Michael sailor today. Alright folks. So today is a special podcast. We got a special guest for you here today. I would say this, the first time we got a billionaire in the vault. Michael sailor for some of you guys that don't know his story. I'll kind of set them up and it will get right in to get your pens. Ready, your papers, ready. Get your mind ready. It's about to go for work out the next two hours. I promise you and for some of you guys that maybe still have doubts of cryptocurrency, or maybe even Bitcoin this man may change your mind. Here's
Why MIT grad, he is the CEO and founder of microstrategy nearly 2,000 employees. They started an 89 went public in 98 over 40 patents. If you own one Bitcoin today, a Bitcoin as of right now is word forty four thousand five hundred and twelve dollars if you own 10, that's four hundred forty thousand dollars. If you want 100, that's 4.4 million dollars, but he owns personally seventeen thousand seven hundred and thirty two Bitcoins.
And it's company microstrategy brace for impact owns. 125,000 Bitcoins up. Let me say that one more time, 125,000 Bitcoins. So, with that being said, Michael Sailors, thank you so much for being a guest on the
podcast. Half a to be here. Yeah.
So here's the craziest thing about what you were just talking about off camera. You just got into this summer of 2020. It's not like you've been a True Believer from day one. It's not like you bought it and you know,
With 12 years ago, 10 years ago, and these guys are time. You just got into years ago for a guy as smart as you what made you switch and say this is the way to go.
You know, most people don't think about money. And we just kind of take it for granted. And, and I really took it for granted up until about 20 20, but I think in March of 2020, a lot of people's worlds, view World Views were shaken, right? I had some deeply held beliefs, you know, one belief is everybody should work in an office and you had to come and show up and work in the office and then during the lockdowns. I found that I had to
Question that belief and pretty soon. We're all working remotely. And I along with probably a billion other people went through that same transformation. So that was like a digital transformation of work and in the second quarter of 2020, we had what we'll call K shape recovery. But in my opinion, the case shape recovery was Main Street. Got shut down and locked down. And if you manufacture anything or provided Services, your business was
Wrecked. And then Wall Street had a rapid miraculous recovery, within six weeks of the pandemic and they had the best year of their life. And I could have basically set on a floaty in my, you know, pole in the Hamptons and got a 30% return in that year doing nothing, which would be the best year of my entire business career, if I'm a finance here, but if I was running a restaurant or running a manufacturing facility or doing,
Thing with raw materials, I would have had to generate 30%, more cash flow to get nothing. You would have had and of course, that
was impossible. So, can you explain, Can you blind to the average girl? With, that means, 30 percent more cash flow.
The value of the currency collapsed in the year. In essence, the FED printed 40% of all the dollars in existence in the 18 months that followed the pandemic. So when Jerome Powell said, we're not even thinking about thinking about raising interest rates, you know and forecast.
Four years of zero percent interest and when the FED loosened the reserve restrictions on Banks and allowed Banks to an Essence. Print infinite money with no Reserve ratio, then the condom was flooded with liquidity. What happened was the stock market immediately recovered people thought that. That was a, that was something good. It wasn't good. It was the money collapsing. It was the value of the dollar collapsing in real time against scarce assets.
So I most of the time, if you owned a portfolio of stocks, if you had a billion dollars worth of stocks and your portfolio went up by 30 percent, you would have thought you were a genius in that year, for doing, what for staying invested in stocks. Why? Because Jerome Powell printed 30% more money. Okay, if you didn't own a portfolio of stocks, if you thought you were going to work as a dentist or a doctor or do things with in the real world. Your business is shut down. The cost of all your materials is going up.
Up your Labor's disappeared and no one's shown up to buy your stuff. The world doesn't look so good. So you had this by dichotomy, I think and the people on one side of the economy, thought everything was just fine and people on the other side of the economy, got destroyed. I was sitting in the middle. I had a Main Street company that generated 500 million in revenue and generated cash flow, and I had a five
Million-dollar treasury that was sitting in conservative instruments. Basically invested in, in short-dated sovereign debt, you know, the conventional strategy for any publicly traded company. Is you take your treasure and You by 125-year t-bills and otherwise hold it in cash. Now, if the, if the interest rates were three or four percent and the money supply was expanding at 2%,
Sent, you might think that that was rational when the interest rate goes to zero percent and the money supply is expanding at two or three percent. It looks a little bit painful. But when Wall Street recovers 30% in a matter of weeks, when main streets completely shut down and it's pretty obvious. It's shut down. Your your catalyzed to consider your premises. Check your premises and ask the question.
Is the economy 30% better than it was before the pandemic or is there something else going on here? And I think the answer is there something else going on here? The actual inflation rate isn't 2%, or 0% The inflation rate was 30% But the inflation was hitting the assets. It wasn't hitting consumer goods. And so what I realize is, maybe the money supply is expanding faster than 0 or 2 percent a year and I started on
I searched and I discovered the Bitcoin standard and some Austrian economic economists. And what I realize is the money. Supplied really been expanding its seven to ten percent a year for the last decade. That's why the S&P index is, is appreciating at 10% a year for a decade. And once I realized that that assets, like the SP and Equity portfolios, and real estate are driven primarily by monetary policy of the central banks.
Then I realized that holding money, a 0% interest. When the money supply is expanding at, 10% is losing 10% of your wealth a year. And then I realize that in fact the money supply was expanding not a ten percent, but about 25% a year starting with the pandemic and I was going to lose half my wealth on that treasury within 36 months. And once I realized that I realize I was destroying about 250 million dollars of shareholder value, if I did nothing.
I started thinking I need to do something. So in an environment where where the money is losing 15, 20, 25 percent of its value a year and you're sitting in all cash instruments. You either need to give the money back to the shareholders, or you need to invest it and some scarce desirable asset. So the reason I did, what I did at microstrategy was if I gave the 500 million dollars back to the shareholders.
That was $60, a share. The stock was a hundred and twenty dollars. A share. I basically was valued at one times Revenue, plus the cash, when I gave the money back to the shareholders. This talk was going to go to $60, a share when that happened. All my employee stock options. We're going to be under water. Right? And we were going to get Beat to Death by Amazon Apple, Facebook. And Google is going to steal all our employees when the stock crashed. And that would mean that instead of growing
10% a year, I was going to be shrinking 5, or 10% a year. Instead of my cash flows doubling, or tripling, their were going to be cut to zero and once your Revenue start falling, your cash flows. Go to 0, you have no Capital all your employees quit. When your employees quit the company unwinds we're going to go to zero. So giving the cash back to the shareholders was a fast death holding the cash at 0% interest when it was losing 20% of its value, a year. It's a slow death doing something was the
Native. And so we decided to do something, which is invest the money in a property or in an asset that would go up faster than the rate at which the money was collapsing and that set us on a search and we considered buying a portfolio of scarce art. I thought about 500 million worth of real estate. You thought about buying art. Yeah. I thought everything. Do you buy gold. Do you buy art? Do you buy real estate? Do you buy a portfolio of stocks? Do you know going through an arraylist?
Options before you settled on bitcoin, you're thinking art, you're thinking real estate, you're thinking anything other than owns cash everything. And in fact, in fact, we put out a press release to our entire shareholder base. When the stocks 120, and you can go read it today. It said over the next 12 months. We're going to buy back, 250 million dollars worth of our stock and we're going to invest 250 million dollars worth of our treasury assets and some some asset in order to avoid inflation and we listed a Litany of these things, and we included Bitcoin is one of the
Things. We're evaluating ultimately. So we went from first principles. We said you have a bunch of money and I'll tell you why. We said we're going to buy back 250 million dollars of our stock in a second, but you have a bunch of money. So they turned 50 million dollars. You want to hold it for 100 years. Give it to your great-grandchildren. Where do you invest it? Well, if you put it into the dollar, the dollar is losing, at least. It's been losing seven to ten percent of its value a year for 100 years.
I mean over the course of 100 years the dollar loses 99 percent of its value my house in Miami Beach was purchased for 100,000 dollars in 1930. Okay. I bought it for 14 million dollars. This is the villain to 2012 today, you know. Yeah, so a hundred thousand to fifty million.
And less than a hundred years. That's that's not the house getting more valuable. That's the currency getting less value
than use the 200 million 100 years from now. There is nothing to million bucks.
Okay, if you took our, if you took any amount of money, take a hundred million dollars in the year 1900 and invested in any currency in the world. You would have lost a hundred percent of your money and every currency except for the dollar or maybe the pound every currency collapse.
Winner of every war in the 20th century was the United States. And so the winning currency loses 99.5 percent of its value, everybody else. You lose everything. Now if you if you put that money in Gold, there's a 95% chance that would have been seized in the hundred years because there's only a couple cities on Earth. Maybe you saw record Geneva where you wouldn't have had it stolen and maybe then they still would have stole it. You know, if you were the wrong citizen in the
Ang country. If you were a Swiss citizen in Switzerland for the hundred years, you might have kept gold but you know, Churchill sees the goal, Roosevelt seize the gold. If you'd lived in Germany, you would add your goal sees multiple times in Japan. They lost it two or three times and Russia, you know, count the number of times. So there's nowhere on Earth where you could have kept your your gold. And now you're stuck with okay. Well, what do you invested land?
Take take a hundred million dollars worth a lot of money and buy land in Florida tax bills, two million dollars a year. If you buy property in Florida's 2% property tax a year. It gets assessed up. Every year. You have the ownership of the land for about 20 years before the government. Takes it back from you. You don't own, you don't own your property, the land. Yeah. Plus the maintenance. So if you want to move money,
Time.
How do you do it? You can't do it with the currency. The money is broken. The money was always. Broken has been broken for a hundred years losing seven to ten percent of its value but and Hyper inflating economies like Venezuela Argentina, fill in the blank. The money loses 20, 30 40 percent of its value a year. Sometimes 80% of its value a year and that case you can't even carry money for a decade. You might not be able to hold money for a year in those economies.
The Russian Ruble has lost 35% of its value in the past few weeks, right? That's how fast it collapses. So, fundamentally, we have this issue. I want to move money through time. I have a 100 Year time frame. I mean, institution, the whole point is institution supposed to go on, right? And so, how do you do it? No currency will work. Can you use gold? Well, gold is money. Is the best idea Humanity had.
And for like five thousand years, but it was but it's not a perfected idea. The problem with gold is gold, miners produced, two percent more gold a year. Okay, that's no better than the State of Florida seizing 2% of your your property a year in a property tax the half-life of gold. Therefore becomes about 30 years. She divided, 2 percent in 270 and 35 years. Your money is cut in half. Hold it for a hundred years. It's cut in half three times.
The second problem is it'll be stolen by a criminal, or a politician that disagrees with you. And the third problem with it is that gold is a property. You have to put in a vault, and if you have to put in a vault, then the counterparty, the bank is able to hypothecated, Andre hypothecated, which means they basically sell 100 ounces of gold paper for every ounce of gold, you hold, and they keep, they keep shorting it naked, and they hold the price down to manipulate the price. You can't hold your own gold.
So ultimately, the problem with the gold is holding money and gold over the course of 100 years is going to lose 85 to 90% of your wealth under the best of case.
The other problem is, you can't move money through space with gold. I need to, I need to move money through time and space. I need to hold it for a hundred years and I need to move it from here to Tokyo. If I want to move, you know, a billion dollars of gold. It's like 30,000 pounds or something. You want to move a bunch of money through space. It's going to cost you three to six months and five million dollars a move at once. If you want to move it through time. You're going to lose 80 90 % of
Our money through time, and it's going to be seized. So goals are pretty expensive, way to move money. Currency is an ineffective way to move money. Property property is only good so long as the nation state that the property is in chooses to allow you to continue to possess it. But, of course the oldest, you know, the oldest story in the world is all we lost the Family Farm because we couldn't pay the property taxes. You can hold a you can.
Add the land, you know, by 10,000 acres of land, someone moves in and sets up shop next to you. They incorporate a city, then they bring 50 people in the city. Then they make themselves mayor, then they prop pass a property tax. Then they annexed your farm, then they give away free money to anybody that wants free housing in the city. Then they double your property tax. You can't pay your property taxes and they seized the property because you can't pay the property tax. So, ultimately property is not a very effective way to hold money for a
Periods of time and you can't move money through space. So this is a problem. We I started going down this Rabbit Hole of thinking about what is money when I realized that I was in essence going to lose my company, right? And destroy the livelihoods of all my employees and you know, waste 30 years of my life. And so when I started thinking about it and you know, it's helpful when Jerome, Powell says, when I'm in thinking about thinking about raising interest rates, you know your strategy of investing
Testing and bonds is broken when I started thinking about it. What I realized is money is energy.
Money is economic energy. Social political energy currency is a medium through which the energy moves if you wish to. If you wish to hold energy and transport energy, you need a technology.
We're not using gold anymore. When we use goal as I pointed out. It's expensive. And it's and it's cumbersome currencies. Don't work the u.s. Dollars, the strongest currency in the world, but is losing 15 to 20% of its value? A year, the pesos losing forty to fifty percent of its value. Your. The boulevard is losing 100 percent, 95 98 percent of its value a year. So once you start thinking about it that way, you start thinking well, what's a better way?
A to store economic energy through time and you realize that the currencies don't work, gold doesn't work. So, what is money? Well, money money. And the last 30 years became the S&P index. You buy a diversified portfolio of companies of stocks, which is a little bit better because maybe you're getting blood 2% a year by the management team, but the company's making money and so maybe you can hold value. It turns out
That the money is losing about 10 percentage value year, in the S&P index, is going up about 10% a year. And you look at that for a hundred years and there's a very interesting correlation there.
A diversified portfolio of assets, is tracking the money supply. Okay, interesting. What's the problem with that? Well, the problem was holding stocks as a store of value is. If the stock goes up by a factor of 10, there's a management team that has a fiduciary obligation to issue more stock. There's a Temptation issue, stock stocks aren't scarce. The the amount of equity shares will also go up.
Stock is overvalued versus the fundamentals of the company. The CEO is almost certainly going to issue more stock. And so that's one problem. The second problem is stocks have political Nexus. They have management teams there in countries. They can be unionized. I could put a tariff on the product. I've got a competitor. What if the CEO goes Bonkers? All sorts of interesting problems. What if the company gets expropriated by the government, you know, are
a jurisdiction and operates within. So, stocks are an imperfect approach better than gold. The other approach is by a bunch of buildings in New York City by scarce, desirable real estate in Miami, Los Angeles, London. That's a an interesting idea. And the best idea in the 20th century. If you're going to, if you're going to try to either create Walter, hold your wealth. If you want to hold your wealth, you buy a billion dollars worth of property.
If you want to create wealth you borrow billion dollars and you buy a billion dollars of property and you start with a million dollars of equity, a sliver of equity and what you're doing is you're going short the currency and you're going along the property. So if I told you, let's go to Argentina. If I told you in Argentina, the pesos going to go from 1 peso to the dollar 25 pesos to the dollar to 10 pesos to the dollar to 20 pesos to the dollar to 40 to 80 to
Hundred the black market rate right now is 210 pesos to the dollar to 20. If I told you, it was going to collapse from 12 to 20 and you had 20 years of notice what your best strategy, take your million pesos, convert to Dollars and you're going to have 220 million pesos. And 20 years. You're going to look rich. Better strategy is borrow a million pesos convert the dollars. Wow. Best.
Right. And she would be mortgage your entire company and pesos sell equity in your company and pesos converted all to Dollars and then get the dollars out of the country. Because if they're in the country, if you're at the million pesos is converted to dollars in a bank in Argentina. Then the government will basically pass a law force, your dollars to be converted back into Pesos. Devalue them. And I happen to have some experience with that because I actually had a million dollars in Argentina during the last currency collapse. They
converted to pesos. They devalue to tend to one a day later. I'd lost 90% of my money. So simple idea.
Short the currency which is collapsing. Go long property and then get the property out of the country. Because the property in the country is also going to devalue. Because the property's value based upon the stream of cash flows, right? If the building is has got a renter and it's got a lease. And the lease is capped at CPI or denominated in the local currency, when the currency collapses, the value of
Of the rental income also collapses. So, wouldn't it be great if I could buy a virtual building in Argentina, using borrowed pesos? And then what if I could Spirit the building out of the country and rent it to people in London or New York City. That's what Bitcoin is? Bitcoin is digital property that you can teleport anywhere in space instantly.
And it's also perfected property with with the lowest maintenance cost. You know, you don't have the property tax, you have on a building. You don't have to repaint. The thing every 10 years. You don't have to worry about leaks in the roof. So if I could buy a big, if I could buy a billion dollars worth of property and it was in cyberspace, and if you couldn't make any more of it, if I capped it at 21 million.
City blocks in cyberspace. And if I could hold it for a thousand years. I might have a better idea than buying a city block in Manhattan or a building in London, or even a company. And it's a lot better idea than by and thirty thousand pounds worth of gold. Why? Because real estate developers going to create more buildings, gold miners, going to create more gold, mayor's are going to pass a property tax and they're going to
They're going to put some kind of in joinder or some kind of restriction on your rent, rent control your building something, you know acts of God or going to create earthquakes and floods and lightning strikes and none of that stuff happening in cyberspace. So the whole idea of Bitcoin is it's perfected engineered gold, crypto gold.
With none of the none of the defects of gold. You can't mine anymore of it. It's weightless. I can move it at the speed of light. It never decomposes. I can decode, I can break it into a thousand pieces in a second. Send it to a thousand places and recompose it all using a computer program and I can take personal custody of it, may be the most, the most powerful two ideas are I can hold?
Action of a billion dollars a Bitcoin in my head just holding a password or set of private Keys. That's a pretty big idea. Maybe the first the first time in the history of the human race that you can actually take possession of your wealth and take it to the Grave with you or take it anywhere else on Earth with you. And even if I put a gun to your head, the most I can do is kill you. I can't take it. And this is a very interesting idea every other form of property in the history of the human race.
I pulled a gun. I get it all.
Right. My incentive is to violence with Bitcoin. I pulled the trigger, I get none of it. So the incentive is the negotiation. I would rather have half than 0, right. And it's a very interesting idea, a big idea and the second big idea is super intimidated by the way. I'm yeah. I the second big idea is it's a monitor. It's a virus.
It's a cyber virus. It's a, it's a chain reaction in cyberspace, or it's a life-form in cyberspace. Bitcoin is a bank in cyberspace, run by Incorruptible software. And the software the software itself is going to basically protect your money. The problem with software is, I don't trust the computer. It's on, if it's on, it's on a single phone. I can seize the phone and reprogram the software. So if I came up with a bang,
A bank that was run by software. How do I prevent any human being from corrupting it? The thing that makes it Incorruptible is I release thousands tens of thousands, or hundreds of thousands of identical copies in cyberspace and it's self-replicating. And all of the copies, keep track of each other. And when one of them is corrupted, gets kicked off the network.
So you could think of it is I released a life-form plankton or a virus and I let it go or a swarm. Now, you're a part of the swarm. I shoot you. It doesn't help. You have the genetic code. I shoot. You does not. I obliterate, all of, you know, the the algae in the Atlantic won't stop it. I eliminate all of the bacteria in your body. Won't stop it. Right? It's a virus. It's going to keep
Writing. And the beauty of the system is, it's in a sense. This chain reaction in cyberspace. And the only purpose of the chain reaction is to protect the Integrity of the network. There will never be more than 21 million Bitcoins. So what you've got is is truth and integrity released as a cyber virus and you can, if you choose to join that.
Network, you Avail yourself of all of the benefits of that Network. How many of the 21 million Bitcoins have been have been mined already about 18 and a half million, okay.
Yeah, it's
I want to read you something. I want to read you something because I'm trying to see more the side like the way you processed everything with real estate with stocks. You know, management team CEO. What could happen to the market, government can regulate them? Etc. Etc. Okay, fine cash. Got it. If you have 200 million dollars, you know, two million dollars, you know, a hundred thousand dollar house in Miami now. It's a 50 million dollar house. Okay, so maybe that's also a risk because what Florida would do it within 20 years, but, so here's what just took place. I'm trying to see it for somebody that
Wanting to play Devil's Advocate and be a skeptic ukrainians are preparing to lose internet access. Okay. This is crypto briefing article performs in Ukraine apps, that permit basic services, like communication and mapping, without internet access our topping the downloads charts right now such applications utilize radio signals or Bluetooth for offline, functionality and are common with when civil conditions deteriorate am at war government, Crackdown a similar searches on such downloads occurred in 2019 with huh?
Kong protests right while there has been an influx of cryptocurrency donations to the country. Emits. Its Invasion. Cryptocurrency usage is generally impossible without internet connection, parts of Ukraine's, third most, populous city or Desa have already lost power in Forbes sources indicated, their expectation. That Ukraine could lose power internet connectivity on a more widespread basis that this is where I'm going with this. So, you know, covid takes place. Whatever you agree with that. There's a lot of different stories. It's a virus. It.
From this, you'll Abby came from this. We don't want more because our lab we haven't done the investigation. We still don't know the tribunal courts. Got to get out there and say, look, we got to do real mastication, but it was a community that says, look China's known for investing most of their money in the military biowarfare. That's what their strengths is that, right? And Russia is known for cyber warfare. That's where, you know, they got the nuclear weapons. We all know they're very powerful with the nuclear weapons, but we experienced what, you know, if
We had a biowarfare, the last 30 months. If we did we experience the glimpse of it. What did it? Shut down the entire world, right? What is your concern with a, what? A cyber warfare would look like? How would that affect Bitcoin and cryptocurrency?
Bitcoin is a nuclear hardened protocol. It's pretty much the most robust resilient thing. The human race has yet to invent. For example, it's running on on tens of
Thousands of nodes, you can't even identify the nodes. And there's an identical copy of the Bitcoin, Ledger on every one of them. So if all of the electricity got shut off everywhere on Earth and every computer failed everywhere on Earth for 10 years. The protocol just goes dormant for 10 years. And as soon as one person turns one node back on the entire protocol, comes back to life again.
There's nothing like that, right? All your money in a bank and Bank of America could be wiped out with, you know, a keystroke you go and you wipe out a few servers, you know, your building can be wiped out with a bomb, right? Lots of things can be wiped out but but Bitcoin is the most resilient thing in cyberspace because it is so incredibly decentralized, you know, if you took if you took an entire country offline, that's the Irrelevant. In fact, we just
All last year during the China. Crackdown that China banned. Bitcoin mining. They took forty to fifty percent of the entire network offline, half a Bitcoin miner was taking place in China, the network didn't miss a beat, not even for a minute. It just kept running completely secure. You could literally wipe out 99% of all the nodes. You wouldn't notice in the network. There's nothing else that you rely upon, if I can take down.
On Google and Twitter, and Facebook, and apple, and Amazon, and the US government. And, you know, there's a lot of other systems you can take down much more easily you take down Bitcoin, so I don't really worry about about Bitcoins fragility to any Cyber attack. In fact, the whole point of proof of work was to create something, which is impervious to a denial of service attack and it turns out that if you dig a bit deeper, what you realize is that not only is Bitcoin.
An impervious to cyberattacks. It's also the solution to cyber attacks because if you want to eliminate denial-of-service attacks, which are the most common Brute Force attacks or you want to eliminate fishing and scam and spam attacks and and other sorts of imposters and malicious behavior in cyberspace. The way to do it is to integrate a layer of monetary energy, which is what Bitcoin is into the internet. You need.
Need to wrap the avatars, you need to wrap the people, the websites and the services that we have in cyberspace with a layer of digital energy. If you did that, you could prevent all denial-of-service attacks. You could shut them down. You can probably shut down. Most of the scam videos on YouTube. All the scamming on Twitter, all the spam in your inbox, right? That it's simple principle is you simply have to post a monetary security deposit in order to hit my
Site or message my inbox or post a comment. And if you're found to be a scammer or a fissure, or a malicious actor, your find, and we just take your money. Now. This is not a problem for an ordinary person. You would pose $10 once in your life and you will trip through cyberspace as you will. But 1000 times a week. Someone spends up a Michael sailor, Bitcoin giveaway on YouTube. And those are live, YouTube class. They'll probably take this.
This interview we have, they'll rip it out. They'll put it into a Michael sale or Bitcoin. Give away. They'll run it on YouTube with 40,000 fake people listening. And they'll have some number where you can, where you can send Bitcoin to get, send one to get to back for those people who listen to you. I won't get once can never send your Bitcoin to someone to get to back. You're getting ripped off. So they'll do that and they will have spun up 40,000 fake actors. If you
Actually required. Someone a post $10 a Bitcoin in order to trip through YouTube or use YouTube. It would cost you four hundred thousand dollars every 10 minutes because they get taken down every ten minutes and they get spun up every 15 minutes. It's literally thousand times a week. And so imagine trying to spend forty thousand or four hundred thousand dollars a thousand times a week to do this Michael, what type of people fall for those scams. I mean, you said you've been a victim of
you'd be amazed.
Seeing your name for this type of one out of a
thousand, one of the Thousand. But yeah, they obviously weren't because they do them every 15 minutes. If you went online right now and type, Michael sailor, a crypto giveaway or something. You would probably just bought a few before I got here.
Just kidding. Yeah.
Yeah. So bad, Bitcoin is its digital energy, right? This is a big idea. We have encrypted money, right? It's such a huge idea. Since most people don't know what money is. It doesn't occur than it.
His energy. Since I don't understand what money is that, they don't really understand that money is defective, that the energy is bleeding out of their currency. And finally, if money is energy, the energy Finds Its way. In order to currency. It also Finds Its way into into stocks and into bonds and into property. They're all bleeding energy over time, or over space. And if you're an engineer and you understand that,
That a well-engineered system is a system that allows you to move energy through time and space with no power loss. No impedance superconducting, which is that we call that like, you know, it's an adiabatic system or a thermodynamically sound system. If you're an engineer, you totally get it. When you're designing a pneumatic system, electrical system, you know, even a heating system and a house or a swimming pool.
If the, if the water drained out of your swimming pool wouldn't work. So well, right if your bathtub, you know, drained out, it was doesn't work. So well, so Engineers understand this, but economists, don't really think of money as energy and so that it doesn't occur to them, that the energy is bleeding out of the system's. Once you figure that out, you realize that Bitcoin is truly brilliant. Because what they've done is, they've created a thermodynamic, we sound monetary
A network that allows you to store any amount of energy for any period of time and move it at essentially. No cost anywhere in space as frequently as you want part of you and it's like Louis he's saying lossless. Yeah, that's the key word. You've heard that money is a tool money enables. I've never really heard money being used as energy. Is this something that you've heard before? Where the energy thing?
Listen? I mean, it makes sense to do it, too.
Only makes sense on what he's saying. The way he's describing it for me when I'm listening to him. Speak all I'm thinking about, and I hope the audience is doing this, as well as how this man processes issues. I mean, as an investor everything he went through was Common Sense. Nothing that he went through on how he came to the processing of why he wants to do. This is now you can sit there and disagree and you can say, I disagree with them. I'm gonna go this way. I'm going to go that way, which is totally fine, but I'm just listening to
Waste processing issues talyn, can you pull up that story? What happened? We Canada because for me, one of the things I'm watching Michael very closely right now is the following. All I watch is, you know, I got four kids. I watch the kids on how they handle a crisis. I watch kids how they handle a loss. I watch kids how they handle a, you know, a breakup, how they handle a rejection, how they handle a Boolean, how they handle all that. So because that's how we're learning about the personality of the individual and maybe there's
An opportunity there to coach and walk the kid through what he's going through. I also watch what's going on with crisis. How the market reacts to crisis. You said, a few different things. You said, you know, what covid did to me? Is it made me question a few things. One of them was working remotely, some of the things you talked about, right? The other one was, you know, this and this and that some of the things that, you know, I was looking at was number one. We've been told, you know, when I went and started working at Morgan Stanley thing with her day before 9/11, even when I was in the army.
Say bye Roth, I run diversify. Okay, diversification. That's a concept. We've heard for a long time. Inflation increases gold whenever there's inflation Peter Schiff. Oh my gosh Gold's going to go because you know, we print a 40 billion percent over, the US dollar has been printed last 18 months. Gold's gonna go up. We didn't see that cause and effect, you know, we didn't see the cause and effect with that taking place. You know, what are your thoughts with some of these things where the traditional conventional way of things have been?
Question based on the last 18, 24
months inflation. And you know, inflation and diversification are both bromides there. There are these simplistic terms of people toss around but no one really thinks very deeply about them in my experience. I mean, let's start with inflation. Inflation is not 2%. Inflation is not to CPI is not seven and a half percent. Inflation properly. Understood is simply the rate at which the price of
Thing appreciates in the currency, which is the frame of reference, which means that you can calculate an inflation rate for a Picasso painting, which is different than a building in New York, which is different than a bond, which is different than a market basket of goods and services that you wish to buy, which is different than the market basket of goods and services. I want to sell you. So, what's the real inflation rate? It's a vector, right? It's not a scalar. A scalar is like two percent now, it's not. It's like an end.
Dimensional vector, and there's a different inflation rate for everything in every place for every time period dynamically evolving. Right, once you understand that, you realize that there's probably two inflation rates of Interest. One inflation rate is the rate at which cost of living is going up for a middle-class family. That's not to see Pi because the CPI is a manipulated Market Basket set by a politician or a
It's that is engineered. Not to go up in price very fast. Most of urge people would find that their inflation rate is higher than the CPI. And if, for example, we don't include the cost of buying a home in the CPI, even though it stands to reason, they just about any reasonable person, would want to buy a house at some point in their life. So you can calculate a consumer inflation rate, which is different than CPI, but you can also calculate an asset inflation rate. That's the rate.
That's the cost of getting rich or staying Rich. If you want to be wealthy, it's not good enough to keep up with CPI. You have to actually keep up with the rate at which assets are appreciating, right? The cost of housing went up 18.8% year-over-year this case-shiller according the case-shiller index, right? That's another, that's that's a common asset. But if you look at the S&P index, which is a Market Basket of desirable companies, that
You surrogate for a monetary inflation rate, the monetary inflation rates been running, seven to 10% a year in the u.s. At the same time that the CPI has been running 1%. If you understood that you understand that your cost of competent was more like 10%, which meant that any investment you made, that didn't yield 10 percent was making you poorer. You were losing wealth. You were, you know, any business person understands that I couldn't get you to accept a two percent ROI on an investment.
So, if you, if you understand inflation's of vector.
Then then you start to realize that the inflation rate in Miami Beach is different than it is in Kansas City. And you understand that the inflation rate. If you want to stay wealthy is much higher the inflation rate and 2020 was about 25% for assets. The inflation rate for bonds was was at one point higher, right? You could have bought a bond for a million dollars. That yielded fifty thousand dollars in interest a decade ago.
If you wanted Social Security, if you want to 50,000 dollars in income risk-free the rest of your life, the cost was a million dollars. When the 10-year yield went to 50 basis points. You would have to pay 10 million dollars for the same Bond. The bond went up by a factor of 10. What's the inflation rate?
Right? The inflation rate. And that particular case was 100%. It was like hyperinflation, you had hyperinflation in the bond market. You had inflict massive inflation in the asset Market. You had no inflation in the Domino's, Pizza delivery, you know, Netflix market for a while. And and if what you want to do is live in your parents basement, and watch Netflix in order pizza, then the inflation rate, much much lower for
And if you wanted to, if you wanted to stay wealthy or do you want to get wealthy or hold shareholder value? Inflation rate looks more like 30 40 percent in like 18 months. So once you understand inflation is a vector, then you stop paying attention to just one cherry-picked number. Because what you realize is, I can manufacture any inflation rate you want simply by adjusting the Market Basket of products and services. And by definition,
by definition. If I never include assets in the Market Basket of desirable Goods, then you will always ignore asset inflation, which is the most pernicious inflation. So, we have had hyperinflation since 1971, but the inflation has manifested itself in the assets, and the /. Here's the pernicious thing about it. I've literally brainwashed you into thinking that asset. Inflation isn't a bad thing. It's a good.
Good thing and it isn't inflation at all. It's actually investment gain, right? So so that's when when I convince you that a bad thing is a good thing, right? We've come to a bizarre point. So we're living in inflation. Since we went off the gold standard. It's just in manifest. In the assets. We have hyperinflation right now. It's just manifesting itself in the assets more so than in the goods and services.
Now if you go to diversification is another bromide another silliness, you should be Diversified. Lots of people say that a lot of times the people that say that to you, want you to give them your money, right? It's like I'm a hedge fund manager. And so I'm going to stand up and tell you, you need a broadly Diversified portfolio of like International equities and domestic equities and like some of these Commodities and it changes all the time. It's very complicated is too complicated for you to figure out so you just give me your money. I'm going to charge you a
You keep 20% of The Upside, and I'm going to invest it into this hyper complicated array diversification of stuff. Right? I'll give you a simple idea. Go buy Bitcoin. Don't give me anything. I don't want your money. I don't want the 2%, I don't want 20% of The Upside, and Bitcoin is a diversified index, all of the entire world economy. And certainly, the crypto economy is it comes to its senses? You can believe one thing or the other thing.
You can imagine if you're in the business of managing people's money. The last thing you want to do is tell them, the answer is just buy this one thing and hold it for a hundred years. How do I make money off of that? Right? On the other hand? What's the problem with diversification? Well, first of all, the problem, the diversification is diversification, is selling the winner to buy the losers.
And the second problem with diversification is you're not really Diversified at all, because everything you own is probably correlated to one currency, which is collapsing. So let's, let's deal with them one at a time. If you own Apple stock in the year 2010.
A mutual fund manager or a hedge fund manager, would tell you, he's going to diversify you, because when Apple stock doubles, he's going to sell some of that. So he can buy some HP, or some Dell or some other IBM, or some other computer company. And when Apple doubles again, he's going to sell some more to keep it Diversified in the computer sector because he wouldn't want you out of Too much exposure to Apple. The problem with that is that at one point, Apple became one hundred and fifty percent of all the profit in the entire mobile phone industry.
That is to say the winner eats everybody. Not only does it. Eat everybody. Everyone competing against apple is losing money to compete against Apple. So you're selling the winner to buy the losers. You're going to sell Facebook to buy the newspapers. You're going to sell Google so that you can buy. Every every company competing against Google, you're going to sell Amazon to buy the other retailers. Amazon one, Walmart, almost kept.
Fifteen thousand retailers lost.
Right. And why is that? Well, it's it should be pretty obvious why it is right. Now when you have a dominant digital Monopoly, the digital Monopoly eats, everything else, and Apple computer is the most valuable company in the world, because Apple computer is literally the most valuable company in the world. They can ship a product to a billion people, over the weekend for a nickel and their competitors can't. So selling the winner.
To buy the loser is an awful strategy. The only people that made money in the stock market last decade where the people that own Fang. They own Apple, Amazon Facebook, Google. Microsoft. There's no diversification here at all. So, if you're, if you're, if you're investing in a stable currency, you have to keep in mind that digital monopolies are dominant and they Crush everything else then and everything else goes to zero. So the only original schools do
Ro name, another retailer you'd rather on than Amazon.
So you're saying aetherium is going to go to 0.
What I'm saying? Is that at their rooms at different subject we can talk about it in a bit? What I'm saying is if you're a conventional investor, the winners tend to crush the losers by far. And so diversification of selling the winner to buy the losers is not a good idea of you know, eventually all. Yeah, what what portion of the SP return is attributable to five companies out of the 500 say 80% or something? Ridiculous.
Like that, right? So now here's the other problem. I'm going to put you in Venezuela.
Okay, so, you're in Venezuela and you have a choice, you can buy one company in Venezuela or the entire index of Venezuelan stocks, or you can buy one building in Venezuela or all the buildings in Venezuela where you can buy one bond in Venezuela or all the Venezuelan bonds. Give me a diversification strategy, which is going to actually keep you from losing all your money over five years. If you're sitting in Venezuela, 15 years ago, what is it?
They're all correlated. You see? It's like you're on. You're shuffling deck. Chairs on, you know, on the Titanic, the ship is sinking. You're shuffling these deck chairs. The fundamental elephant in the room. Here is when the currency collapses, right? Give me a diversification strategy for Russian stocks right now. Which of those do you want to own when the currency collapses, the bonds collapse that are linked to the currency. All the
You said generate cash flows and the currency. They all collapsed because they're valued and as a stream of cash flows. And if the cache is worthless, how is the company going to be valuable? Right? You sell beef and Argentina, the peso collapses, the people are, buying the beef and peso so you want to sell the beef to Europeans for euros? The government passes a law, keeping you from selling, the be for exporting your beef. Export controls come wage and price controls. Come. So the problem is every equity.
Every piece of debt, every piece of property, linked to the currency is correlated to the currency. So your diversification strategy with any given currency, whether it's the peso the dollar, the Euro, the rumble, the Lira, the water, they're all correlated. So then you're like, okay. Well, this is great. I'm just going to buy the dollar.
All the currencies of correlated to the dollar and the dollar is collapsing. How fast is the dollar collapsing? Well, you can you can watch it against Real Estate in Miami Beach, right, you know you can want all you got to do is look at the dollar versus any scarce desirable piece of property. So, what's the dollar valued in versus a Picasso to Leonardo da Vinci? A city block in New York City, a desirable piece?
Bench for beachfront property and how about Palm Beach? Right? What's happened to Palm Beach? Proper in the past 10 years. So ultimately, the problem with diversification is nearly everything every stock is correlated and and every, every conventional asset is generally correlated. The only true diversification is if you find non-sovereign stores of value, stores of value that.
That have vowed that derive, their value based upon something other than the cash flows that you could derive from them. Right? So, you know, think hard about what those are pristine Trophy Properties, might protect you. But I think I think that the problem ultimately is is
If you're on a sinking ship.
You have to get off the ship.
And the problem with diversification, like, when you're in the retail industry, and when is completely getting obliterated by Amazon, you have to get off, you have to get out. There's no winning strategy, no matter how you diversify n. And so most of the time, these models inflation is 2%, or CPI and DNR. We should say, diversify their based upon this very conventional wisdom that I live in this safe world and nothing has changed.
Like there is no when Godzilla shows up to the playground, the rules of the game change, right? If there's an external Factor, right? You have this model. It's like it's always been like, this is always traded like this in the last 30 years. Well, the US dollar never collapsed in the past 30 years, the u.s. Dollars losing seven percent of its value for 30 years. So your model says buy property. And by the S&P index
What happens when the u.s. Dollars losing 21 percent of its value?
Writes like that's a different thing. And I I think that if we come back to energy
Energy is life. And and if I suck the energy out of this room, I freeze you to death right? When I when I suck the energy out, the temperature keeps falling of the temperatures falling 12 percent. You can crank it up and try to deal with it. But when the temperatures falling 10% at some point, you'll start to freeze. If I pull enough energy out of the room fast enough and at that point, you have to entertain a new notion, an oxygen mask.
You know, put on a coat, you got to exit the room eventually. And if we come back to this issue, right? The issue of the day is Ukraine, but what's really going on here, the currency and the banking systems have collapsed in Afghanistan and Iraq. They're falling and collapsing and turkey. They've collapsed in, Lebanon and Syria are not trustworthy and Ukraine, and in Russia. Now, I've just lassoed about 400 million.
People and those 400 million people don't have a currency that they can use as a medium of exchange or a store of value. They don't have banks that they trust that work effectively. And what's the fundamental issue here? It's like, if you don't have a property or a currency with which you can store economic energy, that's like being a type 1 diabetic. You cannot store fat on your body. It means that you can eat as much as you want, you will.
Literally starve to death, right? Because you don't have the ability to store energy. Fat is organic energy just like property is is a manifestation of energy in low frequency. I give you a billion dollars and the currency its high frequency money. I give I buy a billion dollar building. I hold it. For 30 years. It's low frequency money, right? Either way. Okay, I give you a billion dollars. You buy a building in
And some Central African Republic, someone puts a gun to your head. Takes your building now, you have no building.
You buy a billion dollars worth of currency. The currency collapses because the guy that runs the country Prince more of it goes to 0, you know, like paper money in, Venezuela is not as valuable as toilet paper right now. Hmm. What is it? Right? Not a not clear. So what you have is an economic collapse and it's a global phenomenon today and it was accelerated in March of 2020, right? That the catalytic event, the Catalyst for these
Things. Normally is a war, a war on covid, a war on currency, a worn. A lot of things. We're finding a lot of Wars right now. And now we've got real wars, right? A political and actual war. In Ukraine Wars, collapse currencies. They always have World War One collapse, the currency WWII. Also damage the currency you can actually trace it. If you look at real estate values in the years that follow the war, right? So what we're doing is we're collapsing the currency and you could
describe the entire world right now is eight billion people. There's one strongest currency the dollar which is losing 15 to 20 percent of its value a year. That's how fast is bleeding out. You've got to set, you've got a set of tier of currencies pegged to the dollar singing, you know, Singapore, the Middle East, the Euro that are fairly fairly close to the dollar. Then you've got a set of second-tier, currencies the peso and and the Turkish lira and the like and they're losing 40 percent. The the
Well, now losing 40, 50 percent of the value year and you get the third tier currencies, the Venezuelan, you know, the bowl of our excetera. They pretty much hyper inflate, they all collapsed and they're all going to Dollar eyes. This is this trend is going to continue crypto falls into this trend because what's happening is people realize they can't trust their local currency. They can't trust their local bank. If you don't trust the bank, why don't you trust the bank and Canada, right? The bank might seize my
My assets, if they disagree with me and Afghanistan, the bank's all failed, you know, when the u.s. Pulled out and Lebanon, the banks, basically, closed, froze. Everybody's assets seized and converted. All their foreign currency assets into local Lebanese money, devalued the money, and they locked it up for 10 years. Okay. So when you have hundreds of millions, if not billions of people, losing faith in the currency, losing faith in the banks. What do you do? You look for the digital?
Ocean and the digital solution is I download a mobile app to my phone and then I convert whatever asset or work or property. I have into a cryptocurrency and there's two things that I really want badly. One thing. I want badly as crypto dollars like tether or Circle or the like it's basically US Dollars sitting on crypto race table coin stable coin and the world's bought 190 180 190 billion of that from like 5 billion.
Over the past 24 months. It's exploding. It will go to 10 trillion. If they could write. The market has a trillion to 10 trillion dollar demand for that stable coin. What will happen when that happens? Every one of these local weak currencies collapses, right? There's not a single currency in Africa and South America and Asia. You would rather hold in the dollar right now. The Chinese don't want to hold the CNY. They would all convert to the u.s. Dollar. How do you know that?
Because there are capital controls every country that implements a capital control making it illegal to convert their currency or move. Their capital of the country is signaling to you that their currency is weak and that includes the Chinese currency. So that's one Dynamic. You got 130 currencies floating in the world. There's probably only two or three that will be left when the dust settles. You got the Euro, the CNY, the USD,
Everything else either gets Peg to those or it collapses into those and then the second thing the world wants is one scripto property at once money to give to your grandchildren. I want to hold my money for 100 years. If not a thousand years. The dollar won't work. The dollars losing two percent of its value a month.
Which is horrific. And you know how horrific over 36 months. Its catastrophic over 10 years and people are getting smart enough to realize that that won't work. So the issue is where do I put my long-term money? I need a savings account. So hence, this is where Bitcoin comes in. Bitcoin is the dominant crypto property Network in the world. It's pretty much the only. The only perfected digital property Network. The human race is,
It's a proven digital property. Everything else is a speculation that it may become property over time. Bitcoin is the success and every light kind competitive. Bitcoin is collapsed against it. Such that Bitcoin is the 95% dominant Network in this space. The dollar is clearly, the dominant the dominant currency and it wants to be the dominant digital currency. It is really the dominant digital currency as well. Despite despite the fact that the u.s. Government
Doesn't have, you know, U S Bank's issuing them yet, and we've been slow on the uptake. You can see where this is headed. And the driver is the Stampede of everybody else in the world, right? You know, you're a rich American and you feel comfortable with your banking structure. Okay, maybe you can ignore this but name somebody in Africa, Asia or South America that can ignore this issue right now.
Right. I mean I invite you to sell all your money and move to a country in Africa and then invested in local, local property, local companies.
Local currencies and put it in a local bank and feel good about yourself. You've mentioned
South America, Latin, America, multiple times Venezuela. You must have some strong feelings on. What's going on in El Salvador with Nike buchelli. The president of El Salvador. Is that someone
you follow or you're in touch with or anything like that? The situation in El Salvador is is
Instructive. Because our Salvador doesn't have their own currency. They had a war, a Civil War, and following the Civil War, their currency collapsed and so they dollarized. So, the medium of Exchange in El Salvador has been the dollar. And so, their problem is and and and was that the banking system that US banking or the traditional 20th century banking, system is too expensive and cumbersome to serve the people of el.
Over 100 years, they managed to put two and a half million people into a banking relationship over three weeks. They rolled out a crypto wallet, achieve a wallet and they put three million people into that system. So they accomplished more in three weeks with digital assets than they accomplished, in 300 years with physical assets. Right? I mean, I don't, it's kind of ironic. We're sitting in a bank vault right now, converted bank vault and
Or sitting in a converted Bank building, but there's probably no better point to make, which is think about how incredibly inefficient and ineffective. It is to store money and volts across a hundred thousand buildings with tens of millions of people trying to shuffle people pieces of paper around defended by people with guns and militaries and navies and Air Forces, and governments and policemen and court systems.
And armies of accountants and lawyers. We might have froze.
David. Do we know what's going on? Working on it?
Looks like it's back. See if it's back for you.
What did people say in the comments? I've just shot at you wonder. I see him back. Okay, go for it. You were
saying. So, so that the 20th century way of banking and finance is obscenely expensive and ineffective and it ended the day, it leaves to three billion people in the world unbanked with. And it's hopeless. It is hopeless. It is the same problem. We had during the first wave of Internet Computing. Where we used wired lines cable lines in order to
Deliver the signal and that was hopeless for Africa. And so the mobile wave was we put the signal on a tower and now I can put up one Tower and give internet access to millions and millions of people for 1/1000 of the cost of doing it with the copper line technique. So if you think about digital banking, the future of the world is eight billion people with mobile phones.
I download an application and 60 seconds and on that mobile phone. I carry a digital currency like the dollar, maybe the Euro, maybe a local, maybe the Yen, or the one, maybe if there's an effective nation-state, if there's not an effective nation-state. I just quickly swap out to the dollar immediately. Everybody would want to do that. And then I also carry a digital property, Bitcoin.
I want to hold it for a hundred years. It's a instead of holding a building which you can you can tax or C's or rain on or instead of like holding a bar of gold, which you can take for me. I'm just going to hold my digital bar of gold on my phone and then maybe I have some other assets. Maybe I've digital art. Maybe I have digital Securities, you know, maybe copies of ownership of something else and I might like sitting in a wallet, but certainly this I can give to everybody
Beyond Earth and I can move the money at the speed of light. And what do I trust? I'm trusting a piece of software which is, which is a lot cheaper and a lot more reliable than trusting a building a bank, a board of directors, when you actually have your money in this bank, vault. I mean, look at it. Imagine money in the
Think about that. When you hide your money, there you are. Trusting, the guy that ran the bank, the manager of the bank. The mayor, the head of the police force of the bank. That had a security of the bank that dude, that came to actually fix the lock everyone, that touched the thing, the governor of the state. Then you are trusting the head of the country, the central bank, that managed the country, the military system. Who do you trust with Bitcoin?
Nobody, that's the point. Nobody Bitcoins a bank in cyberspace, run by software Incorruptible software. And this is, this is the beauty, right? Really great. Engineering takes in a corruptible element and puts corruptible or imperfect elements together in a system such that they cancel out their imperfections to create Perfection. Where did this happen?
Happens in the thermostat and a thermostat. I, you know, I have a I have a strata or metal and the metal contracts when it gets cold and expands when it gets hot. Okay. Now I tell you build something, which doesn't contract and expand, when it gets cold and it gets hot, you're an engineer. How do you do it? You take the, you take the piece of metal that's going to contract and you put it in opposition to another piece of metal that contracts the other way, but if they're both the same and they both can track.
With the same force and you pin them, they cancel each other out and then you actually get a zero tolerance, perfect machine. That's how John Harrison crated perfected clock. He basically used that Insight, that imperfect elements can create a perfect mechanism and a clock that clock was used to calculate longitude on the ocean. That's how we actually navigated for 300 years and it's all based upon a bunch of imperfect.
It's the crate a perfect mechanism. Bitcoin is the same thing. I've got a piece of software runs on a machine. Is it perfect? Know why? Because you can corrupt it. How do I fix it? I give another piece of software to him. Now, the two of each of your machines check each other. Well, what if you're both corrupted? Well, I throw another 10,000 of those pieces of software Into The Ether. Well, who do I give them to people? I don't know. How do I corrupt them? How
I'm find them. Okay, what if I promise to murder everybody in the US that doesn't change their Bitcoin nodes doesn't help.
Doesn't help. What if I murder everybody? I can find with a Bitcoin node doesn't help. I can't write. How do you stop a fire? How do you stop a fire in cyberspace rights, like, you've released this thing. It's a genetic virus. It's a life-form. You've released it into cyberspace and the life form itself. You know, it takes a life of a, it takes on a life of its own and enforces, the Integrity of
System. And yeah, you can kill anyone. No, Denny one cell. You can take out the cells of the Swarm creature, but you can't really corrupt the entire creature because it's reproducing at such a rate that that it will always stay ahead of that attack. Surface.
Michael. You're you're very smart guy. You've been around the block you've operated you've invested you've seen things. You saw Amazon drop. I don't know. What was it 95% in?
No.5, whatever the year was when the stock went down 95% I may be wrong on the year, you seen a lot. Okay, you see a lot of what's happened? Yes. So you seem 100% certain about what you were talking about, which history doesn't favor 100% certainty, you know, it typically, you know, and it's not even though I'm not even talking about the trust but verify, there's got to be an element of skepticism, but you're like no you're it's almost a combination of a
A person who has experience running a business investor genius, but also sales person. You're very, very good at persuading his well. Are you 100% certain about the future of Bitcoin and that it has zero risk. There's no risk. That could be anything
anything, you can state that. Now, I think that everything in life has risk. So there's a there's a Black Swan risk, and unknown unknown and anybody intellectually honest.
Has to admit that there is that risk, that's not what I would say. What I would say is
You have to, you've got a bucket of money. Let's come back to Africa. Okay.
You've got a, you've got a hundred thousand dollars in Africa, you've got invested in something. You've got to put it into a building and to land into an African currency into something else. What are you going to do? There is 100% certainty that you're going to lose 80 percent of your money in most currencies over the next decade. There's 100. There's 100% certainty. You're going to lose 95% of your wealth over 30 years and just about every currency and and
You have to work through each of these issues and say, what's the cost of doing? Nothing? What's the cost of not taking a risk? Once the risk free rate? Well, I mean, the risk-free rate is the monetary inflation rate. So the price that you pay to not do something is the rate at which the money is collapsing. If you were Russian, they just lost 35% of their wealth by not doing anything in the matter of weeks. Oh so in this particular case,
You just have to look at the array of options. If you're an investor in South America, or Asia, or Africa, I would say the the risk-free rate is much higher for you. Write the in a year in Lebanon. What are you going to do in Lebanon? How about Afghanistan? How about Iraq, right? What are you going to do in all those situations?
They're thinking, maybe I'll Trust my money to tether, you know, tether tether is run by bitfenix. It's just the company. So why is it that people in many countries are more willing to trust a company out of Hong Kong? That's running a stable coin on the crypto Network, then they're willing to trust their local bank will because in fact tether is probably a better bet than betting your money on most currencies in the world. Other than the top 12 currencies. The rest are
Why do tether if you can just do the US dollar or USD? See?
Well, you can't, that's the point. Why do, why do tether? And, if you could just do the US dollar? Okay, how many people in Africa can walk into a Bank of America and New York City, open an account? And then get the US dollar, none of them? That's the whole point, right? And okay. I did it. I'll give you an example. I put a million dollars into Bank of America in Argentina.
Ah, when the dollar was worth one peso because I didn't trust the peso. I did it. What do you think happened? The government basically shut down. For one day. They sent an edict to the bank saying all dollars must be converted back into Pesos, then they went off the dollar Peg and they divided the peso 10 to 1 and I lost 90% of my money.
Okay, so why do tether instead of Trust Bank of America and Argentina?
You tell me.
Right? Because what's the odds that tether is going to go to zero and the next year.
If the odds were 90%, your money is going to zero in the next year, by putting it somewhere else. Then you would think, maybe that's a risk. I want to take. So, you know, people are forced out the risk. Curve based upon the monetary policy and in a hyper inflating economy and Zimbabwe, right? You're going to take everything. You've got your going to buy anything.
I don't know. If you saw buy toilet paper. You'll buy boxes of cereal, right? You'll buy anything. There's pictures and turkey people and this is this year. People go into they go into a car lot and they buy all the cars.
Okay. So here's a, here's the news story, the government in pounds, fifty four cars that were bought by a hoarder. Someone had the temerity to actually convert their currency into automobiles because they thought the automobiles would hold their value better than the currency and then the government seizes their automobiles. Okay, if you look at every single War, right? The war always has the story of the speculators, right? The
Is the Scott, the Smugglers, and the hoarders, what you crime, your crime was not holding your money in the currency, which was losing 90 percent of its value. But rather deciding to buy too many automobiles. Know, your crime was hedging. Yeah, something like that. Picking a picking, an alternative asset as a storehouse of what you perceive to be security until the Sovereign comes back and does one of two things that they're good at sovereigns know that debt long term. There's
Is the Jubilee Theory and also inflate your way out this is, or seized and forced conversion which basically feeds right back in to inflate your way out, eventually that, yeah, that all these countries are just in fight their way out and the currency is collapse and that's why they're all collapsing, right? That the currencies are weaker today than ever. And what I and I think that it's pretty obvious that dollar will also be printed to pay off the debt and that will just
Itself and the dollar continuing to lose value against scarce assets. It will gain value, it'll be stronger than the other currencies because they're just collapsing faster. So eventually we'll see a world where there's a dollar in the sea, and why, right? If you're not a very powerful Empire, you can't maintain your currency and that will be the medium of exchange and everything will be pegged to it or correlated to it. And then you're going to see monetary energy flowing out of week.
Tea and weak assets into strong property. Like I like, I would sell all the land I have in Africa and convert to bitcoin, but I would sell all the land in Africa and I would move it to Europe and I'd probably sell my land in Europe, moving to the US and I saw my land in the US and move it to bitcoin, your just swapping from a weaker thing to a stronger thing. And the definition of week is a function of what's the risk? It will be seized taxed or impaired.
Right regulated, right? So, calculate that right. Will the government, the jurisdiction that your property is, NBC's confiscated, taxed, away impaired away. And the last, the last issue is, will be inflated away. Mmm, right. The reason that Bitcoin is magical is because there's only 21 million. I can create more real estate in New York City. I can create more cars. I can create more luxury watches, I can print, I can create more.
A gold. I can create more shares of stock. I can create more bonds. I can create any commodity, their Commodities by definition given enough money and time I can create infinite of any of them. Bitcoin is a scarcity. Okay, name, another scarcity in the world, right? And technically, it's not clear. There is another scarcity.
Right. A scarcity of something of which it is absolutely capped. If the price goes up by a factor of a thousand or a million. It is absolutely capped. That is not the case with gold soybeans. Silver. Stock bonds, real estate single-family homes ships, Planes Trains. Nothing else. Everything else could be manufactured. And of course.
If the price goes up, thus the, the incentive to manufacture more will go up, which is why, you know, buying a house isn't necessarily going to be a great store of value, in an inflating economy because you're going to have incentives for someone else to dilute the value of your house. If you do, buy a house better off to buy a house on land and then a condo on the 57th floor of a building, and if you do buy it on land, better off to buy it on on waterfront property and
If you buy waterfront, property butter off the boat on the beach and if you buy it on the beach, you're better off to buy it and the in the most desirable location of affluent intelligent people for the next 30 years has scarce pristine. What you talked about, right? You're better to be at scarce pristine or as close as you can and that's that. And you can do that for 10, 20, 30 years. That's Palm Beach. That's the Hamptons, right? You can figure that out. Now figured out for 100 years.
That's this is the problem right? When you go out of
40 individual who cares, 400 years the individual, how many individuals think 100 years?
Do Michael institutions think of
Institutions do but how many even some institutional leaders only care about the return? They're going to give you four decade or two. They don't sit there and or next think about 100 you, right? I think here's the I mean that's that's one of the problems we have with our current political system. Even we have in America, you know, the guy who gets elected. He only cares about two terms. How much can he really do it
stuff to you is the a
Such reflexive. If if I told you that you could buy this digital asset and it would lose its all of its value in 17 years, then people start to amortize it down and when you get to be 12 years old, people start to discount it. It's like you don't want to own a building in London, where there's a ground lease that expires in 37 years, right? That's not as valuable as owning the land outright for a thousand years. So if I told you it's good for 10 years, I think.
Ink. And the other thing is good for 100 Years. Everybody wants the thing. That's Timeless and the difference is going to create a marginal difference in the price. Let's say it's 2% or 3%, Okay. So all the intelligent money, go, they Stampede in the thing. That's 2% better. And when they stamp in thing, this 2% better, liquidity is 10x more and then the money collapses out of the other thing and it goes to 0. That's why Bitcoin cash collapses Bitcoin Satoshi Vision collapses.
Anything that's got a like the same thing, but not quite as good.
We'll go to zero. That's why YouTube is YouTube. Just like there is a tendency of winner-take-all in these things. And and it does matter right now. You have children you have grandchildren, right? I never met anybody that said, you know, I just I kind of want to keep my family generational wealth intact for 12 years, but then I don't care anymore.
Right, you sort of care.
An n and there's one more element to this. It's not just the ability to know that the asset will hold value, 100 years out. It's the portability, you know, if you're living in your living in Nazi, Germany in 1932 having portable property versus non portable. Property makes a difference. Might make a life-or-death. There are people that are dead because they couldn't move the property, right? It does make a difference to be able to move it, so you
You can't blink your eyes and teleport a billion dollars of real estate in Los Angeles somewhere else in the world. You can't even move it somewhere else in the country. Being able to move the money from a city, to another city, from a state to a state, from a country to a country, and from a counterparty to a different counterparty. All of these things are, are extraordinarily valuable the difference between life and death and many cases.
And that's what Bitcoin gives you.
That you don't get with anything
else. I brought up etherium earlier. You said, well can cover that as well. You know, there's a lot of guys that are pro theory. Mm. And, you know, they swear by always and ft, you know, most of the purchase 50% is being done by theorem. The theorem is eventually going to get a better than Bitcoin or, you know, theorem is going to be right there next to bitcoin. What are your thoughts on the
theory? So first of all there, if you look at the crypto ecosystem, that's crypto property. There's cryptocurrencies. There's crypto platforms.
And this crypto Securities and there's even crypto art at these are just asset classes. Maybe they'll be crypto. Commodities, nft is crypto art. It's like art cryptographically protected. Stable coin is cryptocurrency a dollar or Euro moving on crypto rails currency because I can move it as a medium of exchange without paying a tax bill on it a theorems crypto platform, right? People are building other things on that platform. And and that's the
The principal appeal, smart contracts and the fact that you can build something Bitcoin is crypto property. It is long-term store of value and and it is the dominant crypto property. And the way it establishes itself as crypto property is through Nakamoto, consensus and proof of work. You have a decentralized mining Network that is encrypting energy with the sha-256 hash function in order to create this wall of encrypted.
G and and make it resistant to denial-of-service attacks other sorts of attacks and needs to be robust and have integrity over over time and space. And that's, that's the technique that we developed. Now. Here's the big idea, an important idea. Most people don't understand Securities Law. Okay, Bitcoins, the only proven digital property that we have created in the world, we have that, we have created a
30, and not a security. The definition of property is, is a common commodity that is beyond the control of any one, individual or Corporation. If something is deemed property in a legal sense, it means it wouldn't be regulated by as a security by the SEC. Gold is property soybeans are property. Wood Lumber land is property. The coins property.
Okay, do the SEC come out and officially state that it's not, it's not a Securities, especially a proper. It's understood that the coin is not regulated by the SEC. Bitcoin is property. It's the only thing we all agree on in the crypto Marketplace that Bitcoin is property. Securities are regulated by the SEC. And you can, you can create a security microstrategy, mstr is a security go.
I-10 case statement is 123 pages of disclosures that are legally required for that stock to trade that security to trade it cost 20 million dollars. A year for us to maintain all the disclosures to be compliant with Securities Law. If you're a security, it's a different thing.
Bitcoin, is property. Aetherium. Everything else in the crypto ecosystem. Likely. They're all Securities, right? Why are they Securities? They're controlled by groups of developers. They're issued pursuant to icos initial coin offerings and make some security. If there's a pre mine and there was a group of individuals that initially control the thing, it makes it security.
If you know if anyone can exercise undue influence becomes security. And technically, if you know, if you look at the definition, it's when you're making an investment of money relying upon the efforts of others and expectation of profit. It becomes an investment contract, a security. Okay, the fundamental difference between Bitcoin and aetherium is a theorems, monetary policy changes, every six months, every few months of changes. There's a difficulty by
In a theory and it's been getting pushed back since 2016. They keep pushing it back. When it goes off. It will wipe out obliterator fifty billion dollar aetherium mining industry just wipe it out, completely change the protocol flip everything to proof of stake. They keep putting it off. Okay, that sounds like a group of people exercising influence over the protocol. The thing you need to know about Bitcoin is on Pizza Day. May 22nd, 2010. Bitcoin is trading for a
Of pennies for the first time in 15 months, or something like that. The protocol hadn't changed and has not changed. When it was a penny, the protocols were all the same today. They're the same exact protocol. There was a war fought over this, the block size War and the block size War, all of the powerful holders and Miners and exchanges wanted to change the protocol and double the
Sighs. It would have changed. All the economics of Bitcoin forever. For the next thousand years. It would have screwed up the economics of the miners. It would have shifted the balance of power in favor of some holders versus others. That war was lost the original Bitcoin protocol continued on. And that means it's an unadulterated protocol and it's shown itself to be resistant to the influence of any
Group of people, that's what makes it property property is critical because probably, if property makes Bitcoin being property, makes it the ethical foundation of the crypto economy. And by ethical Foundation, I mean, it's unethical for a public figure to endorse a security. If you're the mayor of a city, the governor of a state. If you're a politician, a congressman, a senator a president of a Nation,
You can't endorse a security nor can you make a security underpinning of the balance sheet of a public public organization? Right? It's like, I couldn't say, I really think that every citizen of Kansas City should buy Twitter stock because it's a better store of value. It's conflict of interest. It's probably illegal. My probably violates all sorts of Foreign Corrupt Practices Act as well as all the ethics laws. And so this this is a very bright line property versus secure.
A and as soon as you start to exercise influence over the protocol, it becomes a security. If you look at all the cryptos, you know, there might be a dozen that you could debate or property a debate of the ones that you could debate or property. There's one that's dominant, which is Bitcoin. Hmm. There are 17,000 Securities as the SEC and The Regulators move. There's gonna be a massive shake out if they ever do clarify, what the Securities laws.
Our there's a whole set of disclosures and obligations. And then and then you're going to see, you know, the entire industry rationalize in a big
way. What happens if they do categorize Bitcoin as a
security that coins not a security.
Right, we've already. We've already crossed that Chasm. The point the real question. You should be asking yourself is what happens if they categorize the theory? I'm in every other crypto is a security, your under
estimating the power of politicians to screw things up. You're under estimating, the power of them not like in a person like you to get up and say, whatever you want to say and you offend them, you offend politicians, you know, people who are just read an article right now from political. Can you pull up? The political article is just the way
But
the real Point here is our 17,000 kryptos and and all the rest are much more centralized. So.
Yeah, but they know the most powerful one is the one that you're
supporting. And the reason it's powerful is because it's completely decentralized and and no one nation state can shut it down. Not even all of them. Can shut it down if they wanted to.
So, so, so so these sweet amazing. Nice kind supportive, people.
Ooh, love independent thinkers. Like you politicians. You don't think behind closed doors are sitting there trying to figure out a way to regulate or get their hands on bitcoin because they're starting to lose a little control with the Bitcoin Community because a Bitcoin Community essentially, the crypto Community. Forget. You know, let's just say Bitcoin one side and a crypto Community. I said this the other day, I think it's becoming a political party. I think the crypto commission's regulation for party and think,
first of all, it's like 250 million people that are that are
Pro Bitcoin right now. And this is spreading at Millions per week. So you can't find, you can't find
Any large constituency? That's anti right? It's a virus. That's spreading right? You're not going to get any votes by being against Bitcoin, right? There is no constituency. That is anti Bitcoin s regulations. Not bad, right? Sometimes people say, oh they're going to regulate is bad. Now. The truth of the matter is the faster. The regulation comes the faster, the 17,000, other cryptos get sorted in their buckets as Securities platforms art excetera. And that will actually
Shake out a lot of the noise in the system result in a lot of capital focusing upon the winter, which is Bitcoin and it will also accelerate the entry of institutional Capital into the space because there's a hundred trillion dollars worth of money. That's not in the crypto space. That's afraid to come into the space because they're not sure about the definitions between the Securities that
that's a valid concern property. Yeah, that's a valid
concern. So, in fact, the regulation probably would be the best thing that ever
Ever happened. I've seen you say that,
you know, today I read a quote that you've actually said some page for Bitcoin. Evangelist.
Michael Sailors, says clear crypto regulations would speed institutional adoptions of CNBC story tighter government. Crypto regulations would actually be a positive Catalyst for
Bitcoin microstrategy. Co-founder, Michael Saylor says additional regulatory. Regulatory explain what the regulation is.
Well, yeah, that's what I wanted to clarify says, additional regulatory clarity.
The B Administration is going to go into benefit Bitcoin and accelerate institutional
adoption of that
asset stressing a major Bitcoin believer and holder. He's looking for Clear, bright line, definitions, but digital property versus a digital security versus digital currency and the operating rules of the digital digital Exchange.
You know, you know, you've said something. You said, there's 250 million people that are pro crypto right or Pro Bitcoin, but 250 million
people or more after this week. Okay, we probably made 200 million
fans. I don't disagree, but I think there's, I think it's because of Ukraine. Yeah, but not just Ukraine Canada. There's a lot of different things that's going up. But here's what I would also say Michael. There's seven and a half billion people in the world that are pro Freedom. Except for the people that are pro communism and control your under estimating the pow. Don't you think eat? Because we're part of the same.
Under thinking, but don't you think we're under estimating the power of the few who hate independent, thinkers, who go make their money and they're sitting around, you know, constantly advancing and questioning them. And in a way cryptocurrencies, a big middle finger to all the politicians and they don't want to have 250 million middle fingers, right? So, how do you, how do you address that part amongst these feudal like to control people like
you? It looks like it looks like Bitcoins winning.
If we if we look at what's happening, but quite is spreading everywhere in the world.
Only been a few years,
right? I made its the most powerful disruptive force in the decade, you know, look at look at the rate at which it's spreading 0, to 250 million people. And if you turn on CNBC and watch, you know, count the number of minutes it'll go by, before you'll see the Bitcoin, ticker flip up on the screen or before they'll start talking about it as far as I can see.
the idea of
the idea of Bitcoin and the idea of digital property and digital money and and, and
digital freedom.
Is spreading pretty aggressively very aggressively. I don't really so much worried about it because, I mean, I I've met with a lot of people including a lot of politicians. I think you might find one out of 20, that will be trollish. That will be negative, because they think it gets them attention. But if you speak to most people in private, there are they all think it's pretty good idea.
I think I think you probably find a lot of a lot of Advocates and Russia right now. A lot of advocate. Remember what happened when Putin are when the, when the Russian Bank said they were going to ban it? And then all of a sudden they reverse their stance within 24 hours, right? You see the same thing happening and every single other place in the world. If you look at the Senate and Congress, there's the consensus in Congress. Right now is is very Pro crypto and
Very Pro Bitcoin. It's not anti. If you look at the administration. The administration is moving forward with with guidelines. That will be beneficial to the industry. There is a Schism between the institutions and the entrepreneurs by the way, like for example, if JP Morgan can issue a stable coin, then the existing stable coin issuers would view that as being competitive to them. So there's a lot of tension between institutions and entrepreneurs are between states and Federal.
But I don't think anybody disagrees with the idea that that Bitcoin is here to stay. And this is spreading there's and so I'm not much worried about it, but look it you can choose to be pessimistic and say oyelowo. Somebody, somebody somewhere will take it away because it's too good an idea, but what do you do roll over and die,
I don't think it's pessimism. You you started your company and 89 and you went public in 98. You got a ten million dollar deal with McDonald's in.
E2 from 1990 to 96, your company, grew out, 100 percent every year from getting these facts, right? You come from an era where Andy Grove was God and Andy, Grove wrote a book where he ran until I think they ran the company at what pace that were grown. He wrote a book called, only the paranoid survive. There's a difference between pessimism and paranoia the paranoia from a few comes, from supporting the cause of crypto. Nobody sitting
They're saying about mean in so many ways. This makes sense. It's tough to argue this who doesn't want to not be controlled by the bank. I can't think of any time where bank has been the low income middle income or the average guys best friend who's ever like the back. I don't think any time anybody's ever like the bank, the low to Middle income into Rich, unless when the rich was just getting money without, you know, what you're talking with, the it's being printed. I'm just might, my skepticism is to be a little bit paranoid about what these politicians who sit around.
Wanting their names to be on a bill and a law that can regulate to brag about it. That's the only, you know, paranoia that
exists and the rational response to that is go educate the world. So if you go to Hope.com Bitcoin is Hope go to hope.com those courses and books and educational materials, on bitcoin. If you go to my website saylor.org, we've got a free Bitcoin for everybody. Course, we've given it to tens of
ends of people. Why do you think I'm sitting here talking to you today?
But I think the level above
that do if I was arrogant and presumptuous. I just sit back and wait for the inevitable to take place, but I don't think, I don't think we can sit back and wait, I think we got to go and speak with every politician. Every influencer. We got to reach out to every Community. You got to go on television, you know, go and CNBC Fox CNN, you know, Bloomberg and
Bitcoin is the digital transformation of and we are living through the digital transformation of property money and energy. And, and once you understand this idea, digital transformation, a property money and energy, you realize that, you know, the world is not going to understand that for a decade. I'm it'll take 10 years, 15, 20 years before people get their hands around. What is that? I mean, it's so inconsiderate.
Evil, if you go back 100 years and you look at electricity, how long did it take before? People really understood. The concept of electric energy. Can't touch it right without getting shocked by it, but it was a scary thing, but it was regulated.
Right, it was regulated and and it took a long time for people to embrace it and it changed the entire world. The same happened with chemical energy in the form of Standard Oil. It was regulated. Took a long time for people to appreciate it. Aviation are Power, Nuclear Power. All of these things, you know digital energy is cyberpower. Bitcoin is cyberpower, right? The next war will be fought in cyberspace.
You don't Master digital energy. You're not going to win it. You can't even defend against it. Most people haven't even figured this out right now that that digital energy is critical, but you know, like even I got a lot of Twitter followers when I post on Twitter, only about a third of my followers, understand what digital energy is, right? They don't really get the idea. I we have created a file, which we can move at the speed of light on a layer 2 or layer 3 Network on a nap.
Apple Apple pay Network or a? What's up Network, or any website that moves energy in a conservative fashion? Through cyberspace for the first time in human history.
That's profound idea. They don't get it. Right if I have a digital music file and I send it to you and you run it through your headphones or you run it through a speaker. You can listen to music. If I take away the computer and I take away the headphones. Is it still digital music? Sure. It is. It did your music file, but you need to actually decode it and run it through a speaker with electricity for to be digital music. That's profound if I have a file as digital energy and it holds a billion dollars in it.
And I send it to you and Tokyo and you run it through that decoder. And then you go and you buy a billion dollars of electricity or billion dollars worth of weapons or billion dollars worth of buildings. I have moved digital energy through cyberspace. I have to decode it. It's a big idea. We never did it before, right. It's like putting something in orbit, right? Everything's ballistic until it, finally hits escape velocity and then it orbits the earth forever.
An orbiting forever in orbit is a pretty big idea. That's what's going on here. It'll take a while for people to figure it out. We got to educate
them. So so let's say that's a I like that point about education. I think the other part would be, which is one above that is guys got to get involved in politics and office. They got to get involved there as well. I think some of the guys from the crypto Community have to get involved in political, you know, Arenas congress, senate, Governor, even some being inspired to go in.
Ooh presidency. Look at the president of El Salvador. What kind of a Ted she has. I think the strategy for guy like you going and talking maybe a part of it is also inspiring. Some of these other guys who want to pursue politics because you know, most of the world, when we think about, oh my gosh, Warren Buffett, he doesn't believe in Bitcoin. Oh my gosh, Bill Gates is against Bitcoin. Peter shift, says Bitcoins going to 0 which I believe you said in 2013, Bitcoins going to 0, but you flipped, you started educating and getting a little bit more clear and then you'd want to different direction.
Even Munger recently said, Charlie Munger said the following. He says I wish it and this was last week. I wish it had been banned two weeks ago, immediately and I admired the Chinese for Banning it. Can you imagine Charlie Munger a capital is agreeing with China. Munger said, Wednesday, a Daily Journal, Corp annual meeting, which was held virtually. I certainly didn't invest in crypto. I'm proud of the fact. I've avoided it. It's like a venereal disease or something. I just regarded as beneath.
Amped. The ninety eight year old. Billionaire has been long critic of Bitcoin, previously calling it rat poison. And I mean, he just certainly, the great short squeeze and GameStop was wretched excess. Certainly the Bitcoin things wretched excess. I would argue that venture capitalist thrown too much money too fast in their considerable, Rich excess of venture capital other forms of private equity and he just doesn't stop. He keeps going and going and going. So the world looks at these guys, the people who have been influencers in the finance world for a while.
Al who are totally against it. And then somebody sister and says, well I I trust Buffett more than I do Michael seller. Why should I believe these guys that are talking about Bitcoin?
What you're saying is a shock wave, moving through the culture. You're saying the most disruptive force in the world right now and it's slamming into people and institutions faster than they can. Then they can absorb it and and appreciate it and understand it.
It's just like shock waves in the real world, right? If I move an airfoil through the air faster than the speed of sound, the speed of sound is the rate at which are communicates with itself. They are can't get out of the way. I pound into it. I create massive turbulence and noise the way to solve it. Is you go slower. But you know, then you're not supersonic. You know, Charlie Munger wasn't an advocate of Apple Computer, right? How about Amazon? Right? How about, how about Microsoft, right? Warren Buffett's. A friend of
Bill Gates for how many years and he still hasn't bought Microsoft stock and Microsoft is an idea that was, you know, fairly well, understood, 40 years ago, 30 years ago. So what you have is, is something so powerful that everyone's being asked to have an opinion, right? Presidents, you know, the president of Russia, the president of most Nation States. They're asked to have an opinion, every investors ask to have an opinion, but what if I told you, you couldn't,
Understand it without 100 hours of time invested. How many people after the age of 40 spend 100 hours, studying anything?
And I've like once you get to the, how about age of
65. You don't think a monger Buffett. Gates these guys spent 100 our study in
Bitcoin, aren't you? Sure. They didn't? Isn't it obvious. I would say it's almost certain that he hasn't spent 10 hours. That's how I like I would say the same with most macro investors though right now. You know what I would say the same a lot of crypto investors
the world is full of okay. How many people
I mean, I see it because I see it. My feed most people are the
Stephen spent 100 hours starting this how many people spend 100 hours studying the stock that they hold in their portfolio? Through how many people spend 100 hours, studying Facebook, but
based on what you're saying is you don't need to study East Bitcoin. Just trust you and buy Bitcoin. No, no, he's not saying that he's
now, but yeah, but I'm not saying that that is saying that I spent a thousand hours before what I'm saying is, you're basically saying, look, I've
done the research. You don't need to do it yourself. Just buy Bitcoin, and hold it for a
hundred years. Have a great day. Bye.
Bye. It's basically what you're saying. I'm actually saying that people should do the research until they get the conviction necessary to make their own decision look like identity. This is property. I don't run a, I'm not promoting my own secure in, right? Promoting an exchange. I'm basically suggesting Go West Young man. Gets some land, right? It's like, go get, go go to America, right? Get some property and make a life for yourself, but,
You decide whether you're wanting to do that or not. Here's the more important point, though. It's every single influential person in the world was being asked to have an opinion but they're not spending 100 hours on the opinion. If I roll the clock back, a hundred years and I went to every politician and every rich person in the world in the year 1900 and I asked them what they thought about electricity. What do you think? They'd say, right? How about how about airplanes in the year 1904? What was the opinion then? So,
It's not unreasonable and I don't think we should be spending a lot of time fixating upon the opinions of of famous and powerful and rich people about a technology that they have not chosen to make a focal point of their interest. Well, especially when they're 98 years old,
like
I think has to be a fact. I think the more important point is everybody thinks for themself.
Right, so you wouldn't go to Charlie, Munger and ask him to pick out stocks and your name every winning stock in the past decade.
Netflix, Google, hang Apple, Facebook Amazon. How many of them were recommended to you by any of these people that you're getting a pendulum? None of none of the Bitcoin antagonist or critics would have recommended or did recommend any of those stocks? Right? So it's kind of a moot point. It's really, just marketing or Sparks that are being sent up because what happens is these guys in the media, they interview them and they want to like get a rise out of
Them. So they actually throw this out there. Nobody is asking Warren Buffett's opinion of silver or gold right now because no one's interested in hearing the answer.
Here's a next one. I want to show you. It's you and Peter Schiff, going back and forth on Twitter. Do you have the one in regards to gold? Is this the one in regards to Gold? Tyler? Is this the one? So the only way I can poke, so also instead of just posting it relevant replies, Michael Gold way to the tablet. See what Peter Schiff said, go because he's a
Big proponent of gold. See also follow Michael Sailors, asinine advice to plug their balance sheets into Bitcoin to a hedge against the expected annual inflation rate of two percent. Now down as much as thirty four percent of their hunch of mon month that's 17 years of expected inflation. Losses time to pull the plug, Michael sailor responds with returns on gold versus Bitcoin. Then he responds also instead of just posting relevant replies to my tweets. Why don't you agree to debate me so far? You have turned down every opportunity to do so.
Clear to me that you're afraid to actually confront me and defend your ridiculous view. So you take your coward's way out. By the way, we invited him to be on the podcast today. He said get me a private jet and we want them to be on the zoom and he said, he's not available. I'm just letting you know, we don't get typically people saying, get me a private jet. I was his request and then you say, it's not clear. What we could debate. We would debate, your position appears to be buy some more gold by some gold or silver or gold stocks or government bonds, or corporate bonds or dividend stocks, or value stocks or emerging.
His stocks or small company stocks or anything. Really? Just now too much. The debate would be about Bitcoin. You think it's digital gold, I think is digital foolsgold. You think everyone who doesn't own? It should bite. I think everyone wants, it should sell
it. The fundamental Point here is is you have to give the world a solution to their problem. Not just being a Critic if you want to be a Critic, you can criticize everything. But, but what's his answer? If you listen, if you listen to Peter's debates what he says is he only has 5% of his portfolio.
They invested in gold which means he has 95% invested in something else. But what is this something else? And the point is, you know, you're back in the same, you know, hedge fund, Shuffle mentality is like, just give me all your money and I'm just going to shuffle it with random 95 percent opacity on random stuff back and forth, but don't question it. What about the five if it was it was a recommendation he would own more than 50% of his portfolio when the goal but
He doesn't believe in it. So
his argument would be, his argument would be, I don't recommend people to buy 50%, I recommend people to buy two to five percent. That's his
position doesn't have an answer to the that that means that you're going to lose 95% of your wealth. So what's the answer? So anyway, the point is that diversity, finally. I already have a debate. If you go online and you Google Michael, sailor gold debate. You'll find a pretty good debate that's got more than 2 million views right now where I go Point by Point through the differences between
A coin and gold. The issue with with Peter is Peter's not offering a solution to the world, right? He's simply trolling Bitcoin and he's not trolling Bitcoin with any any real concrete criticism other than he just doesn't like it, right? Well, wouldn't the
world? But Mike if you guys did have a debate.
When the world benefit I guess the question is, I don't really know.
He doesn't he doesn't have a concrete
argument, but you're not dodging a debate with
him. I don't see the point of debate when Peter buys a billion dollars worth of gold.
Then I'll have a debate with him. So you're saying you don't see him as a True Believer even in the he says Hey gold is your hedge against, as Pat properly pointed out to him on the fox interview that Peter. And Pat had said, listen Peter, you're selling Armageddon to so gold yet and you're saying and yet, Peter only owns Five, Peter Short, cold Peter is and Peter is anti everything. For example, he's got more investment in Gold stocks, gold miners than gold will gold miners are short gold.
Miners incentive, is to dump as much gold on the market as possible as fast as possible. If you read the balance sheets of the gold miners, what you'll find is they don't hold gold as an asset. So, so, gold miners don't believe gold is money. If they did, they wouldn't sell it. They buy it. And Peter doesn't believe gold is money. If he did, he wouldn't allocate 95 percent of his wealth to something other than it.
And ultimately, the fundamental issue of the Peter is, you know, he's just debated, you know, he's bit of a this issue for a decade.
All of his argument is just I don't like Bitcoin. He hasn't come up with anything worth refuting that I can see. And if you go online, you'll find three, four, five, six, Peter Schiff, debates, and he just doesn't say anything other than just park the person that he's debating with. So I can't see, it's constructive. This is a reasonably constructive debate. If you go to me and Frank giustra, where we actually had a lot of back and forth fundamentally, though.
Finally somebody in the world that is invested more than fifty percent of a portfolio and gold.
At a billion dollar level, I got my position is pretty quick. I've invested almost four billion dollars in Bitcoin, and I'm not telling you you need to invest half your portfolio in it. I'm just saying that. I think that it is. It is money. It is an asset. It will appreciate in value. And one can create a strategy where it is. The dominant part of the strategy. There are other people that have invested in companies Amazon.
Sean was Jeff Bezos strategy, I get it big Tech other people have bought city blocks in New York City. That's a that's a valid strategy. So investing in property or investing in technology is a valid strategy, but on the other hand find me someone that is actually bet five billion dollars on gold where it constitutes more than 50% of their portfolio and it's their own money and Peter's not 1. Peter hasn't bet on gold Peters, betting on gold going down. He's
Buying the Bitcoin, the gold miners that are dumping the gold, making the gold price to K. So that doesn't make any sense. If you dig into the Gold, Miner, balance, sheets, read, read the two, three biggest gold. Miners. What you'll find is they over mine, the Gold dump the gold, then they pay an income tax. Then they dip in and out there access and pay a dividend tax, then they pay off their debt, which is 2%. So, another way to say it is they would rather loan.
The out to the world for 2% interest than whole gold. That's how bad they don't like gold. Right? And they're the ones that mind the goal. It's an, it's a crippling indictment of the entire industry, right? That they think it's going to zero. That's why they keep dumping the gold on the market. Find me somebody that really believes in gold. In fact, every single goal, proponent. You'll find on the internet. If you listen to them, they'll start their conversation with. Well. First of all, I don't recommend you invest more than
than 5 or 10% of your money and gold. It's just like, it's a hedge thing. Just makes the gold miners. Really. No different as a commercial Enterprise than Timber cutting.
How are you the process? I here's how process. We're one minute over. I want to respect the time as well. As we got meetings that we got to go to as well, Michael, this we don't have enough time with you. Do you? You just talk and you person's got to listen to how your process and your decisions. This was extremely. I hope the audience enjoy.
As much as I enjoyed it, I feel we needed two or three more hours together. I'm, I'm assuming Peter Schiff, wouldn't mind sitting next to you for debate. And if you're up for educating the world, maybe it would be a great educational moment for the audience. If we can get him here. We can't get him in a private gym, and we get them on a Greyhound that floats from Puerto Rico to here. Who knows, or can I have a chat in front of assume and then he'll accept it, but having said that, I would love you have to back on Michael. Thank you again for taking
The time to come and I this was wonderful. Appreciate
you. Yeah, thanks for having me guys.
Absolutely. Take care of gang. We not going to do podcast again this week because I'll be out of town, but we will do it again next week. Maybe I've got a very busy week now. I got a very, very busy week. Yes. Okay. Take care guys. Bye. Bye.
