compute, everything. Compute itself is exponentially declining in cost because everything digital almost goes to zero because you can make infinite amounts.

37:20So that's a real problem in a digital world until the invention of blockchain, which creates digital scarcity. It's a mathematical way to create scarcity. So scarcity is the asset. That is why gold is valuable. It is a scarce asset. That's why silver is less valuable than gold. There is more silver. There's plenty of silver. That's why copper is less valuable than gold. Scarcity is what we as humans value. And in a digital world where everything can be created infinitely, like food in the physical world, what you need to maintain value is something. And that's what blockchain did. So that's why younger generations who live more in a digital world say, okay, this is great because I'm living in this digital world and I want it interchangeable with my physical world.

38:17And therefore, I'm happy that digital assets have value. And I can think of Bitcoin as the foundational value layer for all of this. And that makes sense. Being scarce is not enough. You have to be scarce and you have to have valuable properties that people want. And so gold has very valuable metallic properties. It's the most useful metal on the periodic table. And yeah, there's not of it. So it's something that we need. It's very useful, yet it's scarce. So it's going to have a high price. I mean, something like air, we all need air, right? Air is very valuable. Without air, we die. But there's so much of it, it doesn't have a high price because there's a lot of air in the atmosphere as opposed to how much gold there is in the ground.

39:03So you could say, yes, Bitcoin is scarce, but it doesn't have any value. And so there could be one Bitcoin. If nobody wants it, then it's worthless. Right now, yes, people want the 21 million Bitcoin, but I'd rather talk about the 2.1 quadrillion Satoshis. Because when you talk about gold, in order to actually do something with gold, you need a certain quantity of gold, right? A little speck of it isn't going to do anything. You need a particular quantity to do a job. But with Bitcoin, whether I have an entire Bitcoin or one Satoshi, it doesn't matter. I can't do any more with a Bitcoin than with a Satoshi because I can't do anything with either one.

39:43And so there really is 21 quadrillion Satoshis. So there's plenty of Satoshis to go around. Everybody can have a few hundred thousand of these things on the planet Earth. But not only is there an unlimited supply of, or there's a limited supply of these Satoshis, there's an unlimited supply of other crypto tokens that can be created. More than 20 ,000 have already been created. In theory, 200 ,000, 2 million can be created that have properties that are similar to or even improve on the properties of Bitcoin. And so what? I mean, what is value about you? Yeah, people, it's all the rage now. people are talking about it.

40:25But in 100 years, will anybody even remember what Bitcoin was? I mean, most people probably won't know about it. I mean, how many people even know about, you know, tulip mania or stuff like that that happened in the past or Beanie Babies? I mean, these things are like fads. They come and they go. I mean, some people may study it if they study history. But to think that in 100 years, anyone's even going to be thinking about Bitcoin. We're going to take another quick break to hear a word from our partners. We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing.

41:02What gives you the confidence to say you're so sure? What would make you say, you know what, I don't know, this is interesting, because obviously people like it. It attracts a lot of investors, a lot of smart people. If you go and see Dan Moorhead or Dan Tapiero, do you say, Listen, guys, you guys are morons. You're just believing in something. You wouldn't say that. You wouldn't. Well, look, there are a lot of people, a lot of people on Wall Street have done foolish things in my lifetime, whether it was dot coms, subprime mortgages. I mean, people were doing a lot of foolish things with their money and they lost it.

41:39And I know Wall Street has a tendency just to try to make money off of any fad. I mean, whatever's popular, There's an expression, feed the ducks while they're quacking. And that's what Wall Street does. It's like whatever the public wants, they supply it and they take a fee. And so if they could get a lot of interest in Bitcoin, then they're going to create these products and they're going to make it so that people can trade. They don't care. They're operating casinos. They're making money. But what you should think about is not, OK, maybe I'm wrong. Maybe there's a slim chance that I'm wrong.

42:14But there's a slim chance that you're right. I mean, you're betting on a long shot. The odds are it's not going to work, right? So it's a real long shot that this project is actually going to succeed, right? Would you be less concerned about the whole thing if gold had actually gone up? No. I mean, look, gold has gone up. So gold - For example, gold mining equities have gone nowhere in 45 years. Well, gold mining equities are not gold. Gold mining equities are not gold. So gold, gold in the last 100 years has gone up 100 fold. So the dollar has lost 99 % of its value. And even if you go back to the year 2000, gold has gone from under 300 to over 2000 in the last 20 years.

43:02So it's just that during the last 10, 11 years where Bitcoin has been on the scene, gold has been very stable. While Bitcoin has gone way up. That's in your reference point. Let's assume you were less fixed on your view. And you saw this new thing and saw that people also thought of it in the same kind of way that people thought about gold. And doesn't it make you go, you know, that's fascinating. I wonder if this really could work in the digital age. But instead, you'll say, no, no chance. They shouldn't buy it. They're all idiots. What makes you so sure? Like I would never say about gold, that's stupid.

43:42I would say, I understand it. Of course, gold is interesting. But it's a weird way to approach it is here is literally tens of millions, if not hundreds of millions of people owning something. And you're saying, they're all morons. I'm right. Regardless of the performance of 6 million percent, it's all just beanie babies. Is that really what you think? I'm not saying they're all morons. There are people that are trading it because it's going up and they think they'll get out before the music stops. And maybe they will. How long does this go on for? I mean, we're 14 years in, Peter. We're 14 years in.

44:23What you're saying is, why don't I accept that nothing is something? Why don't I believe in this fantasy like everybody else? Why am I the sane person when you have all these insane people? you should be asking yourself is why do I believe this nonsense? I mean, there are other smart people. I'm not the only person. I can hold two competing ideas in my head at all times. And it's a probabilistic game. It's not that I don't understand Bitcoin. I understand it. That's why I know it's worthless. But there are plenty of other smart people who look at it the exact same way as me. I'm going to jump in really fast because the only way forward is to identify the base assumptions that drive your guys' worldviews.

45:03So as we go through this, Peter, what comes to the forefront from you is that the belief system is if something doesn't have intrinsic value, then all it is is gambling. Do you agree with that statement around your beliefs? If it doesn't have intrinsic value, it's not going to be money. You know, and now currency is a money substitute and currency doesn't have any intrinsic value unless it's backed by gold or something else. But then its value is derived from what backs it up. But a fiat currencies, right, which we use now, have no intrinsic value, but they have governments behind them. They have laws that, you know, make them legal tender.

45:50They have a government that demands payment of taxes in that currency. So you can have a fiat system that will work. It won't work as good as an honest system based on gold, but it can work temporarily and sometimes temporarily can be a long time. But my premise is that if Bitcoin doesn't have an actual use beyond my giving it to somebody else or selling it to somebody else, whatever, other than as a potential exchange, if its only use is I can buy it and sell it to somebody else who buys it and sells it to somebody else, it's a Ponzi. It's a pyramid. It's a chain letter. There are a lot of ways to describe what this is, and they've been doing this for hundreds of years.

46:39It's not new. All that's new is the digital part. But all the other factors have been tried over and over again. It's just a modern version of this. And it's going to end the same way that all these prior pyramid schemes have fallen apart. Okay, so I'll say it a different way because I feel like I understand your beliefs, but I'm having a hard time getting you to agree that I understand. So gold is backstopped by the fact that it can be used by other things. Therefore, it is the wiser store of value because the price is never going to fall below what its usefulness in the real world is. Well, yeah, gold is a commodity, like wheat, like oil, like corn, like cotton.

47:30And people need gold, just like they need these other commodities. The difference is, you know, gold is a better commodity to store because it doesn't tarnish, it doesn't rot, it doesn't decay. And it's relatively easy to store. I mean, it's certainly a lot easier to store gold than cattle, you know, or oil. You know, of all the commodities that you could choose to store, gold is the easiest. And so that's one of the reasons that we use it. Now, is it easier to store Bitcoin? Yes. But then again, you give up the fact that you're storing something, you're storing nothing. Right. What I'm trying to get to is the core of why Raoul, I think rightly from a just understand the world, I'm not saying who's right or wrong, I'm just saying to understand the world, Raoul's reaction makes sense if you believe that belief in the item, the memetic ability to transfer the belief in the item is the thing that matters.

48:27And I think, Raul, tell me if I'm wrong, but that you believe gold's value is driven in the vast majority by the memetic belief that gold is a great way to store value. Well, no, its value is derived from its properties. But I agree that Bitcoin is It's purely a function of your belief, of confidence. It's a giant con game. As long as we all believe it has value, then it can have a price and people will want it. But the question is, can you put your faith in that confidence enduring over time, that in the future, people will be just as infatuated and hold these beliefs just as strongly in the future?

49:15And I think the far off into the future you want to extrapolate, the harder it is to believe that that will be the case. You know, tomorrow, will people stop believing in Bitcoin tomorrow? Probably not. In six months? Well, probably not. But in 10 years, in 100 years, the further you go out, at some point, yeah, what's the odds? And so you can't be a store of value because at any point in the future, there could be absolutely no confidence whatsoever in Bitcoin. You know, it's, you know, it's to me, it's more of a fad. Yes, people, people are infatuated with it now because it's gone up and people have gotten rich and there's all this money being pumped into it.

49:59But who's to say that that's going to be the case in the future? I think a lot of money is going to be lost in Bitcoin. In fact, you know, far more people are going to lose money in Bitcoin than have made money in Bitcoin. That is very possible. So I want to be clear. What I'm trying to do right now is simply state what you guys believe to be true, not convince you of anything else. Because we are in a battle for ideas in the greater world. And so I want people to understand the base assumptions that drive your guys' worldview so they can form their own. Peter, I feel very confident in saying that you believe the reason that gold has value is because it has intrinsic physical properties that people can use.

50:38and that makes it valuable. And so that becomes a game of, I don't need people to believe. So even if belief drives a certain amount of this, it really has usefulness. And that is ground truth for Peter Schiff and Gold. The properties don't always have to be physical. They could be intangible, right? There's a value there. So I'm not against intangible assets. Okay, perfect. So now on the Bitcoin side, on, Raoul, your argument, and take this up and tell me if I'm wrong, is that we are entering a phase of perception where the memetic value, the belief that computers, for instance, are the future, it's a bedrock that people grow up with, that a certain subset of the world, and I actually put myself in this, so I don't have to project into other people, that they believe that the thermodynamics that you can represent on the blockchain to produce the Bitcoin is real, is as real as an exploding star.

51:46Therefore, all that's needed is the memetic spread of that belief. And if that belief takes hold, and one hypothesis, I don't know that this is true, but one hypothesis about why gold is not going up in this time of massive inflation and uncertainty, but Bitcoin is, despite volatility, is that that belief is becoming more and more common. Now, who ends up being right on a long enough timeline financially? We will get to, but I just want to lay out, and Raoul, please tell me if you disagreed with what I just said, that seems to be the set table. Just so we clarify something, just using technology, ChatGPT4 and the World Gold Council, 7.5 % to 10 % of gold supply every year is used for use.

52:34So 90 % is memetics to 92.5%. It's we believe it to be so. Okay, so that is an element of humanity. But what you're touching on is, okay, the technology itself, there are some elements of that, if we believe it's scarce enough, we can attach a value to it. That's memetics. There is also the elements of, okay, the Bitcoin mining itself has created opportunities. So for example, we are seeing in the Middle East using gas flare-offs, which is wasted energy, reusing that energy to create tokens, which then are used to release that. We're seeing it with load balancing. So there's an element of it's a way of sharing electricity in a world that doesn't do that very easily.

53:26But it's also something more. The physical property here is actually the physical property of the blockchain itself. The reason this goes up so fast is not because of mania, it's because it's an adoption of a technology. It's Metcalfe's law. So what you're finding is networks, as they gain adoption, price gets a bit crazy. Now, in 20 years' time, will Bitcoin price be as crazy? Highly unlikely because it gets to maturity and it looks more like a mature asset. So people get confused. What we're doing here is saying, what Bitcoin's price is doing is saying, yes, there's the element of mimetics. It has this scarce value.

54:04Nothing in the digital world has scarcity. So this is interesting for humanity. It's not proven. It's not had a thousand years of history. It's interesting. It also has interesting properties in how it can reuse wasted energy or rebalance energy loads. Okay, that's interesting. But also, what is the future expected value of the blockchain itself? Now, we may say today, or we would have said a year ago, well, Bitcoin blockchain is not very useful. But now we've started to see these ordinals and inscriptions, which is using the blockchain for other things. We're seeing other use cases of layer twos built on Bitcoin.

54:45There's more incentivization in a network the more people that invest in it or join it To create other use cases. I there's money around there's money to do stuff with it So we don't know what the future of the Bitcoin blockchain is But if enough money is attracted to it, it will create other use cases Because it's a network with a lot of people on it So network value is a weird thing for somebody who doesn't live in the digital world. In the digital world, that's what's created all the value in Amazon, Google, Apple, Facebook. It's what's creating the value in Tesla. It's what the value is in ChatGPT, its network effects.

55:32So we've got this incredible asset, which has these scarce properties that solves a problem that we had in the digital world. It has some physical properties because what we can do with electricity and how it's mined. And then it has the future expected value of the network. That, to me, makes it a very interesting asset. Now, the question is, does it exist in 50 years' time, 100 years' time? I don't know. Nobody knows. Would humans use gold in 100 years' time? Nobody knows. Just because they used gold yesterday doesn't mean they use gold tomorrow. So everything changes. People have used cowrie shells.

56:11They've used stone. They've used all sorts of things as a store of value. Bushels of wheat. That was a very common store of value back in Egyptian times. So take nothing for granted, but observe when new things are happening and we're actually seeing people using these things in different and unique ways. You pay attention. And it's driving a lot of value. That, for me, is enough. Because we're getting two elements here. we're getting the store of value plus the adoption of this technology that's driving it. Is for you the volatility of the asset, the memetic belief, is that what makes this interesting to you?

56:54Or are you a Bitcoin maxi who really believes this needs to replace physical gold for reasons of anti-seizure, better ability to store ownership, etc.? So I believe in the latter, but that is a future. We're not there yet. And I'm an investor at Core. My job is really, you know, to also make money out of trends. I'm trying to better my future, as we all are. And so, yes, I believe in the philosophy. That's how I got into it. I saw that this was probably a better answer for many of the issues within the financial system, not for gold per se. Gold is fine. It will continue being gold. I have no issue with that.

57:41But it just seemed to me that this was something that was going to solve the philosophical and the real problems of the financial system, the real core of it. who owns what in an overly indebted society. It's going to really do something there. And so if I can make money out of a solution, well, of course I will. So it's both. But really, you know, how much longer am I on this planet? I'm 56 years old. Maybe I'll live for 50 years if I'm super lucky. What is my job? My job is, yes, if I think this technology is a good thing for humanity. I will help promote it the best I can. But it's also my own life and my family's life.

58:27And if I think it has investment properties that outperform other assets, of course, I'll invest in it. Even with the volatility, because risk-adjusted, even if you take from drawdown adjusted, volatility adjusted, whatever ratio, it's still the best risk-adjusted reward of any asset we've ever seen. Fidelity produced this fabulous chart, which is like, it's a dot plot chart of risk adjusted returns for all of these assets. And there's like gold and NASDAQ looks really quite good and etc. They're all clustered. And there's a blank sheet of paper. And then somewhere up there in the far right is Bitcoin.

59:09The risk adjusted return is alien. We have never seen anything like this. So regardless of what people say about the volatility, everything else, the risk adjusted return is like an alien asset. We've never had anything like this, which is why to me, when I simplify everything down, I just say this is the best macro opportunity of all time. We've got the best risk adjusted return asset that has the highest performance of any asset in history. It's being adopted at the fastest rate. You're looking in the rear view mirror. It may not look that way in the future. In fact, it's more likely to revert to the mean or way below the mean.

59:47Seems like if it's gone up so much in the past, there's a lot of risk that it's going to go down. I think you're ignoring that. You see, all of these, like NASDAQ, and you're probably a bearer of the NASDAQ too, but all of these things are secular trends in a logarithmic chart because they're secular trends. They're not cyclical. This is not the commodity world of cyclical. Bitcoin hasn't been around long enough to be a secular anything. It's been around for 12, 13 years. And really, it's been around in the eye of investors for a much shorter time period, maybe five years. I mean, I've been investing since 2012.

1:00:23So I'm 12 years into this. Yeah, yeah, you. But most Wall Street hasn't been into it that long. They got into it really 2000 timeframe around there. After it really went up, they kind of got interested in it. They weren't looking at it back then. Well, that makes me even more bullish, right? That makes me even more bullish if they haven't really adopted it yet. No, they're in it. What do you mean? They're in it. They've got all these ETFs now. They're in it. They've been promoting it. They've been touting it. There's been Bitcoin commercials now for years. I mean, the top advertisers on cable TV are crypto companies.

1:00:59I mean, they're pumping and pumping and pumping and pumping and spending a lot of money to try to con the public into buying this stuff. And so, you know, they've suckered a lot of people in, you know, but there's a limit to how much longer they're going to be able to do it. You can't do it forever. The bottom is going to drop out, you know. And as far as the Nasdaq, look, you know, yeah, I mean, there's a lot of liquidity. There's a lot of inflation. It's been driving tech stocks higher. I'm not short these stocks. I mean, I think the market could go up because I think the dollar is going to go down.

1:01:30But at least in the tech stocks, a lot of these companies are real businesses. They may be overvalued, but they have some value. You mentioned a lot of companies that you say have networks like Tesla or Apple, but they make a ton of money selling products. I got a lot of Apple products myself. Apple is earning a lot of money. You can argue about what the price of the shares should be, but you can't argue that there's a valuable business there. But with Bitcoin, you know, there is no business. It's nothing. It's like, you know, in sales, you know, they say sell the sizzle, not the stake. Well, in Bitcoin, there is no stake.

1:02:08It's just sizzle. So it's all being hyped up. It's not certainly true because the people who mine it get given block rewards. So they get paid to mine. Well, yeah, if you're mining it, you make some money. Sure, I'm not talking about Bitcoin mining can be profitable for now as long as I can sell it above the cost of mining it. But that's different. But that creates an intrinsic value. You're talking about selling Bitcoin as a business. See, Peter, it's the same as all mining. If the cost of production is above the price of the asset, people don't mine. And so supply is reduced. Or in this case, the amount of hashing in the network, i.e.

1:02:48the security of the network gets reduced. When it comes to Bitcoin, the supply has very little to do with mining. Because almost all the Bitcoin have already been mined. So the question is, with the 19 million odd Bitcoin that exists right now, forget about the couple of million more that they could bring on stream over the next few decades. The question is, with the 19 million that exists, or however many haven't been lost, is do people want to hoard them or do they want to sell them? And if they want to sell them, is there enough new demand to buy them? If not, the price crashes. What happens if China sold its gold?

1:03:26Oh, the price would crash. Why would they do that? They're buying gold. What happens if the Fed sold their gold? But then somebody would buy it. Somebody needs it. This is not an argument. 10 % of all gold's supply is used for industry. So if a central bank comes in and dumps their gold, like the UK did. They have dumped gold. Central banks have dumped gold before. And what happens to the price? It gets absorbed in the market. The price went down. And so maybe the price of Bitcoin goes down when people sell it. No shit. That's what markets do until you find the clearing price. It's normal. I don't see why it has to go to zero.

1:04:02One of the things that I've learned over the years with Bitcoin is it is like a religion. And people believe in it the way they believe in a religion or a cult. And when you get to that type of mentality, there's no rational argument that you can make. I can't logically try to tell somebody that there's no God if they believe in a God. I mean, it's a belief system that you have, and it's almost impossible to entertain that you might be wrong. So you believe in it, believe in it. I mean, there's nothing I can do about it. And if you end up losing a lot of money, you lose a lot of money. And the problem is some people that lose a lot of money can't afford it.

1:04:41The best thing about Bitcoin is that most of the people who are going to lose a lot of money are young, and they got plenty of time to earn it back. And it's going to be a valuable lesson that people learn that they can carry into their older years, the memory of all the money they lost in Bitcoin. Could it possibly be you that learns the lesson? I don't think so. Okay. I mean, maybe I'm wrong. Maybe Warren Buffett is wrong. Maybe a lot of smart investors, you know, maybe we all got it wrong and you guys got it right. I don't think that's the case. But, you know, I suppose anything is possible.

1:05:14What would have to happen for you guys to reverse your opinion? So, Raul, what would have to be true of Bitcoin down to zero for 10 years, 100 years, whatever, before you give up? Peter, same to you. What would have to be true for you guys to reverse your opinion? For me, simply, if people stop using the network. If there's less activity on the network, people start becoming disinterested, then it's shown that it's store of value principles. erode. It would be the same with gold. And that's one of the reasons gold has been somewhat lackluster, because there's been less adopters of gold in a new digital world.

1:05:54So it's not done as well as it would have done historically in the kind of debasement environment that we've had. So if I were to observe in Bitcoin itself, forget all the other crypto, and I'm no Bitcoin maximus, as you all know, if we saw that people were using it less, there was less activity, less value was being transacted, less new people were joining the Bitcoin network, i.e. having wallets, then I would say, you know what? There's something wrong here. And is that persistent over time, if it's persistent over time, then the network may not work. And we've seen many of those things happen in the past.

1:06:37There's a possibility that happens. I don't think it's the highest probability, certainly not this decade. Could it happen after that? Of course possible. Now, why don't you worry about that during the bear markets? Because, so for example, in 2022, it was a great example, is the market went down 70 odd percent, 75%. The number of active wallets in crypto went up 42%. So adoption was still ongoing while price went down. Activity was less. But then we're seeing, okay, so if we step back and we hear, oh, governments are going to build on blockchain rails, CBDCs. All the banks want to put assets on blockchain rails.

1:07:26We're hearing gaming companies want to put these metaverse gaming experiences on blockchain rails. We're hearing, I was at the world's largest, one of the world's largest commodity trading firms in Switzerland last week, speaking to one of their senior agricultural commodities, physical traders. And I'm like, and she's an investor in my digital asset asset management company. And I'm like, are you guys using blockchain? Surely you should be solving supply chain. She goes, oh, we've been using blockchain since 2021. So we're doing eight, I think, of the world's largest agricultural commodities houses, are putting their letters of credit, their shipping, all of the kind of transit proofs, the supply chain and the settlement all on blockchain.

1:08:25So going back to your question, Tom, when I see this and I see the price of Bitcoin down 75 % or the whole crypto space down 80%, you say, I have to ask myself, is adoption stopping or is just this a cyclical factor that's driven by the business cycle? And until I would see otherwise, unless these things go away, then I can only assume that tomorrow is more digital than today. And tomorrow, more people will use blockchain technology than they did yesterday. Simple as that. Peter, what would you have to see for you to change your mind? I don't know. It's going to be tough. I mean, obviously, it hasn't been changed yet.

1:09:05I mean, I've been watching Bitcoin from a few dollars a token to 60 ,000, right? So price obviously isn't going to do it. Um, you know, the whole time I've been observing Bitcoin and, and, and involved in interacting with the whole community and I've seen it grow and I, I, you know, I've, you know, seen more and more people, uh, you know, believing in it and, and, and speculating on it. But what I haven't seen is a use case. You know, people make a big deal about, oh, Peter Schiff, you know, Schiff gold, we accept Bitcoin. Well, we started early on with, uh, working with BitPay, uh, where we enable people to take their Bitcoin through BitPay.

1:09:45And BitPay just lets you sell your Bitcoin, kind of point of sale and get dollars to buy gold. But I haven't seen any real increase. It's a tiny part of our business. Every once in a while, somebody buys gold with Bitcoin, but they don't actually buy it with Bitcoin. They sell the Bitcoin and then they buy the gold with dollars. But I remember back in 2017 when Bitcoin kind of popped on everybody's radar for the first time because it kind of went from obscurity and it had that big run to 20 ,000 from under 1 ,000. All of a sudden, people started talking about it. A lot of companies started to announce, oh, we're going to sell products in Bitcoin.

1:10:24We're going to accept Bitcoin. And there was like a rush of that. And that all went away. I mean, nobody today is talking about how they're taking Bitcoin. I mean, the only company, AMC, the meme stock for a while, they said, oh, we're going to take Bitcoin at our theaters, just part of the mania. That stock is down like 99 % since I got hyped up. Elon Musk announced at one point he was going to sell cars for Bitcoin. And I don't know how many months later he pulled the plug on the whole thing and said, no, we're not doing it anymore. So we haven't seen that adoption. It hasn't become any more of a currency than it was when it was first created.

1:11:07That's a very fair thing. It hasn't, because the problem is it keeps going up. So you're disincentivized to sell it, or it's very volatile, right? It's not very good as a currency. Well, it's not very good at the main thing it was designed for. But, and I remember when I first heard about it, when I first heard about Bitcoin, the way it was sold to me was, hey, you can circumvent all the AML requirements. You don't have, you get out of the banking system. You can transact anonymously in private, and you don't have to worry about the government spying on you. You can be out of the banking system.

1:11:39I got into it for an entirely different reason, which is, as Dan Tapiero would call it, it's the security truth machine. It's the value of the ledger. It's the value of having a new way of creating trust in the world. In a world where trust is broken, you don't know how much gold the Federal Reserve has, right? This is a trust problem. We've got the same trust problem with the futures market. Bitcoin doesn't have any. I'm going to channel the comment section right now, and they are all saying Peter Schiff is religious about gold because Tom asked a question, what would need to be true for you to change your mind?

1:12:11And you've spent the last five minutes telling us all the reasons you won't change your mind. Well, I'm not talking about gold. I mean, gold's been valuable for thousands of years. It's not like it's up to me. Yeah, no, I get that. What would have to be true for you to change your mind about Bitcoin? If the answer is nothing, that is religious conviction from where I'm sitting. I've been given the same answer for 10 years. What will prove me wrong about Bitcoin would be if Bitcoin replaces the dollar, the euro, you know, as a currency. When I go to the grocery store, and not only does the grocery store accept payment in Bitcoin, but all the prices are in Satoshi's.

1:12:52But do we do that with gold? That's a bit unfair. Have you gone to the supermarket with a gold bar? No, because gold, all right. No, No, but gold is not being used as money right now. It's being used as a commodity. It's being used as a metal. Bitcoin can't be used as anything. So it has to be a currency. It was created to be a currency. So let me see it function as a currency. It hasn't done that at all since it was created. You're applying a different set of standards, my friend. No, I'm not. It's like you're also asking me, what would have to happen for me to believe that Santa Claus is real?

1:13:32I don't know. I mean, you're asking me, it's a fake asset. It's phony. I can't imagine what could happen to convince me that something that isn't is. The more question is what gets you to stop believing in it? Because you're the one that believes in a fantasy. I live in reality. So he answered that. His answer, just to recap, is that the energy in the network adoption usage would have to go down. Very finite. Totally understand. But you, in your defense, just gave a very concrete answer. I don't know how. I'm less worried about that, but what I'm trying to do, so I'm just trying to paint a sense of what the base assumptions are that build your guys' worldview.

1:14:14With that answer, Peter, it's very helpful. I come back to your core thesis is if it isn't real, physical, tangible, and does not have real physical tangible use cases, then it will never cross your threshold. It doesn't have to be physical to be useful. But Bitcoin doesn't do anything. All it is is a speculative vehicle that I can trade. Yes, I can hold it and I can sell it. But my ability to sell it rests on the fact that somebody else wants it. And why would somebody else want it? Because they think they can sell it. And they think they can sell it at a higher price. If they think they can sell it at a lower price, they're not going to want it.

1:15:00So the demand for Bitcoin is a function of the fact that everybody expects the future price to be higher. But the minute you no longer have that expectation for an appreciating price, there's no buyers. Because there's nothing you can do with it between the time you buy it and the time you sell it. And so it just goes down. There's no reason to own it. I am very much not trying to convince you. I simply want this position to be understood. You can still reject it and say that doesn't work for you, and I'd completely understand. But I think one position that's worth putting on the table would be that I look at the economic situation that we're in right now, and I say, I need a flight to safety.

1:15:39So I have invested in gold. That is one potential flight to safety. I have unease about that because I have a thesis that every new child born now is going to believe in digital things more than physical things in this case. Now, I could end up being wrong, and over time, that will be in the wash. But again, just trying to be understood, not trying to be convincing, that the use case then for someone with that belief set becomes that if there are only 21 million, there will only ever be 21 million and people keep losing them. So that number is actually deflating. Now I have a place that mimetically people believe in that I can buy and hold that.

1:16:20I don't need the price to be volatile. In fact, with my personality, I would rather it was not volatile. And now as it matures. There's no volatility or at least low. There's a place for me to park my money that cannot be inflated. Now I feel good. Buying Bitcoin today at$60 ,000 of Bitcoin, do you think that's safe? Do you think it's a safe place for your money? Do I think it's safe? No, I don't think anything is safe in a short time horizon. On a long time horizon right now, it feels the safest. But even if in the short run, it can go from 60 ,000 to 20 ,000, you still think it's safe, even though you might need to sell it when it's 20 ,000.

1:17:05Well, so again, I don't consider myself a partner in this debate. I'm merely trying to steer it. So I just want to make sure that that idea is understood. Again, rejected is fine. Just trying to place it as a thing to be understood, because I think this is the core thing that breaks between, again, you guys' archetypes. That's where I think this breaks is when I look at Bitcoin, and now I'm just speaking about Bitcoin, I see, ah, that's an inflation hedge that resonates with me because I believe in the same thing that Raoul happens to believe in, which is the network effects, just memetically people believe in it.

1:17:48And then I ask myself, when I say, is tomorrow going to be more digital than today? I mean, will people have a baseline understanding of the world as a digital place or a physical place? I think they will have a baseline understanding of the world as a digital place more than a physical place. Now, that may have horrendous knock-on effects. I'm not even speaking to that. I'm just saying I think that is where it's going. Maybe you're right. Maybe you're wrong. But regardless, buying Bitcoin is not safe. It's highly speculative. You're speculating on a bunch of things that you think might happen.

1:18:22but you're not playing it safe. Nobody should operate under delusion that I'm buying Bitcoin because I want to play it safe. You should not put any money into Bitcoin that you are not 100 % willing to lose, all of it. So if you're saying, yeah, this is risk money, I could lose every penny that I put into Bitcoin and I'm okay with that. I mean, I hope I don't lose all my money. I hope it goes to the moon and I buy a Lambo. But if I lose it all, I'm okay because I got other resources that I can fall back on. You know, that's how you have to look at it. You can't think that, oh, I'm going to put all my money in here because it's real safe.

1:18:57Yeah, I think that's a very, very fair point and is exactly how I look at it. So just to put a fine point on it. So for you to change your mind, it would have to become a currency that replaces the dominant currencies in use today. Yeah, I'd have to achieve some kind of scalability as a medium of exchange, unit of account. And yeah, eventually the volatility would obviously have to go away. It'd have to stabilize at some price. It could gradually rise over time, slowly, depending on how much inflation there is in other currencies. But maybe no other currencies. Maybe all the other currencies go away, and all that's left is Bitcoin.

1:19:36That's all we have left. There's no more euro. There's no more yen. The U.S. government wants Bitcoin. Bitcoin is how you pay your taxes. Bitcoin is, if you get a welfare check, it's Bitcoin. That's what you get. If all this happens, then I guess I was wrong. But if all it is is a speculative vehicle, if all we have is more ways to bet on the direction of the price, then nothing has been proven. And yeah, the price could go up. Could it go from$60 ,000 to$100 ,000? It could. But it could go from$60 ,000 to$10 ,000 or a lot lower. And my question would be, and I'm sure if Bitcoin falls today from 60 ,000 to 20 ,000 or 10 ,000, all the people who have been telling me how great it is, they're going to be saying the same thing.

1:20:21And they're going to be saying, well, don't worry, it'll come back. It'll come back. Well, maybe, maybe not. Maybe it won't come back. Maybe the next time it really drops, it'll just drop again. There's no way to know. They always say past performance is no guarantee of future results. So just because Bitcoin has come back in the past doesn't mean it's going to come back in the future. Do you do speculative investing? Do you have a portion of your portfolio? Yeah, I mean, I do. I mean, I've been buying, just what I said, I bought a lot more gold stocks this week. I regard that as highly speculative, but I bought them.

1:20:53I thought, I think, you know, I think they're cheap. I think I'm going to make a lot of money on my gold stocks. We'll see. But I know I'm speculating. I didn't buy any physical gold, but I bought gold stocks. Now, when I buy gold stocks, I own some physical gold because the gold mining companies have gold in the ground. They haven't mined it yet. So as a stockholder, I have a share of that unmined gold. Okay. As for both of you, when you're speculatively investing, do you look for volatility or do you avoid it? Raoul? If I'm speculatively investing, I'm looking for volatility with a risk-adjusted return that I think is in my favor.

1:21:34Obviously, we get bets wrong, we get bets right. That's the idea. So you look for a strong trending asset with some hypothesis that is relatively provable over time that should continue to drive the asset, whether it's the Indian stock market, a technology company, or Bitcoin, or even gold. Volatility is something you want if you're a trader. I mean, if you're trying to trade a lot, I don't trade people. I don't trade. But when I talk about speculating in an asset like a mining company, I'm not looking for the volatility. I'm looking to buy something that I think is cheap. But I'm also hoping that there's a catalyst so that in the future it will become expensive.

1:22:18And so I want to buy something when I think it's cheap and not a lot of other people want to buy it. And I want to hold it until I think it's expensive and everybody wants to buy it. And I may be wrong, right? I'm making a gamble because I'm betting on things changing. I'm betting on whatever exists today, whatever perception people have, that those perceptions are wrong and they're going to change in the future. And so I don't care about volatility. I mean, I just want to buy. I care about price. I want a low price. And what I like about the gold stocks is nobody really owns them. There's just a handful of people that if you look at the major, you know, holders, institutions, endowments, pension funds, hedge funds.

1:23:02They own either no gold stocks or just a tiny amount, but most of them don't own any. In fact, I joked on my podcast, you know, there was the NVIDIA's increase in its market cap in a single day basically exceeded the entire gold mining industry in one day, just the gain, not the market cap of the whole company, just the increase on that one day. So it's a tiny little segment of the market that has the potential to be a lot less tiny. And if that's the case, I can make a lot of money in these stocks. Meanwhile, I do get some dividends. A lot of my gold stocks are not my best dividend payers, but I get 3%, 4 % dividend.

1:23:41So I collect some interest, some income on a lot of these gold stocks. But I'm giving up some income because I get better yields in other investments. But I there's a lot of potential for appreciation. I recognize I could be wrong, in which case I don't get the appreciation, but I think some of these stocks could go up five or tenfold. Some of them, the smaller ones, could go up 50 or 100 fold. So I think there's a lot of upside potential relative to the downside risk in these stocks. So that's why I'm buying them, but I look at them as speculative. If you had a time machine, you could go back in time and buy Bitcoin 10 years ago, would you do it?

1:24:18Of course. I mean, I'm not an idiot. Well, first of all, if I had a time machine, I could do a lot of things. But of course, look, yes, do I regret? I mean, I remember when I was sitting at my desk, my studio in Connecticut, in Weston, and a guy working with me on my campaign, they were showing me Bitcoin. And the guy was like, look, just buy some. You know, what the hell? And I looked at it and I don't remember if it was under a dollar or over a dollar because I can't remember. But I remember it was like 2010 when I looked at it. And I remember I thought about it. Yeah, I mean, I can throw 10 grand in it, 50 grand.

1:24:56I don't know. I thought about it and I didn't do it. I was like, you know, this is ridiculous. But what am I? You know, I just I went away from it. But I thought about it. I thought about all the odds. and I didn't see this kind of bubble potential. I mean, I thought, yeah, maybe it could go up, but I just didn't want to deal with it. Now, obviously, do I wish I had made a decision to have thrown 10 grand, 50 grand, 100 grand into it? Sure. Yeah. I mean, it'd be worth hundreds of millions, assuming I didn't sell. But again, I don't know what I would have done had I made that decision. Maybe I would have put it all on Mt.

1:25:30Gox and then lost it there, but maybe some of the Mt. Gox money is coming back. I don't know what I would have done if I had bought it. But yeah, clearly, I mean, I wish I'd have bought it. But even if I had bought it, even if I would have bought it, I wouldn't have told other people to buy it. I would have had kept quiet about it because I never believed in it. So I would have bought it just betting on other people being dumb enough to buy it and pay a higher price. I wouldn't have bought it because I actually believed in it. I would have bought it because I believed other people would be foolish enough or greedy enough to buy it.

1:26:06So I would have had to kept it quiet. I couldn't have encouraged other people to buy. So I think publicly, I wouldn't have had a different, I would have been singing the same song. I just would have made a lot of money if I would have bought it. So you don't think there's a remote chance you might have been more enthusiastic about it, had you have bought it, been involved in the community, made some money, attended some of these conferences, saw what's going on with the technology. Could it have been a different Peter Schiff? And it could have been Schiff crypto written on the wall there. I think there's a chance it could have been.

1:26:44And maybe you missed it. Well, look, I like to think that I have integrity and that I would have had the same outlook. But is it possible that had I bought it, like so many other people did, might the fact that it went way up, might I have decided that rather than being a lucky gambler, I was some kind of a genius and I maybe operated under the same delusion? I mean, it's possible. Look, you know, there's, you know, power corrupts, so maybe money corrupts or it distorts your perception. I mean, it's easy for me to see the bubble when I'm not inside it. So maybe if I was in the bubble with you guys, maybe if I was a crypto billionaire, maybe that would distort my perception.

1:27:34So maybe I would be out there just as crazed as you guys. Peter, in what world do you think it's acceptable to insult asset holders and think that's a normal thing that they're idiots they can't see it they're speculated why is why has that become an acceptable way of interaction i don't do it to apple shareholders well i mean look i mean it's not it's not so there's a there's a some sort of psychology around gold that it feels like it's being threatened and that therefore there's an attack look there's an attack going back i mean And it's kind of strange. I remember, Raul, I talked to a lot of people during the 1990s who were in love with various dot-com stocks, and they all went to zero.

1:28:23I talked to a lot of people who thought they would get rich owning their home and multiple homes during the real estate bubble. And so I know the psychology and the way people act when they're trapped in a bubble and they can't see it. Now, there were plenty of smart people that owned these stocks that went to zero. There are plenty of smart people that own real estate. So I'm not saying there are some really smart people, I mean, intellectually smart, high IQ smart, that own Bitcoin. I'm not saying they're dumb. I'm just saying they're making a mistake and their judgment is being clouded by the money.

1:28:58They can't. Everything is going to be obvious in hindsight. See, a lot of the things that I was saying when I was warning about the housing bubble and the subprime market, A lot of the things I was saying in 2003 and four and five and six that were being dismissed, all of a sudden people were saying the same thing. Oh, yeah, of course. Yes, yes. This. That's Peter. Our house prices higher or lower than they were then. Our technology stocks higher or lower than they were. A lot of them went to zero. It doesn't matter. Most of the dot-com stocks went to zero. Yes. If you bought Amazon, if you bought eBay, there are some stocks that made it.

1:29:41But if you bought pets.com or the globe.com, you lost everything. There were a lot of stocks. Most of them went to zero. You just need to own the NASDAQ. It's an index, and it has the top 100 technology companies. So the bad ones get dropped out. The good ones survive. and he made an enormous amount of money by backing technology. But you're saying that people were stupid to buy technology in 1999. No, I'm talking about individual stocks that I'm talking about. People were, they were cult-like. You would have picked the stocks better than those people for sure because you saw it was all above all.

1:30:15The NASDAQ went down from 5 ,000 to 1 ,000. So it went down 80%. And the only reason it didn't go down 90 % was because the Fed slashed interest rates to 1%. So you had the Fed rescue the market. It's up 15x. I know where it is now. It's another bubble. So let's see where the next bottom is. You know, I mean, it's not, I mean, we're going, it's a serial bubble blowing. It's the same inflation that you're talking about that is driving these asset bubbles. I'm not denying that that happened. You know, and I own some stocks that are into technology that have gone up 10 to, I don't own none of these stocks.

1:30:53I have some. So out of interest, what value do you get out of owning your gold? What is it that it does for you? Gold is a small part of my portfolio, physical gold. But it's a store of value. It's a safe haven. It's an insurance policy. I look at gold. Against what, Peter? Raul, when you ask me, why do I own gold? You should say, why do you own dollars? Why do you have dollars in the bank account? Why do you have euros or yen, right? Why don't I just spend all my dollars and buy assets, buy real estate, buy stocks? See, gold is liquidity for me. It is an alternative to the dollar, to the euro.

1:31:31It's not an alternative to real estate. It's not really an alternative to stocks. It's an alternative to the dollar. So what are you most overweight in? Do you think your savings are mainly in real estate? Well, those are investments. Savings can be in gold, but real estate would be an investment. Unless it's my primary residence or something, then it's more of a consumption. So as an investment, you're speculating and going up, right? Because that's what an investment is. Well, an investment would have an income component. So if I have real estate, I got rental income. If I own stocks, I have dividend income.

1:32:07So my investments are generating a return. If you're speculating, you're betting on the price going up. Is Amazon an investment? Well, Amazon - Because it doesn't pay a dividend, right? So I'm confused because it sounds like it's a bad investment from you. Well, Amazon has earnings. So it could pay a dividend if it wanted to, but it's reinvesting. Oh, it could do, but it doesn't. That makes it okay. Okay. But you're asking me, do I think Amazon is a good buy? No, I don't. I think Amazon is overpriced. It's obviously been overpriced for a long, long time, you know, and that hasn't stopped it from going up.

1:32:44But I do think that there is a major decline in Amazon's future, whether it happens in nominal terms or in real terms. So nominal terms would be the dollar price goes down. In real terms, the gold price goes down. But one of those two things is going to happen. I don't own Amazon. I mean, I'm a good customer. We buy from Amazon every day. So I know there's definitely value in that business model. The question is, what's it worth? You know, what should the price be? And I think the market has been overpricing it for a long time. I just want to plant flags in worldviews here for everybody tracking this.

1:33:22So, Peter, the way that I read where you're coming from is there is a safety measure that you put in when evaluating an asset, whether it has, if it's a dividend paying stock that has a real profitable business behind it, there's a level of safety there that you can count on that it's going to pay out. When things are potentially bubbles, you're certainly going to avoid that. Real assets are going to get a real good look from you. There's something physical, something tangible about it. Gold as a world currency, that feels good because if the dollar hyperinflated or whatever, you have an alternative place to go.

1:34:00That all makes sense whether people agree with it or not. There's at least an internal worldview that I can track. Everything that you're about integrity. Again, whether people agree with that or not, at least it tracks. What's going on in crypto does not meet your criteria of something that you would advise other people to invest in. You tend not to invest in things minus the time machine that you would not recommend that other people invest in. You didn't say that, but I'm taking that much away. So same thing with what was going on in the early dot-com days. There was a lot of madness happening.

1:34:38That all tracks for me. Raoul, you see the network adoption being a big part of this technology, a big part of your thesis, looking for areas of volatility where you see liquidity moving into the system. You see people adopting it. Yes, there's going to be high volatility, but there's some excitement to that. There's memetics, which I think is a big schism between the two of you. Raoul, I know that you are very much a part of meme culture. You enjoy meme culture. It's fun. And I think that that is a bigger part of what's happening in crypto than people give credit to, or maybe just that they don't internalize what a big part of all of that that is.

1:35:27and what people believe in is not something that you place a judgment on. It's just something that is. And as an investor who's looking for that I can buy here and it's going to go up over time, you see huge opportunities in that. And your core thesis would be to advise people the quote-unquote don't fuck this up idea, which we will certainly get to later, rather than stay away from this new space because the volatility is there, because so many people are going to get wrecked, just stay out of it. You take a very different approach. Do either of you fail to recognize those characterizations? Yeah, I just want to just add a little bit to mine because I don't suggest, you know, there's a lot of my videos and you've seen them where I talk about the value of lifestyle and other things, right?

1:36:17So the value of a home, owning a home. So I'm not saying that those things don't matter. They do. That gives you the foundational layer of which to take more risk and then do these things. Another thing I just want to touch on is when you say I'm involved in mean culture, I've learned this bell curve, which is the mid-twit bell curve, which is like, if you can explain, the person who comes into a space kind of like number goes up, that's how they think of it, right? Bitcoin, number goes up. Then there's a whole group of people in the middle, the mid-twits, and they're arguing about every aspect of it, whether over-arguing in its favor or over-arguing against it.

1:36:56And then there's a person to the right side of the bell curve. Gold has exactly the same, right? There's a lot of people who've done a tremendous amount of work on gold and will just say, well, over time, gold's a good investment. I get that. Memes help you distill something down to its simplest essence. And if you don't understand something properly, you can't get it down to simplicity. So I talk about metics, not also in terms of meme. That's kind of fun. But if you've read the book Sapiens, you'll understand that it is the language of humans. It is the basis of everything. Government, religion, community, law, the legal system, everything is based on storytelling.

1:37:42that's the one thing humans have over other animals and we've created an entire civilization based on storytelling gold is part of storytelling everything is storytelling so we can make it as complicated as we can or we can understand that there's some memetics to it and that's why i kind of use that term interchangeably but actually is a much deeper level It's how humans do things. I mean, the other thing that's very important in this whole space, and I think something you and I have talked about, is everything in human society is contractual. Some are verbal, some are written, some are by purpose.

1:38:25And if you understand that all of everything we do, like me turning up today, was a contract. Now, it wasn't a contract for money or anything. It was like, I agree to come on with you and Peter. These things are really interesting because this is also part of what blockchain is doing within these things. And we need to understand the deeper elements of society and why this matters at a larger scale. So there's a lot behind all of this. So it's not just a network adoption. It's like, these are the elements of humanity, much like gold has been an element of humanity in many ways, because it's lasted.

1:39:04when we needed things to last, when things, we didn't store things very well, if you remember. Peter, did you recognize yourself in my description? I guess somewhere in there. But yeah, I just can't accept the idea that we're all just going to, you know, pretend something and that's going to make it so. I mean, I recognize that. Religion? It can work for a while. Yeah, look, I mean, yes, I mean, religions have been around for thousands of years, I guess. So, yeah, I mean, if you're going to say, well, this is a religion, but it's not because, look, people are going to want to spend their Bitcoin.

1:39:47At some point, the hodlers are going to want to buy real things with their paper stacks of Bitcoin. And, you know, and so if there isn't a new group of converts to the religion to buy those Bitcoin, then it's a crash. And so, you know, yes, it's all sounds good. We can all just, you know, believe in something. And because we believe it so, you know, it is so. I kind of like the field of dreams.

1:40:27But I'm not going to bet on that. I mean, that's a long shot. And I'm not going to put my confidence in that. And it's really got nothing to do with gold. I mean, the only reason that gold comes up with Bitcoin is because Bitcoin is trying to pretend that it's gold. It's trying to be a counterfeit of gold. I mean, it's depicted as a coin when it's not a coin. It's depicted as the color gold. It has no color. It has no substance. It doesn't have any of the properties that gold has. You know, it's not a metal. Right. So you can't use it instead of gold in any of the ways that gold is used. But, yeah, you can divide it like you can divide gold.

1:41:08You know, you can exchange it from one person to another like you can exchange gold. but that doesn't make it gold. That doesn't make it digital gold. It doesn't make it anything. But there are people who are trying to claim it's gold to give it value. It's like, what gives Bitcoin value? Well, it's the new gold. We don't need actual gold anymore. We have Bitcoin. That's the selling point. That's the spiel that you're out there promoting to get people to own it. I just don't believe in it. I think it's a bunch of hype. I mean, again, It's the latest iteration of Fool's Gold. That's what it is.

1:41:46Fair. Okay, very clear. I want to ask you guys both your thoughts on Michael Saylor. So he is rapidly becoming one of the biggest micro strategies, is becoming one of the largest companies in the world. Last check, it was at 534, so just outside of the S &P 500. Obviously, you'd have to meet other criteria, but that's all based on the rise in price in Bitcoin. Now, you want to talk belief, perhaps even religious belief. He certainly represents that never selling, only ever going to borrow against it, et cetera, et cetera. What do you guys think about that? At this point, I don't think MicroStrategy is a software company.

1:42:27I don't think the shareholder base even cares what MicroStrategy does. I think it's a Bitcoin proxy. It's kind of like a closed-end Bitcoin fund or something like that. I mean, that's really what it is. So it's just going to rise and fall with the price of Bitcoin. And I know they have borrowed some money, so it's a levered bet on Bitcoin. So it's ultimately probably riskier than just buying a Bitcoin ETF. You're levered up a bit. But I think the market cap of micro strategy is a fiction. I think it's going to collapse. So, you know, I don't care, you know, where it waits in the S &P 500. You know, I remember years ago, Michael Strategy, he had a conference, you know, Bitcoin for CEOs, and he was trying to convince CEOs to put Bitcoin on the balance sheet.

1:43:22I don't think any of them did. I mean, maybe one did. I don't know. But I haven't heard of anybody that did that. And he's not even out there trying to sell that anymore. But he loaded up his own balance sheet with it. And yeah, now that Bitcoin is back at 60 ,000, I think his average price is about 40 ,000. So he's got to gain. But a year ago, he was sitting on billions of dollars of losses. And we'll see what happens. I think he's going to lose a lot of money in Bitcoin. I think the shareholders of MicroStrategy. But I think, you know, that there's people that actually bought it as a software company.

1:43:58They're long gone. They probably made money off of this. They were able to sell out to a bunch of Bitcoin speculators. And so I think when the price crashes, it's just Bitcoin speculators who are going to lose. Rob, what's your take? I won't get into the personal elements because, again, there's no reason to be personal about Michael and his position he holds within the community, he took a very brave bet. He saw something. I think I was the second person ever to interview him. He saw something that nobody else in the corporate had seen. And look, let's face it, MicroStrategy's was a kind of going nowhere business.

1:44:40And he saw a way out. It was sitting on cash and he was worried about his cash, as we've all been. And he decided to put some of his cash into an asset. And that proved out to be really good. It was a risky bet, and it worked. And then he thought about, well, why don't I just use my company to accumulate as much of this asset as possible? No issue with that. There's been several people in commodity world who've done very similar things. It's a great strategy. He took more risks than I probably would have done. I don't really like leverage with a volatility of like that, but it paid off. It could have gone wrong.

1:45:26I know that there was a relative layer of comfort, but in the market like crypto, you don't really know. So he took a very brave bet with a corporate balance sheet and the shareholders came along with him for a ride for the reason Peter said, because it became a proxy to something. In the end, it's, does he turn it into something more, which is now he's talking about? Can he turn it into a whole kind of Bitcoin technology business? Okay, that's interesting. That's another call option on top. Because if not, it's just a Bitcoin holding company and there's an ETF. But if he now says, hey, I'm going to do what Jack Dorsey's trying to do and start using, building technology around Bitcoin to solve many of the problems that we see in the world today, good on him.

1:46:13If he can do that, great. And if he can still keep adding Bitcoin to the balance sheet, no different than if we found somebody who was a gold miner or had a company and they bought gold. If Michael Saylor had bought gold, Peter would love him. And he'd done the same thing with his balance sheet. So look, he took a macro bet and he did a bloody good job of it. It was risky. I probably wouldn't have done it myself because of the leverage. But it worked. And if he can now build something on top of this, then he's taken a ex-growth tech services company and turned it to something very interesting.

1:46:53So he deserves plaudits for that. But it's a little premature to just declare that it worked or that it was a success. Now, it may have been a success for some shareholders who got out and made money. I don't know how many shares Michael Saylor has personally sold or how much money he's personally made off of this decision. But to say that it's been a success for MicroStrategy, it's too soon to say. He hasn't sold. He hasn't paid off the debt, the money that he borrowed. So we don't know how it's going to end. He may end up with a complete disaster on his hands. The company could end up bankrupt.

1:47:28That's absolutely fair. We don't know what he's going to do. Maybe he takes out a$5 billion loan. And, you know, we don't know, right? Maybe he becomes too risk-seeking and the whole thing implodes. I totally agree. It's possible. But so far, what he's done seems to have worked. It seems to have worked for now because the price has gone up. It didn't look like it was working a year ago when he was upside down billions of dollars. So we'll see. We'll see where the price of Bitcoin is when those notes mature and he has to repay them. So there's still a lot of risk in MicroStrategy stock. So again, you should reserve your judgment.

1:48:10Yeah, he made a big bet, whether it was just bravery or foolishness, that he did it. But a lot of the stuff that Michael Saylor says, I don't like. I think he's led a lot of people astray. I mean, I've heard him talk, encouraging people to take out loans, to take out credit card loans to buy Bitcoin. All kinds of, you know, encouraging people to speculate and go into debt to buy Bitcoin. I think that's bad advice. You know, he talks about Bitcoin, you know, as if it's energy. You know, I mean, yes, I understand that you need energy to create a Bitcoin, but owning a Bitcoin provides no energy whatsoever.

1:48:49I can't extract energy from Bitcoin. It's not like it's a battery. You need energy to produce it, but all that energy is a waste because you've produced nothing. But he says a lot of things about it that I just think are completely deceptive to try to tout it up. Because obviously he has a big vested interest in the Bitcoin price going up. And so every chance he gets, he wants to pump it up. But a lot of people have tried to get him to do what you and I are doing. A lot of people have said, hey, Michael Saylor, will you do a Bitcoin debate with Peter Shippey? He's refused every invitation. But he likes to talk about me.

1:49:25He likes to bring up my name. But he wouldn't engage me the way you're doing. So I even was at a conference. I went to a conference and he was supposed to be there. And so I agreed to go and they were going to try to get me to debate him. And then not only did he not want to debate me, he ended up canceling it. He didn't even show up at the conference. I was there by myself. So, yeah, he doesn't want to have, he doesn't, you know, because there are a lot of things that he's said that I've taken issue with that I wanted to challenge him on. And I've never gotten the opportunity. Can you guys help me understand his meme of never sell your Bitcoin?

1:50:02So if he's buying on leverage, the only way I can wrap my head around it is as long as the price has gone up more by the interest on the loan, you could theoretically keep taking out a loan to pay the previous loan. Is there anything I'm missing or is that literally loan after loan after loan? Yeah, eventually he has to sell to repay the debt unless he thinks he can just keep borrowing more. or if he thinks that his creditors will take their payment in Bitcoin, in which case he can just give his creditors his Bitcoin. Raoul, do you have any insight? Look, if your loan is this big and your assets got, so the loan is that your debt's this big and your collateral is this big, right?

1:50:41It's the opposite of the financial system issue. It doesn't really matter. It's fine. It's only when your collateral is below the amount of the debt that you have. So yes, I mean, he can just sell a small fraction of his, a fraction, a percentage of his Bitcoin to pay it off. What would normally happen is maybe people continue to roll it, maybe they don't. Depends what happens with his business. Does he build new cash flow? You know, there's a lot of unknowns in this equation. So I think it's very difficult to know what that answer is until we see how he develops his business. It's also possible that the collateral could collapse in value and the loan amount does not.

1:51:24And, you know, he borrowed, Saylor borrowed a lot of this money in a zero interest rate environment. Now, he didn't pay zero, but he got a pretty good deal. And when these loans mature, to roll them over, it would be far more expensive than it was when they were originally. Yeah, it depends whether the interest really makes a difference in a volatile asset like this. But I mean, that was the risk, right? In the bear market of crypto was, was his collateral going to be worth less than the debt? And was he going to get called on it? You know, a lot of people were trying to work out that mechanic.

1:51:57But, you know, he got it. He did it. He structured it well enough that he didn't get called on it. OK, so far. Is that? Do you know when the debts are due, when he actually has to repay? I don't know how the maturity length, but also don't forget, a lot of them were from much lower levels. If you didn't get tests on it when it was down 75 % at 15 ,000. He's not out of the woods. Look, all these banks that would have failed last year, what did they own? They own treasuries, they own mortgages, and interest rates went up and they were insolvent. I think there's a lot of risk in the micro strategy balance sheet.

1:52:38It all depends on where the Bitcoin price is. Peter, I think there's a bigger risk. I think the bigger risk is hubris. If you think you can do, no, not you, but if once you've taken such a big bet and it's worked and you've used leverage, you have a tendency to want to do more of it. He may buy even more Bitcoin. Who knows? I mean, it's possible. That would be the bigger risk. If he went out and raised another 10 billion in debt to do this trade again, you know this thing hubris is a big you know when people have a big successful trade i've had many friends who nailed stuff like the financial crisis and the subprime and the sovereign christ in 2012 they've never recovered because they've always thought that the next big trade is coming and and they've blown themselves up doing it i don't know there's that's one thing is hubris would be my biggest risk here that can he make a mistake or can he just say i've taken the risk It worked out.

1:53:42I'm going to build this new Bitcoin technology business, and we can all sail off into the sunset and be happy. If he were to sell a bunch of Bitcoin now and pay off his debts early and deleverage the balance sheet, then you could say something. But I doubt that he's doing that. And I wouldn't be surprised if he's buying into this rally. I would not be surprised if we find out that he's bought more. Oh, he had. I thought he bought more. He just made announcements. Yeah. Oh, he did? Two days ago, I think. At these prices. He's been buying all the way. Yeah, well, that's part of the reason it's going up, because he keeps buying.

1:54:18It's like, what happens when he starts selling? We'll find where the price is. Yeah, I mean, we'll see. It's that old joke. His stated thing is he is not going to sell. Huh? He has stated on multiple occasions he is not going to sell. All right. Well, yeah. Okay, he has to say that. He has to say that. Yeah, we'll see. We'll see. I don't know where that goes. All right. I want to move on to where the economy is going. So we set up in the beginning that we have this economic problem. I want to zero in on debt. So I am, Peter, one of the things that I really gravitate towards you with is that I can't shake.

1:54:57The more I learn about the economy, the more I find myself pulled into this sense that the economy is Wile E. Coyote. He's already run off a cliff. And it's that moment where he holds up the sign, but he hasn't fallen yet. and I think I heard that actually from you, Ralph. So it's like, ah, what is happening? Like we have so much debt. How do we get out of this? I've been using that Wile E. Coyote analogy for like 20 years. So it shows you how long we've been off the cliff and nobody's looked down. But does that just mean that we're crazy and that it's gonna be fine? And look, at this point, the numbers are just so big.

1:55:39The trajectory of the debt with the maturity of, you know, we have a$34 trillion debt where in the next year, you know, 10, 12 trillion of it matures. It has to be refinanced. It was originally, the money was borrowed at very, very low rates. The rates are many, many times higher. The structural deficits are higher. The Fed is selling treasuries. The government trust fund, Social Security is selling treasuries. Foreign central banks are either selling or not buying. The bubble is just, you know, it's so big at this point. You have, you know, households have record amounts of debt, credit card debt, consumer debt, all-time record high.

1:56:22You know, all facets of debt, you know, at record highs. You know, the numbers are just so big. So, you know, can it go on for another 20 years? I just don't see how it's even remotely possible. Can it go on for another two years? That's a more pertinent question. I don't know. But yeah, I think at any moment, there could be a sovereign debt crisis. There could be a dollar crisis. I mean, it is inevitable that it's going to happen. The only thing that I don't know is when. And obviously, it's taken a lot longer than I would have thought. The bubble's gotten a lot bigger. I mean, the U.S. has been able to get away with it.

1:57:00We've gone deeper and deeper into debt. And we've been able to survive only because we can keep borrowing more. And nobody questions whether or not we can repay. Nobody even cares if we can repay because they know that we can print. And they just assume that the dollars we print are always going to have value no matter how many we create. And that's just not true. You know, at some point, you know, it ends. Right. It's like how many straws can you put on a camel's back? We're going to find out. But you don't know until the last one breaks it and something's going to happen. And this whole system is going to collapse.

1:57:37And when it does, if you're an investor, you better have the right portfolio. And I think I've been overly prepared for that for a long time. But I think the day will come where I'm going to be vindicated on that. Raul, what do you think? There's no difference between getting the timing wrong and just being wrong. But let me throw out some numbers. By the end of this year, the national debt will be$2 trillion per year. In three to four years, the government will pay more in interest than they collect in taxes. So we're already bigger than national defense in terms of what we pay here in the U.S., just servicing the debt.

1:58:20If it goes for another 20 years, somebody with my mentality is just going to get slapped around the board because I'm acting like it's going to happen soon. But is it? How do we make sense of these numbers? Is there a nothing burger way out of this? Or is this a guaranteed slaughter? And we just don't know when. You are being slaughtered and you don't realize it. It all happened already. It is underway. And everybody's waiting for that. All the assets are down 90%. It can't happen. It simply can't happen. Because it all happened in 2008. In 2008, the world stopped. the whole debt system blew up.

1:59:06We had to have a debt jubilee of resetting all government debts around the world at zero so we could afford to service it. We've kept rates low. We've been then using the balance sheet of all of the central banks just to pay the interest on the debt from the previous cycles. This is this everything code thesis that you and I have talked about. So we are paying the debts by printing money, pure debasement. The system broke in 2008. We then changed the financial system with the Basel III agreements, which forced the banks to lend less and to hold more treasuries. Why? There's going to be a lot of supply of treasuries.

1:59:51The whole system, everybody's aware that it's broken. It broke. So what is going on now? Well, for it to actually broke, the down 90%, it's all going to be 1929 again, can't you just see it? You're missing the point. They're debasing the currency by 15 % a year. It adds up to a staggering loss of wealth. It is a tax that you don't see. 15 % a year debasement is easier than increasing your tax rate 15%, which is politically unacceptable, which is what they need to do to pay the debt. Because the printing of money just debases the currency. So you are paying it. We are all paying it. What they should do is default on the debt.

2:00:39That is the best thing to do. They can't. They can't, Peter. I agree. I know that. The Austrian thing is what they should have done. It was too late. And the reason being - Look, they're not going to do the right thing. Well, they can't because the baby boom. Maybe Malay will do the right thing in Argentina at this point. We'll see. Yeah, but they see the difference of the structure of the Western society is all the money is held by old people. The entire system is basically in the hands of retirees and all the wealth. So if you say all of their assets are down 75%, that is the wealth of the nation's gone.

2:01:18So nobody's going to do it. Not all their assets, but yeah, they're going to, their debt, but they're going to lose it through inflation either way. It's either default or debasement. Of course. But, you know, I wanted to point out, you talk about the national debt, you know, official national debt is$2 trillion, but the actual national debt, the budget deficit they claim is$2 trillion, but the national debt is already growing at$4 trillion a year. That's the rate that it's growing already. And during the next official recession, it's going to be on an even greater trajectory. So the issue is why we all agree, right?

2:01:54But I just don't think it can collapse. Why? Because of debasement. But that is a collapse. That's a collapse of the monetary system. And it could lead to hyperinflation. Yeah. Let me just play out my thesis here, which is I don't disagree. You can't have assets going down 90%, the core collateral of the system, if they're debasing the currency because they go up optically because the currency is going down. The Venezuelan stock market goes up in Bolivar terms and down in dollar terms, right? So therefore, if your collateral keeps going up, which is what they learned in 2008, is we can backstop the entire thing by debasing the currency quickly, the collateral goes up, and hey, presto, my debts aren't so bad.

2:02:40Okay, magic. It's not magic, as you know. It's a sleight of hand. It's not pure magic. What they're doing is robbing you in a different way. Okay, this has happened before. This is exactly what happened in the 1940s and 50s. Saddled with massive debts after World War II, the large economies did the same thing. Financial repression, that yield curve control, which is buying of government bonds, keeping interest rates low, which we've seen. And they just printed money. And over time, the value of the debt had eroded. And what they'd managed to do was create a productivity miracle, which drove GDP growth.

2:03:23One thing, you're overlooking, though, a key difference back then. So after the Second World War, and the government ran up a lot of debt during the war, but they did it, they paid for a lot of the war with tax hikes. They had tremendous tax hikes, particularly the income tax, which tripled when the war started. In fact, they introduced the withholding tax in 1942 as a victory tax. So before the Second World War, hardly anybody paid income taxes. By the end of the Second World War, a lot of people were paying income taxes. And when the war ended, the government had all of this income tax revenue coming in.

2:03:59And they initially, it was temporary to win the war. But when they stopped the war, they didn't stop the income tax. And so the government was flush with cash. And so it paid down a lot of that debt. Debt collapsed in the years because the government ran huge surpluses and paid down a lot of that debt. So it wasn't all just inflated away. Yeah, when the 1960s and 70s rolled around, there was a lot of inflation. But the initial big drop in debt was an honest repayment because we stopped spending money on the war. The problem now is we haven't cut any spending. We're taxing people to the hilt right now.

2:04:35And we don't have the type of economy. We had a real industrial economy in the 1940s. We had wealthy consumers that loaned money to the government, that bought the war bonds. We sold the war bonds to China. Americans are broke. So we're a levered up country running huge trade deficits. And we have no means of repaying the debt like we did in 1946. So the debt is now going to go straight up. It's not going to go down like it did during those decades. We're just getting started. It's 125 % of GDP. It's going to go to 150%, 200%, 300%. It can't stop until everything implodes. I don't disagree. I'm wildly, crazily bullish because I'm so bearish.

2:05:26Bullish on what? Assets. because they're going to - Well, in nominal terms, in nominal terms. Correct. But in gold terms, a lot of these assets have to come down. Their real price has to come down. So I also believe that GDP growth equals productivity plus population plus debt growth. I think debt growth died in 2008, and all debt growth now is servicing of old debts. And population has been shrinking. So economies have been slow and productivity is low because of aging populations. We're just bringing AI and robots into the workforce. It's infinite human, infinite humans. So GDP growth driven by productivity and population growth is what I think is on the horizon, which is what rescues this.

2:06:15Rescues this, but after what? 15 % a year debasement of currency? You add 10 years of that and you've lost most of your money. So none of us disagree. We're all getting fucked. but it's how you're going to get fucked. Are you going to get fucked in one go because it all burns to the ground or are they going to fuck you so you don't really know you're being screwed but you're just going to get angrier and angrier? That's what we're seeing. Politics has gone like this because everybody's so bloody angry because they can't figure out who's screwing them and they're blaming each other. What screwed them is there was too many old people and they borrowed too much money.

2:06:53What I want to understand is the timeline on all of this because it seems like the debt is going to ratchet up so fast. And if we're only going to be able to print our way out of it, I get at first, maybe for the next three, maybe five years, I don't notice that I'm being screwed over. But unless you guys tell me that the amount that we can print before we break the camel's back is 180 trillion or just some unbelievable number that is so far from where we are today. This feels like if we're really in a race for do I get to that number of trillions of dollars before the robots come and increase productivity so much that I'm back to a 1946 place where I'm generating so much productivity, I can actually pay the debt down.

2:07:39I'm sure Peter won't agree with this, and you'll half agree with it and half hate it, and that's okay. If I'm right that AI plus robots is infinite productive units, and you see how fast it's coming, you literally are not capable of understanding what an economy looks like beyond 2030. That's the problem I've got here. I'm not concerned about the cliff of death that we're going through. I found an asset that I can invest in, crypto, or I could buy technology, and it's offsetting the mess of the debasement, so I'm fine. What's harder is to say, what the hell does an economy mean after 2030 when you've got endless AI and robots and AGI?

2:08:26What is a company? What value do you provide in that world or I provide? We sit there talking to people about it and thinking our way through it, But both you and I are developing AI tools of which we will have a digital Tom and a digital Rowland. We don't even need to turn up to these and they'll do a pretty good job. We're both working on these things, right? But are we going to be just replaced? The point being is when you go to like Nick Bostrom, who is the key thinker about this at Oxford University, who wrote the book, I can't remember the famous book about the whole kind of where the future is going.

2:09:07There's a group there, an economics group there who share the same concerns as me. It's like, if this is right, you could double GDP in a year, global GDP, or a week.

2:09:20What do companies mean when AI, I have a theory that open AI is using AGI to build its own AI, which is why they're iterating so fast with, what, 500 people? It's fucking madness what they're doing, how fast they're iterating. I've never seen anything like it. Even Elon Musk is like, I've never seen anything like what's going on here. The more we have AI to build AI, to build businesses, the faster and faster this goes. So in answer to your question, the explosion could be the other way around. It might not be the economy imploding, It could be the economy exploding in a way that we don't even know how to deal with it.

2:10:04What do humans mean? What is our job? All of this stuff you and I have talked about. I actually worry about very different things. I don't worry about the economy going down the toilet because I know how they're dealing with that. They've kind of set the rule book. I can make money from that. That's okay. It's this other bit. That's the hard bit. That's more scary. What do you give the odds, Peter? One, do you think that he's onto something or does that seem just completely sci-fi to you? Well, I mean, I think there's no question that over time, artificial intelligence, robotics is going to lead to a dramatic increase in human productivity.

2:10:46I mean, that's just what capitalism does. And this is, I think, a potentially game-changing innovation. The question is, how long is it going to take to build out and scale up? And how are politicians going to react to the creative destruction, which always comes from innovation? There's always somebody that loses, but net-net society gains. And eventually, over time, everybody gains. Because we don't want jobs. I mean, we want stuff. I mean, that is the secret of an economy. It's the scarcity of things. We all desire certain things, and the constraint is the ability to supply them. And supply is constrained by land, by labor, by capital.

2:11:35but AI and robotics has the potential to dramatically increase the supply of labor, intellectual thinking and processing. And so at the end of the day, we could produce a lot more with a lot less and we'd all be wealthier. I mean, again, work is a means to an end. You don't want your job. You want all the things that you could buy with the paycheck that you earn. If you could skip the job and go right to the stuff, most people would do it, right? Most people don't work because they like to work. They'd rather not work. They just like what they could buy with the paycheck. So, I mean, I think that all of this could be good.

2:12:16And, you know, it's certainly a lot of potential, you know, I'm 61 years old. I'd like to think that this AI could figure out how to do something about that. So I could be younger and live longer. And so that's another game changer. I mean, what if our life expectancy is dramatically extended too, right? I mean, maybe we don't live to 100. Maybe we live to 150. I don't know, 200. Who the hell knows? But yeah, there's a lot of things that could happen that I would be looking forward to. I'm not apprehensive about these things. But I also don't think that it's necessarily, it could be, but I don't think it's necessarily a get out of jail free card for the sins of the past, that we're not going to have to deal with the debt.

2:13:02Well, you probably all agree, Peter, that we are dealing with it now, right? We're all we're all having the effects of this put upon us already. Well, we're we're feeling it. And I've been saying for a while, that's why Biden is so unpopular. It's not because of his mental gaffes. It's because the economy sucks and the voters know this. And they're blaming Biden because he's at the helm of the ship that's sinking. And so despite all the hype and all the statistics, the average American family is feeling the inflation tax in a big way. And yes, there's a lot of jobs, but there are second jobs and third jobs that people would rather not have.

2:13:40They're struggling to make ends meet and they hate having to take on these extra jobs. And this is going to get worse. I think the inflation genie is out of the bottle. It never was really gone. It's just that the government was able to cover up inflation by cooking the books. But the inflation is now so pernicious and the impact on prices is so great that even when you whitewash it with the CPI, it can't hide it anymore because the numbers are so big. The costs are rising so rapidly. People can see it. And there's a limit to how small they can make the packages. At some point, they can't keep shrinking stuff.

2:14:18They got to raise prices and make it even more obvious. But and it's not just America. It's happened in Europe. It's happened in Japan. I mean, all these countries that said for years, the problem is we don't have enough inflation. We need to create more. They now have too much inflation and they can't stop it because stopping it would require politically unacceptable things. They have to cut government spending. You know, they have to default on a bunch of promises. They have to deliver a lot of bad news to the voters. And nobody wants to do that. And so everybody is just going to continue. And they think, oh, we've gotten away with it before.

2:14:51We did QE1. We did QE2. We did QE3. We did COVID so we can do it again, right? Look, every time we get into trouble, we just print money and we're out of trouble. Well, all that is is inflation. And so if your problem is deflation or collapse of assets or whatever, and you think you can solve the problem by creating inflation, The problem is when inflation is the problem, when that's the source of everybody's misery, you can't solve the inflation problem by creating more inflation. Because that's been the solution to every problem we've had is let's create inflation. That's our solution. We can call it quantitative easing, easy money.

2:15:32But what we're really doing is we're solving the problem by papering it over with inflation. Well, now we're at the point where inflation is the problem. So more inflation just makes it worse. So we're past the point of no return. And it's just a question of, yeah, when do we look down and realize we're standing on nothing? And I think that applies to Bitcoin too. You look down and you realize there's nothing there. There's a lot of false perceptions that are going to meet reality in the near future. Just as a side note, what happens, Peter, if all of these value assets that are going to catch up eventually and haven't done for the last 20 years don't.

2:16:11What happens if gold continues to underperform? What happens if your model of the world is outmoded? I'm not saying it is, but could you possibly consider that not everybody's wrong? It's just the way that you assume that everybody's wrong. I just find that a little bit... I'm not saying everybody is wrong. I'm saying that people that believe in Bitcoin are wrong, But that's certainly not everybody. And the market's wrong and the technology price is wrong and that your source of truth is the truth and the market pricing is not the truth? Markets get it wrong a lot. You know, in the short run, it's a voting machine.

2:16:52In the long run, it's a weighing machine. And right now, I think people are making bad votes, you know. And so, you know, I just think it's a mania. I mean, you know, every time there's a mania, right, it means assets are mispriced. I mean, we've had plenty of bubbles and they pop and that's that. I just think that this is another one. So, you know, I think the onus is on the people who believe in it to try to say why this, you know, this is different. Of course, you know, that's the famous words of every bubble. This time it's different. I don't think it is. I think this time it's the same. I mean, you know, and so I think that the same thing is going to happen.

2:17:31But as far as why, you're saying why has gold not gone up? Look, in the scheme of things, when people look at a long-term chart of gold, the fact that it's gone sideways for 10 years is immaterial to the thousands of years that gold has been around and gold has been a store of value. But that's over the period of the worst debasement that we've seen in the last 100 years, and gold didn't do it. Right. So let's say gold all of a sudden has a year or two where it catches up and it goes from 1 ,000 to 5 or 10 ,000. So it doesn't necessarily have to go there in a straight line. Gold could go up, go sideways, go up.

2:18:14And so, yeah, over a longer period of time, it's going to smooth its way out. Now, the question is, why did gold not go up higher sooner? Well, remember, it went from 300 to almost 2 ,000. It had a very big move. in a relatively short historical period of time. And so then it went sideways for a decade. And the reason, I believe, is because investors have complete confidence in central banks. They don't believe that there's a threat of inflation out there or a debt bubble. And so they don't see the reason to buy gold. They would rather buy tech stocks. and so I think it's just people have a misconception just like you know you mentioned the subprime and I remember you know when I was when I first found out about these subprime mortgages a guy showed up at my office named Andy Lottie probably in 2005 or 6 and you know I was already bearish on the housing market and he came to me with an idea to set up a hedge fund to short these subprime mortgages, this tranche.

2:19:24And he explained it to me. And I was like, well, why the hell would anybody buy these? These are obviously going to go to zero. I mean, how can people be buying them? And they were trading above par. They were actually paying more than par to buy these tranches that I knew were going to zero. And I was like, well, people just believed in this. And so the assets were mispriced. And they were mispriced for a few years until they eventually were priced correctly at zero. But I knew that they were worth zero the minute they were explained to me. And what the guy told me is he had gone to a lot of institutions with the same story and everybody laughed at him.

2:20:02I was like the first guy that didn't laugh at him because I knew that real estate prices were going to go down. Everybody else thought real estate prices could never fall. And so as long as real estate prices never fell, well, then it didn't matter if anything defaulted. I was the guy that knew that eventually real estate prices would come down. And so you can have a period of time where a lot of smart people can believe something that's wrong. And so assets could be mispriced as a result of that shared delusion. And I believe that's the situation with Bitcoin. And what happened to me was actually the opposite, because I was the macro bear that everything reverts to the mean that it was all terrible, and it is all terrible.

2:20:42and I realized I had the wrong mental model. And the moment I actually freed myself of my own biases and tried to understand what the fuck was going on and why were these assets going up? Why was this happening? I then could see what was going on and what the big game was. And as soon as I could see that, it became a game I could make money from and that I didn't have to be stuck wishing, and I've seen a lot of friends of mine do this, wishing that value stocks or small caps or whatever it is are going to work for them. And it's been 20 years now. And I've realized I had the wrong mental model.

2:21:25And the moment I changed it, I felt liberated because the world kind of makes sense. And I just urge all of us to just make sure that we don't get obsessed by our own mental models, because they will change. And the world changes. And sometimes we can be dead wrong. And sometimes we can be dead right. I mean, I nailed the financial crisis. I nailed the European sovereign crisis. I nailed COVID. I nailed all of these things by being a big bear. And something I suddenly realized is, yeah, but assets kept going up. That whole period, I should have just been long and have made more money. And that made me ask the question of myself.

2:22:08Buy the dip. Buy the dip. That answer to the question is like that dumb meme of buy the dip. I wanted to go all the way across the bell curve, go to the middle bit, arguing it all, come to the other side and realize that buy the dip was actually the single best strategy to have ever existed over this period of financial mess. And I was stupid for not seeing it. So anyway, I'm just saying, be careful, because Tom, I can see that you're so allured by the black hole, the black hole that is there. It kind of comes to you. And we have this conversation. I try and pull you back from the black hole and say, yeah, it's there, but there's an opportunity here.

2:22:45And you're like, but the black hole. Just be careful of the mental model, because it will massively restrict you in what you do, even how you think about life and how you interact with people around you. So it's something I've learned the hard way is we've all got to be a little more open to A, everyone's opinions, and B, our own biases, and how ingrained they are. And have they become part of a personality just because it is? Or it's part of how we fear, Like some people fear risk. So they become a certain way and present that to the world around them. Or some people have made money and then they're worried about losing it because their family didn't come from money.

2:23:33We're all set of our own human ridiculous biases. So we should just all, in all of these conversations, just step back a little bit. You're looking at it from the vantage point of where we are. Everything is at record highs. And so it looks like, yes, that was the right thing to do to buy the dip. But we haven't had the crisis yet. That's the thing. We've been able to kick the can down the road. And all of these structural problems have been growing the entire time that we've been ignoring them. And the question is, you know, how many more times can this work? Because we get, I mean, I think you got to watch the bond market.

2:24:12You got to watch the gold market, the foreign exchange market. But at some point, it's going to crack. Tom did this earlier, and it was a very good question, is what would make you think the opposite? And we all need to be able to do that because we can't keep saying, well, asset prices have gone up, so therefore you don't know whether you are right or wrong. It's like, and this is no attack on you or anything. it's me thinking through this stuff is how do you know that maybe you have done yourself a disservice or I've done myself a disservice or Tom is doing himself a disservice by thinking the way that we do have we held ourselves back have we lost an opportunity cost that we didn't imagine because we're so anchored in what we think we think or we project to other people I'm just That's all I'm trying to get across.

2:25:09It's not about who's right, who's wrong. I'm saying, at a human level, what happens if you had bought Bitcoin and bought the NASDAQ and were 10 times richer than you are today? Would you care about some of the things you think about now? Maybe not. Tom, if you hadn't made money when you were young and then fear losing it, maybe you wouldn't be worried about the black hole. Maybe you'd be more risk seeking. Maybe, you know, just think about it in a bigger context than fighting over what price an asset is. We need to ask ourselves why we think that. I think that's really interesting. The point is, as long as the underlying problems continue to get worse, I don't think I'm wrong.

2:25:59So if we actually find a way to solve these problems. If we get dramatic cuts in government spending, if we start paying down the debt, if we get enough deregulation - But Peter, sorry, I just want to ask you a question. What is the worst case scenario game? What is the thing that you fear that we are supposed to be - The worst case scenario is we destroy the currency completely, right? And so the dollar has no value. OK, let's assume that happens, right? Let's say we do that, which we've been doing, but slower. But let's say it completely goes. It hasn't got. There's a long way to go between where we are now and zero.

2:26:41OK, so let's assume it goes to zero. I'm long crypto and technology stocks. You're long gold. They all go up. We're fine. What's the fucking problem? Well, first of all, there's a big problem because a lot of people, first of all, maybe crypto goes up, maybe it goes down. There's no way to know. But explain to me what I'm fearing here, myself, personally. Because you're wiping out the savings of a generation. You're wiping out the retirement of tens of millions of people. But I thought they were in debt. I thought they were in debt. You told me they were all in debt. So we're wiping out - Yes, you're wiping out debt.

2:27:19But every time you wipe out one person's debt, you wipe out somebody else's asset. You wipe out the value of people's pensions, their insurance - You said earlier that you wanted the big reset, that we should do this. And when the money is worthless, you can't buy things with it. The farmer doesn't want to give up his food because you have nothing of value that he wants. America can't import anymore because nobody wants our dollars. I mean, if we go through hyperinflation, I mean, it's going to be riots. There's going to be, I mean, it's going to be bad. It's not like something that I'm looking forward to.

2:27:52I understand. But you've got your gold and your real estate and you'll be fine. and I've got my stuff. So what are you fearing? What is the fear? Look, and the other thing is the government can become even more oppressive than it is now. And the worst case is they blame it all on capitalism. And the solution is that we become a complete totalitarian state and the government takes over everything. I mean, so you ask me, what's the worst thing that could possibly happen, right? No, what is it that you fear? So you're now fearing a totalitarian state where they seize all your assets. I mean, okay.

2:28:28Well, what good is investing in gold and what good is doing anything? I don't know. I guess if they throw me in jail or kill me, I guess it's not going to matter. But I don't know what they're going to do. Tom, what is it that you fear, Tom? What is the fear? What is that black hole? Yeah. So as somebody who is very practiced and staring into this, I'll walk you through. So because I feel confident, I will make it to the other side, sort of come hell or high water. When COVID kicked off, I realized I was afraid for people that I know and love that don't understand money. And that began my journey of actually understanding what's going on.

2:29:05So like Peter, I share exactly his concern and I'm a little unclear on the only thing that makes sense for me, for you to push on this is if you think it's basically impossible for it to happen. Because to me, it is self-evidently horrific to go through something where it's either a war, an external war, or an internal war, because like Peter is saying, there's just so much anger and resentment at the implosion of the debt, which to Peter's point is somebody's asset that now just went away. People won't do that quietly. They will riot. Also, when you get to the point where you can't feed your populace because there's no money and your money's hyperinflating and people walking around with wheelbarrows full of money to try to buy a loaf of bread, that suddenly the line of good and evil that Solzhenitsyn talks about in the Gulag Archipelago, you realize it really does run through every human heart.

2:30:05And all of a sudden, all those narratives and mythology that you're talking about that hold us together as a society, all of those crumble. And I'm sure all three of us are students of history, but when you become a student of history, you realize that the long arc that bends towards justice is punctuated with moments of such horrible cruelty, death, and destruction that you just pray to sweet baby Jesus. You are not one of the people that are around for one of those moments of correction. And they happen and they happen so predictably that the black hole I'm staring into, again, I don't feel like I'm staring into it for myself.

2:30:45And I mean, this is a glimpse into my soul. I've told the employees here, if it ever kicks off, come to the house. First of all, we have the high ground. We are up on a hill. I care about them all. And so I want to see them thrive. We will do better as a part of a collective. But the fact that I even have to say that out loud is unnerving. Now, I bend towards optimism. So I actually think nothing is ever as good or bad as you think it's going to be. And so I believe there is sort of this stumbly, slow erosion of the dollar path that will end up looking something like what happened to England. Now, Peter, when you and I last spoke, you pointed out very rightly that World War I and World War II were some pretty bad things.

2:31:29And so since that was part of how they end up losing their empire and status as a reserve currency, I concede the point that that is absolutely horrific. So I just know every empire of all time has crumbled. And I really do think a lot about how America becomes the next Rome. But the reason that becomes a meme and the reason that people think it's ridiculous is because the odds of it happening in the next two years border on zero. The odds of it happening in the next 10 years go up a little bit. Ray Dalio puts America being in a world war at 50 percent over the next 10 years. But like maybe it happens in the next 20.

2:32:09And so if it's true that it doesn't happen for 10 or 20 years, me or Peter, and Peter, I think you know you have this reputation and I have a feeling I'm rapidly gaining it as well, is like I've predicted 10 of the last two recessions, right? So I'm so focused on the confluence of things that go bad that I end up potentially missing all the opportunities that are present. That's what I was trying to get in. I'm not saying you're right or wrong, right? I'm just saying we should think about these things. There's another bias that I want you to think about. Is ask your wife if she shares the same views and her friends do, because she's British.

2:32:50And she won't. It's quite a uniquely American thing. Doomsday prepping, the fear of the decline of empire and the collapse of society is weirdly an American thing. Even though the Europeans have gone through it twice, two world wars where we killed everybody, each other, in the most horrific ways possible. Europeans don't think of the same way of the collapse of civilization that Americans do. It's just a really weird cultural phenomena. And it's because it's the largest, most powerful economy, and it's saddled with debt and everything else. So just again, just there's biases in everything that we do that make us, as you said rightly, Tom, We project too far either way.

2:33:40And it can still be pretty horrible in the middle. It can still be a terrible political environment. There still could be riots. There still could be kinetic wars, but it may not have to be the end game. Yeah, remember, the other thing that's uniquely American is the degree to which we depend on the dollar status as reserve currency to run trillion dollar a year trade deficits. So, you know, we need to be supplied goods from abroad. And if we lose those supply chains, we have no ability to replace them. So it can be a major collapse. But the other thing I want to say - You know what we sell the best at?

2:34:17What we did, though, what the US did was really clever. Is it created a dollar debtor system where the rest of the world has so many dollars that they can't get rid of the dollar. It's like what we exported, what the Americans exported was debt. Oh, and inflation, debt and inflation. But, you know, yeah, I mean, you know, there are people that think that. But, you know, I don't think that the dollar is impervious because we have so much of them and have so much debt. But the point I wanted to make about recessions is one of the problems with forecasting recessions is the government gets to define them.

2:34:55And the government comes out with the GDP numbers. And I think we're in a recession now. I think we've been in one for a while, but the government just doesn't acknowledge it because of the way they keep score. I don't think the deflator is honest. I think GDP is going up because of prices. I don't think it's going up because the wealth of the economy is expanding. We're just paying higher prices for things, and we're borrowing a lot of money to do it. The debt is growing faster, faster than the GDP numbers. So all this is an illusion. We're not growing anything. We're spending ourselves in a bankruptcy.

2:35:31We're buying products. A lot of those products are imported and we're paying higher and higher prices. So we could have been in a perpetual depression for years and years and years. I think we kind of have. It's just that the way that we keep track of it, we don't officially acknowledge it. I think, look, once you're debasing the currency in people's savings by 15 % a year over time, everybody's going to feel like they're not getting ahead. Everybody feels this, right? And you're right. Somewhere hidden within all of this has been an ongoing depression from 2008 for the average person. Not for a tech company, not for certain parts of society, but most people have been in a miserable mess for a long time.

2:36:19Their wages haven't gone up. Their costs have gone up. it's been terrible and they're like choked with debt they can't pay their kids to go to university they can't afford retirement savings yeah i agree that's it's been bad for a long time yeah so uh just to gaze into the abyss a little bit further and i'd love to get a sense where you guys think this goes so um i i believe that society that's a little overstated. I believe that culture is becoming a toxic soup and that toxic soup is causing kids to collapse inside of themselves, eat terribly, poor diet. They are having less sex, less babies, just a general lack of optimism.

2:37:07There's a phenomenal meme that says, we'll put it up on the screen in the final cut, but it says, my parents in their thirties. And it shows, you know, these little sketches standing outside of a house. Let's buy a house. It says me in my thirties and it shows a guy just absolutely frazzled. And it's like, your maximum bid of a$625 cheeseburger has been rejected, uh, by Wendy's. Uh, and that vibe, that meme while funny is real. And that really worries me a lot in terms of, um, I think that ultimately culture is a battle for ideas. and I think the ideas that are taking hold of people's minds are terrible.

2:37:48And I have a feeling that to some extent, maybe a massive extent, this is an echo of what happened in 2008. And so this becomes a question of inflation, interest rates. And so if I'm right, that this isn't like, forget the doomsday scenarios, that it's just a malaise that is gripping the young and that that's going to ripple through society. I don't know how much you guys have read about the industrious revolution, but it's an idea that I find absolutely fascinating that part of what made America great was that there was not only the industrial revolution, but there was a sense of the Protestant work ethic.

2:38:34I'm gonna go ham. I'm gonna work until I dropped out of a heart attack. And I know how silly that sounds, but like it gave birth to the America that leads in innovation, became the dominant global superpower, et cetera, et cetera. And man, as somebody who is hiring a lot of young people, I would just tell you, Jesus, like we have to filter through all of the people that just have that malaise of like, oh, companies are just taking advantage of me. Why would I run on the hamster wheel and make better widgets? It's like those ideas will cause a real problem. And when I look at, okay, so how do we solve it?

2:39:09One, just combating the ideas. but to solve the underlying problem. And without solving the debt by, look, I hear you. I don't think inflation is the answer. Let me just say that. I think that you have to have a period of austerity. I think it is going to be grotesquely unpopular, but I don't see a way around that. Even when you just take sort of that milk toasty, like, ah, there's not going to be any big revolution, but we do have to make a societal change. What do you guys think about that? And if you agree, what is that path? I just think we're using the wrong framing. We have, I mean, there's 76 million people in the United States who are over 70 years old now.

2:39:58You've got a demographic cliff in front of your face. It's happening in Europe. what South Korea got to a 0.0, a 0.7 replacement rate right now. Right, we've got a population collapse coming. Maybe those young kids are dead fucking right. They should not be doing any of this stuff because it's all worthless. Maybe you're wrong. Maybe they can see what the future is for them, which is they're going to be replaced pretty quick. The reason you don't want to hire these people is you don't need to. That's the dirty truth here and we'll need to hire less of them. What is happening is a much larger disruption but it's not in the way of the past.

2:40:43It's always so easy to say the past is going to repeat. Sure, but in different ways. There is whole revolutions happening in front of us that are going to shape society in ways we can't yet understand And we're looking back saying, well, maybe the dollar gets trashed. It's like, oh my God, can't you see what's in front of us? Now, I'm an optimist. I think there's a path that we figure it out. But I don't think it's going to be without volatility. But it's going to be driven by that and not that. That is known. And that is AI robotics. That forward is AI robotics, longevity, you know, so many structural changes, cracking its entire human genome and figuring out medicine, so much to deal with.

2:41:29That is, well, we spent too much money. We're debasing the dollar. We're going to have a hyperinflation. It's like, yeah, tell me something we don't know. Tell me something we don't understand. We don't understand that. That's scarier. Now, it could also be great. It could be amazing, a world of opportunity. But my God, it's not going to be a straightforward course, right? It's just not. Well, first of all, you know, unfortunately, I think inflation is the answer. I mean, it's not the correct answer. It's not the solution. And can you, sorry, Peter, just to check something, can you, inflation versus debasement, are they the same things to you, CPI versus, no.

2:42:10I'm trying to make a point. He said inflation was the, well, he didn't think inflation was the answer. I'm saying it is the answer. It's the wrong answer. It's not a solution. Unfortunately, it's the politically expedient choice because the right choice is too difficult for politicians to make. Because politicians, their primary goal is their own re-election. And so that's how they see every problem is how do I get re-elected? And so they're not trying to make things better for the country. They're trying to perpetuate their careers, which are often at odds with what's right for the country. So we're going to get stuck with inflation.

2:42:49No matter what. Now, can we get an offset to that by a burst of productivity, which without the inflation would just be even better? Right. Because the free market is trying to lower prices by increasing productivity. The government is raising them by creating inflation. And so it's a it's a dance. But to the extent that we can have a huge surge in productivity that's driven by by AI or robotics or a combination of the two. that's actually a good thing. You know, that's not what you'd be afraid about when it comes to AI. I mean, if you're going to be afraid about something, the fear is that AI decides to kill us all and it could actually do it, right?

2:43:30That's the supposed fear. Not that it takes away our jobs. We don't want these jobs. We want computers to take away our jobs. That's great that we don't have to do them. We still get the stuff without having to do the work. I mean, every advancement has, you know, reduced the need for human labor. I mean, if you go back to the beginning of society, everybody had a job. It was looking for food all day long. That's what you did, right? You had no leisure. You had nothing because you worked every minute of every day other than when you slept. But as we invented things and tools, we didn't have to work as much.

2:44:07And so we had more leisure. Ultimately, if we could replace all human labor with machines, we're all going to have a lot more leisure and we're all going to have a lot more stuff. Are we going to have a system of money? Because money is like expenditure of energy, whether it's human brain power, whatever, and in exchange for money, right? And ultimately in an ideal world with complete abundance of everything that we won't even need money. If I could just push a button and have everything I need and I wouldn't have to pay for it because it just gets conjured into existence by some super intelligence, right?

2:44:42I don't need money anymore. Money just facilitates trade. Somebody has something I need or I want. How do I get it? Well, I got to give them something that they need or they want. But rather than barter, we exchange a mutually commodity. But if we're not bartering our own services, intelligence, physical labor, how do we earn money? Well, how are we going to earn money in the future? We may not need to. That's my point. But obviously, between here and there, people have to find, how did somebody who got put out of business, you know, with a shovel, you know, a guy that was digging a ditch and now somebody invents a shovel and so we don't need as many ditch diggers.

2:45:22So what did that guy do? He did something. And so people are going to have their jobs replaced by computers or robots and they're going to do something else, you know, instead. I don't know all these things, like what they're going to do, but the problem might be if the government says, hey, you lost your job, so just go on welfare and here's a check. Because, you know, that's a big problem if that's what happens. And then people end up getting entrenched, you know, in that state of dependency where they don't go out and find something else to do because they just, you know, stick with the government check.

2:45:57And that check is, you know, is offsetting the benefits of productivity because the government prints money to pay somebody to do nothing. So it's the government that would make the mistakes. It wouldn't be the free market innovating. It would be the government inflating and getting in the way. Looking forward, we're in a big year, 2024 election year. Obviously, the having cycle, the debt restructuring all happens in the same year. What do you guys think the world looks like with a Biden victory? What does it look like with a Trump victory? No different. In market terms, no different. You don't think the market will have a response at all to one or the other?

2:46:39Won't give a shit. It's really driven by liquidity and flows. You know, it's going to be, they're all doing the same game. So no, I don't think it makes a single bit of difference. I've not seen an election that has turned markets because shock, somebody's come in. Donald Trump, huge shock. What did the market do? sell off for exactly one evening. Brexit, huge shock. What did the market do? Sell off. It just doesn't matter. Politics don't matter in the short run. But obviously, they can change the structure of economies in the long run. But the market doesn't seem to concern itself with that when liquidity seems to be the dominant factor that drives markets.

2:47:24And that's driven by central banks. Do you think they're still going to be printing their way out of problems? There is no choice. Either one. There is no choice. What are you going to do? You're going to bankrupt all the baby boomers, blow up all the banking system, because for what? Justice? The right answer is to blow it all up? Nobody's going to do that. It's insanity. They will never do that. So they will do absolutely everything within their power to try and not let that happen. And that, it goes back to what we've all been talking about, is however you define inflation, I don't think it's CPI inflation, it's asset price inflation via debasement, is the game.

2:48:04Financial repression, let's call it that. That is the game. And they will do that. Now, Peter may be right. Maybe it ends up in hyperinflation. I would put a very low probability. Well, that's the worst case scenario. I don't know that that's where we're going. No. And again, I would say that's the worst case scenario. Impossible. I don't know what probability. But yeah. Yeah. But yeah, that's what they're doing. They'll keep doing repression. Why not? But in answer, you know, it's not going to change the game. I mean, Trump's been president before. I mean, he didn't change the game then. He ran up the debt when he was president.

2:48:37I think on the margin, you know, it's worse to reelect Biden than to put Trump back in office. But I don't think that Trump is going to, you know, change what's going to happen. We're going to have a currency crisis. We're going to have a sovereign debt crisis, you know, whether Trump or Biden is in office. Whether it happens during that four-year term, again, I don't know. I mean, maybe they kick the can down the road and it happens, you know, on the watch of whoever replaces them. Because whoever wins, we know one thing, they can't run again, right? You only get to run twice. So whoever wins is not going to be president in 2026.

2:49:12So maybe they get out of dodge and maybe they don't. But I would think that assuming we had the collapse during the term of whoever wins, right? We have a crisis. I would just assume have Trump there than Biden. You know, Trump has a greater probability of doing the right thing than Biden. Biden maybe has no chance of doing the right thing and Trump maybe has a slim chance. So slim is better than none. And doing the right thing in this case would be spending less at the government level. Well, dramatic cut, right? They have to do the opposite of every political instinct. Because what they want to do when there's a, the economy is weak.

2:49:52They want to try to stimulate it with more government. They want to run bigger deficits. They want to cut taxes. They want to print money. They have to do the opposite. They have to shrink government, cut spending. They may even have to raise taxes. I'd rather them just do it all from the spending side. But they got to cut spending. They got to let interest rates go up. They got to let banks fail. They got to let companies go bankrupt. They got to let people lose money. They got to allow a lot of painful things to happen to have a real recovery that is on the other side. Do you think – is that what they should do, do you think?

2:50:27Yeah, of course. They have to do the right thing. It's like if you have a drug habit, stop taking drugs. Yeah, it's not going to be good. You're going to be in withdrawal for a while. but you got to get the stuff out of your system. You got to be healthy. We can't keep drugging ourselves up and then we die of an overdose. That's what hyperinflation is. It's the equivalent of a monetary overdose. You destroy the currency and then you destroy the economy. And so I want to avoid that. We need to restructure the economy in a sustainable path. It's not on that now. It's a house of cards. And I don't want to keep the house of cards going, knowing eventually it's going to collapse even worse.

2:51:13I want to let it collapse now so we can start replacing it with a structural, that sound, a real house, not a phony one. So we've heard clearly what you want to happen. What will happen? What do you think? They're going to keep on printing until the dollar collapses. Now, the question is, when the dollar does collapse. Let's stop there a sec. So they're going to keep on printing. So given that information, what would you do investing? I'm doing exactly what I'm doing now. It's like, you know, but I'm hoping that they stop the presses at some point when it gets bad enough that they, you know, because once it's so bad.

2:51:54All of your assets go down, right? See, once it's, let me finish this point. Once it's so bad that everybody in power knows they're gone, hey, there's no way I'm getting reelected with the economy this bad, then maybe they'll do the right thing because they've run out of options, right? They'll do the right thing only after they've exhausted all the other possibilities. So we may be able to do the right thing and stop the presses, you know, before the dollar goes to nothing. There is no graceful way out at this point. We've long passed that. There is no pain-free solution here. You can hope that AI eases the pain, and maybe it does.

2:52:37Hopefully it will. That would be good. And I take this differently. I'm like, if we have an observable behavior, which is most likely to repeat, however ugly the situation is around us, we can actually help ourselves get out of this trap as individual level by investing correctly around this. This is what I strongly believe in. I think the world is truly screwed. But as you pointed out, there is only one way they will deal with this. Armed with that information, that is like the magic bullet. This is the everything behind this idea of the everything code is if you know this to be what is going to happen, you can look into the future and you know what the hell to own.

2:53:19Except every time they've done it before, the dollar hasn't collapsed because people have maintained confidence in the system. If the dollar collapses, our assets are going to go up. If the dollar collapses, it's very different. It's going to look very different than what you've seen in the last 20 years. I don't know. Last time I checked, the Venezuelan stock market went up like a rocket ship. All I'm saying is, Tom, you and I spoke about this when we first started speaking back in 2020. This is the life raft. Right? The life raft is what saves people. It could be gold. I have no issue with that.

2:53:55It could be Bitcoin. It could be tech stocks. It could be whatever. You shouldn't be concerning yourself with any of this stuff, this apocalypse, because we know the outcome is financial repression and print more money. Right? So we just get to hop on the life raft and we avoid all of that. That's what I don't get about all of the doom arguments is I get it. It's totally screwed. but it's so predictable because we all agree what they'll do. Right. But the thing is, they've been able to do it and not precipitate a real crisis. That only matters if we do a different thing in the face of what we've all said, too much debt, inflation's the only answer.

2:54:42No, no, not a different thing. If we keep doing the same thing, eventually it's not going to turn out the way it has. The world is not going to accept it. The world is not going to believe our ability to stimulate with QE, with inflation, is predicated on the false belief that the Fed could shrink the balance sheet, withdraw the liquidity, normalize interest rates. We could pay off the debt. I mean, when the markets come to the unfortunate realization that that's not true, then the bottom drops out. And we can't kick the can down the road anymore because there's no more road. And then we have to deal with the consequences in a way that we haven't had to deal with them in the past.

2:55:25We can't send out stimulus checks because they bounce or they don't buy anything. Forget about the big picture, what they must do. What happens to humans in that level? You and I in investments and Tom, right? The individual. What happens? So let's play this out. And I've gone through this in great depth. is when you play it out, if you go to a hyperinflation, he who owns assets wins. Fact. If you go to any of these - Well, you certainly lose a lot less. The only way you do not win is if they do what you want the most, which is tighten policy so badly that you let the air out of everything. Then we completely get nuked and we are all poor.

2:56:14What I want them to do, what I advocate that they do is contrary to my strategy. Because I don't invest based on what I want, but based on what I expect. I expect them to do the wrong thing. And so that's how I invest it. But even if they do the right thing, I think I'll lose a lot less than everybody else, which means I might win. Because it's all relative. So if my portfolio goes down, but the things I want to buy go down even more, I'm wealthier. But yes, the best thing for my strategy is that they do the opposite of what I'm advising. But that's what I expect them to do. You hope for the best, but you plan for the worst.

2:56:53I hope they don't do these mistakes, but I'm pretty sure they're going to make them. That's just the most likely scenario. I'd rather they didn't do what you want them to do because everybody is going to lose their entire - No, they're going to lose more if they do what I expect. Inflation is going to wipe out more people than honest default and restructuring. Slower. It'll happen slower. You can take your pains fast or take it slowly. It's all pain, right? It's all pain. It will be slower. Yeah. It'll be a slower death, but it will be a more painful death. It's all pain. I get that. I have one last question for you, and it'll be quick.

2:57:26Over the next six months, where do you guys think the price of Bitcoin is going to be? Well, I would guess lower, actually. It's gone up so much at this point. Six months from now, my guess would be lower. It's about 60 ,000 now, right? 61 ,000. So I'd take the under for six months. I'll take the over just on the historical pattern of election years. Stuff like that tends to go up in a straight line. So my time horizon is not really six months. But generally speaking, in these election years, this kind of Bitcoin halving cycle, it tends to be higher. So significantly higher. Significantly higher.

2:58:01So not just higher. How much higher? I think, I don't know, but it wouldn't surprise me if it's trading at$75 ,000 by July, August. Yeah, look, I wouldn't be surprised by that either. But I also wouldn't be surprised if it's$20 ,000 or less. Gentlemen, I cannot thank you enough. I'm beyond grateful for the time that you gave all of us today to go through those ideas. I think it's really super useful. Hopefully this is round one to many. To everybody watching at home, if you haven't already, be sure to subscribe. And gentlemen, where should they connect with you? Easiest place, find me on Twitter at Raoul GMI.

2:58:44And if you want more of this kind of information, these kind of debates, realvision.com. In fact, there's realvision.com forward slash impact. It's free. Just sign up and start watching lots of incredible people. It's not my biases. Peter's been on. You've been on. Everybody's been on. And we have some great long form conversations. So realvision.com. Yeah. So for me, if you want to cash in some of your Bitcoin for actual gold, you can contact the reps at ShiftGold on our website. We even again, you know, you can even take your Bitcoin and exchange them for gold through BitPay. If you have a larger portfolio, I guess, again, I recommend that people invest, not just save with gold, but invest in productive assets.

2:59:32I have an asset management company based here in Puerto Rico, Europe Pacific Asset Management. The website is europac.com, E-U-R-O-P-A-C.com. So check us out. You can give us a call. There's a toll-free number on there. You can fill out a form and have a representative call you back and discuss the strategies. I have a new newsletter now that I'm writing at shiftsovereign.com. So you can visit that website and sign up for my newsletter there. You can follow me on social media. My biggest platform is Twitter. I've got almost a million followers. It seems like it's taking a long time. I'm like 5 ,000 away from a million.

3:00:08But every time I gain a few, I lose a few. So it's been difficult this last mile. But you can follow me on Twitter. But I'm also on Instagram, Facebook, TikTok. I mean, we put out a lot of content. YouTube, I have over half a million subscribers, been there for a while on my YouTube channel. But make sure you listen to the Peter Schiff Show podcast. I do one or two a week, sometimes more, depending on what's going on and how much time I have. But you can listen at SchiffRadio.com. You can listen on my YouTube channel, The Schiff Report, anywhere, Apple, iTunes, anywhere they have podcasts. You can listen to the podcast.

3:00:46So there are a lot of ways to follow me and invest with me. And I've got mutual funds, too. So you could buy my funds at Schwab or Fidelity. I'm going to add a couple more since Peter did some money. One is my asset management business, which is a fund of crypto hedge funds. We invest in the world's best crypto hedge funds. That's XPAM, E-X-P-A-A-M, Exponential Age Asset Management. Also, all of my research I've been doing for 20 years, all of the stuff that I talk about comes from Global Macro Investor. That's the epicenter of my thinking. That's everything that I've done. So if anyone gets a chance, check out some of that stuff as well.

3:01:26I love it. All right, everybody. Thanks for joining. And until next time, my friends, be legendary. Take care. Peace. We hope you enjoyed this episode. At Real Vision, we arm you with the expert knowledge, time-efficient tools, and a powerful network to help you succeed on your financial journey. Get a taste of financial freedom with our free offer at realvision.com forward slash free. Thank you.

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