#702 Bitcoin Will Protect Institutions From Economic Collapse w/ Greg Foss

Greg Foss is the CFO and Bitcoin Strategist at Validus Power Corp. He has spent over 30 years of his career in various credit markets, where he has managed hundreds of millions of dollars. In this conversation, we discuss bitcoin, negative yielding bonds, institutional asset allocation, pricing energy in bitcoin, and why $2 million is Greg’s big number. ======================= My friends at Coin Cloud will give you $50 in FREE Bitcoin when you buy $200 or more at any of their 4,000+ machines. Use promo code POMP to get your free Bitcoin. For details or to find your nearest Coin Cloud machine, visit www. Coin. Cloud/Pomp Coin Cloud has been serving customers since 2014 and has established itself as the world's leading digital currency machine (DCM) operator. More than just a Bitcoin ATM, Coin Cloud machines make it easy to buy and sell Bitcoin and 30+ other digital assets with cash. To get your $50 in free Bitcoin, visit www. Coin. Cloud/Pomp ======================= 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 compassmining.io to start mining bitcoin today! ======================= AG1 by Athletic Greens, the category-leading superfood product, brings comprehensive and convenient daily nutrition to everybody. Keeping up with the research, knowing what to do, and taking a bunch of pills and capsules is hard on the stomach and hard to keep up with. To help each of us be at our best, they simplify the path to better nutrition by giving you the one thing with all the best things. ONE scoop of AG1 contains 75 vitamins, minerals and whole food-sourced ingredients, including a multivitamin, multimineral, probiotic, greens superfood blend and more in one convenient daily serving. The special blend of high-quality, bioavailable ingredients in a scoop of AG1 work together to fill the nutritional gaps in your diet, support energy and focus, aid with gut health and digestion, and support a healthy immune system, - effectively replacing multiple products or pills with one healthy, delicious drink. To make it easy, Athletic Greens is going to give you an immune supporting FREE 1 year supply of Vitamin D AND 5 free travel packs with your first purchase if you visit athleticgreens.com/pomp today. Again, simply visit athleticgreens.com/pomp to take control of your health and give AG1 a try. =======================

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. Greg Foss is the CFO and Bitcoin strategist at Validus Power Corporation. He has spent over 30 years of his career in various credit markets where he has managed hundreds of millions of dollars. In this conversation, we discuss Bitcoin, negative yielding bonds, institutional asset allocation, pricing energy in Bitcoin, and why $2 million is Greg's big number. I really enjoyed this conversation with Greg, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Compass Mining. This episode is sponsored by the world's largest marketplace for mining hardware and

• 0:46Anthony Pompliano?

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• 1:29Anthony Pompliano?

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• 2:14Anthony Pompliano?

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• 2:59Anthony Pompliano?

  simplifies the path to better nutrition by giving you the one thing with all the best things. I drink it every day. One scoop of AG1 contains 75 vitamins, minerals and whole food sourced ingredients, including a multivitamin, multi mineral, probiotic, green, superfood blend and more in one convenient daily serving. The special blend of high quality bioavailable ingredients in a scoop of AG1 work together to fill the nutritional gaps in your diet. Support energy and focus, aid with gut health and digestion and support a healthy immune system, effectively replacing multiple products or pills with one healthy delicious drink. To make it easy, Athletic Greens is going to give you immune supporting free one year

• 3:41Anthony Pompliano?

  supply of vitamin D and a five free travel packs with your first purchase if you visit athleticgreens.com/pomp today. Again, simply visit athleticgreens.com/pomp to take control of your health and give AG1 a try. Athleticgreens.com/pomp. Go get it while it's hot. All right, let's get this episode with Greg. Hope you guys enjoy this one.

• 4:02Speaker 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.

• 4:25Anthony Pompliano?

  Real quick, before we get into everything, remind everyone kind of your background and the perspective you're coming at it when you look at Bitcoin bonds in the financial markets.

• 4:32Speaker 02

  Sure. Well, first of all, thanks for having me. I'm a 32-year veteran of the hedge fund industry and institutional managing money for institutional clients. I retired from that business in 2016. Subsequent to that, you brought up Kathy Wood. I met Kathy as we co-invested in a company in Canada. It brought Canada's first Bitcoin-listed closed-end fund to the Toronto Stock Exchange. I've been involved in Bitcoin since 2016. I believe it's the best asymmetric risk-return trade I've ever seen in 30-plus years of managing risk. Yeah, I come at it from a credit perspective.

• 5:16Speaker 02

  Again, I believe credit is the most important market in the world. It is the dog and equity is the tail. And if you don't understand what's happening in the dog, that tail gets whipped around pretty hard and lots of people get used as cannon fodder. So, congrats to Kathy Wood's Tesla call. Congrats to Elon Musk, who's half-Canadian, and looking forward to having a good talk today.

• 5:44Anthony Pompliano?

  Awesome. Let's start first with the problem in the credit markets. There are a ton of fixed income assets and other types of credit assets that appear to not be doing so well. But given that the investment mandates that people have had over the last couple of decades in this 60-40 type portfolio, they're very, very heavy on bonds and various credit assets. But now that we have higher levels of inflation over 5% CPI, many of those assets are actually producing very low returns or even negative yielding on a real return basis. So, maybe just outline for us, how big is this problem when we think of the credit markets?

• 6:19Speaker 02

  Yeah, great question. So, first of all, total global credit is $400 trillion, okay? That dwarfs the equity market, which is approximately $100 trillion US dollars. So, you can see why you need to understand what's happening in the dog, because it's just a much bigger market. It's traded by very sophisticated Institutions. But within that market, you know, we have government debt, we have municipalities, states, we have corporations, we have junk bonds. We have structured product. It's a, it's a big animal. Um, and in various parts of that animal, uh, there's some weird things happening. So let's start with one of the most weird things.

• 7:00Speaker 02

  Uh, there is over fifteen trillion dollars of negative yielding. Bonds in the world. Now they're mostly sovereign bonds, but there are a few corporate bonds in Europe. It, uh, they, they have negative yield, which means the buyer of that bond is actually going to lose money. By investing in that bond if they hold that bond to maturity. A lot of them will say, well, I'm smarter than the market and I'm going to buy it now in anticipation of yields going even more negative. And therefore there's a price gain in those bonds, but that's like picking up nickels in front of a steamroller, right? It's a dumb, dumb investment policy. But many of these investment mandates have to own bonds.

• 7:40Speaker 02

  So you mentioned the sixty forty, traditional sixty percent equities, forty percent bonds. Those mandates were written pump when interest rates were at levels that you could make a decent return. So when I started trading bonds in the nineteen nineties, well, late eighties, actually. U S Treasury ten year was double digits. Now it's one point six something percent. I mean, you gotta understand that that's been a forty year bull market in bonds. And that is done because it's only mathematics. You can't make excess returns over the contractual returns that are in bonds.

• 8:21Speaker 02

  So first of all, you have these negative yielding bonds, which are not assets anymore. They're actually liabilities. So congratulations, you're investing in an asset. It's actually going to cost you money. Contractually, it will cost you money. Well, that's fifteen trillion of loser money right there. Then you look at some of the bigger things that are going on. So my expertise was in, uh, formulated in the high yield bond market. High yield bonds right now yield around four percent. That's the Merrill Lynch.

• 8:50Speaker 02

  High yield index yields 4% and I need to point this out that 4% is before expected and unexpected default losses. So you'll say Foss, what are you talking about? I'll say very simply, look, high yield bonds have an expected component of default because over time, high yield bonds do default, not the whole industry, but a portion of it. So there's an expected loss in that 4%. And then there's also what I call unexpected losses. When you hit a recession, when you hit some sort of contagion, when there's a systemic risk to the market, you get unexpected losses. So it could be idiosyncratic. Oh, I'm throwing out a lot of these technical jargon.

• 9:32Speaker 02

  At the end of the day, you are earning 4% before losses. So let's calculate some expected and unexpected losses in there. And then account for inflation, which you correctly pointed out. If you believe the CPI is accurate, you're earning negative return, real returns after inflation and piddly nominal returns before expected and unexpected default losses. I've never seen a worse risk return potential for fixed income in my 32 years. And I'm going to add one thing, and this is the kicker. If CPI was actually measured the same way as the original formula in 1980,

• 10:16Speaker 02

  CPI would be 14%, not 5%. Wow. 14% Pom.

• 10:25Anthony Pompliano?

  We talked yesterday about the difference between the cost of goods index and the cost of living index and how the numbers have been manipulated. So to hear that the old way to calculate inflation would be over 14% is pretty powerful. When you combine that with all of this negative yielding debt, one of my questions is just... What is the event that ends that entire part of the financial industry? And how long do we have until we get that to essentially blow up? Right? And I don't think anyone's cheering for it to happen, but the writing's on the wall. So how long do we have? And then what is that catalyst that ultimately blows it up? Do you think?

• 11:04Speaker 02

  So great questions. Look, you never know for certain. I will say there's a favorite term I had in trading risk. Risk happens fast. Okay, you never think it's going to happen and then all of a sudden it's all over you. But to be clear, I agree with you. I do not want this to happen and I don't want it to happen fast. I believe in the long run it will eventually happen. But what happens? What are the events? Well, let's be honest. The United States currency as global reserve currency today will be the last fiat currency to fail. Okay, that's just how it works. You can look in the credit default swap market. You understand that the US Treasury market is the biggest, the most liquid. It's got the most staying power.

• 11:48Speaker 02

  But what happens in credit markets is this thing called contagion. And what contagion essentially is, is what you've seen happen with Evergrande in China and it percolating higher in the credit spectrum to where it's actually impacted the credit default swap rate or the expected default probability of the country of China. Okay, now China's credit rating is single A. But it's the credit default swap market is telling China, you know what? You're trading much closer to a triple B. You better get your acting gear, kid. Because you know what? A triple B credit is right on the cusp of being high yield or junk.

• 12:31Speaker 02

  And using the pejorative junk, I was a junk bond trader for many years. All it takes is a few downgrades into the junk spectrum and there's a cascade of selling. And this cascade of selling then causes contagion into other markets. So China being the second largest economy in the world. If all of a sudden the debt markets say, you know what? China, you're sort of ugly. You're, you're a You're a junk bond borrower equivalent. They'll be contagion to other economies. It's, you know, even though, you know, China would be a G eight country. Absolutely, it'd be a G two country. But it'll, it'll fall down the credit quality spectrum, something I call the risk ladder. And it'll impact countries like, you know, uh,

• 13:14Speaker 02

  Argentina, which is a G twenty country, but it's defaulted four times in my life already. Now, I'm not predicting that I want to see this contagion, but that's what happens in credit markets. Okay. One guy seeks protection by shorting another market. And that guys who shorting that market causes a cascade of selling in that market. And it's just like we saw in the great financial crisis. Okay, it starts to accelerate. The second derivative is the most important. Okay, the acceleration of the change will cause. Am I saying this? A US Treasury bond auction to fail? Highly unlikely. But what about a Canada bond auction failing?

• 13:59Speaker 02

  Ooh, and Canada's a G seven. Okay, so look, I don't want this to happen. And this is why we need this parallel network. We need to develop the Bitcoin safety net. We will have a Bitcoin store of value savings account. And we will have a fiat currency checking account. But don't save your money in a fiat currency checking account.

• 14:19Anthony Pompliano?

  So when you think about all these pension funds and financial institutions that are holding so many bonds? What happens when they all drop it? Is that the acceleration you're talking about? Do they start to say, hey, look, there's, you know, 14% inflation based on the old calculation. There's 5% on the new calculation. Uh, I can't possibly continue to hold these treasuries because I'm actually losing purchasing power and not protecting my assets. I have a fiduciary, um, kind of, uh, responsibility to protect these assets. So I've got to get into some other asset. Does that just accelerate everything? Once one starts to do it, they all start to do it?

• 14:52Speaker 02

  Yes and no. Um, these are investment mandates that have been written. Over time, there's investment policy committees. These things don't change on a dime. Um, now maybe the Smart people are sitting there, much like the Houston Fire Department or the guys in Chicago. If you haven't heard of them, the the blue collar Bitcoin team that is a bunch of first responders in in in Chicago, who are very concerned that their pension plan owns a certain number of fixed income securities because it's in their investment policy guideline. I mean, if the pensioners rise up and say, what are you holding these things? You're guaranteed to lose money on a real basis. Maybe it percolates to the investment policy committee.

• 15:36Speaker 02

  But remember, these investment policy committees are dominated by people who want to cover their ass, right? They don't want to make these decisions. What happens, though, is if one person, a big fund, let's say CPPIB in Canada, or CalPERS in in the United States says, you know what? This 6040 model is pooched. I'm going to go 60, 20, and then 20 in alternative assets that do include a certain amount of Bitcoin. That really gets the ball rolling because it it takes the pressure off of the theory of agents, they call it, you know? As long as one of the big guys moves in that direction, then I can cover my own investment policy decision.

• 16:21Anthony Pompliano?

  When you start to think about the timeline for this to occur, for them to all start trying to move capital because of this this mechanism, is this a five year, a 10 year, a 15 year thing? How long do you think it takes?

• 16:31Speaker 02

  Yeah, it's it's a process. So some will move early and some will be the last. And as a Canadian, I can almost certainly guarantee you that the Canadian knuckleheads will be one of the last ones to move. Okay, so that that pains me because, you know, Canada, we've sold all our in our central bank, we've sold all our gold. Canada does not have the safety net that the US does. We're not as big a country, obviously. We don't have the vertically integrated and horizontally integrated economies that you guys do. Listen, it it happens because out of necessity. Let's do some quick math. If CalPERS has a 8% return bogey.

• 17:14Speaker 02

  And it's a 60 40, it's a 60 40 mix and 40% is in bonds and those bonds to be generous are earning on average over their whole asset mix. Let's say it's earning 3%, right? So 3% times 40%, that's 1.2% they're getting in their whole portfolio from bonds. That means the 60% that's in equities has to earn the difference. 8 minus 1.2 is 6.8%. So 6.8% divided by 60% of the portfolio means equities have to return 10% forever going forward in order for calpers to make their bogey. Um, I don't know. Like, you know,

• 17:58Speaker 02

  yeah, there are going to be some good years, but over time you don't hit that 10% bogey, especially when you're at all time highs in the S and P, which you just pointed out. So there's a lot of stuff going on. It's absolute certainty, the mathematics of it, almost certainly unattainable. And if it is attainable, it's only because the fiat currency is, is pooping the bed so bad that it appears that your equity markets are actually going up when in fact it's just the unit of account is going down, right?

• 18:29Anthony Pompliano?

  So you and I, I think, see eye to eye in terms of Bitcoin being a way to protect a portion or a material portion of a portfolio, whether it's from economic collapse or just high levels of inflation, regardless of how severe you think the problem is, Bitcoin can serve as a piece of the, the solution. It also can do that for an individual or an institutional investor. And so talk about what are the properties of Bitcoin that you think protect that portfolio? And then how do you see institutions starting to really flood into Bitcoin?

• 18:57Speaker 02

  Wow, man. I love your question. So here's the cool thing. Um, I've been trading risk for 30 years and every single asset class out there is essentially short volatility. Okay. Which means when vol explodes, equity vol is the best way to look at the overall volatility in markets. When equity vol goes from its current, you know, sub 20% annualized level. And some catastrophe causes it to spike to, you know, eighty-five percent or even over forty percent. Markets cease to function when equity vol exceeds thirty percent.

• 19:39Speaker 02

  By that, I mean, no new issuance comes to market, markets are collapsing, and all of your assets are generally getting crushed. Why? Because you are short volatility in those assets and volatility has just skyrocketed. So you're getting killed. What is Bitcoin? Bitcoin is the quintessential long volatility asset, okay? It means you own insurance. It's the insurance against the system unraveling. Which means more and more people will begin to understand they need this asset in their portfolio because it hedges all the other exposure they have, which is basically being short volatility.

• 20:23Speaker 02

  This is like owning options on things exploding. Now, you don't like to think that things explode, but on a regular basis, they do, okay? So my opinion is Bitcoin is credit default swap insurance on a basket of sovereign currencies. The more that those currency and the credit quality of those currencies like China deteriorate, the more intrinsic value you have in Bitcoin. Everybody needs that insurance. Don't mess around with your fire insurance when you live in a fire zone. Own the insurance, and by God, don't sell that insurance once you see the fire coming down the mountain.

• 21:07Speaker 02

  You should actually buy more. So Bitcoin is the perfect asset for everybody who needs insurance against the inevitable unraveling of the fiat system.

• 21:17Anthony Pompliano?

  When you think about individuals, corporation ballot sheets, and then institutions, do you think of kind of asset allocation differently for those three buckets? Or is it all a portfolio and they should all think about it similarly?

• 21:29Speaker 02

  Yeah, I do actually believe they should all, there's no difference, right? I mean, if you're managing your own money, your incentive is to achieve high Sharpe ratios, to get better risk-adjusted returns. Measuring risk is as much a subjective as it is, or it's a qualitative exercise as much as a quantitative exercise. Every single asset allocator out there needs to do their homework on Bitcoin. Because just like myself in 2016, my first thought was up, Bitcoin has to be a Ponzi. The reality, though, is you do some work, you see the blockchain in action,

• 22:12Speaker 02

  you see the beauty of math and code and decentralization, and you're like, my God, this is something I've been searching for for 30 years. Why? Because the real Ponzi is the fiat. The fiat currency has consistently been bailed out by Fed printing and quantitative easing. Now, that's the exact definition of what a Ponzi is. Bitcoin is not the Ponzi. Bitcoin is the solution. And again, you gotta have two parallel networks. I like talking with Jeff Booth about this. We don't want it to happen quickly, but we both believe over time it is inevitable, and you need to start this network transfer. Okay?

• 22:54Speaker 02

  And when you do a network transfer, as you know, you don't turn one network right off. Right? You transfer the network over time. I think we have five years, Tom, but in Jeff Booth's words, we are going to see 100 years of change in the next 10 years. So, who knows?

• 23:14Anthony Pompliano?

  How do you think about your portfolio? Like, what's your portfolio allocation? How do you think about Bitcoin versus everything else?

• 23:20Speaker 02

  I own about forty percent exposure to Bitcoin, but that's because when I first got into it, it was it was smaller and that little nugget has grown. But I also have other hard assets. I need to be honest. I've never gone all in on one asset. Why? That's not the way I manage risk. I believe that my price target for Bitcoin, and here's a neat segue. I love the guy you had on earlier, Colton. So he two fifty. I think he's meant two fifty, right? That's his year end price target. I'm not up to the to the kids, the kids talking, you know, two fifty. But if he's two fifty, my long term price target on Bitcoin is over $2 million in today's dollars of Bitcoin.

• 24:00Speaker 02

  I'm going to be just fine. I don't need to go all in for my portfolio to go where I think it's going to go. That being said, I mentioned to you, I own hard other hard assets. Why? Well, I own real estate because I have a house that I live in and I have other real estate investments. I do own gold. Oh, God forbid you own gold. Fos, what are you, a knucklehead? No, you know what? I love Larry Lepard. Lepard. Lawrence Lepard is a beautiful guy who knows how to manage risk and we both think about risk the same way. Okay, sometimes when Bitcoin's getting crushed, you can sell some of your gold and buy some Bitcoin and you can trade that delta all the time. If you're a trader like I am and Larry is.

• 24:42Speaker 02

  I also own silver, but I don't own any bonds, absolutely don't own any bonds. And in fact, I would encourage people, if you are not properly levered, you're supposed to go out and borrow money, provided you are not excessively leveraging yourself and borrow money at historically low levels and invest in these hard assets. So what does that mean? Don't run to pay down your mortgage. Actually, make sure you're fully levered to your mortgage and take that money and put it in other hard assets. Why? I don't know, just because interest rates are the lowest they've ever been in history. So you're supposed to take advantage of that. So, you know, manage your your own personal portfolio

• 25:24Speaker 02

  like you would manage a hedge fund or a company or Michael Saylor. Look, the guy is rewriting capital markets and he's not, he didn't just fall off the turnip truck. That's for sure. But he certainly understands when people are throwing money at him on a contractual basis that he can easily meet with free cash flow from his company. Yes, I'll take that and I'll put it into Bitcoin. Brilliance.

• 25:49Anthony Pompliano?

  I've got two of my brothers here with me. What questions you guys got?

• 25:51Speaker 03

  Hey Greg, that was hilarious by the way, the two fifty. That was great. So you mentioned that you believe Bitcoin will eventually be at or greater than $2 million per Bitcoin in US dollar terms. My question would just be, how do we get there?

• 26:07Speaker 02

  You know, the chart that Pomp was showing, right? That's cool. Like Bitcoins moving up on the, it's too, it is now too important an asset for most of the world to ignore the investing or asset allocating world. And very simply, total global assets are 900 trillion US dollars. So just do some sensitivity analysis. If Bitcoin captures X percent of that market, what does that equal? 900 trillion means it's 900 times the size of Tesla. So that means there's an awful lot of money out there in other assets like real estate, like bonds, fixed income, like

• 26:49Speaker 02

  commodities, currencies, fixed, sorry, fine art, you got it, equities, I mentioned 100 trillion. Bitcoins can eat a portion of all those assets. The biggest one it should be eating right now is the bond market because it's the most mispriced. But over time, if you get 5% of 900 trillion dollars, that's 45 trillion dollars in today's dollars. What's 45 trillion divided by 21 million? There's your $2 million price target.

• 27:18Anthony Pompliano?

  John, what questions you got?

• 27:19Speaker 03

  Yeah. Hey Greg, nice to see you again.

• 27:21Speaker 02

  Hi guys.

• 27:22Speaker 03

  Can you just talk about, why aren't you 100% allocated Bitcoin if you see that 2 million price going, right? So it's $2 million is about a 33x from here.

• 27:32Speaker 02

  Great question. Listen, man, I gotta put a probability on it though. I'm not 100% certain, right? I mean, I'm highly confident and this is where I'm going to use some math to back out. How, if I was going to the racetrack, how I would play this, okay? So I've been studying this pony. This pony is the most beautiful pony that I've ever seen in my life. I've watched it run in Kentucky, you know, in the Kentucky farmland. It absolutely rock and rolls, okay? I think this pony has a chance of winning the Kentucky Derby. The problem is, I go to the race store, it's not the problem, I say, in my head, I think this guy has a 25 to 1 chance of winning. Okay, I go to Kentucky Derby and the odds makers, which is basically the guys that are taking all the bets, say it's 100 to 1 odds.

• 28:17Speaker 02

  I'm like, these guys haven't done their homework. They haven't been sitting there watching this guy go around the track, watching tradeblock.com. They haven't seen this. So they're laying 100 to 1 odds and I think it's 25 to 1 odds. Sold to me, sold to me. And imagine I had so much money that I could impact the amount of bets so that it would go from 101 odds down to my target of 25 to 1. That's how much money I would lay on it where I was getting an expected return based on the risk. So backing that analogy out of what the high, oh, excuse me, what the Bitcoin market is odds of me getting my price target right now is if it's at 60,000 US a coin today,

• 29:03Speaker 02

  that's effectively telling me that there's an, the market only sees a 3% chance of it getting to my $2 million price target, right? 3% times 2 million is 60,000. Look, I'm not 100% certain, but I'm way more than 3% certain it's going to my price target. In other words, if I had all the money in the world and I thought it was at least a 20% chance that it was going to my $2 million price target, I would be buying Bitcoin and making the price of Bitcoin go up until it was at $400,000 of Bitcoin today. Then I would sit back and I'd say, I've laid my bet.

• 29:45Speaker 02

  And that's a pretty big ass bet, isn't it? I don't have that much money. So that's why I don't put all of my money into it, because I'm not 100% certain. But do I continue to buy it when it's anything less than $400,000? Of course I do. But I can't, I don't have the ability to put everything all in one, in one, uh, on one bet. Why? Well, I got three kids. I gotta pay expenses. I, I got other real estate assets. I'm supposed to be retired, but I'm actually working in a pretty exciting company that's actually, you know, providing electricity to Bitcoin miners. All that to be said, I've never managed risk by going all in on one bet and I won't do it now.

• 30:30Speaker 03

  Appreciate that.

• 30:31Anthony Pompliano?

  Greg, one of the things that's, uh, uh, just blowing me away right now. While we've been on this conversation, uh, the news just broke that the FDIC chairman said that the banks and the oversight of FDIC are working to come up with a framework so that banks can hold Bitcoin and cryptocurrencies and also trying to figure out how they would use it as collateral, hold it on the balance sheet, etc.

• 30:52Speaker 02

  Holy moly, holy moly. Seriously?

• 30:55Anthony Pompliano?

  I swear.

• 30:56Speaker 02

  And this is a real headline, right? This is what, this is not one of those big headlines.

• 31:00Anthony Pompliano?

  Reuters put it out, not TMZ. So what, what's your thought process in terms of, uh, US banks? If they start to hold Bitcoin and use it as actual collateral?

• 31:09Speaker 02

  It's the, it's the pristine collateral of the world. Like, that is why I think the US has been served up a gift by China. By China pushing Bitcoin mining to the Western countries. This is a gift for me and my children and for you and your, I know you don't have kids. I, I don't think you do, but anyway, at the end of the day, your future kids, right? This is why we need to take this gift and embrace it. Because you will have a store of value, pristine savings account, and you will still have the US dollar reserve currency or checking account for the world.

• 31:50Speaker 02

  And together, this, these dual networks will allow the US to remain supreme, uh, freedom and it will supreme economy of, uh, global economy. This is what the world needs. This is certainly what Canada needs. Canada needs the US because you're our sec, we're your second. Second largest trading partner and you are our most important trading partner. I need that for my kids. So I love the USA. I don't ever want it to fail. This is good for business. It's even better for freedom. And I just want to summarize with one, with one thing here. I do believe there will be a time when energy, oil and natural gas is priced in Bitcoin.

• 32:33Speaker 02

  I think Vlad Putin is thinking of that right now. Okay? And to do that, he's basically think, how does he get out of the Petrodollar? He doesn't want to hold US Treasuries in reserve. Those are fiat contracts that are programmed to debase. What if he took Bitcoin in payment for his energy? Wow. Then he's starting to build up a reserve of the most pristine collateral ever. Digital energy being paid for natural resource energy. I think it's inevitable. I'm an engineer like Sailor. I'm just playing the odds. And then if that happens, 5% of 200 or of 900 trillion quickly becomes 20% of 200 trillion.

• 33:16Speaker 02

  And all of a sudden, my price target for Bitcoin isn't 2 million. It's something like 20 million a coin. Play the odds, guys. This is the racetrack. This is how you manage risk.

• 33:27Anthony Pompliano?

  Talk to me about how energy gets priced in Bitcoin. Like, what would that sequentially look like?

• 33:33Speaker 02

  All it takes is one of the big non-OPEC guys like Russia to just say, hey, why don't you start paying me in Bitcoin world? You can either pay me in Bitcoin or you can pay me in the US dollars and I'm going to buy Bitcoin, but it'd be, here's my price of oil in US dollars and here's my price of oil in Bitcoin. And what if it's a 10% discount to get it in Bitcoin? I don't know. Pretty smart people in the world will say, well, okay, here's, here's your Bitcoin Vlad. And then all of a sudden, it becomes a basis where there is a market, much like, you know, you have Brent North Sea Oil trading against West Texas crude. It's different markets trade on different, at different prices for different reasons. And again, as an engineer, why wouldn't it be that way?

• 34:18Speaker 02

  Why would you be selling beautiful natural resource energy for useless fiat dollars in the long term? Fiat is very valuable in the short term. What does it do? It facilitates international trade. It eliminates the need to barter, but what it is not good at is storing value over time and space. That is what Bitcoin is. So it just takes a step away.

• 34:41Anthony Pompliano?

  Listen, I tend to think that you understand this pretty well, and I think that you're more right than wrong on a lot of this stuff. And without disclosing too much, I've seen a number of very large companies say, well, if we bought some of this and then we priced our goods or services in it, that would probably have a material impact and would lead to our balance sheet growing. And I think you see that Tesla is kind of the elementary example where, hey, we accept this for payments, and then we also put it on our balance sheet, and the price goes up, that our balance sheet expands, and we're acquiring more of it from customers, that could be pretty interesting. And so we'll see how this all plays out. But it's absolutely fascinating to kind of watch it. Where can we send people to find you on

• 35:23Anthony Pompliano?

  the internet if they've got more questions or want to follow along as you keep talking about a lot of this stuff?

• 35:28Speaker 02

  Sure. I guess my best platform is Twitter. I've just sort of found it. I'm at Foss, Greg Foss. There's me. That's actually my granddad in World War I, beside his fighter plane. So yeah, my granddad would have been a Bitcoiner. I just want to take this chance to shout out all the great work you're doing, Pomp, and talking yesterday about the Lightning Network and how it exceeded everything. I'm in touch with Jose Lemos from IBEX Mercado in El Salvador. I love the guy. I've made a commitment for a personal investment in his company. They are doing unbelievable things for a country, okay? This is good

• 36:06Speaker 02

  when companies get involved. But now countries are leapfrogging companies. Come on, USA. You know, you guys in your PGA or your Ryder Cup, USA, USA, USA. Come on, USA. Embrace Bitcoin. The world needs it. Thank you.

• 36:23Anthony Pompliano?

  I tend to think so. If you weren't Canadian, I'd tell you to run for US President, my friend.

• 36:29Speaker 02

  We ate on that note. I gave a presentation to forty five members of parliament in Canada on Bitcoin.

• 36:36Anthony Pompliano?

  What'd they say?

• 36:36Speaker 02

  Not every single political party is asleep at the wheel in Canada. Okay. Forty five members of parliament led by a good Canadian Pierre Poliev. Okay. He understands Bitcoin. He owns Bitcoin. And he is challenging Canadians to do more work on this pristine asset. So well done. Both sides of the border. This is a process, but it's only twelve years old and it's the fastest entity to achieve a one trillion dollar market cap in history, and it is going higher. It's only mathematics.

• 37:13Anthony Pompliano?

  You guys got any last ideas, thoughts, comments, concerns, complaints?

• 37:17Speaker 03

  No, I like I like Greg's energy and the two million price target.

• 37:21Anthony Pompliano?

  I heard twenty million, just I'm just saying. All right, Greg.

• 37:24Speaker 02

  Here's the funny thing. It's got to get through four hundred thousand before it gets there too, right, boys? So lots of lots of work to be done. Okay, this is this is a learning process and your platform is teaching an awful lot of people some really good stuff. So I appreciate you having me and I look forward to our next chat.

• 37:39Anthony Pompliano?

  Sounds good, buddy. Talk soon.

• 37:41Speaker 02

  Thank you.