Matthew Macinski (4:20)

Hello Matthew, how you doing man?

Matthew Macinski (4:22)

Hey Peter, thanks for having me on.

Matthew Macinski (4:24)

It's great to finally meet you out in Riga. Have a drink with you.

Matthew Macinski (4:27)

Yeah, yeah, enjoyed it very much. You were, we were just talking a little bit pre show how you were. You were doing well with some of those, those very specific Latvian black balsam shots. A lot of people are a bit afraid to take them, but you were taking them like a champ.

Matthew Macinski (4:40)

Well, thank you. Thank you for giving me a bunch of them. The funny thing was I can even remember it but I do remember it now, so.

Peter McCormack (4:45)

But yeah, no, look, it was great.

Matthew Macinski (4:46)

To finally meet you. It's great to finally get your sexy voice on the podcast.

Matthew Macinski (4:51)

Do you know what to kind of ask you something?

Matthew Macinski (4:53)

You know, like how everyone hates to hear their own voice. Is it different with you? Do you listen to yours and go, yeah, I've got a fucking sexy voice.

Matthew Macinski (5:00)

Nope, nope, it's the same. Absolutely the same. I think it's something in our reptilian brains that just naturally averse to that. So it is not, not any different for me. But I do appreciate the nice words, I guess.

Matthew Macinski (5:12)

Well, I have voice envy because, you know, now I do a podcast. My voice is essentially my business or part of my business and every time I hear yours I'm like, God, I've got voice envy. You could well film dubbing, you know the film trailers. You could, you could be that guy.

Matthew Macinski (5:26)

Yeah, there's. I have dabbled in some, some voice work over the years. Mostly boring economic textbooks and things which is, you know, sort of up my alley. You know I've narrated the History of Money and Banking, which was a long tome by Murray Rothbard, he's an Austrian economist. Some other shorter things and whatnot. But yeah, it's just. It's still sort of been hobby for me and you know, the podcast is still up in that, in that line of things. We're trying to. Trying to do more but you know, regular work gets in the way as well. So. But it's fine. You know, it's. The podcast that we do is, you know, mostly it's a bit more focused than yours. It's mostly on, you know, money, banking, economics and bitcoin, obviously. And, you know, we'll see how much that expands or whatnot in the future. But, you know, it's going all right so far.

Matthew Macinski (6:16)

Yeah, it's good. I like your podcast. I also, I loved your presentation at Riga. It was one of the few. I just sat there, watched the whole thing, like was trying to take in every word. And then I wrote down afterwards on my phone, I had a little notes thing. I was like, must interview Matthew. You've got to work through this because, yeah, look, it was super fascinating. I've got the presentation open. I've also got my questions and I think the people who listen to my show, you know, they're probably, some of them are probably a little bit more light touch, maybe don't study economics to the level that you have or don't understand money. So for me, it was an eye opener. So hopefully for anyone listening, it will be. So let's work through it. Like I said, I've got the presentation here, which I will share out in the show notes and I've got my questions. But we're going to do bitcoin as base money.

Matthew Macinski (7:00)

Good.

Matthew Macinski (7:00)

So let's go with it. So bitcoin is unique. Let's kick it off. Tell us why bitcoin is unique.

Matthew Macinski (7:06)

I guess just the genesis of this idea that we sort of, I don't really want to say popularized because I definitely think people still don't really know what base money is economically. But, you know, it's just, it was sort of a common thing that the cypherpunks were looking at back in the day was how to create something that was like, I mean, this was the analogy. It was like a digital gold, something that was scarce, valuable and obviously could be traded much easier online and have superior security properties than gold. There actually is a term for that. There is an economic definition. It's not like something sort of aloof or out there or if you do read some economic works on this and papers, it's not a foreign term. It's. It's a real term and it's called the monetary base or base money. So Fernando and I, you know, during our, during the course of our show, we usually ask questions regarding that to our guests, you know, if they're economists or not, just what they think about the idea of Bitcoin becoming base money or having the characteristics of base money. So that was what I was trying to do in the presentation was explain exactly what it was. And you know, we can, we can go into that, but give the characteristics of what makes something a base money and just explain that, that those are precisely the characteristics that bitcoin has. And then you know, as a little, as a little sort of easy, easy sort of exercise was show exactly the comparable money supplies in the fiat world today, which you know, the fiat monetary bases around the world. And then also just look briefly at gold, silver, those actual supplies in their native units, meaning not what gold is priced in, in dollars, but how many ounces are coming out of the ground. So you know, there's a lot there when you talk about base money and means more to some people than others. But the idea was basically just to get it out there that there is a money supply in the economic world that compares with bitcoin and it's the monetary base. And then just one more point I guess as well, you know, another point of, of the genesis of why we started to talk about this on our show was we just saw it too much on Twitter where, you know, it's fun to do. People like to compare Bitcoin to other money supplies in the world. You know, these are the so called M's, there's M1, M2, M3, we can get into what those mean. But precisely for the reasons that Those money supplies, M1, M2, M3, they're narrow and broad money supplies and economic lingo precisely because they don't share the characteristics of base money. We would kept saying on our show and on Twitter and then we do this monetary base update every quarter. Those money supplies do not have the characteristics of Bitcoin. So we shouldn't look first to those and certainly we shouldn't just look to US M1. A lot of people just look at the US M1 money supply, which means checking accounts and then also physical currency in circulation. Put those together, you just look at that. I mean, well, obviously bitcoin is global. The US Money supply is not. So we can't just stop at the United States M1 money supply. We need to look globally. And so that was another exercise that had to do for this exhibit was actually going and calculating the monetary base of all the other central bank currencies. Because it's actually not done. You can't. There's not really a good site that does this. Some websites like the imf, the OECD websites, Bank of International settlements. They may give you a curve that shows like narrow money, which again is these broader supplies which include checking accounts, savings accounts, so on and so forth. But a lot of central banks, for whatever reason, they don't publish these curves easily. Some do, the US does, but they don't publish these curves easily. So anyway, long and short of it is there's a lot of confusion around what the monetary base is. We're trying to make it less confusing and just explain exactly what it is and show exactly what it is, because it can be calculated.

Matthew Macinski (11:18)

I think one of the things is where I've had difficulty trying to get my friends interested in bitcoin, probably similar to when I first discovered it because I didn't really pay attention and then I got lucky on a second bull run, so kind of got involved in the market and then spent some time researching it. But I, I would say I still don't fully understand money. I've never been taught what money is or the meaning of money. Money for me was always, I have a bank account at the end of the month some money goes in and during the month I spend it. But I never thought about it, of what it is, what it means, what inflation means, what the supply means, how the government manipulates money, what interest means, what central banks are. You know, it's a big, long, deep rabbit hole. So trying to get my friends interested in. It's very difficult, Bey, making a gain by buying bitcoin at the right time. Whereas I guess with someone like you and the cypherpunks, they've actually spent time studying money. So when they first heard about bitcoin, it just kind of made sense. It clicked with them straight away. They didn't have to go through a process of making gains. They'd already done the work upfront.

Matthew Macinski (12:21)

Yeah, yeah, absolutely. And it takes time for everybody. And you know, people go through their whole lives not really thinking about what money is. So it's certainly not a crime if you don't understand money or if you take it for granted or if you don't have the same views as the cypherpunks or some hard money economists, so on and so forth. I mean it's, it is a complicated issue. I think before maybe we would go deeper into to what describes base money, which I know you wanted to talk about. I would say one of the principles that I try to use when you look at money is I try to look at it from the same free market bent that I have with other things in the, in the market, other products and services that are offered in the market. And if you see that we don't really have a free market in money today, like we don't completely have a free market. And other. You know, I listened to your podcast the other day with Eric Voorhees talking about libertarianism. You know, I agree very much with a lot of the points that he was making about markets, basically, but I always look at it one, with one specific word, actually, and that word is monopoly. So a free market in an idealized utopian world, which I don't think we may not ever see in our lifetime, but a truly free market would not have a monopoly. But understanding what a monopoly is, you have to, to truly understand what money is and all these things, you have to understand what a monopoly is. So a monopoly is not a big company that apparently is so good. You know, they're so good at providing goods and services that they have like 90, 95% of the market share, like Google, Amazon, Apple, like these companies are so, apparently so good and have so much of the market share that they're a monopoly. That is not the economic definition. That's not the definition that Adam Smith used. Not the definition definition that Murray Rothbard used many other economists. Monopoly is actually very simply a firm that has special license from the government. So that's where I always start, is if the firm has special license from the government, there's probably going to be issues. And you see that, you know, you see that with a lot of big ticket items. And utilities today are monopolies, airlines are monopolies, airports are monopolies, healthcare institutions are often monopolies. They have special privilege from the government. And then you have money. Money is the same thing. So if you actually, if you look at it from this lens, you can cut through right to the core, in my view, about where you do have some problems in money or anything else. And this is a pretty hardcore anarcho capitalist view. But if you see that there are some issues in a sector in the economy that maybe it's not working as efficiently as it could or as well as it could, the biggest issue to look for is if there is this special license or special privilege from the government. And that's where we are today with money. So money by definition is monopolized industry because only these institutions called central banks can print it. That's like before you get anywhere else in money or talking about if it's good or bad or well produced or not well produced. And again, money should just be like any other good. But we can see, we can observe that money is a highly monopolized industry. So that's one of the reasons why you need something like Bitcoin. Because money is not working that efficient. People can see that. People can see it with price rises, inflation, so on and so forth. They might not understand it. But if you just observe the very simple definition of is there a special license or a special privilege that this institution is receiving from the government? Then you can see, oh, actually that's why this thing isn't performing that well, because they're a monopoly. So that's what central banks are, they are monopolies. They have a special privilege from the government. Supposedly they're the only ones that know how to print money. And obviously I don't agree with that. And other people, whether they might explain it that way or not, I imagine they don't agree with it as well.

Matthew Macinski (16:28)

So the libertarian side of things, really interesting because obviously I spent time with Eric and a few other libertarians. I've interviewed the Austrian economists, I've interviewed Stefan Levera and Safe Dinamous. And I really struggle with the full anarchist libertarian vision. Maybe it's because I've just lived and grown up essentially a statist, you know, not realizing there's any other way of society operating without government. But I do really struggle with the full libertarian anarchist view because I struggle to see how 7 billion people can operate in a fully free market. And I fear it actually quite a bit. I actually prefer the idea of having almost libertarian goals. Like a libertarian goal of reducing government I think is practical and is like something achievable. But I think the full anarchist view is almost a distraction from actually trying to achieve something. Does that make sense?

Matthew Macinski (17:22)

Yeah, yeah. You know, I don't know how deep we want to go in that issue regarding this topic. It definitely, there's a lot of rabbit holes you can go down and you can explore different sectors. And I think you did that with Eric quite well on your show. So I understand. I mean, I definitely, I call myself a lazy anarchist, in fact, because though I really believe the principles, I really believe that if you had pure free markets unencumbered by government monopolies, that you would have private enterprise providing goods, services. And that can include money, by the way. It can, but I also understand whether that's realistic or not in the short run or even practical or not in the short run. And you know, I have friends, like, not all my friends are libertarians, anarcho capitalists. And at the end of the day, like, you just Want to have good dinner conversation and have some good wine, like, I don't know. I call myself a lazy anarchist because I'm happy to engage in it, but I just tend to look towards the practical things. And that's also why bitcoin, right? I mean, bitcoin is an amazingly practical outlet, you know, escape hatch into something that at least for now is fairly unregulated, fairly free. Fairly, I shouldn't even say fairly. I mean it definitely is uncensorable and you know, all the good words that we like to use in the, in the bitcoin community. So that's, that's probably why bitcoin, you know, for, for now, for us. And that's. It gets me more excited just talking about bitcoin and the potential that bitcoin can do to change the world than even trying to say like government should lower its debt or something. I mean, unfortunately those things, I just don't see that happening at all in the short term.

Matthew Macinski (19:08)

Yeah. So the thing I worry about, I kind of like that actually, that lazy anarchist. Because the thing I worry about is I worry about human greed. I would worry about over pollution. I mean we see companies polluting as it is. I would worry over pollution without regulation. I would worry about an unregulated market for nuclear power stations. You only have to have a couple of cities blow up for it to be a major problem. I just, I think the full anarchist libertarian view assumes that all humans will act in kindness and in fairness. And you know, I just don't think that's human nature. And also I think the thing is we are an evolution from animals. And you know, we do organize ourselves. Whether you look at you, whether you go into the jungle and look at the lions or whether you go and see the tribes in the Amazonian jungle, you know, we are people who tend to organize ourselves and we have leaders and followers. And I just, I don't see it working. But like, I do like the goal and I'm with you on bitcoin because I see with bitcoin you have these small achievable goals. You have this ability to potentially start taking away from the state. You know, that there, while the state could tax Bitcoin, if Bitcoin becomes a circular economy and more people are using it, then the government are going to be forced to make better decisions with their money.

Matthew Macinski (20:25)

Yeah. And then looking at it another way, even perhaps to maybe support in some ways what you're saying, but to counter some of the other things is that the presence of government Going back to what I said about Monopoly, even if some of it's not realistic to cut back or so on and so forth. What I, what I observe, and I think a lot of libertarians, Austrian economists, so on, so forth. What, what you do observe is the presence of government in these industries that are monopolized, meaning the, the corporations, the, the evil corporations, especially if they have that license from government. Pretty much you can always look to things happening in a worse way. So I wouldn't actually look at it the way you do, where if we had pure anarchy and energy, things would blow up. I would look at it more, the more government we have, usually it shows that that's more inefficient and more bad. And you can extrapolate that fully to where I'm sitting right now in the former Soviet Union. I mean, they said the Soviet Union was the second biggest economy in the world for 50 years. I mean it collapsed overnight. It was all a charade. It was also usually communism is surrounded by paranoiac ideas such as what Stalin had. You know, literally tens of millions of people die at the hand of communist dictators, as Eric pointed out as well. And you know, I mean China, they had their 70th anniversary this week, was watching the news and you watch those parades and things and the fancy colors and the uniforms and they're all choreographed and all these people marching down the squares. I mean, not the first time we've seen this in the history of the world. And it usually doesn't end well. So centralized states, top down communist authoritarian regimes, they scare me more than anything else. And I do think that bitcoin is one of the best ways to fight them. So. And then actually one thing I wanted to say, maybe to sort of bring it back to discussion about base money or gold or bitcoin. One of the things with gold. It's interesting a lot of people have said this and recognize this, but it really can make no argument that the centralization of gold from a government perspective pretty much ended that standard. In World War I we had the gold standard. Governments, as they usually do, they print money, they go off of the hard money standard. They did that in World War I. They might have been able to get back on it had it not been for literally one man, and that was Adolf Hitler. Adolf Hitler in the 30s started arming up his nation in a very top down fashion, centralizing. A lot of people obviously understand this, but have written about this as well. He centralized the formerly decentralized nation. And the story of gold in Europe is is incredible because in the 30s, the US had maybe something like 30% of all the gold reserves sitting in the New York Fed. And by the end of World War II, it had over 70%. And the reason was European nations were scrambling to get their gold out of the hands of Hitler. When Hitler did his Anschluss into Austria, the first thing he did, act one, was go to the Austrian central bank, take the gold. When he moved in Czechoslovakia, the first thing he did was to take the gold. Poland actually had an amazing story. Poland was just destroyed in 1939, September, like basically the start of World War II. But no one really was paying attention. They fell in like a month. Amazingly, Poland got. It's an amazing story if you read about the history of some of the way the gold moved In World War II, they had like buses of unmarked buses, like 10 of them. They drove down from Poland. Like all. It was sort of decentralized in a couple different banks in Poland. They all met at the border. They drove into Romania, which was like Ukraine, Romania at the time, and then got to the Black Sea, put it on a boat, got to Constantinople. The Germans were waiting for them. They knew they were gonna. They were onto them that they had their gold there. Somehow they got it onto a train in Turkey. It went all the way down to Lebanon. And then they sent it on a French ship, finally got it, and it went to France. Polish gold. And it's like all the gold, like, just to get it away from Hitler. And then eventually that went to Africa. And then to Africa, it went to the New York Fed. Most of the gold actually found its way to the United States precisely because governments in Europe were afraid of letting it fall into Hitler's hands. And that was the story of World War II. Like, how did Hitler build up such a supreme army military apparatus? I mean, it was literally from going into countries, taking their gold and using it to pay for weapons. And so that's actually the tragedy of the gold standard. Where I don't see it will ever come back in a meaningful way is. First of all, most of it's sitting in the U.S. either in the New York Fed or in Fort Knox. It's not. It's earmarked to other countries. Like, countries say they have gold, right? That's in their name. But it's, you know, I just don't see the security of gold really working. And it's precisely because of belligerent governments, you know, fucking with each other that eventually brought down something like the gold standard. And so, you know, the Famous, you know, the French actually didn't want all of it to go to the Fed. They had some of it in Caribbean, they had some of it in Africa and they eventually got it out of Africa and back to the Fed. So the French famously, de Gaulle ended the gold standard. The last vestiges of the gold standard, I should say, and Bretton woods in 1971. But like all of these things are just like illustrations of how something that is supposed to be secure, something supposed to hold value, it just got centralized over the years. Governments were in control of it. I mean could you imagine like some of this. The book is escaping me where I read about the Polish gold.

Matthew Macinski (26:46)

Yeah, I need to read this.

Matthew Macinski (26:47)

What hap. Yeah, like it's called Chasing Gold. It's called Chasing Gold is the, is the book. I definitely recommend it when like there's a lot of these stories about how gold is basically moving out of Europe. You know, the Dutch gold, Belgian gold, Norwegian gold, it's basically making its way to the UK or France and then eventually to the US and then France, France sometimes tried to keep it out of the US and keep it like the Caribbean and stuff. But the actual events like they described the captains of these warships, the admirals of these warships that are bringing it out of these countries, there's one central banker on board, this one central banker from Poland hung around the whole time that gold went out of Poland, on land, through the Black Sea, through Turkey, so on and so forth. I mean could you imagine like how many fuck ups can happen from just one banker trying to guard like 100 tons of a nation's basically their base money, their only wealth? I mean it's just asking for disaster and definitely was like a lot of it sunk, you know, a lot of it was shot down by the. Some, some of it was in planes, was shot down. I mean it was. If you actually look at like the mechanics, the fundamentals of how gold has been moved around in the last hundred years, it just shows that it's precisely government intervention that destroyed the gold standard. And Probably World War II was the best example of that. Like I said, if we say that gold was decentralized before World War II, it was not. After all of it from Europe basically went to the US and then the US eventually closed the gold standard because of France was trying to get some of it back in the 60s. And then I know it wasn't a full gold standard then, but it was, you know, the last vestiges of governments being able to claim gold on each other.

Matthew Macinski (28:38)

And Also, you're highlighting how much trust there has to be between nations and the quality of relationships and that required. I mean, I think at the moment the UK is holding a significant amount of gold on behalf of Venezuela, and Maduro wanted it back and we declined to give it to them.

Matthew Macinski (28:54)

Right, right, exactly. And I mean, there, you know, maybe there's good reasons there, obviously, for what's happening in Venezuela, but, yeah, I mean, the system is not. There's no real way to manage it effectively, especially when it's so centralized at that top level. I mean, there were good examples as well, if you want to call them good examples, like the Baltics, Latvia, Lithuania, Estonia, they're very small amounts of gold, you know, a couple tons each, maybe up to 10 tons when the Soviets rolled in. So Hitler and Stalin secretly cut up Eastern Europe literally days before Poland was invaded and Poland fell. They didn't go into the Baltics until 1940. And then when they went in, there was like three from each country. There was three messages to both the bank of International Settlements, which is in Switzerland, and to the Fed in New York, which both of them held gold for the Baltics. And they said, please send your gold to Moscow because the Soviets rolled into the Baltics in 1940. And the messages were actually so related to one another, and you could tell it was like, basically under duress that they didn't send it. So interestingly, the Latvian, Lithuanian, Estonian gold made it, stayed in the New York Fed all the way until the fall of the Berlin Wall, all the way until 1990, and then eventually went back. And how much is back in Latvia? I don't know now, but if you think about who is executing these trades, who's executing these orders to ship gold across a sea or across an ocean, it's so centralized, so inefficient, and it could just come down to, you know, one person making a right decision or not. And that. That is really the tragedy of. Of the gold standard. But it's precisely illustrating the problem of governments running shit. And that's. That's the problem with. With gold and money, unfortunately.

Matthew Macinski (30:41)

Have you, like, if you considered scenarios where governments move to holding bitcoin, I mean, it's not going to be something that's going to happen quickly. It's not something that's going to replace gold. I don't stand with these bitcoiners who deride gold and say bitcoin is so much better. I see both having a role to play. But have you even considered what it will be like if government Started holding bitcoin instead.

Matthew Macinski (31:05)

Yeah. So again, I would say I certainly have no problem with gold. I like gold. I want to hold more gold. I understand its value in the market. The point of what I was just saying before was obviously to show the shortcomings in its security. But regarding bitcoin. Yeah. We've seen news of Venezuela has some bitcoins now under their control. North Korea obviously has been mining things like that. It's a weird thing, Fernando, he quotes his professor who called something like central banks even holding gold, I believe was the quote is something like the virgin prostitute or something. I mean, it's just, it's a strange thing that doesn't really make a lot of sense. Like if they're supposed to be the ones managing efficiently the money supply of the country, you know, why would you hold bitcoin? And then on the other hand, obviously the bullish case for bitcoin is like, well, whoever wants to hold it, it's great. I mean, let. Let them hold it. But I think the key, the key thing to recognize with central banks holding bitcoin is we certainly don't want to get to the point where they're the only ones like validating. And again, this goes back to the old block size debates and so on and so forth. I mean, you have to keep. You have to keep the system decentralized where everyone can validate. Everybody can, or at least most everybody has the ability to validate where you can truly keep this thing getting back into central bank hands because that's, that's really the problem is once it's in central bank hands, the record with gold and now the record with fiat is usually nothing good. I mean, it's mismanaged. There's more claims that are issued against the base money. We can start talking about that if you want getting back to the base money argument. But yeah, I don't necessarily have any comfort in hearing that central banks hold gold. Although I do understand, like it's sort of a bullish case, you know, to say, okay, well, these guys that apparently know something about money, they recognize that bitcoin is a viable asset that they want to hold against their, you know, hold as reserve. But it is, it's an oxymoron having central bank hold bitcoin.

Peter McCormack (33:12)

Next up, I talked to Matthew Moore about bitcoin as base money. But before that, I've got a message from my amazing sponsors. And today's show is brought to you by BlockFi. You know, BlockFi, right. They are absolutely crushing it in the space and they've even been crushing it during this crappy bear market. They are definitely the future of bitcoin and financial services and they've had so many cool updates recently, especially with their interest accounts, of which I'm a customer. I was actually talking to somebody at the event last night who's also a customer, talking about how amazing it is just to get some interest each month. So they've dropped minimum deposits interest account holder clients will no longer have to meet a minimum deposit amount in their Bitcoin ether or GSD balances to start earning interest, which is very cool. Additionally, BlockFi has removed the early withdrawal penalty from their account and is now offering one free withdrawal per month to all clients. Add to that the recent announcement of BlockFi Flex where you can choose to receive your interest payment in the currency of your choice. So you definitely need to check out BlockFi interest accounts where you can earn interest every month on your bitcoin eth and gsd. Amazing company. They've done it all without a bullshit token. So if you are interested in finding out more about them, head over to blockfi.com which is b l o c k f I dot com. Also, today's show is brought to you by the mighty, mighty Kraken. The most trusted place to buy and sell bitcoin. Are you using Kraken? No. Why the fuck not? They are the best exchange out there. They've got the security covered, they've got every trading option available and they're recruiting some of the most experienced people in the industry. Pierre Rochard just announced he's joining Kraken, following on from Dan Hill joining the company. I'm going to be meeting up with Pierre in New York to talk about this. But if you're a trader, Kraken has the most comprehensive set of tools available for you. They've got kraken.com, which is the best place to buy, sell and trade digital currencies. They've got margin trading with up to 5x leverage. They've got futures, they've got indices. They've got the most badass OTC desk for large trades with private and personalized services. I'm also going to be getting their head of OTC on the podcast soon. Also, they've got crypto watch where you can trade on multiple exchanges from a single platform. And for you advanced traders out there, they have the best account management service in the business. There is no better place to trade Bitcoin. So join me in supporting Kraken. Head over to kraken.com which is k r a k e n dot com.

Matthew Macinski (35:28)

All right, man, well, listen, look, let's get into the base money side of things.

Matthew Macinski (35:31)

Sure.

Matthew Macinski (35:32)

Like I said, I don't think people really understand money. So if you explain what base money is, but kind of explain it in a way that helps us better understand Bitcoin.

Matthew Macinski (35:43)

Sure. So the most important thing about base money, I would say as I put on the characteristics of base money slide, is basically that it's final settlement. There's no further claim. There's no iou, there's no third party that's involved in a base money transaction, like at literally its most basic level. So when you are making. When you have gold, when you have bitcoin, even when you're holding a dollar bill in your wallet, there's actually no counterparty there. There's no visa, there's no MasterCard, there's no. There's no PayPal, there's no check. There's literally no other party that you have to worry about settling throughout the financial system. No other layers. You know, you can make that transaction, you can buy that coffee or so on and so forth. Of course, coffee is that proverbial coffee transaction confuses the issue because no one buys. Even if gold were money, no one would buy their coffee with like a gold coin. No one buys coffee with bitcoin, but they do buy coffee with government fiat. So this is where it gets a little bit confusing, you know, because you have so. So base money, it tends to be some sort of a centralized. Sorry, centralized the wrong word. Some sort of a big ticket item, like something that needs to sit in your treasury. Something that's like there's. At the end of the day, you either have it or you don't. Like if someone steals it from you, if you lose it, then you just don't have base money anymore. It's a bare instrument. It just is its own thing. And that's what the monetary base is. So in the case of gold and silver, it literally is gold that has been mined throughout the centuries. And then bitcoin, obviously it's mined every 10 minutes. But Bitcoin is unique because it has a fixed supply of 21 million. Everybody knows that. That's a very unique characteristic of base money because usually base money can keep being mined or printed. And then in the case of government fiat, it literally is those paper notes that are in your wallet. So, you know, I don't know, we can keep going on that on those descriptions. I don't know where you want to go from there. But it's basically it's final settlement. There's no check, there's no visa, there's no MasterCard, there's no other third party. You have to worry about entering into the picture. When you're talking about base money, like literally, you, an individual can handle it and you can hold it, you can secure it. That's why, that's why bitcoin works just like base money.

Matthew Macinski (38:08)

Well, I think what would be helpful to understand is the differences between them. What the key characteristic differences. Because, you know, base money in terms of kind of gold, silver and paper, it tends to be government issued or government held. But you've also then talked about bitcoin, you worry about bitcoin being government held. So there are some key differences.

Matthew Macinski (38:27)

Yes. And as I mentioned in the presentation, I totally would admit government fiat is very squirrely when it comes to what they can do with their base money. In the last 10 years, they have actually paid banks not to lend their base money. That is a very unique thing that never happened ever. Even during a full fiat Standard in the 80s and the 90s when they could do whatever they want, they never paid banks interest on their base money reserves. They do that now. So it's, it gets, it gets a bit squirrely when you look at the government fiat based money supply. But you know, yeah, I mean it's, it's gold and silver and bitcoin as fundamental characteristics, they have the most in common. They're naturally assets. You can hold them. Like I said, there's no, typically no interest. There's definitely no interest applied in a natural state. Like if you hold a gold coin in a chest, if you hold a bitcoin on your node in your wallet, if you hold government fiat like dollar bills in a safe, it just sits there, doesn't pay interest. So they have a lot of characteristics that are the same. But yeah, government fiat is a bit squirrely. And I guess the most squirrely one or the most confusing one is that central banks bring base money into existence as a liability. I don't know how much we want to start talking about accounting on this podcast, but it is important to understand the difference between assets and liabilities because. So as I mentioned, the basic accounting identity assets equals liabilities plus equity. An easy way to think about that is think about your home. Your home is your asset on your own personal balance sheet. You probably have a loan against it. That's a liability. And then you probably have some home equity built up as well. That's your equity so your asset will equal your debt plus equity in the market. It will always equal gold. And silver and bitcoin are naturally assets. So no matter what anybody tells you, some people actually try to argue different. But gold and silver and bitcoin are just pure assets. If you hold them naturally on your own balance sheet, it's 100% your asset and 100% your equity. There's no debt, there's no counterparty involved. Government fiat is completely different. So government fiat, you know, yen yuan, euros, dollars, when a central bank prints that, a lot of people just like to stop at printing or they like to say it's debt based, so on and so forth. The reality is they can actually print whatever they want. It's just they match their printing with an asset. So the typical one is government fiat. Actually, I didn't finish the thought, I guess. But government fiat is not like gold, silver and bitcoin because government fiat is naturally a liability. Naturally. When it's on the balance sheet. Like you want to see where you're going to find the monetary base on the central bank balance sheet, it's under the liabilities section. People confuse that though with like money is debt and debt is money, so on and so forth. And it is true that most of the money that government central banks bring into existence finances their own debt. So they actually bring the money into existence. Just it's an accounting stroke or printing it, it's a liability on their balance sheet. The matching entry on the other side of the book is typically a government bond. It's an asset for the central bank. It sits on their books as an asset. And of course it's a liability for the Treasury. It's a liability for the state to pay that back. It doesn't have to be. It doesn't have to be that way though. A key thing is Murray Rothbard wrote about this as well, which I think is an important point. They can buy anything that they want. The bank of Switzerland, Central bank of Switzerland has Apple stock. They literally have printed money as a liability. And then they didn't buy Swiss government bonds, they bought stock in Apple and I think Facebook as well. Same with the bank of Japan. Bank of Japan has been doing this for a long time. They're buying a variety of stocks and they're actually holding a lot of equity in the Japanese stock market. Why do they do that? They do that because they don't want their currency to become too strong, which makes more sense for the Swiss central bank than it does for Japan. But it's just we become addicted to money printing. And literally they can print and buy anything they want. It doesn't have to be debt. So this is an important point. Like it doesn't have to be a government bond that they buy. They can buy real estate, they can buy equities, stocks, they can buy whatever. But I don't want to get too much in the weeds about that. But the important point is that the money supply proper, in a government fiat world, it is naturally a liability. So the central bank brings it into existence as a liability and then it's their job to sort of stead the currency. Like that's, that's what it is. It's a liability for the central bank. And that's. Think about it as like they're trying to guide this currency throughout society. Typically they don't do a good job, but they can buy with that money, anything they want they could buy. Like I said, they can buy real estate, stocks and bonds, and they could buy Bitcoin. So that's another thing. And they have bought gold in the past. You know, gold still sits as a reserve on most central banks. Some central banks make a bigger deal of that than others, like the bank of Sweden, for example. I mentioned this on the last podcast we did with Sergey Kotler. But the Swedish central bank is a free floating currency. They can print whatever they want. They can print however many Swedish krone they want. But they make it sort of a big deal that they have these foreign currency reserves on their balance sheet, they have gold on their balance sheet and they sort of make it try to seem like they're a very safe currency that way. That's their strategy. The Fed doesn't do that at all. The European Central bank doesn't do that at all. They just, they admit openly that the money that they print is. They might not say it this way, but the money that they print goes most of the time to financing the government deficit. Most of the time it goes to covering shortfalls as that the government can't pay for by taxes or borrowing. It's like Eric said as well during his interview, you know, they can, they can tax, borrow or print. And that printing portion is exactly reflected in the monetary base. So that's sort of how it all fits together. It's a big topic. I feel like I'm. I go on a lot, I like to go on a lot of tangents with this stuff.

Matthew Macinski (44:59)

So it's good, man. Keep going.

Matthew Macinski (45:01)

I don't know if you. Yeah, man. I don't know if you have any other Questions regarding, like, the characteristics.

Matthew Macinski (45:06)

But most of the time, you know me as somebody who doesn't have this experience most of the time I see money printing as quantitative easing. It happens at a time when the economy is faltering and the government is trying to reject money back into the, the economy. That's, that's, you know, I've not heard of it in terms of the way you've explained it. So what's going on there?

Matthew Macinski (45:27)

Well, quantitative easing is, it's, it's printing money primarily digitally, only digitally, and it's that ledger entry. So what I didn't quite describe yet is the monetary base. I said this in the presentation, but the monetary base is comprised of two things. The first is what we all sort of know and understand. That's the paper notes, those bank notes, Federal Reserve note, the pound sterling note, euros, yen, yuan, the actual physical. And coins, the physical currency. So that's part of the monetary base. And it's globally, as I mentioned, it's about 35% of the piece, 65% of the pie is this digital balance. And that is a little bit hard to understand, but basically, just think about it as each bank's account with the central bank. So, you know, bank of America, Chase, Wells Fargo, they each have one account, one ma. It's called a master account with the central bank. And there lies their, what they call reserves. It's called the reserves with the central bank. And it's just accounting fiction, you know, I mean, it's at the behest of the central bank. If the central bank wants to add reserves to those banks for liquidity reasons or flexibility reasons, they can, if they want to take them away, they can do that as well. And how they do that in the market is by buying or selling assets. So goes back to what we said. Mostly now it's government bonds in Europe and the U.S. so that is, as I mentioned in the presentation as well, that actually is the definition of quantitative easing is it's a manipulation of the monetary base. People never talk about the monetary base, though, because they talk only about the asset side. They talk about how many government bonds like the Fed owns. And you know, for example, just to give you a concrete number, like, let's just, let's just say government debt in the US is something like 20 trillion.

Matthew Macinski (47:21)

Yeah, yeah, 20 trillion.

Matthew Macinski (47:22)

That's where I last heard, yeah, it's about 20 trillion. And the monetary base is 3.3 trillion. So obviously money is not debt and debt is not money. Like, it's not that the Federal Reserve has all of that. The rest of that debt is owned by investors, pension funds, people that believe that the government will pay its debt back. It never will, but some people believe that. And then even that 3 trillion, 3.3 trillion, a trillion and a half, actually close to 2 trillion is in physical paper. So you're only at. For actual. The portion of the government debt that the Federal Reserve owns is something like a trillion and a half dollars. So that's quantitative easing. That means that it's basically filling the shortfall in the market. So if bank of America, if Goldman Sachs, if these banks, they don't want to hold government bonds, then the Federal Reserve will step in and buy them themselves. So it fills the. And that's the definition of quantitative easing. It's increasing the money supply outstanding by. It's the act of buying bonds. But really what they're doing is they're increasing the monetary base, they're increasing base money. It's just how it works. I know it sounds squirrely, and this is definitely what gets people excited about Bitcoin, that you can't do this. This is what gets people talking about inflation, talking about everything else. But that's what's happening in the quantitative easing mechanics is that the central bank is bringing digital money into existence and buying government bonds with that money.

Matthew Macinski (49:02)

So if the debt in the US is around 20 trillion, I don't know the exact figures, but I know over the last few years that's accelerated. And the government is printing money to pay off debt. It sounds like it's. They're almost getting themselves into their own kind of death spiral. And at some point they won't be able to continue this practice because the rate at which they'll print in, it's almost like what we've seen in Venezuela. Right. The inflation will be so high that, you know, what's the. How does this all play out?

Matthew Macinski (49:32)

Yeah. So first of all, I like to ask my guests that question. I usually don't like to answer that question because it's hard to make that prediction. But I will say. I'll say a couple of things here. So first of all, it's 22 trillion. I just got it. And I have. So US is a good one to use an example because again, in the past 50 years, when we've gone this pure fiat standard. Nixon broke the gold standard in its entirety in 1971. 50 years. I just give you a pattern, and pattern's a loose word to use here, but I'll give you a sense of where that number has Been. So government debt in 1970 was only a about 60, 70 billion dollars. And the monetary base was about 16% of that. 16% of that. On the eve of the financial crisis, government debt was $8 trillion and the monetary base was about 9% of that. So debt actually grew faster than the monetary base at that time. Now government debt is $22 trillion and the monetary base is about 15% of that. So we're back up to the same ratio back in 1970, but the debt has exploded. The reason I give you those numbers is it's sort of a working thesis that I have and I haven't. I have some more to come on this on our website and we release this base money update every quarter, which we can talk about more. But I'm actually not sure that there's any pattern to any of this. The only thing that we can really, and this is where I think economics is sort bunk in a lot of ways. Unless you're talking about just basic principles like supply and demand and free markets and what does monopoly do? Like on a macro level, again, to think that one board can do this like the Federal Reserve, to think that one group of people has the information to know where money should be in relation to government debt, how much of government debt they should buy with printing money. These are very, very, you know, hubristic questions to ask an answer. You know, Friedrich Hayek said that's the pretense of knowledge, right? I mean, that's what the road to serfdom was about. Like how can one planning board plan the economy? That's what the Soviet Union did. They thought that they knew how much timber should be cut and how much concrete should be poured. They tried to plan it via quotas and from a centralized, top down way. They didn't plan it, you know, from some. They didn't let it happen in an emergent free market fashion where supply and demand could work themselves out. So that's, I think the main point to say about that. And then the second point to say is when you mention where does this all go? I genuinely do not know and I genuinely think it can go longer than we think. So the example I like to use is so in 1970 we went off the gold standard entirely. Any remnants of any sort of connection to gold? As I mentioned, 1971, by 1980, gold was 800 bucks an ounce. It was there for like 10 seconds and then it fell back down. But it was 35 bucks an ounce in 1971 as a fixed sort of base money price. And then by 1980 was completely off the gold standard. So we had a market again for gold. It could be bought and sold. Sort of reflected inflation. It was 800 bucks an ounce less than 10 years later. If you were a hard money gold bug in 1980, you would have thought, like, it's like game on, like I made it. Like this is my principles of sound money worked like this is it either if we're not going back to gold, like everybody's going to recognize gold. Gold is sound money, Gold is good money. Gold is the best money. It's just game on. Like I made it. And then Paul Volcker did a drastic thing. He raised interest rates like 20%, pricked the gold bubble. And then Greenspan got the benefits of that, the next Fed chair. And gold basically fell from 800 bucks an ounce to 200 bucks an ounce over the next 20 years. In 1980, you could have thought that your principles were going to change the world. And gold was sound money. Everybody would recognize it, but no one did. And central banks made some drastic moves in the 70s and 80s, particularly the US Fed sort of pricked this gold bubble and then went on back down to easy money for 20 more years. And eventually that led to the dot com boom and bust and then the financial crisis. But here we are 50 years later after the end of gold. I have no idea if governments might return to that. It seems very, very unlikely. It seems more that they might try to do some digital standard, might get some bitcoin, might use this Libra idea to have this basket of currencies. They're just going to keep coming up with these ideas. I mean, this could go on for 20 more years. I genuinely wish I had the answer to that question. But I think the key thing to caution bitcoiners on is that the will of centralized bureaucrats, particularly when they have the monopoly of the printing press, is strong and they're going to protect it. Because I started this sort of hard money odyssey, I guess about 10 years ago. It was the financial crisis that sort of turned me to Austrian economics and libertarianism, so on and so forth. I've heard it for 10 years, the bear, I mean, people thought that was sort of the vindicating moment was the financial crisis and then things were even going to get worse or we're going to have turns for the good. Maybe gold would have more of a higher status in monetary society. Nothing of the kind has happened. If anything, the big surprise in the last 10 years has been bitcoin. So how's that for an answer?

Matthew Macinski (55:15)

Yeah, it's pretty solid. Well, a couple of key points. When you talked about the price of gold essentially having a 20 year bear market and we're here as bitcoin has moaning about 18 months of the bear market. It's kind of funny, but one of the things that just kind of stands out for me is there seems to be no incentives for governments to operate with a better monetary policy for a couple of reasons. Firstly, every politician's life cycle career is very short. They're trying to make decisions which affect them over the next one to four year cycle, whereas it seems like these financial cycles are a lot longer. I mean, if you talk about 2008, we're in a third presidential term since then, so there's little incentive there. But also, you know, the other thing that kind of stands out to me, we have a global economy now. Every country is competing with each other. Everybody kind of, everyone's kind of with their currency. We even saw Trump tweeting about it recently. So it's almost like, it's almost like who's going to go first, who's. Which country is going to implement their responsible monetary policy first and kind of suffer the. Because, you know, I talked to Jack and Mazuka about this and he was saying, look, it's like heroin addiction. The longer you take to come off it, the harder the withdrawal is going to be. And that seems to be the problem is that we're building up or governments are building up these problems, but everyone's too scared to deal with it because the withdrawal is going to be too difficult.

Matthew Macinski (56:40)

Right, right. And I think another point there is that the race to the bottom, they use this phrase a lot or Jim Rickards popularized the term currency wars that won't let up for sure. Where that ends I just do not know. But you know, China. So we released this top 30 floating currencies which we're calling the global monetary base. A key is that again, if a currency can float and a central bank can print it at will, then it's definitely base money in the world today. I mean, gold is demonetized. Even though central banks hold gold, it doesn't have any effect on their decision making of printing. You can argue that, okay, the price of gold rises, maybe they're going to think about it. And there's a whole other topic about if there's gold price suppression and so on and so forth. But let's leave all that aside. They are independent in their decision to print. Even if gold screams you're printing too much, they can make the decision themselves. So point is that is a decision that governments love. They love to have that power to make that decision. So there's the top 30 floating currencies which we had that map of that on the presentation I, I can link. I actually just posted the presentation this week. But it's the usual suspects. You might suspect the dollar, the euro, the yen and the yuan are the top four big ones. Then you have the South Korean yuan, the Russian ruble, the Brazilian real Swiss franc. Those are the biggest currencies in the world, biggest floating. And if you get the top 30, that's 90% of global GDP, this trend. So that trend by the way was probably small. I don't know the exact number but the top 30 floating currencies 50 years ago is probably much less than 90%. We may have not even had 30 floating currencies 50 years ago. Many were probably pegged to the dollar. Many were very dependent on the dollar. The point I'm making is that it's increasing. There's no way China now has been market. They're sort of pegged and there's some confusion there. They have a lot of dollars and euros and yen in reserve because they were pegged hard pre 2005. Post 2005 they've started to float. They're not fully floating but they're definitely their market. I just say their market. There's no way in hell China's going to go back and peg its currency. No way. I mean as much as the US Federal Reserve might love to have more control over China, I mean China is going to love this, this the power to print its own money on the market. And they certainly, there's just no reason why they would not want that if you're there, especially as a communist, very top down nation that they are. So the trend is to try to have your currency float if you're a government. Most small countries fail at this, a la Zimbabwe, Belarus, Venezuela. Most small countries fail at this. But some big countries are doing okay and China is an example of the next one up. So and this is why you have all this talk about oh maybe, maybe the Libra is a good idea or maybe we need this. You know we interviewed George Seljan, who's a good monetary historian a couple weeks ago and he talked, we talked about his, he was in Jackson Hole, which is the big Fed conference and they talked. Mark Carney, which is the governor of the bank of England, he talked about the need for some virtual digital currency that's backed by A basket of government currencies. We need to sort of move power away from the dollar. But if you read the tea leaves, what he's actually saying is he does not want too much power to go to the un. He doesn't want too much of the Chinese and the Asian currencies to get too much power, too much of that basket of value. So yeah, I guess that's my answer to that, is governments will always try to make their currency float. They would not like to have their currency pegged because once you float, you have pretty much carte blanche to do exactly that. Third thing that Eric mentioned is print the deficit. You don't have to worry about taxing and borrowing, but you can print the deficit again. Is that going to go for 10 more years? Will we get to this sort of digital backed currency? I don't know the answer.

Matthew Macinski (60:56)

The thing is, I'm going to hit the pub tonight. I'm going to go down, meet a couple of my friends and they're going to ask me how that bitcoin thing's doing, as they always do. How's that bitcoin thing doing, Pete? And I'm like, yeah, no, it's doing okay. They're like, oh, is it dead yet? And I'm like, no, no, no. And I'm going to explain to them, like, have you bought or asking them, have you bought any yet? Have you considered it? They'll be like, no. And we're going to have the same conversation. I'll be like, well, why government's printing money. It's essentially a tax. Inflation is essentially a secret tax. You know, they're eroding your savings. You know, this is a chance. This is like an insurance. Like I'm telling them the same things over and over again. This is an insurance. And you never really convince them. But like all this stuff you've told me here, what is the implication for the average Joe? Like what are the things they don't understand? What's going on here?

Matthew Macinski (61:41)

Yeah, good question. I think it depends on where you live, depends on your local environment. Obviously Bitcoin is more important for some of these nations that are a basket case in the way that they print and the way that, that the trust lies in their currency. Certainly probably less so. As we know, the more developing and I guess stable quote, stable currencies of the dollar and the euro in the short to midterm will be less important. That's my short answer there. The long answer I think goes back to how big bitcoin actually becomes as A proportion of the monetary base. So right now it is extremely small. You know, as, as I mentioned, it's 20 trillion is about the global monetary base. If you add up all of these floating currencies in the world, Bitcoin is falling now it's what, 150 billion in market cap, roughly. So 150 billion versus 20 trillion. It's extremely small. Many multiples less than all of the government currencies combined. Like, it's not even on the map. It's starting to be on the map of central banks and they're talking about it more, but it's not on the map of the average Joe at all. You know, they can't. Many people are just thinking about, you know, paycheck to paycheck or whatever and you know, the common tropes of just providing for your family, whatever it might be. There's not, there's just no time to think about saving in Bitcoin. And here's the hard part too is I really hesitate to say in the long term, there comes a point. I say this a lot as well in the podcast and when I give lectures and stuff like, I just don't know when there comes a point. I mean, even sound money. Austrian economists, they have said this for years and years and years. And here we are 50 years later. The proportions are blown out in some ways with quantitative easing, the proportions of some things, in some ways they're not so out of proportion. Like I mentioned, with government debt, if, if there's one pattern that sort of holds with the monetary base and other things, it's government debt. So they can keep doing this presumably as long as people, other investors still buy the debt. The markets may have some hiccups here and there, but, but they might, it might, it might still go on. But, but the other thing. And again, this is why I don't like, I'm definitely not an economist. Fernando is our trained economist on the show. I'm just the. I don't know, I just read. But all the other patterns that I can see, I've looked at these money supplies, I've looked at the debt ratios. There just isn't a pattern. If there was a pattern, it has been blown out of the water since the financial crisis. I mean, everything pre crisis looks different on a chart. Everything post crisis. I just don't see a pattern how long it can work. It's sort of one of these things like, you know, the Soviet Union. I mean, no matter what anybody says, some people try to say they predicted the end of The Soviet Union or whatnot. Certainly Mises predicted in the, in the twenties that the Soviet Union couldn't work, or maybe it was the early 30s when he made that prediction. But in any event, no one knew the time. And literally people were scared or people thought that the Soviet Union was this all powerful, mighty nation, second biggest economy in the world up until like the 80s. And then just literally overnight, it collapsed, luckily relatively peacefully. Still some, plenty of overhang and aggression from Russia and everything else. But again, how are we going to solve that on this podcast? At the end of the day, this brings me back to lazy anarchism. I can see that I can change it personally with bitcoin. And other than that, I mean, there's.

Matthew Macinski (65:23)

Certainly a chance with bitcoin though, right? There's certainly a chance. You know, there's definitely a chance. At the moment, it's like it's not really on the map. But I've got an interview with Plan B coming out today, and he was talking to me about stock to flow, talking about the halvings, how relevant they are, the impact on the valuation of bitcoin. And you could get to a point where after the next halving, it might be a trillion. So you're talking about 5%, you know, perhaps a couple of halvings times, perhaps, maybe in a decade, you know, bitcoin might be on the map. Say bitcoin does have a $5 trillion market cap. It suddenly starts to become serious. So how do you. Do you see it like him? Do you see as a chance that as the supply restricts, it's almost like a game of patience? Right. There's a number of things that have to fall into place. Technology has to improve. More people have to become aware of bitcoin, more people have to use it. Governments perhaps need to adopt in some way, perhaps institutions get involved. But a whole number of things may happen over the next decade alongside essentially three more halvings, which will potentially increase the total value and then things start to change.

Matthew Macinski (66:28)

Yeah, well, I love the idea of some patterns emerging with stock to flow. I think that's a very interesting analysis that he does. And like I said before, if there's no patterns with the way that the monetary base works with, I don't know, GDP or population, all these things that economists act like they can somehow control or understand, I don't see much pattern there. But if there is a pattern, the one pattern that seems to hold is bitcoin's price. It's generally, you look at that on that log scale, or log log. You see these nice power trends and stock to flow shows that as well. In terms of how much the supply is, the rate of increase is decreasing. So both of those things I think are very interesting predictions though again, I don't know. I think it's. That's hard to do. There's. The whole security side of Bitcoin is still. I'm an amateur at, you know, to. To say when and where. If governments mine in secret or if they do certain things, if they could really, you know, hijack the market or for a short period of time, you know, I have no idea about those things. I think rather than what I do.

Matthew Macinski (67:39)

Think I was going to say rather than predictions that something more like how would you like to see it play out? As somebody who wants a healthy. You want a healthy monetary system across the world, how would you like to see it ideally play out?

Matthew Macinski (67:53)

Well, I'm definitely not someone who hopes for catastrophe to see like sort of this phoenix rise from the ashes, you know, I don't think that would be good. That is exactly what ended the gold standard both in World War I and in World War II. Like any. Any chance was absolute catastrophe and just mismanagement from governments. So that would not be ideal. Is that the only way that it can happen? Sometimes it almost seems like that, right? I mean, pre 2008, maybe everybody thought the economy was going fine, the level of money printing was going fine, maybe some debt levels were getting a bit high. But then it, you know, shit hit the fan. The problem is after the crisis you only get more government coming in. More financial regulations happen precisely after the crisis, ignoring the fact that it was those government regulations, those monopolized decisions that were causing the distortion in the first place. So it's really hard. This goes back to the lazy anarchist thing. Like it's really hard to think or put any hope or trust that the people at the top are going to make the right decision.

Matthew Macinski (69:09)

This is why we like bitcoin, right? Because it takes the decisions away from them or forces their hands in a way. If enough people adopt Bitcoin, enough people use it, then yeah, it just forces their hands. It goes back to those unique properties of Bitcoin that you talk about.

Matthew Macinski (69:25)

Yeah, that's the hope. That's the hope. I think at the present moment, that's why we're in the game. I wouldn't be interested in Bitcoin were it not for those properties. And I certainly think it has a better chance of any disruption in the monetary order than something like gold which again, as we just talked about, literally how one person can screw with the mechanics of gold security was pretty much evident by World War II. And I just see no chance of that.

Matthew Macinski (70:01)

This is like you said earlier, it's like more evidence why someone like Roger Vere is wrong or fake Toshi is wrong, where they talk about block size and they don't really care for the decentralization, like maximum decentralization, whatever that is, as a measure or a benchmark is the target. Because we've got to keep this out of the control of people who can manipulate things. All the stories you've told me today, every bad example has been where the government's had an opportunity to manipulate the market or steal or there's trust issues, you know, whether it's gold or whether it's with Fiat. But with Bitcoin, you know, it is trustless, it's permissionless, it is decentralized. It has this fixed limit. It has all the properties of something whereby we kind of take the decisions away from the government and force their hands, which is the thing I like. I don't know how it will play out. I don't know if it will play out how people want. But when I hear somebody like Eric Voorhees explain to me that, you know, the natural curve of this is tax receipts can come from Bitcoin, but over time, as more people move to Bitcoin, less people are using fiat. The government's ability to print money to, you know, to dig them out of holes, it becomes limited. Therefore, they're forced to make new decisions. They're forced to say, okay, we've got a limited budget. Where are we going to spend it because we can't print more money. That's the kind of romantic side I really like, is that they are restricted. And that's what excites me more than anything, actually, way more than personal gain. I don't know about you, obviously, if the price goes up, it's great, but I'm kind of over that now in some ways.

Matthew Macinski (71:36)

Yeah. I mean, well, it's always going to be there. It's sort of. I think it's probably natural in human nature to want to speculate. That's part of it. But I would not deny that the purely an ideological reason of keeping a currency decentralized out of the hands of any government is absolutely a top reason why I would hold it. And again, a benefit would probably happen where it would accrue value anyway as a result of that good feature. So I think it's pivotal that the system has to, you hear it a lot in the bitcoin space. It has to say decentralized. It has to hold this security model of close to trustless verification, trust minimization, where you just don't have to rely on that one bad actor or potential bad actor to make it, to make it work. So, yeah, that to me is definitely the key thing. As to what you said about sort of gradually, nicely, I think, what's the word they use in the libertarian movement? Like maybe starving the beast or whatever, you know, like slowly, gradually having the government get more responsible.

Matthew Macinski (72:49)

Boiling the green frog.

Matthew Macinski (72:50)

Yeah, I mean, I hope so. I hope it works. But just turn on the TV and watch some of the leaders speak. I mean, the rationality is just very, in very short supply there. So it's just not part of the, you know, politics by its nature is adversarial. Right? Like, there's no, no one really talks about, like, okay, this is, this is how you're going to pull yourself up. This is how you're going to protect your family. This is how you're going to do it. Like, it's just by its nature, it's us against them. And I don't, I don't have much interest in it. I, I hope it works the way that, that you say, like this sort of gradual, starve the beast, but I'm not hanging my hat on that.

Matthew Macinski (73:26)

Oh, man, we're going for quite a somber ending here.

Matthew Macinski (73:30)

Well, I mean, how else. Yeah, let's try to put it on a positive note.

Matthew Macinski (73:35)

Yeah, let's, let's go on unconscious of time. Let's, let's go out with a bang. Give me something positive.

Matthew Macinski (73:41)

Well, I don't know. I mean, at the end of the day, this, I think the reason that you wanted to have me on here. We try to do the best we can to give some economic angles of how bitcoin works. Interestingly, bitcoin, the way its money supply grows, the way that it functions in the economy, very interestingly, it has characteristics of something that has long been known in the economic world. As I said, the monetary base. Everything else is a claim, basically. So it can function as money. It can function as money. Like your checking account can function as money. A PayPal account can function as money. A paper check can function as money. But at the end of the day, all of those things are claims and you're trusting a third party to make it happen. I have no problem with the way that the system scales. In the absence of a central bank in the Absence of monopoly power. Who knows how it might have scaled. Maybe we wouldn't even have a need for Bitcoin. I don't say we definitely wouldn't have a need for Bitcoin. But the fact remains we have had this centralizing, monopolistic trend in certain sectors. Banking and money is one of them. And if you're going to talk about claims in those systems, like checks, Visa, MasterCard, PayPal, they may work to some extent, they may work for some people, but they're, they don't work the way that base money works. Base money is like true free, unencumbered money where no one can tell you what to do with it, no one can stop you. You may have some security issues moving it around, as a lot of governments learned in World War II. But even at that point, if I say the word governments moved it around, we're already well past the average Joe having any control of their money, right? I mean it was governments, it was for kings and queens, by the way. Definitely was for a lot of those mid 20th century monarchies, a lot of that gold. But in any event, base money is, is something that can be controlled by the individual, literally unencumbered by any other party. Bitcoin exactly fits the bill there. That is precisely what bitcoin is. So this is why we try to make the characteristics or provide these characteristics of base money and show that bitcoin fulfills them. And if you want to see as sort of a nice, just a nice comparison how that compares to other base monies, we do that, just a little plug here. We call it the crypto voices monetary base. We release it every quarter, usually takes about a month because a lot of central banks don't release all the data immediately. So we just ended third quarter, you can look out for that. In probably a month we'll release it. But that is the point. I mean there is such a thing as free and unencumbered money that's not in control of by any other party, any other government. And that is what base money is. So bitcoin is base money.

Matthew Macinski (76:27)

Well, also, I've got a positive ending. Bitcoin is kind of hope, right? So imagine Bitcoin hadn't been invented. There was no Bitcoin. I don't know what the hell I'd be doing with my life, but there was no Bitcoin hadn't been created. We would still have these same problems, but we wouldn't have a tool or opportunity to fight back. We wouldn't have this hope, at least with Bitcoin, we have this hope. We have this thing that if enough people adopt because they understand what's happening with money, then, you know, we do have this hope. So I don't know. I'm positive because we have this gift that it seems to be so fortunately well designed in so many ways. Yes, it has its problems, but it seems to be so fortunately well designed that we have a hope. So, you know, I'm pretty positive, man.

Matthew Macinski (77:10)

Completely concur, completely agree, my man. It's. Bitcoin is a positive development in the world for sure.

Matthew Macinski (77:16)

All right, wicked.

Matthew Macinski (77:17)

Look, that's why we do. That's why we do the podcast.

Matthew Macinski (77:19)

Well, listen, look, obviously thank you for coming on. I can't wait to hang out with you again. Probably in Riga next year. I don't know if you ever come to London, but, you know, if you come to London, you're my guest and I will look after you. Actually, no, I've got to come back out. I've got to come back out because I've got to come see Max for something. So we will hang out again in Riga. But before we go.

Matthew Macinski (77:36)

Excellent, excellent.

Matthew Macinski (77:38)

Plug everything, tell everyone where they can find you, how they can hear your amazing show.

Matthew Macinski (77:42)

Yeah, well, likewise. Thanks again for, for having me on. Appreciate it. So cryptovoices.com is where you can find our exhibits, the monetary base, some other pricing and charts on bitcoin as well. We plan on expanding it, plan on making, you know, building out a bit more in the future. But that's mostly what. What we focus on is the economic angle. And my co host, my buddy Fernando Ulrich, he lives in Brazil and we do a podcast precisely on these topics. So money, banking, economics, trying to keep it maybe a bit more focused in our little corner of the bitcoin space. But what, it's what we have time to do and it's what we like to do. So if anyone hasn't listened and wants to check it out, it's. You can find everything@cryptovoices.com.

Matthew Macinski (78:22)

Yes, definitely. Listen to it. It's amazing. All right, listen, Matt, appreciate it. Hopefully we'll hang out soon.

Matthew Macinski (78:27)

Yeah, it would be great to catch up in Riga or London for sure.

Matthew Macinski (78:30)

All right, my man. Take care.

Matthew Macinski (78:31)

Thanks. Thanks, Peter.

Peter McCormack (78:39)

So what did you think of that? Matthew's pretty cool, right? I do love this idea of being a lazy anarchist. That's definitely something I can relate to. I also find the idea of bitcoin becoming the global based currency very interesting. It's a little hard to get your head around, but it's definitely something I'm trying to learn more about, for sure. I'm definitely interested in what it means. What it means for money. This interview also follows on quite nicely from a few of my recent shows around economics and libertarianism. So if you enjoyed this and you haven't listened to my show with Safety and Stefan yet, you should definitely go and check them out. And yeah, if you've got any questions, make sure you reach out to me. My email address is hellohatbitcoindid.com also thank you to everyone who supports the show supports this, also supporting my new show, Defiance. Really do appreciate it. If you enjoy what I do and you want to support it, please do head over to my website. What bitcoindid.com Click on the Support section. That'll explain everything you can do. There's also a support section on my new website for Defiance, which is Defiance News. Go there. Anything you can do to help really is appreciated. Whether it's a review on itunes, or subscribing, or sharing out the show, everything you do really helps. As I mentioned in the intro, I am heading out to Portland today. I'm going to be there tonight. I'm going to be in the city for two days actually, so if you want to hang out, give me a shout. There's an event on tomorrow. It'd be good to meet some of you. And then going to be heading out to San Francisco for a night. I'll be in LA for about a week and then I'm going to be heading to New York for the Human Rights Foundation's Freedom Forum, which is on October 23rd. So hit me up if you want to hang out. All right, listen, hope you have a great weekend. Speak to you soon.