145 - Is the Fed Corrupt? with Christopher Leonard

✨ DEBRIEF | Unpacking the Episode: https://shows.banklesshq.com/p/debrief-leonard ------ How is money created? Why? Whose job is it? We often discuss the Federal Reserve, and in this episode, we’re doing a deep dive into what the Fed is—its origins, its purpose, and ultimately, its concerning behavior. What do we do about this institution? Something has to change, but what is the path forward? Joining us to answer these questions is Christopher Leonard, investigative journalist and author of The Lords of Easy Money. ------ 📣 Infura | Join the New Decentralized Infrastructure Network www.bankless.cc/infura http://www.bankless.cc/infura ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/?utm_source=banklessshowsyt 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 👯 DESO | DECENTRALIZED SOCIAL BLOCKCHAIN https://bankless.cc/Deso 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 📡 TRUEFI | CRYPTO FINANCIAL HUB https://bankless.cc/TrueFi 👾 SEQUENCE | ALL-IN-ONE PLATFORM https://bankless.cc/Sequence ⚡️FUEL | THE MODULAR EXECUTION LAYER https://bankless.cc/fuel ------ Timestamps: 0:00 Intro 5:30 Should We Be Worried? 8:35 This is Insane 15:30 Origins of the Fed 23:50 A Young Fed 30:40 From Gold to Fiat 35:50 A Tool of the State 43:25 Incentives and Structure 47:25 Against Ben Bernanke 55:20 Institutional Pressure 59:30 Jay Powell 1:05:20 Banking Pressure 1:12:30 Political Actors 1:16:30 The Terminal Point 1:20:40 What Comes Next? 1:24:00 What to do about the Fed 1:29:15 The Legacy of the Fed ------ Resources: Christopher Leonard https://twitter.com/CLeonardNews?s=20&t=2hDVEsJqii7nFVkuwxDPvQ https://twitter.com/CLeonardNews?s=20&t=2hDVEsJqii7nFVkuwxDPvQ The Lords of Easy Money http://www.christopherleonard.biz/ ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

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

• 0:07Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Guys, how is money created? Why is it created? Who actually does the job of money creation? And how come everyone is always talking about the Fed? This episode is going to unpack everything you need to know about this odd little institution that governs our lives. A few takeaways for you. Number one, we talk about the origins of the Fed, starting this little place called Jekyll Island. Did we even need it in the first place? Number two, has the Fed strayed from its original purpose? Has it become corrupted?

• 0:49Ryan Sean Adams?

  We talk about the massive damage that the Fed has done. Number three, what do we do with this institution? If it is corrupt, if there is no path forward, what do we do with it? Do we reform? Something has to change. What is the path forward? David, this is a really fun episode. Like, I learned a lot about the Fed, but why are we talking about the Fed? I mean, is this just kind of a wonkish detour? Or how is it core to the crypto journey? And why do we need to unpack it on Bankless today?

• 1:16David Hoffman?

  Yeah, certainly. Well, the Fed is at the very bottom of the global financial system. So why are we talking about the Fed? Well, it supports everything. And so it's important to understand how it works. And it's actually crazy that so few people understand how the Fed works. And this was just a really good learning lesson for me. It's like to go and unpack the construction of the Fed. So

• 1:36Ryan Sean Adams?

  They don't teach this in school, right?

• 1:38David Hoffman?

  No, not at all. And I think it's also emblematic that the Fed is a Federal Reserve or a central bank. You're not supposed to think about it. If it's working, it's invisible. If something is breaking, that is a symptom of that is that we talk about the Fed. And so the Fed is supposed to be in the background. So the fact that it is on top of investors' minds, that is something that is already off to a bad start. And so there are some things I think that listeners should consider while they listen to Chris here. The Fed, it's not a monolith. It's got a number of different people, 12 different board members. And if it's got different board members, some board members come and go over time.

• 2:22David Hoffman?

  So how does the composition of the Fed change? How has it changed since it was created in 1913? How was the Fed originally formulated? And how did time and external influence change what the Fed is? And also perhaps consider what parts of the Federal Reserve story, the character development of the Fed are emblematic of what our goals and aspirations are in the crypto industry? What part of this story really shows us why we are here in crypto? I think those are questions to consider while we listen to Chris in this episode.

• 2:55Ryan Sean Adams?

  Yeah, definitely. And if you're a premium subscriber, stick around after the episode for an episode we call the debrief. Premium subscribers get it in the RSS feed where David and I unpack our thoughts after the episode. Guys, we will be right back with our episode with Christopher. But before we do, we want to thank the sponsors that made this episode possible.

• 3:13David Hoffman?

  Sequence is the all-in-one developer platform you need to build web three games and applications. For your users, Sequence is a smart wallet and it's the easiest, most intuitive onboarding your users will ever experience. And comes with all the features users need to feel empowered in the web three world. Multi-chain support, NFT display, and users can buy SFTs, NFTs, and crypto directly with a credit or debit card. For developers, Sequence is the plug-and-play platform for web three games and apps. Their APIs let you bring NFTs, SFTs, and tokens into your game or application. And a Sequence relayer enables gasless transactions for your users. Sequence already powers some of the best web three games like Skyweaver, NFT projects like Cool Cats, and marketplaces like Nifty Swap.

• 3:54David Hoffman?

  And Sequence is compatible with all the EVM chains, including Ethereum, Polygon, Binance Smart Chain, Arbitrum, Optimism, and Avalanche. So go to sequence.xyz/banklist to start building or speak with the Sequence team today. Arbitrum One is pioneering the world of secure Ethereum scalability and is continuing to accelerate the Web3 landscape. Hundreds of projects have already deployed on Arbitrum One, producing flourishing DeFi and NFT ecosystems. With the recent addition of Arbitrum Nova, gaming and social dApps like Reddit are also now calling Arbitrum home. Both Arbitrum One and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM compatible.

• 4:36David Hoffman?

  On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitrum Nitro, it's also now 10 times faster than before. Visit arbitrum.io, where you can join the community, dive into the developer docs, bridge your assets, and start building your first app. With Arbitrum, experience Web3 development the way it was meant to be: secure, fast, cheap, and friction-free. If you've been listening to Bankless, you know that we're fans of the modular blockchain thesis. The idea that blockchains will separate execution from data availability and consensus, allowing all three to become the best versions of themselves. And Fuel has built the fastest modular execution layer in the industry. By supporting parallel transaction execution, Fuel unlocks significantly faster throughput for the Web3 world.

• 5:21David Hoffman?

  Fuel also goes beyond the limitations of the EVM with its own Fuel VM, which is more efficient and optimized, opening up the design space for developers. And lastly, Fuel brings a powerful developer experience with its own domain-specific language, Sway, and a supportive tool chain called Fork. With Fuel, you can have the benefits of smart contract languages like Solidity while adopting the improvements made by the REST tooling ecosystem, letting the Fuel development environment go beyond the limitations of the EVM. If you want to learn more, there's a link in the show notes to see how you can get involved with a Fuel network.

• 5:52Ryan Sean Adams?

  Bankless Nation, we are super excited to introduce you to our next guest. Chris Leonard is going to help us get into the minds of the Fed. He's an American investigative journalist, he's an author. Christopher's newest book is called The Lords of Easy Money, and that's an investigation into this institution we call the Federal Reserve. The subtitle of that book is "How the Federal Reserve Broke the American Economy." Man, it sure feels broke right now. And of course, this is a crypto podcast primarily, but the Fed impacts everything. Chris, welcome to Bankless. Thanks for having me. So we want to get into the story of the Fed. I guess, you know, high level question, though, is what the Fed is doing right now.

• 6:37Ryan Sean Adams?

  Is that a new thing? Like, should we be worried?

• 6:41Speaker 02

  Yeah, we should totally be worried. I mean, that's the undertone.

• 6:46Ryan Sean Adams?

  All right, cool. Just checking.

• 6:48Speaker 02

  Yeah. I'm pretty worried about a lot of stuff. And what the Fed is doing right now is not normal in any respect. And, you know, I don't want to just launch into a soliloquy about it. But I think to answer your question, the core point that people need to know is that between 2010 and 2020, the Fed just broke into an entirely new graph. Like, they started doing these experiments with easy money that changed their role in the economy, that changed the financial system in really, really deep ways. And, again, it just broke the graph of what they've been doing. So they really broke the charts, starting in 2010.

• 7:33Speaker 02

  They've changed the entire landscape of monetary policy. And that's the backdrop for everything they're trying to do right now. So, you know, here we are, we're sitting here in late 2022, and the Fed is trying to so-called tighten. You know, they're trying to hike interest rates and do all this stuff we'll talk about, like quantitative tightening, to fight inflation. And that sounds pretty normal. That sounds like the job of what the central bank does. It hikes rates to fight inflation. But the backdrop is, is that they're doing it in this wildly distorted environment that they themselves have created, which means that they don't really know what's going to happen. They really are like a person feeling their way through a dark room right now.

• 8:16Speaker 02

  And there's a tremendous amount of volatility and risk sort of underpinning what they're doing. So my headline is, things are the opposite of normal right now. And if there's one party that really has no clue how this is all going to play out, it is the Federal Reserve itself.

• 8:34David Hoffman?

  This is something that I think a lot of people in the crypto industry are learning. We are all kind of learning for the first time, especially because the crypto industry kind of skews younger, the role and importance of the Fed. While also what the Fed is actually doing is also becoming very significant and new. And like, as I kind of zoom out and like come to terms with what the Fed is, Chris, it kind of just seems absolutely insane. Like, and like, and I think that what I mostly mean by that is they're making very big choices that there's no one else checking on them. And like, there's no other entity that's like, "Hey Fed, that is, that's lunatic. That's crazy." And everyone is like, "Oh, the Fed is 0% interest rates for this long and now jacking

• 9:19David Hoffman?

  them up this fast, this, in this way." And like, sometimes I just zoom out and it's like, "This is insane." Is that your reaction too?

• 9:27Speaker 02

  Yeah. And the insanity exists on two levels that you just kind of nodded toward, okay? You know, first of all, I think a lot of young people don't know about the Fed because it seems really boring. It seems like it's way over on the margins, like it's not very involved in our daily lives. The Fed is really practiced at talking about everything they do in an extremely boring way and presenting themselves as just sort of like bureaucrats that just are solving math equations. But, again, the insanity is happening in two key ways. The first is the one you kind of mentioned, which is that this institution is undemocratic.

• 10:10Speaker 02

  Like, it was built to be insulated from voters because it has a really hard job to do to manage the currency. And that means it has to do the hard things sometimes of hiking interest rates, pushing the economy into a recession. But for that reason, the Fed was created to be run by this committee of 12 voting members in Washington DC. And these people meet every six weeks. They make these hugely consequential decisions, like whether or not they're going to plunge the economy into a recession. And like you're saying... There's not all, these, these, this committee never faces voters. They're never up for election. There's no sort of outside entity that can kind of veto what they're doing. It is entirely up to them.

• 10:55Speaker 02

  So that's kind of insane to think about a committee of 12 people making these decisions. But then the second level is that what they've done over the last decade has been so experimental and unprecedented that it's raising the stakes of everything. So let me just quickly, if I can, like lay the groundwork for what I'm talking about. When I keep talking about, oh my God, they've like changed the graph of history.

• 11:23Speaker 02

  The Federal Reserve is the only institution in the world that can create new US dollars out of thin air. That's the Fed's superpower. They make money. They literally create new dollars out of thin air. Okay. So when the, when the Fed creates new dollars, it's like putting water into a swimming pool. And that swimming pool is called the monetary base. It's like how many original new dollars the Fed has created. So when the Fed creates more dollars, that monetary base grows. And when the Fed basically sucks dollars out of circulation, the monetary base shrinks. Okay. For the first 95 years of its existence, the Fed kind of gradually and steadily created more dollars.

• 12:08Speaker 02

  It expanded the monetary base to be about $900 billion. That was like the core foundation of US money, 900 billion. And then between 08 and 14, okay, in about five and a half years, the Fed created three and a half trillion new dollars. So that's 300.

• 12:29David Hoffman?

  More than 3X, yeah.

• 12:30Speaker 02

  Yeah, more than 3X. The way I put it is more than three centuries of money printing in about four and a half years. And so when you.

• 12:38David Hoffman?

  Is it fair to say for the first 95 years of the Fed's existence, they were largely responsible and effective in their controlled metering of adding money to the pool? And then they just blew it out of proportion? Is that a fair description?

• 12:51Speaker 02

  That is a fair description and, and you know, we could sit here for a long time and kind of debate, you know, did the Fed mess up in the 1960s, for example, by keeping rates too low for too long and stoking inflation? But. The way I would put it is that from the day it was created in 1913 until about 2008, the Fed stayed inside these lanes. Okay, the Fed said, we have a lot of power, but we're going to use it to do a couple important things. The first is to just manage US currency. We're gonna make sure we don't have massive inflation or massive deflation. We're going to keep the Goldilocks pot bubbling on the US dollar. And then the second key job was that the Fed was going to be there as the lender of last resort.

• 13:36Speaker 02

  If there was a banking panic, the Fed would bail out otherwise healthy banks and stop bank panics. So for decades, the Fed really stayed in this lane. And what happened after 08 is that you had this very activist, kind of heroic, aspirationally heroic Fed Chairman named Ben Bernanke, who is just like, you know what? We are gonna be like the jobs program for America. We're gonna be the engine of economic growth in America after 2010. We're gonna do everything we can to stoke economic growth. And that's when they print 300 years worth of money in four and a half years. Another way to talk about this, you hear this really boring term of the Fed's balance sheet.

• 14:21Speaker 02

  We'll just call that the size of the Fed's footprint. When they print more money, it increases their balance sheet. The balance sheet exploded from 900 billion in 08 to 4.5 trillion in 2014. And today it's 9 trillion. So you're seeing the footprint just expand dramatically and it's broken outside the bounds of the job it was created to do.

• 14:48David Hoffman?

  There's 10x more money than there was in 2008 right now.

• 14:55Speaker 02

  Core money, original money created by the Fed. And like, we don't need to get into this, but there's this sort of second layer of, you know, banks actually create money when they lend on reserves and stuff. But yeah, 10x monetary base, 10x Fed balance sheet, totally uncharted territory.

• 15:14Ryan Sean Adams?

  And you're telling us that this was all done through an undemocratic, unelected group of 12 bankers in suits, sitting in rooms somewhere?

• 15:26Speaker 02

  Yes, most of them were economists, you know, they weren't even actual bankers.

• 15:33Ryan Sean Adams?

  Well, can we talk about this, Chris? So give us a history lesson here. All right. So we are,

• 15:41Ryan Sean Adams?

  listeners to Bankless are, they definitely dabble in investing, very excited to be in crypto, kind of on the journey. They've heard a lot of the memes, I think, you know, the money printer memes that that circulate nowadays, of course. But I think very few are familiar with the actual history of, and I think some people, you know, within in our circles, think of the Fed as this evil sort of octopus type of creature. And that's become kind of a meme. But I don't think it started out that way, certainly. And can you give us a history lesson of the Fed? So how old is it? How did it originate? And we could talk maybe a little bit more about governance, but tell us

• 16:26Ryan Sean Adams?

  about this institution. How did it come to be? What's the full history here?

• 16:29Speaker 02

  Yeah, you bet. So first of all, in American history, our government created a central bank, which is a government-run bank. We did this twice and then backed off, you know, we chartered a central bank and then revoked the charter two times. Because, you know, America as a country is built on the idea of like fractured power and checks and balances and competing powers. And there was this idea that if the government created its own bank, it would have too much power. But without a central bank, the US kept encountering this problem of trying to have a

• 17:11Speaker 02

  stable currency. So, you know, we'll just start quickly, like after the Civil War, in the 1860s, the United States is becoming kind of an industrial power. We've got these, you know, the railroad spans, the nation, we've got these huge corporations starting to be born.

• 17:30Speaker 02

  But our currency system was extremely chaotic in the late 1800s into the early 1900s. We, we kept having these periodic bank runs. We had long periods of deflation and you know, this might be interesting to your listeners. When you look back at this time, late 1800s, early 1900s, there were actually thousands of currencies in the United States. Each bank could basically issue its own currency. And, and this is a true thing that, you know, if I was a business guy in, in 1883, I could have currency from a bank in Illinois. And then if I went on a business trip to Oregon, you know, I'm at the hotel front desk,

• 18:13Speaker 02

  I would have to kind of convince the hotel clerk that my currency from Illinois is, is sound. I mean, that's how many currencies there were kind of floating around the United States. And currencies would keep value or collapse depending on their, the bank behind them. So to solve this problem, the US did a few things. They started doing these national chartered banks. And what's interesting about the Fed is that a lot of the impetus to do it and a lot of the momentum actually started from the populist level, uh, from farmers in the Midwest who, who wanted to create a, a currency system that broke the power of, of the eastern banking

• 18:58Speaker 02

  elite. And so these populists were pushing for these government run banking systems and they had all these wild ideas like to have a dispersed group of national treasuries that would be like basically like use grain as a commodity of these dispersed treasury systems. Okay. Fast forward, you all have heard of Jekyll Island. I'm sure. Okay, maybe not. There's this meeting in around 1912. I forget the exact year, but now we're getting to the creation of the central bank. And these senators and bankers realize the currency chaos is unsustainable. There's going to be a central bank.

• 19:42Speaker 02

  And we either, you know, ride the train or drive the train. And so these senators and bankers go have a meeting at this resort island called Jekyll Island off the coast of Georgia. And they're like, okay, this is what the central bank is going to look like. We're gonna create a government bank, but it'll be sort of decentralized. It'll be like a federal system. We'll have actually like 12 regional banks and then a governing body in DC, which is that unelected committee I just mentioned, although that committee gets kind of like more sharply shaped in the 30s. But suffice it to say, they create this banking system, but they make sure that the banking system's not going

• 20:24Speaker 02

  to displace the Wall Street banking system. And that happened in really interesting ways we can talk about. But in 1913, the feds created, and it was, the job was to create a stable national currency that's called the US dollar, which is actually a Federal Reserve note. And it was a way to

• 20:46David Hoffman?

  So there wasn't a US dollar before this. This is when the US dollar, as we know today, was created. Is that correct?

• 20:53Speaker 02

  Yes, 1913, 100%. And it's created because of the Fed.

• 20:57Ryan Sean Adams?

  So Chris, this period before, I think it's really hard for people to imagine this period before Jekyll Island. By the way, what an ominous name, Jekyll Island. It just like, just sounds evil. But, but pre this, it wasn't great. The US banking and monetary system wasn't very great because it'd be like living in a world where you had like Wells Fargo dollars and Bank of America dollars, and they were all trading at different rates because they were all kind of independent currencies. And of course,

• 21:27David Hoffman?

  You'd have to pick your bank to trust?

• 21:29Ryan Sean Adams?

  Pick your bank to trust. And of course, this is before the era of a fiat currency as well, in that like, all of the, you know, the currencies, US currencies, had to be backed by commodity at some level. And I know there were also debates about like silver or gold kind of being a backing for some of this. But it was not, we call it today, it was very Poor user experience if you were trying to like do any commerce in the US, right? You're just like, I don't know if these banknotes are good or not, like, what, well, what's your bank? Well, I don't know. You do. Trust me. And by the way, this is coming on the back of as we're recording this, coming on the back of a major, we call them shorthand crypto banks, right?

• 22:12Ryan Sean Adams?

  Because they somewhat resemble banks, although, you know, it's lowercase b, it's not the capital B, but a major exchange that just went belly up. For example, it'd be as if this exchange was saying it had a stable coin, let's say that was backed by real assets and then it wasn't, it just evaporated. And we, we actually just witnessed a bank run and all of these things. We know how terrible the user experience was. So this meeting at Jekyll Island, I'm sure is on the back of like, probably years of this terrible user experience and the bankers and senators all come together and like, well, we better solve this or somebody else will and it'll be an uglier system that kind of cuts us, cuts us out of the process. So let's come up with a solution.

• 22:57Ryan Sean Adams?

  Is this capturing some of what was going on at the time?

• 23:01Speaker 02

  That is exactly what was going on at the time. And, and, and as you talk, I'm picturing like, if you wrote a book, the chapter like bad user experience would cat, would talk about the, the bank panics, the deflation, the, the ruinous of financial crises that happened that put farmers out of business. And, you know, the 1890s, early 1900s, like people were furious. It was chaos and I've had a lot of pushback on this, but I really, I'm of the mind that if we could have done capitalism without a central bank, I feel like we would have. You know, the US has been resistant to creating a central bank, but.

• 23:48Speaker 02

  The alternative was rotten. I mean, the financial system really didn't work in the late 1800s and early 1900s.

• 23:56David Hoffman?

  Right. We've talked about on Bank List a few times, the importance of, we call it settlement assurances with the creation of business, right? Like businesses need to feel secure in the long term. Property rights is perhaps a better way to say it. Strong property rights, but also that necessitates like a strong unit of account that you can assume will exist in five, 10, 15 years. And so like if there's just like a variety, overabundance of unit of accounts that are all fluctuating and colliding with each other and not allowing for people to think in long-term thinking, it makes sense that an entity needs to come in and apply a bunch of order in where there is a bunch of chaos. So it sounds

• 24:39David Hoffman?

  like in this moment of history, Federal Reserve, good, like, yes, like it did its job as advertised and created a bunch of order and stability and allowed probably just a flourishing of economic activity as a result of that. Would you agree with that kind of characterization of the first bit of the Fed?

• 24:58Speaker 02

  I totally would. There are a lot of people who felt the Fed did a bad job during the Depression. They kept the monetary supply too tight for too long. There are people that argue that they did the opposite mistake in the 60s and kept money too cheap for too long and created inflation. But I mean, those aside, yes, the system was stable. The US currency was stable for decades.

• 25:25Ryan Sean Adams?

  So Chris, was this, was the Fed the entity? So at Jekyll Island, you said there was kind of this meeting, right? The senators and the bankers decide what to do. And then was there some sort of legislation that was passed on the back of this to grant this new institution a new set of powers? So this was actually, if so, this was actually passed through our nation-state governance processes. It was passed, the legislation was passed democratically. Is that what happened?

• 25:56Speaker 02

  Exactly. So the senators involved in that had the job of codifying this thing, of making it through law. And so in 1913, the Fed was born through an act of Congress signed by the president, the 1913 Federal Reserve Act. And that's what, by the way, creates this institution. There's, there's no clause in the Constitution for a central bank. There's no basis in that way. It is entirely an act of Congress. So the act in 1913 creates the Fed. And then in 1935, during the New Deal, there's kind of a rehash,

• 26:39Speaker 02

  an update of the Federal Reserve Act that did a lot of things and sharpened, like I said, centralized power in that committee. But yeah, Congress created and governs the Fed.

• 26:49Ryan Sean Adams?

  By the way, is this something that all countries have, like sort of, you know, modern, maybe democracies, a feature is like, I can't imagine a modern country existing without a central bank. Is this just sort of becomes table stakes? Was it at the time? Or was, was the Fed sort of, you know, late on the scene, the US getting its own central bank apparatus?

• 27:13Speaker 02

  Great question. The US was a little bit late to the scene. The Bank of England Central Bank was around before the Fed. And I'm frankly not good on the history of other nations like advanced European nations or Russia in terms of when they sort of founded their own central banks. But I will say that as we sit here today, every nation that has an advanced economy has a central bank. And they all look different, of course. But you know, there's the European Union has a central bank, England has a central bank, Russia has a central bank, China has a central bank. It's a, it's a pretty core part of running an advanced economy.

• 27:55Ryan Sean Adams?

  Well, it would be, it's hard for me to imagine that a advanced economy or a nation competing internationally without a, some sort of currency, right? So at the time, of course, I'm not sure what the, the reigning, you know, 1913, the reigning reserve currency was probably the pound or something like this. It certainly was not the dollar. But in order to kind of gain legitimacy and compete for against other currencies of nation states for even reserve currency status, right? You know, the unit of account for trade, for example, or unit of account for for for storing like bonds on your on your balance sheet. And a country really needs a central bank in order to to participate

• 28:39Ryan Sean Adams?

  in an international economy. Of course, now that the dollar has grown to be, I don't know, what is it, like 70% or something of, you know, of trade? I mean, like, it is the unit of account, not only for the United States, but for the world. But they probably weren't thinking with those types of aspirations in 1913, were they? It was just a matter of let's make the US banking system, the user experience for the economy a little bit better. And if we don't, we it things will fall apart. They weren't yet playing the world reserve currency game.

• 29:15Speaker 02

  That is absolutely correct. They created the Fed to manage our own domestic affairs. It was cleaning house internally. And again, um, you know, we were an agricultural economy at this time. I mean, something like 70% of Americans earned a living through agriculture or some just gigantic number during this time. And and finance lending and currency was critical to that business. And we recognized that to have order and and I hate the with the word liquidity because it's so overused, but to have a flexible money supply that

• 29:58Speaker 02

  was managed in a way to, you know, kind of uphold the economy that that was just critical to making an advanced economy work. So it was entirely to just manage domestic affairs, essentially, that we created the Fed. And this whole reserve currency thing did not happen until after World War II, when the US kind of walked out of the ashes as the dominant economic and military force. And we literally wrote a deal called the Bretton Woods Compact, or I don't know if it was a compact or a treaty, but that's what laid the foundation for us being a reserve currency. So that came much later. I don't want to say it was an accident in World War II, but it was a result of how we emerged from World War II.

• 30:40Ryan Sean Adams?

  All right, so we've got some milestones here. So 1913, creation of the Fed. There was some, you know, what critics would say, mismanagement of, you know, central banking policy during the 1920s may have led to the Depression, that sort of thing, right? The central bank was all caught up in that. In 1935, some of the tools were sharpened, as you said, through some additional legislation. Then get through the Depression, there's a world war. The US comes out of that with Bretton Woods, with reserve currency status in sight, so the dollar being now kind of the dominant currency for the world. That brings us to kind of the 1940s, 1950s. But there was another event that at least sticks

• 31:23Ryan Sean Adams?

  out in my mind. I'm curious what the Fed's involvement, if any, is. And this is Nixon getting off the gold standard. So, you know, 1971, sort of, you know, someone say this is the birth of fiat money, no longer backed purely by gold. Did the Fed have anything to do with it? Or if so, what? And would you say that's another significant milestone?

• 31:44Speaker 02

  It's a hugely significant milestone. And the Fed's relationship to it, I've got to be totally honest, I have not gone super deep on that. So I don't want to, my impression is that really was driven by the Nixon White House and international economic conditions at the time.

• 32:11Speaker 02

  If the gold standard really worked well, I feel like we would still be on it. It is an inflexible system that was creating a lot of problems by 1971. And there's no question. Okay, here's how I see it, and I think it's. Here's what's relevant to the idea of crypto, which is that. As you say, the dollar was backed by gold from 1913 to 1971. And that imposed a kind of external discipline on the money supply. It had to be tied to gold at a certain level. And everybody recognized that that was really important because.

• 32:51Speaker 02

  You know, as you can imagine, the real primary temptation of managing currency is that when you run into a problem, you just print currency to get yourself out of it. You print more money to drive economic growth, but it ultimately leads to inflation and devalues the currency. When a currency is pegged to gold, it imposes discipline.

• 33:15Speaker 02

  There's a great book about this. I think it's called Three Days in September about Nixon's decision to go off the gold standard. And it's because they were facing this pinch and this tension.

• 33:28Speaker 02

  In terms of the international currency values. But here's the point, when they flip off the gold standard. That takes away the external discipline of gold. And in its place, it says, okay. This committee that runs the Fed is going to now be the disciplining force on the currency. Okay, these 12 voting members. Who run this committee called the Federal Open Markets Committee or FOMC. These people are going to be like gold. They're going to decide. How much the monetary base should be expanded, how much it should be shrunk.

• 34:08Speaker 02

  So we're going to have the wisdom of a committee basically replace the disciplinary. Effect of tying it to gold. And so that's the path that we start down in 1971. And.

• 34:24Speaker 02

  Obviously, there's like an entire literary genre of people saying that that was like the original wrong turn. That the, the, the moment we switched to fiat currency is when buying power started to diminish and dissolve, that in fact, the committee didn't have discipline. I, I, you know, and, and that's for listeners to kind of decide. I do think putting the power in the committee of the Fed does help give them the monetary supply of flexibility it really needs. But again, the problem is you have this like seductive

• 35:06Speaker 02

  impulse to try to print, use money to print your way out of problems.

• 35:11David Hoffman?

  Mm hmm. The Bankless listeners will, we all often talk about on Bankless, like one of the cool things about crypto is that it's regulation through code. And, and we take power out of the hands of people and we put it into code because, I mean, we've, we've seen what just happened recently with FTX when we gave too much trust and power into one person and let them do whatever they want with that, with that power and trust. And I, I think I really appreciate the resonance of the idea of just like gold did the same thing. It wasn't with code, it was with physics, though. It was with, uh, just like, you know, you can't print, can't print gold. And so that was the code that you are not able to break. And now we are kind of doing the same thing with, with crypto, uh, with our own, our own bits of code.

• 35:53Ryan Sean Adams?

  Well, it kind of strikes me that like, um, you know, in a, in a, in a system in a country built on the foundation of checks and balances, right? The, the major check on the Fed's power, let's say, or discipline was actually some element of the gold standard, wasn't it? Because without that, how is the Fed really, really governed? And, you know, this, this rotating, uh, uh, group of 12 individual FOMC members, um, they change. They're also susceptible to kind of the, the whims of the time. Uh, it seems to me that, um, the Fed even still, it's like purported to be kind of an independent. Organization, but isn't it very clearly a tool of the state?

• 36:38Ryan Sean Adams?

  You picture kind of the a country and like, what are, what, what does it have in each of its hands? On one hand, it's the sword of the military. The other hand, it's, it's the coin, right? Sword and coin, treasury, military. And so of course it's a, it's a tool of, of the state and it's, it's a tool of politics. And it's not an independent institution anymore. So you could start to see the, I guess, when you remove the, when you remove the, the governor, when you remove the, the check and balance on the thing, how it can just slowly get to the, the stage we're, we're in now. Can you talk a little bit more about like, how it's governed?

• 37:16Ryan Sean Adams?

  Is there, because there is still this pretension that, or pretense that the Fed is somehow independent of politics. Tell us about that. Is that true in any way, shape or form?

• 37:29Speaker 02

  Yeah, and, and God, I'm just, my mind is racing as you're talking. I, I really agree with everything you just said, and I think it's a great way to look at it. But, you know, not to be glib, but one of my responses is no, this isn't just a tool of the government. It's also a tool of the biggest banks on Wall Street. Like, don't, don't leave them out of the equation. They have a vote over this thing. And, and we can talk about why that is, but, but truly the Fed is an odd entity in the sense it's an, it's, it's a hybrid creation. It is a private bank owned by other banks.

• 38:08Speaker 02

  But it's governed by a government committee that's appointed by the president. The members of this committee, like the board of governors, oh, it's, I'm sorry, it's kind of,

• 38:20Speaker 02

  you've got two stripes of leaders. Some of them are appointed by the president, approved by Senate. Others are approved by these local bankers. So it's a, it's a hybrid of, of a private, public partnership.

• 38:37Speaker 02

  But there's no doubt it is like it is the tool of state authority. So let's back up a little bit and just talk about the governing structure. Like I said, when they created it, they modeled it on the Federalist system where you had state power and federal power. So the Fed is an act, it's a network of 12 regional banks, which are like states, and each regional bank has its own president, which are kind of like state governors. And and those regional bank presidents are the ones I just mentioned who are who are appointed at the local level, weirdly by like a board of directors at the local level that's made up of local bankers.

• 39:20Speaker 02

  So a bunch of local bankers in San Francisco will help appoint the president of that Fed. Okay, so you've got 12 regional bank presidents. Then you've got this board of directors in Washington DC that is seven, I'm sorry, the board of governors. Okay. And these are the people appointed by the president and approved by the Senate. And together, the board of governors and the regional bank presidents run this thing. Okay. And and the FOMC, that committee I just mentioned, it's interesting because it always has 12 voting members. Seven of them are the governors. Five are bank presidents that come through on a rotating basis. And I feel like I'm just

• 40:05Ryan Sean Adams?

  Okay, so which banks do they choose? A lot of banks. I mean, there's fewer now than but they just pick the biggest banks or their favorite banks or what?

• 40:14Speaker 02

  By the way, it's like kind of telling how like confusing this gets so quickly. And I'm sorry about that. Like the governance structure is very complicated. The top committee, the FOMC, seven of the members are from the board of governors. The other five are drawn from the regional banks, the Fed's own regional banks. I'm sorry if I kind of wasn't clear.

• 40:37Ryan Sean Adams?

  Banks, not like a commercial bank, not like a

• 40:40Speaker 02

  That's exactly right.

• 40:41David Hoffman?

  Like St. Louis Fed, for example, is a regional bank. I don't even think about these things all that often. I can't, I know, I know the St. Louis one. I know. That's actually it. I don't even know the others.

• 40:51Ryan Sean Adams?

  Richmond for Virginia. I know this.

• 40:56Speaker 02

  I've thought about this probably more than a person should because I've gone back and read through when this committee meets, they actually transcribe their debates and then release the transcription like five years later. And so it's really fascinating to watch these people debate these issues of what they're doing.

• 41:15Ryan Sean Adams?

  That's quite a delay, five years later. So it's completely closed doors. The public doesn't get...

• 41:19Speaker 02

  Totally closed doors.

• 41:21Ryan Sean Adams?

  But they do release it eventually after a five-year... What are the debates like?

• 41:27Speaker 02

  Fascinating, totally fascinating. And let me, if I could, like, the debates I really looked at were the debates that started in 2010, which were like, should we do these hugely experimental programs like quantitative easing and 0% interest rates or not? And so you saw this heated debate inside this committee. The contents of the debate, like you said, they were not released for five years. And so going, it's just shocking to look at this committee in 2010, where you've got four out of 12 members saying, you know, what we're

• 42:12Speaker 02

  doing is incredibly risky. We don't know what the long-term effect of this is going to be. The short-term gains we're going to get are tiny. We're barely going to reduce unemployment. And then you've got the chairman of the Fed, Ben Bernanke, saying, let's do it anyway, basically, you know, there's risks in not acting. But, yeah, so I want to solidify the point, though, before we move on, that the governance structure is these 12 people, five of them are from the regional banks, seven of them are the DC-appointed governors. They meet in secret. They debate for two days and then they make these decisions that we hear about like,

• 42:56Speaker 02

  you know, the Fed raised interest rates today or cut interest rates. And, you know, a month or two later, they'll release a really general overview of the debates in the in the minutes, but then the transcripts come out five years later.

• 43:11Ryan Sean Adams?

  And they, uh, That's insane. That's an insane thing. They meet, they meet monthly? What's the frequency?

• 43:19Speaker 02

  Every six weeks.

• 43:20Ryan Sean Adams?

  They meet every six weeks. Okay. And then, okay, so what kind of pressures are these individuals under? Like, what, what is kind of guiding?

• 43:30Speaker 02

  What are the inputs?

• 43:31Ryan Sean Adams?

  You know, you know, for a politician, we have a, I think listeners have a mental model for a politician. What does a politician care about? Votes? Who's going to vote for me? And fundraising. So it's kind of votes and money, right? These are the pressures that bend a politician to, you know, say one particular thing or do anything. Maybe there's a moral character there, hopefully. But, uh, but these are the main external pressures. What are the pressures facing the average FOMC appointee? And then, by the way, how does, how does, is it majority rule? Or how does it work? Like when they vote on something, is it, um, you know, has to have some kind of quorum?

• 44:12Speaker 02

  Okay. So these are great questions. Um, when the FOMC meets and makes these decisions, it is, it's majority rule. Okay. So with 12 members, it, it has to be seven to five to pass something. I don't think there's ever been a seven to five vote in the history of the FOMC. I don't think ever, maybe once or twice. The votes are always 12 to zero, 11 to one, 10 to two.

• 44:41Ryan Sean Adams?

  What?

• 44:42Speaker 02

  Right?

• 44:43Ryan Sean Adams?

  Yeah. That's odd.

• 44:46Ryan Sean Adams?

  What does that tell us? I mean, is, is there some group thing going on? Or is there, is there just some dominant personalities that sway the rest? Or do they, are they just generally agreeable people?

• 44:59Speaker 02

  So this is, this is like what's at the core of the book, talking about what they did since 2010. And now I feel like the subtitle of the book should have been, that's odd.

• 45:10Speaker 02

  So much of this falls into that. So, okay, so you've got this committee and right now today, they're deciding, you know, do we hike interest rates really, really high, really fast? Do we risk tanking the economy? Do we not do it? Interestingly, this really matters that out of the 12, seven of them are these so-called Board of Governors in DC. So you notice seven out of 12, they have a veto. What, however, they decide to vote is what will happen. And I interviewed a lot of these governors, but you know, one of the most telling statements was from a former governor named Betsy Duke, who really just described in detail what's

• 45:54Speaker 02

  been substantiated elsewhere, which is that the governors, before the vote even happens, they know how they're all going to vote.

• 46:02David Hoffman?

  Right.

• 46:03Speaker 02

  Okay.

• 46:03David Hoffman?

  If you tell me that a lot of these votes are as unanimous as they are, it makes me think that, well, one person's really calling the shots and everyone else is just giving the thumbs up.

• 46:15Speaker 02

  Because what group of people meets every six weeks and votes 11-1, 11-1, 12-0, 10-2? No human. I mean, it's, that's not a real debate.

• 46:25David Hoffman?

  Yeah.

• 46:25Speaker 02

  And this gets into the, the politics and the history of the institution, really changed under Alan Greenspan, but there's this really intense pressure toward consensus. Because as you know, like fiat currency is based entirely on faith. And also, the, the world needs to have faith that the, the committee that runs the Fed knows what they're doing and will be consistent in what they do. So if you saw these votes of like seven to five, Wall Street would be like, yeah, are they going to flip at the next meeting? Like that, that might not make sense.

• 47:06David Hoffman?

  Chaotic. Right. Especially when the Fed was supposed to come in to produce stability. I guess as a user of dollars, I would be concerned if I saw the manager of the US dollar having a bunch of contentious debates. I guess that makes sense. I think that checks out for sure.

• 47:24Speaker 02

  Yeah. And

• 47:26Speaker 02

  Again, I can't overstate that the other part is that they want to look like they know what they're doing, that, you know, these are technocrat PhD economists who are basically just solving math equations. And so therefore, you always come out to a correct answer 12 to 0 or 11 to 1, as opposed to really the reality, which is that this is a bunch of human beings making policy choices every six weeks. That's the reality. And I guess I would like to go back to that year 2010, because it's at the core of what I wrote about. And so that's when the Fed went down this experimental path. And, and, you know, I talked about them increasing the size of their balance sheet. But really, between

• 48:11Speaker 02

  2010 and 2020, they did two extraordinary things. They printed all that money, you know, the 3.5 trillion dollars I talked about. They did that through this program you'll hear about called quantitative easing, which is basically just a maneuver to inject newly created dollars into the Wall Street banking system. That's what QE is. But then, secondly, very, very importantly, you mentioned this, the Fed kept interest rates pegged at zero for seven years between 2008 and the very end of 2015. That's extraordinary. I mean, rates had floated between 3 and 4% for decades. They had brushed up against zero really briefly

• 48:54Speaker 02

  in the late 60s, but had never really gotten there. The Fed decided to keep rates at zero for seven years. That like reorganizes the global financial system around a 0% rate. It was a remarkable and experimental thing to do. And in 2010, the Fed was having these debates as to whether they should do it or not. And there was tremendous dissension, I mean, that's the word, within this committee. You had multiple people, again, saying, we can't do quantitative easing, you know, that's going to pile up risks in the financial system. We're not going to get that much gain for it in the short term. Critically,

• 49:35Speaker 02

  once you start doing this, it's going to be impossible to stop, basically without creating a crash. But the chairman, Ben Bernanke, who is kind of the author of these ideas,

• 49:47Speaker 02

  Pushed that committee to do this in a political way. He talks about this very candidly in his autobiography that he was lobbying members. He had one-on-one meetings with members who were disagreeing with him and he got them to break it down to an 11 against one vote to do quantitative easing. And actually, you know, the main character in my book is the guy who voted no. He was that one no vote. And it's a really fascinating story as to how he stood up against this culture of group think and conformity to do it. But I guess the point is, you know, here's to me the headline. This committee is making

• 50:27Speaker 02

  policy decisions. When you read through the debates, you see that they're wrestling with this stuff and they don't have certainty at all. And frankly, they're making big mistakes in terms of their forecasts and all the rest of it. They're human. And yet, the vote that the public sees consistently, again and again, is a sort of misleading consensus.

• 50:51David Hoffman?

  It's interesting that you're seeing like the people that were arguing against Ben Bernanke, at least Ben Bernanke, the way that you described it seems like, man, they were really prescient. Like, they saw it all coming because that seems to be what happened. Maybe, maybe like you have the benefit of being able to see what happened after 2008. So maybe that's the words that you've decided to choose. But if you're telling me that people that were arguing with Ben Bernanke were worried about risk buildup in the system, unable to go backwards after inducing a 0% rate, if all of these people saw this coming in 2008 to 2010, that's like, wow, and we did it anyways. That's kind of crazy. Why did

• 51:32David Hoffman?

  Ben Bernanke have so much motivation to go forward with this path? What was his inputs into this decision?

• 51:39Speaker 02

  Well, I do want to clarify that the dissenters on this thing did have different points of view.

• 51:46David Hoffman?

  Okay.

• 51:47Speaker 02

  The guy I profiled, I mean, I was drawn to his story. His name is Tom Honeg, and he's the regional bank president in Kansas City. And he did end up being, I think, totally correct on his warnings at the time, that it was going to stoke asset bubbles to do this, that it was gonna...

• 52:06Speaker 02

  Be a quagmire that we weren't going to really be able to pull out of.

• 52:08Speaker 02

  Did he mention wealth inequality, Chris?

• 52:12Speaker 02

  Wealth inequality was a huge part of it. He's, he's like, basically, this program is going to stoke stock and bond prices, which is going to benefit the richest 1% of Americans that own all these assets, but it's not going to do much for the middle, you know, paycheck earning class of America. And on that front, he was without question, totally correct by the Fed Zone metrics. But

• 52:35Speaker 02

  your question, why did we do this anyway? And then, you know, Ryan, that kind of goes back to your earlier question, which I think is a fantastic one. What are the incentives here? Like, what is driving these people? They're, they're not trying to, you know, raise money for the next election.

• 52:55Speaker 02

  And listen, I don't have a pat answer for that. It's complicated. There are a lot of institutional pressures on this central bank

• 53:09Speaker 02

  that led to what they did, that led to the 0% interest rates and quantitative easing. The first big pressure

• 53:19Speaker 02

  is that it got it so interesting. Like I said, the Fed was created to manage our currency and stop bank runs. But then it started to evolve over time that they were seen as sort of the stewards of the economy. And this really, really happened under Alan Greenspan. He was called the maestro. He was seen as this genius. He was helping stoke economic growth without inflation. And so by the time Ben Bernanke came along, there was kind of this view that the, the Fed was, it was like, I mean, I hate to use the Wizard of Oz analogy, but they were like the wizard behind the curtain. They were the people that would manage the economy and it would keep growth happening in a smooth way.

• 54:01Speaker 02

  And at the same time, while the Fed is gaining all this like prestige and recognition, our democratic institutions are kind of falling apart and just becoming increasingly like dysfunctional and unable to act. And that's what led to in 2010, the Fed saying, you know, we're going to drive economic growth. Unemployment is still really high after the great crash is over, this is 2010, unemployment's at 9%. We're going to drive down the unemployment rate. By contrast, in the 30s, it was the federal government that did that, the fiscal government, Congress, like built dams, you know, put shovels in people's hands, you know, broke up the monopolies, regulated Wall Street, all this stuff.

• 54:46Speaker 02

  In 2010, we're like, okay, well, we're not going to do any of that. We're just going to print money through the Fed. And I think that's a huge pressure on the Fed to act and to be seen as like the driver of economic growth. You can't overstate the pressure. I mean, you see it right now today on the Fed and it's Chairman Jay Powell, like, how are you going to keep the economy growing? When really, that's a question for our elected leaders, in my opinion.

• 55:15Ryan Sean Adams?

  I do want to double click on that because I think it's, and maybe listener, you have this in your mind, but I think it's a completely unfair caricature to just paint like the FOMC and Powell and company as just like evil bankers, right? Like just trying to kind of like, just being completely irresponsible and wrecking the economy and being completely reckless without the context of institutional pressure that they are faced with. Because to your point, Chris, in the absence of our government actually working and Congress actually working, look at all of the stuff we throw at these Fed chairs.

• 55:59Ryan Sean Adams?

  So it's like, yeah, Powell, fix the economy. Powell, it's COVID, you gotta, how are you going to fix that? Make sure that we don't have a recession. Oh, and by the way, like, we want full, we want to decrease unemployment too, we want full employment. And oh, by the way, like- And Powell's like, all I got is a money printer. Yeah, and so he uses the tool that he has, but you know, I mean, look at, look at where we are now with kind of this runaway, it almost seems like inflation, where we've used these tools in the wrong way, we're clearly not going, but I guess just putting your path into like, these are human beings that have been thrown into an institution and they're almost like- Subject to the wheel of history, like what else?

• 56:43Ryan Sean Adams?

  If you're Jerome Powell, what do you do in this situation? You're kind of just dealing with the cards that you have. Like, maybe it's more of a problem with the institution and the process, and that we are in kind of the latter stages of this institution actually working, and we need some fundamental changes, and less a problem with the individual people at the helm. What's your take on this, Chris, as you've studied it?

• 57:09Speaker 02

  Well, I think the take-home headline is exactly that, which is that for a decade, we've been relying on the Fed to print our way out of some serious problems. And it's really easy, it's really easy to let the Fed do this, because it just creates money out of thin air. It doesn't have to tax anybody. There's not like some brutal democratic contest happening. But driving economic growth is not the reason we created a central bank. It's not the reason at all. We created it to manage the currency in a stable way.

• 57:54Speaker 02

  It was not a jobs program, per se. You know, and it's complicated, because if you mess up the currency, you have unemployment. But Congress was the one that was supposed to do the job of figuring out how to do economic growth and support people and the middle class and all that. So, yes, we really are at a terminal stage of relying on the central bank to try to solve these problems through money printing. And I think that is the most important point of the book. I, or my view of this thing, which is, of course, like I expressed in the book and driven by it. But yeah, that's my view of it. But I, I do want to...

• 58:39Speaker 02

  I don't want to let these guys off the hook and women, men and women, not just guys, but like, you know, when I started this thing, I felt, I think, a lot of what you just expressed, which is like, I wouldn't have wanted to be the Fed Chair in 09. I mean, that was scary, crazy, brutal. You know, depressions lead to terrible consequences. I mean, terrible, terrible consequences. So how can you fault somebody for doing everything they can to try to avoid that? Okay. Like, I get that. But I turned against this institution, frankly, when I was reporting on what they did in 2012, which was the third round of quantitative easing.

• 59:25Speaker 02

  And this is, I called that chapter "quantitative quagmire" because it's like, they're in this thing, they've been doing quantitative easing for two years, it's really not working. It's, and what's so interesting is Jay Powell, the current Fed Chair, joined the institution at this time, in 2012. And Jay Powell comes in saying, basically, honestly, he's saying, "What you guys are doing is crazy." Because Jay Powell came in from the world of investment banking, so he really knew how economics and finance worked. And when you read his comments in these meetings in the beginning, he's saying, "You folks are stoking an asset bubble and it's going to crash and you need to stop doing quantitative..."

• 1:00:10Speaker 02

  Talking about the same guy, right? The same Jay Powell? Jay Powell, same guy. What changed? And, uh-huh.

• 1:00:21Speaker 02

  Trillion-dollar question. Trillion-dollar question. He's saying all this stuff in 2012, and at that time, the leadership of the Fed is saying, "We need to do this anyway." And they're basing their decision to do more quantitative easing on these forecasts that turn out to be totally erroneous and false. And the point I want to make before I talk about Powell is...

• 1:00:45Speaker 02

  The, the, the, the leadership of the Fed didn't shoot straight with the American public. They, they were not open and honest about the fact that, hey, what we're doing is experimental. We really don't know what the long-term consequences are going to be. We're piling up a lot of risk, but we feel like we gotta do something anyway. And, and to me, that's, that kind of turned me against the leadership of this institution. And, and they continue to have that lack of candor, which does bring us right back to your question about Jay Powell. How did he go from being a vehement opponent of this stuff in 2012 and 2013 to being a huge public supporter of it?

• 1:01:28Speaker 02

  I interviewed him in 2012, and he told me, quote, "My views evolve with the evidence", which is probably what you'd want to hear from a Fed chair. But-

• 1:01:41David Hoffman?

  It also doesn't tell me a whole lot.

• 1:01:43Speaker 02

  No, and, and, and, okay. And like, I interviewed his colleague, a former Dallas regional bank president, Richard Fisher, who worked really closely with Jay Powell for years. And Fisher said on the record, which is pretty extraordinary, he said, "There was no new evidence." Like, there was no study that came out when Powell switched to support this stuff. No new study said, "Oh, quantitative easing does not stoke asset bubbles and increase wealth inequality." And, um, really, Fisher's conclusion, I think, is very rational, which is that Jay Powell accommodated himself to the leadership culture of the Fed.

• 1:02:27Speaker 02

  And that's what changed.

• 1:02:29David Hoffman?

  He stepped into a circle of people that had engaged in practicing group think and stepped into the-

• 1:02:36Ryan Sean Adams?

  But doesn't it just, like, select for that? Like, if his goal was to actually be the chair at some point, you have to conform. There's no way you're going to make it to the chair. Is that, is that also true, Chris? Like, so does the executive branch appoint the actual Fed chair? Correct?

• 1:02:54Speaker 02

  Correct. The president appoints the Fed Chair and then they're approved by the Senate.

• 1:03:00Ryan Sean Adams?

  Okay, so like, that's, they're not going to pick someone who is quantitative tightening. We got to take the hard medicine to swallow. They're not going to, are they going to pick someone that are bad for their political outcomes, right? So if, I mean, if you're trying to get elected, you're trying to have an economy that is, you know, going up and to the right, then you don't want a Fed Chair coming in and spoiling the party, do you? So doesn't the political machine just sort of select for people like Powell? And if they're not, you know, on board with that, then they have to get on board or they never

• 1:03:45Ryan Sean Adams?

  rise to that position.

• 1:03:48Speaker 02

  Yes. Let me say a couple of things. First is that when, when President Biden reappointed Jay Powell to be the Fed Chairperson, there was this sort of mini-competition between Jay Powell and another governor named Lael Brainard. And it was like, oh, who's Biden gonna appoint? The difference between Lael Brainard and Jay Powell on monetary policy was nonexistent. They believed the exact same thing and followed the exact same ideology. They both were huge supporters of quantitative easing and 0% interest rates. They did differ on bank regulation to a degree. Okay, that's real. But I think your point is accurate. And, and the second thing that's been in the back of my mind that I haven't brought

• 1:04:33Speaker 02

  to the front yet, but it's the institutional pressures. We talked about the institutional pressure to be seen as like, doing something and, and, and driving economic growth and, and, you know, sort of being the monetary policy hero. But listen, we need to talk about Wall Street. And, and you said it's, it's unfair to cast these people as evil bankers. And you're accurate. That's, that's true. But during the COVID crisis, when, when the fire alarms were going off and everything was burning down in 2020, Fed Chairman Jay Powell was on the phone with the CEO of BlackRock, Larry Fink. He was on the phone with this guy 17 times a day or something in that ballpark.

• 1:05:21Speaker 02

  When the Fed did quantitative easing, you know, the one group of people who were not going to complain were the biggest banks, JP Morgan, Goldman Sachs, Wells Fargo, the private equity firms, the hedge funds. They all benefited from this because you hinted at income inequality earlier, wealth inequality. When the Fed pumps this money into the banking system, the biggest banks benefit. And so there's an institutional pressure. You know, when Ben Bernanke is talking about doing these experiments in 2010, and when Jay Powell sort of replicated this whole thing later, the big banks benefit.

• 1:06:01Speaker 02

  And that's why the Fed keeps stepping in to also stop stock market declines is that it's bailing out large institutions and getting credit for it and being hailed as a hero all day on CNBC. So there's really no incentive to stand against those interests.

• 1:06:18Ryan Sean Adams?

  Why should this institutional pressure from banks be there, though? That part's not clear to me. It's like, is it just because there's some just friendship and/or like nepotism or like in the industry? It's very clear to me that there'd be this political pressure on the Fed as an institution because they want votes, of course, and they can't get votes unless things are going well with the economy. But why is there this banking pressure? And how significant is it? How severe is it from the very wealthy and the largest banks? How much do they actually influence the policy? It's not clear to me why that pressure would even be there to begin with.

• 1:06:57Speaker 02

  Yes. Let's go back to the very beginning. I kind of skipped past this, but when the bankers and senators started this thing, the Fed at Jekyll Island, they said, "We are not going to displace Wall Street. We're going to create our central bank to essentially stand behind Wall Street." And let's talk about this in a concrete way. When the Federal Reserve creates new money, it does not create new dollars by making them appear in the checking account of people like Chris Leonard or anything like that. The Fed creates new dollars under a system created by Congress whereby it creates dollars inside the bank accounts of 24 licensed banks

• 1:07:42Speaker 02

  called primary dealers. These banks are JP Morgan, Wells Fargo, Goldman Sachs, go down the list. It's all the big banks. They're so-called primary dealers. So that means that, you know, structurally, the Fed can only intervene in the economy through Wall Street. We talked about quantitative easing. The Fed printed $3.5 trillion. The Fed created that money by purchasing assets from the primary dealers. Okay, from like JP Morgan. I've literally, I toured the, the trading floor at the New York Federal Reserve where this happens. So a trader from the Fed will call up JP Morgan and say, hey, I want to buy $8 billion

• 1:08:27Speaker 02

  of, of assets from you, like Treasury bonds. And JP Morgan says, okay, here you go. There's $8 billion in Treasury bills. The Fed trader clicks on the keyboard and boom, $8 billion just appeared inside JP Morgan's reserve account. That's how the money gets created. And so when the Fed did QE, it, it, it was flooding, literally flooding the Wall Street reserve accounts with, with new cash. That drives up the price of assets, stocks, bonds, commercial-backed mortgage securities. I'm sorry, commercial mortgage bonds.

• 1:09:08Speaker 02

  All those new dollars are chasing these assets, which drives up the price of the assets. Who benefits from that? You know, the the primary dealers, the big banks, the private equity firms, they all benefit tremendously. Now, when the Fed tightens, as it's doing right now, that can create a tremendous crash, a downward correction in asset prices. Needless to say, the the big banks don't like that. They they hate that, in fact. And so there's a lot of pressure not to do that. There's a tremendous amount of pressure not to do that.

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• 1:12:02David Hoffman?

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• 1:12:45David Hoffman?

  If they can lobby the Federal Reserve, then they will, either like explicitly or implicitly. Same thing with politics. Like, if the president wants something done and he can, they can exert some influence on the Federal Reserve, then they will do that. And while this institution is supposed to be independent, you know, humans are folly. And so, you know, who can't lobby the Federal Reserve? Like, the 99%, right? The people who are living in their homes, right? Like, they can't be bothered because they have to go to work. And so, it ends up being just like, all right, who are the large institutions that are proximate to the Fed the most that have things at stake?

• 1:13:26David Hoffman?

  And that probably is politics and the biggest banks. And so, like, I think not to think like... Yeah, the Federal Reserve, it's designed to be this neutral system, but you know, we bump shoulders with our neighbors and who are the Fed's neighbors? Politics and Wall Street. So I feel like that, that maybe, well, there's no clear route of influence over the Fed, but I don't think there needs to be a clear one to make, to make the claim that the Fed is a political institution.

• 1:13:57Speaker 02

  And if I could follow up on that, I think you're exactly right. And I, I do, you know, Jay Powell is a very talented political actor, politician type guy. And, you know, in 2019, Jay Powell was going on these listening tours and speaking with like, middle-class people about what do you want out of your central bank? And I think like, literally like talking to homeless people and stuff like this, but let's hypothesize.

• 1:14:20Ryan Sean Adams?

  What did they say? Like, what do we want out of our central bank?

• 1:14:26David Hoffman?

  What can the central bank do for you?

• 1:14:27Ryan Sean Adams?

  It's just like, no inflation, let's keep wealth, like, I mean, reasonable inflation, let's keep wealth inequality, like, measured. I don't know that I'm looking for a lot more, but like, what, what do people say to that?

• 1:14:39David Hoffman?

  Rok, the Fed's supposed to be invisible, right? So if the Fed is working, it's not supposed to be in people's brains. Like, if, if we're thinking about the Fed, it's, it means something's going wrong.

• 1:14:50Speaker 02

  Correct, but I, you know, what's fascinating is, you know, this dynamic we talked about, about the Fed taking on more and more responsibility is like Congress falls further and further into a kind of morass, which has changed a little bit, but the demands put upon the Fed are actually getting larger, in, in the sense that during these listening tours, people were saying like, we want you to tackle climate change.

• 1:15:13Ryan Sean Adams?

  No way!

• 1:15:15Speaker 02

  Absolutely accurate. Google Fed climate change. You know, and, and, and it, it's true. And I want to get to David's point about who can lobby the Fed and who has influence, but like, yes, it's true. The Fed's actions pump money into a banking system that supports fossil fuels. And, and so people who care about climate change are like, stop doing that. You know, you need to, we need to fight climate change through the Fed, stop like, but...

• 1:15:51Speaker 02

  Go back to the core thing of what the Fed does. It creates money by pumping it into Wall Street. And so this is my thing, David, like if, if, if, let's say the Fed really, really wanted to go in and like renew the dilapidated neighborhoods of Chicago or Cleveland, it can only do that by creating money inside the reserve accounts on Wall Street. That's the only mechanism the Fed has. Like, that's how they influence the world. And so by its nature, that is.

• 1:16:25David Hoffman?

  We're just using the wrong tool for the job here. I mean, it seems pretty clear.

• 1:16:29Speaker 02

  Yeah, totally.

• 1:16:31David Hoffman?

  Yeah.

• 1:16:32Speaker 02

  Totally.

• 1:16:33David Hoffman?

  Chris, does, um, does the Fed have like an arc to it? And what I mean by that is like, like a story arc, right? And if you ask my opinion, it kind of feels like we're towards the end of this story. But I am a very biased crypto person who's skeptical of banks. I'm on a podcast called Bankless. But just like, if you're telling me that the Federal Reserve has absorbed a lot of responsibility that was previously expressed by Congress, and they're not going to be able to fulfill that responsibility, because again, like, all they can do is print money, or, or raise interest rates. And like, in the, since COVID, I feel like the Fed has been kind of delegitimized a little bit. Like, we've started to make fun of the Fed with the whole money printer, go bur thing. So

• 1:17:18David Hoffman?

  I'm wondering, like, where, what's the rest of the legacy of the Fed? Like, what's the Fed, like, are we, where's this arc going?

• 1:17:26Speaker 02

  Okay. So in 2010 to 2012, you know, the Fed was praised as this, like, heroic, save the economy institution. And there was, the head of the European Central Bank was that guy Mario Draghi, who later became Prime Minister of Italy. And Draghi was famous for this quote in 2012, I think, where he said, "We're going to do whatever it takes to drive economic."

• 1:17:55David Hoffman?

  Newspaper headline, "Whatever It Takes."

• 1:17:56Speaker 02

  "Whatever It Takes." I think they called it like the bazooka, quote, like, "We're going to take a bazooka to this fight."

• 1:18:05Speaker 02

  Much less noticed was in 2019, Mario Draghi publicly said, "We can't have central banks do this anymore. We've reached the end." Yeah, it's true. It's in the New York Times. It's in my book. Draghi is like, "We've reached the terminal points of central banks being able to drive economic growth. Like, this has to stop." And you would think that that would be the end, but COVID hits shortly after that, and the Fed responds by more than doubling the size of its balance sheet during COVID. The Fed printed 300 years' worth of money in a few months in 2020. And so, we live in this

• 1:18:48Speaker 02

  very, very strange landscape, where, in a critical way, the Fed is at the terminal point, I think, of this theory that, you know, it can drive economic growth, it could save the day, prosperity through money printing. But, you know, there's this old saying, like, "Never bet against the Fed." I mean, who's to say, right now, the balance sheet is 9 trillion. Will the balance sheet be 30 trillion in three years? Because we experience another financial crisis because of inflation, so the Fed decides to just respond by massive amounts of money printing?

• 1:19:30Speaker 02

  I mean, it could happen. And so, it's really hard to predict when this thing hits a wall. And, you know, it's so interesting where we are right now, is it is hitting a wall. Price inflation, rising so quickly, has forced the Fed to tighten money conditions, really for the first time since, like, 2006. And that has started to create massive volatility and crashes in financial markets. But you see...

• 1:20:11Speaker 02

  Wall Street is betting that the Fed's not going to really tighten even right now. Like, the minute you get an inflation reading that's slightly promising, or that, you know, inflation is not rising that quickly, everybody just assumes the Fed's going to go back to printing money and making everything okay. That's what's happening right now in markets. And so it's just, it's, it's very, very, very difficult to predict the future on this thing.

• 1:20:38Ryan Sean Adams?

  The macro folks that we've talked to and had on bankless, like, they're looking at kind of like the longer term perspective. They, they talk about the next, you know, set of years, number of years in the US being, having to be kind of a deleveraging sort of episode where real inflation rates are far higher than kind of like actual interest rates and bond prices. So essentially, the way we get all of that excess debt off the balance sheet is maybe it goes from nine trillion to maybe it goes to 20 trillion, but the money is worth a lot less in real terms at the end of the day. Less purchasing power. So maybe seeing prolonged periods of higher than we're used to inflation,

• 1:21:23Ryan Sean Adams?

  particularly in kind of the, the real rates. I don't know if that's what you see if you have a forecast, but yeah, what do you think Powell's going to do from here? I mean, he was very wrong about that whole transitory inflation thing. And as David was saying earlier, confidence of the Fed is pretty shot. What does he do at this point in time, given, given the character of the man that you studied?

• 1:21:46Speaker 02

  Like, honest answer, totally unknowable. And first of all, if anybody had an inkling of where this guy's going to go, that is the multi-trillion dollar question. It really is. In August, at this symposium in Jackson Hole, Wyoming, Jay Powell got up and said, we are going to tighten. We're not going to allow inflation to, you know, push down the value of money and buying power. We're going to actually do what we have to do. We're going to tighten. We're going to let this deleveraging happen, even though it's going to be really painful. But we're going to do it because that's what's necessary to keep the currency strong. And after he said that markets fell dramatically.

• 1:22:31Speaker 02

  You started to see problems, even the markets for US treasuries. The corporate debt markets and the corporate junk debt markets right now are just like this teetering, teetering structure that everybody's just waiting to fall. And if interest rates stay high for long, that structure will fall and I can explain that. But, okay, that happened in August and everyone was like, okay, oh my God, this dude's going to tighten. This is serious. This is going to happen. And then in October, there's a story in the Wall Street Journal that kind of indicates some of the Fed people are talking about maybe not tightening so much and boom, markets rise, you know, 3%. Everybody's like, okay, this isn't going to happen.

• 1:23:13Speaker 02

  What I'm trying to say is nobody knows which path Jay Powell's going to take. I certainly don't. Um, the picture I have of this guy is of a like a wildly competent fixer kind of guy. I mean, he's, he's rotated his entire career between Wall Street and Washington, you know, Department of Treasury, private equity. He knows how to handle powerful people. He knows how to handle the intersection of big government, big money. He, he can try to make things go forward smoothly, but he's just in this impossible situation

• 1:23:54Speaker 02

  where he either accepts higher inflation, which could be really volatile and damaging, or is sort of wrenching downturn in asset prices.

• 1:24:05Ryan Sean Adams?

  So Chris, because you've studied this for so long and, you know, you, you've given us such a great lens into, into the Fed. I, I want to ask this, uh, this maybe last question for you and just putting the big picture hat on here. What do we do with this institution, right? The Fed? What do we do with it? It's a public institution. It feels like it's no longer working for the people. At least huge elements of it aren't. It's failing. We could see that in a number of ways. Maybe most perniciously, the massive wealth inequality that we've seen that I know we've studied in Bankless is reverberating across a society right now and across our politics, causing a tremendous amount of division. No longer working for the people.

• 1:24:48Ryan Sean Adams?

  In the sense you've given us today, it's kind of reinforced my view that elements of it have become corrupted. Maybe corrupted by group think, maybe corrupted by the politics, maybe corrupted by Wall Street as well. Combination of all of the aboves. What do we do with this institution? Do we reform it? Do we try to reestablish the boundaries? Do we have Congress and legislators actually do their job and step in and take some burden off of this institution? Do we abolish it altogether? I mean, I recall a libertarian who ran a campaign of that, I mean, probably a decade or more ago, abolish the Fed. So what do we do with the Fed right now?

• 1:25:28Speaker 02

  So that's the question. I'm really glad you brought up wealth inequality because that is honestly at the core of why I wrote the book. It cannot be overstated how much they have driven the wedge between the richest of the rich and everybody else. It's been stunning. And that is one of the most destabilizing factors in American life today. Just full stop. Totally destabilizing. So what do we do with this institution? I do think it's been corrupted. And it's not corruption in this kind of like easy to understand way of like Goldman Sachs

• 1:26:12Speaker 02

  bringing a suitcase full of cash to dinner with Jay Powell. It's this much broader institutional framework of...

• 1:26:22Speaker 02

  Who's the Fed's actions are benefiting and why it keeps taking these actions again and again in spite of the negative side effects? So I really do see, first of all, you know, my job in the system is to be a reporter, to read through those internal debates, to report what they said, who made the decisions, why they made the decisions, and really to try to just like explain how quantitative easing works, to drive home the message to average readers of like, hey, they have totally changed the landscape through these experiments. And so in that way, my job is kind of done, like that's what I do, but I don't want to

• 1:27:06Speaker 02

  dodge the question, what comes next? I am not in the school of abolishing the Fed. I have a very hard time seeing how we manage things without a strong central bank to create and manage a national currency for which there's a lot riding on the US dollar. Reform, reform is critical. Democratic oversight and democratic reform are totally critical. And you know, there are, I hate to say this, there are a lot of smart people in Washington DC, and there are a lot of smart people around this country who care about this.

• 1:27:51Speaker 02

  And so I'm sure that there's like a wellspring of good ideas about reform. You know, the initial vision of the Fed to be a decentralized body with checks and balances that had this sort of regional character. So you know, you had a committee member who lived in San Francisco, a committee member who lived in Ohio, that's a pretty smart way to build a system. I support federalism, but it's become highly, highly concentrated, powers become concentrated with the chair and with this like culture of consensus and group think and, you know, 12 to zero votes. So what I would say broadly is absolutely reform and democratic oversight are needed. And at the very end of the day.

• 1:28:38Speaker 02

  The responsibility for, this sounds so cheesy, but like, the responsibility for governing America is in the citizenry, that's how we created this whole system? Like, literally, that's what our whole system of government is based on. And we can't just keep avoiding that obligation. It's, uh, the fiscal powers, the democratic institutions, controlled by voters, need to take on the, like, truly gnarly burden of figuring out how to drive long-term prosperity. And we can't rely on the central bank to print money anymore to do it.

• 1:29:13David Hoffman?

  I think you'll agree with me, Chris, if I say that, um, it seems to be the current trajectory of the Fed, its, its legacy is going to be wealth inequality. Uh, when we look back upon the Fed, like, what did the Fed do? Uh, well, for, you know, back in 1913, it stabilized the currency. And then after that, it slowly went from stability and order into wealth inequality. And I think, uh, the only way, and I'm curious, like, if you think, uh, the Fed, the members of the Fed will actually admit to that truth or not. Um, but I think if we are talking about moving forward with the Fed and like, what is the next step for this institution? A lot of it comes down, if we're going to be like, well, the citizenry needs to take

• 1:29:57David Hoffman?

  ownership over this, well, if that's going to be true, it's gotta be education. Uh, because I think if you go down to like, the average person, average Joe in America, and you ask them, like, hey, do you understand the relationship between the Federal Reserve and wealth inequality?

• 1:30:12Ryan Sean Adams?

  Yeah, I mean, we're asking him for climate change help, and really, we should be asking him for wealth inequality help, right?

• 1:30:18David Hoffman?

  Right.

• 1:30:19Speaker 02

  Yeah.

• 1:30:19David Hoffman?

  But also, like, the Fed seems to kind of intend, intentionally create, like, this super weird jargon that is just so esoteric, that doesn't need to be like that. Uh, and, and it seems to be kind of... Like if they use these crazy words like quantitative easing, it's like it's not accessible to the 99% because like, what do you mean quantitative easing? Well, you're just meaning putting money in more bank accounts. Like, well, put money in my bank account. If we can start to use words that more people can understand, we might actually be able to enable a greater part of the populace to do the democratic thing that we want them to partake in when it comes to ownership over the Fed.

• 1:31:04David Hoffman?

  I wonder if you have any thoughts on this?

• 1:31:05Speaker 02

  Huge, huge, huge. First of all, before the Fed was created, this stuff was debated in the public square. Monetary policy was a retail issue. One of the most famous quotes about monetary policy was made by, my God, you guys are catching me on a bad day, I'm forgetting his name, but he said, "You shall not crucify mankind upon a cross of gold." William Jennings Bryan said that, I think it was 1906. That was about monetary policy and tightening the money supply. This stuff resonated on the ground level. And we've got to make it a political issue again, in the sense of average people debating

• 1:31:49Speaker 02

  the issues that really affect them. Yes, quantitative easing is a term intentionally invented. Well, I guess I can't say intentionally, but certainly it makes it seem like it's this hyper, technical, obscure realm that normal people without a PhD cannot understand. When you talk about printing money inside the bank accounts on Wall Street, people understand that. And in terms of the wealth inequality, I don't think most of them will admit it, but by their own studies and metrics, it's undeniable. I mean, these folks knew that when they kept interest rates at zero, and when they pumped all this money into the banking system through quantitative easing, it was going to create

• 1:32:32Speaker 02

  economic growth by boosting asset prices. Okay? The richest 1% of Americans own 40% of all the assets, whereas the bottom half of Americans own only 7% of the assets in this country. So like, they intentionally knew that their process, their program was going to drive up the wealth of the richest 1%. In hopes that it was going to reduce the unemployment rate by like 0.3%. So they knew what they were doing. And yes, wealth inequality is the legacy of the modern Fed, along with ruinous financial bubbles and asset bubbles and financial volatility.

• 1:33:13Ryan Sean Adams?

  That's a, I love that statement. Monetary policy is a retail issue. It should be a voter issue. And, um, you know, one thing about being in this crypto space is if you're in crypto, you're certainly getting a monetary policy education. In fact, for me, learning crypto has been the single biggest way I've actually learned how money works. Previously didn't think about it. Why do you need to think about it? It just kind of works. But it is so key. It is actually a voter issue. And of course, in one way, crypto is a way to cast a vote. You're opting out of the existing financial system. That's an interesting movement in and of itself. Chris, we're gonna have to end it here. I think we could have talked about this for another hour or more at least. But I just want to thank you for providing some

• 1:33:57Ryan Sean Adams?

  real journalism in this space. Yeah, I think a lot of media can become almost like a mouthpiece of the Fed and sort of like just be another way that the Fed propagates its policy. But you've really dug in here and you've, you've done the hard journalistic work of interviewing folks and looking at the, the meeting notes and really shedding some light here. And you've been a crucial part in that education process. And your book is absolutely fantastic. We're gonna tell you guys where to get it in the show notes. But, um, Chris, thank you so much for coming on Bankless. We appreciate your time.

• 1:34:33Speaker 02

  Yeah, thanks for the time and the great questions. I really appreciate it.

• 1:34:36Ryan Sean Adams?

  Action items for you, Bankless Nation. There is a book you need to read. If you want to learn more about the Fed. This is an easy to read narrative style by Christopher Leonard. It's called The Lords of Easy Money. We'll include a link in the show notes. It's an incredible read. If this, hopefully this conversation gave you a taste for understanding the Fed. I'm gonna end it here. Of course, you know, David and I are doing a debrief after the episode. So if you can't get enough, we'll talk about the episode after the episode. Become a premium subscriber. Get that debrief now. Risks and disclaimers. Crypto is risky. You could lose what you put in. So is the Fed. But we're headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

• 1:35:19David Hoffman?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcasts and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks and exclusive content and even the Bankless token for airdrops, raffles and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings and weekly rollups where we summarize the week in crypto and other

• 1:36:04David Hoffman?

  fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless Nation.