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biggest difference is in 2008 USD was too big to fail in 2023 it's not and if it does go down we don't want China to be that Reserve currency we do want uh it to be Bitcoin and freedom currency and I think that actually the moves that I'm describing that is like the positive vision of the future if this system is going to go down let's have an orderly exit if you think that the FED isn't simply piloting in the wrong direction but actually crashing the plane how do you make your way to the parachute and I think that parachute that exit is BTC if you believe the United States dollar is losing faith and dominance it would not be a bad time to hold percentage of your wealth in BTC Bitcoin is digital gold if you think Bitcoin is some Ponzi scheme or scam you should be doing more research on it right now crypto family welcome back to the channel Aaron here coming back at you with another video if you're new Please Subscribe we have new cryptocurrency videos coming out every single day but in today's clip we'll be checking out Balaji and Kathy Wood they got together and they talked about what was going on in the market right now they talked about what the FED is doing how it's on sustainable the rising and lowering of interest rates and they kind of compare that with how Bitcoin can help fix that problem with the FED they also talk about inflation how it's completely different than what the Fed was trying to fight back in the 70s versus now how we've overreacted to inflation and one of the most interesting things that we'll be listening to in today's clip towards the end is how states in the U.S will start to accumulate a digital gold position along with other small countries in Bitcoin this is actually very interesting something I hadn't thought of myself so I recommend you guys check out the entire video a lot of great information shared by Kathy and Balaji let's go ahead and check it out here completely when I last year was pointing out hey fed what are you doing um I I got um I got a let's just put put it this way a lot of people um just basically said look you're blaming your performance on the fed you know you know we got that pushback I wasn't talking about my performance I was talking about economic policy and some red flags that the Fed was ignoring and still is ignoring which is uh quite worrisome yes so here's the thing is what I've sort of realized is you have to be completely outside the system and have a totally different theory of what should be uh like I'm not of the opinion of the FED should have had high rates the FED should have had low rates and so on basically if you look at this curve right this chaotic curve of up down up down is this really the solution to some equation R star or is this some committee voting and doing political things and you know generally stimulating the economy since you know the mid 80s and printing money and just kind of going like like a pilot moving a joystick up and down because they're like up down you know they're they're like steering a car by mail okay you know imagine you're steering a car you drop a postcard out the window and you wait a week before you get it back for your turn right that's of course you're going to crash right and that's a Fed with this kind of you know group of this group of committee members that is like you know smells the incense and they decide to set the interest rate and low you know we have a new interest rate and the entire economy gyrates to this where it's based on like real world looking things that they're seeing right and you compare this this incredible unpredictability the cyclicity this craziness you know where it's like this bipolar thing where it's down and then up and then down and then up and down and up right to Bitcoin which is completely predictable in terms of issue and schedule it is a fixed policy where we can plan against it for you know years and uh it is is being fixed for you know it's proven itself it wasn't you know uh 10 years ago but uh but it is now um it's certainly much it's certainly much more predictable than the FED as being over this time frame right so this is a root and Branch what I'm trying to get at is rude and Branch critique which is I I'm not I mean do I think the FED is responsible for the economy yes do I think that they are arsonist and firefighter as the saying goes absolutely do I think that it's crazy that some immigrant engineer at you know who has an account at svb is supposed to be responsible for ensuring the banks actually solvent but Jerome Powell is responsible for nothing absolutely but do I think it is one person and just firing one person or tongue lashing them is the issue no I think it's a systemic problem the stomach problem is difference between this and this and uh you know what what's going to happen is we're going to actually have in a sense the true election you know at the end of the Soviet Union they had glasnost and perestroika you're familiar with that right okay great right so so you're familiar you know basically glasnos was more free speech and perestroika was more free markets and these things basically destabilize the Soviet Union because it wasn't built on Free Speech in free markets and eventually towards the end they actually had their first true elections where you could vote against the central planners you could vote against the Communists and then people voted against it right and I actually think something very similar is happening where social media is American glasnost under Elan it's like actually free speech and cryptocurrency is American perestroika and Bitcoin is actually free markets and now we're having the true election which is between USD and BTC where people are again voting against Central planning of a very different kind and that's actually the macro frame that I that I have on this is that the level of instability the FED has been causing they're now in the state of like a plane going like this can I predict every single crazy gyration they're gonna make I cannot and ultimately predicting a lot of the macro economy is on that can I know that there's going to be passengers who are hitting the eject button and like this pilot doesn't know what they're doing we're getting into the parachute the Bitcoin parachute we're getting out of the plane yes I think there will be more all right I started in the business in 1977.
I was in college and so I experienced the last bit of that that that inflation into the double digits um I know yeah and uh well the same place is not shown here but but I mean the rate the rate hike right yeah inflation was in the double digits and rate hikes went uh into the and there was even assert tax uh that they put on at one point so we're over 20 over 20 at one point um and then volcker came in and focused on money and I remember standing this is how long ago this was at the teletype every Thursday at 4 15 or 4 30 whenever the number came out we were waiting for the money supply number and if it wasn't low enough the market sold off and so forth anyway uh monetarism worked to get inflation down you know getting that money supply down and having that as the sole Focus God bless him volcker took interest rates in one year from 10 to 20 percent uh and and that that was the beginning of the end of that uh nearly hyperinflationary period now to contrast with what what Powell is doing today uh so volcker took interest rates up twofold Powell has taken interest rates up 20-fold 20 volt and it's a difference between going from from here to here versus going from near zero up over here and it was also something where like the economy was more I shouldn't say normal but it was like the state of it's like altitude right if your altitude is here you can take a certain set of Maneuvers if your altitude is close to the ground you cannot take the same set of universes right like the state of exactly so and at the same time in uh in Let's see we got to 1981 and he had still had the screws on and you know it was singularly focused uh we got to an inverted yield curve of more than one percent or 100 basis points and for those who don't know what a an inverted yield curve it is um it is when long term interest rates drop below short-term interest rates and it's when the bond and that's where we are now uh the bond market is worrying about something and it's typically recession uh so uh now many people say oh yeah last time 1981 uh back to the difference here you know one percent on a 15 uh interest rate well the long-term treasury yield back then was 15 this is the Fed funds rate so one percent on a 15 percent uh treasury treasury bond yield you can measure that one divided by 15.
that's is roughly six and a half percent one over five percent which is where we are right now is 25 and I finally figured out when I was in LA this last week right near uh the place I worked at 333 South Hope Street in Los Angeles I was on the 50th floor of that building when we had an earthquake and I was in another earthquake the Northridge one when it was a 6.5 these are wicked numbers uh just awful 6.5 on the Richter scale is is a very bad feeling 25 I don't think has ever happened I never would have thought you know 30 years ago 20 years even 10 years ago that Indian Founders would think of Indian Banks as being more trustworthy than American banks that is a massive World model update massive role model update that people are wiring money back home they're wiring money outside the American banking system because they don't feel like they can go and diligence everything 10q by 10q to find the where's Waldo of are they actually insolvent or not will my money be there right that's the same reason that people are moving money to Big Banks and money market funds and so on so I think we agreed that basically in the flight to safety the people will choose Bitcoin whether you call that um contraction and people feeling that flight safety whether you think of it as inflation in the sense of the Bitcoin price going up um that is the one number that they can't fake in the system they can hike rates while printing trillions but they can't change the amount of Bitcoin and that hard denominator constrain trains them and it's visible to the whole system plus it's a global asset plus it's hard to seize now one last thing I want to talk about like from a hope standpoint okay you mentioned that Florida might do state chartered Banks banking crypto right it's a rumor there are certain a number of states the Dakota's uh and Florida among them the states that are trying to attract capital and labor absolutely that's right so all these Regional banks are getting killed and so on and in a sense there's a real deviation of interest between state and local versus the feds right and so what I think could happen is bitcoin.florida.gov bitcoin.texas.gov Bitcoin Dot mississippi.gov and bitcoin.montana.gov all of these states which you know Texas GOP has passed something or it has on its platform the right to buy sell Center receive Bitcoin shall not be infringed the mayor of Miami takes a salary in Bitcoin Mississippi and Montana have Bitcoin mining protection bills Wyoming and Tennessee have Dow bills right so lots of these red and purple States Colorado accepts taxes in cryptocurrency New Hampshire is pro cryptocurrency right lots of these like let's say red and purplish kind of states are pro-freedom states are pro-cryptocurrency and if they reopen the gold window okay if you had bitcoin.florida.gov bitcoin.texas.gov where it's like basically a very simple exchange it's like coinbase circuit 2013.
you can buy sell send and receive Bitcoin you can place limit orders you've got a Fiat USD BTC order book that's it and it's set up for you to just take your Bitcoin off the exchange within you know a few days like or right away ideally it's not meant to be something where you hold it there they just keep pinging you to take it off right and then what happens is the state just takes a cut of that so they're now accumulating a digital goal position okay why is this important why do I think of this as a positive development well first is uh you know this answers and others have come out against the cbdc but what are they for they're anti-cbdc which is digital serfdom they're for Bitcoin which is digital Freedom okay and so now you can be for something rather than simply against and you have essentially a Bitcoin backed local state government right where this is the move against the feds and then the question is okay well the feds you know will the FED try or little fed uh try to shut down fed wire and ACH and other access to these uh these Banks well they cut off Florida will they cut off Texas I think that's probably a bridge too far if they did do it it would show the potential Financial totalitarianism incipient in a cbdc if they didn't do it well the Fiat rails would be open the reason I think something like this is going to happen is it's the next logical step after for example El Salvador adopting Bitcoin mayor's adopting Bitcoin because right now you have the government going and fighting coinbase and binance and that's government versus company a company doesn't necessarily have enough hit points to fight a government but another government does you see in Pacific Rim you know to fight giant monsters you need a giant robots right so if you have a state like Florida and Texas with a lot of hit points that is now you know that can't go easily bust that's got a lot of credibility and reputation and if you have a lot of red and purple states that share their order books their usdbc order books that is now something which keeps the USD BTC window open allows exit from the system benefits local States because they can accumulate digital gold builds upon the existing shall not be infringed Dao language minor language Mayors accepting Bitcoin El Salvador is a sovereign currency and finally can be internationalized because naiba Kelly held a meeting of I think like 44 uh small countries uh you know bankers and been planting seeds about you know what what it's like to transition your country over to a partial Bitcoin standard so you also have this happening globally where small countries like you know Palau for example that a pro crypto could do this okay if that happens if the digital gold window is reopened after Nixon closed the gold window in 1971.
at the same time by the way that China is a totally different animal and they're moving oil and other transfers over to the petrol Yuan the biggest difference is in 2008 uh USD was too big to fail in 2023 it's not and if it does go down we don't want China to be that Reserve currency we do want uh it to be Bitcoin a freedom currency and I think that actually the moves that I'm describing that is like the positive vision of the future if this system is going to go down let's have an orderly exit if you think that the FED isn't simply piloting in the wrong direction but actually crashing the plane how do you make your way to the parachute and I think that parachute that exit is BTC
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