PBD Podcast | EP 128 | Patron Saint of Bitcoin: Michael Saylor

we're going to talk about michael saylor

today

all right 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 uh devault

michael saylor uh for some of you guys

that don't know his story i'll kind of

uh set him up and we'll get right into

it get your pens ready get your papers

ready get your mind ready it's about to

go for a workout 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

uh over 40 patents if you own one

bitcoin today a bitcoin as of right now

is worth forty four thousand five

hundred and twelve dollars

if you own ten that's 440 000

if you own 100 that's 4.4 million

dollars

but he owns personally

17

732 bitcoins and his company micro

strategy brace for impact owns

125 000 bitcoins let me say that one

more time 125 000 bitcoins so with that

being said michael saylor thank you so

much for being a guest on the podcast

happy 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 in you know 12 years ago 10

years ago when these guys are talking

you just got in two years ago for a guy

as smart as you what made you switch and

say this is the way to go

um

you know most people don't think about

money

and we just kind of take it for granted

and and i uh really took it for granted

up until about 2020 but i think in march

of 2020 a lot of people's world's 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 show up

and work in the office and then during

the lockdowns

i i found that i had to question that

belief and pretty soon we're all working

remotely and and i along with probably a

billion other people went through that

same transformation so that was like a

digital transformation of work

uh in uh in the second quarter of 2020

we had what we'll call a

k-shape recovery but in my opinion the

k-shape recovery was main street got

shut down and locked down and if you

manufactured 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

sat on a floatie in my you know poll in

the hamptons and got a 30 percent

in that year doing nothing

which would be the best year of my

entire business career if i'm a

financier

but if i was running a restaurant or

running a manufacturing facility or

doing something with raw materials

i would have had to generate 30 percent

more cash flow to get nothing

you would have and of course that was

impossible so can you explain can you

flint to the average get what that means

30 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 in essence print infinite money with

no reserve ratio

then uh the economy 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 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 your labor's disappeared and no

one is showing up to buy your stuff

the world doesn't look so good so you

had this uh

dichotomy i think and

the people on one side of of the economy

thought everything was just fine and

people on the other side 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 uh i had a 500 million dollar

treasury that was sitting in

conservative instruments basically

invested in in short dated uh sovereign

debt you know the the conventional

strategy for any publicly traded company

is

you take your treasure and you buy one

to five-year t-bills

and otherwise you hold it in cash

now um

if the if the um

interest rates were three or four

percent and the money supply was

expanding at two percent 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 percent

in a matter of weeks when main street's

completely shut down and it's pretty

obvious it's shut down

you're

you're uh

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's

something else going on here the the

actual inflation rate isn't two percent

or zero percent the inflation rate was

30 percent but the inflation was hitting

the assets it wasn't hitting consumer

goods

and so

what i realized is maybe the money

supply is expanding faster than zero or

two percent a year and i started on a

search and i discovered the bitcoin

standard

and some austrian econ economists and

what i realized is the money supply had

really been expanding at seven to ten

percent a year for the last decade

that's why the s p indexes is

appreciating it ten percent a year for a

decade and once i realized that that

assets like the s p and equity

portfolios and real estate are driven

primarily by monetary policy of the

central banks

then i realized that holding money at

zero percent interest when the money

supply is expanding at 10 percent is

losing 10 percent of your wealth a year

and then i realized that in fact the

money supply was expanding not at 10 but

about 25 percent 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 was 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 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 in 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 120 a

share

i basically was valued at one times

revenue plus the cash

when i gave the money back to the

shareholders the stock was going to go

to 60 a share when that happened

all my employees stock options were

going to be underwater

right

and

we were going to get beat to death

by amazon apple facebook and google

they're just going to steal all our

employees when the stock crashed and

that would mean that instead of growing

five or ten percent a year i was going

to be shrinking five or ten percent a

year instead of my cash flows doubling

or tripling they were going to be cut to

zero

and once your revenues start falling

your cash flows go to zero you have no

capital all your employees quit when

your employees quit the company unwinds

we're gonna go to zero

so giving the cash back to the

shareholders was a fast death

holding the cash at zero percent

interest when it was losing twenty

percent of its value a year as a slow

death

doing something was the alternative 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 really you thought about

mine 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

we're going through

perceptions before you settled on

bitcoin you were thinking art you're

thinking real estate you're thinking

anything other than

cash everything in fact in fact we put

out a press release to our entire

shareholder base when the stock's 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 as one of the

things we're evaluating

um ultimately so 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 uh but you have a

bunch of money say 250 million dollars

you want to hold it for a hundred 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

that means over the course of 100 years

the dollar loses 99 of its value

my house in miami beach was purchased

for a hundred thousand dollars in 1930.

okay i bought it for 14 million dollars

this is the villa 2012.

today

you know yeah so

100 000 to 50 million

in less than 100 years that's

that's not the house getting more

valuable that's the currency getting

less value that means the 200 million

100 years from now there is nothing two

million bucks

okay if you took a if you took any

amount of money take a hundred million

dollars in the year nineteen hundred and

invested in any currency in the world

you would have lost

a hundred percent of your money in every

currency

except for the dollar or maybe the pound

every currency collapse the 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 it would have been

seized

in the hundred years because there's

only a couple cities on earth maybe

zurich or 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 wrong country if you were a swiss

citizen in switzerland for the hundred

years you might have kept gold

but uh you know churchill seized the

goal roosevelt seized the gold if you'd

lived in germany you would had your gold

seized 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 uh your gold

and now you're stuck with okay well what

are you invested land

take um

take a hundred million dollars worth of

money and buy land in

florida tax bill's two million dollars a

year

if you buy property in florida's two

percent 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 you don't own you don't own your uh

your property of the land yeah plus the

maintenance so

if you want to move money through time

how do you do it you can't do it with

the currency

the money is broken the money was always

broken it's been broken for a hundred

years losing seven to ten percent of its

value but

in hyper-inflating economies like

venezuela argentina

fill in the blank

the money uh loses 20 30 40 of its value

a year sometimes 80 of its value a year

in 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

uh the russian rubles lost 35 percent 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 it a

100 year time frame i'm an institution

the whole point of the institution's

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 is the best idea

humanity had for like five thousand

years but it was but it's not a

perfected idea the problem with gold is

gold miners produce two percent more

gold a year

okay

that's no better than the state of

florida seizing two percent of your uh

your property a year in a property tax

the half-life of gold therefore becomes

about 30 years you divide two percent

into 70 in 35 years your money's 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 hypothecate it and rehypothecate it

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 and manipulate the price

you can't hold your own gold

so

ultimately the problem with gold is

holding money in gold over the course of

a hundred years is going to lose 85 to

90 percent 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 100 years and i need to move it from

here to tokyo

if i want to move you know

a billion dollars of gold is like 30 000

pounds or something you want to move a

bunch of money through space it's gonna

cost you three to six months and five

million dollars to move it once

if you want to move it through time

you're going to lose 80 90 of your money

through time

and it's going to be seized so

gold's a pretty expensive way to move

money currency is an ineffective way to

move money

property property is only good so long

as the nation's 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 oh we lost

the family farm because we couldn't pay

the property taxes

you can hold the price you can hold the

land

you know buy 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 pro pass

a property tax then they annex 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 tax then

they seize the property because you

can't pay the property tax so

ultimately property is not a very

effective way to hold money for a long

period of time and you can't move money

through space

so

this is a problem

i 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 we're

not even thinking about thinking about

raising interest rates you know your

strategy of investing in 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

um

if if you wish to um if you wish to hold

energy and transport energy you need a

technology

we're not using gold anymore when we use

gold as i pointed out it's expensive and

it's uh and it's cumbersome

currencies don't work

the us dollar is the the strongest

currency in the world but is losing 15

to 20 percent of its value a year

the peso is losing 40 to 50 of its value

a year the boulevard is losing hundred

percent 95 98 of his value a year

so once you start thinking about it that

way you start thinking

well

what's a better way 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 in 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 bled two

percent 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 percent of its value year and

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 with 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 to issue stock

stocks aren't scarce the the amount of

equity shares will also go up if the

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 they're in countries

they can be unionized i can 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 or the jurisdiction

it operates within

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

wealth or 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

a billion dollars

and you buy a billion dollars of

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 peso is

going to go from one peso to the dollar

to five pesos to the dollar to 10 pesos

to the dollar to 20 pesos to the dollar

to 40 to 80 to 100

the black market rate right now is 210

pesos to the dollar

220. if i told you it was going to

collapse

from 1 to 20

and you had 20 years of notice

what's your best strategy

take your million pesos convert to

dollars and you're gonna have 220

million pesos in 20 years you're going

to look rich

better strategy

is borrow a million pesos convert to

dollars

wow best strategy would be mortgage your

entire company in pesos sell equity in

your company and pesos convert it all to

and then get the dollars out of the

country

because if they're in the country if

you're if 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 devalued it ten 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 uh the property's value based

upon the extreme of cash flows right

if the building is uh has got a a rentor

and it's got a lease and the lease is

capped at cpi or or or denominated in

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 buying

30 000 pounds worth of gold

why

because real estate developers going to

create more buildings gold miners going

to create more gold mayors are going to

pass a property tax and they're going to

they're going to put some kind of

enjoinder or some kind of restriction on

your rents

rent control you're building

something you know acts of god are going

to create earthquakes and floods

and lightning strikes

and none of that stuff's 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 any more of it it's

it's weightless i can move it at the

speed of light it never decomposes

i can deco i can i can break it into a

thousand pieces in a second

send it to a thousand places and

recompose it

uh all using a computer program

and i can take personal custody of it

maybe the most the most powerful two

ideas are

i can hold possession of a billion

dollars of bitcoin in my head

just holding a password or a 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 pull the gun i get it all

right my incentive is to violence with

bitcoin i pull the trigger i get none of

it

so

the incentive is the negotiation i'd

rather have half

than zero right and it's a very

interesting idea big idea

and the second big idea is got super

intimidated by the way

i'm

yeah i

the second big idea is it's a monitor

it's a virus

it's 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 a it's on a single phone i

can seize the phone and reprogram the

software so if i came up with the bank

and 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

it gets kicked off the network

so you could think of it as i released a

life form plankton

or a virus

and i let 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 doesn't help 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 gonna keep spreading

and

the beauty of the system is

it's in essence 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

bitcoin

so

what you've got

is

is truth

and integrity

released

as a 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 bitcoin have been i've been

mined already

about 18 and a half million okay

yeah it's it's um i want to read you

something i want to read yourself

because i'm trying to see more the uh i

like the way you processed everything

with real estate with stocks

you know management teams ceo what could

happen to the market government can

regulate them etc and said okay fine

cash got it if you have 200 million

dollars you know two million dollars you

know 100 000 house in miami now it's a

50 million dollar house okay so maybe

that's also a risk because what florida

would do within 20 years but so here's

what just took place i'm trying to see

for somebody that's uh wanting to play

devil's advocate and be a skeptic

ukrainians

are preparing to lose internet access

okay this is crypto briefing

article per forbes in ukraine apps that

permit basic service like communication

and mapping without internet access are

tapping the downloads charts right now

such applications utilize radio signals

or bluetooth

uh for offline functionality and are

common with when civil conditions

deteriorate amid war government

crackdown the similar searches on uh

such downloads occurred in 2019 with

hong kong protests right while there has

been an influx of cryptocurrency

donations to the country amidst its uh

invasion cryptocurrency usage is

generally impossible without internet

connection parts of ukraine's third most

populous city odessa have already lost

power and forbes sources indicated their

expectation that ukraine could lose

power interconnected activity on a more

widespread basis this is where i'm going

with this so you know

kova takes place whatever you agree with

it there's a lot of different stories

it's a virus it came from this uh your

lab it came from this we don't know what

market is a lab we haven't done the

investigation we still don't know the

tribunal courts got to get out there and

say we got to do real investigation

but there was a community that says look

china is known for investing most of

their money in the military bio warfare

that's what their strength is at 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 experienced a glimpse of it

what it 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 it's pretty much the most robust

resilient thing that human race has yet

to invent

for example

it's running uh 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 um

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 irrelevant in fact we just saw

last year during the china crackdown

that china banned bitcoin mining

they took 40 to 50 of the entire network

offline half of bitcoin money 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 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 uh about

bitcoin's

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 impervious to cyber attacks

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 phishing and scam and spam

uh attacks and and other sorts of

imposters and malicious behavior in

cyber space

the way to do it is to integrate a layer

of

monetary energy which is what bitcoin is

into the internet

you need to wrap

uh 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

could probably shut down most of the

scam videos on youtube

all the scamming on twitter all the spam

in your inbox right the simple principle

is

you simply have to post a monetary

security deposit in order to hit my

website or message my inbox or post a

comment and if you're found to be

a scammer or a fisher or a malicious

actor you're fined and we just take your

money

now this is not a problem for an

ordinary person you would post ten

dollars once in your life and you will

trip through cyberspace as you will

but

1 000 times a week someone spends up a

michael saylor bitcoin giveaway on

youtube and those are live youtube class

they'll probably take this interview we

have they'll rip it out they'll put it

into a michael saylor bitcoin giveaway

they'll run it on youtube with 40 000

fake people listening

and they'll have some number where you

can where you can uh send bitcoin to get

send one to get two back

for those people listening i won't get

one scam never send your bitcoin to

someone to get two back you're getting

ripped off so they'll do that and they

will have spun up forty thousand fake

actors

if you actually required someone to post

ten dollars of bitcoin in order to trip

through youtube or use youtube it would

cost you

400 000

every 10 minutes because they get taken

down every 10 minutes and they get spun

up every 15 minutes it's literally

a 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 using your your name for this

type of one out of a thousand

one in a thousand but yeah they

obviously work because they do them

every 15 minutes if you went online

right now and type michael sailor crypto

giveaway or something

i just bought a few before i got here

just kidding yeah

yeah so

bitcoin is it's digital energy right

this is a big idea we've encrypted

money right it's such a huge idea since

most people don't know what money is it

doesn't occur then that money is energy

since they don't understand what money

is they don't really understand that

money is defective

that the energy is bleeding out of their

currency and by the way

if

if money is energy the energy finds its

way into a 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 a

well-engineered system is a system that

allows you to move energy through time

and space with no power loss no

impedance super conducting

which is

that we call that like uh 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 in 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 they it doesn't occur

to them that the energy is bleeding out

of the systems

once you figure that out you realize

that bitcoin is truly brilliant because

what they've done

is they've created a thermodynamically

sound monetary 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

pat have you ever and it's lossless he's

saying lossless yeah that's a 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 though he

it totally makes sense on what he's

saying the way he's describing it for me

uh if

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 gonna go that way

which is totally fine but i'm just

listening to the way he's processing

issues tyler can you pull up that story

what happened with 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 bullying how

they handle all this 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 kova did to me is it made

me

question a few things one of them was

working remotely it's one 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 on morgan

stanley dean with a day before 9 11 even

when i was in the army everybody would

say buy a roth ira diversify okay

diversification

that's a concept we've heard for a long

time

uh inflation increases gold whenever

there's inflation peter's shift oh my

gosh gold's gonna go because you know we

printed 40

percent of the us dollar has been

printed the last 18 months gold's going

to go up we didn't see that cause and

effect you know we didn't see the cause

and effect with that taking place

uh you know what are your thoughts with

some of these things where the

traditional conventional way of things

have been questioned based on the last

18 24 months inflation and you know

inflation and diversification are both

bromides there there are these uh

simplistic terms that people toss around

but no one really thinks very deeply

about them in my experience i mean let's

start with inflation um

inflation is not two percent inflation

is not the cpi

it's not seven and a half percent

inflation uh properly understood is

simply the rate at which the price of

anything 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 of goods and services

that you wish to buy which is different

than the market basket of goods and