#1017 Max Keiser On Helping A Nation Build On The Bitcoin Standard

Max Keiser is a Bitcoin OG, popular podcast host, and has a new book "The Book Of Max". In this conversation we discuss Max moving to El Salvador, helping El Salvador build on the Bitcoin standard, and the progress that has been made in the country. We also go over Michael Saylor's 10 points on how Bitcoin can be strengthened over time. ======================= Bullish is a powerful new exchange for digital assets that offers deep liquidity, automated market making, and industry-leading security. Combining the innovations of DeFi with the regulated environment of traditional finance, Bullish empowers users to trade with certainty and earn passively at scale across variable market conditions, in an environment backed by multibillion-dollar liquidity contributions from the Bullish Treasury. Visit bullish.com/pomp today to learn more. Note: Bullish is licensed by the Gibraltar Financial Services Commission. Virtual assets and related products are high risk. Consult your investment advisor and trade responsibly. Bullish is available in select locations only and not to U. S persons. Visit bullish.com/legal for important information and risk warnings. ======================= Since 2018 Copper has been at the forefront of institutional digital asset development. From award winning custody solutions, to creating the first truly off-exchange settlement function, Copper pioneers technology, products, and services, in lock-step with a rapidly changing world. No other infrastructure provider covers as many assets, across as many exchanges, with the speed and security that Copper can offer. To learn how Copper helps the world’s largest institutional investors secure their digital assets, head over to copper.co Copper - the unfair advantage. ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin. Visit http://compassmining.io to start mining bitcoin today! =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Max Keiser is a Bitcoin OG. He's also got a very popular podcast and he's got a brand new book, The Book of Max. In this conversation, we go through the 10 points that Michael Saylor listed as to why Bitcoin has the potential to become a stronger asset. Some of them Max agrees with and some of them he doesn't. This was a fascinating conversation and I hope that you enjoy it. Before we get into this episode with Max, though, I first want to talk about our sponsors. This episode is brought to you by Bullish. Bullish has reinvented the digital asset exchange. They give you access to DeFi features like automated market making and liquidity

• 0:43Anthony Pompliano?

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• 1:27Anthony Pompliano?

  when you want, at scale, with better pricing and lower risk, all within a regulated market environment. Good reasons to be bullish. Learn more at bullish.com/pomp and follow @bullish on Twitter today. Bullish is licensed by the Gibraltar Financial Services Commission. Virtual assets and related products are high risk. Consult your investment advisor and trade responsibly. Bullish is available in select locations only and not to US persons. Visit bullish.com/legal for more important information and risk warnings. Today's episode is brought to you by Copper. Since 2018, Copper has been at the forefront of institutional digital asset development. From award-winning custody solutions to creating the first truly off-exchange settlement function, Copper pioneers technology, products, and services in lockstep with a

• 2:10Anthony Pompliano?

  Rapidly changing world. No other infrastructure provider covers as many assets across as many exchanges with the speed and security that copper can offer. To learn how copper helps the world's largest institutional investors, secure their digital assets, head over to copper.co. Again, copper, the unfair advantage. Check them out at copper.co today. Next up is compass mining. Compass mining is the world's largest marketplace for mining hardware and hosting. With compass, everyone can mine bitcoin. Their team makes it easy to start mining wherever you want, at home or in one of their 23 hosting facilities around the world. Through the compass marketplace, retail miners can access mining hardware with similar prices and purchase plans as the world's largest mining companies.

• 2:56Anthony Pompliano?

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• 3:26Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:50Anthony Pompliano?

  Ladies and gentlemen, boys and girls, the man, the myth, the legend, Max Kaiser is joining us next. Mr. Max, how are you, my friend?

• 3:58Speaker 02

  Pomp, Pomp, they call him Pomp. Pomp, Pomp, Pomp. That's my gang sign for Pomp. It's a Pomp show.

• 4:08Anthony Pompliano?

  Are you calling into this show from the United States or from El Salvador?

• 4:13Speaker 02

  I'm in El Salvador.

• 4:15Anthony Pompliano?

  What is going on on the ground in El Salvador? Give us a on-the-ground report from the one and only Max Kaiser.

• 4:22Speaker 02

  Yeah, sure. So, as you know, the country made Bitcoin legal tender a year ago. And they are experiencing all the benefits and changes that come with that. The economy is doing very well. They printed a 10% plus GDP gain. They're looking to do that or more this year. Tourism is up by a couple hundred million dollars. They just completed a surfing competition, international surfing competition, that attracted people from all over the world, that brought in millions of dollars. They've got forward and direct investment coming in, in the billions of dollars. So, that's all happening that's very positive.

• 5:07Speaker 02

  Now, additionally, the government has decided to crack down on gangsters. So, they have essentially arrested and incarcerated thousands of gangsters. And this also has a very beneficial impact on the economy. It's estimated that the gangs are extracting about $6 billion a year. And this is an economy in aggregate. I think it's like a $45 or $50 billion economy. So, that's a lot, that's a big difference to this economy. It's like giving everybody a 25 to 30% tax break because they're not paying the extortion. For example, you've got 5,000 pupusa sellers. Those are the local delicacy that are sold on the street.

• 5:52Speaker 02

  There's 5,000 of these around the country. They're primarily women. And so, they would pay up to half of their revenue to these extortionists, to these gangs. So, now they are being, the gangs are being wiped out. So, that has a huge knock-on effect. The confidence people have in the economy, you see entrepreneurialism is getting very strong. We have a venture capital fund here called Elzante Capital, which is investing in local startups. And we've got an incubator starting with Jimmy Song, who's training up some local coders. So, there's a lot of talent here. We want to germinate and feed that local coding talent. So, that's going on. And it's, it's, it's, it's, it's all happening.

• 6:35Speaker 02

  You know, they're, they're having a tremendous, tremendously positive impact. Now, people will say that... They bought their Bitcoin at a higher price. They've got an unrealized loss on the books. Last I checked, it was like maybe 30 or 35 million. But you know, you got to put that in the context of what's happening throughout the economy, right? So without the Bitcoin law, you wouldn't have those hundreds of millions of dollars with a tourism boost. You wouldn't have all that investment coming into the country. It's essentially the cost of a rebranding. And you know, in the world of corporate America and global corporations, the cost of rebranding a major corporation would be hundreds of billions of dollars, you know, certainly hundreds of millions of dollars.

• 7:20Speaker 02

  So here you have a rebranding of a country, thanks to this Bitcoin law, and they've got an unrealized loss on the books of approximately 35 million. But you know, that will be a net gain as Bitcoin continues to march higher. So that's what's going on.

• 7:38Anthony Pompliano?

  So when you start to think about El Salvador, they're creating a playbook. And that playbook, based on many of the metrics that you shared at the beginning of the conversation, seems to be working. How do you take that playbook and get it in the hands of other countries? And are there other types of countries that you think will be the most receptive to this? Are they developed nations, developing nations, certain geographies around the world where you say, yes, that's where we expect this to be adopted next?

• 8:03Speaker 02

  Absolutely. So the president here in El Salvador hosted a get together of, I think it was 44 central bankers from around the world, mostly the global south. This took place just a couple of weeks ago. And they all came to El Salvador. They were down in El Zante. They all got a Bitcoin wallet. They were all using their Bitcoin wallet, hyper Bitcoinization. And then they went back to their respective countries, having been orange-pilled. So the president, President Bukele, is orange-pilling central bankers by the score, you know, dozens of them coming to the country and getting orange-pilled. And then they go back to their respective countries and they carry the message. Obviously, we've got the Central African Republic, or CAR, has made Bitcoin legal tender.

• 8:45Speaker 02

  So that's happening in Africa. And he's orange-pilled, and the way he talks about Bitcoin is very... Very, very strong. He's got all the very strong talking points there. Uh, so you see it spreading there, but the playbook i- is key. You know, Samson Mao, who left Blockstream recently to join a company here in El Salvador that he's starting called Jan 3. He, that's his whole business model was Bitcoin as a, as a service, as a sovereign solution. And now he's going to other countries in this region, specifically Guatemala, Honduras. And he is talking to higher ups and getting them to get on board with making Bitcoin, uh, legal tender.

• 9:26Speaker 02

  So that, that playbook, as you, as you call it, uh, is, is being, uh, spread to other countries, particularly in this region. And they, the people, the, the folks are really receptive because they see the, the effect, the, the, the positive impact it's had here.

• 9:42Anthony Pompliano?

  When you think about the average citizen, what is the path, uh, to educating them on the actual asset? On monetary history, on economics, like, how do you, how far deep down the rabbit hole? Do you think that the average citizen has to go until the light clicks and they say, oh, I get it. Like this is something that I want. This is something that I need to use.

• 10:02Speaker 02

  Well, this is, you know, Pom, this is the, uh, the, the, always the big question, you know, because Bitcoin is, is, is not something that you can pick up over the weekend, you know, you really have to think about it for a while and, and think deeply about it. You know, for me, what I always talk about first, whenever I talk to people is the, the quality of Bitcoin where it's unconfiscatable. Uh, so this is really unique in his history. Uh, we've never had a, as a species, the opportunity to have wealth that's un, you know, absolutely unconfiscatable. And that resonates that really, you know, people like that idea. And the folks here who were unbanked, you know, like 70% of the country before Bitcoin was unbanked.

• 10:45Speaker 02

  Now 70% of the country is relatively banked as they all have now the Chivo wallet and they have access to Bitcoin. So that was a flip, you know, an incredible change and people like that idea, you know, I come up to me. People come up to me all the time in the street and they pick up their, show me their phone and they go, I have $20. Like I'm like, wow, that's fucking awesome, dude. Uh, and they know that that they, nobody can take that, you know, this is, this is theirs. It's unconfiscatable and this is, they can't be inflated away. It can't be taken from the government. Uh, it can't be stolen, it can't be extorted. Uh, and this is significant. Uh, the other thing is that it's uncensorable. So, um, this is particularly key for remittances, right?

• 11:28Speaker 02

  So money going back and forth from El Salvador to the US. Uh, this money can go and nobody can stop it. Nobody can, can stop that transaction. It's uncensorable. So those, those two key points, uh, I think get into it. People, you know, they're, they get some over the hump. They're like, well, you know, that sounds good. Let me try it. Let me download this. Let me get, let me get started.

• 11:47Anthony Pompliano?

  So there's a recent, uh, appearance by Michael Saylor. Uh, he went and he talked with, uh, with Bloomberg and he gave 10 steps that he believes will make Bitcoin a stronger asset. I want to go through each one of these 10, kind of get your thoughts in terms of ones you agree with, ones you disagree with, or ones that you think that you can, uh, elaborate further on. Uh, the first one is that he says that there's an absence of the no wash trading rule, uh, which basically allows people, if Bitcoin is purchased at 50,000, it drops in price. You can basically sell it, buy it back, you can book the loss, uh, and then continue to just hold the same amount of Bitcoin. Agree, disagree, good or bad for Bitcoin?

• 12:24Speaker 02

  Yeah, I, I'm glad you brought this up. I, I think this is really interesting because Michael Saylor has had an interesting point in his Bitcoin experience, right? Uh, he's now going through what anyone who's been in this, uh, space for, like I've been in it for 11 years, right? Started buying it at a dollar. I've been through three halvings. I've been through four, maybe five, 80% corrections. And so Michael is having his first, you know, big, you know, cream pie in the face, uh, of volatility. Everyone experiences with Bitcoin at some point. I think his basis at MicroStrategy is 30,700. And of course they're down, you know, on paper from that. But, um, so this list of things he came up with to try to address what he's, what he says, what he thinks is, uh, could be improved upon.

• 13:07Speaker 02

  Now the wash sale trading rule, uh, in my, I, I would give that, you know, a, I'm fairly ambivalent about that. It's like, yeah, that would be kind of nice, but I mean, he's trying to avoid this hyper trading that's going on, people trading without any cost whatsoever into kind of the fastest moving, you know, I'll say shitcoin, I don't know, you know, I mean, altcoin. And there's a tremendous amount of social media where you see hyping of a meme coin. And so there's no penalty for that mass of meme coiners out there to just jump into a new one. There's no tax penalty, etc. So bringing in a wash sale rule would theoretically put a buffer

• 13:52Speaker 02

  between that kind of murmurations, as I call it, pomp. You know, if you ever look up in the sky, you see starlings and the flying and they're flying in these fantastic constellations of birds and they seemingly just can go with thousands of birds simultaneously. That's kind of like the altcoin market and all these traders, they're hyping on social media and they go from very rapidly from one to the other and they're playing this extraordinary game. And so that theoretically would kind of put a bumper on that activity. So I guess, I guess it's okay, but you're, you know, you're opening the door to regulation. So that's where I would say, put a caution light there.

• 14:36Anthony Pompliano?

  The next point that he made was that there's 520 unregistered and unregulated crypto exchanges that offer 20x leverage. And his point was that this often leads to unprotected investors, which can lead to massive losses. Agree, disagree, and good or bad for Bitcoin?

• 14:53Speaker 02

  Well, you know, again, Michael is somewhat of a newbie. You know, it wasn't too long ago when over there at BitMax, you could get 100x leverage. So 20x leverage is moving toward a more sane environment than 100x. But I mean, obviously, again, that kind of leverage is not consistent with the kind of the guardrails that should be in place for the average retail investor.

• 15:22Speaker 02

  And so having access to that, it's almost guaranteed you're going to get wrecked. It really turns platforms like Coinbase and others, they become more like casinos. I've called them casinos before, unlicensed casinos. And so it has that element to it where you're, you're, you're really, you know, you're putting up a penny and you're gambling on a hundred, on a 20x or a 30x. And as you know, that type of trading is, is almost guaranteed a loser. So, I mean, he's right in terms of, of that kind of existence of, you know, as a casino operations going on.

• 16:04Speaker 02

  He's correct. Again, it opens a door toward regulators. So that's, that would be the downside.

• 16:10Anthony Pompliano?

  So the next point that he made was this idea that there's 19,000 cryptocurrencies being cross collateralized and associated with Bitcoin. And that currently holds Bitcoin back by comparing it to badly managed, unregistered securities. I'm scared to ask you, but agree or disagree, good or bad for Bitcoin?

• 16:27Speaker 02

  Well, this is, this is, this is an interesting point. So, you know, we've been in this for a while and that these points are not new. You know, Michael is just discovering them, you know, because this is the learning curve people have. But, you know, the, the, everything that's not Bitcoin, as I've said on your show before, would come under the heading of either relatively or absolutely centralized versus Bitcoin, which is uniquely decentralized. Additionally, a case can be made applying the Howey test, that everything that's not Bitcoin would be an unregistered security. Right? So, and it also brings up out the question about Senator Lummis in her bill that she's trying to get through Congress,

• 17:11Speaker 02

  talking about applying some regulations to quote unquote crypto. And she does things like she equates Ethereum and Bitcoin. She calls them both commodities, which I think is false. I mean, you can make a case that Bitcoin is a commodity like gold, but clearly Ethereum is an unregistered security without, without any doubt whatsoever. So Gary Gensler over At the SEC, it kind of pushed back against all this and said, hey, lady, you know, stay in your lane. You don't know what you're talking about, which I think is the correct, correct response. But when the cross collateralization issue that he's getting at is really, really the crisis du jour,

• 17:52Speaker 02

  I would say, because of what we saw with Terra, Luna, and all these other DeFi coins, that they're manufacturing that yield, you know, pomp from kind of cross collateralizing and putting money to work into other DeFi coins. And these other DeFi coins are generating returns by, by creating coins out of thin air. I mean, by definition, that's a Ponzi scheme. So a lot of that DeFi return is just cross collateralizing into new situations that are creating coins out of thin air and rewarding early, you know, coin rewards, et cetera. Again, unregistered securities. So you, that, that's definitely an issue.

• 18:34Speaker 02

  And here, I think that this is definitely a regulatory issue, where this definitely would require regulatory kind of enforcement. And, and you see this things, for example, in with Luna, these guys are definitely getting into big trouble. I believe they're completely prevented from leaving South Korea. They're being held by the police. So, you know, this is, this is definitely an issue. So I think with that, you know, he, he understands that this is what, what's, what's, what's keeping the lid on Bitcoin at the moment is you've got hundreds of billions of dollars. You've got people like Sam Bankman Fried over at FTX,

• 19:18Speaker 02

  who's become a kingmaker by creating these enormous kind of cross collateralized, market making, unregulated situations where price discovery can't take place. You know, this is something that people talked about a couple of years ago. They said, will Bitcoin experience the same problems gold has? Because there's no good price discovery in gold because of all the derivatives. And so Wall Street can can really decide what the price of gold should be, not the market. And what Saylor is pointing out is we're seeing this now in Bitcoin. You've got derivatives or DeFi that are making creating price discovery for Bitcoin.

• 19:59Speaker 02

  And it's and it's it's blocking it from from a more natural price discovery from taking place. So I think he's got an excellent point there. And this is definitely under the wheelhouse of the SEC. They're they're definitely should be enforcing in this case. And and they're being lax and it's unclear why the SEC is is being lax.

• 20:21Anthony Pompliano?

  So his next point was connected to this, which is this idea of these Wildcat banks, the ability for centralized platforms or decentralized in name platforms to actually offer unsustainable yields and kind of gamify or or celebrate a lot of these. What what is your thoughts there? Good or bad for Bitcoin? And do you agree or not?

• 20:42Speaker 02

  Well, it's like a tag on to the to the previous point, right? It's just that he's just emphasizing the same point. You've got these what he called Wildcat banks, these big platforms, and they're interrupting price discovery. And they're doing so in a way that's manipulative and fraudulent. And it's the perfect opportunity for the for the SEC to step in and enforce the rules.

• 21:03Anthony Pompliano?

  And so when you start to think about his next point, he listed ignorance and fear of the asset class as a lack of technical know how still terrifies many, as does media coverage telling of the many supposed deaths of Bitcoin. Kind of the the sentiment, the conversation, the lack of information being a problem. What is your thoughts there? Agree or disagree and good or bad for Bitcoin?

• 21:23Speaker 02

  Well, the adoption is definitely tied to understanding Bitcoin. And we know that the more you learn about Bitcoin, the more of a maximalist you become. Nobody who learns about Bitcoin fails to become a maximalist. Only people who really don't take the time to learn about it are left in the camp of a no coin or or a skeptic. But on this point, I think what he's missing is the global nature of Bitcoin. In the US, which has the US dollar and it has a much different culture and the financial markets are in a much different place. This is a bigger problem to get through to people who are bombarded with

• 22:08Speaker 02

  so many things happening in the financial space and the way that that's changing. You know, I look at how, for example, gambling has become legalized with platforms. Now that that we didn't really have even a few years ago. But if you look around the world, places like El Salvador, the Global South, places in Africa. The need for Bitcoin is so great that the learning curve is very fast. They just get it. There's a need for it. And that's where you're going to see the growth pump. You know, Bitcoin is really very much going to be the Global South making a move on the Global North. You're going to see the changing of the guard. The central banks, the Federal Reserve Bank and the Bank of England, European Central Bank are going to be usurped. They're going to be overtaken by this Bitcoin revolution and it's going to come from these other countries.

• 22:52Speaker 02

  It's not going to be led by the United States. So I would suggest to Michael Saylor that he take his message to overseas. You know, get, take your yacht and sail to countries that where Bitcoin is adopted. And the learning curve is rapid because there's a real need for it, you know. Throw America under the bus for now because they're just mired in too much other stuff. These other countries, however, it's where it's happening faster because the need is clear. And the asset is performing brilliantly for, you know, these millions of people and soon to be a billion people and more.

• 23:33Anthony Pompliano?

  He made the point that we don't have a real stablecoin yet because there isn't one that is fully regulated and approved. Agree or disagree and good or bad for Bitcoin?

• 23:42Speaker 02

  All right, this I totally disagree with Michael Saylor. Because when you're talking about a regulated stablecoin, you're talking about a CBDC, a central bank digital currency. You're talking about USDC, the Circlecoin. You're talking about a Fedcoin. You're talking about a surveillance coin. And you're removing one of the best aspects of Bitcoin in that the on-ramp would be outside of the banking system. Right? Bitcoin exists outside of the banking system. And it's so when you have a regulated stablecoin, you're creating a regulated on-ramp to Bitcoin and defeating the purpose of Bitcoin. So that in that in this in this piece that Michael Saylor mentions, I completely disagree.

• 24:26Speaker 02

  And I think it goes against the ethos of Bitcoin. This is something that he and I have talked about before. I am 180 degrees in opposition of this idea.

• 24:35Anthony Pompliano?

  So let me ask a clarifying question here, which is regulated stablecoin is different than stablecoin. Is your thought process that there will be stablecoins and people will use them, but they just won't be the central bank digital currencies? Or like, how do you think this plays out? Do you think these stablecoins end up all failing and nobody adopts them? And Bitcoin is kind of the last remaining one?

• 24:57Speaker 02

  Well, Tether is working great. You know, it's the biggest one out there. And they just added the Mexican peso and they added the British pound. They have the US dollar. I believe they have the euro. And it's it works fine. And it works for the unbanked. So the Tether model is fine. And it will resist being encroached upon by nefarious regulators.

• 25:23Anthony Pompliano?

  And so when you think about that, it's really just the the regulated component versus more of a free market stablecoin is really where the difference in maybe you and Saylor's opinion?

• 25:32Speaker 02

  Yes, I would say that's correct.

• 25:35Anthony Pompliano?

  Yeah, it feels like stablecoins are going to be a thing. But I think the nuance of free market versus regulated is up for debate, right? So that that makes a ton of sense. His next point was around the absence of a spot ETF in the United States. We obviously have the Bitcoin Futures ETF. We have a short Bitcoin Futures ETF, but still no spot Bitcoin ETF. Agree or disagree with him here? And good or bad for Bitcoin?

• 25:59Speaker 02

  Totally agree. It's unconscionable that Gary Gensler and the SEC would allow this to keep going without having a spot ETF in the marketplace. And by allowing things like a futures Bitcoin ETF to exist, and the futures-based ETF products are notoriously horrible. They almost never work, and they're not suitable for retail, they're not even suitable for institutions. They're not suitable for anybody, and yet somehow these things have gotten into the marketplace. Other countries have spot ETFs. Their argument that there's no good price discovery in Bitcoin is fallacious. It's false and easily disproved.

• 26:37Speaker 02

  And so, again, when it comes to the SEC, it's really hard to understand who they're working for. Are they working for the open and transparent markets on behalf of investors? Or is there some other agenda going on? I cannot, for the life of me, understand their reasoning behind this. It seems to me to be some element of corruption here going on. Obviously, a lot of people don't want Bitcoin to succeed because it challenges them and it challenges the banking system. I mean, is that what's going on? Is there a conflict of interest? Because it makes no sense.

• 27:18Speaker 02

  You know, I'm an expert in this area, having invented a virtual currency in 1996, a patented virtual currency in market making and securities. I mean, I am one of the foremost experts in this in the world, and I've looked at Gary Gensler's reasoning on this, and it doesn't add up. And in conjunction with the other decisions he's made, as we've said, failing to enforce some of these obvious scams, I mean, I really question this guy's integrity. I really do, Paul.

• 27:50Anthony Pompliano?

  When you start to look at the next point that Saylor makes here, he says that there's a lack of regulatory guidance and support institutions that currently must overcome. And he also makes points that include the lack of insurance as well as guidance and becoming involved with the space. So it's hitting on a lot of the same points you're talking about here. Agree or disagree? And do you think that more regulatory guidance would be helpful to Bitcoin?

• 28:14Speaker 02

  It would definitely be helpful for Michael Saylor because as a corporate officer, he has to comply with a lot of regulations and he's also trying to get his other corporate CEO friends involved and there's a lack of it for them. So as a reserve asset for a corporation, he's seeing a paucity of guidance from regulators that would help him communicate with his stakeholders and investors and to other CEOs and CFOs out there that would be interested. So it would

• 28:54Speaker 02

  help institutional or corporate adoption for sure. Ultimately, it doesn't matter to Bitcoin as such because it's a self-regulating entity. It doesn't need regulation. It regulates itself. You know, Bitcoin regulates the regulators. So it doesn't mean, in the long run, it doesn't mean anything to Bitcoin. But yeah, it'd be great for him to be able to, on his 10 Ks and 10 Qs, refer to something that was written by the regulators to guide his ship of Bitcoin, that he's trying to put together there. So it would definitely help him.

• 29:36Anthony Pompliano?

  When you start to think about the macro environment right now, Bitcoin is down 70%. I think that you have lived through maybe four or five different drawdowns of 80-plus percent. What is similar to past market drawdowns? And what is different about this one compared to those past market drawdowns?

• 29:55Speaker 02

  I think in the past, there was a definite lack of liquidity going on. So, you know, Mt. Gox was the only exchange around and it was incredibly buggy and wasn't suitable for making markets. And so when it started to blow up, you had a pretty predictable fall in the price. Other exchanges that were dominant, like BitMEX and others, were run without much thought to concern about hewing to regulatory guidelines, let's say. I think when Saylor first started buying Bitcoin, he made the comment that maybe 50

• 30:37Speaker 02

  million a day in volume was actual Bitcoin, the rest was wash trading. You know, Bitcoin has had a wash trading problem for years. You know, exchanges trading in their own accounts to create simulated volume. You see that in the NASDAQ market all the time. You know, NASDAQ is a network of dealers, right? It's not like the New York Stock Exchange where you have a specialist at this post making a market, you have a network. And NASDAQ is, for years, guilty of wash trading amongst themselves to create the painting the tape and all these other techniques to create the illusion of volume and to manufacture prices. And Bitcoin had this problem for years. And so when the sentiment changed, you would have an 80% drawdown because there's just no volume, there was no volume.

• 31:21Speaker 02

  Now, what's different here is that over the past, let's call it the Michael Saylor era of the past several years, the volume has become legitimate and the demand is legitimate. And so the markets are legitimate. And, but the issue here would be the layering on top of this market of these derivatives or DeFi and cross collateralization. So that's created an obstacle for good price discovery. So that would be the difference. But the net effect is the same. You know, people... Always, of course, ask me and ask you and ask others for price predictions. And it's it's an incredibly volatile asset.

• 32:02Speaker 02

  So it really is incredibly difficult to make a price direction other than this prediction, other than to say that what I've been saying for 11 years, I think I'll tell you the direction of Bitcoin is up. You know, if you hold it for three or, you know, maybe three and a half years, anyone who's held it for three and a half years or four years is in the black, right? So if you've got a timeframe of, which is not a long timeframe, three and a half, four years, you're going to be in the black. But I think that would be the the main difference is that also, you know, in this environment, when I was at the Bitcoin Miami 22, that, you know, the conference, the difference between that conference and let's say conference from 10 years ago was the quality of the suits, right?

• 32:44Speaker 02

  So the people on stage are wearing, you know, $3,000 suits. Back 11 years ago, 10 years ago, people would show up in torn t-shirts and there were coders and, you know, rarely came out of their basement. But it's the same kind of struggle to come to terms with this emerging asset class. And in a lot of ways, it's the same. You just have a higher grade of speculator. You have, of course, the amount of money that's been flooding the system has increased every year for many years now. I mean, we got the the the central banks have have decided within the last six months

• 33:22Speaker 02

  to to raise rates and really put an end to a 40-year bull market in the bond market. So on the macro side, this is the first time Bitcoin has faced a rising interest rate environment, which causes on the macro side of huge shift in the funds. You see, for example, something like the Russian ruble is the strongest performing currency in the world in 2022 because it's commodity based. I think, starting in February with the Russia-Ukraine conflict, we saw the end of a 40-year bull market in bonds and financialization and the beginning of a secular inflationary.

• 34:05Speaker 02

  Move in global markets that'll be tied to commodities. You know, commodities were not a big factor for 40 years. It was financialization, interest rates, extend and pretend, just create more bonds, lower, lower, you know, the coupon rate, extend the maturity. That's the way the world worked for 40 years. And now we're in a new world where suddenly the price of stuff like energy and food, it cannot be hidden anymore. It's actually hitting people's bottom line. And that's not going to change anytime soon. That's a secular shift in the inflation in the economy, in the globe, that's going to be with us for years, not a few months. And so that's something that is new for Bitcoin.

• 34:47Speaker 02

  And ultimately, it's going to do well in that environment because as people begin to understand that the financialized world is crumbling, having a, you know, I've often, I often say Bitcoin is a risk off investment. It's not a risk on, it's a risk off. This is where you put your safe haven cash. It's hard to make that case with the volatility, the way it is. But when you have something for all the other reasons, it's unconfiscatable, uncensorable, immutable, you know, it makes sense. And it makes a lot of sense for a billion or 2 billion people out there that have been unbanked. That's where the growth's going to come. That's where the adoption's happening. So that, those are the changes, some differences, some similarities.

• 35:31Anthony Pompliano?

  When you think of the macro environment, the Fed says they're going to continue to raise interest rates, they're going to conduct quantitative tightening, they're going to get a soft landing, inflation will come down, everyone calm down and all will be good in the world. How crazy are they and how off are they in their thought process that they can actually get inflation down and not push us into a recession?

• 35:52Speaker 02

  You know, it's, as I said, I think this is a kind of a follow up to what we were just saying there. So. The Fed is still thinking like the world is similar to the way it's been for 40 years. You know, starting with Greenspan, you had the so-called Greenspan put. You know, every time markets came down, Greenspan would flood the market with more cash and lower interest rates. And that had, they went through Bernanke, Janet Yellen, Jay Powell. They, the activist Fed, this, the model has been with us for 40 years. And that there's no problem that can't be solved by money printing. What happened in February 24th with Russia, Ukraine now, is that that model is dead.

• 36:35Speaker 02

  And the price determining factor for prices is shifted from the New York Fed or from the Fed to the East, to Russia. Russia, China, Iran, India, Central America, South America, Brazil. Those countries are going to be determining prices going forward. And so the, and the Fed only makes, can only operate if the world is on a globalized US dollar standard. But that's no longer the case. You know, on February 26th, two days after Russia-Ukraine conflict, the Fed sees like

• 37:20Speaker 02

  600 billion, I think, or million, billion in Russian reserves. So, you know, China looked at that and said, you mean our reserves aren't safe? So, um, that was a huge, you know, self-own, you know, that was, that was one of the stupidest things that anyone could have done. So now we're on a, we're in a new world. And I just think Jay Powell and these guys and Janet Yellen, they're thinking, they haven't adjusted yet. But, you know, markets are cruel, you know, and the market price ultimately works its way into reality. And that gas price isn't going down.

• 38:02Speaker 02

  You know, we're talking 10, 11, 12, 15 dollars a gallon for gas in the United States. You know, uh, and that, that...

• 38:12Speaker 02

  Do the math, Pomp. That's not gonna... That's a fundamental shift in this standard of living for the United States. That's just a fact, because we don't have the ability to control these markets and prices anymore, because nobody... People are dumping the dollar. Dollar's not gonna be world reserve currency. And the guys with the actual energy are in control. So how are we gonna fight that? And all the rhetoric coming out of the UK and these other countries seems like people are totally tone deaf to this reality. Germany... Let's look at another industry, for example, the ESG industry.

• 38:57Speaker 02

  You know, the climate change industry, the move toward renewables. Well, you know, that's completely blown out of the water. Germany, which was heading toward 100% renewable, is now going back to coal. Like, all these countries are going back to coal now because of what's happening in the energy markets. And so that's just a total shift. So, I mean, I believe you're a millennial, and Pomp, and, you know, I think of it as being one of the unluckiest generations ever in history. You know, you kind of grew up through 9/11. You've been through the 2008 crisis, the subprime crisis, and now you're gonna watch the US dollar lose world reserve currency, Pomp. You know, you guys and your brothers are really...

• 39:42Speaker 02

  You lost the generational lottery, I can say that.

• 39:47Anthony Pompliano?

  Max, while I agree it's been tough in the streets, you, my friend, have gone through all of those things as well, plus more shit before we were even born. So I agree that there is generations that are... It almost seems like these crises are happening faster and faster from a timeline perspective. And I definitely agree that they don't have as much control as maybe they want to have. The big question is going to be, how quickly do people understand what's occurring? And those who don't understand will likely get hurt, and those who understand, they'll be able to kind of position themselves so that they don't have as much of an impact.

• 40:24Speaker 02

  Well, yeah, to the first point, you know, I started on Wall Street in 1982.

• 40:29Anthony Pompliano?

  I wasn't born yet, Max.

• 40:31Speaker 02

  I know, that was the peak, you know, Volcker took rates up to 16, 17% on the 10-year. And so my entire professional career has been by watching rates go down. I literally have not had to work a day in my life, Paul. It's just been riding this wave for 40 years. And never make a mistake, just add more debt with a lower coupon and a bigger, longer maturity. It's been great. But now, that game is over. And, but yeah, you know, the going forward, I think that the generational rifts and all the other societal rifts. So you've got what The Economist magazine euphemistically calls cohesion risk,

• 41:15Speaker 02

  which is their way of saying social unrest. So in the US, you know, people are already, you know, tense. There's a number of different issues that people are rallying and gathering around. And there is the cohesion of our society in the United States is fraying. And you add in higher costs and a downshift in the standard of life, and it's only going to get worse. You know, during the globalization period, when America was shipping jobs to China, the quid pro quo there was that, okay, I'm making less,

• 41:57Speaker 02

  but the stuff I'm buying at Walmart that's made in China, like TVs and clothes, is so much cheaper that I don't notice that my quality of life is degrading much. Because even though I'm making less, or I don't even have a job. The stuff on getting a Walmart is so cheap that I don't see much of a difference. Well, that's completely reversed now. Now, everything coming in is going to be more expensive and your wages are still squeezed. So that it's going to be shocking reversion to the mean, where quality of life, the standard of life, is going to take a remarkable downshift. And, you know, people don't like that. And there's going to be more unrest.

• 42:42Speaker 02

  You know, I don't want to be like a doom monger, but how can it not be? Historically, every time you have that kind of looting going on at the top, and let's be honest, you've got to refer to it what it is. The ability to, through the practices of a Cantillon effect, where you're printing trillions of dollars and keeping $1,000 for a banker and giving it $1 to the plebs. That process was going to eventually lead to a huge social dislocation. And that's where we're on the doorstep right now. And there's no way, you can't print your way out of this. This is the problem. You cannot print your way out of this if most of the world's actual population,

• 43:27Speaker 02

  not by GDP, but by headcount, is against you, right? That axis of China, Russia, India, Central, Latin America, South Africa, that population is greater in number than the ones that are supporting the US in its current trials and tribulations. You've got a global split here, you've got a domestic split. The leadership is lacking. I don't want to get into a pissing match and to throw the president under the bus, but I mean, clearly, it's not the finest political leader that America has experienced, that we have leading us now.

• 44:11Speaker 02

  And the people on deck don't appear to be particularly ready to embrace this job either. So you have political breakdown, you have societal breakdown, you have an economic breakdown. You know, again, people should be buying Bitcoin like their life depended on it, because it does.

• 44:32Anthony Pompliano?

  I could literally talk to you for hours about this stuff. We unfortunately don't have hours, though. So, one, you have to promise me you're coming back again soon. And, two, where can we send people to find you on the internet, learn more about your new show, learn about your podcast, and learn about what you're doing in El Salvador?

• 44:49Speaker 02

  Oh, well, you just find me on Twitter, and I will definitely shitpost on you and troll you. And, you know,

• 44:58Anthony Pompliano?

  You're like the nicest guy on Twitter. What do you mean?

• 45:02Speaker 02

  Yeah, I'm like, I'm the sweetheart. Yeah, you know, I'm trying to get up to half a million on Twitter after 47 years on Twitter. You know, you and frickin' Michael Saylor are in the millions. I'm sitting here sucking hind tit. You know, how do you guys do it? What's your secret, man? I mean, is it just good looks?

• 45:20Anthony Pompliano?

  No, listen, you gotta get one of these. I got a suit and tie. This suit and tie helped defeat the 2018 bear market. I'm aware it until we defeat this 2022 bear market. You got a suit jacket, and I'm gonna get you a tie like me.

• 45:32Speaker 02

  I'm so old, Pomp, that I remember when people used to make fun of you because you wore the same jacket and tie on two consecutive interviews. This is going back a few years.

• 45:42Anthony Pompliano?

  And they thought that I had lost the tie. But this is the only tie I own. And, boy, does it do wonders. You know how easy it is to pick your suit and tie?

• 45:50Speaker 02

  It's a good tie. You know, it's a good tie. Shine, get a shined on your shoes, and you can conquer the world. This is American, not American.

• 46:02Anthony Pompliano?

  That's it, Max. We will see you next time, my friend. Later.

• 46:08Anthony Pompliano?

  Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more, and I'll meet you guys for the next episode.