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Economics, Finance, Crypto and Retirement podcast interested in exposing: the false left-right paradigm, central bank manipulation, media double standards, lying politicians and Fake News.
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Saturday Nov 18, 2017
Saturday Nov 18, 2017
[00:00:01] Welcome everyone.
[00:00:31] I'm Tim Picciott and I'm here with my guest host Matt.
[00:00:38] Tim great to great to be on the podcast today. So I'm Matt McKean and I live in Scottsdale Arizona and my career has been spent as an entrepreneur. A lot of that in real estate finance mortgage banking. Almost 25 years. Three 3 1/2 billion dollars in transactions between myself and company's CEO or sales teams I've run. And I have an entrepreneur in the energy sector as well. Very interesting technology of patents and three almost four continents now. So I'm happy to be here and fun to speak with like minded individuals friends about other crazy happenings going on and the changes going on in the world now. So Ben thanks for having me on today. Fun conversation.
[00:01:23] No problem. Just so knows how I got to hold my is we have a mutual friend interest of fairness if anyone needs health or life insurance you guys make sure to check out. Teresa and Teresa told me like hey you Matt can you guys really always posting similar stuff on Facebook and you guys should get together. So I'm actually in person that at one time. So it's not like we are in a long time friends going back but you know we really hit it off. We actually both found out they were also both Ironmen triathletes which is also a pretty rare thing here. And we were pretty close together so you know today we're coming live from North Scottsdale and what we're really bracing and talking about it is everything that's going on in the crypto space so that the you know cryptocurrency space for some of you that coined space block chain. You know maybe these are words that don't mean a lot to you guys and we want to do is we take that road break down what's going on in the fork. We might not even know what a fork is. So we want to talk about what the fork is you know why did they point for it. Don't get into some of the issues of why people had to fork. We also want discussed. Is Bitcoin a bubble or not. You know I see a lot of people saying this is basically the media 2.0.
[00:02:36] And for those who don't know what the true meaning was is that bleed was in the Netherlands maybe sixteen hundred seventeen hundred sixteen seventeenth century I think in the 17th century you know Holland people were selling tulips and the price started going astronomically high at one point.
[00:02:55] People were piping like thousands of dollars for his regular tulips and people were you know just betting and speculating on the price of tulips and as long as they found somebody else to buy that tool for more money than people willing to buy it because you know they could sell to another for later on down the road. But eventually like all bubbles it did collapse.
[00:03:14] Actually read about that first in a book called Mania's Panics and crashes that read actually in 2007 which stand help give given the foresight when I was part of my school student and investment team to actually specifically targeted financial stocks and made the recommendation not to buy any. So this is sort of strange that yet myself as a fashion advisor and then the Matt where he also has a role doing mortgages. But yeah we're coming to renegades in our industries that we both know how the system is rigged and basically the Stand still. The reason that I wanted to get involved with crypto currencies is I really understood what was going on in the central banking system and it's a system that really benefits myself as a system that benefits Mac because you as financial assets go up are really as central banks print more money. It creates stock prices to go up. It
[00:04:14] makes all financial assets go up in people's home down goes up and then they need more money to borrow and take out a mortgage so you know it really benefits you. Benefits me because as my clients account values go up then I make more money as people take out larger larger loans because now the prices of the house cost more than you know it benefits you.
[00:04:33] So we're actually literally speaking against our own self-interest here in trying to expose the central bank system. And really you know what you know at the crux of all this is the very first dollar that was ever created in 1913 that was based on debt. So essentially if you created one dollar at the end of year one you would oh let's say a dollar for what. Now how do you pay back a dollar for with one dollar you need more money.
[00:05:04] And so what you have to do to borrow that dollar into existence and so it's a very strange term concept for people because our entire monetary system is built on debt. So I always say you know that makes the world go around. And you know without debt if that of all the debts were paid off in the United States for example there'd be no money because you would all be zeroed out.
[00:05:26] If people want to talk about you know paying off the debt when you can mathematically never pay off that debt. A matter of fact that debt has to keep growing. Just to be able to keep this whole GDP and Ponzi scheme going and at some point it's going to collapse and there is a lot different ways that it can collapse. So we didn't really talk about this in that little preview we did. But I think you know I kind of like where this is going is that you know I see it really happening in one of two ways. One way it can be is central banks have to print so much money that all of a sudden you know the value of everything goes through the moon and maybe the stock market. The Dow Jones is at a million now and I think certainly I think by the time I retired I think there is a good case that will that it could be a million but it's not going to be a million because you know all these companies are earning a whole bunch of money. It's going to be because you know we purchased so much money that we made the value of the dollar go down. And so that's one way that's going to happen the other way can happen is you could have a deflationary deflationary crash where essentially what it means is for the value of financial assets would go down.
[00:06:35] And I mean correct me if you if you don't agree with this or not but I think then the response to that would be we would put so much money that eventually you'd have that same hyperbolic having the stock market going through the roof again. Anyways it's just I don't know the timing of that is going to look like. I thought it would happen maybe you know at least the demographic the deflationary part. You know I thought maybe it would have happened like a year or two ago. So I'm I'm sort of you know you know I didn't time it right from that standpoint but you know I'd rather be a little early then even a second to late.
[00:07:10] Yeah. I'm a big student of Martin Armstrong. I'm trying economics. Phenomenal resource for anybody. Number one documentary I think in 2016 in Europe called the forecaster was banned and it's banned here banned in the United States and banned Switzerland so they banned the documentary. How many movies are banned in the States. I mean you know there's no porn for crying out loud. And you can't watch a documentary about a guy that was treated very badly by the U.S. government. And that's another conversation about do we really have freedom. But Martin Armstrong genius I think is his economic model.
[00:07:53] He's made some of the biggest product predictions in history been right. He the crash in 1987 to the very day years in advance so the stock market crash in October 1987 and then it came out during the middle crash. He said The Dow was going to go to an all time high at the end of 1988. Picked that high. The Nikkei the day used advance pick the Russian financial crisis in 1997 picked up at the height of the real estate index in February of 2007 to the day. Over a decade in advance and his economic model uses mathematics and some interesting calculations to pick the business cycle which has been the same for decades and hundreds of thousands of years and that never changes because the business cycle always return because human nature is the same.
[00:08:44] So it's actually very predictable. I believe in the deflation that kills the United States. We're trying to keep the dollar low. But what's going to hurt us is strong dollar. There's always people talking about the dollar collapse coming while the strong dollar is going to kill us because our dollar is too strong we're not able to trade with people because our dollar is too strong and so is interesting things coming with. I believe that the euro will begin to crash in 2018. You're seeing tremendous central bank problems European Central Bank loans like 40 percent of all the debt in Europe.
[00:09:19] Is that the new issuances from the ECB or is that just like already in total. I think the percentage might be higher.
[00:09:25] Well there's about 10 trillion in negative negative interest rate debt out there.
[00:09:31] So explain to people what a negative interest rate is. You know I give you a thousand dollars and you're going to promise to give me nine hundred dollars.
[00:09:41] Right. Right. I'm such a safe place to put your money. I'll make sure you get back a little less than the money that you give me.
[00:09:48] If anybody wants to do half either way and he wants to give you a thousand dollars and argue back 998 in two years you know who I'm open for business.
[00:09:56] So there's so much volatility and anxiety about European markets European central banks they start banks started coming out with negative things or shape policy. So that's how crazy. So that's why the U.S. 10 year Treasury is about 2.4 right now and it looks like you know you know crazy type returns compared to a negative interest rate return. So you're going to continue to see my fleet up Fleet in the United States in my opinion and our models that believe the Dow is going to continue to climb significantly over the next few years probably to 35 to 40000 within the next three years I believe is where it will go or if we go back on time.
[00:10:41] So there's such variability here where it doesn't really matter.
[00:10:46] Like myself or yourself as your years younger also but you know if you're 65 you're 55 years old and you're you know counting on the pension counting on your Social Security you're counting on your 401k. There is. You better be hedged. A lot of different ways right now about how this could happen because I know enough that you know if this all crashes tomorrow or 10 years from now it doesn't really matter. I'm only 31 so I don't. Matter of fact I get to have it happen sooner than later. But you know if you look at even like Germany and Germany I don't know the exact the exact currency names I think it was a Renmark right smart deutschemark. And you know if you were a German citizen holding on to you know I would be safe and have all my money and you know the Renmark will then eventually die of collapsing. And then you have your money into the rice market. I know that ends up collapsing. And so you know if you had your money that's saying Mercedes Benz which is the oldest car company in the world you know. Now instead of having 100 shares pressing Renmark maybe now we have a five share price prices right Mark. So by being in stocks you're really something is safe from that because you know the S&P 500 is not going to go to zero. Someday there's always going to be companies that are out it's always going to be the largest 500 companies in the world. There's always going the largest 100 companies in the world.
[00:12:07] And then getting back to you you're saying about interest rates are crazy because in Japan right now you the actual fascism going on currently.
[00:12:14] But the central banks in Japan right now are taking their keyboards printing money out of thin air and then using that money to then buy up the Nikkei 100s or something like 75 percent of all new wishes issuances. And again I'm not looking at notes for that number right now but it's pretty sure it's somewhere in that ballpark of 75 percent. All new issuances are being bought by the day Japan. So if you have a central bank that is buying up their own companies that is the merger of their of the state corporations and that's fascism. So worse and to the left of fascism in that regard. And often laugh should be cheering on Donald Trump for getting rid of that TPP. I don't really get into that today. That's a whole nother can of worms. But you know as it relates to central banking is the entire system we're under right now is predicated on the ability to print more and more debt so that we can expand this Ponzi scheme of which we can never actually repay the debt. You can never repay the debt. From day one you can tax everybody 100 percent assume they'd actually still work which they wouldn't and take all the rich people's money and assets and you can still never pay off the debt. So it's a fraudulent system that you know that honestly I'm benefiting from right now working in the stock market.
[00:13:27] I know that at some point it's not a matter of if it's only a matter where it's going to collapse and people want to say oh well the dollar can never collapse or America always has its honors its debt Bolsa in 1971 in August when Nixon got off the gold standard that was defaulting on the debt because we were going to originally promised to pay you the gold for every dollar currency was backed by backed by tangible assets. Yeah the dollar used to say for those you are watching this right now are full of you are listening in on a piece of paper that's shipped directly will kind of like a dollar you just say no this is a United States dollar you say or do you will buy gold on the top. No it won't be redeemable for silver. Very briefly and now it's a federal reserve note and and again not going to get into the whole thing of Federal Reserve and all that Ponzi scheme but this is why you know what crypto does is it gives us a way out of this system. It gives us a way to have a you know have no third parties involved and me transmitting value to you without having to go through a middleman to do that. And that's you know one of the biggest reasons why crypto is so promising that you know we're not saying go put 100 percent of your money into this. You know it again you should you shouldn't just trust somebody like us up here saying that you know you should you know definitely go investor crypto you should understand where it is before you try to invest in it.
[00:14:55] And I see a lot of people who are getting into this space just because they saw other people make money into it and other throwing throwing money at all these you know B.S. You know initial coin offerings are always new without any point and that was the you know guy just yet did one of those which had to get to him before he's done quite a big part of it and really no understanding of the stakes at all understand the underlying technology development or historical basis as to why he is even getting into it other than to try to make money.
[00:15:30] And there's a word for that's called greed. You know you should always do things well thought out and Prun really making wise decisions and what we're talking about about you know the currency and the debt structure. It's just very arrogant. I believe as Americans to think we're America American pride and this is the third central bank we've had.
[00:15:51] There was one in 1812. You may remember that the British at the British Open he owned it and they came down here and burned down the White House which that's not even in the basement of the White House have actually seen the black and blackened walls actually from the original White House.
[00:16:07] Yeah. You see that by the bomb shelter.
[00:16:09] I've not seen that.
[00:16:12] But again then we had a second Central Bank of America that Andrew Jackson then got rid of and that's where you know I think Trump should take down his post of Andrew Jackson because Trump appointed the globalists from Powell to go run the fat whereas you know his idol Andrew Jackson you know they said You guys are den of vipers and I shall drag you out. I mean that's completely different but you know Trump is in a very tough spot right now where if you were to admit what we're talking about then it would create everything and he'd get the blame could couldn't get anything done. So I think what he wants to do is no great and we get by you know a three to seven year reprieve of all the security. What I'm trying to say and I think what you're trying to say is in the grand scheme of things I don't care about a three to seven year reprieve because it's going to happen at some point. It's inevitable. And the longer we wait for this to happen the worse it's going to end up being. And so again as you see the forecast here. Did you get to see. I
[00:17:05] saw a half of it at the beginning and if you can get that on video I originally downloaded it through Amazon only in my catalog and Amazon pulled they never hold it. From what you actually like it was interesting because right before the election for about three weeks I couldn't access it before the general election for about three weeks before. That was interesting. But I have it again my catalog. But they don't carry it anymore. I mean because of course Amazon doesn't provide products that people want to buy.
[00:17:34] You know Amazon wouldn't you be making any money if you actually back out there CIA data storage contract so you know the other day somebody asked me how much money is Amazon's making and actually they don't know until recently that they were actually losing lots of money in lost money for a long time.
[00:17:52] You get to see a country writing about the Washington Post which is of course a CIA front Boston posters Operation Mockingbird.
[00:18:00] So the stuff that comes out of Washington Post is just it's not even just the Washington Post and you know that's a whole nother.
[00:18:07] Like I said it was six or seven or nine. Our contract with the CIA about the watch was interesting.
[00:18:15] But anyway so just you know no home Operation Mockingbird was a declassified CIA program where essentially of all the news rooms they were getting their talking points from the actual CIA. And so if you don't think that you know like a Mockingbird 2.0 type situation is going on today. You're absolutely crazy. It was actually a year ago yesterday that the first time the term fake news in terms of being used was a year it was a year ago yesterday when it was out of Paris that it was it was this I'm sure people are strongly there those two words are. But from a social media standpoint taking off it was this crazy professor like Melissas and ours and she you know basically went to all the Web sites that you and I go to that said these are all fake news sites. So what I did was on the 17th was I made me say fake news sites and it listed all the you know Snopes and Politico and MSNBC. I even wrote most of Fox News on there and polls and yet it was a 30 at Huffington Post watching all these ones were on there. And I actually had that that go viral on November 17th so I think I'm actually making the claim that from somebody calling the mainstream media fake news and having it go viral on social media I'm the first one and I have the actual proof.
[00:19:34] It also places the show that is part of the overt not saying well am a million like a million or several million immigrants.
[00:19:44] No I mean that day the pages seem like 91000 times. But then it was picked up by other players and then push it again it was just all part of the overall it's like I said not like claiming credit of like that's just the way it happened but but we tried doing so far leading up to all of this is really kind of on the stage of why is central banking is a scam I have a leak in the show notes and another video that I made it's like eight minutes long. That's the title why we're all slaves to central bankers or you guys can watch my last podcast episode 6 where I get into this as well. But I think we want to talk about really now the big 24 is and why big forks we're going to do is I want to move this really move because of the chemistry with the white board because we think that the best way to illustrate this would be through the whiteboard so I happy to get your to answer as to why I probably do.
[00:20:38] Right now see if you want to see our sure I'm not blocking the blocking of the camera for people OK that looks like it's good. And if you seen this part you maybe added this part out and get back and restart once when you go going with all of stuff. All right. So what the fork is say got big coin up here. Of course. Take the one pen that doesn't work. So we got people up here. What happened is let's say you had one city at one point and the ticker symbol for big quieter ticker symbol is a symbol BTC in the crypto world.
[00:21:20] We may want to talk a little bit about this to read from you.
[00:21:26] The coin is a digital currency. The two fundamentals of the coin. So there's really two fundamentals of Bitcoin Bitcoin have come into being. Interesting nobody really nuts. It was a white paper written by a mystery show. You say your name's Akashi not Comodo came out right after its attention that came out right after the financial crisis. November 2009 yeah I think that's right. November 2009 Savatage 2008 doesn't 2008 for about nine years now and it was the white paper is basically a instruction manual on how to create a new currency and a new superhighway of information that could flow with this new currency called the block chain. So there are a lot of times people say no. Have you ever heard of. I'm going to say two words says I'm having fun. A lot. If you've never heard of these two words but well you remember this because remember that on November feet you know 2070. And that was the first one there to tell you have you seen Internet just James is going to change your life.
[00:22:38] So the block chain really has two fundamental tenant or concept that it's built to draw out the watch chain or out of the way you can go to discuss how they can comes into existence or work.
[00:22:53] So the block chain really has two elements to it and one it is a it is a de centralized ledger of information and so decentralized means it's not stored in a building in your city. It's still sort of a cloud you know and that's that's stored in you or your daily Amazon Amazon is de-centralized What does that mean. It is in a network of circulating computers that are all independently owned by anyone that wants to become part of the block chain and they can see it's continually circulating all across the globe. And these are commonly known as minors.
[00:23:41] Let me explain one of the ledger so I read your eye on this drive.
[00:23:48] Ledger Yeah Ledger is essentially a record of information. So you know you've got you on this you've got this on this date and then you know let's do this because you get one picture that works.
[00:24:04] So you know Ledger is you know I'd say you know Bob has you know 10 units and that has you know for you it's a unit of anything I've had to say because it's dollars. And then if Bob wants to take two of his units and give it over to his salary and then basically them. Now what we do is we talked to you over here somebody has a salary that is correct. So it's just a way of keeping track and we'd have to do is to go through the banking system where and work. Let's see an international wire transfer might be you know 45 bucks or you want to do pay have to take 2 percent. Do you know they might take 2 percent if you want to you know. You know take a pony express and walk over somewhere. You know that there's a cost to that. This is a way for Bob to give value to Suzy without having to involve a middleman. The middleman in this case is a whole decentralized network where anybody can really be a part of this network if they want to be.
[00:25:09] That's exactly right. And that's what's growing is the block chain. And the second component of this is cryptography. And so my I was a pre-med student in college is really bad. So but hopefully you can see that these are times when I say I'm tired from using military grade cryptography. So you have a decentralized Letcher that's permanent store within the block chain with 100 percent infallibility that cannot be hacked cannot be erased cannot be modified cannot be changed that it is done so using validation of transactions to validate the data before it burned into the block chain. So it was beautiful and this is a good view and I read upon something never before in human history. Can Tim and I agree to a transaction where we he was in Romania I live in the United States or vice versa. We can agree to that option pretty well. Yes there are so there. So without knowing one another the block chain could validate each one of us laws with perfect 100 percent accuracy validate the transaction with hundreds now and who has the money that has changed hands where certain other applications the block chain like smart contracts which just other applications of the chain that are going to radically transform our lives so it's hard to do that right. I'm going to but we're not we're we not dependent on a middleman or a law firm a bank you know some other firm or strong person to validate all the information. It's now done electronically through the block chain through independent monitors using using that might cloud the rhythms to code and protect the information.
[00:27:02] So we want to talk about maybe how it can be. It may be could be hacked but the effort of it. There are some vulnerabilities but her ability to be your individual wallet could be hacked through brute force attack but the amount of energy it would take in order to do that you know without quantum computing. You mean you have to have a billion dollars in that wallet for you to be of use. Even the energy to it takes you 10 hours of energy to get out of the box. Then you got to spend millions of dollars of energy to get out of the box and you're rewarded more for being honest than trying to screw things up so that when you get your information start here let's say Bitcoin or another cryptocurrency you would store it in a digital world.
[00:27:51] And he's the only one that has that. He's. To those two that will soon be no different if I stole your keys if you left you.
[00:28:00] If you went down the street to the coffee shop and you left your keys on the table and walked out and I go to take his keys and goes to his house you can get your money back so the bar bills are at the exchange you trust somebody else with your private key.
[00:28:16] Then that's really not anyone's fault that's that's your fault. You can have a little old you know USP drive. There's different ones out there like the trailers or that's your answer. And with that let somebody have somebody take your pleasure or trace or unless they actually knew what your password was there would be a it wouldn't matter if you were to lose that or break it right over with it with a car. Well then you can with these different seawards be able to then get it back on another device. So it's not so it's not gone forever. So what we say is is it can be hacked let's say that this is the block chain. So every time a new block comes to access is added onto a chain. Well if you wanted to let's say hack the blotching you would have to basically have every other previous transaction that's happened and the amount of. And then you have to then find the next block before it before. So let's say this is a bad actor over here and you got it checked it today it was like a thousand had a half a second now hash is a guess and a Pedda hash is like what is it like 8000 trillion Gas's per saccades going on the network so you will not only have to.
[00:29:33] You would not only have to be the first one to find this blocking you sandflies network and everyone else trying to find that block up to 8000 for a second but you would then have to go back and hack every other transaction that's ever happened. So the energy would take to do that. As you pulling it off and the risk of war is so low that you are more incentivized to basically not be a dick and do the right thing then you are to do the wrong thing when you have my view and not transact.
[00:29:59] Yes. No no no no what you're asking.
[00:30:06] Well look at the Federal Reserve or Obama yes. You know that might be something they do.
[00:30:11] Very important it is the concept of control over your assets because you know let's say you spend your money in precious metals and you don't want to leave and go outside the country.
[00:30:24] Good luck trying to take hold of the country but with the coin or two currencies you can walk across the border with ten million dollars. Oh it actually came out in the watch chain and all you need is your keys to your electronic wallet somewhere in the watch chain and you can you happen.
[00:30:40] So this is the crypto conspiracy podcast on the conspiracy angle. There's a guy James Corbitt of the court reporter and he sued the TSA and they accidentally sent out an unredacted version to him where it said that those machines are there to be able to make sure. Gold and silver are leaving the country and they want to not having had highway checkpoints where you would then condition people. And it's funny because I had a silver bullet actually. I go straight to the point. But it is not sober and TSA is actually freaked out when when I went through there with that assuming they were you know you know they can catch you with 90 per cent the fake bombs that go through when they have it you know but they have government agents try to you know you know field tested people but you know one little tiny silver bullet you know. You know they sure as I said you are talking about how the block chain comes into existence or how they fire how these blocks are found. For the people out there who were saying that you know we know you know all these new plots yet as to change but you want to talk a little bit about what is.
[00:31:47] It's a little technical in the mining community of miners.
[00:31:51] So the way the White Paper was created for that we're not talking yet. We're not in force in other currencies yet which are hard for us sir. But the point that was designed there will never be more than 20 one 21 21 million about 21 million Bitcoin ever created.
[00:32:09] It's just that right now it has been $16 created. It's supposed to be like five. Twenty one for most of what they have.
[00:32:17] The fine print is for that coin that silver coin. So what happens is that in 2020 so that the community solves all of these mathematical equations equations to be able to produce it concurrently they the price of bitcoin today. This is around 70 $200 says as of right now. And of big currently according to the data that I see cost more than a thousand dollars in May and manpower labor or electricity and hardware to be able to produce one.
[00:32:55] These are people who are getting electricity as cheap as possible and that is way lower cost nothing there previously were to try to not give water really at least from the standpoint that they also have. You know they got keep miners plugged into volcanoes in Iceland using geothermal geothermal cost of thousand dollars to furnish so a quantum computing power to do it. And so people's lives are the network it's like you put it all together the billions and billions of dollars of hardware and so forth.
[00:33:26] So when people say there's no intrinsic value to it it's just a number that's made up. No it's not it's not some it's not some record to get it on Word documents stored on a computer word is a indelible unit. And interestingly enough there is belief that because Bitcoin really on the way it was stored and people had it that 20 percent of the existing flow of currency can last forever or even through the hard drive away never be worth anything.
[00:33:54] A drip you know Silk Road you know people's assets confiscated and that are all sober OK. Yeah.
[00:34:02] And then FDR came in basic stalls and said hey yes you've got all these the guy and the guy get nailed the FBI agent and he recently found and they just recently came out they got caught for stealing his enemies and stealing.
[00:34:15] And that's a whole other can of worms and actually at Nexus actually had the guy sitting next to his mom at dinner one night. And you know it basically you know you know the whole drug thing you know aside you know it's Caylee or you loved ones and zeros to somebody else you know and not have that be a crime. And so what he was able to do is come up with a way to send one of their elders to be able to created germ free market and then they come up with all these B.S. stories. You know all we hired hitman to do this one. You
[00:34:47] know again this is a whole other can of worms I don't want to get into but it's some of the attacks on cryptocurrency is government use that money laundering and terrorism out of money.
[00:35:00] The thing is it was marketed as being anonymous when really you know there's a whole public ledger of exactly what's going on and you don't want it to. I think one of the worst ways to be a drug dealer would be to start using bitcoin because you've got to know what made you chose right where the walls are and where the money's going and how it's transferred.
[00:35:19] And yeah I think you've got to be and actually there there are other coins that are used for purposes like drug use and there there.
[00:35:27] I mean mostly from what I've her best to wrap that wrap that is natural. Yes. And that's actually looking at our headquarters around here. This is near Scottsdale. I know that because I think Dasha summerlike down the street I think it's close to your office and learn something that helps over there. But you have to get one of these luck and you go and get one of these is the system. You've got a whole bunch of different computers that either. And number that number it is you know it's like all the atoms in the universe you know type number but it's not all that you can just guess every single number wants because how it works is there is an algorithm. And so what they use is something called Shop 256. And what that means is secure hash over them you know blah blah blah doesn't really mean anything to these people but what it means that over the years let's say I guess 10 10 is not really a guess.
[00:36:18] It could be it could be X plus you know 90 times 100 minus four divided by seven plus 50. So. So you say you're 10. Well then you get some 10 then add 90 to it. At times a hundred know for about 70 plus 50. And then that number is now your guess not the guess of 10. And so what they're trying to do is whoever can get you know can then guess that number is it then counts as one transaction. And then whoever then is in the second person to then gets it.
[00:36:56] There actually blocking block square. So then the second person guesses it kind of builds off that valid just validation so that you get six validations inside of the blocks or the transactions. Let's say I would send you the box that would be inside there.
[00:37:14] And what this does it's important is is that the innovation was how to secure and prevent the coin from being sold for more than one person.
[00:37:26] So they have double spending on the spending.
[00:37:28] So that was just sent electronically currency and for people watching actually eliminated that and preserve the integrity that way.
[00:37:37] You know we sent Tim Tim and John King specifically to me on record and projected through the other way that you could do this you know hey I spend know give you to you to give you 50 and then basically you know I walk away with a good book realized only one person is going to get that $50. So it's a way to then try it you know safeguard against that.
[00:38:00] We're going to now is you know the big point for and so a lot of you are probably wondering you know what the heck is going on out of this poor and why is it for essentially gave back to this example. You know again this is not to be a big technical analysis of this is you know you've got information over it.
[00:38:21] Over here Paul the hatter. He's got no other scripting code. And again this is more like Lehmann's is not being called a deferred ravels we get into this and then you've got all the various transactions.
[00:38:37] One of the problems is that now the big void has gained a lot wider adoption is that for you know there are all these transactions are the one megabyte blocks are completely full. As a matter of fact there's like a backlog of like Last I checked like over a hundred thousand transactions is what people are doing is a paypal word or you know I really didn't get my transaction so I'll stand no point bossy to make sure I'm at the top of this list. So the miners are doing is they're saying hey when I found that a coin how did you know. So in the big way is rewarded whether there are minor fines that they get to keep all these transaction fees so it's incredibly profitable for these for these miners. So back in the day you know it may only cost you 20 cents or two cents or a dollar or two dollars and now it's sort of getting up to $20000. Where is my vote. Using a bank if he's going to be 20 to 30 blocks.
[00:39:30] So one of the ways to one of the ways to correct that is you know there was different. There was different methodology. One of them was going to be doing something called of witness. So let's say you are one big point then where one point is that software did in August first get super Teddyboy today. You know you're one big point.
[00:40:00] You still have the same Bitcoin but now it is operating off this other software called Segway. But they also then had another hole where they got hard for or hard for because you know you're at home depot and you know you need to get a bigger share.
[00:40:15] You just you know go buy bigger sheds in the trash the old one whereas the software gives you maybe you built in addition to your current set.
[00:40:24] Now we have to really change the entire underpinning all that so they can cast how they want to solve this is this they say you know this is not scale but you know they want to have everything he saved and have an eight megabyte walk. And whereas the point several people say hey we've got a better way to be able to do this.
[00:40:48] And what was going to happen is that we're going to have another software called Quain are called segue to access we want targeted at all to get you expert on this.
[00:41:01] Better than those are types of and there's people that are a lot more knowledgeable in this than me but if they have their own way of doing it. These guys know that Hayward is to make it bigger. And what happened was they called they saw the price point is skyrocketing. There was a lot of confirmation in terms of you know hey are the miners going to get on board with this.
[00:41:24] And then really they called off the agreement. A logical Hey you guys promised that this was coming. And this was going to then solve the scalability issue. Is going to solve the transaction fee issue. And it was going to make way for this lady network it was which is a whole nother can of worms. But then you guys reading everything as you read it you know now we're going to take some of this or just take some of our Bitcoin and move toward a big quaint cache.
[00:41:52] And again if you own Bitcoin prior to August 1st you had one unit of what they call BCSC and you still have your one unit of the siege. I don't get that effect I guess it will pull away and a different change in recent years.
[00:42:08] Some see some BCA said matter like coin market cap is going to be said for people looking thats probably a certain see a market cap but DTC is always the original Bitcoin.
[00:42:23] And bitcoin cash a lot of people that were mad and some of my core can get the cash because theyre like why do you call it and point out some of these people like Roger vear Jesus are now calling this quaint segue because you know it's a different protocol but that's over the heads of men actually some of it is over my head even by so surely over demographics have sort of really want to get into all the specifics of that.
[00:42:55] But really what to know I wanted to do is we have is probably really hard for you guys to see. So a lot of people listening to this it doesn't really matter. But what we have is a chart where it shows the average transaction costs. And we what we see on this chart is you know Bitcoin was pretty reasonable you know January was like 20 says 30 secs searching a particular bar five hours coming to lie in an ally of India.
[00:43:20] And this audience is like a fox and they all suddenly start staying up till like $20 a transaction. Whereas you've got other. You've got Bitcoin cash is coming in right now. I'm pulling this up right now but you know Bitcoin cash is coming in at you know eight cents 11 cents 12 cents 14 cents. At the same time that you know Bitcoin is in the you know many many dollars and you got other ones like like coins you know what Max said you made a transaction the other day that cost a penny. So you know billions of dollars. My question is do you want to get into it. You know how the transaction issues and some of them might get a hundred our viewers want it.
[00:44:02] Sure. Yes that's so.
[00:44:04] So you really hear things like frequence of Bitcoin. It's morphed into is Bitcoin currency used all the time. Why are you paying for a coffee and Bitcoin or got it or is is becoming more of a store of value. My personal philosophy is that the coin the way it sits will become more like gold plate Reserve. And so if you think about using the examples you have given a hundred dollar bill. Never heard of Bill. Right and you're not really you need to buy something for 100 bucks. Pretty easy. Now if I go down to the carnival you know and I walk up to a hotdog vendor and I hand them a hundred dollar bill they may tell me something like Well you know it's bills. Sorry you don't have or can't make change for that.
[00:44:50] So I'm going to send you 30 bucks. It cost $20 to send it.
[00:44:55] I'm not going to do it because it's going to make sense for you to send me you know a hundred thousand dollars from the sale combo for a couple. Or you might say that Bitcoin and you know a couple of dollars worth of and five bucks.
[00:45:09] So you've got other colleagues that have been developed one of those coin.
[00:45:14] So they called me from my Ferrari and the other thing my older other things looked like coiners cream by Charlie Lee early in innovation.
[00:45:23] The coins. He took the original White Paper of Bitcoin and he basically created a completely different all currency based upon what he saw. And so there are thoughts like like coins. It's faster. So what you see cryptocurrency says they're all trying to solve a few problems one.
[00:45:40] So you know speed you know Congress writes a little ability.
[00:45:47] Some of us are an entity like Manero right.
[00:45:50] Some of these are more like operating systems like you get into a theory and it sort of like a Mac versus a decent PC.
[00:45:59] Like a decentralized platform launched this software.
[00:46:03] The centralized software is like a Mac versus PC or other things are more applications where let's say I use cookbooks you know cookbooks is a good application inside of either Mac or PC. Or let's say Facebook is something I go on inside of there weren't any other software I'd use. So people see all these other coins coming up with some of them are more or have specific functions like it just because Quick Books came out and then there's a thousand other applications that do you know maybe was a music player so it was iTunes iTunes.
[00:46:37] They were going to say cryptocurrency is a bubble because you got iTunes doing one thing in cookbooks to another thing and you know password managers doing the other thing and this is why when we get into the chain and what it's going to do is in the future this whole de-centralized we have computers. Imagine your computer on your phone even not running inside the phone but pulling pulling the applications that's running out of the Internet off of the box.
[00:47:05] That's some kind of overseeing some things like a light coin for example which is fast very inexpensive original hard work often that doesn't mean that he just needs it.
[00:47:17] And there's technology now that they can swap back and forth. We've seen a lot of innovation in this space.
[00:47:22] I think what's important when I personally see Bitcoin now is that some of these things are attacks on Bitcoin if you will some of its questions about Is it really that or is it financially motivated you know the 2 percent fall within a 2 percent. People are always going to try to exploit the psychopaths of the world is basically monitoring opportunities. But bitcoin is dead and can be replaced quickly with something new. So one day it's worth $7200 and we're honored.
[00:47:53] Which hasn't happened. That group would create tremendous instability and confidence in tech Kryptos space.
[00:47:59] So that's you know the traditional rule of marketing is be first be better be different. So back in the day you too young for this but we used to when the video video cassette recorders came out and if you remember was ever data.
[00:48:12] I see. OK.
[00:48:14] So there's the first one that came out called the VHS and big bulky or the tape and rewind the beta and then the baby that came afterwards of Beta was smaller faster better in every single way. So new Betamax said never caught on because it just became the standard and it was good enough.
[00:48:34] It always has to do with the porn industry is using the same thing with life. No because there is a battle between Blu ray and HD HD DVD yes. And actually I was kind of surprised because I thought with backing of Microsoft I thought maybe the HDDVD and I had a DVD I can actually tell my Xbox into my work for. So that's something that he said that there was then another four what was that yesterday or two days ago where it was a big corporate goal.
[00:49:08] So essentially if you had a coin never sold that you'd have your big point cash you have here a coin Segway and now you have your gold and then you. I'm not an expert on Bitcoin gold but I think what they're doing is they're trying to take the money that's using these you know existence hokey to volcanoes joke around. INTERVIEWER You've got to be you know basically this you know the Exxon Mobile of these massive glomerata compete is they want to bring it back down to the non-POD you know kid in the basement using their computer to be able to mine this and taking away from it the sexualization of all the all the mind.
[00:49:45] So I just want to tweak that or before we sat down where we want to get into it. You know I think lastly make sure you know is Bitcoin up a whole you know that's you know pretty widely object in and out and also on of how the equator is connected to the group and then finish it off with you know how people are always talking.
[00:50:13] And so short term they coined. So I if you want to address the bubble aspect of this because that's something you see more. We've got mutual friends that have made comments that there a bubble but I want to you know your take on y you either do or don't think they going as well.
[00:50:33] So bungholes historically the term bubble usually happens when there's over a natural overconcentration of capital in one place. So real estate rules you know implosion that happened back in 2007.
[00:50:51] We're in Arizona which is one of the top and hardest hit areas of Vegas.
[00:50:58] Easily top three is tougher. And so you've got you have an over concentration of capital or do you financial instruments that allowed any person to borrow money and access to capital drove up real estate prices.
[00:51:13] You didn't have to qualify you. All you do is have a credit score essentially. Not even a down payment.
[00:51:20] And today you own a home and you want to buy another one you might other one another one.
[00:51:25] Well that created artificial demand because of financing and so we saw a real estate bubble was inevitable. And we won't get into the reasons for that. But we want to make sure. Sure. And other conversations behind how that happened. But if so bubbles usually happen when there's an unnatural concentration of capital in one market. So we saw that in 2000 when the dot.com bubble burst. You had companies that were getting where I IPO penstock comments that Don who had no product. They had a name of a company with an idea and a web address and nothing else.
[00:52:04] And so we're going to we want an ice IPO or a company in our valuation is going to be this because we believe we're going to do all these and it's completely crazy idea. So.
[00:52:13] So Bitcoin is a bubble doesn't meet that criteria because first of all the market cap of that maybe some of the CEOs can meet their criteria or forgotten.
[00:52:24] I see we got an idea a white paper.
[00:52:26] It's 50 pages and I see a different company. It's different from those of those yes those similar to so there's some there's a lot of stocks that are out there of the sure is ridiculous you know Bitcoin there you know cryptic meaning refers a lot of this shit.
[00:52:42] Shit coin. So there are some shenanigans and unscrupulous people will try to prey upon. That's why China came down pretty heavily upon Heisey hopes because they saw people being taken advantage of and duped. And instead of buyer beware. People be free to make dumb decisions you know the big brother government wants to step in and prevent people from hurting themselves right. So is Bitcoin a bubble will Bitcoin the market cap for Bitcoin is about one hundred and ten billion. Fifteen hundred twenty billion. I think this morning in the second. Yeah yeah. Ms slides around several billion dollars of the day bigger than the market cap of Goldman Sachs the world's largest investment bank. How ever in the grand scheme of global currency. It's very very small. A lot of people in the crypto world and now an institutional hedge fund hedge funds they believe that the crypto space will go to five trillion dollars in the next three to five years. So. So the whole crypto market right now is just over two hundred $220 dollars which is unbelievable to me because a few months it was 70. I remember when it hit 70. Billion. Not a whole crypto space with all the cryptic complaints about 220 billion so it's one to five trillion. If you think about it as a currency it'd be like saying you know the dollar is a bubble or you know is gold bubble. You know it's hard. How do you how do you really call it that I think. I don't think that's proper.
[00:54:19] What they're trying to say is where's the price discovery on the valuation and you would have people like John McAfee who believes Bitcoin is going to go the price of bitcoin is going to be $500000.
[00:54:31] I think it was actually not 500000 that you might take out of live television is actual actual quote by 2020 or three years.
[00:54:40] So within all that is true of the time of year or within three years.
[00:54:44] Yeah. So he's he's Yeah it's an interesting illustration but so in terms of a bubble between us and the thing because it's climbing quickly you have to understand the underlying reasons behind it. There are people if you look at Venezuela which the country's been decimated with hyperinflation socialist policy communism socialism communism there's a hundred thousand people miners who are mining bitcoin because that's the only way they're even able to eat have made money essentially. I didn't know was that big.
[00:55:18] It was it was 100000 last time I checked there were mining Bitcoin and I think another point I want to make is in the dot com era the first time I started looking at investing I was years old my grand father was there to give me a thousand dollars he saw me interested in CNBC and all this stuff that I was back and for us too young to realize that it was really CMBS and that a bunch of whores on tv that. But again you're 50 years old and 14 and you know you don't you don't know any better. So I really actually wanted to buy into Bluetooth and to in 1998 99 and my grandma was like or you think that people would be walking around with cell phones and listening to music and now that everyone has Bluetooth but I feel like this is like Loo-Choo times of the Jilian.
[00:56:05] But the fact is I didn't invest back then because I was too scared and I just gave my grandpa back the thousand dollars because I thought it was like a like a billion back then you know grown up some hands you a thousand dollars or 14:15 you know things like a billion dollar store kind of wish I did that maybe I would have made it wouldn't happen with a college or because that was a pretty good pretty good investment in that but the fact is there are whether you know the whole industry is whether there's a whole industry is a bubble versus you know there are the Amazons in there there are the you know like the bluetooth thing there are things that are going to survive whether or not you know there's a bunch of you know whether there's a thousand crypto currencies and 950 of them are shit. You know it's not my problem that you and that you overextended into the ones that are shit. You that's not my that's not my priority.
[00:56:53] But back in the tech bubble where I was going with this is that everybody essentially had a series of segments of the micro SD card is full.
[00:57:03] So I've got no more video going on here. But we still go through because of this. But you know back back to the day though every single person had essentially had tech stocks everyone had that tech stocks and but then how many people you know. I mean the wealth management business.
[00:57:18] And maybe like two of my clients have cryptocurrency is you know other people other advisers I know here you know you know you think this guy has one. This guy has two guys one but we have a lot more than just one of your clients. So it's you know it's a very very small percentage of people who are walk around with corporate currencies might be point to five percent whereas in the days of dot.com it was everybody in the days of two of bubbles it was everybody and I was on the radio you know earlier this year talking about this and it was actually really cool. You know for those of us you know listening and there was a chart a visual capitalist if you take in visual capital is zero hedge. Bitcoin is from November of this year 2017. And what it's showing is that each one of these little squares is worth a hundred billion dollars and it shows a market cap of silver. Just one tiny little square a cryptocurrency. It's you know again very tiny little squares and it shows you know the biggest companies you know the failing stocks that are out there you know Facebook gap on that first Google Berkshire and it shows you know 50 richest people and shows you know a few more blocks and shows California's GDP and shows on this estimate which shows you know 20 blocks that shows the Fed's balance sheet which was three and a half trillion which that was just added on to that system. Q I think it's like point four inches in bigger than this.
[00:58:40] So several blocks there that starts getting into you know USA and my currency. And for people that are listening to this the takeaway is that the currency versus you know big coins like it's got you know a pimple on the ass of an elephant. You know where's the elephants. You know the currencies in the temple as you know the Bitcoin is nothing. If you look at all the value of all the girl gold in the world again relatively you know relatively small then it shows the Duyvil stock markets. And these are again this eyeballing this you know hundreds if not thousands of times the market cap of what crypto currencies are. Then you get into the global money supply. This is what that chart that you guys need see have a link to the show notes or this is just a huge frickin amount of it's showing that you've got you know thirty six point eight trillion of easily accessible money and then another 90 trillion of money that's not as easily accessible. Then you start getting into global debt it's at 215 trillion. Where again this is like a needle in a haystack where the haystack is all the data and the needle is you know the cryptocurrency that shows you all the value of global real estate again pretty big number that shows the derivatives. And this is where it starts really getting interesting where you have 544 trillion.
[01:00:01] And I've seen other numbers that seem to be immediately into the quadrillions. But Aimee's I'm scrolling down. And it took me a good like four seconds of scrolling down just to get to the bottom of that. So we're talking a market cap of a hundred billion dollars.
[01:00:16] But if you if you talk about the debt we're looking at closer to you know this estimate is 544 trillion. So you know which one is the bubble. I mean the bubble to me is not the the second smallest thing on this graph the to me is the amount of debt but nobody really knows how all this is going to shake out. And again we'll have this lynxes as the show notes.
[01:00:39] The last thing I want to talk about because we're an hour Alice I want to kind of wrap this up is when it comes to Bitcoin One problem I've had about Bitcoin really from the beginning when I found out about Bloch's dream was I looked into all you know who runs block Stroom block stream the biggest investor in blocks stream comfortably with bloodstreams so blocks stream. A good point. BLOCK stream is basically what's known as the core developers of Bitcoin. They're the ones you're kind of doing you know developing the code kind of steering what direction it's going to go into.
[01:01:13] You know for lack of a better word really companies affiliation.
[01:01:18] But they mean they do have a lot of funding behind them and they are paying people to do code. So you know what kind of what happened wasn't a lot of big you know people like this because they were IBM people that were getting this philosophy or those who've been kicked out. Now it's more of a globalist type people who are in it and it's actually so Bloch's dream is that they got their funding from a company that's known as X say it's Shellback say or Aksa. And so when I heard I saw that I just had when I first heard of Blackstreet Michael what's stream. And then I saw wait there were run by or there are major funders Aksa and I just happen to know that the Build-A-Bear a group was headed by a guy like Henry day custodies or how you pronounce his name. And he was the head of Aksa up until about a year ago. So now I don't know what he's doing you know figure out how he's going to take on Bitcoin or so you know I don't feel from a philosophical angle that you know I want to put all my eggs into the Bitcoin basket when I know it's being somewhat steered by the same goal is. I was trying to get away from it in the first place. So again it's decentralized so you know not saying they can come in there and you know have their way with everything because you've got all the miners onboard. You've got to have the nodes and you've got to have the users and there's all these competing interests. But you know are.
[01:02:44] Are they in there. But what would I be doing if I was trying to mess it up I'd have you know really high transaction fees.
[01:02:50] I want to make it less you know less and you know able for the average person to use and basically doing all the things that are going on right now which is maybe a reason why people are going into Bitcoin cash but it's just very hard that I don't see a lot of big time people in the industry pointing this out. Yesterday I happened to watch a little clip of Luke Radomsky and Jeff Berwick and I was pleased to see them actually talking about this and get the idea to talk about this because I saw yesterday's fire because I talk to you briefly yesterday before I even watched that but I was pleased to see these guys talking about this. But you know that's you know I would probably hitch you guys a lot today. We hope to be doing. You know. You know come out with these regularly again you can find it on the libertarian advisor podcast which is on iTunes Google Play stitcher. Play it for POD bean U2. You've got a libertarian adviser dot com up there will have the post with all the links to everything else you just mentioned. We'll have some of the show notes and their transcriptions and let us know you know other topics you guys want us to cover whether it's in Kryptos and conspiracy's you know because you know really has a lot to keep up with. So the conspiracy is really a subsection of the libertarian advisor podcast where we've got libertarian advisers anymore you know geopolitics you know current events type stuff that's going on.
[01:04:11] Whereas this would give me more of the different crypto currencies and conspiracy so I know not everybody listens to me. You know some people don't give a shit about the public political angle. Some people don't give a shit about the crypto angle whereas I don't give a shit if you don't give a shit because now I got it. I'm not going to segment it out or you can decide you know hey Tim's talking about markets. You know mass mass no time on the market. You don't care about that when I hear about conspiracies. Now I've got the method of doing that. But anyways you know appreciate you guys watching listening today will be out with more of these in the future. And you know for Matt for joining us you know he's in the regular part of this and we're signing off and see you guys I enjoyed that letter.