The Fed Pivot, Bitcoin vs Gold & The Return Of QE | Lawrence Lepard

23:36Not necessarily currency, but asset. People used to save. I mean, since 2014, net treasury bills held by foreigners have been flat to down. People just don't trust the dollar anymore. They can see what we all can see. So that's part of it. And then, you know, the Chinese and others, they've stood up the Shanghai Gold Exchange and the volumes there are huge. And, you know, you've now got China trading with Saudi Arabia. And if Saudi Arabia ends up with too many yuan and they don't want it, they can't buy goods from China for it. They just converted it gold. In the old days, with the petrodollar, they would have converted that excess into U.S.

24:08dollars. And so, you know, so you've got nation states going for gold as a neutral reserve asset. That's part number one. You've also got central banks realizing the problem. And central bank purchases have been growing and they're large and steadily growing. And you've got a third issue that kind of falls into a little bit of the conspiracy theory world. But, you know, I would consider we all know that a lot of conspiracy theories have kind of become conspiracy facts. and that is kind of the paper markets that have manipulated these things. I mean, the United States and others for years and years, and I know this, I believe this, there's absolutely conclusive evidence if you go to the Gav site or a lot of other places to show it that they've suppressed the precious metals prices because they know that doing so helps their inflation numbers look better.

24:58And they've done it by selling paper gold and paper silver. And you can do that as long as buyers are willing to accept paper gold and paper silver. And up until more recently, that's been the case. But what's happened, and you see it this year in the data, and it's really kind of stunning data, Danny. I don't have it right in front of me, but trust me on this, that people are starting to say, yeah, yeah, yeah, that's nice. I've got a derivative contract. I've got a CME contract for, you know, one CME contract is 5 ,000 silver ounces. It's five bars at 1 ,000 ounces a piece. I know because I took delivery of one once.

25:29It bottomed out the trunk of my car when I put them in the trunk. And, you know, they're saying, you know, give me the silver. You know, yeah, I bought the contract. And it's funny, when I said I want the silver delivered, they were like, no, you don't. I was like, yeah, I do. And they were like, well, there are going to be charges. And, you know, we're willing to pay you a small premium to not take delivery. I said, no, that's not what I want. I want you to give me the damn bars. And eventually they did, but it took a lot to do it. And that's happening everywhere. Everybody is saying, you know, we realize that this is a house of cards.

26:00And the way to think of it is like a game of musical chairs, right? I mean, a real silver bar is a chair, and a paper silver claim, that's not a chair. And so if you take the paper claim and say, I want the real bar, there are only so many bars. I mean, the silver market is so financialized and so paper over that we mine 850 million ounces of silver every year. We trade that in half a day. So I mean, think about that. I mean, there are days when we trade two times the annual mining volume on one of the silver paper exchanges. Isn't that crazy? That's crazy. What that tells you is there's just a lot of paper claims against what's really being produced.

26:43And, you know, we're moving from a world where paper, you know, we've had 50 years of, you know, the U.S. had the leading form of paper and paper could be used to buy everything. And, you know, you didn't need to really have the stuff. And, you know, the bricks and others in the world are now kind of saying, well, That's all really nice that you got that paper, but show me the stuff. You know, I can't build a solar panel with a silver paper contract. I can't, you know, build my Tesla with a silver paper contract. And you've seen it. I mean, you've seen it. It's reached even down to the company level.

27:15I thought this was very interesting. A company I'm involved with, Samsung. So silver, and that's the other thing about silver. Silver demand is really growing. Silver demand, silver is used heavily in solar now. It used to be used in photography. That's gone away because of digital. but it's also being used in these new batteries that Toshiba and Samsung have developed. And they're not commercial yet, but they use a lot of silver. But the solar demand alone, I've read that the solar demand in China could consume over half of, right now it's about 20 % of world silver supply. And that will grow to over a half in the next five years if it continues at the current slope, right?

27:48And then you bring these Japanese companies who have these new solid state batteries that require a lot of silver. They're going to have enormous demand too. And so if you took a lot of electric cars with a lot of electric batteries with these silver component, there's going to be demand getting added there. And to that point, one of those companies, I believe it was Samsung, went to one of the companies I'm invested in and said, we're going to invest$10 million in you on very preferential terms, slightly above market. But in exchange for that, you're going to agree to sell all your production to us.

28:19Now, why does a user of silver do that? And not at some fixed price. They're not trying to arb the price. I say, whatever the market price is, they are worried about their supply. They know supply is tight and they want to have a guaranteed source of supply. So they're willing to make an investment in the company to help them and lock in that supply. So that's the kind of thing that's going on. So this is very real. And, you know, in Bitcoin land, others have seen people say, well, silver, you know, look at the chart of silver. It's a parabola. This is a short. It's going to collapse like it did with the Hunt brothers, like it did in 2011.

28:52I'm not so sure. I mean, you asked me my target price on silver. I mean, we'll be at 100 in days. And, you know, I mean, how high up is up? I just don't know. But it's been suppressed for so long, and 50 was a ceiling for so long. We broke through that ceiling. 200 could be possible. I've seen 500. It's not nuts. I mean, it's interesting that the precious metals, I say this a lot when people kind of laugh, but the precious metals have no top because fiat has no bottom. Right. And I'm not predicting hyperinflation yet. It's not my base case. I just think high inflation is very likely built into the system.

29:33And there's really no way to avoid it. I mean, other than letting everything collapse, which I don't think they'll do. So you think this sort of commodity bull run is nowhere near over yet? Absolutely. I've said, and I'm going to say it in my letter, I think we're in the second inning. I really do. And it's very hard. I mean, my fund's up a lot. I've got investors saying, God, we've got all these profits. should we take them? And I'm like, yeah, let's take a little bit. And we actually distributed 10 % of the fund this year to our investors. Just said, yeah, let's, you know, it's prudent in case we're wrong to take a little bit of the profit off the table.

30:03But no, I think that, you know, this is a case of we're in early days of this kind of a problem. Unless we see sudden, and when I say this, people always chuckle because it's not like, if we see sudden responsible behavior out of the United States government, you know, balanced budget, et cetera, that, you know, it's, well, look, it's, it's not, you know, stranger things have happened, right? I mean, you know, if they got, if they, if they started behaving in a responsible fashion, um, you know, then we'd have to reevaluate our thesis. But, you know, I mean, I, I see them going the other way. Like I said, Trump said, you know, I was, I was shocked when he said it.

30:41He said, you know, the defense, our defense budget is about just under a trillion dollars. And he said, we should take it to one five. I'm like, sir, where the hell is that going to come from? Do you know what I mean?

30:50Lawrence Lepard:I mean, it's just, it's nuts. It's nuts. I mean, safety noise used to say the biggest threat to Bitcoin was responsible fiscal policy by governments, which really means there's no threat to Bitcoin. I mean, I think that's what most of us see. I mean, but look, I've got my eyes open. I mean, I, you know, I'm, I've been burnt before and I don't want to, you know, I'm not believing my own bullshit here. I mean, if I see, if there's evidence and the price starts to show me that we're wrong, then I'll react to that. But it feels to me like we are, I mean, I know a lot of people, I have investors, I've talked to people, and I mean, in my cohort, and I know a lot of wealthy people, most of whom don't own gold or silver or Bitcoin, they own stocks.

31:30And they're all talking to me, and they're just like, God damn, Larry, I'm just too late. And I'm like, no, you're really not. As you and I both know and agree, I mean, Bitcoin will be at a million someday and then some higher number than that. And I think gold 10 ,000 is very doable. So buying it at four is not nuts. I mean, four and a half. I mean, so it's, you know, to me, it's interesting because, you know, remember this year, one of the things I pointed out is that they've labeled this now. They've come out and they've called it the debasement trade. I mean, it really started in a big way in September, right after the fall came in.

32:04And at that point in time, Doge was dead. And it became very clear. And the big, beautiful bill had passed. and so they're going to spend another three four hundred million dollars more than they thought and it became and elon had given up on it all because you know he's a smart guy and he realized he couldn't fix it so he walked away from it and um yeah so you know at that point in time you know gold and silver just woke up and said okay we know what comes next guys you know we're um let's go and you know the i think that these people who ask me am i too late i just i say to them you know It's not a trade.

32:40I mean, they call it the basement trade. It's not a trade. It's a trend. It's a multi-year trend. And I don't know what the top is. And will there be corrections? Sure. There'll be corrections in all of these assets. But I think the trend in all sound money assets, silver, gold, Bitcoin, is up and to the right strongly. Yeah, the idea of a trade implies that at some point

33:01Lawrence Lepard:you're going to want to sell it back for dollars. Well, that's right. And I thought about that. I thought, should I sell some of my gold and silver? I think, well, where would I put it? Now, it's interesting in my case, because I've got assets in both of these camps, as you know, one of the hardest things I've had to do in this whole goddamn sound money world is, and I got the Bitcoiners, you know, criticizing me for being a boomer with rocks. And I got the rocks guys, you know, criticizing me for believing in magic internet money. And I get all these trolls on Twitter, trust me, fucking nuts.

33:30but you know it is the one nice part about having that balance of these two assets is like right now i am trimming some silver mining some silver and gold positions and i'm buying micro strategy because to me micro strategy at one seven is just money laying on the floor it's like go pick it up i mean you know the m nav has gotten completely compressed there's nothing broken with the thesis you know i i sincerely believe that sailor is a genius and he will continue to you know do what he's doing and that this will be a thousand dollar stock so you know on a relative basis um you know bitcoin and strategy are cheaper to me right now than gold and silver in the debasement trade it's interesting too danny i'll point something out you know three years ago bitcoin was flying and gold and silver stocks were in the sewer and everyone hated them and and that was when a lot of bitcoin said why don't you just dump that shit do you know what i mean it's like yeah i don't know i think we got a couple more puffs in the cigar i'm not going to give up you know and and here we are and it's kind of worked and right now i got a lot of you know shift and all these other gold guys are like hey see the bitcoin thesis is broken it's all over you know it hasn't correlated we got five years of flat performance i mean luke groman who i love and think is brilliant i've learned a ton from you know even he kind of backed away from i don't know you know maybe you know he lightened up and i'm just like gosh guys i you know to me that just feels like you know this new york times piece right the totally attack total cheap shot hit piece on sailor i mean to me that's going to be like the magazine indicator you know inflation is dead or you know i mean a gold is a pet rock i mean they they the you know the journal published an article gold is a pet rock right at the bottom in 2015 i mean they almost nailed the low price of gold at a thousand and here we are at four thousand five hundred and so you know they're attacking sailor and i think in two years sailor is going to have the last laugh.

35:20And, and I, you know, like Bitcoin is going to wake up and, you know, it's like the Christopher Walken's lion. It's going to wake up and just show everybody who's boss. So, so I'm very, I'm very sanguine about it, but that's, that's because I've been at this for a long, long time. And I've seen these, you know, these psychological swings occur and it's just like same old, same old.

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37:26Lawrence Lepard:I love his newsletter. I really enjoy having him on the show. But he sold at least a portion of his Bitcoin a couple of months ago. And the reason being was that he thought the four-year cycle was still a thing, which I just think that's out the window. I'm more and more coming around to the fact that maybe it never really existed. Maybe it was just sort of the quiddity cycles. I don't really know. I'm not sure that's his reasoning. When I heard him talk about it, I think his reasoning was a little bit more that it was still trading like an equity. It wasn't trading like a neutral reserve asset.

37:54Which is true. There's some of that. I mean, it started to detach from the triple Qs. And it's clearly risk on versus gold, which is more risk off. But, you know, the thing about selling an asset with this much asymmetry to it, I mean, you know, so he sold it in the 90s, got to pay tax. So now he's, you know, he's got to it's got to drop into the 60s or 70s to just get the same amount of Bitcoin after he pays his taxes on what he sold. Right. And so to me, you're picking up nickels in front of a steamroller. Right. So you're hoping it'll go to 50. And by the way, it might go to 50. It might go to 60.

38:29I mean, I have that in my model. I my partner and I talk about this a lot. We have about a 30 % chance that we're not done with this Bitcoin correction. And there's one more cleansing flush sometime in the next three months before the real big print comes. But I think that, you know, as I mapped out earlier, I do think that big print's on deck. And I do think that when it comes, Bitcoin will respond and it will respond ferociously. And so, you know, I mean, Fred Kruger wrote a really good book, which I recommend a lot, called Bitcoin One Million. And in that book, he had a very interesting statistic, which is that from 18 to 24, when the coin went up 7 or 8x, you missed the 10 best days.

39:12You didn't make any money. I mean, so how do you time this asset? And so it's a classic to me because as you're, you know, I thought your last interview with Saylor was really great. And I, you know, my take is he was just having a bad day. And I think he was a little hard on me unnecessarily. I'm not sure he really, I think you guys were kind of talking past each other because he's right that anyone buying Bitcoin, we should support. But you are right that not all of these, you know, Bitcoin treasury companies are going to make it. Some of them are pretty poor to run, to be fair. So, but, you know, it's a situation where, you know, at some point the thing is so asymmetric, it's just going to explode to the upside.

39:52So I don't get it. I mean, you know, like I say, Kruger said that, you know, 10 days, you missed 10 days and you lost the money. You lost money. I mean, I don't want to know when those I don't want to not be there, I guess, is the point I'm making. Right. A hundred percent.

40:07Lawrence Lepard:And like, I'm not someone who can predict the price of Bitcoin, but I would be surprised if it went back down to 50, 60 K. And like it could, it could. And if it does, I'll buy more Bitcoin. It's not it's not my sort of base case. So like the question I'd want to ask Luke is when does he sort of, if it doesn't go down there, when does he capitulate and buy back? I listen to him carefully and he said he thinks it'll go down there. You know, he expects, I think the other reason, and to be fair, he may be right about this. He does expect some kind of something breaking and a real deflationary flush that I think then leads to the big print.

40:42I think that's more his model that it's going to look like COVID or it's going to look like 2008. And that in that environment, you might see 60, 50, whatever it might be. and he would buy it he also in a more recent interview i listened because i listened to everything he says like i said he's brilliant um you know he said look if it you know if it if it turns around and they start printing like crazy and the print comes and it goes to 110 or 115 and i gotta buy it back slightly higher fine you know i'll do that um you know look everybody manages their own money in their own way and you know it's it's not a religion it's not like you know this All you're doing is you're making probability-based bets.

41:20And he's been so damn right about so many things. He may be right about this one, too. Another really good guy I respect is Michael Oliver. He's not a Bitcoin fan, but he's a very good technical analyst. And his technical models show it going to 60 ,000 as well. If you kind of look at it in Elliott Wave terms, the first wave down was an A round, then to 80, it bounced back up here into the 90s. That's a B. And then the C should take it below the 80. I'm not sure we get to 60. I could 70s probably seems likely, but you know, I bought some micro strategy yesterday. I mean, I just, I mean, I want to own a lot of micro strategy.

41:54I've got some cash from having sold some silver stocks. And so I'm going to just kind of dollar cost average micro strategy for the next six months. Cause I know that at 170, you know, I mean, if, if Bitcoin goes to 50 or 60 strategies going to 110, but you know, you can't, I mean, that's the thing. You can't get the absolute tops and the absolute bottoms. That's what Rothschild said. You can't be a pig, right? I mean, when things are on the cheap side of the board, you buy them. And when things are on the expensive side of the board, you sell them. And by the way, that's why I've been selling a little bit of silver.

42:25I mean, I think silver's still got quite a ways to run, but I could be wrong about that. So I've sold some. I mean, I've got silver that I bought in the 80s and 90s for$6 an ounce. I mean, what is it today? I mean, it's like 80 something. It's nuts, right? Right. Yeah. That's not bad. Yeah. I've got silver right now at 94. I mean, this is crazy. So, you know, if, if I didn't sell some, I mean, one of the things, when I look at investing, one of the things I try and do is, because I've done this for so long and I've made so many mistakes is you try to minimize regret. Right. And you think when you're sitting there and looking at something and saying, well, if you know, okay, so silver's at 94 and I think it's going to 300.

43:05Okay. But guess what? It can also go down to 40 again. And if it's a 94 and I didn't sell any, What were you, some kind of an idiot? Do you know what I mean? So am I going to sell all my silver? Hell no. Am I going to peel off 5 %? Yeah. And then what's cheap right now? Oh, MicroStrategy is pretty cheap. Well, maybe I'll sell 5 % of my silver and I'll buy some MicroStrategy, right? So it's just, you know, that's, I mean, I'm a, you know, I'm a professional investment manager. That's what I do. And so to me, it's all about kind of probability and odds. None of us know anything with certainty, but you can kind of lean, you know, you can lean into things when you think you're on the right side of stuff, right?

43:40Lawrence Lepard:Yeah, I mean, this might be a bit of a mid-curr take on what's going to happen this year, but with the midterms coming up, Trump is obviously worried that if he doesn't do well in the midterms, he's going to get impeached, all sorts of stuff. He needs to have an incredible year, which means he needs the economy to be running absolutely blazing. So he's going to do everything in his power, which is obviously why he's doing the stuff he's doing with the Fed, to just make the economy the best economy the US has ever seen, essentially. You got it. And so like, I don't know how you bet against Bitcoin in that environment.

44:13Lawrence Lepard:Like, I don't know how you can sell Bitcoin now with that coming. I completely agree with you. I mean, it's just, yeah, the politics of it all. I mean, what he said, you know, the aggressiveness of Venezuela and Greenland, I mean, all of it. I mean, it's just, you know, the one five on the, on the defense budget. I mean, you know, the money is, you know, they will find the money. They will spend the money. They will have, and, and, you So the tell, the thing to watch, I think it's kind of surprising to me, but I guess it's the basis trade that's held it together, is that the U.S. 10-year is hung in there at 4%.

44:45I mean, I just can't imagine who would want to own a U.S. 10-year bond paying 4 % when you've got a government that's out of control. It makes no sense to me, but it is what it is. But at some point, I think that will break, and that'll be the tell. That is what I watch most carefully.

45:02Lawrence Lepard:So do you think if that's true and Trump tries to run this incredibly hot going through the rest of this year, asset prices will do really well. Do you think he'll be able to do that without inflation coming back in a serious way? Well, yes and no. So as you know, there's a lag between the time when you print and the time when the inflation shows up, right? And they're probably trying to time it well. you know that the sense i mean um pals out in may you know hopefully they get a new fed share they let's let's say hypothetically they can get the rates down to two or one i don't know if they can i mean there is a board and they all vote but i think they're going to really bully the shit out of the people at the fed try and get them that would lead to a whole round of refis that would lead to a lot of you know real estate transactions that would lead to a lot of borrowing and locking in those low rates and by the way it would bring down the u.s interest cost because we've we've financed everything short term, you know, and our average interest cost right now is about 3.3%.

46:00I mean, if bills got down to 1.5%, you know, that trillion dollars we're spending on interest would get cut and that would make the deficit smaller. So that's another consideration that they're facing. And, you know, all of those things will lead to rapid, in my opinion, M2 growth, but that doesn't necessarily happen immediately. If you'll recall with COVID, you know, they printed a lot of money very quickly starting in 2020, but the peak inflation was kind of 12 to 18 months. I'd have to go back and look at the numbers, but it takes a little while to show up, you know? So, so, you know, they might, you know, print the money, get the high, feel good, you know, and the inflation prints are still okay, you know?

46:40And so they, they cruise through November and they get the seats, but guess what? You know, inflation in 2027 goes back and heads towards double digits. You know what I mean? So just more kicking the can down the road. Yeah, I could see that scenario. That's my best guess as to how it plays, right?

46:58Lawrence Lepard:Larry, you're like a free markets guy. And one thing that I've never really understood, like Trump said that he wants to get the rates down to like 1%. Surely that shouldn't be the cost of capital. That seems too low. Like, What do you think the cost of capital should be? Oh, it's way too low. Well, so none of us really know because we're living in a Potemkin artificial world. I mean, the real cost of capital is set by, you know, the balance of savings and investment demand. And, you know, and that would only occur if we didn't have a Federal Reserve and we had a true free market for interest rates.

47:34But we're so far away from that to be ridiculous. I mean, if you look at the level of inflation we have, the, you know, across the capital should be higher. I can't answer the question because I just, I don't even begin to know. And things are just so crazy distorted. But I mean, one thing I do know is true though, if you look at the chart of what the federal funds rate has done since Volcker, I mean, you know, they jack it up, they drop it down, they jack it up, they drop it down. We'd almost be better off if it had just been set on autopilot at 4 % or something. Do you know what I mean? I mean, it's because we've got these enormous swings.

48:08I mean, you know, Volcker quote rates up to 20%. I mean, and part of what created this mess and has us where we are now, Danny, that's so screwed up, and I talk about this a lot in the book, I mean, zer, the whole notion that capital is free, it's just insane. That's like a tautology. That's like a crime. It's like a chart crime against capitalism. You can't have free capital. Okay, if you say interest rates are zero, you're implying that money has no value, which one could argue that's true when it comes to fiat. But, you know, I mean, Zerk was just a, it was ridiculous, you know, and it was a free subsidy to everyone who could borrow money, and that's why all these cotillionaires got rich.

48:48And so, you know, it's, this is no way to run a railroad. It's just no way to run a railroad. And, you know, that's all pretty depressing, and it's tearing the country apart, and you see all the bad social things that are happening in Minneapolis, everywhere. And, you know, it all just comes back down to the money being broken, which, again, is why I wrote the book. I just I wish the country understood that, you know, and I think most Bitcoiners understand it. It's the base layer that's broken. And it's not unsolvable, folks. I mean, if we if we go back to a sound base layer, you know, we've got all this great technology.

49:24And we don't we don't get into a world war. We don't all kill each other. You know, everything will reorganize. Now, there will be winners and losers. You know, people who hold debt will get wiped out, and there'll be a lot of inflation in the transition. But, you know, things will be good again. I mean, it's, you know, we are all productive actors who will, with the right incentives, do the right things and make the world a much better place. And so, you know, all I'm waiting for is to get through this fourth turning and return to that sound money. The problem is that, you know, it's going to take, it's probably going to take crisis or semi-crisis conditions to get us there.

50:02because, you know, the average boobus americanus and certainly all the politicians aren't going to take us there on their own. Although one interesting possibility, and I've talked about this on other pods, is that Trump and or Bessette, you know, do something really, really bold, which is to try and do a monetary reset. And, you know, I don't know if they have the political space. I don't know if they have the guts. But, you know, we could theoretically skip the, you know, let's go to super high inflation. The country tears itself apart and currency fails. by, you know, Besant waking up one morning and saying, and Trump's and saying, we're going to revalue gold at$30 ,000.

50:39We're going to revalue Bitcoin at a million dollar coin. And, you know, the government will now exchange your dollars for either of those two things. Bring us a million dollars. We'll give you a Bitcoin. Bring us your ounce of gold. We'll give you 25 ,000 or, you know, give us 25 ,000. We'll give you an ounce of gold. And we are now on a sound money standard period. And, you know, 1971 gone done. Oh, and by the way, we're going to balance the budget by basically cutting expenses here and there. And the TGA would be revalued and that markup of the TGA would be used to pay down the government debt.

51:12I mean, if they did that, it would be enormously painful for bondholders. It would be enormously one-time inflationary. So it's like ripping off the bandaid. It would hurt like shit. But on a go-forward basis, we would actually have a sound money solution. um now you know that's my 10 case because i just i don't know that they'll have the guts to do it i mean and and even even i may be wrong about it i mean it's a scary step i mean i i could be wrong about the way that it plays out um so you know will they do it i don't know but i do know this i do know that until we get back to sound money i think inflation is going to be the problem of our age.

51:53And, you know, the more likely path on the whole thing is I think inflation just gets worse and worse and worse. You know, the blue team wins in 2028 and inflation really gets bad. Maybe the currency even fails with all their actions. And then, you know, I've said this in other pods, I really do believe there's some chance that we get, you know, Michael Saylor stands up and says, hey, you know what? You know, I've studied history. I went to MIT. I'm an engineer. I understand how this all got broken. I've got the receipts. I'm the richest man in the world because bitcoin's at 10 million dollars a coin i'm gonna burn my keys i don't give a shit about any of that i want to be the thomas edison slash um you know thomas jefferson of our age and uh you know elect me as president we're going to reform the constitution and reset this whole goddamn system and that's my that's my hope for my kids because you know the other going the other direction you know it could be decades of pain you know um you know trying all these other solutions that won't work.

52:51You know what I mean?

52:53Lawrence Lepard:I'm surprised you put the idea of Basant and Trump doing a monetary reset at 10%. Like that seems very, very high to me. 10 seems high or 10 seems low? No, 10 seems high. Like I think that would be the most ballsy move by any president ever probably. I think that's right. But think about it. Think about it. I mean, it's going to come down to Basant. And Basant basically said, you know, we need a new Bretton Woods and I want to be at the table when it happens. They understand it. Moran understands it. I mean, Trump might realize that, you know, if he lets, I mean, let's say it's 2028 and inflation's raging and it looks like Vance is going to lose and blue team's going to win.

53:33You know, why not throw a Hail Mary pass and just say, screw it. You know, let's try and reset this whole goddamn thing. And, you know, he'd get challenged in the courts and everything else. But, you know, Nixon did it. FDR did it. Lincoln did it. But, you know, I mean, the monetary stuff is supposed to be controlled by the Constitution, you know, Article 1, Section 8 in Congress. But, you know, that's not what's happened. It's a practical matter. The chief executive has done it. And, you know, I think it's 10. I think there is some possibility. I think they, you know, you have to remember these guys, I mean, in my opinion, for all their, and there's some good things about them.

54:11There are a lot of flaws about them. I mean, don't, you know, don't get me started on the Epstein files. But, you know, or Trump coin, Trump and Melania coin, right? But, you know, I think they are thinking, you know, about what's truly best for America and maintaining our sovereignty and our leading position in the world versus, you know, a couple. I mean, look, I don't love our government, but I think I love it more than I love the Russian government and the Chinese government. And so, you know, and I think they do too. And I think they basically want to try to maintain our position of leadership and, you know, returning to sound money in this way would be, you know, in my view, would keep us in a leading position.

54:51And particularly if they have Bitcoin in the picture, I mean, because I don't think I don't think China has made any kind of a bet on Bitcoin. And and I think China has a lot more gold than they say they have. so leapfrogging China with a Bitcoin piece of the whole solution would be a big positive in my view

55:08Lawrence Lepard:yeah I mean the risk I'm sure they would have to calculate is whether it's worth it to give up being like the global hegemon but I mean I think it would be an amazing thing to happen I don't know you may be right it may be high I mean maybe I'm a dreamer I don't know it's probably sadly we probably just keep stumbling along down this road until it gets so painful that everyone demands a solution. I mean, if we get kind of South America-style inflation in the double digits, I mean, this country has been through so much and people are hurting so badly, and you can already see it in so many different measures of the social fabric being torn.

55:53I pray that at some point in time, the large remnant within this country will stand up and say, god damn it give us politics give us politicians who are willing to you know to balance the budget and return to a sound monetary unit i mean you know i mean another data point you may not be aware of judy sheldon is a sound money person she's a gold person she's proposed the treasury bond with a gold piece a gold back into it or gold exchange clause in it so that you would be protected in terms of the purchasing power of your principal and you know andy sheckman says Sheldon told him that she was in a meeting with Trump and Trump said, that's a great idea.

56:30Maybe we do that in July of 26 when we have the 250th anniversary of the country. We introduced that bond. So, I mean, these, these ideas are not, they're not completely, you know, alien or far fetched, you know, to, to the people who are in office today. Now that doesn't mean they're going to do them.

56:49Lawrence Lepard:I mean, the, the idea of like a goldback bond or a bit back or a bit bond is, seems like a no-brainer to me. That kind of thing I could see happening. Absolutely. And I guess that would be a step in the right direction towards returning to a sound money standard. Absolutely. Yeah, no, absolutely. And they should do both of those things tomorrow. Yeah. I mean, it's not that painful or that hard to do. I mean, that's a step. It doesn't fully solve it, but it gets you thinking. And I mean, they tried to kind of do it. I mean, they were, you know, what they were hoping, what Basant was hoping was that these stablecoins were going to solve the problem that there'd be enough stablecoin demand for all those treasuries but if you actually run the math you look at the size of the stablecoin market versus the size of the treasury bill market stablecoins are just too small still and they're not growing fast enough to absorb it so that's that's not going to bail them out i mean they've been they've been kind of throwing hail marys right i mean or they've been you know doge was a hail merit you know elon we're going to save two trillion oh no well we'll save a trillion well maybe this kind of doesn't work oh shit i'm fed up i'm smart i'm not wasting my time here i'm gone so i mean it's it's sadly sadly it's a very very broken system and reforming it is just no piece of cake um so you know but i mean i i believe in a higher power so i think this higher power sent us bitcoin and i think that you know we're basically bitcoin's going to smash the system whether they like it or not.

58:14And the only real issue is on what time scale. And, you know, I kind of think that all this, I mean, fourth turnings tend to last between 20 and 30 years. This one started in 08. So 2028 is the short end of the line and 2038 is the long end. This will get resolved probably in the early 30s, in my opinion. We're not too far away. Not that far away, actually, if we're, you know, talking, you know, five, six, seven, eight years. So, I mean, we're getting to the point where it's you know we're serious now right i mean these metals moves are serious i i said on twitter and a lot of people laughed at me but i said on twitter you know wouldn't it be ironic if silver was the lehman brothers of this cycle i mean there's somebody you know if some big banks are short silver you know they're going to go they could go bk and if they do their governments will have to bail them out and then that will lead to you know all the leverage in the system could come cascading down and you know there's your big print right so so one of the

59:13Lawrence Lepard:questions i've always had for you larry and i've never actually properly asked you so since the first time i think i ever spoke to you you've been talking about how gold price was suppressed for decades um do you i guess this is a two-part question do you think that suppression is ending and also on the the second question being how do we avoid that for bitcoin that's a great question yeah so so yes i do think it's ending because people are demanding the physical and it's you know you're at the stage where the you know that we can see the man behind the curtain and we don't believe him so it's like give me the goal so yes i think the answer your first question yes i think it's it's happening for um it's having for gold bitcoin thing is interesting there's a lot there is paper bitcoin i mean if you go to the binance perpetual futures you know it has grown a lot you can go and you can buy paper bitcoin and somebody can sell you paper bitcoin and you've got to put a contract on the Bitcoin price and no Bitcoin ever, you know, it was demand that you had, but no Bitcoin ever got purchased.

1:00:09So that market has grown a lot. James Check, check me, one of your country mates has done a really good job of this. He's got some great charts. You're going to subscribe to a service to get them, but we do. And that whole market has grown quite a bit. I've often said that they had 50 years to perfect the gold manipulation scheme. And, you know, they had Cayman Islands entities, they had central banks that owned it. They had the BIS, They had all these different things. Bitcoin's a different animal. It's a lot harder. One, it's not as old. Two, the suppression mechanisms aren't as developed. And three, one of the things that Bitcoin can do that gold never has done, Bitcoin can go up 6x in six months, right?

1:00:48And so, you know, when they had a problem with gold, I mean, a bad year for them in gold was a 20 % or 30%. Well, they'd sell into it, create a narrative, drive it back down. And even if they needed to print the money to cover the 20 % or 30%, that wasn't a lot of money on a relative to keeping the whole system going basis. When you're short something and it goes up 6x, that's a come to Jesus moment, right? I mean, you know, so if you're suppressing it with paper Bitcoin and the price does that. In fact, that's part of what drives it to go up the 6x is the fact that, you know, when we break through this 26, you're going to see people scramble that are on the wrong side of that trade.

1:01:27I mean, there's a big pair on Wall Street that said, you know, they had a pair trade where they're long with triple Qs and short Bitcoin. And that pair trade has actually worked because the triple Qs have hung in there and Bitcoin has failed. I think it's a stupid trade because the triple Qs are overvalued. I think Bitcoin is undervalued. But as long as it works, it works until, you know, they get too far out over their skis and then it reverses. And that's what causes Bitcoin to trade like the wild animal it trades at. And so what I think few people understand is how when this thing does hit, when this next wave does hit, it's not going to 140, guys.

1:02:02It's going to 250 or 300 or 350. I mean, because there will be so much, you know, there'll be two things happening. There'll be all the shorts who have to cover or else they're going to get their faces ripped off. And then there'll be a whole new category of long D-gens who'll come in and who'll lever it and go long it, right? And that's what'll shove it to 400. And then from 400, by the way, it'll correct back to 150. But I mean, it's the nature of a speculative asset that's being adopted. You know, this is, if you go look at a very long-term price chart of Amazon, which is a similar network-based business that had multiple, you know, one had one 90 % correction, multiple 60, 70, a lot of 40, 50 % corrections.

1:02:43I mean, either it's going to take over the world or it's going to die. And right now, Bitcoin's in the, you know, right now we're kind of hearing, oh, it's not, I mean, I just saw a tweet this morning from a gold guy. well not really looking like digital gold is it and i was just calling you wait you know okay you know just just wait you just you just relax you know it's it's not a straight line but you know i i'll take the other side of that bet in two years we'll see who looks right so so you don't

1:03:10Lawrence Lepard:think it's an issue that um so much bitcoin is now being owned in like a non-self custodial way through sort of IBIT, the options on IBIT, strategy or treasury companies? I don't. Yeah, that goes to the issue of are they going to grab it all? And I suppose that's a possibility and it's always a risk. But let's be honest, Denny. I mean, we had to have the ETF. We had to have corporate adoption. We had to have nation state adoption, sovereign wealth fund adoption. And all of those things had to happen or this asset wouldn't become what we thought it was going to become. So they're all net good. I mean, as you know, I'm a real self-sovereignty nut.

1:03:46And I think, you know, having control of your coins is critical. But that, you know, for people who don't want to do that or can't do that, you know, the 6102 risk, I don't view it as being that large yet. I mean, I think it's one of those things we got to watch, you know, how dystopian does our government get? I mean, you know, let's, I mean, let's map it out. So let's say it's now 2028 and sadly red team loses, blue team wins, you know, and we've got, I don't know, Stephanie Kelton's the treasury secretary and the narrative develops that this great Keynesian monetary system that we've had going for all these years, that's being ruined by these gold and silver and Bitcoin people.

1:04:26And we need to tax that shit at 90%. In fact, we need to go further than that. We need to just seize it because they're ruining this country. They're ruining the financial system. And so we're going to seize it. And here you go. Here's your cash. Send us, you know, send us your Bitcoin. Well, if you're in an ETF, you know, Fidelity and BlackRock, they're going to comply with the law and send the Bitcoin in and give you the cash. The cash will buy less the next day, but that's just the way it's going to go down. Same is true with the gold and silver. So, and that's, that's one of the possibilities.

1:04:56I mean, I, it's one of the reasons why I sincerely feel like we got to make a lot of, and by the way, the other thing that's going to happen with absolute certainty if you study history is taxes are going to go up and just you know it just it's um we've been lucky to have such a low tax rate environment i mean you got to remember when reagan came in in 80 you know top marginal tax rate in the united states like 70 percent you know i mean right i mean it's i mean there's been and you know with all this wealth inequality i mean you think a blue team in in 2028 isn't going to jack taxes on everybody Of course they are.

1:05:29It's going to be horrible, which is also another reason why, and I'm not suggesting anybody don't pay their taxes or cheat or any of that kind of crap. I'm just saying that if you own money that's got no counterparty in your own possession and you lose it in a boating accident, I don't know, how are they going to tax it? I mean, good luck with that, right? But it's a real consideration, right?

1:05:56Lawrence Lepard:yeah i mean i think that's definitely true like the 6102 is a sort of tail risk i think it's obviously possible i don't think it's likely but i could 100 see them taxing bitcoin and oh absolutely absolutely and using us as like scapegoats for the system oh absolutely those damn sound money people jesus christ look at what they've done to our beautiful how dare they want to save their money yeah yeah exactly we we i can't believe that they've done they pulled this off, right? And so, yeah, it's, you really are seeing these camps dividing, you know, between the socialist communist side of the world and those of us who believe in liberty and freedom and all the things that are in the constitution.

1:06:35And, you know, we've got to fight like hell to make sure that our side wins, you know. And I think our side will win. You know, we're heavily armed. That's a positive, right?

1:06:48Lawrence Lepard:Not here in Australia. Well, I know you guys aren't. Yeah, but you got brave guys that'll go tackle guys with rifles. That guy was a stud. Yeah, that was insane. That was absolutely insane. While the police were terrified. Is that right? Larry, I always love talking to you. Is there anything that's happening in sort of macro world at the moment that we've not talked about that you want to? Well, let's see. I don't know. No, I mean, I think we've kind of hit most of the high points. I mean, I guess the big thing we didn't really talk about was what happens with the Fed becoming less or completely non-independent.

1:07:27Yeah, well, I think, yeah, we haven't talked about that. I think that in general, it'll be interesting to see because in general, the history of the Fed has been that the chairman kind of pushes whatever the direction is and he beats everybody else into accepting his decisions. I mean, that's kind of behind the scenes what occurs. But as a practical matter, they actually really can vote and do vote. And so, you know, I don't think I've ever been, you know, and occasionally they'll have a few dissents. But, you know, it's never like gets down to a split vote where one person swings it. You know, it could become a very, very political organization.

1:08:03And Trump has made it very clear that he wants to get as many seats and he wants people who see it the way he sees it. And he wants lower interest rates. And so, you know, I think you've got to believe he's going to kind of get them. I don't know how far, how much, how quick, but I think he's going to get them. And honestly, you know, you kind of need them. I mean, if you look at all the budget deficit, I mean, the interest expense is about$1.2 trillion at the current run rate. I mean, you know, if interest rates go up, I mean, it gets worse, right? I mean, that's your death spiral. And so, but if you could take the average interest rate down to 1.5%, that would seriously help in terms of balancing the budget, right?

1:08:52Now, you know, it would also create massive growth in M2, which is inflationary. So, you know, pick your poison, right? But I think, you know, this administration, I mean, it's interesting to me. I mean, another thing we haven't talked about, we haven't talked about the Supreme Court, right? Because the Supreme Court's going to rule on these tariffs. I mean, and it's become very clear. I read the journal. I read everything very carefully. It's become very clear to me that, you know, the court wants to say, no, these tariffs really should be part of Congress, not the executive branch. But Trump has drawn it so, you know, he said, well, how are we going to give the money back?

1:09:27And it's a national security. I mean, everything's being framed in terms of existential national security, fighting China, winning the overall war, you know, for being maintaining, quote unquote, our empire, our position in the world. And in that, if you use that argument, it's kind of like, what's the counter argument? You know, you can do anything. Right. And so, you know, I mean, if they say, look, this is an existential threat, you know, the budget's going to blow up the country. You know, we got to take interest rates down. Fine. Well, then the bond market blows up and they say, well, that's an existential threat.

1:10:07We can't pay big money on our bonds, so we're going to start buying them. I mean, that's going to yield curve control. Yield curve control. I mean, Danny, that's going to happen. Okay. I mean, that is going to happen. That has to happen. mathematically that literally has to happen and i know it i believe it most sound money people know it and believe it but i think the average person doesn't believe it and won't believe it until it actually happens but when it happens they'll wake up and they'll believe and they go holy shit this guy was right you know it it'll happen and and at that point in time you know money supply is going to explode again and and we're we're right back to you know where we are so i mean i laid this all out in the book.

1:10:48And so it just, you know, I mean, it's interesting to me. The book's done pretty well. It's sold 50 ,000 copies, but people tell me that's great. I think it sucks. Why do I think it sucks? Because there are hundreds of millions of people out there. And it's kind of like, hey, you guys, you all need to know this. And so, you know, we really got this, you know, we really got to get it to go viral because if you want to protect yourself from this thing, which seems to be a very high mathematical probability, you know, the only way to do it is to fully understand it. But I think it's coming. So I think I would end it on that note unless there's someplace else you want to go.

1:11:25No, that's perfect. I mean, I think 50 ,000

1:11:29Lawrence Lepard:bucks is pretty impressive, Larry. Well, I appreciate that. Thank you. Thanks. But I always love talking to you. Maybe yield curve control is the big print. We'll see what happens. I think One of the most interesting things about late-stage fiat is that these conversations just get more and more interesting. Well, they do. And something will surprise us, too. Something will happen that we couldn't even foresee, and we'll get there that way. I mean, who could have foreseen COVID, right? Exactly. The math is, you know, I keep coming back to, you know, the math is what it is. And so how are you going to resolve it with this mathematical problem?

1:12:07It's just too hard to solve any other way. Yeah.

1:12:11Lawrence Lepard:Well, let's close out. We'll sell a few more copies of the book. Where do people go and buy the big? Yeah. So I'll just show the cover. So the book is available on Amazon. It's interesting. I can't get a publisher. And the reason I can't get is too edgy. So it's fine. But it's there. It's hardcover paperback, ebook, and then also Walker read an audiobook. It's about 12 hours if you listen to it. um so um yeah and you know i my i wrote it because i wanted to orange pill the world i wrote it because i want to try and protect the average person i tried to write it with enough detail to support my argument you know and the facts but in a simple enough way that you know um you didn't need an economic background and you you shouldn't be intimidated by it an average person can read it you know i mean that could be a nurse or um you know karma can i mean it doesn't matter who you are.

1:13:04If you've got a functioning brain, you can read it and go, oh, I get it. Here's how they're screwing me and here's what I got to do. And they are screwing you and there is something you can do. So those are both good things to understand. Yeah.

1:13:18Lawrence Lepard:It's an awesome book. I love that it's not like a textbook. A lot of the Bitcoin books end up being like you're reading a dense textbook. Oh, 100%. I look at Lynn's book, I look at Sage's book and I'm jealous. Those are fantastic books. And honestly, I borrowed heavily from all these people. I borrowed heavily from Luke Groman. I mean, you know, I think what I've done and what people have told me I'm decent at, and I'll accept the compliment, is that I can take these complicated things and I can put them in words and everyone can understand and indense it in a crisp way so that people can, quote, unquote, get it.

1:13:51And so I thought, you know, I'm 68 years old. I've seen how this country's deteriorated. I know how broken it is. It really pisses me off. I want my kids to live in a better world. And so, you know, I thought I've got to tell the story of how we got here because it's a fascinating story. And once you see it, you know, you can't, as you know, you can't unsee it. And then, you know, I challenge it. I challenge anybody to read this book and not become a Bitcoiner. I mean, I've had some very, very skeptical friends who've read it and go, oh, shit, I get it. I'm in. There you go. There you go. Right.

1:14:26Yeah.

1:14:27Lawrence Lepard:So, thanks. I mean, I do. Those other books are great, but it's nice to have one that's like a narrative. It's a bit easier to read. It's easy to understand. But go buy Larry's book. Thank you, Larry. Always love talking to you, man. I hope I'll see you soon at some event. I'm sure I will. We'll be at an event for sure. Thanks, man. Take care. All right. Thank you.

1:15:00Thank you.