BTC080: MACRO AND BITCOIN EDUCATION

W / GREG FOSS, JAMES LAVISH, JASON SANSONE, & SEBASTIAN BUNNEY

31 May 2022

Preston Pysh has a deep-dive conversation on all things macro, Bitcoin, and education. The guests for today’s show are Greg Foss, James Lavish, Jason Sansone, & Sebastian Bunney.

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IN THIS EPISODE, YOU’LL LEARN

  • From a macro standpoint, what surprises them the most?
  • What is happening in the Credit Default Swap market?
  • Why are the CDS prices in Japan not so bad considering how much Yield Curve Control has been implemented?
  • Why is Fidelity so involved in Bitcoin and why is it so important?
  • Are the Credit cycles getting faster?
  • What’s the next major central bank to implement Yield Curve Control?
  • What are fixed income investors thinking right now for long duration?
  • What kind of timeline is this “great reset” playing out?
  • What was the incentive for building the Looking Glass Education Platform?

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

Preston Pysh (00:00:03):

Hey everyone. Welcome to this week’s episode of the Bitcoin Fundamentals podcast. On today’s show, it is broken down into two different segments. In the first segment, I have finance veterans, Greg Foss and James Lavish, to cover macro, surging credit default swaps, oil and energy prices still bidding; and what that means, Bitcoin, the broader stock market indexes, and plenty more. Then, in the second half of the show, I talk about the Looking Glass Education platform with Dr. Jason Sansone and Sebastian Bunney. Both of the conversations are action packed and full of actionable information. So sit right back. And I hope you guys enjoyed this conversation as much as I had recording. So with that, let’s roll the intro.

Intro (00:00:47):

You’re listening to Bitcoin Fundamentals by The Investor’s Podcast Network. Now, for your host, Preston Pysh.

Preston Pysh (00:01:05):

All right. Hey everyone. Welcome to the show. Like I said, in the introduction, I’m here with this team. We’re going to be talking macro. We’re going to be talking about the Looking Glass Education platform. Gents, there is… It seems like every day just gets crazier. It seems like every day you read something else in the news and you’re just like, “There’s no way. There’s absolutely no way.” So my first question for the group here is: what are some stats that have recently popped up on your radar or a chart or a news article or anything that just made your eyebrows go up and you said, “My God, what is this?”

James Lavish (00:01:44):

Go ahead, Greg. I know what you’re going to say. Just go for it. Just say-

Greg Foss (00:01:47):

Oh, no, no, no. No, I want the other fellows to get their time. Preston, thanks for having me for… I think this is the fourth time, so people don’t need to hear from me. So go ahead, fellas. And I have an idea right there, but it’s not going to be the first point of discussion.

Preston Pysh (00:02:02):

James, take it away.

James Lavish (00:02:02):

Yeah. So I mean, one of the things I’ve been watching, we’ve been talking about actually with Luke Roman. We’ve talked about it a little bit is the problem that with the Central Bank of Japan and the Japanese Yen and where that’s going right now. We talk about yield curve control with the United States and the Fed and just to jump right in yield curve control. So to back up for your listeners a little bit, the yield curve normally looks like it’s… In a normal distribution of a yield curve, which is just the plotting of all the yields of the treasuries in a government. So you’ll have the three month, you’ll have the six month, the one year, two year, 10 year, all the way down to 30 year. In a normal distribution, in a normal chart, it will actually curve upwards. Further you go out, the higher the rates go. It’s just a normal distribution for people in their time preference.

James Lavish (00:02:58):

If I’m going to loan you money for a longer period of time, I’m going to want a larger return for that. But anyways, the problem that we’ve come up upon, and we just saw the Yen fall out of bed the last couple of months, and it has just gotten destroyed. And so people are asking, why is that happening? What’s going on? Well, we talk about the Fed possibly asserting yield curve control down the line, meaning that they’re trying to keep the yield at a certain rate. Well, in Japan, they’ve declared, they are absolutely going to buy every single 10-year treasury and keep that rate at a quarter of a percent, 25 basis points, they will buy every single treasury.

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James Lavish (00:03:40):

And so the problem is, that leaves all these institutions, all these investors who are selling those bonds with Yen, that they don’t want to be holding Yen, so they’ve got to sell the yen. And the obvious return, the obvious other side of that trade will be the US dollar. So you’ve seen the yen just collapse from the US dollar as they sell those treasuries, the Bank of Japan buys them and then the investor sells the yen. And so we’re in a situation now where I think the yen is in deep trouble and it depends on what they do going forward, but they’re holding over a trillion dollars, $1.3 or $1.4 trillion of US Treasuries and another $1.3 or $1.4 trillion of US denominated assets.

James Lavish (00:04:29):

So to shore up the end, they may be selling those, which in turn will affect our market and our treasuries. So it’s just something that I’m kind of watching and seeing how it plays out. But Greg and I talked about it last week, and just watching some of these treasuries rolling off the Bank of Japan sheets, and it’s something out there that surprised me that it’s happened so rapidly.

Preston Pysh (00:04:51):

When I’m looking at the chart for the yen, you’re seeing lows relative to the dollar that you haven’t seen in literally 22 years on that exchange. Now, one of the things that I find strange, because Greg has taught me to look at the CDS. When I look at the CDS and how much a lot of these CDSs have moved around the world over the last six months, the Japanese CDS is actually not nearly as bad as most other locations. So why would that…? That doesn’t make any sense to me.

Greg Foss (00:05:25):

The credit markets move slowly and incremental change is what’s… You always have to look at the velocity and then the acceleration. Right, Preston. You’re a physics guy.

Preston Pysh (00:05:37):

Yeah.

Greg Foss (00:05:37):

And you know that it’s actually more often the second derivative than the first derivative that matters. But let’s be honest, we are not in a contagion event for a G7 nation yet. So Japan, I’m going to group all the ECBs together. The USA, we [inaudible 00:06:00] Canada, which is the outlier, is the one we have to worry about relative to a G7 nation that doesn’t have historical support for the stability of its currency. All I’m trying to say is, let’s remember there’s G7 credit default swaps and G7 fiats. And then there’s 150 other countries that really need Bitcoin that really suffer the challenges of managing a central bank and a debt burden in a “junk sovereign.”

Greg Foss (00:06:37):

And what would be a junk sovereign? Well, Argentina, which is a G20 country has failed four times in my career, Preston, four times, which is to say, they’ve never had a 30-year bond that’s actually matured. Isn’t that amazing that the Argentina Government will issue a 30-year bond and it has never matured in my 40 years of managing risk. A 30-year bond from Argentina has never matured, yet they keep issuing it. And then, we’ll take a G11 country like Turkey, which is on the precipice right now. I don’t want it to endure more pain for the citizens of Turkey, but the odds are it’s going to get worse. I’m not laughing about it. I’m just like, that’s the way momentum and acceleration is your enemy when you are in a deck spiral. You can never attain escape velocity, if the acceleration is sucking you into that vortex.

Greg Foss (00:07:39):

And I guess, Japan will deal with their demons in due course. This is the first, James points out a first break in it, but it’s not going to be… In my opinion, unlikely to be the event that pushes it right over the cliff versus what does Japan really do indirectly makes other countries worse. And they don’t understand this, but it actually, “Okay. I can’t swear, so if something flows downhill, okay, you know, it just flows downhill.” And you have to remember that’s what happens when you lose confidence in the top dominoes. Maybe that domino wobbles a little bit, but it’s like a butterflies winds. The butterfly starts up here, but the damage starts way downhill.

Greg Foss (00:08:32):

And look at the general movement of yield spreads in credit, default swaps on sovereign debt, and it’s a widening of spreads, and the acceleration of the top rated credits is actually the same as that of the bottom rated credits, but the bottom rated credits is more visible because you’re starting with a greater elasticity, if you will. I don’t want to get too granular here, but-

Jason Sansone (00:09:02):

You already did, Greg.

Greg Foss (00:09:06):

For a surgeon, it’s like, pass me the butcher knife instead of the scalpel. Bang! You’re done, we’re taking a limb off. We’re not even going to try and do that. We’re going to cut the limb right off. And it’s tough, right, guys? Credit is an asymmetric bet to the downside, like nothing good happens in credit. It’s a horrible business to manage. If you really do well, you get your money back. And if you do really badly, you’ll lose everything. How’s that for a great. So that’s why there’s an expression, Preston. Equity holders are optimists. Trees grow to the moon. Absolutely, the growth is going to go on forever and bond holders are pessimists. And there’s the reality is somewhere in between those two.

Greg Foss (00:09:53):

Japan is not the problem right now, and I’m going to tell you exactly why. It has a current account surplus. It is a country that exports, that is diametrically opposed to the United States, which has a current account deficit because it imports. The trade balance of the JGBs of Japan has allowed it to run up a deficit that the USA could never support purely because the USA has a current account deficit.

Jason Sansone (00:10:31):

To your point though, Greg, a couple things that you were saying in there. So first of all, I love it because your first and second order derivative comment was the initial reason why I reached out to you. And you don’t need to get into the origin story, but the whole point was, you’re telling everybody this is 11th grade math. I don’t remember covering that in the 11th grade. I remember covering in like third semester of college calculus. And then, my all-time favorite Greg Foss’s quote was, “You know, it’s a Taylor series. I mean, hello, everybody knows what a Taylor series.” Nobody knows what a Taylor series is, Greg, literally nobody. So the point is though, is that when you talk about velocity and acceleration and you relate that into the bond market. I mean, that’s difficult for financial outsiders like myself or like Seb to kind of grasp.

Jason Sansone (00:11:19):

And I think that’s one of the points here that we’re trying to make with regard to translating this message, because your point’s well taken and now that I’ve heard it 15 times, it makes sense. But for most people, that’s right over their head. Interestingly, back to what James had said too, I’m interested in the same thing with the yen, but I’m watching, or asking the question of what does that do to yuan? I mean, when suddenly their neighbor is more competitive exporting goods, what does China do? Because suddenly their exports are less attractive to the rest of the world and that’s going to cause some issues there. So I’m kind of interested in the geopolitical fallout of the drop in the value of the yen.

Sebastian Bunney (00:12:03):

I think that it’s important to also bring up the fact that we have all of these moving parts right now, but the problem is, are we even being given clarity as to what is happening? And so we can look at, say CPI. If we think about interest rates and we look at CPI, the problem is a lot of this stuff is controlled by a centralized body. And so we’re not even getting accuracy as to what the true interest rate is on debt. And so interest rates, if we think about them in their simplest form, they’re credit risk. So naturally, as the economy starts to be fiscally irresponsible, as we start to see a rise in malinvestment, interest rates should naturally rise.

Sebastian Bunney (00:12:40):

If we can suppress interest rates, then nobody really knows what’s actually going on. And this is the same for what Greg was saying when it comes to the credit ratings for countries. If you’ve got a AAA like Canada, AAA or AA, but when you look at CDS, it is far higher. The CDS is telling you something that these ratings are not accurate. They’re not actually telling us the truth of the matter. And so, I think going back to the whole Bitcoin decentralization/centralization, when you have a centralized body controlling a metric which is meant to dictate risk in the markets, are we getting an accurate representation of what is going on?

Preston Pysh (00:13:14):

Greg, so the last time you and I talked about the CDS, the credit default swaps, I pulled up the website here and it’s on worldgovernmentbonds.com. And then, under sovereign CDS, you can see the rates and how they’ve changed over the last month, over the last six months, and, I mean, this is aggressively different than the last time you and I talked about this. I’m just going to throw out some numbers for people: Denmark 45% increase in the last six months, Austria 27%, Norway 21%, Germany 47%, Sweden 61%, New Zealand 70%, Australia 74%, Portugal 66%, Spain 58%. These numbers that we’re throwing out are not normal increases in CDS for standard normal functioning economies or global economy.

Greg Foss (00:14:15):

Correct, except the world is all linked on what’s called a volatility metric. And as equity volatility increases, there is a natural hedging dynamic that causes credit spreads globally to increase. That is just a time tested metric that measures risk. Okay, go ahead.

Preston Pysh (00:14:40):

Greg, wouldn’t you say that’s more that global collective tightening of this and this price blowing out is a function of how strong the dollar is and how interconnected it is to everything in the economy.

Greg Foss (00:14:55):

A hundred percent. I mean, one of the things when the DXY increases and the strength of the US dollar, there’s a time tested formula that says emerging markets blow up. And so, let’s take that to a second level effect. What if you were a country that sells a lot of product to emerging market economies? Your economy itself is going to be indirectly impacted by trade flows, that you can’t sell your products to these. So everything is connected, Preston. You know it. Volatility is a measure of risk and there is no market that escapes it, why? Well, because you have hedge funds in the world that ensure that pain in one market is translated to another market. Because if it’s not, they’re going to make sure they are out there invoking pain on that other market so that it all settles out in the risk washing machine.

Greg Foss (00:15:55):

There will never be a market that is isolated from a risk off event or a withdrawal of liquidity from the system. It flows downwards, as I said before. It’ll start in high yield debt. It’ll move to emerging market debt, because the high yield traders always watch what CBS is in emerging markets. If high yield spreads are blowing out, they will buy protection on emerging market debt because that correlation, and it all flows downwards eventually to the higher rated sovereigns. Because again, if a lower rated sovereign is blowing out, someone will say, “Guess what? I’m going to sell protection, meaning, I’m going to sell insurance on the lower rated sovereign and buy insurance on the higher rated sovereign and play the delta or the basis spread between the two.”

Greg Foss (00:16:45):

You may think this is like some sort of Star Wars movie. It’s not. This is how trading desks work. They do it in big size. It’s very, very hidden to their retail investor. They will never see what’s going on, but that’s not what the retail investor gets to see. This is where big money operates. This is where there’s billion dollar trades over the counter, the Goldman Sachs of the world lining up against AIG or with AIG against BlackRock. And this is how risk is mitigated or transformed throughout the market. It’s actually pretty fun. That being said, it is like an elastic band. There is nothing that escapes. There is no way that any credit market would stay stagnant in the event of a NASDAQ market down 30%. That’s all you have to know. The NASDAQ’s down 30%, equity volatility is above 30% annualized. Credit default swap spreads are widening because there are guys that can create [inaudible 00:17:54] out of a sovereign credit default swap spread and sell it back to those other markets. It’s just a game of whack-a-mole.

Sebastian Bunney (00:18:03):

When I think you bring up such a good point, which is if you distill that down for the average wage earner, what’s important to note is that at the moment when we see Bitcoin declining, as it has been the last little while, it’s not that Bitcoin’s value proposition has changed. It is not that Bitcoin has lost anything in the eyes of Bitcoiners and people that see the potential of Bitcoin. Because what happens is if you overlay Bitcoin’s chart with the NASDAQ, the S&P 500, what you realize is that it is only declining because we’ve seen all of these institutions and big money start to exit Bitcoin. It’s got nothing to do with its value proposition.

James Lavish (00:18:37):

And not just exit, but also using it as a very sloppy or quasi hedge for their risk on assets. So they’re shorting it ahead of, they know that they need some sort of protection. And if they don’t want to just short cues, they’re using Bitcoin to hedge that next move lower. And we all agree here, I know all of us agree that that’s not really the point of Bitcoin. That’s not… It’s the purest form of money that’s ever been created. But until you get investors truly understanding this broadly and deeply, it’s going to continue to happen. It’s got to form a separate asset class completely in order to be used properly and by those institutions. And honestly, there has to be some price discovery and faces ripped off for that to happen. And it will. It will happen at some point. It’s just a question of when. I think that’s a great point, Seb.

Jason Sansone (00:19:37):

And to your point, James, I mean, I think the average retail investor has no idea that this goes on behind the scenes. None. And so, it’s always amazing to me when Bitcoin trades down a $1,000 or whatever and it correlates with the SPX and everybody on Twitter is like, “Oh my God, when is it going to, when is it going to, you know, de-link from…?” That doesn’t happen. It doesn’t happen overnight. But again, back to the point of people, don’t have a basic understanding of how markets work. And when that happens, they’re forced to essentially make poor decisions, whether it’s with their own money or with their emotions or whatever, because they don’t see what’s actually going on. And so that’s I think part of the issue in why there’s such a need for education for retail investors and even wage earners really. It’s not just you don’t have to be an investor to actually understand what’s going on, because when you read the headlines and you try to follow the narratives that the mainstream media paints, it’s complete falsity, completely false. And it leads people very, very astray and very confused.

Greg Foss (00:20:49):

So Preston, one of the things that you mentioned what I saw lately that blew my mind. I’m going to turn it back to a legacy investor who is a top four global account, and that’s fidelity. They have come out with a number of research reports that I think will be seminal investment reports that will change the digital asset community. One of the most important ones is they examine digital assets and the conclusion basically is, there’s only one digital asset that hedges the fiat Ponzi and that’s Bitcoin. So there’s Bitcoin that stands alone as a hedge against the fiat Ponzi, and then they describe it less rudely than I will, but… And you need to read that report because you will see that they are laying the groundwork for offering digital assets to their clients.

Greg Foss (00:21:48):

And they are a top four account in the world, and if the other three of the top four accounts in the world, the Vanguards, the BlackRocks of the world, do not offer digital assets to their clients and fidelity is, and the clients want that silo, they’re not going to stick with the other two that aren’t offering them.

Preston Pysh (00:22:11):

Yep.

Greg Foss (00:22:11):

The other two may offer them and not believe in them and will wait and see whether their clients actually allocate assets to it or not, but it’s a very important report for an asset that’s only 13 years old. Okay? I need people to understand. This is not like high yield bonds that are 30 years old. This is Bitcoin and digital assets that are just over 10 years old. Now, the more important-

James Lavish (00:22:38):

Just to give context to that to what you’re saying, Greg, is the Fidelity, Vanguard, BlackRock, State Street, Morgan Stanley, when you add up those five firms, you’re talking about $30 trillion of assets under management. So Fidelity coming out with this report is massive. They’re over $4 trillion, so sorry, but that’s not [inaudible 00:23:03]

Greg Foss (00:23:04):

Yeah. And so, look. Let’s do the math on the run here then. So they own $30 trillion or they manage $30 trillion of assets, and let’s say, they advise their clients to put a 5% allocation in there. So $30 trillion times 5% is $1.5 trillion. That’s a tripling of the value of Bitcoin relative to its current market price. And it will actually go much higher because it’s not like you can purchase that much just on the run. But I wanted to point out, Preston, if I may, the bigger issue that I saw from Fidelity that it went under the radar by and large. And that’s the comparison of the adoption rate of Bitcoin relative to two other technologies that have happened in my lifetime. One is the internet and the other is cell phone adoption.

Greg Foss (00:23:57):

And in both cases, Bitcoin is beating the adoption of that. And Greg Foss may have a price target for Bitcoin and no one in the world cares except that Fidelity has by and large the same price target as I do based on different metrics, but this is Fidelity. This is a $4 trillion asset manager. The most assets I ever managed in my life was $5 billion. Okay. These guys are thousands of times bigger than I ever was.

Preston Pysh (00:24:33):

Your [Inaudible 00:24:34].

Greg Foss (00:24:35):

Okay. Well, at the end of the day, I also swear a lot and they don’t. And they keep their clients and I lose all of mine, but at the… So remember the price target that goes from here though, guys. They’re calling for multiple million dollar price targets in Bitcoin, not with a hundred percent certainty. But man oh man, if I’m listening to Scott Minerd in one ear and I’m listening to Fidelity in the other year, I’m going with Fidelity. I’m sorry, Scott, you might change your price target like you change your shorts, but at the end of the day you’re knucklehead. You are not allowed to change your price target without stating the probability of it going either direction. Okay. I know that your price target includes both sides of the bell curve. The MSN is going to pick up whichever one they want to pick up on a daily basis, but you can’t just suck and blow at the same time. You have to give probabilities on both sides of the curve.

Preston Pysh (00:25:40):

One of the charts I recently saw, Greg, that I just loved was this one from Jurrien Timmer from Fidelity, he’s their global macro director. And he showed what I’m interpreting as the last credit cycle.

Greg Foss (00:25:53):

Okay.

Preston Pysh (00:25:54):

Before you had the COVID meltdown, the subsequent central banking response to the tune of 11.3 trillion globally was how much was added onto the top four central banks. You saw the reflation across all these different asset classes, and then you saw it fizzle out, you saw the units, the fiat units in the system start to contract and you see all of those different sectors start to contract. And in that chart, you can see the performance of a cycle. You’re an engineer, I’m an engineer. What’s the hurts? What are the magnitude of the wave when I’m looking at it? And so for me, this chart was just so representative of… That’s a cycle right there. These cycles are getting faster. The frequency of them are getting faster. They’re having more magnitude as this thing’s trying to express itself into the new financial system that everybody seems to be talking about now. You mentioned that before. If you said that we’re falling into a new financial system pre-COVID, everyone would’ve rolled their eyes and just laughed at you. Now, it’s kind of like, “Yeah, you’re right. We are moving to a new financial system.”

Greg Foss (00:27:03):

Rapidly. Yeah.

Preston Pysh (00:27:04):

In this chart, I think it’s really important to… Because people will look at this, people will buy Bitcoin six months ago and they’ll say, “It’s down. It’s down a 50%. You guys are crazy,” and my immediate response back to that person is, “How are you snapping your timeline of what you’re considering a cycle?” Before things started getting so crazy with Central Bank intervention, I would’ve told a person, for Bitcoin for me, if pick any four-year period of time and I think that’s representative of the performance of Bitcoin. Now, I think I would probably say, what’s one full credit cycle that are happening very quickly now. It seems like they’re happening on like a two-year timeframe, and they used to be like six-to seven-year credit cycles, 10 years even. But these things are picking up pace, this thing’s fallen apart. It’s very clear that all the Fiat units in the system are drying up because they’re broken promises, broken paper promises, and it’s all becoming… It’s coming down to whether you actually have hard commodities that everybody’s demanding and they’re trying to trade in their paper promises for it.

Preston Pysh (00:28:14):

So as we look at this, I think it’s going to be really interesting to see when the Fed capitulates, when these central banks eventually have to step in. And we all know they have to, and they go for the reflation, it’s going to be really interesting to see that I would love to see Jurrien’s chart, and I think most people know which chart I’m referring to, and if not, we’ll have a link to it in the show notes. It’s going to be really interesting to see what percent all of those are at compared to the previous bottom, because you can see where they’re at from top to top, which is one cycle. I’m very curious to see where they’re at from bottom to bottom when we complete that portion of the cycle, just to see what percent… And clearly Bitcoin’s still outperforming all those other sectors on this chart.

Jason Sansone (00:28:55):

Impressed [inaudible 00:28:56]

Greg Foss (00:28:56):

Can I say one thing? Sorry, Jason.

Preston Pysh (00:28:58):

Yeah, yeah.

Greg Foss (00:28:59):

I need to say this because as an engineer, you’re assuming there is a next cycle. What [inaudible 00:29:04].

Preston Pysh (00:29:04):

Absolutely.

Greg Foss (00:29:04):

And this is the problem. There will be a time when the cycle doesn’t repeat. And I think just-

Preston Pysh (00:29:12):

Well, Greg, if I was going to argue with you, like we’re already seeing the contraction of it. So if they stepped in tomorrow, well, for me tomorrow would be the bottom of it and I would take the measurement from-

Greg Foss (00:29:22):

Oh, I hear you. A hundred percent-

Preston Pysh (00:29:23):

Yeah.

Greg Foss (00:29:24):

… except what if we have a lawyer in the world’s most important [inaudible 00:29:28] risk share that decides to push to an extreme that he’s never managed risk before and he’s stretching that rubber band further than it ever has, and that rubber band doesn’t come back. What if there is no fed put? Remember, everyone’s counting on a Fed put, and this is an article that seven I wrote why I love Bitcoin so much, it’s actually a put on the Fed put. In other words, it means you own insurance that the fed is either not going to invoke the fed put or more worrisome. And this is the one that worries me, the markets call their bluff and they say, “I’m not doing this again,” because every single fed put you do your cycle and correctly, you’re saying, this is how it was and now it gets shorter and sharper. And they’re like, “I don’t want to do this anymore.”

Greg Foss (00:30:21):

It’s like the Luna collapse. The Luna collapse is exactly what could happen to fiat currencies because the Luna is basically fiat on a digital blockchain and centralized by a bunch of buffoons. Okay. So exactly like central banking. And don’t overthink the fact that there will be a time when the fed put is no longer the savior. I don’t want that to be the case, Preston, but you need to own insurance for when that could, and I’d say, could happen.

Sebastian Bunney (00:30:58):

Well, I think… Well, I was just going to mention one thing quickly. Well, two things. So first off, if you ever listened to Lacy Hunt, he talks about how there’s basically three drivers in the economy. There’s basically land, so it’s just kind of our natural resources. There’s labor. It is our productivity as our demographics that’s how hard we work, and then there is our capital, and so, that is the banks, that is the monetary policy, that is the central banks. Now, we tend to always focus on the issues we are facing from a monetary policy perspective. And I think that Greg puts it so well where, if we look at Canada for a second, Canada has 422% debt to GDP. Now for those who don’t know GDP, just think of it as a country’s income. So that means we’ve got 4.2 times debt to the income of Canada.

Sebastian Bunney (00:31:43):

Now, if we’ve got 4.2 times debt to the income of Canada and the interest rate, a conservative interest rate on all of that debt is say 3%, that basically means that we are looking at 12.66% required growth just to pay the interest on this debt let alone like start to pay down the debt. And if we look actually over the last 100 years of Canada, our average GDP growth has been 0.76%. We are a long way off, a long, long way off ever paying down any of our debt. And so, that’s one point. But the other point is, if we look at… You [inaudible 00:32:18] at the start any interesting like wild facts that you’ve kind of noticed. One thing that I read the other day is the People’s Bank of China has come out and said because of the one child policy, in the next 45 years, China’s population is going to half.

Sebastian Bunney (00:32:32):

If we look at the US, the US has a 0.35% growth rate in population that is since 1900s. That’s the lowest it’s ever been. And Canada is going to see a 60% growth in 65 and older versus a 10% growth in everyone under. That means that suddenly, all of these people that were spending into the economy, all our spending are going to stop, that money’s going to dry up because these people are going to have to save for retirement. So not only are we facing a massive debt burden, but suddenly all this money is going to be sucked from the financial markets, sucked from the natural spending into the economy.

Sebastian Bunney (00:33:05):

And I think we’ve got a massive, massive issue, and this kind of goes back to Greg’s point, are we seeing a paradigm shift? Are we seeing a change? Because we’re coming to the end of the tether. Now, it may not be in the next four years, maybe in 10 years, we don’t really know, but we are facing some major, major issues. And at the moment, the only response government really have is to print more money, to try and like mask the issues.

Jason Sansone (00:33:28):

And that’s the thing is that while this is all going on in the background, your average person out there who doesn’t know a thing about the economy, who just reads headlines, turns on 60 minutes one night and hears Neil Kashkari from the fed in St. Louis saying we can print infinite money. And so, of course, if you’re hearing that, you’re thinking, “Oh, well, that’s fine. Reserves got my back. We’re we’re covered. We’re good.”

Sebastian Bunney (00:33:57):

[Inaudible 00:33:57]

Jason Sansone (00:33:58):

That’s the problem I had with it. It’s this narrative that’s based upon effectively a whole book of lies. And unfortunately we live in a world in which the truth is obfuscated from people who are none the wiser. [inaudible 00:34:17] example, it’s like, I’m sitting here, my daughter’s going in the middle school next year, and we’re looking at the courses she can take. She gets some electives, not that she needs to take advanced economics and Austrian economic theory as a sixth grader, obviously not. But my point is, there are no courses on financial literacy. None. She can take a course where she gets to sew something. Well, that’s real useful. I appreciate that. At least she’ll get to sew a pillow for her bed, but yet she’ll go through her entire high school career and potentially college career with knowing zero about the way the financial world works.

Jason Sansone (00:34:58):

And I’m not putting on a tin foil hat here, I’m not a big conspiracy theorist, but I have to ask if there’s a certain amount of that’s by design. Because if I was running the type of system that the federal government’s running or governments around the world, central banks around the world, if I was running that system, I don’t think I’d want to tell anybody the truth either.

Preston Pysh (00:35:19):

Amen to that. Hey, one more question on this macro, and then I want to dive into some of the Looking Glass conversation that we were planning on talking about. James, you started this off with the yield curve control and I’m with you. I think that this is such a driving force to all of this that we’re currently experiencing right now. And I think people that aren’t familiar with currency markets don’t might not realize is, if you have Japan doing these actions and they are a major, massive in size central bank and they’re debasing their currency and making it that week, they’re making the dollar that much stronger, and they’re making all that dollar denominated debt that’s prevalent throughout the world that much harder to repay for all the people that deal with currencies, right?

James Lavish (00:36:05):

Yes.

Preston Pysh (00:36:05):

So you’ve got this driving force that’s happening in Japan, and some people were asking me about yield curve control because I’ve been talking about it a lot here in 2022. And what I haven’t really kind of talked about is, I think, the US is probably going to be the last country to really implement yield curve control.

James Lavish (00:36:24):

Yes.

Preston Pysh (00:36:25):

And so, when you’re looking at it from a global lens, it doesn’t surprise me that Japan’s first. They tapped into 0% interest rates and got here first. So when you’re looking at another G7 or major central banker around the world, where do you see the next… Because once you go yield curve control, I don’t know that you can necessarily come off of that, so who’s next? And then, what does that do to the dollar? Does that just keep… Are we in this fight where the dollar just keeps getting bid until the US has to yield curve control at the very end and then, it’s just game over at that point.

James Lavish (00:37:02):

Your guess is as good as mine, Preston. But I think the next major one that we’re all thinking about and watching is the ECB. I mean, they’re just now [inaudible 00:37:13] rates this summer.

Preston Pysh (00:37:15):

They’re at zero. They’re negative.

James Lavish (00:37:18):

I mean, just now… Right. And that’s the thing, if they’ve had negative rates for so long, it’s unbelievable how they’ve strangled their economy, not their economy, they’ve strangled their investors with this debt.

Preston Pysh (00:37:34):

Yeah.

James Lavish (00:37:34):

They don’t realize because pension funds in Europe, they have a mandate, they have to buy the debt. So they’ve been able to do it for all this time. So I think that… We’ve heard the central banker say it over and over again. We just heard Powell say it. I said this morning on a Twitter spaces that he admitted the fed is reactionary. They’re not looking at being ahead of the curve, they’re reacting to the information they have, and the information they have is months old. And it’s off of information that is so slow to move. I mean, like they’re so far behind the curve, so imagine how far behind the curve the ECB is. So I think that… My opinion is that they’re the next big one to actually [inaudible 00:38:20]

Preston Pysh (00:38:19):

I agree with you. Greg, what do you think?

Greg Foss (00:38:23):

I can’t argue with that because if it wasn’t for the Germany, you remember when in 2012, the acronym PIGS. So Portugal, Italy, Greece, and Spain, all of those guys would be gone right now, except that they are under the protection of Germany. And the European Central Bank Lagarde famously said, “We will do whatever it takes.” Right.

Preston Pysh (00:38:47):

I remember that. I remember that.

Greg Foss (00:38:49):

And that was a crazy thing. But can I take a step back in one stat that I wanted to point out that… So I was in South Dakota this weekend. Heck, what a great state! All right. And I was there with Eric Yakes. Do you know Eric, Preston?

Sebastian Bunney (00:39:03):

The seventh property book?

Greg Foss (00:39:04):

Yeah.

Preston Pysh (00:39:05):

Yeah.

Greg Foss (00:39:05):

I haven’t read it yet. But Eric gave a presentation that I was very impressed with, and the stat that he said that stuck with me is that the US Treasury bonds have gone from representing 72% of global reserves down to 59% of global reserves. And people can say, “Oh, people will always buy our debt.” Perhaps, true. But you got to look at the trend, and the trend is your friend or it’s not your friend. So that 13% decrease in the representation of US Treasury bonds on the global balance sheets of central banks is a trend. Is it accelerating? Well, actually it is accelerating, but I don’t want to go into that level. What I want to point out is Japan has been a net seller of US Treasury bonds because their interest rate parity calculation does not allow them to hedge US Treasury holdings using the cross rate for the yen versus the dollar back to yen at an efficient rate. So it’s more easy-

Jason Sansone (00:40:20):

Can we translate when you said there just for a second because I think its-

Greg Foss (00:40:23):

No, no, no, because we don’t need to do it right now. The point is this. I love what you’re trying to do, Jason, but don’t overthink this, 72% down to 59% is the number I want people to focus on. Japan is a net seller. We don’t have to explain why they are. They are just a net seller. As you go down, who has to pick up that slack, that’s quantitative printing by the Federal Reserve, that is why we have QE infinity. One more shout-out to our beautiful Bitcoin community and the work that Luke Groman has done on this subject. Okay, Preston?

Preston Pysh (00:41:05):

Yeah.

Greg Foss (00:41:05):

I was on a worldwide tour. I felt like a rock band. I was in Dallas, not because I’m a rock band, just because I’m lucky enough to listen and I was at the Mark Moss conference with James Lavish in Dallas. The presentation that blew me away was Luke Roman’s analysis that absolutely rocked the world from a math perspective. As you know, I love mathematics.

Jason Sansone (00:41:28):

Well, we know.

Greg Foss (00:41:31):

He basically tells us why it is mathematically impossible for the USA not to continue printing money forever. He laid it out as beautifully as I could, but the big picture for people, Jason, for surgeons and people that like big numbers, 72% down to 59% and it’s going lower people because that’s the way math works and [inaudible 00:41:58]

Jason Sansone (00:41:59):

Yes. There’s a lot to unpack there, I think, and what you’re talking about is with the yields on sovereign debt so low on the US Treasuries, when you have to then buy a contract to hedge your foreign exchange exposure. Your yield either goes de minimis or it becomes negative. What you’re speaking about is, it relates to the yen and foreign nations buying our debt. When the yields are so low, you can’t hedge the currency risk because it becomes a negative yield.

Greg Foss (00:42:31):

I’ll throw out one that is not in the calculations of most economists. And that is the fact that the USA can freeze reserves of foreign nations that are holding US Treasuries. If they don’t like the way those foreign nations are behaving. So like-

Jason Sansone (00:42:46):

What’s your point?

James Lavish (00:42:48):

Or block payments.

Greg Foss (00:42:49):

Exactly. That’s what I said, so there you go. You’re [inaudible 00:42:53] default.

James Lavish (00:42:53):

[inaudible 00:42:53] to force [inaudible 00:42:54] to default.

Preston Pysh (00:42:55):

Exactly.

Greg Foss (00:42:55):

These are all things-

Jason Sansone (00:42:57):

In Luke’s big point, which is completely brilliant and everybody should read Luke Roman. But his point is, the rest of the world does not want to use US Treasuries as their reserve assets for obvious reasons, the least of which is they can be sanctioned. They’re holding a debasing asset that over time we’ll lose [inaudible 00:43:20] power. I mean, there’s all these reasons, geopolitical and financial in nature, and so, to your point, the world’s been dis-hoarding of US Treasuries for quite some time. And what is… Like you’re saying 72% to 59%, where does that end up? It ends up with fully reserved debt on our own balance sheet.

James Lavish (00:43:38):

Exactly.

Preston Pysh (00:43:39):

I think you’re finally getting the moment where the fixed income community is, they can do the math, they’re looking at the trend and they’re saying, “I can do that math too,” of where this looks like this is going and you’re having an awakening. And they’re starting to piece it together and they’re starting to say, “This is looking like a really ugly baby from a global perspective of all the fixed income on the planet when they’re looking at these inflation prints that are not going away and they don’t appear like they’re going to get any better anytime soon. And then when they’re looking at the reaction that they’re expecting out of every central banker on the planet, they’re saying “My God, if that was their last response and they’re probably going to have to double down on whatever that last response was, I can only imagine what it is I’m holding right now?”

James Lavish (00:44:29):

The next response is they don’t have a choice. They are going to have to decide to allow the natural inflation rate to gravitate upwards to 3.5% to 4.5%. They just don’t have a… They’re not going to be able to keep it at 2%. So where does it go from there? Because now if the natural is at 4% or 5%, then where does it go from there? So a couple cycles from now, it could be-

Preston Pysh (00:44:54):

People thinking that this is like 1981, I think, are grossly mistaken.

Jason Sansone (00:44:59):

Preston, can I ask a question from the financial outsider perspective?

Preston Pysh (00:45:04):

Yeah. Yeah.

Jason Sansone (00:45:04):

Which I think is on a lot of people’s minds, because we talk about this concept of the whole system unraveling and the fixed income market really getting impaired. For the three financial insiders on the call, if you wouldn’t mind kind of laying out, what kind of a timeline is this? Because my impression on Twitter is people think it’s going to happen next Wednesday. And then, when it doesn’t happen, they’re like, “Well, that’s it,” [inaudible 00:45:30]

Preston Pysh (00:45:30):

Greg and I, I think, see this a little bit differently. I’m kind of curious how James sees it. So I think it’s a faster timeline. Greg seems to think it’s a going to be a little bit slower and kind of work its way out, but let’s hear what James thinks.

James Lavish (00:45:43):

I think it’s going to be… I don’t think it’s as fast as people… And maybe it’s because I’m hopeful, but [inaudible 00:45:49] it’s not because if it’s super fast, it’s going to be cataclysmic. It’s going to be an ugly unwinding. And so-

Preston Pysh (00:45:57):

But James, that’s mixing what you hope versus what you think is most probable.

James Lavish (00:46:04):

I know. And you have to keep an emotion out of investment, right, Preston.

Preston Pysh (00:46:08):

Yeah.

James Lavish (00:46:08):

Honestly, just looking at it and people, you would expect things to happen a lot faster than they normally do, especially with currencies. You heard what Greg was saying before. Debt markets move super slow, like everything’s moving in slow motion. And what we’re seeing surprises us because we’re paying attention. There are a lot of people who… This isn’t even on their radar. They have no idea how quickly rates have moved in response and especially at the riskier tail end of it. So I think you’re going to get… My opinion is this year we’re going to step up rates. We’re going to step up a few more times, 50 BIPS another quarter, another quarter, and then they’re going to step back.

James Lavish (00:46:56):

And I think that the market is going to tank because, like I said, I think that Powell is going to… He’s going to be reactionary. And then, by the fourth quarter or first quarter next year, they’re going to pivot. I don’t think it’s going to happen in the summer. I think they’ll pivot probably sometime next year. Well, then you go back to the quantitative easing or you start stepping rates back down, whatever it is, right. 2023-2024 will start moving rates back down. But then you get right back in the same situation again, and it happens again. So I don’t think it’s going to be… But they’ll get away with it a few times and you’re going to have to have some major currencies collapse before you have the impacts of the dollar milkshake, which is a swallowing all the other currencies. It’s going to take a while, so I don’t think it’s going to be a two-to five-year process. I think it’s going to be a decade or longer personally.

Preston Pysh (00:47:56):

If you see the supply chains hold together… And this is my personal opinion, if you see the supply chains able to kind of hold things together and they’re able to massage these CPI numbers so that they stay under double digits and you don’t see people freaking out because they’re not getting baby formula and things like that, I think the longer term adjudication of all these markets can play out. I don’t necessarily think that’s the most probable. Of course, from what I hope happens, whatever Greg or James tells you, I hope it takes longer than whatever they say.

Greg Foss (00:48:34):

And respectfully, we don’t want it to happen. We actually want it to take as long as possible so we can build this parallel system. But then I also have to call out the elephant in the room, Americans don’t generally need to worry about this relative to other countries because America is so privileged. And it’s really the other countries that we have to think about as well. When the US dollars strengthening torpedoes third world lesser developed countries, those are the countries that get punished historically.

Preston Pysh (00:49:11):

This is what Ray Dalio… I’m sorry to interrupt you, Greg. This is what Ray Dalio just literally tweeted out today was basically your comment, which you just said.

Greg Foss (00:49:16):

Interesting. So, yeah. But that’s the truth. I mean, American lives from a perspective of privilege and it’s true. That’s why they are the strongest economy, the world’s strongest military. They have the Petrodollar, which allows them to print oil, but that could all end. I don’t want it to. I need to be really clear. If Canada is to survive, which I really hope Canada survives, it needs the USA to survive. The USA does not need Canada to survive though. That is the reality of the… It’ll hurt the USA, that one of their largest trading partners goes belly up, but it is not imperative that Canada survives in order for the US fiat currency to survive. I’m working hard in Canada to ensure a soft landing, if you will, or a buffering in any outcome, all paths lead to Bitcoin.

Greg Foss (00:50:07):

It’s that simple and let’s not overthink it. This is insurance. And we talked about the correlation with other risk assets. There will be a root awakening to the world when they realize that your most beautiful insurance product with no counterparty risk is actually something you’ve been shorting to try and hold it down like a beach ball underwater because your NASDAQ long tech position is underwater. It’s going to be hilarious, sort of, but there’s going to be pain on the street. The bigger picture though, Preston, I want to bring it back. Firstly, we don’t want the US dollar to fail. Secondly, there will be every single other fiat currency in the world will fail before the US dollar does. So it’s a push-pull.

Sebastian Bunney (00:50:55):

Well, I think it’s also important to note that like Bitcoin is going to benefit the economy even before we see kind of this potential fiat collapse, if it ever happens. Because I think what ends up happening is as Bitcoin grows, we have a fallback. If people have a fallback, a trustless, permission-less fallback, it keeps governments honest because over time, naturally, as Bitcoin grows, people can invest in Bitcoin or they can hold their savings in the local currency. If people feel as if their government is being dishonest, is misaligned, or is following their own self incentives, what naturally happens is they’re going to see people flood back into Bitcoin. Bitcoin’s price is going to rise, pulling power away from government. Whereas governments that are offering favorable terms and managing their fiat currency effectively, naturally their population isn’t going to exit to Bitcoin as fast. And so, I think Bitcoin is going to benefit the global economy, not just from like an individual perspective, but I think that it keeps people honest, it keeps governments honest, it keeps integrity with governments as well.

Preston Pysh (00:51:50):

Love that.

Jason Sansone (00:51:51):

[inaudible 00:51:51] to your point, I just to give a shout-out to an event that’s going on this week that I was lucky enough to attend last year, which is the Oslo Freedom Forum, Alex Gladstein’s event with the human rights foundation. You talk about groups of people that understand Bitcoin immediately. It’s these groups in emerging markets, unless they’re developed countries that do have authoritarian regimes in place and they need financial sovereignty. Like to Greg’s point, us here in North America, I mean, this is like a video game to people [inaudible 00:52:27]. It’s not very funny when you literally see the value of your entire life savings get cut in half overnight.

Preston Pysh (00:52:36):

Yeah.

Jason Sansone (00:52:36):

And so to your point, Seb, I think you’re exactly right. People are going to-

James Lavish (00:52:39):

And that’s it-

Jason Sansone (00:52:40):

… choose to save in a different currency.

James Lavish (00:52:43):

And [inaudible 00:52:44] 44 different countries visiting El Salvador this last week. Is that right? Was it 44? I mean… And Greg, you and I were talking about this earlier today. It’s not like all of them are going to go home and just say, “Oh, that was fun.” You’re going to have some of them working to adopt Bitcoin.

Preston Pysh (00:53:00):

Yeah. And there’s a template.

James Lavish (00:53:00):

As a template. Exactly. And so while you’ve got the forum going on in Oslo, you’ve got the forum going on in Switzerland at the same exact time. It’s just classic.

Preston Pysh (00:53:13):

It is.

James Lavish (00:53:13):

It is almost comical that Dallas is going out the exact same time. Right. It’s a perfect demonstration and visual that two systems are diametrically opposed and one of the system needs the other to not work, but is trying to figure out how to get that to not work yet. We all know, you can do whatever you want, it’s not going away. It’s here to stay. And so, it would be better if you’re one of those 44 countries that visit El Salvador, if you embrace it and start working it into your system.

Preston Pysh (00:53:52):

I like Sebastian’s point because, in a way, he was indirectly saying to us, it doesn’t matter if it happens faster or slower, the system is there to catch whatever the transition point is, the system is in place and ready to catch that.

Preston Pysh (00:54:09):

Hey guys, I want to transition over and talk about the Looking Glass Education platform. So my, oh, my, this thing is… This is amazing. This is for people that are wanting to look this up. We’re going to have links to it in the show notes. It’s called lookingglasseducation.com. You guys, mission here is to educate people and empower individuals to take control of their financial future. Tell us the story of how this got stood up, because you got free courses on here. People can learn from the ground up. If you’re listening to all this and it just sounds like a bunch of financial jargon, that’s part of the story here, why they built this platform? So Jason, go ahead and take it away and tell people. Was it Greg speaking in an alien language that was the [inaudible 00:54:55] for this.

Jason Sansone (00:54:56):

It was literally Greg saying, “Yeah, it’s easy. It’s just first and second order derivatives.” And I’m listening to this podcast with you, Preston, thinking nobody knows what that means, Greg. And I’m sure that I should know what it means and it really sounds like important, but I don’t understand. So I reached out to Greg on Twitter and I IM’ed I said, “Excuse me, sir, could you please suggest somewhere I could go to try to make some sense of the fixed income markets that we’re talking about?” And so he sends me his four-part paper. It was like 40 pages long and I’m thinking, “Oh, this is perfect. I’ll just read this paper. I’ll be good to go.”

Jason Sansone (00:55:32):

I understood less after this article was sent. I mean, he’s got stuff in there that’s jargon and that he’s talking about mark-to-market and insolvency. Nobody understands this stuff.

Preston Pysh (00:55:44):

Yeah.

Jason Sansone (00:55:46):

And so I reached back out to him and I said, “Would you mind setting up a Zoom call with me? Because I’m at a loss, but I think there’s a significant need in the community at large to actually make sense of this stuff” right. And so, that’s how the whole idea was born. And luckily, Greg has many talents and he’s a fantastic human being, and one of them is he connects everybody. And so-

Preston Pysh (00:56:13):

That’s true. That’s true.

Jason Sansone (00:56:14):

It is, right?

Preston Pysh (00:56:15):

Yeah.

Jason Sansone (00:56:15):

You can’t even walk through the Bitcoin conference [inaudible 00:56:19] and you can’t make it five feet without him stopping to talk to three different people. So he was able to connect all of us up and we’ve kind of taken this mission head on, which is the meet people where they’re at on their journey, everywhere from… I don’t even understand what the word fiat means to all the way up to people who are kind of at intermediate retail investor understanding, but just want to learn a bit more.

Preston Pysh (00:56:45):

I love it. So you guys, you transcribed the article where you made sense of it and put it in terms that any person could understand. Talk to us about that process.

Jason Sansone (00:56:57):

Yeah. I translated the article into plain English that most people could understand. And of course, I write this and we get it published in Bitcoin magazine and anybody can look it up in the magazine if they’d like. But so I write this article with Greg. I’m really proud of it and I send it to Seb and Daz, one of the other guys on our crew, and they say, “Yeah, this isn’t 101 level stuff, Jason. This is like 301 as opposed to 601. And to their point, they were right. And so, I want to send it over to Seb now, because Seb has been an absolute godsend for our organization. He’s 29 years old, and, trust me, he is far wiser and more mature than I was when I was 29. And he was able to create the kind of introductory foundational course with Daz, one of our partners from Australia.

Sebastian Bunney (00:57:54):

Ah, you know what? I appreciate the comment. I feel like it’s the book talking. I’m just absorbing too much information. But I think what really… I have to say, I want to reiterate that comment about Greg, like Greg is this magnet in the space and it just blows me away at his connections and the people that he knows. And so, initially, Jason reached out to Greg and then Greg reached out to another guy called Daz. And then those guys reached out to me. My background is kind of, I’m a mountain bike instructor and I’ve always loved coaching and educating people. And I find a fascination in trying to distill complex subjects down into their simplest form. And from that, after years of teaching back country, working as a mountain bike instructor all over the world, I was just like, “Man, I just feel like I can make a difference.”

Sebastian Bunney (00:58:39):

And I love making a difference in someone’s life, but I think I can make a difference on a larger scale in this love for teaching. And so, I took this passion for teaching and tried to write about the financial markets. And if I had to be a hundred percent honest, Preston, I have to say like, I’ve been watching your podcast for [inaudible 00:58:58] five or six years. It has completely… I used to be a massive Warren Buffett value investor. And I just fell deep down the rabbit hole. And I ended up writing an article called When more isn’t Better Inflation in the 21st Century discussing the issues that we’re facing with inflation for the average investor. And then it brings and ties it all back to Bitcoin. Greg, read that article and shared it, and then from then that’s kind of where the group kind of formed.

Sebastian Bunney (00:59:23):

And we really recognized like more than anything. For most of us, and I’m sure I speak for most of these guys, Like if Bitcoin’s price goes up, that’s amazing, but that’s not why we’re in it. We’re in it because at the moment there is a tear in our social fabric and we need to fix this social fabric more than anything.

Preston Pysh (00:59:40):

Yes.

Sebastian Bunney (00:59:41):

And so, we really recognize as a group, the importance of educating those who need it most. And so, our focus is making sure that our product is free to those who need it most and kind of that end user. And so, at the moment, we’re focused on really trying to release high quality jargon free, concise, simplified content that really teaches people about the macro space. Because we also recognize that there’re tons of amazing, amazing companies in the space and individuals in this space that are sharing Bitcoin content for Bitcoiners. But we recognize that Bitcoin… Bitcoin is intimidating and Bitcoin does have the MAXI market, whether you agree of it or not, but the problem is to the average user that scares a lot of people off.

Sebastian Bunney (01:00:24):

And so, we really focus on through our content, we really focus on trying to teach people how our world works and the macro environment, why do we have inflation? What is inflation? Why have we got the debt burden that we have? What are the byproducts to this wealth inequality, consumption, environmental destruction? And then, we believe that if you teach people how the world works, Bitcoin is naturally the orange light that draws you in. So we don’t need to push Bitcoin as Bitcoin maxis. We just need to explain how the world works and people will naturally get sucked into Bitcoin, because it’s the natural logical step as to what can fix a lot of the issues that we face in our economy.

James Lavish (01:01:00):

But the way that it’s laid out, you guys laid it out so well. I mean, I didn’t do this part. You guys did this part. It’s incredible that it’s a simple course, and you step through it module by module and it builds on itself. It makes it so easy to do. You could do a course for just a few minutes or a module for a few minutes or you could burn through it over a weekend, whatever it is. You could just dive in and go deeper and deeper through those different modules. And in the definitions of some of the things that they talk about or we put in there and dive even deeper into subjects that are within there, if you want, but they did an amazing job. I mean, it’s absolutely incredible.

Preston Pysh (01:01:41):

And this is free. For people listening, this is all free. There’s nothing you got to pay for. This is something that if you’re listening to this conversation, you’re wanting to get a good foundation, go to the website. Just click on start course and start taking the course, it’s free. Guys [inaudible 01:01:59]

Sebastian Bunney (01:01:58):

I was going to mention one quick thing.

Preston Pysh (01:02:01):

Yeah.

Sebastian Bunney (01:02:01):

Just for a little bit of clarity for those that just listen to kind of what James was saying. I think it’s important to note what is our offering at the moment. At the moment, if you go to our website, we kind of have two offerings. We have the course, which is for the average Joe, the wage earner, the person who’s trying to explore the issues we face and they don’t even know where to start. And so the course, it steps through what is money to start. Well, it’s time and energy, and then, we explain all of this stuff about what money is. Now, once someone understands what money is, we go through the evolution of money. How do we get to where we are today? So we go through barter. We go through gold. We go through paper backed gold. And then, we get eventually to fiat. We even include central bank digital currencies.

Sebastian Bunney (01:02:40):

And then, from there, that sets the basis for understanding our inflation and debt issues, and then, it looks at what are our options with this? We’ve got gold, we’ve got bonds, we’ve got equities, we’ve got Bitcoin. What are the pros and cons to each of these? Because we really… We want people to understand that we are not just pushing this multi-level marketing Ponzi. Like when you understand the issues we’re facing, Bitcoin makes logical sense, and for everything we’ve talked about in the macro side of things. So that’s the core side of things, and then we have the deep dives. In the deep dives, we have James’s absolutely phenomenal… If you’re looking for more of a newsletter, he’s got the informationist, and so we post up James’s informationist newsletter and those are kind of the deep dives into specific little subjects and they’re each week.

Sebastian Bunney (01:03:23):

And then, we also have Greg and I’s article. We’ve got Jason’s article. We’ve Greg. We’ve got other contributors as well. And these are more specific articles on a topic that someone has gone deep into. And at the moment we’re also working on a Bitcoin specific course, like how does Bitcoin work, what is miners, who are the nodes, what are the BIPS, Bitcoin improvement proposals, things like that.

Sebastian Bunney (01:03:43):

And then, our biggest goal right now is we recognize… And this is an issue throughout the whole space, we recognize if we want Bitcoin to become mainstream and benefit the world, we need to get in front of the people that don’t know about Bitcoin. They don’t even know that we have issues in the economy. They don’t even know the questions to ask. And so we are really focused right now on building out our course into educational curriculum for schools. And so, we are partnering with people in Madera, we’re partnering with people in Columbia and El Salvador, and we’re really trying to focus on pushing education because if we can get into the schools, that’s where we can start to change the next generation, so they know how to stand up when there are issues in the economy and they know how to protect themselves and their families for the issues that we currently face.

Jason Sansone (01:04:27):

I think you’re precisely right and eloquent as ever. And I think what our core thesis is that really adoption is a function of education. It’s a function of once you see these things and you actually understand the way the world works. As Seb was saying, your conclusion will be Bitcoin. We don’t have to actually jam that down your throat. It just becomes a natural progression of how you understand things. The other group that we’re kind of focused on as well is everybody’s been in this situation. You’re at a dinner party or you’re out hanging with your friends, whatever, and somebody who doesn’t know anything about Bitcoin asks you because they’ve heard that you are interested in this internet money, whatever. And I always think of kind of that Mike Tyson’s quote, which is, “Everybody’s got a plan until they get punched in the face.”

Jason Sansone (01:05:17):

You say, “Yeah, the Bitcoin’s great. It’s an inflation hedge,” and then your buddy says, “Well, what’s an inflation hedge?” I don’t know. I mean, the fact is if you have some understanding of how this works, even at a basic level and you can speak intelligently about it for five minutes, three minutes even, and you can describe what the Federal Reserve is and what inflation is and what fiat is and what… If you can actually have an intelligent conversation, suddenly your message is heard by that person, and they think, “Oh, okay, there may be something to this. It’s not just some [inaudible 01:05:51] digital asset that people trade and have fun with. So it’s kind of aimed at all those groups of people as a way to really ultimately spread the adoption of Bitcoin from a grassroots organic level.

Preston Pysh (01:06:05):

So guys, we have a very generous audience and for some of them, they’re going to go through the course, they’re going to learn a ton. And for others, they already know a lot of this stuff, and they’re hearing your story and they’re saying, “What can I do to help?” And so, what would help you guys the most? And if the answer is donations, if the answer is we need people from other countries to volunteer, if we need… Whatever that is, feel very free to be blunt about it, because I think most people listening to this show are just very straightforward type individuals, and if you say that X is what I need, they’re going to reach out to you and they’re going to give you X. So what is that [inaudible 01:06:51]

Sebastian Bunney (01:06:53):

We fully recognize that, when it comes to donations, we’re setting up a donation section to the page, but more than anything, like we’ve really, really recognize that the educational space is so convoluted globally. And so, whether you’re in the States, whether you’re in an individual state of the States, whether you’re in Canada, whether you’re in a developing country, we really any guidance whatsoever or if anyone has any feedback when it comes to helping us reach out to school boards how to structure this educational content. Because more than anything, if we can get into the schools, we can target thousands, tens of thousands of people. We’re no longer targeting an article with a few hundred, a few thousand people. Well, this is going to change face of… As I mentioned earlier, kind of the social fabric.

Sebastian Bunney (01:07:34):

And so, I think it is so important if we really appreciate any help whatsoever, any insight into education, any insight into the educational space. And on top of that, on our website, if you take the course, if you read any of our deep dives, we are always open to feedback. Because in the end, we want to make sure that the Looking Glass is as beneficial as we can be to the general populace. Because more than anything, we believe that Bitcoin can make a difference in this world. And it is such a powerful technology, and we just need people to understand the issues that we’re facing in our economy.

Greg Foss (01:08:08):

Well, Preston, though, one thing that I need to point out, and this is a reflection of me when I say this. We don’t need any more fat old white guys though. We need and we have a graciously, I shouldn’t say graciously, luckily met a young lady from Columbia, Dahlia Pratt, who is involved in the education system in El Salvador, and it’s called my first Bitcoin. I’m not sure if you’re familiar with that initiative in El Salvador. [inaudible 01:08:37] Bitcoin, and they are trying to build a school system and they’re seeing results already. They’re succeeding in getting the kids off the streets or at least giving them an alternative to going when they’re 15 and 16 years old to work with the gangs. And I’m really proud to say that our platform has donated already $40,000 USD to the education system in El Salvador.

Greg Foss (01:09:02):

And it’s because of having a conduit like Dahlia, who we trust. She’s part of our team. She’s obviously Spanish speaking, very, very advantageous for us to have boots on the ground. And we’re proud to say that those donations that anybody funneled through us, perhaps we could be a conduit to furthering the efforts because their budget is bigger than $40,000. It’s quite substantial, but [inaudible 01:09:33] starts a program down there, but it’s like everything. It comes at you in a tidal wave and then they don’t think about, well, how are we going to actually implement this in the schools? Because if they don’t have school, physical school houses to teach the students, then it falls on deaf ears a little bit. So we’re really proud to be part of that and a shout-out to Dahlia and her desire reaching out to us.

Greg Foss (01:10:00):

So we can’t be all things to all people, but one of the things that I was really proud to be, I actually was a reader of a high school kid’s thesis in Florida that was on Bitcoin. And I [inaudible 01:10:13] a 45-minute dissertation of his thesis, and Seb took it upon himself and said, “This is such a great thesis. We’re going to publish it on our website as well.” So it comes at you in all different ways. Preston, it’s a thing of beauty. I often say that the Bitcoin community… Having worked on Wall Street where 99.9% of the people are takers, it’s so great to be involved in a Bitcoin community where 85% of them are givers and the other 15, that aren’t quite givers, they’re not nearly as bad as the Wall Street takers. They might be a little toxic and all this. But it’s a great community, really proud to tell you that Seb has taken this and is running it with Daz. These are two young kids that are going to change the world because they have time to change the world. Right.

Greg Foss (01:11:03):

What a great thing that you guys were flattering when you said I’m a connector, I’m not a connector. Well, maybe I am. But here’s what I would say. If I’m the smartest guy in the room, we’re in big trouble, right. I like to surround myself with people in the wrong room.

Preston Pysh (01:11:16):

In the wrong room.

Greg Foss (01:11:17):

Yeah, yeah, yeah. I love to surround myself with people that are really smart and really motivated in different ways, and that’s what this group brings to the table.

Jason Sansone (01:11:27):

Greg, and I told you this before that the world is a place right now where good human beings are in short supply, and you are a good human being and you have really pushed this initiative because you saw the value in it. I would just add two more things, Preston, as far as other people, what they can do to help. One of the things we’re going to be working on is putting together this concept of a community educator toolkit, so kind of a turnkey solution. If you go on and you want to print out whether it’s study guides or a curated list of resources or some really basic educational material, put together a Bitcoin meetup group in your community, right. Sit down with 10 people, 20 people and start explaining this stuff. Every little bit counts because that type of thing just expands the understanding and the adoption curve exponentially.

Jason Sansone (01:12:17):

And then, the only other thing I would say is that also on our radar is, we’re trying to put together some in-person instruction courses, like for folks who are kind of on the intermediate stage of the spectrum of understanding this, right? They have a vague familiarity with, let’s say, fixed income markets and equity markets and global macro, but they’re really looking to actually figure this stuff out in a granular fashion. We’re working towards putting together some in-person courses that people could attend, probably piggybacking on some of the other large conferences that occur kind of on an annualized basis.

Jason Sansone (01:13:01):

And so, we’re going to need help from some folks like you Preston in bouncing ideas of curriculum and structure of those courses off because trying to put these large macro pieces into a schematic that fits together for people, really is the key here. We need to provide a structural framework that people can understand how part A fits with part B and connects to part C. That’s what’s missing. And so, we’re going to look to people like yourself and connections with Lyn Aldens and Luke Romans and whatnot, to really help us translate this to financial outsiders and retail investors.

Sebastian Bunney (01:13:42):

I think, there’s one more thing I just want to highlight out of this and it’s not actually do with Looking Glass, but it’s more… I just think the more time you spend in this space, the more you realize that if you look at fiat system, the fiat system is this, centralized coercive product. It’s coercing people to use their product, and there’s only a handful of people at the top that control this product.

Sebastian Bunney (01:14:03):

When you look at Bitcoin, you look at this passion based decentralized project, there are people, millions of people, including all of us that have left our jobs or dedicating immense amount of time out of our free time and passion for this thing, because we want to truly just help. And this is where I believe that in the end, the truth will prevail. We’re going to have a rocky road in between. But I think in the long term, I think that when you’ve got millions of people globally that are here just to help because they want to try and do something for the betterment of society and the economy, that is just phenomenal. When you look at the coercive system, it does not incentivize that. It incentivize everyone for themselves and everyone just trying to build as much of a safety net as they can because the economy’s kind of collapsing.

Preston Pysh (01:14:46):

It’s all the white blood cells eating the parasites. Right, Jason?

Sebastian Bunney (01:14:49):

A hundred percent.

Jason Sansone (01:14:53):

Exactly. And here we go into COVID.

Preston Pysh (01:14:53):

Yeah. Guys, this was a blast. We’re going to have links to all of this in the show notes, I’m going to have links to all your Twitter feeds, so if people do want to reach out to you directly, they can do that. If you go to the lookingglasseducation.com website, which we’re going to have a link to, if you go to the bottom, if you scroll down to the bottom, there’s a tab or a button there that says contact us. So if anybody’s listening to this and they want to provide resourcing or just kind of answer their call to action there that they were highlighting at the end of the show, please, I tell you, go to the website, reach out to these guys, help them out. When you see the website, you’re going to see how quality this thing is and how awesome their course is.

Preston Pysh (01:15:39):

And for people just listening to this and saying, “Wow, I don’t really know all that stuff that I heard at the beginning, but I would really like to try to understand it,” go to the website. It will help you understand it. They have this thing all laid out. The architecture’s awesome. I’m excited to hear that you guys are even looking to expand that architecture, and how people can learn to kind of wrap their heads over this behemoth of information that’s out there that you really have to wrap your head around to fully grasp what it is we’re truly talking about here. I’m very excited about this platform. I’m very excited about this interview. And thank you guys so much for making time to come on the show today.

Sebastian Bunney (01:16:17):

No, and I think more than anything I just want to say, and I know you’ve probably been told a thousand times, but, Preston, I think the energy and what you guys do with this podcast and your other podcast, you guys have educated millions of people. You guys are one of the biggest, biggest people like influences in the space. And I as well as many others including Daz on this, we really, really value everything you bring to the community. It’s phenomenal.

Preston Pysh (01:16:41):

Thank you, Seb. [inaudible 01:16:42].

James Lavish (01:16:41):

Absolutely.

Jason Sansone (01:16:42):

I can tell you, I didn’t buy any Bitcoin until… I had never even thought to look into it until you split off and started doing the Bitcoin part. When you had that first episode with Breedlove and I was like, “Oh, okay. This is kind of a big deal. This is different,” and the only other exposure I’d had was 50 cents got paid in Bitcoin for some rap concert I gave eight years prior and I thought I don’t know that I want to be involved in this.

Preston Pysh (01:17:10):

And that’s the challenge. That’s why the education is so important because there’s so many tangents people can take in this space and so much noise and confusion that it’s really, truly hard to keep it all straight. And who do you trust?

Jason Sansone (01:17:31):

Preston.

Preston Pysh (01:17:31):

Guys, it’s crazy.

Greg Foss (01:17:32):

Yeah, but here’s the truth. If they taught this stuff in high school, no one would ever deposit their money in the banking system-

Preston Pysh (01:17:40):

No.

Greg Foss (01:17:41):

… and they couldn’t continue the fiat Ponzi, if you will. Now, again, I don’t want this Ponzi to fail. It is a reality though, and it will fail over time. What we are teaching is combined hundreds of years of experience, James and myself together, we have 60 years of experience managing money and managing risk. That’s a lot of experience. It’s… God bless the maxis that are 24 years old, but the math doesn’t work. If you’re only 24, unless you’ve been managing money since you were negative years old, James and I have more experience than you, and we can bring this to the platform, not because we’re smarter. That’s not what we’re saying. Please understand. We’re not saying we’re smarter. What we are trying to say is this, these are some considerations you will not get from local education because they do not want you to understand this.

Greg Foss (01:18:41):

And that’s again a part of our giving community, not just this platform but our giving. Seb Bunney is 29 years old. Jason said, he’s got way more character than Jason had when he was 29. I’m going to go out on a limb and say, he’s got way more character than I’ll ever have in my life and I’m 58. So this is what I want to put. I want to back the horses that are going to win the race. And I think James says the same thing. We are pretty simple people. We know what we know and we know what we don’t know. And God forbid, I should ever try and put together a website, that would be the end of any education platform I was able to put together. But there you go, you get the young kids, you bring this together, it creates momentum. And I will say, if it wasn’t clear enough, our friend Daz [inaudible 01:19:29] in Northern Australia, who is a huge contributor to our platform and with all due respect to my other partners, probably the second most important person on the platform behind Seb. Preston, He basically said that he needed me to kiss you on stage to convey his love for you. So I’m kissing you publicly on behalf of Daz [inaudible 01:19:49].

Preston Pysh (01:19:49):

Oh my Lord.

Greg Foss (01:19:50):

Okay, buddy. And thank you for everything.

Preston Pysh (01:19:51):

You guys are embarrassing me here.

Greg Foss (01:19:53):

No, don’t be embarrassed because… Look, you got to take praise where praises do, and this he’s a guy that has taken it. He said the very same thing. He would not be where he is if it wasn’t for listening to your education process. So on behalf of Daz and Greg Foss from Canada, an Aussie and a Canadian, and then Seb who’s a transplanted Canadian, but [inaudible 01:20:15] origin. Thank you, buddy. I mean, this is good. This will get out there in front of the people. That’s all we want to do. Because it’s going to be translated into Portuguese, because it’s going to be translated into Spanish, we know that all the downloads that have already happened after a few short months, we know that the momentum is there and that we have a quality product.

Preston Pysh (01:20:37):

Guys. Thank you for that. You didn’t have to say. Hey, this was a blast.

Greg Foss (01:20:42):

All right, buddy.

Preston Pysh (01:20:43):

Thank you, [inaudible 01:20:44].

Sebastian Bunney (01:20:44):

Thank you, guys.

Greg Foss (01:20:46):

Goodnight, everyone. Great work. Great work, boys.

Preston Pysh (01:20:47):

If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use, just search for we study billionaires, the Bitcoin specific shows come out every Wednesday and I’d love to have you as a regular listener. If you enjoyed the show or you learn something new or you found it valuable, if you can leave a review, we would really appreciate that. And it’s something that helps others find the interview in the search algorithm. So anything you can do to help out with a review, we would just greatly appreciate. And with that, thanks for listening. And I’ll catch you again next week.

Outro (01:21:20):

Thank you for listening to TIP. To access our show notes, courses or forums, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decisions, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permissions must be granted before syndication or rebroadcasting.

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