Julian (3:41)

Where do we start? First of all, welcome back. Good to see you again, man.

Peruvian Bull (3:46)

Yeah, no, thanks for having me. I had a good time coming on back in December with Julian, but I know we had planned to do a, a podcast, just you and me, because there's so much to talk about and especially this week in the last few weeks with Gamestop and Bitcoin has been absolutely insane. So I'm excited.

Walker (4:04)

No, same here.

Julian (4:05)

And there's, there's a lot I think we can get into. I also saw, like, right before we hopped in here, they're saying that the Epstein files are coming out today as well. So I'm like, you know, when it, when it rains and it pours like bitcoin, you know, bitcoin's dipping, shit's going wild. Epstein files are maybe going to be released, hopefully, like all the names and not just parts of the names, because that would be honestly, like kind of sketchier somehow if they were like, yep.

Walker (4:30)

Here'S a subset of the names and.

Julian (4:31)

It'S like, well, why are you holding.

Walker (4:34)

Any of them back?

Julian (4:35)

That's kind of weird, but I don't know. We'll see. This is totally off the Bitcoin GameStop topic, but what's your read on that? Do you think they're going to go like, like, full list, here you go, here's everything. Or is it like, well, some of.

Walker (4:47)

This is too sensitive to, to disclose.

Peruvian Bull (4:49)

Actually, I'm, yeah, I'm a little, I'm a little on the pessimistic side. I mean, just given, first of all, they had that photo op with all the Cons Inc. Influencers, you know, D.C. drano, Drano and like those guys where they're like taking pictures with the binders, which a lot of people are pointing out on Twitter. That's pretty inappropriate because these are crimes against kids. You know, like to take pictures with them. Like it's your high school yearbook or whatever. And like being gifted this thing. It's like, why, why are they doing this? Rather than just dumping the files in PDF format online and just saying, okay, everyone go. Go for it. So I'm a little more pessimistic that they're going to cut some names out that are still alive and, and, you know, powerful enough to influence them.

Julian (5:30)

I'm honestly of the same opinion. And yeah, it's kind of gross because it's like we're talking about like horrific things that were done to minors. Like, this is not something you should be, you know, using for engagement bait. Like, just put this out there publicly, like, you know, WikiLeaks style. Dump it all out there and let people go through it. Because you know that the army of autists out there is going to find more than, more than any, you know, investigative reporters or, or, you know, conservative influencers will. But yeah, we'll, we'll see. I mean, at least it's a start. But I hope they go all the way with it because otherwise it's just kind of like, okay, like, so you're part of the problem too then. All right, I don't know, we'll see. But okay. On to, on to happier things. So, so GameStop. So I have, I've, you know, I've done. I was not like part of this initial GameStop saga. Like I, you know, I jumped on board like later on when it had already done a big run up and because I was like, I want to get, you know, a couple shares just to be part of like this, this movement. But you've been kind of like on top of this for a very long time. I know you and Ian Carol both have been like, very vocal about this. Can you like, can we take a couple steps back to like when this first came on your radar and just like what made you kind of focus on this as like, this is something that's actually way more important. This isn't just a meme stock. This has larger repercussions.

Peruvian Bull (6:56)

Sure. So I first was turned on to WallStreetBets in 2019 actually. And I started monitoring the board and seeing what kind of stocks they were in. And I kind of like the informal, fun kind of retail investor shitposting approach to finance. It just made it much more dynamic and interesting. And in the fall of 20, I started seeing the chatter about GameStop and especially in December of that year because we saw some price action. It broke out above like $10, which was a huge line of resistance. And in the summer of that year, in August, Ryan Cohen had taken control of, had bought 12% of the shares, outstanding shares of GameStop, later building up to above 13%. And he had taken a position on the board. And so he was basically, you know, writing. Initially he was writing letters to the board asking them to make serious changes to GameStop, saying that the company was at risk of bankruptcy if they didn't make, you know, strategic moves soon. And then he finally just said, I'm going to take action. And he poured, you know, hundreds of millions of dollars into GameStop shares and bought a huge stake. And then he upped his stake over and over again and then started taking control of other board positions, getting more voting rights and eventually pushing out, you know, board members who are essentially not really doing their, their fiduciary duty, not doing their job. And so that was the initial catalyst for the games, one of the initial catalysts for the GameStop run because his purchase restricted the amount of, you know, shares to borrow. And then his, his moves on the board and ideas to rejuvenate this dying quote, unquote, brick and mortar were indicative of like a broader plan to reinvigorate the entire company and to, to turn it around basically to create this like, you know, David versus Goliath story and reimagine what GameStop should be. And if you're a hedge fund in 2019, 2020, it did make sense to short GameStop. GameStop was, you know, losing revenue for the last like 12 quarters. They were net income negative, they were EBITDA negative. Their average store was losing, you know, several hundred thousand dollars a quarter. It wasn't a good picture. And to add on to that, they had $400 million bond in March of 2021 that was coming due. So all these short hedge funds began to pile into short positions and convince other hedge funds to pile into short positions. And that created this kind of domino effect of the share price falling, revenues falling, pessimism building, short seller reports keep coming out, shitting on the company. And it was just this downward spiral of the stock continually falling. And then with Ryan Cohen coming in and buying a huge portion of the. That was the first indicator that something was afoot that could turn this thing around. And when we saw the initial spike in January of 2021, which again, the Gamestop apes, we don't believe that that was the actual squeeze. We believe that that was stopped because they turned off the buy button. But that initial move gave them enough momentum to start really working on the fundamentals of the business and start to reimagining things. And so they were able to kick that $400 million bond due in March of 2021 down to, like, June and late June into July. And so by delaying it by a couple months, they were able to raise capital that summer and then pay off the bond completely. And in the last few years, what they've done is they've been able to basically, you know, you could call it like, operationalize the company. They've. They've reduced SGA expense, they've reduced this, the amount of stores, the total store footprint. They've increased overall per square foot revenue. And so even though the company is a bit smaller than it was in 2021, they've mostly gotten rid of the bloat and they fired like, you know, hundreds. I think it's like 900 different administrator and manager positions. So they basically slimmed the company down by a significant amount to make it profitable. And in the last few quarters, it has been profitable on a free cash flow basis. But the problem that they face now is obviously, like, what's next? Like, this summer, they raised $4.6 billion of cash. They have no more liabilities on their balance sheet other than what's called a leasehold improvement, which is basically like a promise to upgrade some of their stores. So it's not really a bond. So they're basically debt free, have a ton of cash. But we've been in this cycle where the shorts are still trapped. And this is per a House Financial Services Committee report, the shorts never fully covered. In January of 20, they were able to kind of escape the noose by, you know, freezing the buy button and essentially kicking the can down the road with these, what we Call swaps and total return swap derivative positions that allowed them to push ftds into the future. And so the problem with the way the modern stock market works is everything, just like fiat banking, everything is on a fractional share basis or like a, you know, promissory basis. So when you go and buy a share from a broker, like let's say you go buy Apple shares, the broker will give you. They might show up in your account like immediately, right? But in reality those shares aren't there. They have to be delivered by the DTCC. Now the market maker has a T Plus 3 delivery window, so they can wait three days to give you the real share. But the thing is they can use what are called, you know, like good in kind or good faith redemptions to push that forward. So essentially what that means is like, okay, imagine you know, the, that Citadel sells you 100 Apple shares and then the DTCC goes to Citadel and you bought these through Vanguard. And DTCC tells okay, we need the 100 shares. And they're like, well, we don't have the hundred shares but we do have an option in Apple and that promises, promises us 100 shares. So that's as good as shares. So you should just use that to, to settle our obligations. So then they say, okay, we'll give you T plus, you know, 35. So we'll give you another 35 days to deliver the real shares. But because you have this kind of good in kind or almost like equivalent security, we'll just call it good. And we'll not tell the retail investor that they actually don't have a real share. And this game continues on every single stock in every single market basically all across the world, but especially in, in the US and the naked short positions that they built, you know, amount to trillions and trillions of dollars. But obviously these are isolated because this is a risky move, right? You're, you're selling shares you do not have. It's a risky move. And so the main, you know, targets of these, I guess you call them operations are me are like poorly performing companies, right? If it's a meme stock or if it's a, you know, dying retail company or some sort of like e commerce company that's gone off, you know, gone off the cliff and lost revenue. All these things can contribute to the company essentially getting on the short sellers like short list so to say, like, and that causes them to start shorting it aggressively. And from the research that they found, like Dr. Suzanne Trimbath, who is a PhD economist and she worked at the DCC, she put out in her book that retail investors are seven times more likely to receive a fail to deliver or basically what's called a phantom share, so a fake share than an institutional investor. And small cap and micro cap stocks have something like 20x on a volume weighted basis, the amount of naked shorts as a large cap. So basically these hedge funds and these market makers are saying, okay, we're not really going to take the risk with Apple or with Microsoft because these are the big boys, they have money, they could fight against us, right? And there's other institutions buying and those guys can see that we're not giving them real shares but retail, we don't really care what happens to retail. We can just give them phantom shares and they'll never actually call their shares into their actual broker. They're just going to leave them on loan, on margin accounts and that allows them to just put this fake share in your account and you think it's actually there. And this problem by the way, is not only isolated to GameStop, it's across the entire market. There were people writing about this in the early 2000s on some of the messaging boards. And we've also seen this happen in the treasury market, right? There's multiple treasury issuances where they've shorted more than 100% of the bonds. And this is just rehypothecation, right? They, they take the bond, they sell it to the market, then they want to short a bond so they borrow another bond and then they pledge that bond as collateral to somebody else. That person promises to sell it to somebody else. And it just kind of is like a daisy chain where everyone is thinks that they're holding this collateral. But when you go like open the doors and look at the DC's DTCC ledger, there's only one bond there and there's seven people who think that they borrowed it. And so that's, it's the same issue. And that, that endemic naked shorting that was revealed with GameStop because we saw, you know, we saw the short interest above 140% per FINRA data that weekend and even before that in the lead up we saw it at 220 and Ian Carroll even shared a screenshot with me that was at 330%. So no one really knows the true short interest of GameStop. But all these meme stock stocks were shorted into the ground. And it seems that these hedge funds were essentially coordinating to destroy companies. And there's even some tinfoil which could be believable that There are certain venture capital funds that were putting, you know, like management in key positions to drive the company down. So there was this very famous post called Bust Out Amazon and Bain Capital. And it was basically analyzing how Bain Capital and Amazon were working together to destroy retailers like Toys R Us or Bed Bath and Beyond or Blockbuster by installing. They would appoint like an Amazon VP of business development and the guy would just load the company with debt and do nothing about revenue. And then the company would go into bankruptcy and then these VC funds and the hedge funds could come in at the bankruptcy court and buy everything cheap. So it's really like a. A nasty, nasty system.

Walker (17:20)

Fuck, man.

Julian (17:21)

Yeah, it's like this rabbit hole goes so deep and it's kind of mind blowing that, like, it's. It shouldn't be surprising, but it somehow still is that, like none of this.

Walker (17:32)

Like all of the things that you.

Julian (17:33)

Think that you're trading in the FIAT world, they're like, they're all just fake. Like, they are literally just their numbers on a screen. There's no way to actually really meaningfully verify them, at least not in real time. Like you said, you have the option to like, call it into your broker and be like, no, I actually want to make sure, like, I have these shares, right? But beyond that, like, nobody does that for the most part. And so most of these shares are just floating out there being fractionalized over and over again and none of it's ever, like, really clearing. And meanwhile, the guys with like, you know, the Ken Griffiths of Citadel with just ungodly amounts of money are able to just kind of move things whichever way they want, right? Like, there's really. And again, it's like, well, you know, we're not going to go against the. We're not going to screw over the big dogs. We're not going to screw over our buddies. We're going to screw over retail. And what are they going to do? Like, what? You know, come on. Like, you're going to try and like, get a class action together on us? Like, that's cute. You know, we'll, you know, destroy you in court for years and then, you know, maybe pay a little fine or something. Like, it's honestly just like, it's a. It's pretty dark when you think about it. And like, seems like there's got to be some criminal stuff going on there. Like, that level of collusion can't possibly be legal.

Peruvian Bull (18:42)

Oh, it's definitely not. And the thing is, the SEC for, you know, from what we found out very quickly, in 2021 was that the SEC was complicit with all of this. They will slap fines on the brokers for, you know, naked short selling. They'll slap fines on the brokers for illegally using client funds or client shares for, you know, borrowing or lending. But they'll just, they'll never arrest anybody. And so what will happen is, you know, like, let's say there's one example of Goldman Sachs for 16 years was using their own customers shares to lend and trade their own proprietary accounts. So Goldman is supposed to be segregated, right? Like here's their wealth management where a rich person wants to put $20 million in the S and P and then they have their own trading desk where they're just trading the firm's capital and they were just dipping their hands into the wealth, clients, shares, borrowing them, using them, trading them, and then trying to make a profit and put them back before anybody noticed. And the fine for that, they had made, you know, hundreds of millions of dollars and they were fined like $12 million for it. So it's just like, which is literally.

Julian (19:48)

Nothing like that's, that's, that's a cost of doing business essentially. Like, that's just not like they don't even like blink at that. It's like, okay, here you go, like done. That's my. And we see this kind of thing like all over the place with the, with the big banks and investment firms too. Like there's something we wanted to get into a little bit later is just like the gold market. And like there's massive, I mean it was like Deutsche bank and, and I think HSBC and JP Morgan like all got in trouble multiple times for massive years long, like scandals for manipulating, for using things improperly. Like, it's just like this, this corruption runs so deep and it kind of just makes you realize that if you are a little fish, you know, you're, you're, you or I. Even if you have, you know, as much information as you can have as a plebiscite, you're just, you're, you know.

Walker (20:42)

You'Re playing a fixed game.

Julian (20:43)

Like the house is going to win. They are the house. Like you're just like the game is not designed for you to even have.

Walker (20:49)

A chance at winning.

Peruvian Bull (20:51)

Yeah. And that's, see that's the irony of what GameStop like revealed, right? It's, and their name is also very serendipitous. Right? Game stop. The game is stopping. And that was again, I worked in, I worked in a private equity fintech at the time. And it was so funny because, you know, everyone, a lot of people on the, on my floor were all Talking about the GameStop fiasco and all this stuff. And I was like sharing with them these charts and this analysis from, you know, intelligent people on Reddit or economists or PhDs. I'm like, look guys, I know you, I know you shit on these people because they're quote unquote dumb retail or whatever. But what they're saying makes sense. Like these hedge funds are trading in pictoseconds, like tens of thousands, a millionth of a second. And your retail order travels like a hundred times slower. So what happens is if you, because of payment for order flow in the United States, if you submit an order to an exchange, basically people can snipe your order, they see it coming, they go buy shares somewhere else, and then they sell them back to you at a tenth of a cent higher or a hundredth of a cent higher. And that might not sound like much, but given that there are trillions literally of trades that happen every week, it adds up to billions and billions and billions of dollars of revenue for these, for these companies. And they're, they're literally putting their servers in the exchange closer physically to the main exchange, you know, clearing box to fight. And they pay money for the, for a shorter cord because the shorter cord means they can front run their competition that's 10ft further away in the server room. Like, that's, this is how insane this competition gets. And it's, it's really sad because it's, it's all just grift, right? There's all just different ways to try to scam normal people out of a couple cents here, a couple cents. There's every single day hundreds of thousands of times a second. And it's not productive in any real way to the real economy.

Julian (22:45)

I mean, that's really the sad thing, right, is that there is no value.

Walker (22:48)

Created there at all.

Julian (22:49)

Like it is a purely extractive business endeavor. It's, it is not doing anything of value for, you know, the world at large. Like, you are not producing anything. You are literally just trying to figure out how you can, you know, shave seconds off to be able to shave pennies off and do that an, you know, innumerable number of times to make your profit. It, I mean, so do you think where we're at now in this saga because like, the mask is somewhat off because more people are aware of this? I mean, but like, does anything actually meaningfully change? Where does GameStop sit in this now? What do you think the next move is there?

Walker (23:29)

It continues to blow my mind that.

Julian (23:31)

There are bitcoiners out there who are.

Walker (23:32)

Not yet on Noster.

Julian (23:33)

Seriously, what are you doing?

Walker (23:35)

Just like you shouldn't need to ask permission to use your money, you shouldn't need to ask permission to speak freely or have control of your own account. But that is exactly what you are doing. If you are still trusting centralized social media platforms, you may have seen several high profile bitcoiners and friends of mine like Lawrence Lepard and Lyn Alden more recently get their X accounts hacked and then struggle to work with X support to get those accounts back. Where did they go to give people updates? They went to Nostr. On Nostr you can't be censored, you can't be banned, and you can't be deboosted for saying words that Mark Zuckerberg or Elon Musk don't like. And honestly, the vibes are just better on Nostr. Plus Nostr has bitcoin payments built in so when you post a meme, a spicy hot take, or just a photo.

Julian (24:21)

Of your steak, people will zap you.

Walker (24:23)

Bitcoin to show you they like it and find your content valuable. And if you are a content creator, you can start monetizing your work immediately on Nostr. Unlike on X, YouTube or literally any other centralized platform, you have to hit engagement thresholds and then kyc yourself.

Julian (24:39)

You can find me on Nostr by.

Walker (24:41)

Going to primal.netwalker and you can find this podcast on Nostr@primal.netcoin Primal also has a built in bitcoin wallet so you can literally get zapped by people for your posts. Then go use those sats to buy a coffee or do whatever you want all from the same app. Search for Primal in the app store, go to primal.net or choose any of the hundreds of other Nostr apps that are out there because you can freely switch between any of them anytime you want. So come join the largest bitcoin circular economy in the world and start zapping sats on Nostr. Shitcoining is bad for you and you know what else is bad for you? Trusting a centralized exchange to keep your bitcoin safe. So go to Bitbox and use the promo code walker for 5% off the easy to use bitcoin only fully open source Bitbox 02 hardware wallet. Then get your bitcoin off the exchange and into your own self custody. Bitcoin is chop solidating around $0.1 million and companies are buying nation states are Buying. And unless you have your head stuck in the sand, you realize that your stack is going to be worth a heck of a lot more later than it is today, at least in fiat value. Because we all know one Bitcoin equals one Bitcoin, right? So now is the perfect time to make sure you have your security locked down tight with Bitbox Plus.

Julian (26:10)

And I cannot emphasize this enough, the.

Walker (26:11)

Bitbox 02 is just super easy to use. Whether you're brand new to Bitcoin, it's your first time setting up a hardware wallet, so you're a little bit nervous, that's okay. Or you are a well seasoned psychopath. Again, it's Bitcoin only and again fully open source. Head to their GitHub and verify that for yourself. Don't trust me or Bitbox when you go to Bitbox Swiss Walker and use.

Julian (26:35)

The promo code Walker, not only do.

Walker (26:37)

You get 5% off a great piece of Bitcoin only open source hardware, but you also help support this podcast. So thank you.

Peruvian Bull (26:46)

Yeah, that's a good question. So we were really hopeful in 2021 because the retail investor movement was so strong. We wrote letters to the sec, we even got Gary Gensler to do like multiple podcasts, live streams, Twitter spaces with us. And we were basically like telling him about the problems. And he was playing the devil's advocate and also playing ignorant, I think, to a certain extent. And so we were very hopeful that, that things would change. But as time ground on like he, they would do small things that would maybe help alleviate the problem marginally, but it never addressed the real problem. And the real problem is naked shorting and fail to deliver. If you can fail to deliver a stock, that essentially means you can just print money because you can sell shares that you don't have. And then what you do is, like I said, you do this obligation rollover. So you just go to the, you know, the clearing mechanism, the DTCC and you just tell them, hey, like, oh, I'm sorry, I don't have the shares today. I have an option for the shares. I have a derivative for the shares. I have a borrow agreement for the shares in 30 days. Can you just give me 30 days more time? Then they give you 30 days more time. And then in 30 days you just do it again. You say, oh, actually I have a different option, so let's just use that. And so we saw that crisis, right, that kind of rolling FTD crisis play out. And that's actually the reason for the, for the spikes is every time there was a Spike in the share price. It was a spike with the ftds. The amount of failed delivers was building up so much that the central clearing system started to force buys. So it started to force people out to net everything to zero. And that's what caused some of the, you know, some of the, the I guess you call violence in the moves. But the issue was again, we never got actual regulatory clarity on banning short selling or banning ftds or the market maker exemption or any of these things that we want. And at this point, and this is what I've been saying too, you can't expect like life altering change from a system that depends on this kind of grotesque parasitism to survive. So I think comment letters, again, they're nice, but really what we need is just complete reform of the entire financial system. And like I've said before, that starts with Bitcoin. That starts with the money. If you fix the money, all these contingent problems downstream of it like the shares, you know, naked shares and ftds and all this starts to get resolved because now you have a real money backing it and you can track everything on a public ledger.

Julian (29:22)

I mean that's, that's where things get interesting. So let's, let's talk a little bit about this kind of intersection right now of, of GameStop and Bitcoin. Because you know, Ryan Cohen posted, I forget when this was, you know, a couple weeks ago maybe a posted a photo with Sailor, you know, and everybody's like, oh shit, like, okay, he's sitting on what you said, 4.6 billion in cash. That's a lot of cash. That is, you know, melting there. What do you think the realistic chances are of Cohen saying, you know what, okay, like I'm going to follow the Sailor microstrategy playbook. Let's ape into Bitcoin. Let's, you know, let's make ourselves a bitcoin treasury company.

Peruvian Bull (30:05)

I think the chances are actually increasing every day. So this summer again. So GameStop was able to raise $4.6 billion this summer, or it was 4.5. They already had like 100 million cash on hand. But they were able to raise a huge amount this summer. And again they were debt free. They were just kind of sitting on the cash. And what I did with several other Bitcoin GME people is we wrote letters to the board recommending that they buy Bitcoin as part of a, you know, basically like a modified Sailor strategy. And they didn't listen. Nothing, nothing came of it. We tried to even create a shareholder proposal that didn't go through. And so we were just kind of waiting on our hands and we were like feeling like we're yelling into the void because Ryan Cohen wasn't listening. Even though we've tagged him, we've created posts, we've made Twitter threads, it just wasn't enough. But him, first of all, he's been posting about Austrian economics for, for the last few years. So he's posted memes from Thomas Soul and he's posted quotes from Miceys. And so we know that he's like in this same frequency, he's in this room, but he just is not fully getting it. And the issue was, I think GameStop early on. So right after the initial like sneeze, or you call it like mini squeeze, they had raised some capital and they were no longer overly debt indebted. And so they were able to put, put some money towards a Web3 marketplace. And so they built out NFT marketplace gaming basically on Immutable, which was led by Robbie Ferguson. And they were planning on creating this web3 utopia of using Solana and Loop Ring as like the settlement layer for their NFT collection. And all the games could be bought and sold on their third party marketplace and you could create custom skins and, and everyone was so excited about this. And unfortunately, of course, Ben Wehrman was one of the first people who was a bitcoiner to sound the alarm bell. He's like, guys, this is bullshit. They should just be doing bitcoin. What are they doing? And no one listened to him. And Ryan Cohen spent like $30 million developing this thing. And then when the NFT boom turned into a bust, their revenues collapsed and it became a complete sink of money and they lost a ton of cash. And so they had to close it down after a year and a half in the bear market. But that was a clear fumble that the company did in a strategic move or strategic blunder that kind of scared them away from cryptocurrencies. But we thought, we're like, I hope he understands the difference between crypto and bitcoin. I hope he gets that these aren't the same thing. And I think that that's what's stopped him for so long. He met with Saylor and stock price went up like 8% popped. And then the next week there is a CNBC article saying that according to sources inside the board that they're considering buying bitcoin. Then the stock pumped like 20% in after hours. And then this week, Ryan Cohen has followed Bitcoin magazine and Bitcoin. I Think it's just Bitcoin, the Twitter handle. So he's following three things now. GameStop and two Bitcoin accounts. So I think that with the momentum that's building, I think, think he's starting to finally get it.

Julian (33:27)

I mean it is, it is sad that it's like, you know, they, they almost had to shitcoin and get wrecked by that, you know, before they could emerge as fully, you know, toxic Bitcoin only maximalists. You, you wish it weren't the case but you know there are many such cases of this out there. And I mean I, I think it's interesting because it's like the question is ultimately what else do you do with that amount of cash? What else do you do with $4.6 billion? Like this was sailors problem too, right? Yet a bunch of cash. It's like, well we can't just keep sitting on it. Like we are getting debased, we're losing.

Walker (34:05)

Purchasing power if we sit on it.

Julian (34:06)

So what can we buy? Like we can't buy, you know, other securities. Like we can't have too much of that. So. Okay. Oh, here's this bitcoin thing. I'm finally going to pay attention to my buddy Eric Weiss who's been, you know, talking my ear off about it for years and we'll go all in. It just seems like for GameStop this is the next natural evolution. And from like a memetic standpoint like wow, this is like two of the, you know, probably the most powerful, you know, meme stock of all time. Like basically invented the graded the term meme stock essentially.

Peruvian Bull (34:40)

Yeah.

Julian (34:41)

And then Bitcoin, which is just the ultimate meme. And I don't mean that in a meme coin way. I mean that in like as a meme, as a way of propagating information. Like it just kind of seems like a match made in heaven. I don't know, maybe that's also because I am a bitcoiner. But like Cohen seems like he's like, he's pretty close. You know, he's, he's aligned ideologically at least with like, you know, sound money. He's clearly knows that the Fiat system as it relates to the stock market is hopelessly just corrupt. So it's like what do you do? You buy the incorruptible money at least that's, that seems like a no brainer to me.

Peruvian Bull (35:22)

Yeah, I totally agree. And the funny thing is like you know, we've seen. Cohen has tried different ways to escape this like you know, naked short like overhang, that's, that's been basically a cloud over the company, right? He first they did, you know, we got the buy button turned off and then they finally raised up money to pay off the debt. Then they did a split end in 2022. They basically issued a dividend that was in the form of shares. And all that happened with that is that they found brokers basically creating fandom shares again. So like, you know, there were brokers in Germany where they were supposed to give out 300, you know, they were given 300,000 shares from the DTCC to give out as dividends. And yet from our own research within the Reddit community, they found that it was like 490,000 just from the people that they pulled and they verified their holdings. 490,000 shares were distributed as a dividend. And so it was like, where are these shares coming from? And clearly the broker just creates them, creates phantom units and then again creates this kicking the can down the road problem of obligation, obligation settling. And so they just never actually give you the shares. And so every time that they've tried to do something, it doesn't work. And I've been telling them like, guys, you will not win the game of the fiat system within the fiat system, you can't beat them. You know, if you do a dividend, they'll find a way to fuck with it. If you do a share split, they'll find a way to fuck with it. If you do, you know, share recall, they'll find a way to fuck with it. You know, Michael Burry was buying actually GameStop back in 2019 and he noticed that the stock was extremely shorted and that the, especially the options activity and the derivatives activity around the stock was really weird. And so he tried to call in his shares from his broker, basically tell his broker, okay, you have the shares in your account at the dtcc. I want to call them in to what's called the direct register system, which was created in the late 90s. And that moves the shares from street name, which is the name of the broker, to your name. So it gives you full legal ownership and full like physical holding of the shares. You can think of it like self custody. And he waited for weeks and weeks and calling them, he's like, guys, I have 1.3 million shares. This needs to like, you need to tell me where they are. No, no one, no one, no one, no one. And finally he got like a third of them in and then he just gave up and he sold his, the rest of his position. Because he realized he's like, the shares aren't there. This is too rotten of a system. And so unfortunately, he sold before the squeeze began, so he didn't really get to participate in that. But that was endemic. That was an example of the endemic nature of this shorting problem. And so I think Ryan Cohen finally realizing, like, the true path for this memetic warfare is for GameStop to be buying Bitcoin and join MicroStrategy in this kind of like, financial vampire attack against the very fiat system it exists in.

Julian (38:21)

Yeah, I mean, it would certainly. I actually did not know that about Michael Burry. That's kind of fascinating. So basically, he. He tried his utmost to get his shares. Yeah, the shares, like, they just weren't. They weren't there. Like, they had a third of them and the rest were just kind of like, we're having some trouble getting a hold of these. Like, what do you even say? Like that just. That's just so absurd.

Peruvian Bull (38:43)

Yeah. It's insane. And that's. I think that's why he sold his investment, because he was just so fed up with. With the settlement system, because it was ridiculous. Right. And if they'll do that to Michael Burry and a fund manager like, you don't think they're gonna do that to. To you or for your dad in the. His Vanguard account, like, they don't give a shit about you. You know, they're not. They don't want to give you the real shares because then that starts to expose what they're actually doing. And this kind of like infinite money printer that they've, you know, almost as bad as the Fed, but obviously not as bad, but this money printer that they've created within the. Within the financial system, within the stock market. And so, yeah, no, I think like, them buying an incorruptible, immutable asset is. And then even potentially doing a bitcoin dividend for their shares is one of the things they could do to, to basically squeeze the stock. And then the brilliance of it, like I talked about on, on Marty's show, is you could see them buy Bitcoin, the share price triples, a bunch of shorts are forced to cover. Then they can, if they wanted to, they can do an ATM offering into that, and then they can do it again and just continually buy more Bitcoin, the Stock shoots up 100%, sell some shares, buy more Bitcoin, and then just continue this game. Kind of like what MicroStrategy did and have a dual effect of attacking the fiat system at the same time that they're stacking bitcoin, which would be kind.

Julian (40:08)

Of just like Chef's Kiss. I threw up here on the here from bitcointreasuries.net which is a great website for those who have not been on there. It's quite fascinating to look at. I think this is amazing. So just run the number very quick using whatever we're at right now. 83,000 cuck bucks per bitcoin. And at $4.6 billion, if they dump that into bitcoin, that gives them like a little over 55,000 Bitcoin. So this puts them at the. If GameStop did this, this puts them.

Walker (40:42)

At the number two spot for corporate holders of Bitcoin.

Julian (40:46)

Like MicroStrategy is obviously almost. There's just like about to touch, you know, half a million. Half a million coins. But the next one down, Mara, like GameStop would literally be 10,000 ahead of them. Then they'd be light years ahead of Riot. But I think it's amazing that Tesla is still actually pretty high up there. All these other bitcoin miners, I mean, they'd literally have over 5x the number of bitcoin that Coinbase has, which is like a whole nother wild thing that it's crazy. Coinbase has so little bitcoin, but we'll save that for a different day. But like, that's kind of wild if.

Walker (41:19)

You think about it. That's a massively meaningful amount of coins.

Julian (41:23)

That they'd be able to accumulate like that. And with cash that is already sitting there. And I mean, I don't know, that's a pretty incredible strategic move to be able to make. To make yourself the number two corporate holder of bitcoin in the world.

Peruvian Bull (41:38)

Yeah. And think about this. It would unite the two. Two of the largest retail investor bases in the world, or probably the two biggest, because you have the MicroStrategy bros, who I've seen on Twitter, they've shit on GameStop. And I understand if you're not in the space and you still think the 2020 thesis is valid. Yes. You think GameStop is a dying company now. It's not dying. It's no longer on life support. But it's like, okay, they're only making like 30 million a quarter. They're no longer of debt. But there's no more growth thesis. Right? There's no more. It's like, what can they do with that much money? Right? And people said they can buy a company. I'm like, well, if you can show me a company that has a better return than Bitcoin then sure, but I don't see one. And so it just makes sense that that much capital should be funneled towards a hard asset that will keep pace or even outperform inflation as we're seeing inflation chart just pick up in the last few months. So just, it's the perfect hedge, the perfect combination.

Julian (42:37)

Yeah, it's going to be really interesting to see what happens to. I mean, first of all, now, I mean, if GameStop was able to move quickly on this, now is a pretty nice time for them to be able to do it. They're getting like a 20% discount basically on the kind of range that Bitcoin's been for the past little while. But it's going to be really interesting to see what happens this year. Just as far as, you know, the group of shamans that control our money, the Federal Reserve, like, what they decide to do, what Trump pressures them to do, because you know that Trump loves green candles like Trump is. He loves doves, hates hawks. He wants to see the market do well. He knows people are happier when their investments are doing well. We're still in a fairly, relatively speaking, tight set of monetary conditions. We saw M2 is starting to go up again. It was actually decreasing. That's another incredible thing to me is that bitcoin had this incredible run up over this last little period here over the last year. Plus, while we had the, one of the tightest rate hikes in history, while M2 liquidity was actually being pulled out of the system. That's kind of incredible because what happens when they turn that faucet back on, when they warm that printer back up, things are going to get really, really interesting. And I feel like even though their inflation numbers are coming in hotter than they expect, shockingly, you know, who knew, even with their completely cooked CPI metrics, they just can't, they can't pull enough out to make the inflation not look bad. But at a certain point I just have the feeling that they're, they're going to say, you know what, okay, we've done as much as we can on inflation. We don't want to reach this like, stagflationary period where we've basically, you know, rate hiked the economy and kept conditions too tight for so long that, you know, we can't have any growth. But we've also got this high inflation, like stagflation would be a bad outcome for them. But I'm curious, what, what, where do you see that going? Like, do you have any read on what the Fed's moves are in kind of the coming year, especially with the new Trump administration? Of course, they're separate, wink, wink. But, you know, how do you see that playing out?

Peruvian Bull (44:51)

I think they're, they're going to try to hold rates high for as long as possible to fight this ostensible inflation threat. But they're going to have to eventually capitulate to the treasury market. Right, because that's the real elephant in the room, that's the real third mandate of the Fed is Treasury market stability. And so if there's, you know, if there's a crisis, if there's a problem with the banking system, if there's a problem with the treasury market, they'll throw all caution out the window in order to save it. Even, even if it's just, you know, destructive to the real economy. And what we've seen in the last few years is an explosion of gross interest expense of a trillion dollars a year. We've seen the debt accelerate, the debt path accelerate substantially. And now we're at what, 37 trillion. We're expected to hit 40 trillion just in this next year. We have or adding a trillion dollars every hundred days. That's soon going to be 90 days and then 60 days and then 30 days. And so if that debt path continues to accelerate, the issue that the Fed faces is, where do you stuff all those bonds? Who's going to buy the bonds? Lebowski. And the answer to that question has historically been banks with Basel III regulation adjustments. So they made Treasuries, hqla, and so that all these banks have to load up on majority Treasuries as part of their position. And then they said, okay, well, the banks are all loaded up a lot, so let's load up the money market funds. And so in 2014, the SEC made very literary requirement changes to money market funds, made a bunch of money market funds, the what are called government MMFs, and so they can only invest in treasury bills and treasury notes. And then, you know, they made even more changes, obviously, to their own liquidity pools, like the reverse repo and the TGA, where in 2020 we saw reverse repo, you know, start to rise. And then by 2022, it hit the all time high of like 2.4 trillion. And the TGA, which is a Treasury general account, which is their spending account, hit like 1.9 trillion. So they stuff like trillions of dollars in these war chests that they can use to drain out later, but it's not on their balance sheet. So it, or at least not as listed as the same assets as like just their securities holdings. So they can claim that they're not easing even though these two war chests of trillions of dollars of money are able to be drained. So they did all these things, right? They did all these gimmicks, all these moves to try to get everyone to swallow more Treasuries. But they're getting to the point where the demand, especially on the long end is falling off. And so they're having to issue more and more bills, shorter and shorter term. And they're also seeing a fall off in foreign central banks and foreign government buying. Now the only buying is coming from some private wealth funds overseas and then some domestic investors. But really the only thing that's keeping things afloat is the fact that they've been shifting issuance so much to the short end. If they were keeping the issuance like they were on the long end, we'd see that the 30 year at 7% or something, it'd be insane. What they've run into is they're kind of at the end of the road. And that's why I think that they're cutting even if they're cutting slowly, that's where they're cutting even with rising inflation numbers, right? We started this cutting cycle in September and I was on a spaces with a lot of other people after the FOMC meeting. They're all arguing, right, all the finance dividend bros. And they're all like, well you know, the Fed, the Fed's, you know, going to cut, going to cut, they're doing this. And then I just was asking them, I was like, guys, why, can anyone explain to me why they're cutting right now? Like there's no recession indicators, at least on the surface, right? Inflation in September was moderating, the unemployment is low. It's like, why are they cutting? Like it doesn't seem, there's no reason and nobody could answer. And then I was like, I'll answer it. It's because they, you can't keep rates at this, this high with this level of debt to gdp. And so whether they want to or not, they're just going to be forced to lower and lower. And again, they've never done a cutting cycle without doing qe. So the likelihood is that by end of this year, maybe into next year at the latest, they're going to start to have to do QE again. And like you said, that just means that the booster rockets on bitcoin are going to go into overdrive and we're going to see this thing rocket to the hundreds of thousands because we've had this entire bull market without real easing from any central bank. Just some minor rate cuts and a little bit more liquidity to keep things alive until they really have to, you know, let the printers run.

Julian (49:33)

Well, that's the thing. It's like they, there's only a couple of ways out of this. Like one is to start printing again because as you said, the interest expense on the debt, like it, the debt is becoming unserviceable, basically. Like our interest expense is beyond our military budget, which is massive and somehow the interest on our debt debt is larger than that. Like, and I'll just pull up the, for anyone watching or for folks to see. Like this is the chart of our, the growth in our interest expense, interest payments on the national debt. Like where do you think this goes? Like, you know, this is where, you know, Lyn Alden would come in with a nothing stops this train meme. But it's like, so you either have to basically inflate away that debt burden to make that debt worth less, as you had said, or you need like a global total war reset like that. Those are kind of your two options. Like I, I would prefer the inflationary option. You know, everything's going to get more expensive. However, I think that's preferable to all out war. Personally. Maybe, you know, I'm, I'm old fashioned in that regard, but it's like they, they're, they're backed into a corner and I think they kind of know it even, you know, Powell in the, like multiple times last year made the commentary about the fiscal situation saying look, this is unsustainable. Like we literally cannot, you know, sustain this. I'm not supposed to get involved in the fiscal side, but I just want you guys to know it's unsustainable. Like, please pay attention. But it, I mean, then again, you know, you go back to Lynn, it's like that's why it's the best meme for this.

Walker (51:08)

It's like nothing stops this train.

Julian (51:10)

Like they, it's, it's print or go to war. And there's not really another option for them that I think anybody would reasonably suggest they may have a path to do. And so it's like what's the path of least resistance?

Walker (51:24)

Print.

Julian (51:26)

That's where we're going.

Peruvian Bull (51:28)

Exactly. Yeah. I mean the other option would be. Right, like it's either revaluation or default. Right. The problem with default. And I pointed this out to a Lot of people is like they don't understand basic accounting. So the basic accounting principle is A, equal L plus B assets, equal liabilities plus equity. And that holds true across the entire financial system. And so that means that every single liability is someone else's asset in some way, at least in the financial economy. And so a bank loaning money to another bank means it's a liability on the borrower's balance sheet and it's an asset on the lender's balance sheet because now they have future promise of cash flow. So if you delete, right, let's say $10 trillion of federal debt, if you just say click delete like we're not paying those bonds, bye bye, you're deleting 10 trillion of liabilities, you're also deleting 10 trillion of assets from someone else's balance sheet, like baby boomers or some banks or hedge funds or money market funds or whoever. So if you do that, you're effectively just axing the entire financial system anyways because it's all fractional reserved. If you get rid of $10 trillion of assets like we saw in 2008, you nuke the entire financial system. And with the fragility that we have now, like you can't, you couldn't even nuke a couple more than a couple trillion before you start to reach danger zone levels. And so what they will have to do is, is, I agree, is, is print their way out. And that's what they've done with basically every single cycle since the beginning of history of central banks. Hindenburg research did a research piece on all the countries that have been above 120% debt to GDP since 1850. They found 55 countries of the 55, 54 of their currencies. So 54 times they saw either hyperinflation, stagflation, like basically burning, slow burning the currency to the ground, devaluation, default or war, and a total demonetization of the currency. So the currency completely just dies. And the one exception to that was Japan. And Japan is obviously currently in their own slow motion currency crisis with inflation rising again and the yen blowing out 30% in just two years. And so they're now finally starting to face the reckoning of their own problems. But there is truly no way out. You know, Larry Lippard says this, it's just math. Like he's right, you can't get out of this conundrum. And this is why every fiat currency dies in the end, because the math just doesn't work for it. Oh you got a book. Nice.

Julian (54:09)

I'm so speaking of Larry's book, give a plug for him because he is still banned from his account on X right now, which is insane. Like, I cannot believe that they are making it so difficult for him to get back on there. But if you haven't gotten Larry's book yet, the big print, go and pick up a copy. It is excellent and I'm reading it for the audiobook. I'm narrating it. So. But get his physical book too, to support Larry and then the audiobook will be out with haste. But it's like one of the great things that he lays out really well in that book is that, you know, each of these bubbles gets bigger and when we don't actually resolve the underlying issues in the system, we kick the can down the road and there's some short term pain, but nothing near as bad as it should be. And each time that bubble gets bigger and bigger, the magnitude of the print needs to increase necessarily. And so you get to a point where it's like, what? Like the COVID print made the 08 print look like nothing. What does, like, the next print is going to make the COVID print look like nothing? I don't think most, like the vast majority of people have wrapped their heads around the fact that that is coming, like, you know, to quote, to say, but the big print is coming. And like, are you prepared for that? Like, are you prepared for that to happen? And it seems like the gold market seems to be giving us some signs that gold is kind of the canary in the coal mine. It is analog sound money. Can you talk about that a little bit? Because I know you are far more up on that than I am. And like, what's going on with like a lot of the fish, Physical gold redemption as well. Like what, what, what's shaken out there?

Peruvian Bull (55:48)

Yeah, sure. So I wrote again, I've been writing about macro now for a couple years and last fall I wrote a piece called Printers Coming where I was basically going back into, you know, last couple gold cycles and also bitcoin and showing that gold, historically front runs, moves in global liquidity and bitcoin is much more coincident with it. So bitcoin, if there's like a 10% increase in global liquidity in a month, Bitcoin will react very quickly to it. And obviously bitcoin's like a leveraged or basically like a higher beta form of gold. So it's more volatile. So gold goes up 10%. Bitcoin can go up 40%. And so we see changes in global liquidity very quickly be baked into the bitcoin price. Generally there's always exceptions. But what was interesting about gold is that even though obviously it moves much less on a percentage basis, it would front run these things because I think this is due to obviously a lot of factors, but pension funds, hedge funds, all these guys think they're boomers and they think in boomer terms. And so their solution to an increase in global liquidity that's coming down the pipeline is to buy gold. We saw this in the 2018 run up. We saw, you know, gold start to peak up, you know, into the 17, 18, 1900s and then hit 2070, announced in August of 2020. And then it started retracing. And everyone asked why is it retracing? And I was like, well, I think this is telling us that there's going to be a taper in a year and a half. And lo and behold, 12 to 18 months later, March 2022, they announced the taper. And then this year, you know, 2024, gold market in March starts to go on a run and in February and March starts to rise. And then we saw it obviously hitting 2600, 2700 last fall and now it's at 2950. And so what it's signaling is that there's now, I think a global indicator that there's going to be a huge liquidity wave coming in the next six to nine months or so, because we're about halfway through this cycle when gold started to really move, move. And so what that tells me is that not only is global liquidity coming, but obviously this rush for physicals is starting to accelerate as well because all these players are starting to move into buying more and more physical gold. They don't trust the LBMA or the BOE to custody their gold. And so I'll go there next. So last month the COMEX saw a record 1.9 million ounces of gold of gold that were settled for delivery. And for reference, that's about four to five times the average monthly delivery. And it was like seven times the prior month delivery quota. And that freaked the COMEX out because this has happened before. In 2020 during COVID there was a huge amount of physical delivery and that forced the COMEX to front run the market basically by building up their, you know, what are called net eligible and net allocated ounces. And so they had built up this huge war chest of gold and silver to basically make sure that they wouldn't be drained completely. And we saw after 2020, that number slowly decreased, decreased, decrease. They didn't have as much of war chest, it was being drained, but there was no huge change in demand, so they didn't care. But now what's happened is somebody or a group of people are now basically creating this run on the, on the comex that's causing COMEX to get worried and they are starting to increase their deliveries. So they got 1.9 million ounces drained in January. They bought 11 million ounces physical to refill their coffers into front run. Anything more. The problem is that like, just like the, you know, bank run virus, right, how financial contagion works. If you create a run on one exchange and that exchange solves the solution by draining somebody else, that just moves the problem to the next person, right? And so now what's happening is London and the LBMA is facing a massive run on their gold markets. And a large part of this from comex, a large part of it's also from other entities, central banks, private investors. But in the last few weeks we've seen hundreds of millions of ounces being, or I should say sorry, tens of millions of ounces being drained from, from, from the lbma. And the conditions there have gotten so tight that the, what are called the bullion banks, which are J.P. morgan, Citibank, HSBC, those guys have started to turn to the bank of England to borrow gold to settle their, their obligations because they're panicking, right? They don't have, they, you know, the entire gold market is fractionally reserved, just like the fiat system. So they'll sell, a bullion bank will take 1 ounce of physical gold and sell 100 ounces of paper contract against it because statistically only 1% or sometimes even less than that of paper futures are ever called in for physical delivery. Everyone just rolls forward in cash because no institution wants to take the physical delivery. And that's because of the fundamental problem that gold faces, which is the settlement issue, right? It's great money in every way, but settlement, like nobody wants to carry around bars of gold to settle payments, nobody wants to flake a bar of gold to pay for their coffee. So you kind of have to centralize it. That's its weakness. And so because of that, the paper markets in London were leveraged to an insane amount. And now that the run is beginning, all these bullion banks are being drained. The LBMA reported that there's about a billion ounces of, of physical gold in London and 800 million are already claimed. So they're already basically getting pulled out. So they only have 20% of it left and that's why they're going to the bank of England. And so then we see again this daisy chain, like I said, this financial contagion move. And so first it was the LBMA that was under pressure in like late January and now it's moving to the bank of England because all these bullion banks are like, holy shit, we need to go get gold. And the bank of England has a ton of gold. So they have a borrow program. We're going to go borrow gold from the bank of England. England. And now the bank of England has four to eight week delivery timelines. So yeah, just, it just keeps kicking the can. Right. And I think I've told people before that if you want to own gold, you only own physical. Don't own any paper, just like with bitcoin self custody it. And don't play any of their paper games because you never know if they actually have the gold.

Julian (62:21)

Well, right. It's like that, you know, the, just like the, you know, the money in your bank account isn't actually yours and it's not actually there. It's like, like your paper gold, like it's not actually yours if you don't have possession of it. And it may or may not be there, but probably not. And it's like, I mean, so do you think this. I know Peter Schiff's obviously very happy right now. He's like, he, he's really like gold, gold is up, bitcoin is down. He is just like basking in this right now like absolutely loving it. And I'm happy for him, honestly. He, he needs a win after just being, being so. I mean, and he's still wrong about bitcoin coin, but at least he gets like a few weeks or a month maybe where he can gloat and be like, see, I told you guys, you know, you should have held gold this whole time. And you know, but hey, let's, we'll let him have this. But I mean if gold is signaling that there is a big print coming, that there is a, you know, a lot of liquidity that's about to be injected into the system based on like your prior experience looking at this how like think when do you think this starts getting injected? Like is this something that's going to happen kind of gradually like they're going to, you know, try to not just pump the markets too fast or you know, obviously nobody can predict any sort of black swan that might cause them to, to really need to Ramp up pumping the money into the system. But like, how do you see that shaking out? Do you think? Gold just kind of continues to chug upwards and then, you know, right, like right now bitcoin's down like 20% from where it was kind of range bound around 100k. Terrible. We've crashed down to 83 or $84,000. The world is over. But like, do you think bitcoin starts? Basically people start picking up on what's happening in the gold market. The weekends, the short term holders have been, you know, they've just sold at a loss. They, you know, the, the tourists basically bought their bitcoin sold at a loss, washing them out of the system. What, what happens next for the bitcoin and the gold markets, do you think?

Peruvian Bull (64:16)

Think, sure. So like I said, given my timeline of the last three gold cycles, we've seen gold front run liquidity by 12 to 18 months on average. And it varies, it's not perfect, but 12 to 18 months is the rough heuristic. So again, if we're starting at March 2024 as our starting timeline of when the gold market started to really take off, we're looking at end of this year into maybe at the latest next year. Right. So I would, and I would also be on the, on the side that would say the liquidity will most likely be coming in a bigger form. You know, it will be a large injection of liquidity at one at a single time rather than it being petered out at a little bit. Just because of the nature of how QE works and how these cycles work is they can't, you know, they can't keep saying that they're tapering and holding high rates while doing qe. And so I think that what's going to happen is there's either going to be a black swan or they won't even say there's a black swan. They'll just be like, hey, we have a lot of treasury debt, no one's buying it. We're not going to let the federal government default. So we're restarting QE. That's it. That's the rationale. Sorry, inflation's at 7% or realized inflation is at 7%. Sorry, the headline CPI is at 4, we don't care, Sorry, we have to do this to save the country, quote unquote.

Julian (65:37)

Right, so, well, well a question there actually, Sorry to interrupt but like in the past the Fed has tried to pull maneuvers where they're like, no, this isn't qe. Like, you know, don't call it qe. It's not qe. Like, we're like, we're just doing some, some fancy things and we're going to give them Fancy, you know, PhD economic names and whatnot. Do you see that as another alternate where they're like, no, no, no, we're not doing Q qe. We're still, we're just being slightly more accommodative than we were previously, that's all. It's just an increase in accommodation. It's not quantitative easing.

Peruvian Bull (66:09)

Absolutely, yeah, absolutely. They could, they could do that. Right? And they've already done that to a large extent. Like, like I've covered earlier. So they did changes to the money market fund, they did the Basel 3, like, you know, HQLA making treasuries, like the Tier 1 capital asset, requiring banks to hold treasuries as, as a majority of their liquid assets. And then, you know, we've seen, like I said, reverse repo tga. There's also something called the foreign repo pool, which is also a liquidity, you know, a liquidity buffer they can use. They also had the btfp, which they can restart at any time. And all those things are, you could kind of call them like quasi off balance sheet activities that they can do that aren't qe, but it's just like, wink, wink, nod, nod, like they're adding liquidity. It's like if global liquidity is rising and you guys aren't doing qe, it's like you're basically still doing the same thing. You know, it's like saying, I'm not doing drugs while injecting heroin. It's like, oh, this is, you know, medical grade morphine. It's like it's still, still an opiate, dude. Like, it has this, it has the same effect. It's like it doesn't matter what their, you know, what their words are, what their lexicon is. It doesn't, it, their nomenclature doesn't matter. It's just, okay, who gives a shit of what you call it? If, if inflation's rising, liquidity is rising and Bitcoin and gold are up 30% each month, it's like, yeah, you guys are fucking doing something.

Julian (67:31)

You know, do you think, do you think the paper gold market is, is manipulated? Or. I guess the question is more so to what extent do you think the paper gold market is manipulated?

Peruvian Bull (67:43)

It's, it's heavily manipulated. And that's, that's been, that's been known for years. If you look at, back in the days before I was A bitcoiner. I was super into the gold space, so I actually worked right out of college at a retirement fund as an analyst. And I was covering the gold sector specifically. And so I was obsessed with reading all I could about gold markets. And very quickly I found hedge fund managers posting research papers showing mathematically how the gold price would be, would pop on the open and then be depressed right before a close, like by 20, $30, like clockwork, every single day. And they were like saying, like, this requires billions of dollars of capital to move the market that much and to continually buy it open after open and then slam it down before it closed so that the price basically looks lower than it really is. And they're like, the only people we can think of that would do that, would have the power to do that are the bullion banks. J.P. morgan, Goldman Sachs, HSBC and the Central banks. Those are the only players that could be moving the market this much. Not even to mention that, like we said, that you don't even have to come up with some evil conspiracy theory of some conniving central bankers trying to suppress gold. Just structurally, this is the problem of the market. This is like any trader, any gold trader will tell you, oh yeah, this is all settled in cash. So we know that there's 100 paper futures for every 1 ounce of physical gold. Or we know that like bullion banks, for example, when they work with a gold producer, what they'll do is, so the gold producer says, we have a stream of gold of income that we can basically sell to you as cash income. And then the producer will receive cash and be able to pay their operations, but they will send the gold to the bullion bank. Right now the issue is the bullion bank. So let's say you're JP Morgan, Mining Services Division, Mining Banking. You now have an inflow of gold, of physical gold. And as you know, bankers love to hedge. So they say, oh, well, I have an influx of 100 million ounces a year of physical gold. I have to hedge that. So the bullion banks go out and they short the paper markets the equivalent amount or more to make sure that they're hedged. And what that means, structurally, ironically, is that the more gold that gold production increases, the more shorts build up on the paper markets. And so that suppresses the price. And so that those things are just like structural things that again, if you look at it piecemeal, you're like, oh, that makes sense. Yeah, the gold producer, they want cash. And the best person to get cash from is the Big bank because they'll buy a huge amount of gold. And then if you're the bank trader for gold, you're like oh yeah, that makes sense. You want to hedge your position, short it. But the net effect of all this again is just lower gold prices in paper terms and suppression of the real price discovery. And I think, I mean will the gold market finally break in London? I think it'll get very close. But again I think these are fiat games. I think they're always going to declare a bank moratorium, declare a freezing of gold withdrawals, declare some sort of state of emergency emergency like they always do and basically kick the can down the road. I think the only scenario which we see everything being forced is something like, you know, near revolution, right? People on the streets with guns saying give us back our gold. And then the bankers are finally like okay, let's give it to them, but.

Julian (71:14)

We better give these guys their gold. I was just going to share this quickly just because we were mentioning this case earlier but and this is from the, you know, DOJ archives. JP Morgan Chase and Company agrees to.

Walker (71:27)

Pay $920 million in connection with schemes.

Julian (71:30)

To defraud precious metals and U S Treasuries markets. This is where they were, they were spoofing, basically spoofing trades. And it's like this kind of thing is just like a lot of the banks are caught for doing this. A lot of them probably are not or make, you know, some of this doesn't get prosecuted by the doj. And I just think it's so like again it's so ridiculous. It goes back to like the, the gamestop thing as well where it's like these fiat markets are just completely corrupt. They are, they are gamed so that the house is always going to win. And the house is, you know, is, is the big banks and like you are playing on their game board, you are playing with their loaded dice and like you kind of know it to too. If you've, if you've done a little bit of reading like you know, this game is rigged. And that's where you know, not to sound cheesy but it's like man, bitcoin gives me a lot of hope because it's like, okay, at least this is something I know that you know, doesn't play their fiat game. I am curious if you think that bitcoin can be subject to some of the same sorts of market manipulation that that gold can. Or if the fact that you know, you can actually, you know, basically instantly self custody bitcoin like you can call the bluff if that changes the paradigm because that's, you know, the settlement of bitcoin is infinitely better than the settlement mechanism for gold which is, you know, get a giant armored truck and a freighter and armed guards and like you can't even compare the two. It's like tap a couple of buttons or like ship really, really heavy rocks across the world.

Peruvian Bull (73:04)

Yeah, exactly. And that's, that's what's so difficult about again the gold problem is it's just a settlement. It's just, it's. There's an article today from the Wall Street Journal saying that they're filling the cargo containers or cargo compartments of commercial airline jets from London to New York with gold because they don't have enough space. And then they're putting the brinks armed guards on the planes basically saying okay, this is our gold, we're going to protect it. And it's so anachronistic to think that in the 21st century worth shipping gold over in a plane or in a boat like you know, with physical guys there. And of course that's more risky than just settling on, you know, on the blockchain. You know, it's, it's, anything could happen. The plane could crash, there could be a storm. You know, we could see engine failure. We've seen so many engine failures, so many like you know, crashes recently. And if it crashed over the ocean or something, then the gold, it could sink to the bottom of the ocean and almost irretrievable. Very difficult to retrieve. So yeah, I think bitcoin obviously has that advantage. That's the, that's the Achilles heel that it solves. And to answer your question on manipulation, I think, look, I think anything you put into the fiat system can be manipulated to a certain extent. Obviously. Like if you put something, and Dylan LeClaire has talked about this, like you, you have futures markets, inevitably you'll see price dislocations between the futures market and the spot market just because of speculation, just because of hedging, just because of, you know, net trader shorts that build up too much on one exchange. And then people try to arbitrage onto the spot market or you know, some expectation of some future event that could suppress the price or it could collapse the price of bitcoin. Right. So all those things could temporarily, you know, adjust the price. But I think again the genius with Bitcoin is that it's the only asset in the world that you can safely self custody easily and remotely. Right. The problem with all these shares and all these ETFs and all these futures is that you need a broker. And why do you need a broker? Because the broker has an account at the DTCC or the occ, like the Options Clearing Corporation. And those are the central entities with a massive SQL ledger that just say, okay, you know, Vanguard has this many shares of Apple, okay. Fidelity has this many shares. Goldman's wealth, Private wealth has this many. You know, Jane street has this many, Citadel has this many. And so they have a giant. Since they have the giant SQL ledger and they have approval authority on who enters the ledger, they can control the players of the game. And so even if you think you're playing a fair game with, you know, bitcoin paper futures, you're really not because you're using these authorized participants as your intermediaries to do a trade. And it's all being cleared by a central entity that obviously does not have your best interest in mind. They just care about making money and they don't really care about catching fraud. They don't care about eliminating any waste or eliminating any, you know, like, you know, crime that is happening under their nose. And so what you find obviously with Bitcoin is you could see temporary dislocation in the, in the futures markets you could see manipulation, at least in terms of temporary price movement. But I think the genius of it is first of all the ability to self custody. But also the philosophy of the bitcoiners, right? The rampant, like, you know, take no prisoners, like, give me my fucking Bitcoin or else that I think will slowly spread to the institutions. The institutions will realize, like, why are we doing this? Like why are we custodying a bunch of Bitcoin ETF shares with BlackRock? Why? Let's just take control of the physical. It's easy. We'll hire someone to help us figure it out and we'll just create a multi sig wallet and we'll Split it into 10 wallets and do it safely. And then once you create that protocol that can spread between every single company or every single country or every single institution. And so that will allow, you know, rampant self custody. And so, and again, even if that doesn't happen, right, 90% of the supply is already mined. Over 90% institutions only own, you know, the BlackRock ETF and plus the other ETFs own just like 4 to 5%. We see Saylor with like, right, almost about 5%. So like they're, they're already late to the game. That's the thing that other people don't realize. Like they're already, it's already been built. This thing is already here. It's already kind of impermeable. It's already a bulletproof tank. Like you guys own 10% of it. Okay, cool bro. Like so what? I can still own my bitcoin, I can still self custody it. And even if you guys fuck with the, with the futures price by 10 or 20%, I won't care because I have my physical, like my physical bitcoin, right? My real bitcoin in my wallet. So yeah, I think, I think that this truly changes the game in the long term. But I think it just takes time for people to realize how to self custody and then obviously it takes time for them to do it.

Julian (78:06)

Yeah, I saw, I think it was river put out a report recently that just in the last couple days they were talking about like the amount of bitcoin that is held by like individuals in self custody. And it was some like it was a quite a large amount, I think like 56%, something like that, which is pretty great considering just the amount that is held by exchanges, which is still a very large amount. But. And there's a lot of people that probably should call in some of those, those bluffs and take that into self custody at least with the more meaningful amount of that. But, but it is a pretty incredible thing. It's like that we can all call the bluff. Like we don't need to be Michael Burry, you know, on the, on the phone for months trying to, you know, get our shares given to us. It's like no, no, no, just, just go on your computer, go on your phone, send it to your self custody and like if they don't, if they're for some reason blocking you, that raises red flags. You get on social media. Anybody else having this issue? Oh yeah, I am too. Oh, it looks like Coinbase or whoever else doesn't have our bitcoin. That's the other beautiful thing is that like we're people are too aware now of the shenanigans that can happen for them to be able to keep getting away with it. Like because you can call their bluff very easily and if you find that they were bluffing, they don't actually have your coins. Okay. You've got actually a means to go and drum up a lot of social support for your cause and to have a lot of people trying to call their bluffs. So it's a, it's a, it's a nice thing to have I would say. It gives me a lot of Hope there. So I want to. Want to be conscious because we've been. We've been running. I want to be conscious of your time here. I know you've had a. You've had a long one. You're. You're running this, the GME podcast circuit with bitcoin. I love it, but I want. I want to bring it Back to. To GameStop maybe a little bit and just to. To close out with and just kind of one of the. You know, I put up that tweet that really has done some shocking numbers. Yeah, I. I put it. I put it up as like, kind of a. A joke, but also like. Like, you know, honestly, as I typed it out, I was like, not a terrible plan, but, like, this is the cool thing that I think, you know, I was thinking about GameStop and I was like, man, they have these physical locations, right? Like, that's. That's a powerful thing to actually still have brick and mortar in this day and age. It could be seen as a liability, but that's also, you know, like, that still has a lot of power. There's not a lot of brick and mortar left. Like, they're the only, you know, only open store in a lot of strip malls that are completely, you know, ripped out besides that. And I'm curious if you think, like, do you think there's any possibility, like, let's say Ryan Cohen starts going down this bitcoin rabbit hole. He stacks the $4.6 billion, converts them into the hardest money that's ever existed, bitcoin, and then, like, just throws up some Bitcoin ATMs. He starts selling Bitcoin hardware, wallets, and AS6 and, you know, merch, who cares? Like, out of these stores, do you think, in addition to games, like, I'm a gamer, I still love games, you know, nothing wrong with that at all. But, like, to me, this kind of seems like it could be an incredible turning point. And it's like, do you. I mean, that may be a little bit more of a pipe dream, but what. What do you see? Like, first of all, do you think this is something that GameStop, that Cohen moves on quickly, or do you think this is something like, are we still talking, like, you know, a year or two out? Or does he. Is he a guy who's like, clearly he's willing to make big moves in a short period of time, as he's done in the past? Does he just pull the trigger and go for this thing?

Peruvian Bull (81:39)

I think. I mean, I think I'll take the middle ground on that he's not going to either rush it or is he going to delay it unnecessarily once he understands, like, the value proposition. So with the crypto, you know, blunder, where we did the Web3 Marketplace and poured tens of millions of dollars into it and then just kind of, you know, pooped itself, that he had talked about it and had tweeted and had followed Robbie Ferguson or like, quote, retweeted him a few times and the immutable X and all these people. And it took him from there. It took him about like six months to finally get everything in line to pull the trigger to start building the marketplace. And so I don't think it's going to be years. I also don't think this is going to happen within the next month. Month, even though things do look like they're accelerating. And I hope, I hope he finally gets the board's approval and can start buying bitcoin here before we go back up to 100,000. But I think if he's going to be buying bitcoin, it's a strategic move, obviously, and with the amount of cash he has on hand, he's going to have to do, obviously, like a broader bitcoin gamestop strategy. And so what you said is exactly right. Like put up Bitcoin ATMs, he can sell. They already sell trading cards that are like collectibles basically. And you could sell those for bitcoin easily. You could create microtransactions in like an online store using Lightning Network where, you know, if you're playing a game and you're like, oh, I really want this new skin on League of Legends. Like, here's I need to pay, you know, 2,000 sats. Okay, boom. I want the new skin and 2,000 sats. You could integrate everything. Not super easily, but it wouldn't be that hard. Right? He just needs to go out and hire a couple dozen lightning developers and a couple other front end, back end game developers and they could probably do this. And they definitely, like we said, they have 4.6 billion in cash. They have the money for this easily. So just 50 million of that would probably be enough to do the whole thing. But there's a lot of ways you could go about it. So like we said, he could be selling skins, he could sell games for bitcoin, he could create the bitcoin reward system where the more you spend at the store, you get rewards back in bitcoin that you can redeem in the store for games or whatever. And the benefit like we said, is that he has these physical locations which are rallying points for his customers. But he also has a huge online presence. Right. There's a, a massive retail investor base and all these people are ready to be orange pilled. I think they're already disillusioned with the financial system. They're already in consternation or frustration with the way that the stock has been manipulated and the way that their own investments are manipulated and that their savings are dwindling and inflation's killing them. And a lot of these people have been arguing with on Twitter because they, they get like 90% of the problem, but they just haven't made that full leap into bitcoin yet. They think that bitcoin plus crypto is the answer or no crypto is the answer and they should just stack silver eagles. And I'm like, guys, you're so close. Like, you know, we're almost there. And I think him getting there would unite the, you know, microstrategy bitcoin audience and the GameStop audience and finally orange pill millions more people and provide a strong customer base for him to sell products to. Right, for, for bitcoin. And so I think that he'll make the move here in, you know, a couple months, probably a quarter, within a quarter or two, but it's not going to be immediate. And I think that especially that after he does that, the share price will start to skyrocket and then that's when his, his optionality will come in where he can do a pull. Michael Saylor and say, hey, are we going to start just, you know, issuing convertibles and buying, buying bitcoin or are we just going to change 20% of our free cash flow and just buy smash by Bitcoin with 20% of the money we make or maybe 50%. Why don't we just stack it? We already have 5 billion of it. Why don't we just stack even more? All those are possibilities and the share price could go bonkers if that happens for sure.

Julian (85:46)

I think that's the thing. It's like you're already seeing a pretty, I mean, in my mind, rapid uptick in the number of companies. Like Eric Semler has basically called them, you know, like zombie companies that are ripe for bitcoin, for bitcoin allocations. Like, and I don't, I don't think GameStop quite falls into that. Maybe it's, you know, some, it's something a little bit different. But a lot of these other companies that are, you know, nobody's really heard of them before, unless you were like, are really deep in this stuff, they are kind of just sitting there. They haven't really moved a lot in a while. Maybe their share price has been kind of steadily losing value. And it's like, okay, you realize, because now you've seen this again and again, you start to put bitcoin on the balance sheet and investors are paying attention again and your share does pretty well. Now I think there's also going to be like even more companies that come in maybe with their intention is not to be like a long term bitcoin holder as a company. Their intention is to juice their stock price a little bit in the short term and then kind of see what happens. Of course you're going to have that, but I think for each of those you probably also have ones like Semler Scientific seems to be one that are getting in this and like stacking aggressively. And now Semler is like one of the, you know, largest corporate bitcoin holders. Like, that's pretty cool. And I, I, I think we're going to see that trend accelerate. I think GameStop adopting Bitcoin would certainly like set that like be really like the spark that set that off for a whole nother wave of companies. And I love your point about if, if GameStop does this, that's a huge potential orange pilling moment for the massive horde of retail investors out there who.

Walker (87:27)

Have been disillusioned by the system, who.

Julian (87:29)

Have seen how it can screw them to be like, wow, okay, maybe I need to take another look at this bitcoin thing, which I either dismissed entirely or lumped in with crypto or whatever else that could be a really, a really powerful thing. And like in my mind, like the reason I have a podcast to talk about this magic Internet money is because I want as many people as possible to know about it. Like, I, it's not because the, you know, one extra retail person buying bitcoin is going to pump my bags. It is because I think that this is something that everybody who doesn't want to be completely bent over by the system should hold. And the more people that get exposure to that, the more people through whatever channels, whether it's because President Trump is talking about it more and launching shitcoins on the side or, or because GameStop buys it. Like, I think that's a net positive thing. Like the more people that get exposure to it, I view that as just a, an overwhelmingly good thing. So I hope they move forward with it. And can you imagine the memes like these two communities of memers, toxic Bitcoin psychopathic maximalists and GameStop apes teaming up. The memes would be off the charts, I think.

Peruvian Bull (88:39)

Oh yeah, I can, dude. Like, like I told you in 2021, the meme game was incredible. And still on, on the Gamestop subreddits and Twitter, the, the memes are awesome. And I can just see them doing, you know, Lord of the Rings, like, you know, GameStop investors fighting the stocks at 25. And then you see the microstrategy. It's just like bitcoin retards and they're like, yeah, you know, you could totally, totally see that happening. And something else I'll mention as a closing thing is one thing that I've noticed with the Gamestop, you know, like sneeze thesis or these like ramps that just rip the stock into the stratosphere is first of all, like we said, it seems to be institutions that are forced to close out their shorts. It's an FTD basically like closeout forcing by what's called the Central Continuous Net Settlement, cns. And so that always happens when there's a catalyst. So the first catalyst was Ryan Cohen buying shares and getting into the board and starting to reinvigorate the company. The next catalyst was them paying off the debt and the share price going haywire. And then the next catalyst was Roaring Kitty coming back last summer. So again, if they do this, just the rumor that one board member said maybe they're kind of thinking about Bitcoin in a potential future scenario that shot the stock up 20%. So if they actually go ahead and smash buy, I don't see any reason why the stock wouldn't rally 80%, 100%. And then again, they can sell into that strength if they want to, or they can issue debt or they can do, you know, they can sell options. They can do whatever they want and monetize that volatility and then just use it to buy more bitcoin and then more and more shorts have to cover. And they're essentially using this negative, the negative feedback loop that works against, had worked against them. Now they can use on their positive to propel their share price higher and increase their bitcoin stack at the same time. So that's like the genius I think of this, of this move. And that's why you also have to plan it carefully, right? Because, you know, there's. These are big institutions. They have a lot of lawyers, they have a lot of money, they have a lot of power. They will not like having to force their Short positions and then seeing you buy just, you know, apishly buy bitcoin with every share you sell, they're not going to be happy about that, so.

Julian (90:54)

Yeah, but it would be beautiful. Yeah, it would. It would be quite beautiful to see, man.

Peruvian Bull (90:59)

Yeah.

Julian (91:00)

Well, well, I appreciate you coming on here and. And ripping about this because I think it's. It's super fascinating. I hope that they do it, but I hope that more people pay attention to bitcoin that otherwise would not have because of it. And yeah, honestly, I would love to see a lot of these big institutional short sellers get absolutely wrecked. That's a win right there. So this is a win, win, win. It's a good thing.

Peruvian Bull (91:26)

Absolutely, absolutely. And I'm hopeful that your tweet, which made into the stratosphere, just continues to climb because this information just needs to get out there. People need to think about this seriously. Like, it's a meme until it isn't. Right? Like, with everything.

Julian (91:39)

Right. That's well said. It's like, yeah, this sounds a little bit ridiculous, but, like, does it, you know, like, it starts sounding a little bit less ridiculous when you're like, huh, Actually, you know, not a bad plan. So, Ryan Cohen, if you end up listening to this and, you know, you need a couple of advisors on this new, you know, B stop rollout, just, you know, know, let us know. We'll be happy to. Happy to come on board and help out a little bit, at least for, you know, we'll bring the attendees and the memes.

Peruvian Bull (92:05)

Yeah, and the bitcoin.

Julian (92:07)

Exactly. Exactly. Well, dude, thanks so much. Anywhere you want to send folks after this, I'll link. I'll link your. No. Or your Twitter anywhere else you want to point them.

Peruvian Bull (92:15)

Sure. So I have, Yeah, I have a Noster account. I have Twitter, which is Peruvian underscore bull. I also have a substack where I write about macro, I write about finance. You can find that@dollarndgame.substack.com you can just Google that or you can go to the link in my bio to find it. And I also have a YouTube channel which is just Peruvianbull.

Julian (92:35)

All right, man. Well, hey, great catching up with you. Appreciate your time. If we may have to have another emergency recording, if, you know, we get some wild news in the next couple weeks, months, I'll plan to keep some spots open for you just so we can get back on if things start getting wild.

Peruvian Bull (92:52)

Yes, let's do that. Totally. I'm looking forward to it.

Julian (92:55)

All right, man. Well, hey, good to see you. And yeah, I hope we hope we get a chance to talk again soon.

Peruvian Bull (93:00)

Absolutely. Thanks for having me on.

Walker (93:08)

And that's a wrap on this Bitcoin Talk episode of the Bitcoin Podcast. If you are a Bitcoin only company interested in sponsoring the Bitcoin podcast, head to bitcoin podcast.net Sponsor or send an email to hello@bitcoin podcast.net if you are enjoying the Bitcoin Podcast and find it valuable, give it a boost on Fountain a five star review wherever you're listening. Or better yet, share this show with your network so more people can learn about bitcoin.

Julian (93:38)

Or don't.

Walker (93:38)

Bitcoin doesn't care, but I sure do appreciate it. You can grab links in the show notes to watch or list this show wherever you get your podcasts. Or go to bitcoin podcast.net podcast and you'll also find the links to Follow me and the show on Noster and on X. Bitcoin is scarce. There will only ever be 21 million but Bitcoin podcasts are abundant. So thank you for spending your scarce time to listen to the Bitcoin podcast. Until next time, stay free. SA.