Why Bitcoin Is Ripping Again — Transcript (auto-generated English captions)

Why Bitcoin Is Ripping Again — Transcript (auto-generated English captions)

Source: YouTube auto-generated English captions. Repeated rolling captions were merged by continuing speech; recognition errors may remain.

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Yo, welcome back to another episode of the Jack Mer Show. I am your host, Jack, and you are listening to yet another edition of Mail Bag Monday. Ladies and gentlemen, it's got to be a macro week. What a time. What a time to be alive. Lad, let's get this show on the road. Let me timestamp it because we have a lot to talk about. Ladies and gentlemen, I'm talking to you all at a Bitcoin price of 78,000. Yeah, you heard that right. $78,930 per Bitcoin. Bitcoin's market cap back above 1.5 trillion at 1.85 trillion US. All-time high remains at $126,160, but we are now only 37.4% off that high. Don't look now. Here comes the coin. Objects in the mirror may be closer than they appear. We made that all-time high on October 6, 2025. It's now been 322 days since Bitcoin hit its all-time high. The last Bitcoin block height since I hit stream was block height 963,911. Tik Tok next block on our way to 1 million. Okay, boys and girls, this is episode 132 of Mailbag Monday. All signal, no noise. every Monday, 6 pm Eastern. And today's title is, as such, why Bitcoin is ripping again. What is going on? Over the last few weeks, we've been doing Bitcoin 101, some fundamental stuff, and a lot of the comments, dude, we love you. We like the education, but it's got to be macro. We got to get back to big swinging. Hey, kid show. Kid show. We got to get back to uh what are we the the chief volatility officer Scott Bessant uh the CFO of the United States of America making moves. Uh bond market is a mess. We're living through uh sovereign debt crisis. I've been saying it for months. So much of what we've been talking about on this show for months, for months is now coming to fruition. It's coming to reality. Uh this is the type of of time of era of chapter I can feel it in my bones where we look like geniuses when all we've been doing is stand humble and stacking sats. So if you've been looking for a deep dive into the macro really understanding what the hell is a buyback program? What is the treasury actually buying? Why are they doing this thing these things? What the hell does this have to do with Japan? Somehow it's related to AI and why did Bitcoin go up at the very second that it did? It seemed gold went up at that same second, but Bitcoin kicked gold's butt this time around. I'm going to do all of it. We're going to get into all of it. I would never let you guys down. So, without further ado, let's go. Why Bitcoin is ripping the bond market may have forced Washington's hand. Okay, here we go. What the US Treasury just did. So this on the left is Treasury announces increased sizes of nominal long-end liquidity support buybacks beginning September 9th. Okay. So to be clear, the Treasury actually hasn't purchased anything yet. They announced that they've doubled the program and their next opportunity would be September 9th, which is still some weeks away. However, on the right, what you guys are looking at is in the white, that's Bitcoin's price. In the blue is gold's price and in the green is the dollar index. Okay? And you can tell the performance that I put on the bottom left of the screen at this one very moment when the US Treasury made this announcement on August 19th, 2026. Bitcoin ripped 25.2%, gold ripped 6.1% and the dollar index fell 60 basis points. All at the same second. Let me zoom in so you guys can see. Oh, shoot. Here we go. Not a professional podcaster. Let me zoom in. You guys see literally at the same second. This is not a coincidence. Why did Bitcoin rip? I mean, it's you cannot really justify anything else. Now, it's never as simple as just one thing. There's all sorts of stuff going on. Markets are complicated. We'll get into all of it. But when you look at this chart, you see gold and Bitcoin move at the same time and the dollar fall. The dollar weakened immediately after this announcement. So it is very obvious that hard assets repriced on this announcement and the dollar weakened on this announcement. So what the hell happened? Um I call it number go up yields edition. Here's what we're looking at on this slide. This is the 10-year US Treasury yield in white and

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[민감정보 가능성이 있어 이 줄은 공개 페이지에서 숨김]

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about this on this show over and over and over. And let me preface this. I'm going to, you know, because I know what you guys want and I'm a man of the people. That's what they say. I didn't say that. That's what they said. [laughter] But it could really be as simple as this, guys. These governments have borrowed way too much money and they have no way of paying it back. It's that simple. The these guys only have so many options. You could default. Okay? And the whole system collapses. Fine. That's an option. We enter some form of austerity, a great great great depression, right? Not just a great depression 2.0. like a great great super great the greatest you have ever seen depression. The other option is you can just print what you owe, print the difference, buy back your own debt and the currency is the escape valve where the the loser is the currency. You're just going to devalue the [ __ ] out of the dollar and that is just very inflationary. So the losers are those that use the dollar saving in the dollar and that's going to repric everything else. That's all that's happening. That's it. If if you could you could end this episode turn on a music playlist if you're in the gym lifting after hearing that. These guys just it's that simple. Okay. So let's get into it though. If you do want to understand what's going on, chapter 2 is treasury 101. Let's break all this down. So here's what's going on. First and foremost, this is basic 101 stuff. When taxes aren't enough, when taxes can't fund the bills, the government has to sell IUS. Okay, I'm calling uh Treasury security an IOU. So, you start from this premise that the US government needs cash, which starts from the premise that the US government exceeds its means. It spends more than it earns. So I I mean I already think tax is property theft. I already think it's an outrageous level of tax that I pay as an American citizen. I pay federal tax and I pay state tax and I pay city tax. Everyone around me in this country is in debt and exceeds their means and borrows from my future and wastes it on dumb [ __ ] Crime has gone up. Quality of life has gone down. Life expectancy has gone down. Disease has gone up. the quality of my food has gone down. What the [ __ ] am I paying you guys all this money for? And how are you still in debt? Time over time and time. You're still in debt. I digress. But we start from this premise that the US government needs cash. Okay. Now, the US government sells Treasury securities to raise that cash and an investor lends the US government dollars in this transaction. Does this make sense so far? So all these things and we've talked about this. All these things are is a way for the US government to raise dollars. This is it. It's a very very very and I don't want to oversimplify it, but it's a very very fancy way of taking out a loan. Okay? Whoever's buying these is effectively lending the US government money. Okay? Now you can lend the US government money over a certain duration. You can lend them money all the way from three months to 30 years. Now, the price of what you get in return for lending them money is different because a lot less can go wrong in three months versus 30 years, right? And so when the Treasury says they are buying back its own long-term debt, let's say an investor owns a old 20 to 30year Treasury security, these things, these IUs, the US government is paying that investor that owns that security cash, and they're removing that longduration bond from the market. They're taking it off of the market. Okay? So, as I mentioned, you can lend the government money from three months to 30 years. So, let's take a look at the different types of instruments. I I'm using all these terms. Let's define them. Cash, everyone knows what that is. There's no maturity to cash. Cash is already money. Cash is good. You walk in the store, you could use cash. A threemonth T bill. Okay. Now, this is all for this is for illustrative purposes only. I'm not this is I'm not using actual math here, but you give the treasury, let's say you give them 99 bucks today and in three months you get back $100. That's very short maturity and that's very cashlike. It's effectively cash. Okay? It's, you know, sometimes you'll hear people talk about

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balance sheets and it's cash and cash equivalents. You ever heard that? Well, this is this cash and cash equivalence. These securities are very very cashlike. Now let's take the direct opposite of that. Let's take the 30-year Treasury. You're lending the Treasury money for 30 years. For context, I'm 32 years old. You would have lent the US government money when I was two. I don't even remember being two. You collect interest and then you get the principal back at maturity of the security. You get the principal back when I turned 32 in April. Okay, that's decades of rate and inflation exposure. A lot can go wrong in 30 years. Okay, that's lending the US government money in 1996 before all the internet companies were invented, before the iPhone, before Bitcoin, before AI. I mean, that's crazy, right? And so what you'd see, and we call this a yield curve, is that it's more lucrative. You get paid more money to lend the government money over a longer duration than you would to lend them money for 90 days. And if you own cash, you don't you're not lending to them at all. That cash is there's no maturity on it. It's money and it's yours. It's in your pocket. It's bearer. It's a bearer instrument. It is not an IOU. Make sense? so far. So the yield, when I say this word yield, the yield is the price that the government pays to borrow from you. Okay? Now, if there's lots of buyers of these IUs, that's a very fancy way. It really bothers me how complicated these guys have made these concepts. Now, you can make an argument that they've made it egregiously complex on purpose. Um, I'll never be able to prove that, so it doesn't really matter. But it is frustrating because to say that there's a lot of buyers of Treasury securities, all that means is there's a lot of people willing to lend to the US government. That's it. Okay. Now, when there's not enough buyers of these Treasury securities or bonds, that means that there's not enough people willing to lend to the US government. That's it. So if there's lots of people willing to lend to the US government, the government can play pay less. It's very simple. It's just supply demand. Hey, I need to borrow $100. Well, if I have a trillion dollar willing to lend me a hundred, I can drive the price down and see what $100 is willing to lend to me at the cheapest terms and I can find that lowest price point in a market. Now, if I need to borrow a trillion dollars and I only have $100 interested, well, I got to raise the price I'm willing to pay because I'm not able to recruit enough capital that's interested in financing my needs. Makes sense. So, a higher yield just means the government has to pay more. But a higher yield also means that there are less people interested in lending to the US government, meaning they need extraordinary amounts of money lent to them for them to continue to operate. And there's not that many people willing to lend to them at current prices. So you could say, "Hey, is everyone willing to finance the US government losing or whatever, not losing deficit, their deficits of $2 trillion a year? We'll pay you uh 4% of the 10year, 5% of the 30-year to lend." And the market says, "No, price has to go up." Okay, 4.1% 5.1%. No, price has to go up. And that's what it means for higher yields. Higher yields means the market is saying, "No, I need the price higher." So that's what this slide walks through. Bond prices and yields move in opposite directions. We've talked about this on this show. When there are more buyers, that means the bond price goes up. Bonds are in more demand. The yield comes down. When there's less demand, that means the bond price is coming down because people aren't as interested and the yields are going up. So this is what we call bond math. It's inverse, okay? price and yield. So when the Treasury, the literal government itself becomes a buyer of long-term bonds, it is leaning toward higher bond prices and lower long-term yields. Okay? So, and and we'll get into this, but basically what's happening is the market is saying, "Yo, we do not want to lend you guys money. You're reckless spenders. You're constantly at war. The way you're allocating capital is totally

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outrageous and stupendous and egregious. It's unclear if this AI thing is going to take everyone's jobs. Inflation is now all of a sudden back. I don't want to lend you money. And the US government is saying, "Well, we can't afford for the yields to go any higher." So, if you're not going to buy them at this level, then we're going to effectively print money and buy them because we can't afford to pay 10 year at 5%. That's not an option for us. We're too broke. We have too much debt. [laughter] Sorry. I mean, if you don't laugh at it, I mean, the other emotions are just far less enjoyable. That's that's it, guys. Don't let these economists with all their fancy degrees and their long essays confuse you. It's that simple. And that's a huge problem. And I'll get into it, but it's a huge problem because think about it. Why in the Lord's name would I own an asset that the US government won't let go up in price? Why would I be interested in this thing? This is the US government intervening in a market and saying, "No, no, we can't afford the price to go any higher." Imagine if someone could step into the Bitcoin market and say, "Sorry guys, the highest I can afford Bitcoin to go is 60,000. That's it." So, if you were hoping for a $61,000 Bitcoin, you're going to have to get lost. And that's that. That's what just happened to these instruments. And I'll get into it. They're saying 4.7% on the 10ear is as high as we're willing to let it go. And if you guys aren't interested to lend to us at that rate, then we're going to have to lend to ourselves. What do you And you you must think, what do you mean lend to yourselves? Yeah, they're effectively printing money and giving it to themselves. So again, this is kind of what we call whatever the the curve, the spectrum. These are the different instruments, right? So on the far left where you've got money and money like there's cash the threemon tea bills and then you get to the 2-year the 10year the 30-year and that's more duration and so now you guys can visually see from left to right short duration long duration short duration long duration and so let's talk about the actual buyback. So how are they actually able to basically lend themselves money? And if you're sitting there thinking to yourself like, "Wait, oh, my brain hurts. This is so confusing. I can't follow this. This just sounds like a Ponzi scheme architected by a five-year-old." That's it's not you, it's them. That's what it is. That's what this is. I'm sorry. I'm sorry. Because sometimes people be like, "Dude, how did you get into Bitcoin so early? You're a genius. How'd you have the foresight? Guys, I'm not a genius. I'm not a genius. It's really simple what I do. Nothing these guys do makes any sense. Any sense. All I do is I work hard and I say, "Okay, the value that I produce for the world and the income I generate from that value, as long as that's more than the money I spend on my lifestyle and I have an ability to save in something that is not susceptible to these guys doing these ridiculous gibberish tricks, then I should be good." And that's all I've [laughter] been doing for the last 14 years. And and it I guess to some people it's like wow you genius. It's that simple guys. It's not your fault. These guys are this is kindergarten Ponzi. Okay. So here's how they're lending money to themselves. The Treasury is issuing short-term bills. So they're issuing these T bills. investors are handing over cash for these T bills because you know really T bills are they're they're cashlike. You're taking virtually no risk because you're lending to the US government for three months. Okay? And what they owe you they can print. So it's virtually no risk. If you're going to own cash, you might as well own a T bill or you know and there's derivatives of these types of there's money market funds. We're not we're not going to get into all of it, but you're getting a yield, right? like Strike's going to start giving at least 3 and 12% yield on cash. Like you might as well get a yield if you're going to hold cash. Yes, fair enough. So the US government starts issuing these T bills. Investors buy them. Okay. And

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then the US government takes the money that they get in return for issuing the short-term bills, these T bills, these 90-day three-month papers, and then they use that money to buy the longer duration bonds. So, they're issuing three-month paper. People buy them, they take the cash proceeds from the three-month paper to buy the 10-year and the 30-year or the 20 year. So this is what we call and and you'll see this term when you go read about this stuff. This is what we call taking duration out of the market. So technically it's not money printing because the Fed is not creating new currency yet. We'll get into this in a second yet. But it is certainly easing monetary conditions. And the reason that hard assets were so violent in the way they were, like Bitcoin and gold, is because the government showed their hand. We've talked all the time, well, this system is collapsing. What are they going to do? Are they going to let it fail? And they basically said, no, we're not. Worse comes to worse, when you guys hit our price level and we can't afford a higher yield, we're just going to start printing the money and debasing the currency. And the market was like, okay, well, in that case, which is fine. Listen, let me say let me say this. Is this Trump's fault? No. Is this Besson's fault? No. This is the fault of weak politicians over almost a century. This is this is the hard times create strong men. Strong men create good times. Good times create weak men. Weak men create hard times. Hard times. The great depression. A long time ago there were very difficult times in this country. Our founding fathers, you know, our founding fathers wrote about the dangers of central banking, of fractional reserve banking, of printing currency. Our founding fathers wrote to avoid that. It's destructive to society. It's distortive to wealth. So those were hard times that created very strong men. And those strong men built the America that is the the house on the hill that the world adors, the leader of the free world. But those good times, those strong men created great times. And those good times created incredibly weak leadership. People that borrowed and exceeded their means, left debt for generations to come. Borrowed and spent capital before generations were even born, like mine. How do you think I feel about the leadership over the last 90 years? Great. I'm glad all the boomers have all the assets in the world that have greatly benefited and appreciated from monetary monetary policy over the la last 90 years. I'm glad you guys have all social security payments set up while my peers are to their eyeballs in debt getting an engineering degree only to realize that Elon's robots are taking their job. So, they're jobless. Rent is through the roof. They can't afford a home. Nobody's fertile enough to have kids with them. So, it's weak leadership. I digress. So we go on. So basically how Bessant and the US government could lend money to themselves is they raise money from bills and then they buy these long bonds. So they're they're raising money short-term to buy the long-term debt off the public's hands. Okay. Now, if you guys want to Google something, I didn't have enough time. I I I mean this episode's already gonna be who knows how long this is gonna be. So I had to cut there's if you want to look up operation twist I think it was in 2011 where the Fed did this basically where the Federal Reserve said we're going to I think they sold short-term paper to buy long duration. But look up Operation TR Twist. This is basically the US Treasury doing something that the Fed has already done. But it's you're you're you're creating more cashlike debt. Okay. Another way that this can be financed, and this is what Bessant came out this morning, and he told CNBC or or I guess a source close to him told CNBC, Scott Bessant in a Halloween costume told CNBC that so the Treasury has a bank account at the Fed just like everyone else. Okay. Their balance is about a trillion

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dollars. I looked it up. It's about 950 billion. Okay, this is called the TGA, the Treasury General's account. Now, what he's saying is I can use that money to buy these long duration, which is basically saying, well, I might not have to issue a bunch of three months to buy 30 years. Sorry, I apologize. This is so confusing. It's really unnecessary. But he's saying, I I have a trillion dollars in the bank. I could spend that. Now, the problem, and this is all this is all this is why it's not really if you're a Bitcoiner, it's really not worth your time because it's all such a giant joke and nonsense. If he the the Treasury of the US government cannot have a low bank balance. Um, they need money to like roll over debt to finance things. I mean, remember when the government shut down last October? Like if the if the Treasury didn't have any money in its bank account, then like payments would have just stopped. So the you cannot like this is it's all a bluff. It's all a bluff. Okay, fine, Scott. You can spend down your TGA. Fine. But then you have to refill it. So if you So if you spend the $900 billion from the TGA and look me in the eye and say, I didn't issue any T bills to finance that, but then you refill the TGA by raising money with three-month bills. then you just you did the same thing just in a sneakier way. And that's really that's really all this is is it's it's political warfare. It's it's deceptive tactics. Because here's the thing, guys. At the end of the day, they have to make I've been saying it I I was going to say for months, but this is for a decade plus now. They have to make the currency weaker. They have to print the money. So things like Bitcoin have to go up. Have to. I'm sorry. I'm sorry to speak in definitives. I know that pisses people off. Sue me. I've been right for almost 14 years and I plan to be right for the next 40 years. Okay? Until I'm wrong, I'm going to be as confident as I've always been. That's just the way it is. Now, the detail is all about making it confusing and tricking. It's this is all some variant of quantitative easing. This is all some variant of money printing. This is all easier monetary policy. This is all weaker dollar. I pulled up the chart. As soon as Bitcoin exploded is when the dollar started to get weaker. It's just so simple. But if you want to follow the ins and outs and stuff, that's where you confuse yourself. So, the details don't matter. If you want to know, yes, he can use his bank account. He could issue three-month paper, raise cash that way to to pay off 30-year paper. Sure, he could also spend down his bank account, and then when his bank account hits zero, he could refill it by issuing three-month paper. What's the difference? There is no difference. Okay. Um, so, oh shoot, did I just screw this up? There we go. Um, so anyway, this slide basically just says as much. The the Treasury general account balance will go down. Private sector deposits and reserves will go up. Um, it's it's all a waste of time. Um, okay. Again, I just want to be clear. Technically, technically this is not QE. They're not calling it QE. I'd be shocked if they ever call it QE. QE stands for quantitative easing. It's effectively money printing. And quantitative easing is when the Federal Reserve, the central bank themselves creates reserves and the central banks themselves buys bonds. And that would be quite literally printing money out of thin air and lending it to the US government. Okay, this is not quite that because it is the US government itself financing or using existing cash to buy bonds, but it's a very similar direction. And the point that was made to the market is abundantly clear. And let me say, why is Scott Besson doing this now? Well, there's a lot of reasons. You know, there's first of all, the this war in Iran, like I mean, just couldn't have been poorer timed, bigger miscalculation. It just was a bad strategic move. I mean, all of this was playing out kind of slowly until I mean, if I go back, hold on, let me go back. If you guys see here on the screen, let me zoom in to the 10-year here. Do you see the low here on the screen? So, this is the 10-year yield year to date. The low was the end of February. When was that? Right when the Iran conflict started. And since then, yields have been on a tear. So, you can't sit here and tell me that that was like a great idea. And I know I I hate getting into politics. I know we can't let them get nuclear weapons. And I'm not in the decision rooms. So, I I just I have no place to comment and tell people what to do. But what I can tell you definitively

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just looking at charts is the yields have been on a tear. Like so whatever slow painful process of the United States facing a debt spiral which I've been talking about for years now I mean clearly this conflict was exaggerated it greatly greatly. Um, so anyways, uh, so this tweet from, uh, Peter Schiff, I jokingly crossed out the end, but let me read it because before he arrives at the conclusion that you need to own gold, um, he makes very good points. It's my boy Peter Schiff. Um, he writes, "Besson's plan to use the TGA, so as we said, Treasury general account to fund Treasury buybacks makes possible exactly what I warned would happen. This reckless plan will substantially shorten the average maturity of the national debt, increasing our exposure to rising short-term rates and making it even harder for the Fed to hike rates without exploding federal interest expense and budget deficits. It's a it's a recipe for massive QE and runaway inflation. He wrote, "Got gold." I crossed it out and I said, "Got Bitcoin." Now, his points though, and now we have a difference of opinion on what you should own, but his points are very good. Okay, he's saying the average maturity of the national debt is now going to be greatly shortened because we're effectively financing the US government on these like 90-day rolling loans as opposed to 10 year, 30-year. Let me tell you guys, if I could give you a more if I can give you a 90-day mortgage or a 30-year mortgage, which one would you prefer? [laughter] Hey, hell, if I instead of a 30-year mortgage, what if I offered you a 300-year mortgage? Of course you want the longer duration. Of course. Of course. And if people were willing to finance you longer duration, that speaks to your creditworthiness. If no one's willing to finance you over a longer duration, they're like, "Dude, you got 90 days before like I I don't trust you that much." Well, that speaks to how creditworthy you are. Okay, so that's his first point. His second point is the sensitivity to rates. So the T these T bills, they don't use the Fed funds rate, but think of it this way. Let's say uh T bill rate is I'm just picking numbers out of my butt, but just bear with me for this the sake of example. Let's say the T bill rate is three and a half percent. Okay? And let's say the Fed is, man, there's inflation out the wazoo. We need to raise rates to 4%. But by raising rates to 4%, why would anybody buy T bills if they can get higher rate at the overnight window? Right? The Fed's giving you 4%. Why would I buy a T bill at three and a half%. So then the US government has no ability to raise money using T bills because the Fed is paying more. You see? And so what he's saying is now the Fed is going to have a lot harder time raising rates to fight inflation in the future because the US government is increasingly reliant on the what we call the short end on these moneylike 90day flash loans almost you know you know like in Cash App where they're like we'll loan you money for two weeks. That's like almost how the US government is financing itself with this new plan. Um and so then he he mentions now this is a recipe for massive Kiwi and runaway inflation. So basically this is all highly highly inflationary meaning weaker dollar debasing the currency real rates negative uh hard assets go up. You know we can I I can pull up a chart. It was Bitcoin gold oil. By the way you know what did not have a sharp upwards reaction? The NASDAQ. So again, Bitcoin to me is technology plus fiat liquidity. It's got properties of technology. It's got properties of hard money. And people try and bucket it. And I can point to numerous examples where sometimes it acts like gold on steroids. Sometimes it acts like a tech stock on steroids. And people try and bucket it as one or the other. And they're going to perpetually be frustrated. That's the innovation. It's both. But NASDAQ didn't flinch on this. NASDAQ's been flat to down since this announcement. And Bitcoin's torn the face off markets. So you're Yeah. Anywh who hoot we go on. So the more debt refinances at the short end, the harder it becomes to keep short rates high. So again, this kind of sets an expectation. Now, why why is Bessant doing this? And I ended up getting into a rant about how, you know, uh hard times create strong men. I'm I'm out of control. Okay, I'm fired up today. But another thing to keep in mind, this is just me speculating. I I have no

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proof, but I don't know. Why not? We're all hanging out every Monday. Why not? Just me and my homies. Uh what about Wars? You know, to me, it could be. I We all know that Worshant buddies. We all know that they're uh disciples of Drunken Miller and that whole macro hedge fund crowd. And I mean you the the Fed and the Treasury are going to need to act in tandem together uh to to pull a lot of this off. I mean basically you know the like we're building the plane while it's flying. The plane is on fire and they need to like tame the fire a little bit um and make sure that it doesn't burn in the air and find a way to land it. But the plane is like the like a wing of the plane is on fire. Okay. And it's going to take the Fed and the Treasury acting together in this kind of era of fiscal dominance. And to me, I just found it peculiar and interesting that Besson decided to really just like start going nuts. Like, yo, I got a trillion dollars in my bank. I'm ready to buy all the long end. He's telling all these reporters, writing opeds on them to go [ __ ] themselves. I mean, he's losing his mind. And it [snorts] might be because he finally got a counterpart in the Fed that knows the plan and is willing to play ball, which is basically rates are not going to go up. Inflation is going to have to be persistent. And and remember, we've talked about Worsh who's been talking about inflation, but he's coming up with a new definition of it. I forget what it's called, but it's like his version of inflation. Not actually, but it's like some like weird variant of inflation, which is like, wait, you're just redefining inflation. You you're the chair of the Fed. You cannot just like come up, you can't use this like dormant at the bottom of the drawer definition of inflation. But my another I my Spidey senses, let me put it that to you that way. My Spidey senses are as such where I'm like, wait a minute. So Bessant got his buddy as the Fed chair and shortly after he's been sworn in, Besson's going full-blown nuclear, basically implying we're not going to be able to hike rates. Inflation is basically baked in. We're going to have to grow our way out of this, run it extremely hot. This is very, very weak dollar. This I mean real rates are going to have to be negative. They're going to full send this thing. And is it because him and his buddy have a plan? And then you think, well, where's Bitcoin in that plan? Um, it's interesting. Food for thought. Food for thought. Um, so anyway, back to the point of this isn't yield curve control. It's not because technically it's not like according to the definition. But this chart from Luke, it effectively is because so yield curve control would be hey the number is 4.9% and like that's it and that's where we're that's that's not what is happening. But if you look at this chart every so the black line is at 4.7%. Every single time the 10-year yield gets to 4.7% they do something. And all these green arrows the red is the dollar. So every single time the 10-year gets to 4.7% they whack the dollar down. And so yes, it's not yield curve control technically, but it's basically because they're effectively saying the level is 4.7 to 4.8%. So like like I said, if I'm an investor and and this is what's happening around the world, who's buying Bitcoin? Who's buying gold? If I'm an investor and the US government is saying, "I'm not going to let the price of the thing go up past this level, then you guys, why the [ __ ] would I buy that? Why would I buy that?" This is the power of something like Bitcoin or something like gold is it is a floating free price. Think of think of Bitcoin as a zeroyielding bond that can go up forever. Think of it that way. So, what's Bitcoin pay you in yield? Zero. But what's the cap on Bitcoin's price? Infinity. I'd rather own that. Okay, fine. You're paying me 4.7%. But inflation is a lot higher than that in all the things that I need in my life. And you're not going to let the thing go up to the price of inflation. Let's say inflation's 6 7 8 9 20% if I want housing. Okay, great. So, I own something stuck at 4.7% while the rest of my life's getting 20% more expensive. Meanwhile, Bitcoin's paying me 0%, but it's up 25% over the last week. It's a zeroyielding bond that can't be price controlled. That's what people want to own. [ __ ] your yield.

45:00–50:00

[민감정보 가능성이 있어 이 줄은 공개 페이지에서 숨김]

50:00–55:00

Fi financing Medicare, Social Security, and uh Iran conflict. [ __ ] that. So this is the government's I mean this chart says a million words. The government is borrowing at crisis size levels. It's outrageous the amount of spend and AI is competing with the treasury. So I mean this is from Bloomberg. AI is driving up treasury yields. It just touches everything. So these hyperscalers are issuing debt to finance data centers, power, chips, infrastructure. And the same investors that would lend to the government would rather lend to Elon Musk, to Google, to Zuckerberg, to Amazon. Like it's just a no-brainer. And so it's becoming a lot more competitive. So this slide is the treasury wants money, AI companies want money, infrastructure buildouts want money, and they're all competing against the same capital. So the market is saying, listen, this is again guys, it's just supply and demand. There's a lot of demand, and there's not a lot a lot of long-term capital. And so the long-term capital is saying, I'm going to raise the price. Hey, hey, US government and Elon and Google, how much are you willing to pay me for my money? or how much duration are you willing to give me? And these AI companies are giving a better deal. And so people are like, why would I own again, why would I own a government security where they're interfering with the free market on how much it's going to be worth and how much they're willing to pay me. I don't want to own that. You'd have. Again, that's why this is such a big deal. What Bessent is saying is he's like, we're going to step in and we're going to start intervening. It's like, okay, well then I don't want to own any of that. Why would I ever own that? I'd rather lend to Elon. I'd rather own a T- bill than a 30-year or I'd rather own Bitcoin. That's it. So, the market is very explicitly saying, "Pay me more. Pay me more. There are more people that need a loan. I'm the long-term capital. Pay me more." and AI businesses and others are willing to pay more. And the US government is not. The US government is saying, "Shit, I got I got 4.7% on the 10-year max. Anything more than that, you got me [ __ ] up. Okay, I'm just going to start printing money and giving it to myself." Well, then never mind. Let's all own gold. Let's all own Bitcoin. Let's all build AI. Unless these guys are insolvent. These guys are insolvent. Another thing, so who is the marginal? And I put buyer, but really it's lender. Who is lending to the US government? And we've talked about this on this show. Hedge funds. So this tweet, hedge funds now own 8.5% of the entire Treasury market. That's more than China, Japan, and Saudi Arabia's official holdings combined. This is dangerous given how important the US government bond market is to the entire global financial system. Yikes guys. And you can see around COVID this number was between four and 5%. Now it's between 8 and 9%. That's a lot of growth. So I mean a lot of this market that's actively lending to the government is leverage. So the other thing that Besson, I call him the chief volatility officer because not only is he trying to intervene and get the right prices, but he also can't have too much volatility because when these guys are on leverage, volatility makes them delever. You know, if you're on if you are collateralizing alone and your collateral is extremely volatile, then you're like, "Ah, shoot. I I got to unwind this a little bit." You see? So I put on the screen here, volatility rises, leverage funds may delever. And that means that stocks and treasuries both get sold. So if you need to raise cash and delever, well then you got to sell what you can, not what you want. And what do people own? People own stocks. People own treasuries. And so again, okay, now how is Japan related to all this? You guys have probably heard a lot about Japan. So, Japan historically has been one of the biggest buyers of US debt. Period. Um, Japan as a country, enormous excess savings, extremely low domestic yields. So, the yields we're talking about theirs have historically been extremely low. So, they've been buying US treasuries because it's obvious. Okay, Japan now has a problem. Okay, this on the right, this chart, I know you guys can't see the literal numbers, but it doesn't really matter. That's the Japan 10-year government bond yield. Okay, that's not good. So, they have had rising yields because inflation has crept into their lives. So, these yields are repricing because investors are saying, "Why would I lend you money and get paid nothing when everything around me is getting more expensive?"

55:00–60:00

Okay, so Japanese rates are rising. With that, currency hedging becomes a lot more expensive and that makes US treasuries far less attractive to a Japanese investor. So the question is, why wouldn't a Japanese investor just buy a 4.7% yielding 10-year Treasury? And what we have to keep in mind about Japan is Japan, you know, their currency isn't the dollar. Ultimately, they need yen, not dollars. And so when they do something like this, and this is what, and I I didn't want to get into it too much, but this is what we call the carry trade is where, you know, let's say you borrow yen cheaply, and then you use that yen to buy a US treasury and you're you're taking advantage, you're carrying over the weak borrowing cost in Japan to buy high yielding assets in America. And you can do that by borrow cheap yen, buy stocks, borrow cheap yen, buy bitcoin. And we saw this in 2020, summer of 2024. If you guys remember the carry trade unwind is when this trade started to unwind and people had to start selling stocks and selling Bitcoin and everything fell off because this trade started to walk itself back in reverse because the the yen started to get expensive and and uh and rates started to rise. So, this chart from Luke is awesome because what it's showing is a 4.7 US Treasury can become a negative yielding investment for a Japanese buyer because the US 10ear at 4.65% if it's JPY hedged. So, if you're hedging out the currency risk because again, they need yen at the end of the day. They don't need dollars. They can't spend and live on dollars. It's that it's not their currency. So, right now that's negative1.2 2% return. So basically 10-year US Treasury unhedged versus hedged. I mean this is negative yielding for Japanese investor. So all of a sudden Japanese investors don't want these things anymore. And this is where you've seen Bessant has had to intervene and give Japan dollar swap lines or give Japan like basically intervene in the Japanese market because he does not want Japan selling a bunch of bonds because like we've talked about they sell these things yields go up right demand down yield up and he's trying you know yield number go up and he's been trying to get number go down for the yield. And so Japan can be summarized. What's fascinating about the Japan stuff is the yen can't get too far up or down against the dollar. Basically this, if the yen goes up too much, I think I have it in the slide here. Yeah. Okay. If the yen gets too strong, then the carry trade breaks down. Meaning what was really valuable is that the yen was incredibly weak and it was easy to borrow. So, I could borrow all this dog [ __ ] money, and then I just can puke it all into Bitcoin or stocks or US treasuries, whatever my flavor of tea was, and it's like printing money out of thin air with like virtually no risk. But as soon as the yen isn't super super cheap and dog [ __ ] and it starts to strengthen a little bit, well, then that trade has to unwind and I have to sell the Bitcoin or sell the thing I bought and return the capital home. And so if the yen gets too strong, so I have here on the screen, you borrow cheap yen, you buy global assets, the yen suddenly rises, then the debt becomes more expensive. So then you have to sell stocks, sell bonds, sell treasuries, and buy the yen back. That's a forced deleveraging. And that's what we saw in the summer of 2024. And so, you know, the US has to help make sure the yen doesn't get too strong because now you have all these foreigners that own all these US assets. And Bessant doesn't want all these foreigners dumping stocks, dumping treasuries, sending yields to the moon. And obviously, as you know, Austrian free market, you don't want any intervening. If people can't afford to own these assets, let them sell them. [ __ ] it. It'll drive the price of housing and stocks down. They'll become more affordable. But obviously, the amount of leverage and the way this the monetary system works, it's hardly a free market, if at all. Now the yen also can't get too weak. A weak yen implies inflation. So if their currency becomes too dog [ __ ] Japan has been facing inflationary tendencies. So a weak yen, energy and imports now cost more. Inflation rises and then Japan has to defend the yen or tighten their currency or or their monetary policy and then treasury demand becomes vulnerable, which is what we're seeing. You're seeing Japan yields rise and all of a sudden Japanese investors after you do the math and you hedge

60:00–65:00

yourself out against currency risk, you're like, "Oh, I don't want to own this thing as at all. It's negative yielding." So you're like, "Well, shoot, there's like there's like two two I wrote here two live wires." So the yen too strong means the carry trade unwinds and US assets gets get dumped. And the yen too weak means [ __ ] Japan's importing inflation and they've had their own domestic issues currently right now. And so when you see Bessant say, you know, he's intervening swap lines, he's helping out Japan, it takes very very careful crafting to make sure that the yen is between two levels that don't blow anything up. Now, why does Bessant care so much? Just to keep in mind, guys, the long end runs the economy. So, your mortgage, your corporate borrowing, AI's financing, government interest expense, asset valuations, this is all dependent on things like the 10-year Treasury. So, if the 10-year goes up a lot, yes, the US government can't afford it, but you're not going to be able to afford a house either because the bank that's lending you your mortgage is all based on the 10-year. So, higher rates hit the borrower with the most debt. And who has the most debt? The United States of America. [laughter] So here's I I've shown this before. This is the US outlays, largest outlays. So on the left you have health and human services. Blue is full year 2025. Uh or excuse me, green is 2026. So you can see we're spending more year-over-year. So the US government continues to spend spend spend debt debt debt. Health and Human Services, then Social Security, and then Treasury, that's interest expense, and then after that, defense. So, when they say like, "Oh, yeah, we've we've uh cut down on our education spending," that's such a rounding air, you can't even see it. Um, now another reason Bessant is like truly panicking and the US government is in, in my opinion, like an official debt spiral that's only going to get worse. and I tweeted, you know, I think Bitcoin's gonna like totally rip uh over the coming years. So Luke Groman, I love uh he calls this true interest expense, that's his own term really, but he's basically accounting for what are the fixed expenses of the United States. So he's got health and human services, social security, gross interest, okay, and VA. Now our federal receipts, so like the revenue that the US is bringing in is $4.15 trillion roundabouts. All of our fixed expenses are $4.375 trillion. So that's 105% of federal receipts. just our fixed expenses as a country we can't afford with revenue with tax revenue. So just to get by we basically have to print money and then of course there's all sorts of other expenses that will be layered on top of that. But that this is a debt spiral when like you can't afford your own bills just based on your revenue. So just to get by you have to print money to get by. That's a debt spiral. That's crazy. So, this is another reason why in my opinion and and so like when did this change? Well, the US keeps increasing the amount of money it wants to spend. So, one way to solve this is cut spending, but clearly they're not willing to do that. Instead, they want to stop uh and intervene in yields and intervene in the bond market. Fine. I mean, listen, here's the thing because another thing that I want to say about Bitcoin that I'm very grateful for is that Bitcoin allows me to just stay humble, stack sats, and chill. I don't have to fly to Washington and protest. I don't have to convince Scott Besson to not do this or do that. He could do whatever he wants, and I'm cool with it. You want to intervene in the bond market? Fine. I know what to do with that information. I know what to do. Own some goddamn Bitcoin. That's what I need to do. But go for it, dude. Whatever. You know, Bitcoin a and my neighbors may say, "Oh, Bitcoin burns the oceans. Oh, Bitcoin stupid. How could you how could you believe in that? I can't even hold it." That's fine. You guys don't have to believe in it. That's chill. Guess what? I've got a great life. For the last almost 14 years, Bitcoin's been unbelievable. It'll continue to be unbelievable. You can't. There's nothing you can do about the fact that there's going to be another block in about 10 minutes on average. There's nothing you can do about its supply. You cannot censor my transactions. I don't have to protest. I don't have to convince you of

65:00–70:00

anything. So, these guys want to keep spending money and they're not willing to cut back and they want to win midterms. They want to win more elections and they know that cutting back and not promising free [ __ ] will they'll lose to the Democrats and and they'll they'll lo they'll lose midterms. they'll lose everything. And so they need to find ways to finance this and they're going to intervene in markets and scare everybody out of bonds. Okay, fine. By all means, brother. I'm going to stay humble and stack sats, keep my sats on ice. Um, so another thing to keep in mind these obligations that these guys have. So keep in mind social security, you have to keep in mind you have to adjust to the cost of living. healthcare, you have to pay like real medical services. Like these people are getting old that you have made all these promises to. They're going to need new hips, new knees, wheelchairs, surgeries, okay? Like veterans interest like these are real expenses that rise with inflation as well. So when the cost of medical surgery goes up in inflation, like that is painful to the government too. So you can inflate a fixed bond away, but it's much harder to inflate away promises for real goods and services. So keep in mind that the US government has those as well. So when I say that this is going to be like serious inflation, I'm talking like smoking hot, piping hot, fresh out the oven. Is that smoke that's coming off those cookies? Inflation. They're going to run this thing hot, which is great. I mean, like I said, fine. I mean, I don't blame you. If I was in the in your seat, I don't know. Like I I I would basically just not try and get reelected and I would say screw this. Like we're going on a Bitcoin standard. This is all pointless. Um so anywhoot uh that's pretty much it guys. Uh I wrote here default question mark austerity question mark or financial repression. Now you can nominally default. Um, you can cut spending or what they're doing. You could hold yields below inflation and that's what they're doing. Real rates negative. Financial repression, currency debasement, destroying the currency. That's it. That's it. So, what is real rates negative? Figured I'd put a slide in here for it. Let's say a bond is yielding 4% and inflation 7%. Your real return is negative. Yes, you're getting paid 4%, but everything around you is getting 7% more expensive. So, your life is getting -3% every single year. So, yes, they're paying every dollar back, but also, yes, they're making each dollar worth less, even less. You see? So, anyways, what's going to happen if investors don't want to store wealth in a managed longduration debt? Where does their money go? Well, you only have so many options. You've got gold, you've got equities, you've got real assets, and now you've got Bitcoin. And this is where Bitcoin becomes the fastest horse. This is where Bitcoin goes up 25% in a week and gold's only up 7%. This is where the show, this is, hey, now I'm speaking from experience, okay? Can only warn you so many times. I don't want to look back in two years. You got to say, "Oh, Jack, you should have told me so." No, no, no, no, no. I'm telling you now. Okay? Now, it's going to be volatile. Hold on to your buttocks. It's going to be volatile. Bitcoin's not only going to go up. Don't take on too much leverage. Don't exceed your mean. Stay humble. Stack SAS. It's critically important. Okay? But I'm telling you now, okay? And so, if we go back to this asset I showed earlier, I mean, look at this thing. Tell me what the fastest horse is. You've got the dollar, gold, and Bitcoin all on the screen. And right when Scott Bessant basically said out loud, "The time has come." I, my friend, am in a sovereign debt crisis. So, I mean, when guys like Ray Dalio are, you know, running to the media and saying, "Sell your bonds, buy gold, and buy Bitcoin." Yeah. Okay. I mean, what else do you want to know? Paul Tudtor Jones disclosing uh in the 13A I think that uh he materially added to his Bitcoin position. Okay, so when it comes to Bitcoin, I tweeted about this, but I want to make something clear. Trying to do a little Bitcoin 101 in each episode. So something I've explained before, I wanted to spend a little bit of time today. The unique thing about Bitcoin is there's no amount and this is only unique to Bitcoin in regards to monetary assets. Gold doesn't have this, oil doesn't have this, stocks don't have

70:00–75:00

this, more demand cannot find more supply for something like gold. If there's enough demand for gold, it will be economical for miners to spin up new mines and find more in the ground. If there's enough demand for oil, it'll be economical for people to spin up new drills and find more oil in the ground. There's enough demand for bonds. If there's enough demand for Tesla stock, let's take strategy stock for example. If there's enough demand for MSTR, Sailor will print that [ __ ] Let's take your own life. If there's enough demand for McDonald's cheeseburgers, McDonald's will make more. If there's enough demand for vodka sodas, the bartender will pour you another. If there's enough demand for housing, they will build you another one. Ken Griffin said, "You know what? I like this building in New York, but I want a floor on top of the highest floor." And they said, "Mr. Griffin, we can't do that. That would ruin the existing penthouse owner." Yeah, but I'll pay you $250 million for it. Oh, you got yourself a deal. With enough demand, you find supply. The only thing I know of where that's not true is Bitcoin. It doesn't matter who you are, what you are, where you are. No amount of demand can create more bitcoins. Period. So where does the supply come from when there's more demand? Guys, it comes from a higher price. Okay? Demand always finds supply. And if it can't find it in the ground, if it can't find it in a factory, if it can't find it behind the bar, if it can't find it in a penthouse, it finds it in the market at a higher price. Meaning this, all of a sudden, when Scott Bessant said, "Yeah, sorry. You guys were all right. It is a sovereign debt crisis. We're going to start printing money to lend to ourselves. Buckle up. We're growing our way out of this thing." And everyone said, "Shit, I need some Bitcoin. We couldn't make any more in a factory. We couldn't make any more out of the ground. We couldn't get any any behind the bar in the basement. There wasn't any in an oil rig. So, the market says this, how many are available at 60,000? And they're asking all of us, all of you listeners that have Bitcoin, did how many of you guys grabbed your coins from cold storage and threw them on an exchange because Bitcoin hit 60,000? And they said, "Well, [ __ ] there's not enough there. How about at 61,000? How about at 62, 63, 64, 65? And when I say prices are set at the margin, that's all I mean because one buyer can drive the price from 60,000 to 80,000. How? Because none of us are willing to sell. And it doesn't no one can go mine more, no one can go make more, no one can go print more. It's got to come from us. And eventually what you see in these bitcoin adoption cycles where the price goes up up up up it's entering what we call price discovery where it's basically the market saying we want more bitcoins. What price is it going to take for you guys to go into cold storage deposit on an exchange and give it to us? And eventually it finds some equilibrium. Like let me tell you guys when I got into Bitcoin the price was under a hundred bucks. Then I watched the price go to $1,200 and then Mount Gaus and Silk Road and all of that. And the price went from $1,200 all the way to like 250, a little lower. And so the price was going up from $50 to $100, $200, $300, $400. Like at what price is someone going to say, "Fine, I'll take a new car. I'll take a new house. I'll pay off my old debt. I'll put my kid through college. Fine, I'll sell you some bitcoins at $1,200." And then that's the part in the market where you saw more sellers than buyers. And then the price falls to 250. And then it goes from 250 to 20,000. And during that run, it's like demand, demand, demand. Largely, Bitcoin is priced on expectations of new fiat currency. There's more units of fiat that are competing for a fixed amount of bitcoins. Every single time these guys print money, Bitcoin goes on a run. Okay? goes from 250. What price is it going to take for you guys to go put Bitcoin on exchange and meet the demand? Supply meeting demand. Is it $250? $500, $1,000, $5,000, $10,000. It took Bitcoin to get to 20,000. Okay. Then I watched Bitcoin fall to 3,000, then 3,000 to $69,000. Then it fell to whatever 17,000. 17,000 to$126,000. Now down to 60,000. We're doing it again. This is okay. They're about to print a bunch of money. Everyone wants Bitcoin. What price is it going to take for the market to give enough supply to meet the demand? Well, it wasn't 61,000. It wasn't 65,000. It wasn't 70,000.

75:00–80:00

Right? So, look at this. $2 billion of flows from the ETFs last week. Their best week since October 2025. That's a lot of demand. People are like, "I don't want to own bonds anymore. I don't even know in this era of money printing. I don't even know how much gold I want to own compared to this Bitcoin thing. You're telling me that you can't mine anymore? Elon can't go what what Elon say? He's going to get a bunch of gold out of an asteroid in space. There's no Bitcoin in space, brother. It's it. If you want more bitcoins, you're going to have to pry it out of my cold dead hands. That's why the price is going up because I'm not [ __ ] selling. That's why. Because you got a bunch of guys. And let me tell you something. Because there's a lot of egoomaniacs out there that think they're the Bitcoin market. They set the price. Bitcoin wouldn't be [ __ ] without them. Guess who sets the price? You and I listening to this. We do. because we earn more than we spend. So, we're not levered. We're not in debt. We don't have to sell for [ __ ] You guys can drive the price as high as you want. And there's no price that's going to get rid of all my bitcoins. I'm going to die with these bitcoins. And you can't mine any out of the ground. You can't get any out of space. Tough luck. You can't tell Donald Trump and Scott Bessett and the US military to get you more bitcoins. Tough luck. So, I I love this. I love explaining this because it's a like, oh, duh. So, Bitcoin doesn't need trillions of more dollars plowed into the market for it to gain trillions in market cap. The trillions in market cap go from marginal amount of demand, but there's no supply. Oh, you want 10 bitcoins? You might have to push the price up to 100k to get 10 bitcoins. Now, I I'm exaggerating, but not by a lot, right? So, I'll tell you guys this. If Bitcoin hits 250K, 500K, a million dollars, I will start asking like, wait, how much are the Chicago Bulls? Yeah, why not? I mean, it's not going to be my whole stack, but the Chicago Bulls. But everybody's got something. And and this is really to me this is really the world evening out because because you've got all these people with all these legacy assets like all the young folks like like my generation. They can't afford a house. They can't afford to put themselves through school. They can't afford their debt. They can't afford their credit card. But they've got bitcoins. We've been staying humble. We've been stacking sats. And then eventually we swap some of our sats for a house to pay off that debt. And it's the way it's a way of the world evening things out a little bit. Like, okay, all these all these people were born into asset inflation and and they get their social security and stuff, but they're going to have to wire me 500 grand for one Bitcoin. [laughter] Okay, call it even, [ __ ] You know, but anyway, this is what monetization is. This is what it looks like. This is what adoption looks like. When I say Bitcoin is technology plus fiat liquidity, the fiat liquidity piece is right now everyone's scrambling to get their hands on something that the government can't print. And that's why Bitcoin went up 25%. Why did Bitcoin outperform gold so much? Well, guys, it's pretty simple. There was a lot of demand and not enough supply. And and clearly the price didn't get high enough for all of us to go into cold storage and dig it out. Now, did it? How high is this thing going to go? And every single cycle strengthens Bitcoin because you're getting weak hands. Get rid of it in strong hands. So, think about all the people that are kicking themselves like, damn, I bought the top at 126. They're not selling there. There are long-termers now. This asset's been in existence for over 15 years. This asset class is made of long-term hodlers. So, another thing I want to mention, Strike tweeted this. I actually made this asset myself. Bitcoin's performance on average comes from 10 days a year. meaning this Bitcoin the the stay humble stack sats and huddle meaning you just own it for 365 days a year on average since 2014 it's 157% returns if you just owned Bitcoin its 10 best days a year so you only own Bitcoin 10 days a year but it was the 10 days where it had its best performance 162% a year so you marginally

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outperformed med just holding it every day. Now, if you own Bitcoin 355 days a year and you don't own it the 10 best days, so you own it every day except its 10 best days a year, negative 14% a year. So, Bitcoin's performance comes from these moments, guys, these repricings like this, a snap, a blink. And this is why I can't stress enough to stay humble, stack sats, and huddle, guys. You're not going to be able to guess the 10 days a year, every year. This is the humble part. Bitcoin's humility money. You're not smarter than the market. You're not smarter than your neighbor. Just work hard. Be kind. Be patient. Stay humble. Stack sats. Huddle. That's it. There's You can own Bitcoin 355 days out of the 365 days in a year and lose 14% a year. This is why I'm say and I know the bare market's hurt and I know the volatility is hard. That's the price of admission. That's the price that you pay. I'm telling you. I'm telling you. I'm telling you. You don't have to listen to me. Obviously, do whatever you want. Just just take it take it from from someone who's who's been around the block once or twice. Okay. So, like I said, you know, Jordy tweeted this. He he said BTC is a community-based energy asset that historically accelerates out of bare markets when VA has compressed and it is ignored. This is measured best in sigma moves. The pattern of the last two major shifts coming out of the 2018 and 2022 bare market. The pattern was seen by a large weekly sigma move where Bitcoin crossed the 200 day moving average the week of the sigma move. So far this week is exactly that same pattern. Okay. So basically the market tried to raise the price of money saying you guys want us to loan you money over a long duration whether you're AI infrastructure buildout military equipment building uh government spending we're going to need a higher price in Washington DC in the White House said we can't afford that. Sorry we're going to start intervening and weakening the dollar. Uh, and so if the price of capital can't fully clear, can't fully be priced freely, then something else has to adjust. And that's what you're seeing in hard assets. Hard assets are repricing this reality. That's it. So scarcity is king, guys. That's my macro breakdown. We got it in slightly under 90 minutes. I'm out of breath a little bit. I need some water. But in a world where governments increasingly manage the price and supply of financial assets, an asset whose supply they cannot manage is the whole game. And that's what it means to be a Bitcoiner. For 90% of our lives, we're weird. We're stupid. We're egregious. We're obnoxious. And then very rarely, in the snap of an instant, wait a second. Are they right? I'm telling you. I'm telling you. I'm telling you. Okay, let's do some Q&A and then I'll get out of here. Ow, my chest hurts. That was so much talking. Water. We're so back though. I mean, how back are we? So, back. That's the right answer. Uh, okay. Q and A, let's go. Question for Jack. Is it possible that Fiat's easy credit actually accelerated our tech boom? Without cheap capital funding, would we even have the internet or AI today under a hard money system? Um, yeah, I think we would. I mean, a lot of the US's growth has just been inflation, and that can be demonstrated by the fact that the stock market has not outperformed uh gold, but it's been up in dollar terms. So I mean assume if you assume that gold is generally an inflation hedge and has been maybe more the re real price of quote unquote money. Um but yeah I think these things would have been built of course I listen this is all about misallocating capital. You know, without a free market and consequences to your decisions, you're allowed to make mistakes, print more money than you need, borrow more than you can afford, and not have consequences and just bail yourself out. Doesn't mean that proper smart allocation of capital would go away as well. I mean, if there's innovation, then people fund it. People finance

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productive things. That's what's happening with AI. One of the reasons that the US government yields are going up so much is everyone's like, I'm not giving my money to one of the greater misallocators of capital in human history in the government. I'd rather give it to the some of the most productive people ever, Google, Meta, Amazon, like what? So, yeah, of course. I I think that I mean, think think about like venture capital like so people looking for productive entrepreneurs. So, I don't think that innovation is a function of just this hush slash pile of fiat. I mean, the Wright brothers invented the airplane on the gold standard. How'd they do that? They like someone was willing to help them fly and finance that. I mean, you I I think that there's just they're not No, my my I I reject the premise. Reject the premise. Uh, okay. Question for Jack. Prediction markets are a hot thing right now, but what are your thoughts on coordination markets? I don't know what coordination markets are. Um, yeah, prediction markets are cool. Listen, I just my problem with prediction markets, I have two. one is I just don't think that they uh I I don't think that they need a shitcoin associated with them. Like we could do prediction markets just on like a MySQL database. We don't need a blockchain for them at all. It's all a regulatory arbitrage. The reason is like DraftKings uses a MySQL database and they're not allowed to do what prediction markets are doing because technically prediction markets are quote unquote decentralized according to regulators, although practically not really. So, it's all a regulatory arbitrage. It's a way to pull off something that was previously illegal, which is all shitcoins are good for. Like, how do you you want to print your own money and be your own central bank? Well, if you did that on a MySQL database, you go to jail. But if you do it on Ethereum, then you're an innovator and you are on Forbes magazine until you eventually go to jail. So, it's all a giant regulatory arbitrage. That's my one problem with prediction markets. My second problem with prediction markets is it just it further I I love the idea of like free markets. I think it's cool like insider trading. It it should be available to all if people are going to do it. I would love to see what the insiders are doing when it comes to live events. So, that part's definitely cool. uh the more like as a businessman the issue I have is just the gambling I like if you look at I think it's Kshi 80% of their volume is sports gambling with these prediction markets. So again, it's just a regulatory arbitrage to compete with DraftKings and FanDuel and have products they don't have because technically they're on a shitcoin instead of my SQL and the government hasn't gotten around to like truly regulating these things in an equal way. So, I just think that all these companies are going after the fact that everyone's a speculator in this era of currency debasement, which is very unfortunate because your your customers are just rapidly losing money betting on sports and they think the only way they can ever afford a home or get out of debt or have a higher quality of life is just gambling on [ __ ] And I would never offer that product. I think it's like feeding drug addicts drugs. And obviously it's a good business until they go to rehab and um fix themselves and eventually stop gambling and find a way to save money. So I just it's just you know you got all these apps that are crypto trading, equities trading, prediction markets like Robin Hood, Coinbase, Poly Market, all of these is just like degenerate gambling. People just gambling. Um and uh yeah, I don't know. I mean, I'm sure they're going to be good businesses in the short term, and I get it. Like, if you know, you're just optimizing for shareholder value and just trying to meet next quarterly earning expectations. Yeah. I mean, there's a lot of degenerate gamblers out there because the currency is being destroyed. But eventually, you know, you're going to lose customers because your customers are getting increasingly poorer using your products, buying Trumpcoin and Melaniacoin and betting on NFL through your app. House always wins. Um, and I just don't find that constructive to building a better world. I would rather, you know, take a longerterm view and build a business just based on Bitcoin. And I know I don't make as much money as all these other guys, but, you know, I think one day I will. Just got to stay the course. So, that's my prediction market opinion. Um, I don't know what a coordination market is. Uh, question for Jack. Is Larry Leard's the big print playing out in real time? is the beginning of the end of the forth turning hyper bitcoinization. Yeah, it could be. You know, listen, I'm sensitive to saying like this is it, this is it. You know, because markets can remain irrational far longer than you can remain solvent. And so you you you

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overestimate how quick like, oh my god, it's all about to go down. And you know what? What defines the big print? What does that mean? But yeah, no clearly the US government and the Treasury is intervening in markets and you know what it's usually overestimated like these buybacks like going from two billion to four billion doesn't matter guys like we're talking about$2 trillion of debt 4 billion what that's meaningless but it's the point that he's coming out and saying there's no austerity we're going to intervene and that's when when the market was cute little four billion and then he comes back on Monday and says, "No, I got a trillion in the bank, motherfucker." Everyone's like, "Okay, okay, here we go. Now we're good." Right? So, you can just see it escalating. But how long is it going to take and what's the path to get there? Who knows? I have no idea. But what's ve what's abundantly clear is the yields they can't afford the yields to be any higher. and and the sovereign debt crisis thesis has legs and that means Bitcoin does. And you know, my time preference is so low. Who cares? Like I'm it feels I feel really good with my worldview, with my savings, with how I'm spending my time, with building a family. Like on a relative basis, um I feel confident in not owning bonds. That's all though. I I have no I have no time based prediction. But yeah, I think Larry's book is great and I think Larry's opinion he we share the same worldview 100%. A question is the pressure for the clarity act to pass a tell for the US government to a get dollars via tether into other countries and b create more demand for US bonds to be bought up by tether. Yeah. Yeah, I mean there's a thesis that what Besson is trying to do listen so I I'm talking about these short duration instruments and this is what Tether owns this is what stable coins own. So in theory if Bessant can get stable coins to pr proliferate throughout the world then he can help finance a lot of this basically via stable coins. In practice though, I just don't think they I mean, they're just not big enough. They're not big enough. So, I just Yeah, the math doesn't work out that way. I mean, I don't know the pressure for Clarity Act to pass. Clarity Act really has nothing to do with Bitcoin if we're being honest. I don't really care if it passes. In fact, I'd rather it not at this point. Let's just get back to I think there's a a good thing or two in there for us. Um, and I really appreciate the work that's being done in DC by the Bitcoin Policy Institute, BPI, and those guys. And I know that there's a few good things I I think that protect developers. And so I I don't want to be uh obnoxious to those. But broadly speaking, it's a bunch of shitcoiners fighting over regulatory moes and shitcoin privilege. And I just find it off-putting and kind of disgusting. And it just doesn't really matter. like if clarity passes or not strikes business like we don't give a [ __ ] like a [ __ ] at all. So I don't really care. Um and why there's pressure, there's all sorts of pressure. There's pressure because the biggest donors to the admin um are the ones pushing this and you know theoretically going to continue donating um to Republicans going forward if they're if the admin's able to make whole on their promises. Um, so you know, there's all sorts of political capital probably up for grabs right now. Clearly, the Democrats are trying to shove their nose in the face of the whole crypto movement and all all of that money that donated to the admin that are trying to get their way. So, I don't know. But yeah, I mean, one thesis is stable coins can help finance all this, but you know, when you do the math, that's a I would call it a hail mary if I were to do sports analogy. It's totally possible. I mean, every now and then you see Aaron Rogers complete a few throughout his career, you know, but what's the math on them? You know, it's uh very unlikely. Question for Jack. Does the US government actually have an incentive to trigger a stock market crash, forcing a flight to safety into treasuries? The problem is, it's a good question. So the question is can the government basically cause panic in the market where everyone goes oh crap I might as well just go into US treasuries so I feel safe. The problem is recently and recently meaning the last like some odd years I don't know exactly call it four five six years treasuries have not been a flight to safety it's been the opposite where stocks down yields up and this is emerging market behavior.

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This is behavior of a sovereign debt crisis of an indebted nation. This is like the behavior of like a third world country. But when when assets down and yields up, that means everyone's dumping the treasuries too. And so I would say like the way you're thinking about it is correct. And historically, treasuries have been a safe haven. But as of recent, they haven't. People don't want to lend to the US government anymore, which is the crux of the problem. to oversimplify it but get my point across. Jack question. Do you think Bitcoin actually can be a medium of exchange without the US wanting that? Um, yes. Over what time frame? I'm not sure. Like I said, I I you know, I really don't find it too productive to make timebased predictions. Who cares? Because I tell you what, tomorrow I'm gonna wake up and I'm gonna work on Bitcoin. And my work on Bitcoin, the hardest thing is to figure out what to do today to make progress because there's so much going on. There's so much noise. There's so much possibility. There's so much you can do, but what should you do? And it's organizing your resources and just creating a to-do list that has the right priority and just staying focused and just one at a time because great things are the result of day after day after day after day and just getting better, just getting better, just getting better. And then you look back a month, a year, a decade and you say, "Wow, I did it." But I did it just by winning the day. And so I try not to I don't know. I think that Bitcoin is better money. It It's physical settlement. There's no fraud. It moves faster. It's cheaper. It's just better. And so I think people will use it inevitably because it's better. Now, are we going to use Bitcoin as techn technological infrastructure first to move fiat currencies over it and then eventually we're like, why do we want to swap into these? I might as well just take the Bitcoin I'm receiving and go to Whole Foods, maybe. Totally possible while I'm alive. I don't know. I have no idea. I don't even know when I'm going to die. So, uh, yes, but I don't know the timeline. And as fun as it is, I mean, listen, I'm happy to have fun with you guys on podcasts and just guess for the fun of it, but practically speaking, I try and hold myself to, you know, I have long-term thesis and I vision, but then executing is what separates boys from men is executing, discipline, work ethic every single day. Win that day and don't celebrate. Enjoy the day. win the day. Once you go to bed, you wake up in the morning, it's a new day. You got to win. You got to earn that day. You got to wake up the next day and earn that day. Prior day doesn't give you any right to to the next day. And you just got to stack days. I'm telling you. So, you know what's going to happen 10 years from now? I don't know. But I know what to do tomorrow. And I'm a stack that day. You know what I mean? Eat good, lift heavy things, see the sun, love my fiance, bust my ass at strike, work for you guys. You know what I mean? [sighs] Uh, if one has saved in Bitcoin and has credit loans available at a bank, would you consider those loans a form of savings, too? Don't want to suggest taking out loans, rather get liquidity from other places. I'm not sure the question, but listen, I mean, borrowing in fiat is the name of the game as long as you do it responsibly. You want your liabilities in fiat, just like the US government. The US government is making the dollar worth less so it's easier to pay back their debt. Let's say this. You know how like in some of these crazy highly inflated currencies like Venezuela, you have to like wheel Venezuelan boulevards just to get a cheeseburger. You got to like wheel a pile of them. Well, imagine you had debt that was 10 Venezuelan boulevards. And now it, you know, you earn 10 Venezuelan boulevards for doing 30 seconds of work because it's such dog [ __ ] currency. Well, how easy is it to then pay the debt back that you created from years and years and years and years in the past? And so I would say [sighs] like if you can create fiat liabilities as debt, I mean that's the sailor game

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plan, the US government. Um that's what wealth pe wealthy people do is they borrow the thing that's only going down and they hoard the thing that's only going up. But you obviously have to do it responsibly. That's also what we call leverage. So, you know, it's like playing with fire. Fire can heat a home, can change civilization, right? Can also burn the house down and kill you. So, you know, you're playing with an adult toy. You got to be careful. But that is the name of the game. Fiat liabilities. You want Bitcoin on the asset side of the balance sheet and you want fiat on the liability side of the balance sheet. That's how you retire your bloodline right there. tell you that much. Uh, okay. Strike question. Qu question for Jack. Any update or estimated timeline on bringing loan consolidation to California? Is it actively in progress? And what regulatory approvals is still needed? Yeah, guys, unfortunately, and I'm sorry about this, um, doing stuff in America is regulated by each state, and California is unbelievably difficult when it comes to our products. So, yes, it is being worked on. Um, we're slowly bringing more and more products uh to California. Um, I will check with the product team and I will get back to you. Speaking of, I forgot to give you guys just strike updates in general. So, let me do that actually. Uh, cuz we launched, hold on, we launched a new activity. Um, hold on. I'll just show it to you because I'm gonna try and explain it and you guys will still have questions which makes it pointless for me to try and explain. So, basically, everyone's familiar in a finance app, your activity. So in strikes activity, you can see payments you've received or made, the Bitcoin you've purchased, direct deposit, bills you've paid, loans you've taken out, loans you've closed, line of credit usage, everything. Now, the activity used to be very simple. It's just like uh here here's your cash activity, here's your Bitcoin activity, and here's the activity feed if you wanted to see both at the same time. It's like, okay, whatever. Pretty pretty boring. And you guys were like, "Yo, dude. I need to create certain feeds of my own. I need to filter by certain dates. I need to be able to at any point export this like custom activity feed for myself." And so we How do I Oh, shoot. How do I do this? Uh, we made like an activity feed on steroids. It's really, really cool. Can I open this in Chrome? Crap. Hold on. Sorry. I'm trying to figure out how I can share my screen that's not on a browser and I might not be able to. Uh, so we did that. While while I try and figure this out, I'll keep talking to you guys of what we launched. So, we launched this new activity feed. So, check your activity. You'll see things like I'll show it to you in a second. Uh, we also uh launched flexible refinancing and consolidation. So for standard loans, we raised the LTV requirement and are now excluding interest from the LTV calculation so more customers can access these flows. So I think that's unbelievably cool and important. And then BIMI, so all emails from Strike now have a blue verification check mark. So it's a huge win for trust to protect you guys against fishing. So Strike, we now have anti-ishing codes. So, inside your strike app, if you go to security, you have a unique code that we give you, and if you ever want to refresh it and get a new one, you can inside the app. So, if we ever email you, we prove to you that it's us by in the email having the code that is unique to your account that you can find in your app. So, if you ever be like, "Oh, Strike emailed me and they want me to send all my Bitcoin here." You can be like, "Wait a second. Is this actually Jack and Strike?" and you can check for that code and map the code to your app. And then on top of that, we now have this blue verification check mark, which is another stamp of approval. So, we're just trying to do everything we can to protect our customers and protect you guys from fishing and all the scams out there. Um, the flexible refinancing consolidations is really exciting. Let me try and get

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this video. Oh, supposedly according to a colleague of mine, I can just drag the video into Chrome and he's right. Wow. Legend, Jonathan, designer at Strike. Absolute legend. Okay, here's the video. So, uh, let's see. So, on the activity, look at this. So, you can now there's type, balance, date, availability. You can create your own filters and then at any point you can download and export in the top right. So this is obviously a power user feature but it's unbelievable and you can create any version of your activity you want and always export it and we basically send the CSV to your email and you can create custom filters. Look at that. So you can create any filter that you want. And so for those of you whether it's tax interest, exporting certain data there, we now have look at the search that we have. You can search for all your interest payments, all your bills paid, all your direct deposits. You can filter to to a certain date and then search. So I think we have like the best activity tab in the history of FinTech ever and it just you guys asked for it. So, I'm actually incredibly proud of that feature. Um, so that's what we got from Strike. And then, hold on, hold on, hold on, hold on. Shout out Jonathan again for that hot tip. I really appreciate that. I would not have figured that out. Um, coming soon, interest on cash. So, we're just about done finish testing that. We'll launch with at least three and a half% interest on your cash payable in Bitcoin. Um, we're launching a new website. Uh we've got a few lending enhancements that are coming which are going to be really really really cool and our stacks feature. So all of that coming in hopefully the weeks ahead which is really really exciting. Oh and Dylan's got a few more questions for me that are categorized as other which is usually now Dylan last time was ask me about religion. Caught me off guard. Let's see. Uh question, thoughts on your time visiting Madera. I'm lucky enough to have spent time there. It was an amazing place. I loved Madera and there's some of my favorite Bitcoiners ever in Madera. I'm not going to dox them, but I thought Madera was great. Really scary place to fly to. I would recommend taking a boat. It's so windy that pretty much every flight into Madera, your planes like flipping over and over and over. I didn't enjoy my flight there, but I enjoyed my time there. Jack, please make the slide decks available on your website again. You used to do it a few months ago. Uh, I can try. I keep iterating on my AI tooling and my decks and stuff. And uh, it would be harder for me to do that, but I will try and find a way to upload these. Um, there's got to be a way. If there's a will, there's a way. Um, but this is not Ah, whatever. I'm not even explain to you. Hey, brother. Love Bitcoin, freedom, sovereignty, love the movement. How can I support the mission more as an individual? Dude, you guys support me enough, man. I don't have any advertisers on this and I get to do what I think is best for the world because you guys use my [ __ ] products and you guys support me. Even when you are mean to me, it's out of love and it's feedback that I need to hear. Sometimes the truth is necessary. So even in those times, like I really appreciate it. So you guys support me enough. I think just to be a Bitcoiner, you know, listen, the price is the metric that matters. It's really a reflection of how many of us are using Bitcoin to store our effort and our value and our savings. And so just by taking the work you've done in the world that you want to save in choosing Bitcoin as all the other things you can choose and be like, you know what, I believe that what this thing stands for is good for the world and good for the future and good for my kids. Like that's enough. That's enough. And the fact that you listen to this show and hopefully are a customer of Strike, like that's enough, dude. Plenty, if you ask me. Plenty. Mo more than 99.9% of of the population. That's for sure. All right, guys. Almost two hours. I'm out of here. Feedback. Okay, I looked at all the comments and you guys were like, "We love the education. You're such a sweetheart. Thank you, Jack. But give us the macro goods." So, I gave you the macro goods. I got no ego in this game. I'm here for the vibes. I'm here for the fun. I'm here because hopefully it's useful to you. Okay? So, keep telling me what's working, what isn't, how I can make the show better. You like them longer episodes, you like them shorter, you like them more macro, you like educational stuff, maybe we switch it up, maybe we try and do two at the same time. You guys let me know, okay? I work for I work for the people. They said it, not me. Love you guys. Take