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THE Bitcoin Podcast
Jekyll Island, The Federal Reserve, & The End of Fiat - Julian Figueroa & Peruvian Bull (THE Bitcoin Podcast)
01:46:50
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- [00:00]
Julian Figueroa
So with this cycle of lowering interest rates into a recession and increasing them into a boom, they just keep allowing more and more bad debt to accumulate, accumulate, accumulate, accumulate, until we get to the point where we're at 80% private debt to GDP and 130% public debt to GDP in the US and there's so much debt that the system starts to fall apart when every time we hike and that's where the Fed has to cut. You know, we have a Fed meeting today, they're cutting again, they just cut 25 basis points. Why? We're not in a recession. You know, we're not, there's no banking panic that they're talking about. We're lowering because the system cannot handle this, right? The treasury itself is straining. And so this is just, it's just their game. And the problem is that this game is terminal because it eventually means that the system is so indebted that nothing can save it except for QE Infinity.
- [00:47]
Peruvian Bull
When you have a monetary system that has no limits on how much can be printed, the only way to really establish long term security for yourself and other generations is to just hoard as many assets as possible, as many real assets, whether they're cash flow producing or whether they have like, you know, just good speculative value, just accrue as many of them as possible. So they set up a world where greed is the only way to essentially make it. You have to be greedy. You can't be selfless because if you're selfless, you're going to be poor. And so what, they turn money into, they turn money into a drug essentially that you have to acquire at all costs and there's never too much of it. You have to keep accumulating more because if you sit, once you're satisfied with your, you know, couple million cash, guess what, after a couple years, your purchasing power is eradicated.
- [01:36]
Julian Figueroa
I've come to the conclusion that, you know, there is no way to fix it within, you know, within the system because it's humans and human incentives and human desires that ultimately shape the system. That's why Bitcoin is so brilliant, is because it, it removes humans from the monetary system for the first time in all history.
- [02:01]
Walker
Greetings and salutations, my fellow plebs. My name is Walker and this is the Bitcoin podcast. The Bitcoin time chain is 875347 and the value of one bitcoin is still one bitcoin. Today's episode is Bitcoin Talk where I talk with my guests about Bitcoin and Whatever else comes up. And today those guests are Julian Figueroa and Peruvian Bull. Julian and Peruvian have a documentary coming out on December 23rd about Jekyll island and the creation of the Federal Reserve, which they worked on with Isabela Santos and Ian Carroll. This was a fascinating discussion and we go deep, deep down into the dark history of the Federal Reserve's creation on Jekyll island, the immediate aftermath and the Fed's historical track record, the damage that the Fed has done, from wars to inflation, booms and busts, inequality, and a whole lot more. We also get into countries adopting a bitcoin strategic reserve, what that means for fiat currencies down the line, and why individuals need to understand bitcoin now more than ever.
- [03:08]
Ian Carroll
I saw an early cut of the.
- [03:09]
Walker
Film and it is awesome. Head to the Show Notes to grab links to watch the film on getbase TV when it comes out. Before we dive in, do me a favor and subscribe to the bitcoin podcast wherever you're watching or listening. But I personally recommend you listen on Fountain fm because not only can you send bitcoin to your favorite podcasters to give value for value, but you can earn bitcoin just for listening to podcasts. Check out bitcoin podcast.net for episodes and additional resources. Head to the Show Notes to grab discount links for my sponsor Bitbox, or go directly to Bitbox Swiss Walker and use promo code walker for 5% off the fully open source Bitcoin only Bitbox 02 hardware wallet. Send an email to helloitcoin podcast.net if you have feedback or if you're interested in sponsoring the bitcoin podcast. And if you find this show valuable, consider giving value back by giving it a zap on Noster or a boost on Fountain. I truly appreciate it. Without further ado, let's get into this bitcoin talk with Julian and Peruvian.
- [04:15]
Ian Carroll
Good to be here with you guys.
- [04:17]
Peruvian Bull
Thanks for having us.
- [04:18]
Julian Figueroa
Yeah, yeah, thanks.
- [04:19]
Walker
It's my pleasure.
- [04:20]
Ian Carroll
You know, this is the. The hack of bitcoin podcasting is like, I really just did this because I wanted a chance to shoot the. With bitcoiners and have an excuse to do that. And so it works out pretty well in that regard.
- [04:36]
Walker
All right, we are.
- [04:37]
Ian Carroll
Yep, we are good to go now. And look at that. You know what I love about Noster is that, like that we're on. It's a random Wednesday afternoon. Got like 20 some people in here already. Hello to all of you who joined. It's a, it's. It's a Beautiful thing, people just coming and hanging out. But we have some fun topics to discuss today, actually. I don't know if that. Well, they're fun in like a sort of a morbid way, I suppose. Like, like, it's like fun in the way that like a car crash is fun, I guess, if you're not in it. But this is kind of like a giant car crash that we're all in and only some people are paying attention to. So I'm pretty excited to dig into.
- [05:16]
Walker
This with you guys.
- [05:17]
Ian Carroll
You're just for everyone's knowledge, the documentary, the film that you guys created is coming out when for like, official release.
- [05:25]
Peruvian Bull
I'm really aiming for December 23rd. We're waiting on one more party to, you know, with the edit, but if it's not December 23rd, it'll be very soon after. So in the next, in the next week, hopefully.
- [05:40]
Ian Carroll
Okay, well, I'm, I'm stoked. I think it's, it's coming at a good time. I mean, it's a perfect bit of light viewing to do with your family around the Christmas tree, you know what I mean? Learn about Jekyll island and the Federal Reserve. Like, what could make the holidays any better than that?
- [05:52]
Peruvian Bull
It's the hundredth and eleventh birthday of the Federal Reserve on December 23rd this year, man.
- [05:59]
Ian Carroll
Happy.
- [05:59]
Peruvian Bull
I believe I have that right.
- [06:01]
Ian Carroll
I, I, yeah, yeah, that would make sense. 1913 to 2024. Yeah. You know what's okay, I'm, I'm trying to figure out like where even to start with this. Cuz there's, there's a lot. Maybe a good place to start is just with, with you guys. How did you guys end up making, making a documentary together also with Isabella and Ian Carroll, and you had some other folks contributing as well, but you decided to make a documentary about Jekyll island and the Federal Reserve and actually.
- [06:35]
Walker
Go to Jekyll island for this.
- [06:37]
Ian Carroll
Like, how did you guys all get together and decide, yeah, we should just like, fuck it, we'll just go do this?
- [06:45]
Peruvian Bull
I've always like, I've known the story and a lot of bitcoiners know the story and it's one of those things where there's a couple books in the, in the, in the bitcoin space where you just say the name and people kind of just take your word and then they read the book. Like everyone says, oh, if you have a problem understanding, you know, bitcoin, you know, block stuff, go read like the block size Wars. I'm like, yeah, well, like, what does that mean, and it's the same with, like, if you want to understand the Fed, read the Creature from Jekyll Island. I'm like, yeah, but, like, what does that mean? Like, why do they call that book that? And the book is amazing, but it's very, very long. It's about 3, 400 pages. It's super, super dense. But essentially the idea is that the inception of the Federal Reserve started because of a meeting on this island in southern Georgia called Jekyll Island. And I always thought, like, why that specific place? Like, what? Why? Like, you know, it's an interesting name because if you know about Jekyll and Hyde, and even though that's actually has nothing to do with the naming of the island, you know, you think, oh, that's kind of a, like a sanctimonious place to have a. Such a. A meeting with such dire consequences for the rest of the world. And so I thought, well, like, could I learn anything more about the origin of the Fed by just going there? That was kind of this, like, grand experiment I had. And then I kind of thought this whole creation of the Fed was sort of a joint effort between multiple parties. And I thought, well, the best way to probably explore the origins of the Federal Reserve wouldn't be for me to just go there on my own or maybe just me and Isabella. It would be to try and get some other perspectives on this, too, and kind of round out our crew. And so it started with us first messaging Ian to be a part of this. If you don't know Ian Carroll, he does a lot of these great conspiracy breakdowns, but he gets in really deep to the links between, you know, pharmaceutical companies and advertising and what's going on with P. Diddy and all this stuff. And he's just super analytical in the way that he breaks these things down. He's got, like, a nice touch of sarcasm to it. So I reached out to him and said, you know, you should come join us. And then Peruvian Bull is actually, I believe, like, you're pretty close with Ian. And so he, I guess, told you that he was doing this, and you reached out to me, and I was actually familiar with your work because you've done some excellent deep dives into the Fed. And I was like, absolutely, got to have you. And then we even had a fifth person tag along named Mark, who had met Isabella at a previous event. And he was super well informed about the Fed as well. So he's part of this. And what came together is basically this group of five of us, six of us, if you include my girlfriend Makiko, who did a lot of the cinematography. Just walking around the island, taking in the ambiance, learning some interesting things about the history of the island and how it all connects basically to the origins of the most criminal enterprise on planet Earth.
- [09:26]
Ian Carroll
What a, what an intro. Yeah, you guys, so I thought going in, I've watched now this, the rough cut you sent me twice now just because the first time, like, I was just like, watching it to, just to experience it, you know, and the second time I'm like watching it to try and kind of prep for this, this discussion and I, I learned a number of things. Like, I thought I was fairly well informed about the Fed, about the whole Jekyll island thing, everything. You know, I, There were some nuances and some, well, not so fun facts that I just had, like, no idea about. And I think this, again, this film is coming at a really nice time. I mean, there's a, there's a Fed. An FOMC press conference today. I believe it might be happening right now, actually, as we're recording this. I believe so. I mean, that's, that's perfect time and Fed's birthday coming up and people all over the country and all over the world feeling the pain of inflation more.
- [10:26]
Walker
And more year after year after year.
- [10:29]
Ian Carroll
And so, you know, maybe a, a place to kind of kick this off a little bit is just like, how did you guys approach the topic of telling this story about the Fed? Because there is a lot to get into. There's a lot, like just with Jekyll island, but you guys kind of went broader than that. You talked more about the other downstream impacts of the Fed. How did you figure out, like, how to, how to really structure this so that it would be an effective kind of educational tool? But of course it has to be entertaining too, right? Like, otherwise, let's be real people, people's attention spans are like goldfish and they just will tune right out.
- [11:07]
Peruvian Bull
I'll, I'll try not to take up all the airtime here and pass it to Peruvian. But essentially for me it was like there's three, there's three acts to the film. It's like, how did this, why did this Fed form in the first place? And what do you need to know about central banking in general? Because the Federal Reserve is not the first central bank. You know, what was the immediate aftermath? How could we tell what the impact of the Fed was? And you can just see it throughout history and then like, what does it mean for the average person and, yeah, I know. You know, Peruvian brings, like, a ton to the table on this. I'll just pass it to you as in terms of, I guess, figuring out, like, how did we figure out what to talk about here?
- [11:46]
Julian Figueroa
Yeah, I mean, this was the challenge, right, because the story is so complex, and you can literally, you could talk about the fed for probably 10 hours and still not fully grasp the entire story. And because I came kind of later on, it was, you know, I had to kind of get myself up to speed. I had known Ian Carroll for, like, the last year and a half or so, even before he blew up, just because he lives in my area and we're both content creators. And so we'd linked up a few times and chatted, and he had reached out to me and said, you know, know, hey, I'm doing this documentary. This is gonna be really cool. It's right after the Bitcoin conference, and I was already going to the conference to talk until. So I was like, you know, I'm gonna let me tag along. Like, do you guys need some more economic analysis and economic history to add on to this? And Julian was kind enough to absolutely agree with that. And, you know, we wanted to. When we were thinking about how to. How to, like, set the stage, we wanted to give a little bit of the back backdrop of the story of why the Fed was founded, go into the actual history of the founding. You know, how these people, how these men, you know, drove, well, basically got into this train car in. In northern, northeastern the US and then secretly made it their way down to. To Jekyll island and had this. This meeting on this, like, nondescript island. And immediately what, you know, what I wanted to touch on was, was the issues with the banking system pre 1913, like the 1907 banking panic, the 1893 banking panic. And then the rationale and the arguments that these economic actors, the Paul Warburgs and the JP Morgans, were able to use to further their cause. Because when you look into this, when you're trying to convince a, you know, a large section of Congress for basically any, you know, any policy, you need usually to have intelligent arguments on your side. You know, money and lobbying will go a certain way, but at certain point, you want to convince the general public, and so you need to have arguments. And so what they did was ingenious. You know, these people funded. They funded institutes and research programs to produce papers that argued for the existence of a Federal Reserve. And the Federal Reserve, you know, they changed their structure several times until they got to their final structure in 1913. And even then, you know, as we're talking, right, we're coming up on the anniversary when they actually passed the bill for the creation of the Federal Reserve in December 1913. They did so with a third of the Senate and about a quarter of the House gone because of hope holidays. So they still had to scrape it, scrape it through by the skin of their teeth. And you know, once they've created this, this entity, right, all it's done is grown in power and influence for the past, you know, hundred plus years. And so I wanted to set the stage and, and tell that story, but also really focus on the, the second and third order impacts of the existence of the Federal Reserve, because especially in finance, which is my field. Right, like people understand why it exists, but I don't think not enough people understand the effects of what the Fed has done and how this has affected financial markets, wealth gap inequality, and just the broader geopolitical landscape, not to mention.
- [15:11]
Ian Carroll
The funding of forever wars that would likely not be possible without the infinite money printer. It gets. Like, I'm glad bitcoin exists because if it was only this, if there was just this vacuum and there was the Fed, I think a lot of us would be pretty depressed. So glad, glad that bitcoin is here to at least bring some hope to the future. Because things look pretty dark when you realize the extent to which this centralization of control of money, of the market for money affects everything else. Like we can't have a full free market when the market for money itself is not free. And I think that people really don't, don't grasp that. And I want to get into a lot of these kind of downstream impacts because I think that's really going to hit home for folks. But for maybe for people who are not familiar with this story, with the players that went into the creation of the Federal Reserve, they just, they think, okay, it's, Yep, it's our central bank. Yeah, whatever. It's been around for a while. It's just kind of always been there. Right. Can you talk a little bit about what led up? You mentioned, you know, the, the banking crisis prior, some other events, but you know, how did we get to this meeting at Jekyll island?
- [16:21]
Walker
And who were these people involved?
- [16:23]
Ian Carroll
And I guess what, what gave these guys the right to decide they were going to be the ones who got to control the money forever?
- [16:32]
Julian Figueroa
Well, I mean, you know, we can really trace the origins of this back, first of all to the fractional reserve banking system that existed in the 1800s, you know, because of the structure of the decentralized banking system, there were always banking panics that had a contagion effect, almost like a virus, right? Because the issue came where, you know, obviously the banks loan out, loan out funds that they do not have. That's how banks work. And then they only back those. Those loans which are liabilities to them or assets to them, but, you know, liabilities to the people who owe those loans, they only back those with a fraction of the gold that they have on hand. And so if there's ever a run, that bank immediately faces insolvency where they cannot get enough liquidity. And where the banking system started to get more and more dangerous in the late 1800s was where they started to use what were called reserve city banks. And so, you know, let's say you're a rural bank in, you know, Pennsylvania, and you have a certain amount of, you know, gold reserves on hand and cash deposits on hand. You want to, you know, have earn interest on that as well. And so what they would do is they would take that gold or take that, you know, physical US dollar cash and deposit, deposit it in the bank of a major city. So like Philadelphia, the problem was those banks started to become central spokes, the system where now you have a reserve city bank that has the deposits of other banks. And so if enough of their, what are called correspondent banks fail, these smaller rural banks now, that bigger bank will be in trouble because they'll have all these deposits that they are holding for their, their client banks pulled out of their, out of their vaults, right, because of bankruptcy. And so that creates this contagion effect where a bank run would not only affect fact, a small bank in a rural city would start to kind of balloon out into bigger and bigger cities, and it would move to Philadelphia, New York and Boston and the major money centers that provided finance for, you know, post Civil War America. And in 1907, this came to a head where there was a. There was a. There was a trust company called Knickerbocker Trust, which was a, you know, you could kind of think of it as like a shadow bank. Basically, this entity was, you know, pooling deposits and lending them out in the form of stock loans to speculators. And two of the speculators, Franz Hines and I'm forgetting the second guy's name, but they, they were speculating on the shares of a copper mining company. And that copper mining company, the price raced up. They thought they could corner the market. And then finally, finally it collapsed. And they got called on their margin loans. This Knickerbocker Trust, which was a shadow bank which only had 5% of their deposits secured, went under. And again, this trust had liabilities with all these major banks. All these major banks start to get called on. The bank run starts to move throughout New York City. And before you know it, by Late October of 1907, the entire banking system of New York City is collapsing. And JP Morgan is able to basically strong arm the leaders of the major banks to put up their own personal capital to recapitalize the New York Stock Exchange itself as well as some of these banks and basically let some of these trust companies die. Because the trust companies obviously were much more levered because they only had 5%, you know, deposits, or you could call it like gold to, you know, deposit ratio versus the banks which had around 20%. So they, they had to like let this system, you know, kind of implode in some, in some form and take some losses. But they were able, luckily to save the system and its majority. And then, you know, the question became, what happens if, you know, we don't have a JP Morgan around to organize a, you know, quasi bailout, private bailout of the banking system? And so immediately they started funding, you know, there's the National Monetary Committee that was already funded by Congress that was doing research into, you know, what the existence of a central bank would look like in the US And Paul Warburg actually was a German banker who came over and he was actually initially writing papers for the National Monetary Commission and putting out research showing, like, you know, this is why we need a central bank. This is how this system will implode without it. And again, instead of thinking of how do we stop this fractional reserve banking system or how do we solve these fundamental problems, their goal is to paper it over and to create even more centralization and more control. And so, you know, by the time we get to 1910, there's enough momentum to push, you know, the first attempt of an act through Congress. The issue was that, you know, Democrats in the House along with Teddy Roosevelt were very antitrust and anti banker. And so they opposed the Federal Reserve act and it was actually called, I think, the National Reserve act with the first attempt. And so they shot that down. And then after they shot that down, you know, the bankers had to reconvene and kind of reassess the situation and try again and change. They changed a few key things like changing the name to Federal Reserve to make it sound more, more in control of the Government, they changed the governor and the chairman so that they would be appointed by, you know, the executive branch. And they also made some, some changes to, you know, how the appointments and dismissal of different officers would go. And they wanted to make this seem like it's a government, you know, entity where in reality it was really a, you know, a creation of the bankers. And for the bankers, right. Like 9 out of 12 of every board of governors in Federal Reserve banks across the nation had to be appointed or recommended by the banking industry itself. So they were guaranteed a permanent majority on every, you know, board of governors on every Federal Reserve bank district. And even the existence of the districts was another attempt at feigning decentralization because, because they were trying to show, look, this isn't a single central bank. It's 12 central banks that are all decentralized and each one has an independent board of governors and they're all going to independently issue money and they're all going to independently set interest rates. But as you can imagine, once you have the structure in place, it's pretty easy to create a new charter that says, oh well, actually all the banks will coordinate interest rates and all the banks will follow the New York Fed or follow the Washington and you know, D.C. fed. A board of governors. And so yeah, once they, once they passed this, it was kind of like a Trojan horse. And I think, you know, Julian mentioned this earlier, but the naming of it, right, having this happen on Jekyll island is, it's just so, so perfect because Dr. Jekyll and Mr. Hyde is the story about this doctor who turns into a monster at night and then turns back into a human. And slowly he, he starts to turn more and more into a monster and he cannot control it. Which is exactly essentially what the Fed has become. It's more and more of a monster in financial markets and as has distorted price mechanisms across the board.
- [23:44]
Ian Carroll
You know, as you were talking about like the, the kind of decentralized in name only nature of the Fed. Like yeah, we've got all these, you know, all these member banks. It's okay, it's totally decentralized. Just, it just reminds me of shitcoins too where it's like totally decentralized.
- [23:59]
Peruvian Bull
Proof of stake.
- [24:00]
Ian Carroll
Yeah, like it, it's just, it's so absurd too. And I mean again, great marketing on their part on the creators of the Federal Reserve to call it federal. Like that's really, that's the brilliant part. It's like, oh well, it's the Federal Reserve of course. Like then it must Be fine. It's, it's, it's just the government, right? It's like. Well, no, it's, it's kind of a cartel of private bankers. But I, yeah, Julie, I'm not sure if there's anything you wanted to add to that, that kind of, that lead up there before I, I, I dig into a little bit of the meeting itself because I do want to talk about the fact that they had this meeting in secrecy, like, and that should tell you so much. But is there anything else you want to toss on top of that first?
- [24:41]
Peruvian Bull
No, that was a perfect backdrop to it. The, the documentary touches upon. What I find really interesting is that, that central banking was something that the American public was very aware of throughout the, I believe, the 19th century. So in the 1800s, like, I gotta get my presence right. I'm a Canadian, so excuse me for this, but it was. Andrew Jackson was one of the biggest opponents to central banking and he fought like tooth and nail to keep them out of the United States. And there were attempts throughout the 1800s to do this, but they had limited charters. So there were a couple central banks in the United States that would only, you know, they had these timelines where they would only be there for 20 years and they'd be shut down and they kept these things on guardrails because I think they saw what happened in Europe and they saw the impact of the Rothschilds and the endless wars there that were happening as a result of, you know, the banking decisions made. And the American public really did not want central banking. So again, like, you know, we discussed it had to be the only way it was going to come to America was one, by taking advantage of a crisis and by two, kind of passing it under the shade of night.
- [25:46]
Julian Figueroa
Yeah, I mean, all the, if you actually look into the story, right, like, all the bankers, Paul Warburg, JP Morgan, they got on a train in New Jersey and they all gave fake names and the name of the car, which in olden times, wealthy people would have their own train cars and would usually name it after their own last name or a relative. They changed the name of the car car. So even the servants wouldn't realize that this was J.P. morgan and Paul Warburg, you know, other industrialists that were coming at, you know, at night, literally sneaking away to Jekyll Island. And Jekyll island itself is a very, you know, reclusive place. It's a, almost like a, you know, golf, Golf slash. Like no fishing resort for wealthy people on this island. It's, it's not Very well populated. It's, you know, almost like an exclusive country club. And it's hard to get there. I mean, now there's a bridge, but in the past you had to take boats.
- [26:40]
Ian Carroll
It's. There was a. Yeah, it's a moment in the. In the dock. I don't want to give too much away because people should watch it, but basically we're talking about, like, islands are a great way to get. Or a great place to get away with stuff. You know, like, it's like what happens on the island stays in the island. But I just. I find it to be such a. So ridiculous that this plan was literally hatched in secret. Nobody that is there is any sort of elected representative of the people. Right. The. Or correct me if I'm wrong, but nobody who was attending that initial meeting was in any way an elected representative at that point.
- [27:15]
Peruvian Bull
Or there was one Senator Nelson Aldrich, which was.
- [27:18]
Ian Carroll
Okay, Aldrich. Yep. Okay, so. So you did have one representative of the people, clearly doing exactly what the people wanted. Right, but, okay, so they, they're on Jekyll island and they are doing it there in secret. They're like, what, basically, how do they. How do they go from that? I mean, I know they. They renamed it, you know, to the Federal Reserve.
- [27:41]
Peruvian Bull
Right.
- [27:41]
Ian Carroll
And they, they did all these other things, but, I mean, do you think that they actually had any decent motivation? Was there any part of this that actually they thought, well, you know, maybe.
- [27:53]
Walker
This will benefit the people, we will increase stability? We will. Or do you think this is truly.
- [27:58]
Ian Carroll
Just a play for control, a play for power, a play for centralization, which JP Morgan obviously already had wanted to do.
- [28:08]
Peruvian Bull
That's. I mean, that's kind of like the biggest question that I've had, and it's kind of impossible to know. There's some evidence that, you know, this, this decision was made out of kind of like a malevolence and like, you know, self interest and not. Not done selflessly. But, you know, there's seven different participants and there's varying levels to which we can kind of like, guess, you know, who came up with what idea here. But I'll pass to you proving, like, what do you. What do you think about it? Because I, I don't think that they could have seen what this would become, but I think there was obviously an insight that this would become an increasingly larger part of the, you know, the fiscal decision making. That power would, like, gradually accrue to this Federal Reserve over time.
- [28:54]
Julian Figueroa
Yeah, absolutely. I mean, I think, you know, again, I think even the most, you know, benevolent and kind hearted spirits of the meeting knew that this would centralize a banking system. And I mean, it's even written into the Federal Reserve act itself. There's a stipulation that once they created the Federal Reserve, right? So once they created these 12 district banks, which by the way, they haven't updated the banks since 1913. That's why there's only, you know, one bank on the west coast in San Francisco, and most of them are centered in the Eastern or Midwestern U.S. there's a stipulation that all the banks in the region were required by law to buy into the share capital of the local Federal Reserve Bank. So it was not an optional system. That's another thing that people misunderstand. They think, oh, the Federal Reserve was like this alternative system that banks could use as a lender of last resort. They could put the reserves there, right? They could earn interest on their reserves and then if ever they needed a bailout, they could ask for a short term loan and again, the loan would be paid back in time. So it was just, it wasn't an issue of actually a permanent bailout for the banks. It was just a temporary solvency or liquidity facility. But what it really was was a forced mandate for all the private banks to buy into this local Fed bank. And then they were obviously granted a 6% dividend on the bank's shares so that they would profit from it. So they would have a vested interest in continuing to perpetuate this system. And they also had the ability obviously to appoint governors to their local Federal Reserve Bank. And so I think, you know, it was very, it's very hard to make the case that this wasn't structured in a way that made it into that, that wasn't. They weren't thinking of a, you know, centralization of control and power of the banking system. Now could they have thought that this was overall beneficial? They thought, hey, look, look, I'm going to profit from this. But this is also better for the system as a whole. I think that they probably did think that and I don't think that they probably anticipated the size and the, you know, just the pure nefariousness of what they created. They probably, there's no way they could have anticipated that. But yeah, I think to say that they were completely unaware of the centralized centralizing force that this would become is naive. I think think they knew that and I think they wanted that to be a fact because they were worried about the decentralized nature of the banking system itself. Because of these reserve city banks that already existed. And again they made this structure, they kind of modeled it after what already existed. So they're trying to like shove, they're trying to convince the banks, like if you read some of the transcripts of like Paul Warburg's discussions at the National Monetary Committee or him talking to bankers, you know, in New York or in Philadelphia or in Chicago, he was telling them, he's like, look like these banks, like these Federal Reserve banks are exactly what, you know, it's exactly the same as what already exists. You already are rural bank and you already put your reserves in these, in these, what you call reserve cities which are the major money centers, right? Philly, Boston, New York, Chicago. And you already do this. So he's like, why not just do it with the federal government handshake on your back and this bank that can print infinite reserves, why not do that? And so it was a very easy sell for them.
- [32:17]
Ian Carroll
Well, and I mean obviously the players at this meeting too, being already involved in the financial system, they stood to.
- [32:24]
Walker
Benefit greatly from this.
- [32:25]
Ian Carroll
Is that fair to say?
- [32:26]
Peruvian Bull
Massive conflict?
- [32:28]
Ian Carroll
Yeah, it just seems a little bit like, you know, like obviously this sounds like a good idea to them. They're going to make ungodly amounts of money because of this new system.
- [32:39]
Walker
Right.
- [32:39]
Ian Carroll
Like there's, there was no way for them to lose essentially if the Federal Reserve was created. Is that a fair statement?
- [32:49]
Julian Figueroa
Yeah, yeah, absolutely. Sorry. I wanted Julian to respond, but I.
- [32:54]
Peruvian Bull
Don'T want to think about that a little bit more. But what's the result? We're still talking about JP Morgan today. It's the biggest bank in America and you know, get a hand in crafting.
- [33:04]
Ian Carroll
That so, and, and thank goodness they exist. Otherwise how would Jeffrey Epstein have been banked? You know, I'm so glad that JP Morgan still exists as a banks that they can bank. People like Epstein, just truly impressive.
- [33:17]
Walker
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- [33:54]
Ian Carroll
Down tight for the long haul with Bitbox Plus. And I cannot emphasize this enough, but.
- [33:59]
Walker
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- [34:04]
Ian Carroll
It'S your first time setting up a.
- [34:05]
Walker
Hardware wallet so you're a little bit nervous or you are a well seasoned psychopath. Again, it's Bitcoin only and it's fully open source. Head to their GitHub and verify that for yourself. No need to trust me or bitbox when you go to bitbox Swiss Walker and use promo code Walker, not only do you get 5% off a great piece of open source Bitcoin only hardware, but you also help support this podcast. So thank you.
- [34:30]
Ian Carroll
You know, I. Okay. And boy, there's like a whole another rabbit hole that maybe we can go down a little bit later about JP Morgan and some events leading up to this meeting and certain large ships crashing. I don't want to derail us with anything like that just yet because. Because. But maybe that's. We get into. Get into a little bit later. But you know, there's that, there's that quote by. I think it's like Stafford Beer or some of. But it's the, the purpose of a system is what it does, right? It's like a general heuristic for systems thinking. And it's like if you look at what the Federal Reserve does, what the result is, some of the things you mentioned earlier, Peruvian, whether it be, you know, decreasing purchasing power through inflation, increasing wealth gaps, massive forever wars, all of these negative externalities, all these downstream effects, like that's, that's what the system does thereby. That is the purpose of this system. And I'm wondering if we can talk a little bit about kind of in the years following the creation of the Federal Reserve, some of the historically significant events that happen, obviously you have World War I and then, you know, another decade and a half or another. Yeah, decade and a half down the line you have the Great Depression, which people like to think just kind of like came out of nowhere. And like it was just because of all these speculators. But it's like, well, why were all these people speculating? Why was there so much liquidity floating around? And then around that same time, I think it was 1927, you had the McFadden act, which if I'm not mistaken, is the act that actually granted the Federal Reserve a charter in perpetuity. But can, can we talk a little bit about those post 1913 years and kind of what was the results of the Fed's creation in terms of like what actually happened in the world? What hand did the Fed have in it?
- [36:24]
Peruvian Bull
Yeah, I think, I think World War I is probably a good place to start with all this because that was like pretty, pretty soon after, around the time that the Fed Federal Reserve was established. And again, like, to me the evidence is pretty clear that the length and the magnitude of that war was enabled by central banking. Just the sheer amount of debt and role that not only the Federal Reserve played in that, but the European central banks and the interaction between the central bank of America, the Federal Reserve and the European central banks, know, cross collateralizing, using, leaning on each other for resources. And the US Dollar, kind of. The US Dollar was not a standard, correct me if I'm wrong, I don't believe it was like a very standard unit of account before the Fed. Like it was, there was a US Dollar, but there were all sorts of different commonwealth, you know, dollars around the US they made it one solid thing across the country. After the Federal Reserve, it says on the bottom of each note, Federal Reserve Note. After World War I, that note started to expand outside American borders. Basically the Fed enabled the US Dollar essentially to travel outside of the US In a way that I don't think it could have before that.
- [37:41]
Julian Figueroa
Yeah, I mean, what's, so what's interesting about right this story is that there was obviously central banks in Europe even before the existence of the Fed. And there was a massive pressure from European bankers for the Fed itself to exist. And then once the Fed did exist, there was much more openness from these bankers to extend credit and to do business with American banks. And again, they, they hide under the auspices of, of banking security. They say, well, you know, we only want to do business with a nation that had a central bank. And so we know that any bank would do business with can be bailed out. And so our contracts are more secure. But if you look at the actual history of central banking, you've seen almost a retaliatory nature when it comes to central bankers or banking in general, to nations that do not have central banks. In 1836, I believe, or 1837, Andrew Jackson failed to renew the charter for the Second National bank in the US which was again second central bank. And you know, that bank was much different from the Fed in that it was not, you know, did not have this large decentralized system. It did not force people to buy in. And it also was barred from buying government bonds, at least initially. And even though you Know, that was the case. It was a very limited central bank. When they, when Andrew Jackson decided not to renew the charter and veto the Senate vote to renew it, bankers in the, and England and France stopped providing credit to the United States. And so that caused a banking panic and a deep recession immediately for several years after he decided to do this. And again, they put out propaganda leaflets in the US saying hey look, you're in a recession. That's because of Andrew Jackson and that's because he didn't let you guys have a central bank, whereas they were knowingly and willingly deciding not to extend credit. So that pressure has existed for a long time. And you know that. I agree. Like a great place to start is World War I, where you know, you have the major nations of Europe enter into this war where it very quickly turns into a stalemate and it becomes a battle of attrition. It just becomes, you know, how many men, how many, how much equipment, supplies, dollars can you just throw at this, into this, you know, meat grinder and see who comes out the other side. And so, you know, the existence of any nation, like the existence of any nation on a gold standard would prevent that. And so that's why Britain, France, Germany, you know, all the major nations involved had to go off a gold standard very quickly. And when they tried to go back on the gold standard in Post World War I era, they all did it in different ways. Germany just decided to hypermobile because their, their liabilities were way too great. France posted at a, at like a, you know, it was like a PAR value, those 20% above where the value was. And so they experienced massive inflation. You know, after four years of 30% inflation, they did another 20, 20% inflation. And Britain decided to try to go back at the pre war parody of gold to pounds. And that was not tenable because now you have four times the amount of pounds in existence as before. And you're trying to peg back to the pre war parody. And so Britain experienced a great Depression even before the US did. But what really happened is, you know, as you see through this process is that the Fed was able to, and central banks in general were able to slowly incrementally increase their power, increase their influence and increase their centralization. You know, if you go to the Depression, I mean, for example, it's, it's really easy. The, you know, the, the Fed's district banks were all independent in the sense that they all issued their own notes. So like if you actually went to, you know, the Federal Reserve bank of Richmond or the Federal Reserve bank of San Francisco. In that region, you would actually get a Federal Reserve note, a banknote that wouldn't say Federal Reserve, it would say Federal Reserve of San Francisco. And so it was like a note that was valid in your district. And so that was part of the decentralization in 1933 with the great Depression. They centralized all of that into the single Federal Reserve. And they also centralized control of all the interest rates because again, all these banks, supposedly at least most of the time, were able to set their own interest rates. And so you could have a 5% interest rate in San Francisco and a 7% interest rate in Chicago. But with this, with these further acts that amended their charter, they changed this to become a single interest rate set by the Board of governors in Washington, D.C. and just centralized, continually centralizing. Centralizing, Centralizing on what? A system that was already being centralized even before they existed.
- [42:25]
Ian Carroll
And to me, the sad irony of so much of this stuff, like you look at the Great Depression and it's like, oh, no, this horrible thing happened because of the animal spirits of the market. Like, we, we don't know how people were speculating too much. I guess all these animal spirits flying around, you know, we should probably have more control. And by the way, we need our charter to never expire. We need that charter to be guaranteed in perpetuity. Which it was after that. I don't remember if it was the. Maybe, maybe, you know, Peruvian. If it was the McFadden act in 27 or the.1 of the acts that came out in 1930, 33, that guaranteed the charter in perpetuity. Do you know which one it was?
- [43:02]
Julian Figueroa
I think it was the McFadden Act.
- [43:04]
Ian Carroll
I'd have to go back and read that. Feels right. But either way, it's like you're using these crises that presumably come out of nowhere. Like, who knows why the market got so frothy? But it's like, well, no, you're literally the ones controlling the money. You're the ones that are setting these interest rates. You're the ones deciding how much to print. The market goes through these boom and bust cycles because they're orchestrated by your monetary policy. And then the only antidote to that.
- [43:33]
Walker
There'S never any sort of reflection to.
- [43:35]
Ian Carroll
Say, you know what, maybe we actually don't have this whole market thing figured out too well. They're just like, nope, we just, we should probably just have more power. Like, that's, that's the obvious solution to this. Like, it just, it's just kind of mind blowing. I Don't know. Yeah, yeah, I didn't even have a question there. I was just. Sometimes I'm just dumbfounded by it.
- [43:55]
Julian Figueroa
You're right. And actually, so one of my early pieces, again, I'm like a macro econ writer. And one of my early pieces that went really viral on Twitter was when I called the financial gravity and the Fed's dilemma. And I kind of like juxtaposed the existence of the Fed and they're lowering and raising of interest rates to financial gravity. I was saying, you know, look, despite the traditional orthodoxy that believes that, you know, the Fed is preventing the business cycle from overheating, right? Their goal was, you know, they've known that for centuries the business cycle has existed because the business cycle is just human. It's just human psychology, right? People start to get together, they start to buy a bunch of houses, the house prices start to go up, then they start to speculate, and then the house prices rise too high and then there's too much debt and then it starts to roll over and then you have a recession. And so recessions were commonplace. I mean, you can trace them from every, you know, in every developed economy for the last 500 years there. Every eight years, there's a mild recession. And that's just kind of how this system works. The problem that the Fed had was they had the arrogance of belief that they could kill that, that business cycle. They believed that they could quash it. And what they would do is they would lower rates into a recession and then they'd increase rates into a boom so that they would stop the economy from, quote, unquote, overheating. And their goal, which was pounded into my head when I took economics courses at university, was they had this line of GDP potential. And instead of having us go up and down and up and down and have a boom and then have a bust and have a boom and have a bust. And again, these recessions were normal. They've happened for thousands of years. Yes, it's painful for a few years, 18 months, but usually it works itself out. The leverage cleans itself out of the system. They wanted to just have it be a straight upwards line. So they're like, we want to quash this business cycle. And so the perfect example is the 1920s, right? They lowered the call loan interest rate to 2%. And they keep it there for like five years. And they don't start raising until like 1920s. And by the time they start raising, it's way too late because the economy of the US is overheated. By every single metric, there are people gambling their, you know, life savings on radio companies and General Electric and car companies. And there's, you know, 130% margin loans on some of these stocks. Like it's, it's insane. And you know, they're, they're 1920s is exactly like a predecessor to the 1980s, almost like, you know, what's that movie with Jordan Belfort, Wolf of Wall street, where it's just mania, right? People calling grandmas and you know, the existence of the radio. There were radio programs going on saying, you need to buy, you need to buy General Electric, you need to buy Ford. You know, it's gone up 30% this year, it's going to go up another 50%. You need to buy, you need to buy, you need to buy. And we got to this insane bubble to territory by 1920, 1929, and the Fed started hiking and blindly hiking into, into a recession. And then this whole, you know, house of cards collapsed. And so once that happens, of course, then they blame the market for this reaction, not it's never their fault. And then if they lower rates into the recession, the irony is that they don't actually allow these bad debts to clear themselves out, right? They don't allow the, the entities that should go bankrupt. They never do. And so that bad debt just accumulates. And so with this cycle of lowering interest rates into a recession and increasing them into a boom, they just keep allowing more and more bad debt to accumulate, accumulate, accumulate, accumulate, until we get to the point where we're at 80% private debt to GDP and 130% public debt to GDP in the US and there's so much debt that the system so starts to fall apart when every time we hike and that's where the Fed has to cut. You know, we have a Fed meeting today, they're cutting again, they just cut 25 basis points. Why? We're not in a recession. You know, we're not. There's no banking panic that they're talking about. We're lowering because the system cannot handle this. Right? The treasury itself is straining. And so this is just, it's just their game. And the problem is that this game is terminal because it eventually means that the system is so indebted that nothing in save it except for QE Infinity.
- [48:09]
Peruvian Bull
You know, you made me aware of something really interesting because back in the 20s, there's actually a really good parable between the studio system and how Hollywood used to package movies and how CDOs kind of worked pre 2008 so I don't know if people are privy to, like, the old Hollywood studio way of doing things, but essentially, when you wanted to contract out a new deal of movies, you'd kind of have, like, your headliner movie, and then you'd package it with a bunch of, like, other crappy, you know, B, C, D films. And I was thinking, like, the other day, I remember I for. I think it was called, like, Metropolis or something. There was some. Or M. There's a massive studio flick that back in the 1920s, cost $40 million back then to create, which is almost something like a billion dollars today that, like, was a massive financial flop. So the studio industry, I don't know how big of a factor it was compared to the, you know, the subprime industry, but it's the same antics were going on back then with, like, priming the pump, easy credit. The studio systems were bundling, you know, like B and C grade, you know, call it debt productions in with, like A grade debt. And yeah, there's so many interesting parables in history there, but the Fed's always part of all that stuff.
- [49:24]
Ian Carroll
Well, I mean, just talking about, you know, like, the history doesn't repeat itself, but it rhymes. And like, in the case of the Fed, it seems to rhyme very closely. Like, as you just said, proven. I just. I was just searching on the side and I saw that, yep, the Fed. The Fed just cut again. And, you know, what you just described happening in the leading up to the Great Depression is literally like what we've seen here today. It's like, okay, they, you know, they overheated the economy. That. That the inflation started going wild during COVID Right. I mean, who could have seen that coming with all of the. All of the monetary debasement that was happening? It's truly shocking. And then it got hotter and hotter and hotter. And then they were like, oh, you know what Jerome Powell went from? We're not even thinking about thinking about raising rates to the fastest rate hike in history. And now after the fastest hike, they're now just cutting them again. And it's like we're. We never learn, apparently. I mean, at least there's more information accessible now. But it's like we're just. We're just doing it again.
- [50:28]
Peruvian Bull
And you know what you get at the end of that? After they destroy countless amounts of lives, countless amounts of businesses, all you get, the one concession you and I get is you get, whoops, sorry. It's the same phrase. Ben Bermenke, Janet Yellen. One day, it'll be Jerome Powell. Whoops. We miscalculated. Sorry guys. Move on, I guess, right? Well, guess what? We are finally fucking moving on. And it's called bitcoin. And we're not gonna take this shit anymore for the next, like few decades or ever hopefully anymore after this. So.
- [51:00]
Ian Carroll
Yeah, you know, I want to get into bitcoin a little bit as, as well here because I think, I think all three of us might be kind of interested in bitcoin, if I had to guess. Just a little bit, but just a little bit.
- [51:12]
Peruvian Bull
Can't tell.
- [51:13]
Ian Carroll
Yeah, yeah, no, no idea. You're, you're keeping a very low profile. But I did want to talk a little bit about just kind of like these downstream effects of the Fed, because I think for a lot of people, like the average person who's just trying to go through their day, who's trying to put food on the table and keep a roof over the head of their family and is just, you know, making it, you know, just trying to get by, they, they don't, they, you know, they're not reading the Creature from Jekyll island, right. Hopefully they'll watch your film because it's short and approachable and high density entertainment or I should say edutainment. And so I, I encourage anyone who ends up listening to this to please go and watch that when it comes out. But like, I don't think people realize the actual extent of the damage that.
- [52:01]
Walker
The Fed has caused.
- [52:02]
Ian Carroll
And they have, they have a dual mandate, right? It's maximum employment and price stability. And if you just look at that like they've just been a colossal failure, first of all, just, just right on that dual mandate. But it goes so much deeper than that. And I mean, maybe you can just talk a little bit about like, what, what do you think people need to understand about the damage that the Fed has done and why? And that it's not some nebulous thing, that it's actually something that affects them. It affects them in their daily lives. It affects their futures and their children. It'll affect their grandchildren too, unless we end the Fed before that. But like, what, what do you want people to understand? And maybe what do you want people to understand from this film as well?
- [52:44]
Peruvian Bull
I'll, I'll try and get my bit done quickly. But essentially, when you have a monetary system that has no limits on how much can be printed, the only way to really establish long term security for yourself and other generations is to just hoard as many assets as possible, as many real assets, whether they're cash flow producing or whether they have, like, you know, just good speculative value, just accrue as many of them as possible. So they set up a world where greed is the only way to essentially make it. You have to be greedy. You can't be selfless because if you're selfless, you're going to be poor. And so what they turn money into, they turn money into a drug essentially, that you have to acquire at all costs. And there's never too much of it. You have to keep accumulating more because if you sit, once you're satisfied with your, you know, couple million cash, guess what? After a couple years, your purchasing power is eradicated. So it sets up this world, and Ian says it beautifully in the film, it sets up this world where you're paid to sin. And those are the downstream effects. It's the only fans. It's the crypto, you know, get rich quick scams. It's the hoarding of real estate, it's the hoarding of assets. It's all of these things. It sets up this world where you're paid to sin. And that destroys society, that destroys cultural cohesion, that destroys, like, you know, morality, the fabric of families. Like, we just, we can't even fathom all the downstream effects. But eventually, if you look, it all just kind of just ties back to that, in my opinion.
- [54:13]
Julian Figueroa
Yeah, yeah, I agree. I mean, it's really complex, right, to unpack all of it. And, you know, the first place, whenever we talk about the Federal Reserve printing, right. My fellow macro enthusiasts on Twitter always have confronted me in spaces and they've said, peruvian, you're an idiot. The Fed doesn't print money. You know, have you, have you not looked into the actual, you know, structure of the Fed? And I say yes, and actually they, you, you know, to say that they don't print money is, it's like an oxymoron. It's true and it's not true. And I'm like, yeah, they print reserves. And it's actually more nefarious in some ways than even just printing money outright. And the reason why is because bank reserves exist only in the financial system. And so when the, when the Fed does QE and they create bank reserves and they swap them for assets on commercial bank balance sheets, they're increasing the size of the overall financial system because they're creating right assets out of nothing and swapping them for other assets and growing the overall size of, of the balance sheets of the banking system. And that means that there's more capacity to lend, there's more capacity to speculate, and risk assets start to rally. So The Fed does QE. You know, like for example, we saw this in 2008, perfectly right. The bank system's falling apart. Stock markets are in free fall. They bottom by March of 09. And as the Fed begins their first QE program, 600 billion markets start to rally. And then 2011, 2010, 2011 comes around. It's not enough. The market starts to stagnate again. They announce QE2, and then they grow the balance sheet to 4 trillion. And then they realize they try to taper the balance sheet, it doesn't work. They have to do QE3 and then QE infinity, which is, you know, Covid. And so at every juncture, they're forced to create more and more reserves. And these reserves flowed into commercial bank balance sheets, which flowed into hedge funds, you know, money market funds, mutual funds, pension funds. All of these institutions get this cash. They're barred obviously from actually using this cash functionally. You cannot use it to buy real world goods that we think of like, you know, Beanie Babies or Big Mac. You have to use it to speculate on financial assets, you know. And so these institutions go out and they buy the S&P 500. They go out and buy bonds, they go out and buy stocks, they go out and buy even crypto. And so you see this proliferation of, you know, risk taking all throughout the system. And the reason why this is problematic is because, you know, every single system in existence, almost every single system in existence, follows what's called a Pareto distribution. So mathematically, the square root of the sum of the total has around 50% of the supply of goods or services. So if you think about Spotify, the top 100 artists on Spotify make 90% of the money. If you think about the size of stars in the universe, the amount of paintings made by people, the amount of money made on YouTube by YouTubers, it's all Pareto distribution. So it's naturally the system's natural unequal. That's how the universe works. The problem with what the Fed does is it exacerbates that to a level that was never seen before, right? They take these assets. There's already people who are wealthy that own, let's say, they own $2 million in the S&P 500. And the majority of people obviously do not own that. And if you increase the S and P by 20% a year by running QE, you make that person's wealth balloon by 400,000 a year, whereas the person who owns $10,000 of Spy only makes $2,000 a year. So the people who are ahead increasingly get further and further and further ahead. And we live in a system now where the top 10% own 83% of all listed equities. So when the Fed does QE, they're effectively enriching the wealthy. And that just makes, you know, lobbying, bribing, like you said, wars like Big Pharma, all these things become easier because now all these already wealthy entities have more wealth to use at their disposal as like a power tool to influence the real world. And it's unfair because they didn't work for this money. They're just getting it for free by just holding assets.
- [58:22]
Peruvian Bull
And to add, to add insult to injury, almost all the regulations work in favor of having more. If you have more, more capital and more collateral, you're allowed to borrow in a way with a higher leverage that poor people just can't. Right? Like your, your local mini mart where you have to take like a payday loan, you're paying 3, 400%, but you know, someone can, like, like Elon Musk can pledge Tesla shares at collateral and probably borrow it at basically prime, right? And it's like no other person has access to those things. So again, it's, it's, you're totally right. The Pareto principle just, it just goes ad infinitum because it's just, you got the regulations, but then you just got the math behind it that just makes it just so much worse over and over and over.
- [59:01]
Ian Carroll
I think it's always interesting too. Like, you see, you see politicians, you know, like, let's, let's take our favorite bitcoin hater, Elizabeth Warren as an example. And you know, she's always blaming these, you know, these billionaires and these greedy corporations for, for prices going up and for all these things. And it's like there's no acknowledgment that I'm not saying that those things, that they don't happen, right? That there's not, as you said, like, you know, people, if you have a lot of money, more money accrues to you because of this fiat system. The, the, you know, Cantillon effect, or Cantillon, depending on if you want to take his Irish or French ancestry for his name. The closer you are to the money creation, the more benefit you derive from it. But the point is that it's still always, all of those things are downstream. The billionaires and the greedy corporations are downstream of the money creation. Itself. Whenever you hear politicians, not all. Thomas Massie, for example, actually talks about the Fed. I mean, Ron Paul has been talking about the Fed for decades, but most politicians don't actually address the giant fricking elephant in the room, which is we have a central bank that prints money, creates reserves, however you want to say it, out of thin air. And that is what creates these massive and ever widening distortions that most negatively impact the poorest and most vulnerable in the society, while enriching anybody who owns assets. And the people who own assets, well.
- [60:33]
Walker
They are the wealthiest in the society.
- [60:34]
Ian Carroll
And if you own a lot of them, you're definitely the wealthiest. Like, it's just crazy. It's like all of the political solutions that are put forward seem to be like trying to put a band aid on an ax wound. Like, that's okay, that's nice, but like, I don't know if you noticed, you still have a giant gaping axe wound in your leg. Like that band aid's not, not doing anything. Like you need to close that wound. And again, that's where it like comes back to Bitcoin. It's like, maybe there's not a solution from the inside. Maybe because this system is so entrenched, so broken. Like, I'm curious what you guys think, if there is any possibility of reforming this system, this Federal Reserve fiat system.
- [61:13]
Walker
From the inside out, or if that.
- [61:15]
Ian Carroll
Can only happen by external forces, parallel systems being a forcing function for change from the outside, if that makes sense.
- [61:28]
Julian Figueroa
Julian, do you want to add anything or. I can go for it.
- [61:30]
Peruvian Bull
You can go for it. I have to think on that.
- [61:32]
Julian Figueroa
Okay, so, you know, this is, this is something I've been, been thinking about, been writing about for the last two or three years. And you know, the, the conclusion I came to is actually really simple, right? Like the existence of the fiat system demands that interest be paid. And the reason why is because debt is money, right? Whenever their new currency units are created, they're loaned into existence. And you know, to complete the loop on that prior thought of is the Fed printing money technically, Right? I said it's an oxymoron. They are and they aren't. Yes, they're printing reserves. The irony is that those reserves, again, they float into the banking system and if they're loaned into the real economy, they become real cash. The other way, they become real cash. And we think real cash, like M2 is if the government spends money. So the government, the treasury, they sell bonds. Who do they sell bonds to? Pension funds, banks, Hedge funds, Right? Primary dealers. Those that money goes into their treasury general account, which is their checking account, and then they spend it into the real economy. There's like a magic button they press that turns bank reserves into M2 cash. And so that's why you see that the chart of M2 just go exponential with COVID Because the government had this huge stimulus of trillions of dollars of money flowing to the real economy. And that's the missing link that I think, think Peter Schiff. You know, all the gold bug Austrian libertarians missed is, you know, they were decrying hyperinflation in 2011. It never came because we didn't have the fiscal spending to pair with the qe. Once you have fiscal spending, once you have a government that's so indebted that they're just only spending their way out, you have this release valve from the financial system that moves down into the real economy. All these reserves that are created up in the, in the financial economy right in the markets by the central bank that are flowing around on bank balance sheets, they're all now starting to channel down into the real economy and turn into real money, M2 cash. And that just causes this explosion of cash. And because money demands an interest rate, that means every year, you know, if you think about a simple System, if there's $100 and there's 5% interest rate, $105 needs to be paid back next year no matter what. And so where those marginal $5 come from, do you have to create them? And so that means that if you base a monetary system on debt, you have to continually increase the money supply no matter what. And, you know, the only way to like prevent that would be to have almost like a military rule where you would tell the banks, 0% rates, you know, you cannot make usury is essentially illegal, unpunishable by death. But the issue with that, again is, okay, so people are really pissed off about the monetary system that works for a generation or two. And then the people forget about the evils of central banking and of interest and usury. And they say, hey, you know, the banks are like, please, come on, we need to make some profits. If we make profits, we can more intelligently invest in the market. And so people say, okay, well, 2%, you know, let's let the banks loan again, and then let's let them loan at 5 and 7. And then the problem starts all over again. Where now these banks need to lend more money. The central bank needs to help finance that. The central bank is able to manipulate rates to allow them to lend as much as they want, and the system just perpetuates. And so I've come to the conclusion that there is no way to fix it within the system because it's humans and human incentives and human desires that ultimately shape the system. That's why bitcoin is so brilliant, is because it. It removes humans from the monetary system for the first time in all history.
- [65:03]
Peruvian Bull
Yeah, And I think there's this really interesting conversation going on right now in the States about a bitcoin reserve and sort of like what the whole point of it is. You know, is it, Is it, is it a system that eventually, if that reserve grows big enough, could we just, you know, press delete on the fiat system? Because it just kind of like removes all the liabilities out of the U.S. you know, economy. Like, let's just say we buy a trillion dollars of bitcoin and bitcoin does, you know, a bitcoin thing and goes up 100x, right? It's like, wow, now all of a sudden the assets are maybe worth as much as the liabilities. And now we're at a crossroads. Or maybe we can, like, make a decision about, you know, how we're going to redirect and conduct Fed policy. I don't know. You know, like, it just feels so early on that I personally hold out hope that there will be parallel systems. And I think the thing I'm a little surprised by, honestly, and maybe I'm just like, my expectations, I'm not being patient enough, is I thought after El Salvador adopted it, more people would get it as, like, we should start storing this as a reserve. And I think a lot of people are. But I think maybe the logical thing right now is they're all trying to do it in secret as much as possible before they're kind of like, out in the open about it. Because I think it's like, it's the game theory thing. It's like once the firing shot is off and it's clear to the world, then it's just a rush into this asset. And so everyone's trying to kind of. They're just waiting and hoping no one, you know, peeps too loud about it. But yeah, I don't ultimately believe that, like, the fiat system can reform itself. I think there's like, just a. There's the level of, like, incentives that I just don't think will ever be perfectly aligned from bankers and the government and the people. I think it's just a very, you know, maybe overly optimistic view of things to expect that to happen. But I don't know, I could be wrong on that.
- [66:45]
Ian Carroll
Peruvian, I'm curious what you think about the Bitcoin strategic reserve idea as well. Just because Julian brought it up, like, do you think this is something that, I mean it seems more and more likely that this is going to happen according to source. But where are you at with this? How are you thinking about this? Good thing, bad thing, saves fiat, ends fiat, what happens?
- [67:09]
Julian Figueroa
Sure. Actually this is a really good. I was about to jump in with what Julian just said because it's a really good point and I've actually written about it in my Dollar Endgame series extensively. The issue with Bitcoin being adopted as a strategic reserve is that it's coming for the King Daddy of all fiat currencies, which is the US Dollar. The dollar is the global reserve currency. It's loaned in 170 out of 180 or so nations and it's used for cross border payments globally. And we're talking about 62% of global forex reserves denominated in dollars, 53% of all transactions, 83% of all cross border transactions. Something like 80 to 90% of all banks globally have access to the US Swift system. So this is like the King daddy, it's like the underpinning of the entire global financial system. You could kind of think of the fiat system as the dollar and then derivatives of the dollar which are all developed economy currencies and then below that all emerging market currencies. And so you know, the Fed, this is, you know, on the back of Brent Johnson's milkshake theory, which is a really good, he's a really good macro pundit and commentator, which is that the Fed essentially controls the price of money globally because all currencies have to use the US dollar to transact trade. And so when the Fed changes interest rates or when the Fed moves, you know, monetary policy, it affects every single nation, right? And right now is a perfect example. You see the Korean won, you see the Japanese yen, you see the Canadian dollar at historic lows against the US dollar. And it's because of this hiking cycle that they've done that's been so fast that's put the domestic US interest rate above the rest. And El Salvador adopting Bitcoin as a strategic reserve, as a Treasury asset. I think it doesn't have a hundredth of the importance of the US government doing that. Again, it's because the US Government actually controls the global reserve currency. And with the central underpinning of the entire Global monetary system beginning to adopt Bitcoin. That is what finally puts a target on other central bank backs. You know, Bitcoin, I think it's going to follow the same, you know, it's a new money. So it's going to be difficult. Like, it's very difficult to map out exactly how this plays out. But I agree with the thesis that, you know, it goes through the three stages of money. It goes through store value, then medium of exchange and then unit of account. And we're still in the store of value stage, right? We're still convincing people, hey, this is a superior, you know, capital preservation mechanism. It's going to be much more difficult to convince people to actually adopt it as a medium of exchange and unit of account until the fiat system begins to truly enter its terminal stages, which again, I believe it's coming in the next 10, 10 to 15 years. But as the, you know, if the US government can, can do this, I think that this really sends a signal out to other central banks because no longer do they need to hold US Treasuries, they can just hold Bitcoin. And as the US acquires more Bitcoin, their values will increase. And as other nation states join in, it's almost like a game theory mechanism where everyone starts to rush, right? Every single, if you're Singapore, if you're Australia, if you're Norway, you're just like, wait, wait, the global reserve currency, which is the global empire, hire the, you know, hegemon is acquiring Bitcoin at, you know, 400,000 Bitcoin a year. I'm going to start, you know, like, what am I doing? Like, I need to get in this immediately. I'm holding US treasuries. Why do I even own those that make 5%? Why not sell the US treasuries only hold liquid US dollars and only hold Bitcoin. And I think that that's, you know, that's a much more consequence. And so I'm, I'm hopeful that that happens. But even if it doesn't, right, this is inevitable no matter what. It's just a question of timing. This would speed things up if they don't do it, it would slow things down. But eventually, again, all, all fiats must, must die because this, you know, the system's unsustainable just by design.
- [71:15]
Ian Carroll
Well, let's, I want to, want to pull on that a little bit because you mentioned, like in the next 10.
- [71:21]
Walker
To 15 years, you think fiat enters.
- [71:23]
Ian Carroll
Kind of a terminal stage. So just to clarify, do you think that nations like if we look, let's, if we look at just like the G7s or let's look at, you know, the nations that, that are printing their own currency and that are, you know, have the, the, they're the largest, richest nations, right. Do those nations adopting a bitcoin strategic reserve, does it prolong the life of.
- [71:50]
Walker
Of their own fiat?
- [71:51]
Ian Carroll
Like if the US does this first, is the dollar the last fiat domino to fall? I mean, I think it's kind of positioned to be the last domino to fall anyway, even without that, if all else being equal. But, but how do you see that? Does that. So does that accelerate fiat demise or. And do you think we reach a state where actually they're like fiat currencies are a thing of the past or. Because I struggle with that and I often think it's like, well, fiat currencies.
- [72:18]
Walker
Could be useful tools for governments still.
- [72:20]
Ian Carroll
Even on a bitcoin standard, they may want to still use them. They would just be different from the fiat we know today. There'd be more accountability to that fiat. So how do you see that playing out?
- [72:31]
Julian Figueroa
Sure. The only way, right? Like the only way that it would really work to save their, their domestic currency is if they pegged their fiat to bitcoin and allowed redemptions and capital flows. Some nation, a lot of nations actually cannot do that functionally. Like China or like Russia. They have closed capital accounts. They cannot allow money to go in and out freely because, you know, they have, they have a currency peg rate that they want to maintain. And it's, you can't have, it's called the, the, it's like a, the policy trilemma in macroeconomics. You can't have an open capital account, free floating exchange rate and independent monetary autonomy. So either you're either you're going to give up your monetary autonomy to the Fed, which has become a vassal state of the U.S. or you're going to close your capital account or you're going to lose your pegged exchange rate. A lot of these countries like Japan don't want to do that. So, you know, if they do want to prolong the existence of their fiat, yes, they can peg it to bitcoin. I think that would work. But then that would, that would kind of bring us back to the Austrian point of, well, great, that's what we wanted. We wanted to rein in excess of fiscal spending. We wanted to rein in excess of debt. And now you have a limit. Hey, you can't issue, you have, you know, 100 sats per yen you can't issue any more than that. Okay, great. And if you start to, then the people will start redeeming it and you'll be drained and then you'll have a bank run just like the old days and your nation will collapse. And so, you know, I think that, yeah, I think that the civilian system, it could have evolved to adapt like mini fiat Bitcoin, quasi Bitcoin standards where they peg the rate. My hope is that we eventually make it to a pure Bitcoin standard. And Fiats are purely a point of the past. But that's obviously the most bullish, hyper bitcoinized world. The more maybe middle ground you take is we're going to exist in this world where there are fiat currencies, but there's pegged to Bitcoin and Bitcoin is the store of value and all governments are responsible for redeeming at that parity. And this is actually how the global monetary system worked in the 1800s, 1700s where everyone was pegged to gold. And whenever a nation would excessively spend or inflate their currency, you would see an outflow of gold restrictions reserves from that nation. So you know France fighting Napoleonic wars, they got into debt, they started printing money, they started seeing inflation and gold started to withdraw from France and it was all drained to the, to the neighboring countries. And then to recover from that, what do they have to do? They have to raise interest rates, rein in monetary spending, actually induce a recession so that their currency strengthens in the forex markets and then that finally draws the gold back in. And so that's a, that was like a self balancing mechanism that existed during the gold standard where it would prevent any one nation from issuing too many banknotes because other nations would call in their banknotes and start to just take the gold. And so you know, the same thing happened to Germany in World War I. And so we could see that same dynamic play out under a bitcoin standard.
- [75:37]
Peruvian Bull
I think a probably a pretty cool place where you can maybe picture some of this, this stuff happening is is look at what's going on with Tether and MicroStrategy. These are companies, one of them has, you know, super put Bitcoin as like the lead treasury asset. But Tether is like a really cool parable for what potentially the US Dollar could be something that initially was backed solely by Treasuries, are almost, you know, entirely by Treasuries, just like the normal US dollar but whose Bitcoin reserve has grown and is now eating a bigger slice of what, what? The treasury reserve ratio is within tether now. Tether, if you believe the attestations, is now like it's got a lower LTV ratio because of the increase in the value of bitcoin in their treasury. They no longer need as many treasuries as, I don't know if they're selling them off because of the bitcoin. I have no clue what's going on there. But tangibly as bitcoin's price rises and as long as they keep it, they could sell off treasuries. Right. And so you can use that as maybe a little bit of a microcosm. See what they do as a microcosm for what potentially the US government and other, you know, debt bearing entities could do.
- [76:42]
Ian Carroll
I think tether probably keeps holding quite a bit of treasuries though. Just they don't piss off US government too much, if I had to guess. Don't worry guys, we'll keep buying them.
- [76:52]
Peruvian Bull
There's some under the table deal there for sure. But I think it's interesting. Right, right. Like we just passed in Vancouver a motion to explore adding bitcoin to the city's treasury. And one of the arguments that our mayor made is that we have $3 billion or $3.2 billion of bonds that are only worth $2.8 billion. Right. So we're under collateralized for what we need to pay out. And his argument to adopt bitcoin is we don't need to put all our money into bitcoin, but we should have this as sort of like a hedge on these bonds. They're moving inversely to one another. And I just think like you're seeing that shift of thinking in all these smaller institutions work its way up to the bigger mama institution, which is, you know, the federal government and how they treat that asset. So interesting to see all this play out, you know.
- [77:41]
Walker
Well, it is.
- [77:42]
Ian Carroll
That's actually something I wanted to talk with you guys about because it's like, you know, okay, we've talked about the, the Fed quite a lot and there's proving, as you pointed out, we could go for, you know, all day long and still, you know, get close to scratching the surface maybe. But if we look at the state of like bitcoin adoption. So, okay, obviously individual adoption is one thing, retail adoption as it's commonly called. There's a massive, massive wave of psychopathic hodlers of last resort that continue dcaing all the time. And that's just, that's not going to stop. I know My DCA is not going to turn off. You know, then the. There's a lot of new entrants that may come in. Okay. But setting aside retail, we look at all the different levels of, let's say corporate nation, state, but also local adoption. Like you mentioned Vancouver, you look at also in the United States, I think Ohio just put forward a bill. There's other states that have done this as well to establish their own bitcoin strategic reserves. I know Florida was looking at it. Texas, you're seeing this happen at all, all these different levels. And it feels to me like there's sort of like something about Bitcoin hitting 100k, like, even though this is like, you know, it's a number, right? Like, it's a psychological number, does that number actually, like, mean anything? I mean, not more than it does in our. In our brains. Right. It's just. It is what it is. It's a hundred, 100,000 US cuck bucks. Like, wow. But something about that seems to have flipped a switch where now we're seeing, like, the con. The conversations seem to be accelerating. They seem to be getting more serious. It seems to be that everybody is kind of coming around to this realization at the same time that, oh, I guess this is real. I guess it's not going to die. At least not, you know, tomorrow. And maybe we need to figure this out. Like, right, right. The now is. That is. Are you guys feeling that kind of vibe shift is.
- [79:36]
Peruvian Bull
Well, 100%. 100%. It is interesting that there's a second order effect of this now where you're seeing unit bias and people are like, ask. Or this bitcoin thing, I missed it a long time ago. And it's like, oh, I hate to see that discouragement among people who haven't picked it up yet. And, you know, I think we have to do our duty as bitcoiners to tell people, look, SATs are a thing. And like, that's. It's. It's just because it's already gone from 0 to 100,000, that doesn't mean that it's like near the end of where we think it's going to go and all that. And that. That all comes with education. I'll say this. I don't have like a ton to say on this, but if you're a creator in this space, it's like the best thing you can do is just stack sats, because that will pay for your ability to educate people more. Like bitcoin is your reserve currency to educate other people. About bitcoin. So don't like I made, I've made some mistakes in selling quite a bit of my bitcoin to pay for other ventures. And I'm realizing like I probably should have just taken out like fiat debt to pay for my films rather than like sell my bitcoin and pay for my films. So take that as a bit of experience for me. But like accrue bitcoin, you can go out and you can educate people so they don't have the unit bias problems. But yeah, in terms of everyone, everyone else, that's not retail. I think the, the urgency is really starting to kick in.
- [80:54]
Julian Figueroa
Yeah, this is where you get into, right. The psych, like monetary economics in monetary psychology. And you know, I think like I get into arguments all the time. I was in a spaces the other day where people were, you know, bitcoin skeptics, which is fun. I, I think that I almost laugh at the bitcoin skeptics because especially now with us past 100k, it's like guys like this, I was telling you about this at 50k. People were telling me that 25k people were before me were at talking at 5k and you still aren't listening. Like how, how ignorant you have to be. But you know, they were saying, they're like, look, it's not used. They're like proving you're an idiot. This isn't used as money. This isn't used as a transaction tool. And I'm like, yeah, do you understand what have you heard of Gresham's law? Have you heard that bad money drives out good if bitcoiners, we believe it's a store of value, we're not going to, you know, go out and just spend. We want it to remain a store of value. We don't want to go out and spend all of our bitcoin immediately because we know that the dollar is going to continue to debase. And so because of that incentive structure, it's going to continue to become a store value and a superior store value for longer and longer periods of time until it finally reaches market cap saturation where then it will flip into tears law where we'll start to actually use it as money because it no longer is going up 20% or for the 10 year CAGR, 60% a year. Right. So once that train stops then sure, people want to spend it, but we're still in the store of value stage. We're still convincing people. And every day, you see, I think this hundred thousand level was very psychological. Where you see the pensions, pension funds in Michigan you mentioned. Florida is looking at it. Texas. I've had several asset managers that I know reach out to me and ask me about bitcoin custody. And. And it's funny because these are people I haven't talked to in, like, maybe a year or two since the bear market. And now they're just like, hey, Peruvian, do you know a bitcoin custodian I can talk to? You know, some of my clients, they keep pestering me about it, you know, and I'm like, well, I have some. I have some advice for you, but I also have a little bit of I told you'd. So. Because I told you at 30k and.
- [83:01]
Ian Carroll
You didn't want to listen, you know. Okay, couple things I want to pull in there. One, just as a. A. A point about the store, like, store value, medium of exchange, unit of account, progression. Right. I think an important caveat to that is like that, you know, that expression like, the future is already here. It's just not evenly distributed yet. I think that's the same thing with the progression of bitcoin as money. I think that, like, most people do and will go through that kind of standard progression of store value, medium, exchange, unit of account, but that doesn't mean that everybody is only at the store value phase. And depending where you are in the world or just depending on what you do and where your head is at, like, I. Personally, I think, you know, maybe you guys do too. Like, I try to. I try to use bitcoin as a medium of exchange as much as I can. I mean, I. I certainly use it every day on noer, which is great. People are using it right now in this noer live stream to zap some SATs. I. I also try to denominate my life in bitcoin as much as possible to use it as my personal unit of account, because I find that it's a more accurate one for measuring how much value I'm actually creating and bringing back into myself.
- [84:15]
Walker
The dollar is just a really bad measuring stick. Right.
- [84:18]
Ian Carroll
Even though it's the prettiest horse at the glue factory, it's still at the glue factory, right? And so I think that that is an interesting point. I do think that a lot of these, like, if we go to Lightning, if we go to Fedi, if we go to Noster, kind of indirectly as a way that bitcoin is used in a very normalized way, I think these are really important things because that medium of exchange piece is actually really important for as Jeff Booth would say, Bitcoin remaining decentralized and secure. But I would also, I would also concede the point that like right now, what do the vast, vast, overwhelming majority of people care about? Is number going to go up, is value going to be stored? That's, that's just the reality. Right? And, and that doesn't, that's not a, you know, it's not like it's a bad thing. That's just the reality. It is what it is. And I'm, I'm very curious to see too as we, as we go forward, you know, we've got, I'm curious to see how much bitcoin the ETFs end up pulling in because they've obviously been a historic success from an ETF standpoint. It's also like, you know, a lot of bitcoiners, myself included, I would much rather have actual Bitcoin that I control the keys to than holding an etf. But okay, for a lot of people.
- [85:31]
Walker
That'S an easy way to get exposure.
- [85:33]
Ian Carroll
And I'm curious if you think, you know, okay, between nation states setting up Bitcoin strategic reserves potentially and that kind of snowballing and accelerating between ETFs gobbling up ever more Bitcoin, do you think there are any risks to that as we go down the line in terms of, this is a centralizing force in.
- [85:53]
Walker
Terms of Bitcoin ownership, in terms of.
- [85:55]
Ian Carroll
Economic power in the network. Because a node that controls a lot of Bitcoin and can move it in the event of a chain split, economic nodes are.
- [86:03]
Walker
A thing like this does matter.
- [86:05]
Ian Carroll
My node is not the same as Coinbase's node. It's just not the case. I'm just curious if you guys see any sort of kind of risk there for, for us down the line?
- [86:16]
Peruvian Bull
I think that it's, it's really important as Bitcoin educators to number one, acknowledge that like there's no situation where 8 billion people are self custodying Bitcoin like on the base layer. But we need to reach the people who have the capability to self custody. There is an economic cost to doing that, which is, you know, running the money for a wallet. And there's a technical know how that you need to get to. And the optimal way of doing it is probably through multisig. So you need to make sure that you have people that you can trust. But we need to meet those people and really motivate them to choose self custody if they're fully capable of doing it over leaving it with custodians like BlackRock because it's just the convenience model right now. It will wins every single freaking time. And the ETFs and the microstrategy are the convenience model. And there's just a lot of people out there. And that's kind of the mission of what we've been trying to do with getbase TV is to like find those people that can take that responsibility and to really like act on it as much as possible so that we don't end up in a situation where you have too much centralized, too many centralized forces. I think there's just a lot of misconceptions about how difficult it is to self custody bitcoin. I think there's also a side of people in the bitcoin space that say everyone should do it, it's super easy, blah, blah, blah, like you have no excuse. And it's like there's a middle ground there and we need to just like find the right people, you know, that can self custody with their bitcoin and really push them to do so.
- [87:45]
Julian Figueroa
Yeah, I mean my, my take on it is right, we're already sitting at what, 19.7 million of the supply has been mind. And you know, we had again, we had this discussion in that Twitter space, as I told you, about where it's basically me and one other couple, other like quasi bitcoiners who it's, they somehow half get it and also half don't get it arguing about this. And they, you know, people were saying, hey, there's another 2 million to be mined. The network is compromised. I was like, how are you ignoring the 19 million that's already been mined and already, you know, being held, right? Something like there's what like 6 million unique addresses with over 2 bitcoin and there's millions and millions over 1 bitcoin. And obviously even more than that, between 0.1 and 1. And so we really have a network where there's already a huge amount of small level holders, retail holders, and those holders are trimming, right? You see like the amount of addresses holding one bitcoin. It started to fall every time there's a bull market, but it falls by, you know, 10%, falls by 12%. Lynn Alden said this in the most recent newsletter. And it rebounds afterwards. So they trim some of their position and then when the bear market comes back in, they all buy back in. And so what the market's telling you is people still obviously have a preference for owning bitcoin as a store of value. And I think that the ETF's getting in, the Saylor getting in. I think the main risk this poses is a price risk and a narrative risk where if Saylor blows up or if the ETFs blow up or some bitcoin, somehow there's a hack where the custodian coinbase gets compromised. You could see a situation where, you know, there's this narrative that comes out. Bitcoin is dangerous. You know, look at these renegade capitalists that lost billions of dollars on bitcoin. You're an idiot. The bitcoin prices, price crashes to $30,000 or whatever, and everyone in the space says it's over. Right? And my opinion would be that's the perfect time to stack sats. I'm going to work even harder and just buy even more. And because I know that these, you know, these are temporary flush outs, right? It's just like FTX and Celsius. This is. The system sometimes needs to clean, clean itself out. And by no means am I saying sailors going to blow up or the ETFs are going to blow up. I'm just saying that this is, I think that that's like the main risk that they pose because I think at this point it's too late for them to actually compromise the network in a meaningful way. You know, Even with what, 2% of the Bitcoin that Saylor has. Right. He can't affect all the consensus rules, he can't change the miners. There's, you know, block, you know, block pair, what are they called? Paradigms or. I forgot the word.
- [90:33]
Ian Carroll
Templates.
- [90:34]
Julian Figueroa
Templates, yes. He can't. Yeah, he can't change that. And the block size wars prove that. Right. Like, even with concerted effort at an early stage, they weren't able to change the block height or the block size. And so because they're not able to. Right, like, that makes this the perfect system to kind of be like that Trojan horse to enter the fiat system and, and kind of take it over for its own. Now, I don't love the idea of billionaires getting in because I think they're already wealthy enough, which is why I think retail, we just need to stack as much as we can now, because there's only, what, 1 to 1.5 million in free floating bitcoin, meaning bitcoin that's being actively bought and sold on exchanges. Once that dries up, right, who knows where the price will go? It'll have to go much higher to find sellers.
- [91:19]
Ian Carroll
No, I think that's such an important point because if you have A significant amount of capital. You do not care if Bitcoin's at 100,000 or 200,000 or 300. It's actually a much safer bet for you. That looks good to you? Okay, this is a mature asset. Yep. Now I'm going to allocate 2% to 5% of my insanely large portfolio to this. And that part of my portfolio is going to carry the risk. Rest of it, actually much more than I thought it would. Wow, isn't this great? I'm now, you know, even more exceptionally wealthy. But, like, they, they don't have a unit bias. You know what I mean? Like, it's just, they're just allocating a percentage. But for the average retail. I honestly, I hate the word retail. It just, it just feels, it just feels dumb for the average person. Like, 100,000 sounds like a really scary big number. It feels like you've missed the boat. But it's like, I've only been in bitcoin for four years, and I can say, wow, you know, every time bitcoin started pumping it, I was like, well, this will probably be the last, you know, last chance I, I, I have to buy it cheap. But the reality is that if you go forward, you know, one year, two year, four years, go through a full cycle, that's when you realize, oh, no, it's always cheap. Right now, when you're looking back four years later, like, bitcoin is, is always going to be cheaper today than it is in four years. So you haven't missed anything. It's just, but it, that's like, that takes some time to come around to that idea too.
- [92:53]
Walker
Right?
- [92:54]
Ian Carroll
But that's Julian to your point. That's why education is so important and to bring this back full circle. I think one of the most important things to educate people about is the problems with our current system. That's why I'm super stoked that you guys made this film. Because until you understand just how dark and just how broken our monetary system is, you may not have the, you may not have the tools necessary to understand why you need bitcoin so much. And I want to, I want to again, bring it back to the, the doc a little bit just before we close out. Want to be conscious of y'all time. What do you hope people get out of this as, as this film is coming out? What, what do you, you know, and I guess is this a film that you really hope kind of, you know, reaches out just, you know, into the normie world? Like, I think it has the Potential to, because it's, you know, it's an accessible film. But what do you hope that people take from this? Who do you, you know, who were you thinking about as your audience when you made this?
- [93:56]
Peruvian Bull
I. It's hard because it's, it's, it's a super like dense story and you know, you'll see it when you come out and you can come to your own opinion on it. But my intention with all the content with Get Based is I think that you can't understand or appreciate bitcoin until you reprogram and you rewire your, rewire your brain to have a low time preference. And so there's a lot of different ways to get there. You've seen my shorts. I try and explain concepts in very high time preference ways because I think it's just like it's a bridge, right, to get to the low time preference stuff. But my hope from all this is that slowly, piece by piece, there's a lot of sacrifice in one's, in one's day to day and one's routine, routines and habits to get to an area where you, where you choose, you know, the low time preference way of thinking and going. And I think the more that I can just hammer that into people through interesting films that make you think twice and things that entertain you and you know, seeing how I've gone on that journey myself from being a pretty high time preference individual to working towards being a low time preference individual. I hope through all that just journey people will eventually go there and that's. Once you're there, then bitcoin becomes a lot easier to understand. You just have to rewire people's brains slowly and surely. And I think this is like a pretty cool part and a cool way of doing it because I just think that this story in particular is just not something and, and you know, you're just never going to be taught it in school, you're never going to be taught it in your favorite movie. You have to learn it somewhere. And I think the somewhere that people learn nowadays is it's YouTube, right? And it's Twitter and it's seeing these things in 30 minute formats and it's seeing these things told from like three or four people, you know, and, and especially Ian, who's really broken through, you know, kind of the social media echo chamber to really bring these interesting values through his content. And so I'm just so stoked that we got this crew assembled. There's like a levity to it, there's some intrigue, there's some conspiracy theorying inside the film. And a. I just hope people enjoy the ride and kind of arrive to where they need to arrive to see that bitcoin's the solution to a lot of this.
- [96:11]
Julian Figueroa
Yeah, absolutely. I'm on the same page. I've been studying macroeconomics finance the Fed for the last eight years, nine years at this point. And the further you dive down this rabbit hole and the further you study econ, you realize how much of our world is just, just warped and distorted and broken because of this. Right? Even the economics profession itself, Right. They are the foremost propagandists of Keynesian economics and the existence of the Fed. And so they've kind of indoctrinated an entire generation of economists to believe in this. And it's going to take a lot of, you know, hard discussions to unprogram and to reconfigure people's minds to realize the truth. And I think, you know, this is coming whether we like it or not, right? The inflation is going to come back. We're going to see, you know, more wars, more government spending, more debasement, more chaos. Because that's just the nature of the cycle. You know, we're at 130% GDP. We can't get it. You can't get out of this in any way other than either devaluation or depression. And the Fed does not want to allow depression under any circumstances because that puts the banking system at risk. So they're going to opt for inflation. And you know, that, that will finally, I think, open people's eyes to the evils of the system. And hopefully docs like this one will be right there to show people, hey, this is the reason why you're in a world of constant debasement and constant theft of your life, of your life force, of your energy, of your time. And this is why it should change. And you know, that would hopefully orange pill some more people and add to the bitcoin movement. So I'm very hopeful for that.
- [97:55]
Ian Carroll
You know, just because Julian said the words conspiracy theory and I said I would get back to this. Did J.P. morgan know the Titanic was going to sink? I have a hard time, I'm just asking the question.
- [98:09]
Peruvian Bull
I have a hard time with that one because the, the idea is that there were three bankers on that boat that were anti central bank. However, there is zero evidence that they've made any statements about that. I don't know where that assumption came from. But the conspiracy is that three anti central bank bankers were on the Titanic and it was A planned demolition to get them out of the picture. In the conversation around the Federal Reserve, I just don't have the evidence if someone can link it to me. But like I dug, I dug deep on that. There's another weird conspiracy in the film which you'll see, which is, you know, the, the dead bodies and stuff. That one I was willing to kind of like chew through a little bit more, but the Titanic one, not so much.
- [98:49]
Julian Figueroa
Wait, what, what about the dead bodies? Sorry.
- [98:52]
Peruvian Bull
The Rockefeller's house is built on top of, let's just say where some sacrifice, I'm pretty positive took place. And I think they were aware of it.
- [99:05]
Ian Carroll
That was a dark, that was a dark part of, of the film for sure. I, I was not aware of that particular, yeah, particular storyline and it was a little bit disturbing.
- [99:14]
Peruvian Bull
Yeah, well that's how you should feel. Yeah, that's the fit for you disturbing.
- [99:20]
Julian Figueroa
It is, it is coincident, right, because again the National Reserve act, right. So they met in December 1910 to plan the National Reserve, which later became the Federal Reserve. They put, you know, they lobbied Congress, they put forth the act and In January of 1912, it was shut down. And then in April of 1912, the Titanic sank. And those, you know, those bankers who were on the Titanic, you know, even though they didn't have public statements, I believe that they had voted against the act. And you know, behind closed doors, at least in the National Monetary Commission, they had been, you know, in opposition to it. So we don't have. The problem is it's one of those things where it's like, it could be a coincidence and as far as I can tell, I'm same as Julian. I couldn't find a direct link where it's like, oh, here's a letter from J.P. morgan ordering for bombs to be put in the mail room of the Titanic. For sure, yeah, there's, there's nothing like that. But you know, there's just an, it's just a weird, it's an interesting weird coincidence and it could be, you know, could be true, who knows?
- [100:20]
Ian Carroll
Well, the, the weird part for me is like he was, J.P. morgan was supposed to be on the Titanic and then he got sick a couple days before and then decided to stay. But then he was like seen out and about making public appearances so like clearly like not that sick. And didn't he own the, like he, he owned, it was like the White Star Line or something. He, he had various interests in the construction and operation of the Titanic as well. So you know, I'm just, just Asking questions here, you know, I. I have no idea. But I think it's also an interesting thing where it's like, oh, you know, we can't find any evidence on this, but it's like, man, at that time, it was. It's not like the Internet existed where, like, something, a piece of information could get out there and then be really hard to, like, forever delete. It's like, if you're one of the wealthy people in the world and you also have ownership stakes in all of the media companies, and you also have ownership stakes in the cruise lines and construction companies, and you literally, you know, own a giant bank, it's pretty easy to make sure that a story is spun whatever way you want and that there is no evidence to the contrary.
- [101:32]
Peruvian Bull
I just don't feel like there's, like, a lower budget way to pick off all those bankers. That probably would have made more sense than, like, we're gonna destroy this boat with, like, hundreds of other innocent civilians.
- [101:42]
Ian Carroll
You know, the question is, what kind of insurance policy was there on the boat? That's what you really have to know. You know, again, just asking questions like.
- [101:50]
Julian Figueroa
And, yeah, and if you think about it, too, it's a great coincidence. Right? You can always hide behind the accident. Right. If to get that amount of wealthy people in the same room, if you just had an assassin go in and shoot them, it's clearly targeted. But if they all get on a boat and it's this maiden voyage and they're sitting first class and then the boat sinks. Very easy to have plausible deniability around this.
- [102:10]
Peruvian Bull
Well, you should tell the. To the subtlety part to the CIA. You know, they didn't get so good with the whole subtlety thing. We're seeing all these people picked off left and right, and it all looks so suspicious. You know, maybe they could. The CIA could learn from JP Morgan if that's the case.
- [102:25]
Walker
Yeah.
- [102:25]
Ian Carroll
I mean, they literally invented the term conspiracy theory theorist. So, you know, at least they have that going for them, right?
- [102:32]
Peruvian Bull
Yeah, absolutely.
- [102:34]
Julian Figueroa
Yeah. And, you know, it wouldn't. Again, none of this would surprise me because I was recently doing some research on J.P. morgan and Tesla and how J.P. morgan had funded Tesla's research at Wardenclyffe Tower. And then, you know, when Tesla wanted to create this free energy that would be available to all people wirelessly, and he didn't want to file for patents for the radio or, you know, any of his other inventions, J.P. morgan decided to pull funding because he. He wanted money. He wanted, you know, to produce. He wanted he wanted his investments to, to make income. And so he pulled all this funding from Tesla, basically sabotaged and blacklisted him from all of the private, you know, equity investors. And then he went and funded Edison and Edison's other compatriots who basically plagiarized his DC current, DC ac, current work and then, you know, stole it, monetized it and profited from it. And Tesla was left, he died broke and penniless and his possessions were seized by the FBI and by, you know, private bankers, apparently again in a conspiracy because. Because they sent his, his belongings back to Europe and to his son. And when it arrived, there were like 10 crates of his belongings missing and no one knows where they went. So the conspiracy is that JP Morgan stole them upon his death. Original.
- [103:59]
Peruvian Bull
And that's why Satoshi stayed anonymous. Exactly.
- [104:03]
Ian Carroll
There's another.
- [104:06]
Peruvian Bull
I gotta believe that.
- [104:08]
Ian Carroll
Yeah, yeah. But look into this and later, if you feel like it. I believe it was like it was Donald Trump's grandpa who was like, you know, like the extremely long tenured MIT professor and he was the one who was in charge of like the invention part of the estate of Tesla when it was given to mit. There's a whole different rabbit hole to go down there. We won't get into it. I appreciate you guys coming on here. This was super fascinating. I encourage everyone to check out the film when it comes out. Where do you want to send people? Where should they go watch it? I'll make sure to link it in the show notes.
- [104:42]
Peruvian Bull
Yeah, Twitter xetbassetv. It'll be posted there hopefully a week or so from now. I don't know when the recorded edited version of this will come out, but for the live viewers a week from now and then on YouTube as well. We prefer if you watch it on YouTube because we self funded this entire thing and we get ad revenue from that SOTBaseTV TV on YouTube as well.
- [105:05]
Ian Carroll
Awesome. And I'll, I'll link you guys on, on X and Noster as well. But seriously, thank you guys for the time. I'm gonna try to get this out this evening actually once the, the wife and son go to bed. But this was a great time talking with you guys. I hope this encourages more people to go down more rabbit holes. And thank you guys for going so deep down this Federal Reserve rabbit hole because it is a fascinating one. Appreciate you guys.
- [105:28]
Peruvian Bull
Guys, awesome. Thanks so much for having us. I really appreciate it.
- [105:31]
Julian Figueroa
Walker, thanks for the invite.
- [105:39]
Walker
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 to hello@bitcoinpodcast.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. Or don't. Bitcoin doesn't care, but I sure do appreciate it. You can grab links in the show Notes to watch or list this show.
- [106:15]
Ian Carroll
Wherever you get your podcasts.
- [106:17]
Walker
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.
- [106:36]
Ian Carroll
Until next time, stay free.