Episode 9 Bitcoin Podcast Transcript

and a very warm welcome to another
episode of the bitcoin briefing
today is the 10th of february and we’re
going to cover our rolling story of the
last couple of days
which is of course elon musk and tesla
purchasing 1.5
billion worth of bitcoin transferring a
significant proportion of its free cash
into bitcoin a risk that the mainstream
media is calling extremely risky
but the community but the bitcoin
community has been waiting for for quite
a long time
it is in fact quite a predictable move
and we of course at the bitcoin briefing
did predict this move a few days before
it happened
now when i was researching the the
details of this show today i did notice
the internet is just awash with
news about this all covering pretty much
the same thing
what this means for price what elon has
done
and what’s going to happen next so i
want to move away from that
i never like to do what other people are
focusing on so instead of the what
let’s discuss the why why in one of the
most financially risky times
ever are companies making the move of
swapping
either all or some of their cash
reserves into
bitcoin to help me answer this uh let’s
introduce michael saylor who can speak
far more eloquently on the subject than
i can and is probably more
experienced both of us are all in on
bitcoin but of course you know my
holdings represents
a grain of sand in the sahara desert
of sailors wealth i i think the big
challenge every investor every person on
earth has right now
all 7.8 billion people and all 300
trillion dollars worth of investments
their big problem is where’s my store of
value
and and in a world where if i double the
amount of currency
but i keep the assets and the goods and
services
constant then that means everything has
to go up
by a factor of two right so in a world
where you’re expanding the money supply
it’s like it’s like uh expanding
the the uh dropping the air pressure as
you go up
in altitude the air pressure’s dropping
oxygen’s falling out of solution the
heat is falling out of the air
you’re going to freeze to death or
suffocate so
everybody needs to find a store of value
but david
i hear you say cpi is only two percent
two and a half percent at most and i
hear there are deflationary pressures
going on pushing consumer prices down
even more and
i’d say you’re correct that is exactly
the case when we look at consumer prices
there are a huge amount of deflationary
forces that are acting on it in
in a downward way oil prices are down
technology
is constantly improving advanced
manufacturing techniques
bringing the cost of bringing the costs
of new products down all the time
every year media is basically free now
we used to pay for albums and dvds and
videos and god knows what else for 10 20
a pop now we just have a you know an
eight or nine dollar
spotify subscription i don’t know what
the price is now but you know it’s
significantly cheaper and that’s if
you’re just paying for it it is
available
unpaid if you go down the you know if
you’re torrenting things
covert is going to put downward pressure
on the housing market as
inner cities global cities basically any
working hubs
will be hollowed out by the trend of
people moving and working from home
so you know thousands and thousands of
companies all over the world no longer
need to rent whole floors
of large buildings to put office spaces
in while their staff work remotely
this is inevitably going to ripple out
into the suburbs and the wider
property market so yes if you’re just
looking at consumer prices and
particularly cpi which for me i think is
a pretty redundant metric it’s
incredibly arbitrary you have
people choosing what products and assets
are going into the basket to be analyzed
completely open to at best misleading
statistics
and at worst you know dishonesty and
corruption
nevertheless cpi is largely irrelevant
for
a large corporation when it’s looking at
its cash reserves
it doesn’t matter what the price of milk
and bus tickets and train tickets are at
any one point
what matters to them is what large very
important assets they can purchase
with their hard-earned working cash
they like to buy bonds they like to buy
property equities fine wine
paintings they like to buy other
companies they like to buy stocks
on all of these things respective to the
dollar
is just inflating massively it has been
doing it for decades and with the amount
of money that the government is printing
it’s not going to stop anytime soon and
as michael saylor said he had 500
million dollars sitting there in cash
and he was working out real inflation
inflation against the ass he wants to
purchase
is closer to 10 or 15 which means that
every five years that 500 million
is worth half as much and then in five
years time you can only buy 250 millions
worth of stuff
five years again you’re only 125
millions worth of stuff
you know this is the result of years
decades even
of hard work by hundreds or thousands of
people this is it and for these ceos to
see it become worth less and less and
less every year
particularly for a company like michael
strategy which maybe hasn’t innovated
really
as much as say tesla has particularly
for them
that money is it that represents the
future of their company
and if michael sailor hadn’t have done
anything and just allowed it
to to to inflate away over the next few
decades that company would just become
you know another company that’s just
faded away it lost its relevancy it lost
its competitive edge
you know and its significance as a
company fades away as its balance sheet
inflates away
to show you what i mean about this let’s
have a look at some graphs first up is
the u.s money supply
which has been increasing anyway since
nixon put a final nail in the coffin of
the bretton woods monetary system
and moved the dollar and on all
currencies to a floating
exchange this really turns government
money into monopoly money
not linked to not backed by anything and
really is a massive confidence game if
we look at this we can see that the
money supply increased dramatically in
2008
after the financial crisis when ben
bernanke asked congress
begged congress for 800 billion dollars
otherwise the world as we know it would
end soon
and since then 800 billion is just a
drop in the bucket
the banks are printing trillions now and
it’s not going to stop
this graph is an absolute joke
especially when you realize that every
dollar printed represents a dilution of
you and your family’s hard-earned
work so this really sets up the context
for what we’re talking about
okay so next let’s move on to 10-year
treasury bills
in 1989 you were getting nearly 10
yields on a bond
that means to say that if you wanted a
bond to pay you as let’s say a hundred
thousand pounds a year
you would need to buy a you know a
million dollars worth of bonds
now bond rates are closer to two percent
of course we said cpi is about two
percent
bond yield to two percent why would you
ever buy a long-term bond
that has interest rates that matches
today’s inflation in an inflationary
environment
it doesn’t make any sense so you know
somebody that’s sitting on a large
amount of cash
bonds are no longer an option they’re
not going to preserve wealth into the
future
you know we can look at the 90-day
t-bills they’re the same they peaked in
the 80s and now
they’re not even not even one percent
you know they haven’t been this low
since the wall street crash and until
well
until world war ii end i mean that
really represents how serious
this is let’s move on to house prices
you don’t need a graph for this we all
know
we look at the price our parents paid
for their first houses
mine i think paid at you know 13 000
pounds 15 000 pounds
and now sitting on or recently sold
houses in the hundreds of thousands of
pounds boomers and this is not a
criticism of them at all
have had the greatest run of their lives
you know everything they’ve touched has
gone up 10 or 20 times whether that’s
their shares their equities or just
their house
okay so then let’s move on to the dow
jones industrial average
this again has been on just a huge run
for decades
it’s very strange that we didn’t have
any kind of correction during covid
but of course the government printers
were just on overdrive
pumping out stimulus checks and uh you
know like
pandemic loans and all of this which has
gone straight into the stock market and
is why now we’re pretty much at all time
we’re pretty much at all historic times
even though we’ve had a year where
basically nobody’s done any work or
produced anything
it doesn’t make sense to me tells me
that this whole thing is basically just
a show the market does not reflect
reality
and it’s just especially when the money
printers just won’t stop printing they
can’t stop printing
from the point of view of these ceos
when they’re looking
everything is increasing in price with
respect to their dollars
the right thing to do is to you know
they need to find a life raft and so i
mean what’s left
gold and bitcoin i’m going to do a show
covering the the you know the different
advantages and disadvantages of both
gold and bitcoin
but for now you know the gold price is
not increasing that much it’s only up 15
this year this should have been the year
that gold did really really
well and it hasn’t bitcoin is up 300 and
the reason why is people looking for a
life raft
these are the two life rafts and frankly
because it’s so
liquid transportable censorship
resistant and all of its other benefits
people are choosing bitcoin
and i think that we’re going to start
hearing announcements over the next
couple of days or weeks about other
companies that are also moving their
funds into bitcoin
larry ellison of oracle is a close
friend of elon musk
and uh many people think that he is
going to be the next person to announce
a large bitcoin institutional purchase
and it’s very well very likely something
that is slightly less likely but i’m
going to i’m going to stake my
but i’m going to stake my reputation on
a prediction
that this year will be the year we hear
apple
that we hear tim cook and apple coming
out making a
large very large bitcoin corporation now
i’m not the first to make this
prediction
zero hedge have come out and said that
they’re expecting a five billion
purchase
soon um i didn’t know the amounts i
don’t have any inside any information
but i do have pretty strong conviction
they’re going to do it for this reason
the first is they’re sitting on like 19
billion dollars
of cash and they don’t know what to do
with it they’ve never known what to do
with it
for for like a decade now they’ve not
known what to do with their money
uh apple like to pretend that they’re an
innovative tech company
they’re not a tech company at all
they’re this huge whale
sitting on loads of cash from ideas that
it made
decades ago and they haven’t innovated a
single thing since
apple at this point are like if prada
and hitachi
had a baby they make nice really really
really nice
thousand dollar two thousand dollar ten
thousand dollar items
and that are no better than their
competition really except for
you know they’re shinier they um they
maybe work a little bit better they’re
certainly not a significant technical
step ahead
than their competition like samsung and
other people it’s very different
you know when you look at a flag when
you look at a flagship samsung compared
to
a flagship apple product that there is
very very very little difference
um except on the edges compared to when
we look at say an old nokia phone
compared to the first
iphone which represented several degrees
of magnitude improvement so the reason
why i have this conviction
is is is really that because they
haven’t innovated they have this amount
they have a huge amount of money
they are playing or at least keep
talking about
releasing ai self-driving software but
for me
looking at their their rhetoric i feel
like they’re very very scared
to roll it out maybe they’re just being
cautious and careful
but you know they don’t want to roll
something out too quickly especially
when
um elon musk is already like years and
years ahead of them
in ai but really as of 2021 that is the
only move that apple have got
large strategic move is to go into uh
self-driving cars other than that what
has it got it’s got wireless headphones
that’s that’s his big break over the
last few years wireless headphones
great business model great product i’m
sure but it’s a joke really when you
plot apple’s innovation
curve it’s just been going like this
they have one
shot and that is of course self-driving
as we’ve talked about but until then
buying bitcoin you know they’ve got
billions and billions of dollars sitting
in the bank just putting a fraction of
that in bitcoin
would get them a huge amount of goodwill
it would be the first innovative and
adventurous
and you know like like ambitious
steve jobs-esque thing that they’ve done
in a very very very long time
and not only that but they’re in the
perfect position to start integrating
hardware wallets and
bitcoin wallets directly into the phone
and rolling it out to to their customers
and then of course samsung and the rest
of the companies would copy
and then you know everybody in the world
has suddenly got a secure bitcoin wallet
in there
in their pocket and and really at that
point the countdown to
well i think the countdown to
bitcoinization
is is really on i mean there’s no
turning the ship around
at that point okay so that’s it for
today if you like this show uh give it a
like and subscribe
and more news and analysis on bitcoin
coming up tomorrow

Start The Show

Listen to the latest episode of The Bitcoin Briefing podcast here or you can watch the the video version of the show on Youtube.

YouTube | Spotify | Apple Podcasts | Google Podcasts

Support The Show

If you find the Bitcoin Briefing helpful, please consider supporting us in the following ways:

• Subscribe to the show on YouTube / Apple Podcasts / Spotify / Google Podcasts
• Recommend the show
• Buy me a coffee with Bitcoin (BTC) – bc1qcpdprrjg374rl0hnz0p06a8hmptx0e3k39jwwf – (Please let me know via email so i can say thank you)
• For any enquiries regarding advertising and sponsorship please get in touch with us here.

Episode Details

Thanks for watching The Bitcoin Briefing podcast.