#794 Competition Instead Of Conflict

This episode is a little different than the usual podcast format. There is no guest. Instead, I will share a couple of thoughts I have around a specific topic. Today I discuss the relationship between the United States and China and ideas around competition and conflict. ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp ======================= Compass Mining is the world's first online marketplace for bitcoin mining hardware and hosting. Compass was founded with the goal of making it easy for everyone to mine bitcoin. Visit compassmining.io to start mining bitcoin today! ======================= Crypto is all about democratization and freedom of choice. But many companies limit their offerings to centralized trading products. The crypto companies leading the pack in terms of innovation are those that extend access to the industry's cutting-edge products and services — bridging CeFi and DeFi. If you're searching for a platform that reflects crypto's promise of a more open and less restrictive financial future, look no further than OKEx. On OKEx now you can easily switch over to the new DeFi mode, connect OKEx's bespoke Web 3.0 wallet via browser extension and start exploring opportunities at the bleeding edge of crypto. From the DeFi Dashboard, you can monitor your portfolio of self-custodied assets across a range of blockchain networks and generate passive income from yield-farming with top DeFi protocols. In the NFT Marketplace, you can participate in exclusive drops and trade nonfungible tokens without secondary market fees. Meanwhile, the GameFi section is your portal to the latest and greatest in play-to-earn and blockchain gaming. Venture to the forefront of crypto innovation and connect with OKEx DeFi today. =======================

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

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Today's episode is a breakdown of some of my personal thoughts around the United States, China, and the ideas of competition and conflict. I hope that you enjoyed this episode, but before we get started, I want to first talk about our sponsors. First up is LMAX Digital, the number one institutional crypto exchange. They offer clients the deepest pool of crypto liquidity on the planet, underscored by 100% uptime track record through volatility spikes. They leverage LMAX Group's liquidity relationships and ultra-low latency technology. LMAX Digital is the market-leading solution for institutional crypto trading and custodial services. If you've never heard of LMAX Digital, it's

• 0:46Anthony Pompliano?

  probably because you're not an institution. They have no retail, only institutions. They feature a central limit order book streaming spot Bitcoin, Ether, Litecoin, and Bitcoin Cash, all paired with US Dollars, Euro, and Yen. LMAX Digital, they're secure, they're liquid, and they're trusted. Learn more at LMAXdigital.com/pomp. Again, LMAXdigital.com/pomp. Next up is Compass Mining. Compass Mining is the world's largest marketplace for mining hardware and hosting. With Compass, everyone can mine Bitcoin. Their team makes it easy to start mining wherever you want, at home or in one of their 23 hosting facilities around the world. Through the Compass marketplace, retail miners can access mining hardware

• 1:29Anthony Pompliano?

  with similar prices and purchase plans as the world's largest mining companies. Compass miners own their machines, they choose whatever mining pool they want, and they mine directly to their own wallets. Miners who don't want to host their machines can order ASICs directly to their doorstep. Simple and low-cost hosting agreements, coupled with best-in-class customer service, are the reasons why Compass is the simplest and most popular way to mine Bitcoin. Start mining your own Bitcoin today by visiting compassmining.io. Again, compassmining.io. Go check them out and let me know what you think. Last but not least are my friends over at OKX. Crypto is all about democratization and freedom of choice, but many companies limit their offerings to centralized trading products.

• 2:14Anthony Pompliano?

  The crypto companies leading the pack in terms of innovation are those that extend access to the industry's cutting-edge products and services, bridging C-Fi and DeFi. If you're searching for a platform that reflects crypto's promise of a more open and less restrictive financial future, look no further than OKX. On OKX now, you can easily switch over to the new DeFi mode. Connect OKX's bespoke Web3 wallet via browser extension and start exploring opportunities at the bleeding edge of crypto. From the DeFi dashboard, you can monitor your portfolio of self-custodied assets across a range of blockchain networks and generate passive income from yield farming with top DeFi protocols. In the NFT marketplace, you can participate in exclusive drops and trade non-fungible tokens without secondary market fees.

• 2:58Anthony Pompliano?

  Meanwhile, the GameFi section is your portal to the latest and greatest in play-to-earn and blockchain gaming. Venture to the forefront of crypto innovation and connect with OKX DeFi today. Again, go check them out at OKX. That's where you can find OKX DeFi. All right, let's get into this episode. I hope you guys enjoy this one.

• 3:17Speaker 01

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

• 3:40Anthony Pompliano?

  I was recently listening to a conversation between Joe Rogan and General H.R. McMaster, a retired United States Army Lieutenant General, who served as the 26th United States National Security Advisor from 2017 to 2018. The discussion was quite wide-ranging, but a specific comment from General McMaster caught my attention. About 30 minutes into the conversation, the general is speaking about the United States and China. He described the difference between confrontation and competition. This excerpt highlights his main point. He said, quote, "What I would often hear from friends in Southeast Asia and beyond, these are my counterparts when I was engaging as the National Security Advisor. They would say, 'Don't force us to choose. Don't force us to choose between Washington and Beijing.'"

• 4:22Anthony Pompliano?

  And what I would tell them is, hey, that's not the choice you face. The choice you face is between sovereignty and servitude. The United States is on the side of sovereignty. China wants servitude because what Xi Jinping wants to do, and the party is clear about this, is they want to establish exclusionary areas of primacy across the Indo-Pacific region and excluding who? Us. As the first step in being able to rewrite some of the rules of international commerce and political discourse and to isolate the regional rival Japan. So I think we are at a critical moment where we have to compete effectively. This does not mean that we are on a path to confrontation. Because we vacated these competitive spaces, China became more and more emboldened and

• 5:05Anthony Pompliano?

  we were actually on a path to confrontation. Now I think this idea of transparent competition is what we ought to really pursue with China. End quote. So this idea of competition rather than confrontation is a nuanced concept that is important to understand. The United States and China are the two superpowers of the world. They have competing ideologies and political systems. The two countries are optimizing for the same end result, but they are choosing to take very different paths. Violent conflict was the default way of dealing with countries that are at odds with each other historically. That solution appears antiquated in today's environment. Modern weapons have evolved to the point where they are almost too lethal. Either country could wipe out entire cities and wide swaths of the other country's population with lightning fast speed.

• 5:50Anthony Pompliano?

  The collateral damage is unknowable and frankly, the battlefield has shifted from atoms to bits. Cyber warfare is a bigger focus for both countries compared to military operations that would require invasions, the dropping of bombs, and potential loss of human life. Regardless of the military tactics that are pursued, there is no denying that the United States and China are in a global competition. They are competing for resources, technology, talent, and ultimately, economic prosperity. The United States' pursuit of efficiency over resilience was well documented by the COVID-19 pandemic. We were exposed to have little domestic manufacturing capabilities and a heavy reliance on international partners for the production and distribution of various goods.

• 6:33Anthony Pompliano?

  This realization has rekindled a concentrated effort to onshore manufacturing and supply chains while treating these important functions as national security issues. As we look forward to other areas of competition, it is hard not to identify the intersection of money and technology as an important area of focus. The Chinese Communist Party has created and is testing a central bank digital currency that gives them immense control over their citizens. This new currency carries the exact same monetary policy as the existing renminbi, but the technology upgrade empowers the centralized government to more easily confiscate wealth, censor transactions, punish citizens, and exert complete financial control over all users. You could argue that this won't be a problem for the global population

• 7:16Anthony Pompliano?

  if China is merely going to hand this technology to their own citizens, but that is not their plan. Just as China has scoured the world for opportunities to lend capital and exert more influence or control, they're looking for opportunities to increase adoption of the digital renminbi by citizens outside of China. As I have written about before, this pursuit of the Chinese digital currency is all about accessibility. If you're a citizen in Venezuela, Zimbabwe, or other faltering countries, you are frantically seeking for an asset that you can convert your fiat currency into. Your domestic currency is failing. Historically, gold and other analog assets were options, but there are too many horror stories of confiscation at borders, etc. The first option for many of these people is to seek US dollars.

• 8:01Anthony Pompliano?

  There's safety and stability that comes with holding the world's reserve currency. The issue is that it may be dangerous to purchase physical dollars on the black market. Your bank is likely to collude with your government to confiscate money from your account, and it can be incredibly expensive to purchase dollars due to unofficial currency conversion rates. The ideal scenario is that you can use an internet connection to access a new currency. If you don't have access to a digital dollar, but you have access to a digital renminbi, there's a high likelihood that you will simply pick the best of what is available. Now, many people will say, "No, they will convert their assets to Bitcoin." Maybe this is true, but the reality is that the volatility of the asset and the newness of a decentralized currency still scares a good amount of people in these countries. Regardless of the popularity of Bitcoin,

• 8:46Anthony Pompliano?

  the United States can't sit on the sidelines in these scenarios. The global competition for digital currency adoption is already underway. China, the most important competition that we have today, has already created and distributed their digital currency. They are going to push the pace of adoption outside their borders, which is essentially a move to gain market share. The United States must act with speed and conviction. We must decide whether our central bank and the US Treasury are capable of creating their own digital dollar in a timely manner, or we must go with the technical solution that has already received market adoption from one of the private US-dollar-stablecoin enterprises. Additionally, just as General McMaster's pointed out, the United States should heavily consider advocating for and facilitating the use of technologies

• 9:30Anthony Pompliano?

  that give the average citizen more sovereignty. China wants servitude. America was built on sovereignty. If America was to continue to pursue our ethos, there is a national security argument to be made for the United States to work aggressively to see Bitcoin succeed on a global stage. This may seem counterintuitive to most people, but the United States of America should pursue a dual strategy: drive global adoption of digital dollars and Bitcoin. Bitcoin prevents the centralized authoritarian governments of the world from sinking their fingers into every corner of an individual's financial life. It makes it impossible for a dictatorship to censor citizens or coerce them via financial controls. The digital dollar extends the US-dollar dominance and increases the likelihood that the world's reserve currency is the number-one choice whenever someone wants to make a transaction.

• 10:15Anthony Pompliano?

  Bitcoin is defense. The US-dollar is offense. These two assets, working in tandem, can help the United States become the dominant player on a global stage while simultaneously wreaking havoc on our largest competitor. We have to recognize that we are in competition. Conflict is not the intended goal. The United States can win in the free market. We have the intellectual horsepower, the technical capabilities, and now we must ensure we have the political will to compete. If we are willing to play the game, I like our chances of winning. I hope that you enjoyed some thoughts here on the United States, China, confrontation, and conflict. Please make sure that you subscribe to the podcast feed, and I won't be mad if you share this with a couple of friends. Thanks so much for listening to today's

• 11:00Anthony Pompliano?

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