EconVersations: Lessons from the FTX Collapse. (episode 208)

Dr. Dan Sutter, of the Manuel Johnson Center for Political Economy, hosts EconVersations, a program that explores the role of free markets in promoting prosperity through conversations with Manuel Johnson Center faculty and guests. In this episode, Dr. Sutter interviews Peter Earle. as they discuss "Lessons from the FTX Collapse."

Episode Transcript

(00:00):
The opinions expressed on
this programrepresent the viewpoints
of individual authorsor contributors,
and do not necessarily reflectthose of Troy University.
This is E Conversations,
a joint production of JoyTrojan Vision and Emmanuel H.
Johnson Centerfor Political Economy.

(00:20):
Now here's your host, Dr.
Dan Sutter.
Hello and welcometo the Conversations.
I'm your host, Dr.
Dan Snyder of the Johnson Centerfor Political Economy at Troy
UniversityCryptocurrency Exchange, FTI.
And as founder Sam Bankman-Friedcame roaring out of nowhere
in 2018with celebrity endorsements

(00:40):
from the likes of TomBrady and Larry David
and the naming rightsto an NBA arena.
And then,just as abruptly after collapsed
and into bankruptcyin November 2022,
is this what we should expectfrom a cryptocurrency firm?
Sinceafter all, cryptocurrencies
are ultimatelynothing more than computer code.
As a tale of greed,the narrative

(01:01):
seems a little misplacedbecause Mr.
Bankman-Fried was a vocalproponent of effective altruism
who claimed he was making moneyjust to give it away.
What lessons does a collapseof FTC's hold and just
what exactly is a cryptocurrencyexchange after all?
Joining me on Conversationstoday is a regular guest, Mr.
Peter Earle,

(01:22):
an economist with the AmericanInstitute for Economic Research.
Mr. Earle studied engineeringat the US Military Academy
and then earned graduate degreesin economics and finance
and worked in financefor 20 years before joining air.
So I often turn to Pete
for insight
and work on events in the worldof finance and commodities.
Welcome back to the show, Pete.

(01:44):
Great to be again.
Well,let's just start with a little
bit of history hereso that people know exactly
who might have
just heard glancinglyor offhand about aftershocks.
Tell us a little bitabout the company and its,
I guess, very first very famous
founder and now a sort ofinfamous founder,

(02:06):
Sam Bankman-Fried.
Sure.
So all of this starts withI mean,
with a hedge fund calledAlameda Research,
which was formed in 2017by a number of traders, analysts
who left an obscure hedge fundcalled Jane Street Elevator's
involvement in crypto startedwith a focus on arbitrage.

(02:27):
In this case, Sam Bankman-Friedand a few of his associates
were focusing on arbitragein Bitcoin, which means looking
at the very same Bitcoinin different markets
at different prices.
If you can trade them
at different prices and as longas your clearing costs and your
foreign exchange conversions aretoo high, you can make money.

(02:47):
So they got very good at that.
And then over timethey purchased the assets
of a handfulof other crypto firms.
And at one point they decidedto start an exchange.
FDX followedin May or June of 2019,
and then with a seriesof acquisitions
and some venture
capital investments, grewto be to roughly that valued

(03:08):
at about $32billion in January of 2022.
And so
let's talk a little bit here.
Cryptocurrency.
So let's remind our viewers,
as you might have heard ofBitcoin, we've talked about
had some shows on Bitcoinbefore.
But let's be clear, like whatexactly is a cryptocurrency?
And then like,what would exactly
a cryptocurrency exchangebe involved with?

(03:31):
Sure.
So our cryptocurrency isessentially a digital currency.
But what makes it different
than many othersis that the transactions
and are recordedin a decentralized,
encrypted formatcalled a public blockchain.
What that meansis that there are many, many
remote firms that are basicallyrunning the transactions.

(03:52):
They're called miners,and it's very hard to shut down
because it'sbecause there's many different
decentralized servers,whether they're owned by people
or by universities.
They're taking partin recording those transactions.
And then Bitcoin can serveas sort of a medium of exchange,
a way for peopleto make make payments

(04:13):
to each other where their nextdoor or across the globe, right?
Yeah.
Bitcoin functions essentiallyas a medium of exchange,
which is of courseone of the functions of money.
The other store of valueand unit of account.
It doesn't especially storevalue. It doesn't do very well.
Unit of account would takea very long time to do.
But there are now there
there are thousands,probably tens of thousands

(04:33):
of other cryptocurrency,some of which are
cryptocurrenciesby that strict definition,
some of which are mere tokens.
And the the crypto environment,
the crypto ecology is vastlymore complicated
than was even ten or 11 yearsago. Mm hmm.
And so then, well,
you mentioned that there arecryptocurrency exchange.
I mean, I guess I rememberwe are visiting once the Chicago

(04:56):
Commodities Exchange.
So what's involvedwith a cryptocurrency exchange?
Yeah.
So FDX was a financial exchangesimilar to a stock exchange.
There are many others as well,
although it's obviously virtual,
there's nophysical trading floor.
But in other words,the function is meant to be
the same as you'd findat the stock exchange
or commoditiesexchange options exchange.

(05:17):
That's a locationwhere individuals can buy
and sell cryptocurrenciesand other instruments.
But what'swhat's different about
exchanges in the crypto world
is that most of themdouble as brokerages as well.
So in the regular world,
you would have your moneyat a brokerage
and you would say, I want to buy100 shares of Coca-Cola,
and that brokerage would bea member of the stock exchange.

(05:38):
They would do that
transaction, cash would go out,
stock would come inand go to your account.
And in many cases,these crypto exchanges
are also the brokerage firm.
So your money
and your positions are storedright at the exchange.
Okay. Now, you mentioned
that Sam
Bankman-Fried and his colleaguesgot busy,

(05:59):
started sort of like arbitrageing these different prices
of Bitcoin.
And that's an important functionin economic markets as well as
because they're sharing has
to bring those prices togetherso that you have like once
one consistent price across
different marketsfor this same commodity or same
currency.

(06:19):
Right?
Yeah, No, I mean the increasesmarket efficiency lowers costs
and it also, you know,it makes a
like so much of economics,it makes some sort of a
it makes a an inconvenientor a negative point,
a profitable one,which is those differences,
those slippage elementsthat occur between markets

(06:41):
become profitable.
So there's an incentivefor traders to go out there
and try and hammer them out,which means that the cost
for a Bitcoin in this casecould be a stock,
could be anythingelse, can be a commodity.
The cost of a Bitcoinin the U.S.
versusin Korea is at a minimum versus
where it would bewithout arbitrage,
trying to make money offof those differences.
So, so far, although I mean,

(07:02):
sort of high techor new in some different ways,
it's also a relatively familiarfunction here for
in the worldof economics and finance
and sort ofhow we're seeing a market
come into existenceand become more efficient and,
you know, ultimately helppeople make transactions better.
But then then things went,oh, you said

(07:24):
in the beginning of 2022
it was estimatedto be worth over $32 billion.
And then it all camecrashing down.
And it seems like there was,you know,
some Iguess some old fashioned miss
misdeeds going on here.
Weren't that.
Yeah, absolutely.

(07:46):
There's a number of themwe can get into.
And some of that has to do
with really one of the sourceshas to do with the FTT token,
which was essentiallythere's not a lot of equivalence
of tokens in the crypto worldin the regular securities world,
although they sort ofthey sort of emulate well,
they just went off,so they sort of emulate

(08:09):
the short term equitiesor something like that.
So after FTT was the FDX token
and the role of FTTwas not only to add to
it wasn't intended to add
to firm capital,but the original idea
was that customers who boughtFTT were kind of showing their
at a vested interest
in the exchange
and in so doing they could lowertheir transaction costs.

(08:31):
If you are a large holderor at least a substantial holder
of FTT tokens, you would tradefor a lower level.
And sort of that'salso a way of sort of
adding capital to the firmand making yourself
a more important userof the service.
So that wasthat was the initial idea.
But I want I'm taking
sort of a negative turnas the amount of FTT tokens

(08:52):
began to become
a substantial portionof the firm's overall capital.
And FTT was a that token thatyou say the FTC's themselves
put out and,and that was a part of
that was a part of this whole
situation or
scheme or depending onhow you want to put it.
I mean, I guesswhen FDX went into bankruptcy,

(09:14):
they appointed a gentlemannamed John Ray to oversee it.
And and in his earlier career,I know he supervised
the bankruptcy of Enronand and Mr.
Ray made a statementto the effect
that never in his career
he had ever seen such a failureof of corporate controls or
I think a complete and totallack of trustworthy information.

(09:36):
So although initiallyI think Sam Mr.
Sam there was trying to spinthis as a simply got caught
in some fluctuatingcurrent cryptocurrency markets.
These are have beenvery volatile.
It seems like this was
there was some just oldfashioned fraud involved here.
You know, so, so all throughout2022 as inflation began,

(10:00):
I mean, inflationreally started in early 2021.
But in early 2022,you had inflation
start to becomea lot more evident to consumers.
We had the Russian invasion ofUkraine, we had high gas prices.
And so what began happeningis all of that
on top of the factthat we had three years
of expansionary policieson the part of the Fed
lifting up asset prices,we had this huge liquidation.

(10:22):
And so while there's been a hopefor a long time
that cryptos would besort of inflation hedges
because a lot of them are out
there, supply is algorithmicallylimited.
So like gold,whose virtue you know
is that you can only pullso much out of the ground.
I mean, it was thought that
cryptocurrencieswould be an inflation hedge.
Not at all the case.
What we found
it is in a general liquidationof assets, crypto

(10:44):
gets thrown out as quicklyas everything else.
And so that 2022
you had all these cryptos
getting liquidated alongsideequities, fixed income,
other instruments and the FTTtoken was part of that.
Now if we can just expandon this a little bit
because I mean, I think that'sa fairly important point and
like with Bitcoinand other cryptocurrencies,

(11:06):
there is a computer programthat really does limit
the number of of bitcoinsthat they'll ever be
according to this program.
And like you said, it's
stored onall these different computers.
So it's very hard.
Some people claim
it's unhackable, but I mean,you have this very strict
limit on the number of bitcoinsthat there is going to be.

(11:26):
And yet you also said
they sort of got caught upin this inflationary cycle,
not because there wasany inflation in Bitcoin,
but simply
because it was one of the many,
I guess, investments that peoplewere putting their money into
As the Federal Reserveis expanding the money supply.
Is thatis that what was happening?
Yeah,I mean, by the end of 2020,

(11:48):
Bitcoinwas absolutely running at
I mean, you know,a lot of new money was created.
We're talking about cantilloneffects here, a lot of new money
going into variousfinancial markets.
And Bitcoin was one of the mainbeneficiaries of that.
But that spread soon to many,many other tokens,
many other cryptocurrencies,the whole ecology,
a whole set of tokenswere running up in price.

(12:09):
And come early 2022,there was a rush to the exits
and everythinggot thrown overboard
pretty much at the same time.
And so then
I guess if people were tryingto liquidate some of their,
their positions in these
and then that'sgoing to drive down anytime
you have a bunch of peopletrying to sell an asset that's
I guess,simple supply and demand,

(12:31):
a lot of peopletrying to sell, it's
going to drive downthe value of the assets.
Yeah, I mean, a lot of thesemarkets don't have dealers.
So basicallythe only selling you can do
is the people who are bidding.
And what happens when you havethis precipitous fall in assets.
Nobody's bidding, but,
you know, nobody's out therecatching a falling knife.
So what happens is these thingsfall until there are buyers.

(12:52):
And many timesthat takes a while.
I mean, in the case of FCXtokens, they fell well
over 80%in a short amount of time.
And that was
that was a big that was abig part of the beginning.
That was the beginningof the end really for FCX.
And it'sthere's been some reports in of
obviously we're at a pointnow where I think we still don't

(13:13):
absolutely know what happened.
So we have to go a lot on whatwe see reporting and maybe,
you know, two years from now
or five years from now,there might be a different
story on this.
We might know some more factsthat we don't
currently have now,but it certainly seemed like FTI
was manipulating the value ofof their FTT token.
And then if I understandproperly, back

(13:36):
after selling banks and otherlenders on the value of this
FTT token borrowing against it,which allowed them to sort of
like access that money,and then that that's
part of the money that hasthat has disappeared here.
Yeah.
I mean, I mean if I,
if I were to use an example,it would be like finding out

(13:57):
what manufacturer makesa, makes a
makes a particularcasino's chips
and then making themand bring them to the window
in exchange for cash.
You know,FDX really did two things.
They created a lot more tokens,
which is a symbolthat was very similar to fiat
currency,you know, central banking.
And theyalso borrowed against them.

(14:18):
And what I mean,two things happened.
First of all, those
those those FTT tokensfell precipitously in value.
But also when they
when the leadership of Binance'sso just equipped,
I need to back up for onesecond.
There's really two modelsof cryptocurrency exchanges
that were sort of vyingfor supremacy

(14:38):
in terms of regulation.
There's the exchange modelof which
was sort of the primary one.
And then there'sthe Binance model,
which is another firmthat was like a web based one,
and actually FDX and Binanceas sort of the duopoly.
The two major firms havesort of a friendly relationship.
What happened was Binanceowned a lot of FTT tokens

(14:58):
when when Binancewhen the Binance's CEO,
whose name is Jasonat the moment, I remember
when he found out that SBFand the leadership of FDX
were in Washington sort
of advocating for themselvesto be the regulatory model
and for themselves essentiallyto be the self-regulatory head.
They dumped all of their FDXtokens, all of that

(15:20):
FTT, and that really pushedthe value down even more.
And that's when that's
when thingsreached the beginnings
of a liquidity crisiswithin Alameda and within FDX.
And therewere also allegations that
Sam Bankman-Fried, I
think we would call them SBFbecause that's why he's been
referred to many timesin the media that SBF

(15:43):
had, I guess, borrowed or moved.
Some investors account moneyfrom the exchange
into his Alameda Researchhedge fund.
And I mean, that would be
that that's just not acceptableor I mean
that's just a complete and totalviolation of the rules, right.
Yeah, I mean that'sthat's as bad as it gets. So

(16:06):
it was the fall in the FTTtokens and liquidity crises
that led to the discoverythat most of the customer
funds were eitherabsconded or missing.
And so a lot of people have saidthat the FTC's collapse
is similar to Enron.
I think it's correcton a philosophical
and maybe a psychological
or media level, but, you know,huge attention grabbing events.

(16:26):
But I think it's more akinto a more obscure
crisis that occurred maybe 2013.
That's the year 2011, 2013.
That's the MF Global debacle.
Because in the MF
Global debacle, it turned outthat a very large fund
led a very large Wall Streetfirm was using customer funds
to meettheir corporate obligations.
And there's a hugeand I mean a huge prohibition

(16:48):
in financial marketson co-mingling
customer and firm funds
two basic things
Every customer's account,whether it's security or cash,
has to be kept separate.
You can't haveall customer accounts
in a giant electronic pile,essentially.
And the second thing isthat you can never,
ever as a brokerage firm,use customer funds
for any other purpose other
than, you know,if they want to wire,

(17:09):
if they want to buy something,
you can't use itto meet your bills.
You can't use it to satisfytheir obligations.
And so, you know, poor controlis definitely part of it.
But I think the senior people
absolutely knewwhat was happening.
And what I don't thinkthey knew is
I don't think they knewthey were dead in the water.
By the time
the FDX tokens were falling,there was no future for RTX.
And so now

(17:32):
SBF has now been arrestedand there's charges against him.
And and certainly it seems likefrom what's been reported
this like co-minglingor absconding of
customerfunds will clearly be illegal
and something that they will bein a lot of trouble for now.
Yeah absolutely.
No therethere is some more to this story

(17:54):
that we haven't gotten into yet,and that is,
especially in the 2022election cycle,
SBF was a major,major political donor donor.
He gave millionsand millions of dollars to
a lot of political candidates,I think over $5 million to
the President.
Biden I guess I would'vebeen back in 2020,

(18:14):
but he's been giving millionsand millions of dollars
to politicians,mostly Democrats,
although if you Republicanshave gotten some money
and then like it is on the order
of tens of millions of dollarsof donations to nonprofit.
So again, mostlyfor for progressive causes. So
that's anotherbecause this gets into this part

(18:36):
that he's SBF was talkingabout effective altruism.
So what's your take on this
this this other part of thisis he's giving out all this
money to it to politiciansand then to nonprofits.
So, so effectively, terrorism
is basically a rebrandingof basic philanthropy.

(18:57):
It suggests.
But but, but
but specifically, in the caseof effective altruism,
there's a suggestionthat there's this evidence
based process that involvescalculating
where your moneywill do the best
and then giving it away.
So it makes the biggest impact.
And of course, you mentionedthat nonprofits
say Bankman-Friedhad given a lot of money
to climate change,causes things like that.

(19:18):
But a lot of money was given,
as you said,to political campaigns.
And so it's very difficultfor me
to see that as a manifestationof effective altruism.
Those are those donationsthat he made were far more
had far more to dowith pending crypto legislation.
As I mentioned,there's really two major models
for cryptocurrencythat were being that were being

(19:39):
they're being sort of proposedin Washington.
His his idea of his firm RTX
sort ofwas the model of one of them.
So that was the basisfor spending heavily
on those individualsin Congress and regulators. And
yeah, Imean, to the extent that I mean,
there are people out therewho lost money and in FDX

(20:01):
who now know that
that their money
was not only usedin corporate purposes,
but might have been usedfor political donations
or for philanthropicgiving, that's, you know,
sort of averseto their personal,
you know, beliefs.
It's why it's one thing
if Sam Bankman-Friedmade millions of dollars
off of his firmand then did that.
But there's a good chance,in fact,

(20:21):
I think it's
probably beyonda shadow of a doubt
that he was usingactual customer funds
to promote those costs.
Yeah, because I know that Mr.
Rey is trying to goafter the politicians
who received some of this money,
presumablybecause he has some evidence
that that that money actuallybelonged to the customers.
And that's why he's tryingto get that money back
in the bankruptcy process here.

(20:45):
Before we go on to regulationand who lessons for regulation
about this, let's talk mention
a little bit about bankruptcy,the bankruptcy process here,
because after it did gobankrupt.
But, you know,
if you don't follow bankruptcy,if we don't know what's
involved legallyand financially with bankruptcy,
you might figure, well, oncewe have a firm declares
bankruptcy, that must meanthere's no money left at all.

(21:06):
But it's actuallya legal process to try to
protect all of the creditors
of a companywhere it looks like,
yeah, they are not goingto have enough money,
but it doesn't mean thatthey don't have any money, Don't
they simply don't haveenough money to pay all of their
their creditors. Right.
Yeah.
So colloquially we use the termbankruptcy synonymous

(21:27):
with, you know, insolventor out of business.
But that's not the case at all.
Bankruptcyis essentially a legal status
that the firm applies forand can be given in court
and that gives it protection
to the claims of its creditorsand will reorganizes its debts.
And, you know,
without bankruptcy,what you would have is firms
would I mean, conceivably pick
and choose the obligationsthey satisfy for those

(21:48):
they don't not pay itall that sort of thing.
And there's also a concernabout the
about the pecking orderof creditors. Right.
So secured creditors,
which owed collateral,are supposed to be paid first,
then general creditors,
then the unsecured creditorsand finally equity shareholders.
And in my experience,which is between 20 and 30 years
of actually being a trader,

(22:10):
you know, watching
what's going on on Wall Street,there's usually
nothing left for shareholderswhen that happens.
But bankruptcyis a very important part
of the rationalizationof commercial processes.
It's very important.
And so so I have is currently
it's in bankruptcyreorganization.
What will emerge? We don't know.
But at the very least,
you know, we'renow getting a clawback of funds

(22:31):
and those firms and otherswho are creditors
are getting at leastsome of what they're owed back.
Yeah.
And hopefully,you know, as this process goes
on, you know, it'squite possible Mr.
Ray's going to findsome of this money.
I suspect that
SBF has had some of ithidden in different places.
It might be kind of hardto find, but, you know,

(22:54):
if he can uncover any of it,figure out where any of it is,
I guess that
money could eventually go back
to some of the peoplewho lost their money here.
Yeah, Yeah, that's the idea.
I mean, we do know that
SBF bought housesand cars for people,
which is really unseemly.
So some of that will be clawedback in the process
of bankruptcy. You
know,

(23:15):
we wantto thank I want to turn now
to some of the lessonsfor regulation about this.
And one of the thingsthat happened
almost immediatelyafter the scandal started
breaking was the Securitiesand Exchange Committee
Commission and the CommoditiesFutures Trading Commission
announced that they were goingto investigate after acts.
And, you know, one questionwould have been, well,

(23:37):
perhaps they should have,you know,
where were theyfor the last several years
before this,
when they might have raisedsome red flags and maybe saved
some of the people
who had their money investedin, maybe could have saved them
their moneybefore it got absconded with.
So, you know,what do you think about
should they have

(23:57):
should the SEC and othershave acted earlier and like,
why weren't they?
So so
we do know now it came outafter the FDX bankruptcy that
that there was an investigationin at one point in the spring.
Now, those investigationsusually progress very slowly,
and we don't know exactlywhat they're investigating.
But I think the bigger answeris that the actual headquarters,

(24:19):
the holding company of FDX,
was a Bahamabase, was was incorporated
in Antiguaand based in the Bahamas.
And that's essentially outsidethe jurisdiction of U.S.
regulators.
The U.S. subsidiary wasn'tbeing investigated.
Again,
I don't know how much we knowabout that, but there's also
the fact that the firm was superhigh profile in Washington.
You know, when you have a a firmthat's doing Super Bowl ads

(24:41):
and they put their nameson an NBA arena
and they have a $30billion valuation,
they're having cocktailmeet and greets in the U.S.
capital.
The fact isthat they are really not
setting off many alarm bells.
There's this ideathat they couldn't possibly
be either stealingmoney or doing something.
You know, that that
that's that below boardwhile being that high profile.

(25:03):
But and andand their political donations
don't hurtbut that was the case.
I think they were hidingin plain sight as it were.
Yeah. Yeah.
Because I it certainly
you know I knowSBF was appearing on on these
very high profile panelslike with Bill Clinton
and other than some of the mostdistinguished

(25:24):
people across the country,across the world, really, and
and was even appearingat some events after the
bankruptcy bill beforehe was arrested, which I think
he was arrested about a monthor so after the
the implosion there.
Yeah, it was astounding.
I mean, he washe was on some New York Times

(25:45):
panel,you know, weeks afterwards.
And there were people saying,this guy, you know,
there were many peoplewho were common
people who had madea lot of money in crypto.
And now they're,
you know, from ragsto riches to rags and five years
they've lost everything.
So seeing him
seemingly escapethe law, escape from percussions

(26:05):
for some number of weeksafterwards
really left a bad tastein many people's mouths.
But I mean,
there's also this side of itthat there is a legal process.
And, you know,we are pursuing indictments
or whateveryou do have to jump through.
So I'm sure the legal processthere and I think.
Right, you know,
there were some parallelsor some people were talking

(26:27):
about the case of Bernie Madoff,who had run a fraudulent hedge
fund that blew up.
But I believe in his casewhen when he was questioned
about it, he actually admitted,yeah, well, yeah,
this was a fraud.
And of course, that makes it
very easy to thengo ahead and arrest him
because he just likesort of admitted, you know, what
he was doing.

(26:49):
There's some
parallelsbetween Madoff and SBF and FDX.
I mean, so SBF and theand the situation was not,
as I understand it, at the point
where it collapseda Ponzi scheme.
They hadn't read to ityet, gotten to the point
where they weresoliciting donations
and paying out,you know, deposit
crack peopleon a question of money.
But there was very much aclawback situation in the Madoff

(27:11):
situation in the Madoff case,because just before
the $50 billion Madoffscam was discovered,
he had paid outlarge bonuses to people.
A number of people had been
very fortunate to askfor their money back and got it.
And the bankruptcy trustee said,we cannot allow that.
We're going to take that moneyback and clawed back
and we're going to apportion it,

(27:32):
you know, more or more equallyamong the claimants.
So that was that.
And that way, although the namewas used a lot in that way,
the after and the Madoffscandals were similar.
Thoughwe've already mentioned that.
You mentioned how after,you know, a year or so long
before the blow up happenedwas trying to pursue favorable

(27:54):
regulation for its modelof a cryptocurrency exchange?
And is that sortof like a bigger lesson here
for regulation going forward?
That many times, you know,we think you're going to have
regulationthat's going to benefit
consumers,but the people who write
the regulationsare really sort of the insiders.
And it's it's
it's almost it's alwaysgoing to be an insider game.

(28:18):
Yeah, I think I think anybodywho thought I mean so there's a
there's a very strong strainwithin cryptocurrency
fandomor cryptocurrency proponents
of almost utopianism.
And what we saw hereis that at some level,
whatever cryptocurrenciesrepresent,
you know, or stateless money,whatever,
as long as thereare these businesses

(28:39):
like these large exchangesand all that sort of thing,
you're still going to havecronyism,
you're going to have rentseeking
and everything that we know fromthe more familiar businesses
going backto railroads and before that.
Yeah, well, it's
in some ways cryptocurrencyis completely brand new.
But then there's also sometimeless lessons in finance.

(29:00):
And, you know,
I guess one of the
timeless lessons in finance ispeople are always trying
to get their handson other people's money.
You know. People want people.That's right.
Well,thanks very much for coming on
and enjoying ourselvesand join us again
next time for anotherE conversations.
This has been E conversations,

(29:21):
a joint production of TroyTalking Vision and Emmanuel H.
Johnson Center for PoliticalEconomy at Troy University.