Episode #223 - Vince Lanci and What Lurks Beneath Stablecoins - Gold Goats 'n Guns Podcast

Episode Transcript
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Speaker 1 (00:20):
Hello, and welcome to the Gold Coats and Guns Podcast
for July twenty fifth, twenty twenty five. I have a
lot to talk about, and we're gonna have a lot
to talk about today because I've got Vince launch you
with me, and you know, Vince's brilliant, and I've got
a and there's a bit of a chatterbox as as
am I and we always have a great time discussing
these things together. Is episode two twenty three, and it's
been a little while because well, I went on vacation,

(00:43):
which I needed and all of that. So Vince, how
are you? What's going on? My friend?

Speaker 2 (00:48):
I'm okay, I'm lots going on, but you were on vacation,
so why don't you tell us what was going on?
Did you?

Speaker 1 (00:54):
I mean, I went up to North Carolina with the
wife and the daughter, probably the last time for I
don't know, maybe forever, that I get to actually do
a vacation of any sorts with with my daughter because
she's now an adult with gamefully employed and rapidly while
she's rapidly approaching adulthood. I think the last night we
were chatting about it, like you're approaching adulthood, asymptotically and

(01:16):
she was like, yeah, that's about right, dad. So it
was just funny. But yes, But we went up to
North Carolina. We did some hiking, you know, we visited
the property that we're developing up a Tennessee for the move,
and visited some friends and mostly did exactly what we
do at home, except we did it somewhere else. I
played a lot of World of Warcrap. The wife watched
a lot of videos on YouTube, and the daughter did

(01:39):
a lot of and played a lot of Slave the Spire,
and you know, we ate a lot of mediacre play.
She played, she played, she was playing Slave the Spire.
Actually she got back into playing Warkcrafts with us as well,
which was fun. So and just my daughter is a
gamer like your dad and drives my mom, which drives
her mom nuts. But it is what it is, because

(02:00):
you know, the wife likes the garden and all this
other stuff, and you know her daughter and her husband,
don't you know what I mean. So it is what
it is. But we got to find I finally got
a chance to really see the property that we have
we're developing up in a, Tennessee. Since Camille that got
all the work done and over. So the last year
while I was working and I went looked at it
one uh, they just freaking killed it. Like it's it's

(02:23):
gonna be really nice. I can't wait to, like, you know,
get that process started. So with that said, a little refreshed.

Speaker 2 (02:30):
Gratulations when you break around graduations, when you break ground.

Speaker 1 (02:33):
So yeah, yeah, it's it's it's uh, it's you know,
we have a two stage plan now in place that
I'm really going to enjoy and I we probably will
be up there in within six to eight weeks in
any ways, so that'll be good because I'm getting really
tired of having bad internet and where I'm going to

(02:54):
I have STARLINGK, which is fine and then no no,
no offense on musk. But you know, yesterday we had
a big outage and it's like everything is just always
so tenuous because the DSL is flaky and starling.

Speaker 2 (03:06):
Oh my god, you have a DSL. I have like
a ten inch floppier.

Speaker 1 (03:11):
Two Yeah, no, I don't know eight inch floppies, dude,
come on, or at least in the nineteen eighties.

Speaker 2 (03:18):
Yours is eight inches minus ten.

Speaker 1 (03:20):
So yeah, I remember ten inch floppy drives, dude. So
all right, enough of that stuff. Let's uh but where
I'm going up to Tennessee, I get to move farther
away from people, but I'll have fiber. It'll be gig up,
keep big down fiber. I can't wait. So that's pretty fun. Yeah, great,
all right, So what are we talking about today?

Speaker 2 (03:38):
Then we're gonna We're gonna talk about stable coins. I'm
in the middle, luckily, luckily for you. I'm in the
middle of writing a piece for Goal Fix, and uh,
I just finished all the research and I have a
lot of bullet points and a lot of things to
talk about, and you know, as I'm going through it,

(04:00):
I'm kind of chuckling to myself on certain areas about
the dollar, about the Euro, about the risks to them
and the risks to other countries. And I said, you
know what, this is a good topic to talk to
Tom about. And I think sharing, as I learned, is
probably the best thing to do. So I think we're
going to try and we're going to try and lay

(04:21):
out the pros and cons of stable coins and why
despite everything, they're going to fucking happen anyway.

Speaker 1 (04:28):
Yeah, well they are happening. We got the genius all
the bills passed for Congress, right, and you know, and
this is funny, I have a distinct feeling I know
the kind of the arc of this conversation. I'm going
to leave that to you, of course, to work through,
because you're the talent today and I get to sit
back and not as you as you would put it,
not have to work that hard today, which I do appreciate.

(04:52):
But all I'm going to really say is in teeing
this up, is that this goes all the way back
to that pot cast we did about Gold arbitrage, and
in my mind and the beginnings of that that when
we first when you and I first worked out practically
in real time, that we were moving back towards mercantilism,

(05:16):
and that everything is downstream of that, and that that episode.
I don't remember the episode number. It will be in
the show notes, but it's the title is Vince Launching
and Gold is the New Black, and I think it's
episode one seventy five or something like that, but it
is what it is. It's really important to maybe go
all the way back for those of you who were
listening and listen to that one as well, because by

(05:37):
the time this is finished, like you're going to see
the whole story, I think. So where are we at
the end this point in the story? Vince take it away.

Speaker 2 (05:45):
Well, that's funny that you say, I'm not going to
go down a rabbit hole in now, but yeah, that's true.
It kind of started with I guess the theme is money, right,
the theme is money, Well.

Speaker 1 (05:54):
It's I think it's the it's the I think it's
that the fact that the financial system we recognized very
early on that the foundations of the financial system we're
going with the change, and here were the early signs
of it.

Speaker 2 (06:06):
Right right, right right, there's your reset. Right. The reset
is a process, I say a lot. So yeah, that's right. Okay.
So so just as a quick leading because you know,
gold is part of this too, and not in essential,
not a cential way, but if you're following gold closely,
you end up seeing how stable coins are necessary. Okay,
So here's like the lead in bullets, the US Treasury

(06:29):
I'm talking about to Hal, I'm talking to half of
the world. Right, So US Treasury is no longer the
safest store value due to counterparty risk. Gold is that
may not last forever, but it's the current vibe right now.
It's it's like the world is split into two is
splitting into two currencies. China is offering their currency, the yuan,

(06:53):
which is internationalizing and will be tied to gold one
way or another, golden yuwan, whoever you want to call
it off for counterparty neutrality and safety. So if you're
the US among all the other things, right, if you've
lost your safe haven status or safest haven status status

(07:15):
with half the world, uh, you must pivot to something
else to sell your product. So we used to be
the put safety right now, they all have treasuries. They're
not going to dump their treasuries tomorrow, you know your
we know right, we're going to get into that, I'm sure, right.
Saudi's just did a deal where they're going to do

(07:36):
even more treasuries, but they're going to put them in
other things. Anyway, the US is no longer the dollar
as a proxy for treasuries, so the treasuries are no
longer the safety now they're I'm not saying they're I
just want to I'm not I'm not trying to qualify myself,

(07:57):
but there there are reasons to not own treasuries and
to own gold now period right, So financialization has failed
at the counterparty level. So what And obviously the US
needs people to buy our treasuries, We need our debt
to be financed, YadA, YadA, YadA. So how do we sell?
Because that's what America is. It's a sales it's it's

(08:19):
it's it's a sell. It's an innovator that markets this
innovation as well. I think that's that's the way to
look at it. The US must pivot and make up
for the lost safe haven status by saying, screw it,
we're the upside. You want to own a pet rock,
I mean, just to use the language, you want to

(08:40):
own a pet rock that's going to give you safety.
That's fine, But don't you want more than a little
bit in something that's going to give you upside? And
so they have to pivot to like a risk on
innovation to compete. So we're the upside now, which brings
us to stable coins, right, stay of coins. We offer

(09:02):
the US strategic advantages, particularly from the perspectives of debt financing,
dollar strength, financial innovation, which I think is the leading point.
I don't even think a lot of people understand why
they're innovative. But today I do, uh, and geopolitical leverage,
which you know, it's kind of like a uh, we're

(09:25):
witnessing a you know, a dairy free milk shape. We're
witnessing like a euro free a euro dollar free milk shape.
That's what's happening now anyway. But that's it. So, I mean,
they're strategically beneficial to the US. They will break something
along the way, and uh, they're going to happen anyway.

(09:47):
That's that's how I would open, you know.

Speaker 1 (09:50):
Okay, So with that, why don't we go through a
couple of those individually? Right? And uh, I mean the
public debt financing is obvious by by wrapping by you know,
wrapping US treasuries around the US dollar stable coin, which
is getting internationalized, very obvious plague. Caitlin Long and I
have talked about it. You and I have talked about it.

(10:10):
Heather is clearly out there doing yeomen's work, internationalizing the
dollar in places that it was never capable of being
in unbanked areas of the world like South America, like Africa, YadA, YadA, dada.
That one's easy. Dollar dominance, then, by by definition, is
also easy because it's you know, it's bound up in
the same effectively the same thing. It's the financial innovation

(10:32):
and the geopolitical leverage are the interesting ones. And I
think I like you to go through those two you
know what you're thinking about those two things, Uh, those
two points directly, and we'll go from there.

Speaker 2 (10:44):
Yeah, yeah, before financial innovation and and what's the other one.

Speaker 1 (10:49):
And geopolitical leverage.

Speaker 2 (10:51):
Oh yeah, yeah, that's what we're gonna have some fun. Right,
Let me if I can just touch based on a
little bit on the dollar part. First, sure, I know
everything about the dollar thing, but uh, it's kind of
like a redollarization play right, I mean, and and it
hits two ways. One if there's a geopolitical way, which

(11:11):
we'll get to like that'll be like the dessert. But
the the thing that makes the dollar, you know, people
talk about the military, but the thing that makes the
dollar attractive, which will support stable coins, is that we
have the rule of law. And yes, we're gonna break it,
we're gonna invent it, we're gonna change what we have to,

(11:32):
but by and large, it's more stable than anything on earth.
And so a stable coin from the US, governed by
US laws is going to be more safe than many
nations own sovereign currencies period. So that's that's that's the
reason to redollarize, you know. So it's kind of like

(11:52):
a stealth dollarization, and and that's and I think that's Look,
there's one example I want to give before I move
to the actual financial innovation part, which is actually the innovation,
and that is you know, if you look, and I
know you've seen this, but when regulatory agencies in the
world get on the same page, it's the US that determines.

(12:16):
So that's I'm not trying to be arrogant about it,
but it's kind of like, do you Basil three was
an example. Okay, US says, US and Europe and whoever
else get together and they say, okay, this is we're
going to move towards. They agree to it, right, and
then the US says, parwafirm, I'm making it up. But
US says, all right, you guys launch first, let's see
how it goes, and then we'll adopt. You know, it's

(12:39):
kind of like we I mean, it happens with a
lot of things that happened with stable coins. By the way,
you know, against It was in charge. He was vehemently
enemy of crypto and stable coins, and it was Europe
that was launching deals first that they hated them, and
it was after Againstler visited them that they made their announcements.
So anyway, regulatory wise, everyone will be on the same page.

(13:04):
And so that's a reason that stable coins will be
accepted in most, if not all the world. So obviously
it's not gonna make China happy, they have Hong Kong.
It's not gonna make Rush happy, et cetera. We'll get
into that financial innovation. That's actually you know, a lot
of people talk about shit, but they don't really talk

(13:25):
about like why it's innovative. You know, there's some words
at you like a lawyer, you know, like, for example,
properly regulated stable coins improve liquidity, settlement speed, and transparency,
especially in cross border transactions. They'll say they offer programmability
and I'm reading my own script here because these are
my notes, making them ideal for new financial tools like

(13:46):
automated when you we're going to go into these because
it's interesting. They make them ideal for new financial tools
like automated escrow, yield bearing tokenized assets, which you have
to have because stable coins cannot have yield themselves. And
conditional payments, which is a fancy way of saying optionality.
So why are they better. To understand why they're better,

(14:10):
and I'm speaking for myself and people who are ludites
like me, is you have to understand how money market works.
You know, when money markets first got really popular, we all,
I all, I thought they were just like a savings account.
I got my money in a money market. I didn't
see the word I didn't pay attention to the word
fund you know, even as a fight, I was like,
all right, so when I wanted to sell, when I

(14:34):
wanted to buy a stock, I would say, just take
the money from the money market and put it in
the stock, right, No, it takes a day. What do
you need to take to day? Well, we're going to
buy the stock for you with this price, but the
funds won't. So we're going to lock you in because
we have the cross margin aspect of it. But the
money won't leave the money market for a day. Two days.

(14:54):
It was it has to be and the guys, you
know my my bank, was like, no, no, it has
to be sold for I'm like, we do the money markets.
We saw it is fucking it's I.

Speaker 1 (15:05):
Didn't know it was a fund, right, Like, it was.

Speaker 2 (15:08):
So naive it's fun. So he had to sell it.
I had to become cash. The cash had to transfer
over and then close out my borrowing for one day
for the stop. And I went, oh and and that
lesson was well learned because money markets were almost broken,
you know, uh, for a very short period of time.

(15:28):
And I'm like, oh, money market funds were broken, and
they were broken almost broken for really one reason. H
And I might be misspeaking technically here, but money market
funds are products. So the JP Morgan money market fund,
the Goldman Sachs money market fund there there. Even though

(15:53):
they're dollar based, they're products. So it's like the product
can default. Your money is fine, but you may not
get your money back right away. So they lack and
I'm using technical terminology and maybe everyonna use it wrong,
but they lack what's called a two tier system. So
if they break. If the phrase we were using then
was if the buck breaks, I remember that was like

(16:13):
that was actually I had my big one of my
biggest home runs is during that time for some reason,
because we kept lower grades to stabilize it. But anyway, uh,
the if the buck breaks you'll get your cash back.
But because there's a lack of two tiers, right, So
the tier one this is how I'm using their terminology.

(16:35):
The tier one is the backstop, the central. The reason
it's important because they look at at these guys fucking
look at everything in a hierarchy pyramid, the pop priests.
You know, it's like it's like, uh, tier one is
the backstop. That's the market maker of last resort. That's
the fee right right, the treasure right and then and

(16:58):
then the corporations can go under, but the money is guaranteed.
But it doesn't matter because you know, during the give
me an idea, like why it doesn't matter what that's
the risks. I don't want to get too the risks yet,
but it does matter. It matters because let me just
stay with the financial innovation. So before against the risks,
the innovation is you don't have to sell the stable

(17:21):
coin to buy the stock, right, stable coin buys the stock.
That's like you know, zero day clearing. That's amazing in
this day and age. Now there's all other there's many
other reasons for it to be us. Look, that's one

(17:41):
of the reasons that gets rid of becks. You know
what I mean. So, so they had to get involved
in it or or they were out. So that's that's
the financial innovation.

Speaker 1 (17:51):
Just just to be clear that everybody understands what we're
yelling with here, the money market fund you do not.
I'm going to just repeat what you said back, just
to make sure that we're clear on this, because this
is quite technical in a lot of people, including myself,
don't necessarily understand all the ins and outs of this.
So but in a money market fund, you have to
say it. You know, ten thousand dollars in a money
market fund, you don't own ten thousand dollars. You own
ten thousand dollars worth of shares in a money market fund, right,

(18:15):
which have to be sold in order to collect x
number of dollars nominally ten thousand, in order to then
utilize that money later on to for example, buy stocks. Now,
if you've got credit with your broker, your broker will
buy you the stock, lock it in today, and you know,
and everything, and Bob's your uncle. You'll be okay. You'll
get charged a couple of pennies worth of interest on

(18:35):
the timeline. The stable coin innovation is that the stable
coin does not need to be sold in order to well,
the stable coin's going to get sold to buy the stock.
Is when you buy one thing, you sell something else.
But you don't have to have that secondary transaction. It's
not a two step transaction. It's a one step transaction.
You go directly from you have ten thousand dollars with

(18:58):
the stable coins U S Dollar stable coins. You just
buy ten thousand dollars with the stock with them done right,
And it's right right, yeah, they're they in a sense.
And what you've done is you've wrapped, like the money
market fund wrapped the US T bills in a fund,
the stable coin wrapping the US treasuries, and a stable

(19:20):
coin which can be used directly to transfer be transferred
to somebody else's custodian ship directly to the broker, and
you can get you know, not T plus three in
this case is T plus three seconds, not T plus
three days settlement.

Speaker 2 (19:36):
And that and that's an innovation that makes us just exactly,
I mean, that's that's the way to say. That's an
innovation no one else has, and it would it would
really piss off China, you know, if they're trying to
come up with something that's all. It does so many
things in it. It preserves swift. Uh, what was the

(19:58):
next part that you want to talk about?

Speaker 1 (19:59):
Well, I would say it actually actually bypasses swift directly
if necessary.

Speaker 2 (20:04):
Right, But it's supportive of swift in the short term. No,
I'm it's a monster that I'll eat it eventually. I
totally see that. I totally see that. But they'll just
keep swift important by making it dollars gotta be dollars
got to be dollars's got to be US treasuries in
US stable coins, can't use Japanese government bonds in US
stable coins, and so that preserves swift. I think I

(20:24):
think it knocks out vis Inmester card first. If they
don't have their own they don't have their own answer
to it. I think that's which is it.

Speaker 1 (20:30):
Which is interesting when we're having a conversation last night
amongst me and my my some of my patrons who
I play well the warcraft with, this is a This
is gonna sound like a digression, but it's not. Actually,
it's materially important to this conversation. One of them noted
that what we're seeing in for example, in Steam, for
those viewer gamers. You know what Steam is, Yeah, a

(20:51):
gaming platform where you can buy games and you can
see people in your library. Well, Steam has been getting
pressure from an AS from Australia to delist certain games
that don't meet certain criteria, meaning meaning that what they
were doing is because they can't do that anymore in

(21:12):
the United States because we made DEI and all of
the shit illegal and you can't discriminate now, and you
can't do that, And they're trying to go outside the
system in order to get pressure in order to continue
to hold onto control of who gets to publish what
that and they're using they're using the payment rails and
probably in effect what you just said, we we figured

(21:34):
out last night was probably be MasterCard and and and
stripeing anybody else who there who's processing those payments. They're
the ones putting the pressure on, and they're using Australian
basically NGO to to do the pressure. And they're trying
to get out, they're trying to get around the work
around the the you know, the the executive order from Trump.

(21:55):
It's very interesting. Well, we had our just are the
way we described it last night. Oh look, these fucking
people won't give up. We told them, though, you can't
do this, and they're like, nope, We're going to find
a way to get around it. Like these fucking people
never stop. These fucking people, of course are dabas.

Speaker 2 (22:10):
But no sopathy has so theopathy, sociopathy doesn't doesn't listen
to reason, you know.

Speaker 1 (22:17):
No, no, no, no, it just keeps trying to figure out
a way by which to insert itself as a toll
booth operator and pull a big off of the entire
off of an unearned access to a market.

Speaker 2 (22:28):
That's that's right. I was thinking. I was thinking gatekeeper,
but tot booth operators better, right, bull.

Speaker 1 (22:32):
Booth operators absolutely the thing.

Speaker 2 (22:35):
What's the reason for the toll? Well, I mean the
game is the game is rude or it's unfair. Okay, well,
how much do we have to pay you for it
to be fair? Again?

Speaker 1 (22:44):
That's really exactly, That's exactly what it comes down to.

Speaker 2 (22:48):
You. They're won't but they're capitalists, you know.

Speaker 1 (22:51):
It's it's it's it's a get another trying to you know,
classic soft capital control kind of scenario.

Speaker 2 (22:57):
Your game is, your game is the stable coin, you know,
I mean, it's like, we're not gonna allow that because
it's you know, yeah, I get it. That's that's actually
very good.

Speaker 1 (23:07):
So all right, so that's the financial innovation part of
it now and market efficiency we figured that one out. Now,
let's talk about the geopolitical part of that, because I
think this is this sparts. This spart's fascinating. So you
get the start, and I will respond.

Speaker 2 (23:21):
Sure, well, first of all, uh, although it's not directly geopolitical.
I mean it is directly, but it's not. It's not
the part that's fun. It's a cb DC work right now.
Most of your audience knows, most of my own toes.
But CBDCs are an invasion of privacy and who wants
to give all that control to the government? And so, uh,

(23:45):
that act that went down what was the name of that? Uh,
there was, there was, There was a.

Speaker 1 (23:57):
It was the Genius Act that first that first didn't pass, right,
and then they had to insert new writers saying there
will not be a CBDC in the United States. And
then what they mean when we mean specifically around a
central bank digital currency that is programmable, that is not
necessarily a payment rail thing or you know, I always
made the distinction between a retail CBDC and a wholesale dcbd.

Speaker 2 (24:20):
Right, that's it. That's the key. That's the key, right,
that's it.

Speaker 1 (24:24):
Now, the wholesale CBDC is what we're all worried about.
The the the wholesale the retail one is the when
we're a worried about. That's the one where Christine Laguar
gets to say, you know, the pizza guess you're fat
or you're not allowed to say, or you don't get
that you don't get to have a bank account because
you called Ursula vonder Satan. Right. But the wholesale CBDC

(24:45):
is a thing for banks to communicate and move money around,
which is a fundamentally different. Okay, that's that's to try
and preserve the two channel monetary system from the central
banks to the commercial banks, from the commercial banks to
the retail and to the gonna be mine.

Speaker 2 (25:01):
And that's and that's right exactly, that's the CBDC. That's
the angle that that that I haven't processed. I mean
I've processed it, but not like that. That's very good. Yeah,
So at the at the retail level, it's not gonna
be tolerated. But you're gonna need something as good as
cbdc's to transact internationally and guess what right, so so

(25:22):
country to country, back to bank, guess what stable coin?
And and that brings us to the geopolitical ship.

Speaker 3 (25:28):
So, uh, the there's two ways that it's geopolitically uh fun,
especially if you're you're in the dollar situation.

Speaker 2 (25:43):
So the first one we kind of we kind of
touched on.

Speaker 4 (25:46):
But the Genius Act mandates that the US Genius Act
mandates that stable coins be fully backed by high quality
liquid assets like short term treasure rebills, which, by the way,
that becomes a risk later on not for the obvious reasons.

Speaker 2 (26:05):
Treasury bills reposing cash right, so call that a money
market layer that does not have to be liquidated to
buy a stock. Right that creates structural demand for US debt.
The snowballs into the geopolitical thing, right, particularly in the
short end of the curve. Now, according to the TBAC,
the Treasury Barring Advisory Committee mandated reserve holdings by stable

(26:29):
coins could absorb up to one trillion in treasury demand
by twenty twenty eight, reducing the government's debt servicing burden.
So we're going to do it right, Well, that's debt
that other people's, that's other people's that that's not being bought.
That's the first thing you know, we're going to be financed.
They're not stable. Coins are again stealth buyers of our debt.

(26:55):
Now they also create, and this I'm not saying anything innovative,
but they also create. They also create, They normalize I'm
trying to give you like tight words here. They normalized
international dollar usage. They crowd out the Euro, the y Wan,

(27:21):
and the end based on payment solutions. Now before I
before I read anything, that's a little bit wonk here.
It's kind of like bitcoin. Bitcoin was a global asset, yes,
glob but it traded overnight, big volumes. Right, Okay, But
the US has the network, the US has the capital,
and once we've created the ETF for all of its

(27:45):
shortcomings and faults, we control the pricing. Now we I
mean controls out the book. We heavily influence it. All
the stuff that's not going that's going on that we
don't like. If you're a bitcoin person, I get it.
But the thing is we control we could break I'm
not saying we want to, but we could break a

(28:05):
country that's relying on bitcoin right now. If we wanted
to just a rehypothication, which, by the way, that's goal
two point zero. So the point is, once you get
inside of our network, we can control the pricing. Yes,
Bitcoin can end up being the trojan horse. That fine,
maybe it is, But right now all they care about

(28:26):
is the next fucking election, and that's what they're going through,
so and and and that's and that's the indirect pressure
on competitor currency. So for example, uh, the ECB is
like banning them everywhere because it's a threat to their business, right,

(28:46):
I mean right, I mean they have they have a
CBDC that they're trying to push, right, they do, right,
us stable coins would erode Eurozone monetary sovereignty. And that's
the reflection of the advantage. Mhmant to get your thoughts
on that.

Speaker 1 (29:05):
Yeah, no, I I agree with you. This is that's
that's part of it. The other thing I'll say is,
you know when you obviously when you have a like
this is just basic Greshams law stuff. That is why
I think what you're getting at, right, you have a
digital euro that comes with all of these strings, right,

(29:30):
all this programmability, all this financial transparency, all of this
you know, anti free speech, all of the everything that
the European Union now stands for, anti democracy, anti free speech,
anti you know, anti all of it. They're they're literally
telling you what you can and cannot do with their currency.
And what we're saying is, oh, no, use the currency,

(29:52):
use our currency however you want.

Speaker 2 (29:53):
Yeah.

Speaker 1 (29:54):
Now, Now, in Gresham's law, bad money drive is popularized.
This bad mone he drives out good No does. That
doesn't mean that the euro is going to be hot.
What it means is overvalued currencies circulate. Undervalue currencies are hoarded.
And but that's the classic degression's law scenario. What in

(30:17):
this case, it's actually the reverse of Aggressiam's law because
the dollar is actually going to be the superior currency,
which in this case will circulate driving out the inferior currency,
the one that comes with all the strings. I think
that's the way you're trying to describe it. In a sense.
It's not a reversal Aggression's law. It's a it's a

(30:38):
it's a it's a reversal of the way it expresses itself.
We're going in the past, it's always gold was hoarded
because we print a lot of dollars, right, right, Okay.
That's the classic expression of Gresham's law. You have a
you have good money is hoarded because it's under the
value that's under it's an asset that's undervalue. In this case,

(31:00):
what we're saying is we're going to send this out
there and it's going to be backed by the most liquid,
the best, and the reasons why the dollar took over
the world in the first place, right, are still going
to be in effect, and we're going to just as
a product, it's a better product, and therefore it's going
to circulate. And if you try to compete with it,

(31:22):
against it with an inferior product, your product is going
to fail in the open market for money.

Speaker 2 (31:30):
You know. That's the thing. Gresham's law is really kind
of confusing. And I think it's because people can myself included.
We've talked about this off the air. You know, good
money crowds out bad No, No, it's bad money crowds
out good right, right, Okay, so bad money is spent,

(31:51):
get it out of your fucking hand as soon as
you can. Right, I want to go buy the Milky
Way bar. Whatever good money is hoarded, that's your word, right,
and and hoarded saved invested, so the stable coin becomes
the stable coil with US treasuries in It becomes held

(32:13):
like you're buying oil with it, but you never buy
the oil, you buy stocks with it. Right, the Euro
gets spent locally, it becomes a local currency.

Speaker 1 (32:23):
Sony Anyway, Yeah, again again just thinking about if you're
talking about now, I agree with you, but let's just
make sure we're on the same page. Where I see.
The geopolitical risk is no way will the Euro become
be able to become the any kind of an international
standard even after they go for and when and then remember,

(32:46):
in order for them to do the digital Euro, they
have to collapse the member central banks, repudiate all the
existing debt that's denominated in the old euros, and then
put create a new digital Euro that's backed by tax
and spend and bond issue is authority from the European
Commission backstop by the DCB. That's what's clearly, that's the

(33:07):
route the European Union is clearly going. Like every day
they make that abundantly clear.

Speaker 2 (33:12):
That's what I haven't they even going that way for
like fucking thirty years.

Speaker 1 (33:15):
Like yeah, but they have to do it by the
end of this year because because we're moving so quickly
to go for fiscal dominantly.

Speaker 2 (33:22):
Wait, are you saying that they're going to move towards
a currency that has fiscal unity like taxation behind it.

Speaker 1 (33:28):
Yeah, well yeah, there's there was the announcement the other day.
You've got one. You've got the SIU, the Savings and
Investment Union, which we still have zero I mean and
I literally mean zero details on they just announced it.
And then there's another couple of things that are happening
where they're now talking about giving Now they're giving the

(33:51):
European Commission a seven year budget and tax and spend
authority and all of this stuff. And they're also going
to force they're giving the European Commission the ability to
issue bonds, and they're going and then and the one
thing they haven't quite said yet but they're about to say,
you know they will, is that they're going to force

(34:13):
domestic investors, meaning pension funds, insurance companies and the rest,
to all be forced to buy those bonds because stations
so state, so so sovereign nation pension funds like Germany's
pension system is going to have to buy those bonds.
That's where they're going to create demand for this thing

(34:34):
and they're gonna and it's all gonna be dominated in
this new digital Euro which they're supposedly launching in October. Okay,
this is all happened.

Speaker 2 (34:44):
They do you think they can pull off the euro bonds?

Speaker 1 (34:48):
They I don't think they have to pull it off.
I think they're just going to mandate it and full
and make it happen. I don't think it's going to work,
mind you, but I think that's their plan. They still
have their hand chart over Evil Corp Central and this
is like happening. Okay, So they've decided and there, and
they're also looking at how they can mobilize their words,
not mine, mobilized the existing stock of savings within the

(35:13):
European Union and how else do you think they're going
to do that?

Speaker 2 (35:18):
Right? Right, right, right right?

Speaker 1 (35:19):
Okay? These people all have there, they're the ones with
the most with with all the bailing rules and all
of this and all that. So what they're doing, and
I'll be honest with you, and you can look to
the UK, and you can look at what they're doing
in Germany and Spain and everywhere else. What they're trying
to do is collapse the economies to ruinous spending and
fiscal policy and invasions and inbiting the world and all

(35:40):
this shit. In order to tell them to put forth
in front of the people. You have two choices. Either
we're gonna we're going to destroy your country, right, we're
destroying it. We're going to destroy your life. And here
is and the only way you're going to accept this
new system is to be so desperate for air because

(36:03):
we've taken all the air out of the room that
in order for you to breathe, here's our new system.
So thesis, and this is the synthesis. It's the Straussian
two step was what I've always called it. But the
that's what they're going to do. That's what they're doing,
and they're hoping to get all this. They're going to
push them into crisis, right and as we and this

(36:24):
is their only counter move to us trying to fix everything,
which is because they know that US fixing stuff is
going to push them into crisis because the world is
going to look at the United States and go, we
don't want our money in Europe, we want it outside
of Europe. So you can see them that you can
see the plan, and so that's why they're trying to
ramp up trillions of dollars of new spending the the

(36:46):
and it's tied to the not it was re armed
twenty thirty, it's now, I don't recover or reinvest. They
renamed it. But when they passed all that military spending,
like everything is military spending now in the European Union,
by the way, like with a very broad definition. So
they're going to spend trillions, right, and they're going to

(37:08):
and they're going to basically take over the budgets of
these countries. And what you have to do at that
point then is force their bank, their central banks into
bankruptcy in order to get that, and they're by the
commercial banks.

Speaker 2 (37:20):
Let me add two things to that, because I think
they're going to corroborate what you're saying. The first thing
is is gold based. About a year ago I saw
a big uptick in European countries talking up gold. Now,
first I thought they were just saying I thought they
were just piggybacking on gold is going up de dollarization.

(37:40):
It's a year ago before they started, you know, freaking
out right. But now it makes a lot more sense
because if you're going to be mandated, it's a sovereign thing.
So for example, if Switzerland's not a good example, but
I'm talking about countries. We're talking not just by gold.
It wasn't just buy gold, it was pensions should buy gold,

(38:05):
not bonds. Pensions should buy gold, not their own sovereign bonds.
With Switzerland, I mean came right out and said it. Switzerland.
Ireland not a big country, but certainly one that would
understand that, and a couple other countries we're talking about that,
like if you it was like the sixty forty four film,

(38:25):
if you replace your sovereign bonds with gold, you're you're
going to do better. And and now that I think
about it in this light, I didn't know that. Uh.
They're basically they were saying, don't buy the eurobond by gold.
That's what they're saying.

Speaker 1 (38:42):
If it's comed, that's what they were saying. And I
think they're doing that in order to prop up the
balance sheets of the central banks. And then they're gonna
then then they're gonna swap the gold for the new bond,
the new bond issuance and put all that gold under
the ruber. The end that gold into the brook. That's
the missing point that I didn't realize now that you
put put that. I was like thinking about how they're

(39:03):
going to pull this off other than mandated. No, if
you've got if they're if they've got gold on their
balance sheets. So all the sovereign gold of all these
countries is which has already pledged to the ECB, but
it's now going to have to be owned by the ECB.

Speaker 2 (39:16):
Right right right now. That's that's a nice little Uh,
that's nice little.

Speaker 1 (39:21):
I also think that that's going to be the mechanism
by which the European Union breaks, because I don't see
Italy giving up their gold. I don't see Serbia just
came out the other day and said, yeah, no, we're
taking all. They're not a member of the U per se,
but they're like, nope, we want all our gold back.
It's being held in custody for us at the FED,
the b OEC No, no, we want it all. It's
only a couple of billion dollars, but it's Serbia and uh,

(39:43):
and they've been steadily steady buyers of gold for like
fifteen years. By the way, I don't know if I mean,
I look at the world of Gold Council Day eight
every once in a while, and they're they're always one
of the few that buys every month.

Speaker 2 (39:56):
Yeah, that's that's where that's where all the world wars start.

Speaker 1 (39:59):
Serbia, you know, that is the gateway that use this
is the gateway to Russia.

Speaker 2 (40:06):
Right, so landlocked country that got fucked by every everyone
else when an economic collapse. Okay, So so that was
I had another reason, another thing to add to what
you said, but it wasn't important have remembered it.

Speaker 1 (40:21):
So so we have all those things and the and
so what you're talking about, in effect is this all
goes right back to the original point about dollar dominance.

Speaker 2 (40:31):
Right.

Speaker 1 (40:31):
You're creating a you're creating a situation where the dollar
can retain its dominance in terms of you know, global
payments and and but it doesn't necessarily have to be
anything other than market driven, as opposed to the way
it you know, post of the way it kind of
was in the past, where it was you could make

(40:52):
the argument, very persuasive argument that it was you know,
that the US dollar was backed by the mind of
the US military. Right, that's not what's happening here.

Speaker 2 (41:03):
Well, I mean it kind of. I mean, it kind
of still is meaning the rule of law, the rule
of I'm looking at it as the rule of law,
and I'm looking at the rule of laws backed by
the military. So so yeah, I mean.

Speaker 1 (41:15):
Yeah, but it's but it's far more removed from that.
I mean, in the past, it was always you know,
we stay at a curve in terms of like in
the past, like it was always like swift and all
that stuff, and we just took the old existing infrastructure
and inserted the dollar into the old global in the
old London infrastructure, London infrastructure.

Speaker 2 (41:33):
Le me differentiating. No, you're right, because let me differentiate
when when when we say, or any American says, the
dollar is backed by the military might of the US. Okay,
maybe ultimately that's the backstop, but that's not the reason
you knew it use it. It's because the network is

(41:54):
worth more than any other network out there. It's the
incumbency of convey it's the it's the look. I mean,
can you afford to not have a telephone, even a
cell phone? Now you can't. You can't get anything done.
So you know, the last person on Earth would pay
a million dollars for a cell phone if you had to.

(42:14):
I mean, that's not gonna happen. But the point is
the network. This is what the US. This is a
big deal and it's it's part of two things, stable
coins and the concept of US charging for people to
have their money and dollars, the capital charge. What we've
done is this is like uber, but it's a good uber.

(42:36):
What we've done is we've realized that the network, which
in normal industrial capitalism is treated as a loss. You're
plumbing is a loss. It's when it breaks you care
about it. But you're plumbing is a loss. It's not
a profit center. Right, So right, so what we what

(42:59):
we've real and I say we, I mean the government.
See banks have realized for years if there's plumbing, financial
or otherwise, and there's a connection or a friction point,
they can put a tall booth there, which is your word, right,
They can put a tall booth there and charge to

(43:20):
facilitate around the turn, or to facilitate some of the
drag from the seam in the pipe. They can charge
for that. The government never understood that they treated plumbing
as an expense. The product, the pen is is where
the money's made. The plumbing is a lost leader and

(43:41):
banks understood that going back to ATMs when they started
charging for ATMs. Now the government, and this is by
the way, this is the funny thing. Now the government
realizes that, you know, Trump and Besset understanding that that
the plumbing, the network, the architecture of the net work
is worth more than the product. Now. Yes, so the

(44:04):
cheeseburger McDonald's burger, I don't give a shit. How does
it get to me? That's the value, and so we
need to monetize that, which brings us to We're not
just monetizing the plumbing. We're making it faster with stable coins,
and so they have to be used if you want
to move things a little bit faster. I mean, that's

(44:24):
that's all. That's the pros.

Speaker 1 (44:26):
Yeah, well this is again and this is one of
those things that that it touches on, you know, another
thing about you know what a bitcoiners can talk about
all the time. You know, why is bitcoin going we
to win overall? Why would bitcoin? These are the arguments
they were making ages ago, back in like twenty seventeen,
and they're still making them today and they're not invalid

(44:47):
even today, right, which is that network effects matter, the
size and scope and the and scale of the Bitcoin
network is its greatest advantage. And you know, network effects
matter and they have value, and every block that goes
into the blockchain adds value to the Bitcoin network in

(45:09):
terms of, hey, look another block one by the board
and Bitcoin didn't crash. Can this guy? Can this shitcoin
say that?

Speaker 3 (45:14):
No?

Speaker 1 (45:15):
Can this shitcoin say that?

Speaker 2 (45:16):
No?

Speaker 1 (45:17):
What's the competing what's the comparable advantage between I don't know,
pick bitcoin and like coin? None? So why would I
go to like coin?

Speaker 2 (45:26):
Right?

Speaker 1 (45:27):
No, light coin doesn't have the network and if even.

Speaker 2 (45:30):
If it is, is robust like I guess bitcoin cash,
people would make that argument first mover advantage.

Speaker 1 (45:37):
First mover. In this case, first mover advantage matters, and
by virtue of the way Bitcoin operates, it has these
advantages that make it the perfect form of pristine collateral
in a digital market. Right right, Not to say that
there aren't competing forms of pristine collateral, but they don't
have the network effects, so they're not used to the same.

(46:00):
That's today. What does tomorrow look like? I don't know,
but that's where we are today, and that's why for
the state of the market today, never argue with the
bitcoin MAXI is that no, Bitcoin is doing exactly what
it was designed to do, which is move itself slowly
but surely into the plumbing networks as a pristine form

(46:23):
of collateral that can be used to undergird and fix
the existing the sclerotic and broken financial system that promoted
inferior moneies which were spent and while bitcoin was hoddled,
gold was hoddled, YadA, YadA, YadA, and that that dynamic

(46:46):
is still in place here.

Speaker 2 (46:47):
You know, there was just a little, a little cydebark
just how you're describing it. Back in UH, I think
it's World War one, after World War II on where
they were debating on money. There were two theories. Not
going to go down the rabbit hole except to say
that there were two theories. One is the state controlled

(47:10):
theory of money. I'm not I'm mislabeling it, sure, but
that was that was Keensian and the other one was
what was called UH at the time it was called
And you can look the people people can look this
up the charitalist chart all list, chart owl list, UH
theory of money and the chartalist theory of money says

(47:32):
that I'm just very broadly speaking, the Chartalist theory of
money says that money is nothing. Money is what I'm owed,
so you know, if you're if you're led your balance,
that type of stuff. And so the chartal theory of
money lends itself very much to bitcoin. Uh, And I'll
put bitcoin and gold in the same category all the time,

(47:54):
I too, right, right, But when I read it this way,
I see Fiat being stupid and out of control, and
they used gold and silver to anchor it and it worked, okay,
And then I look at the Torontalist thing and it says, no,

(48:17):
money is just an ioeu, a favor that you owe
someone back. So in in like in the whole tribal society,
we're in a neighborhood and I'm borrowing a cup of
sugar from you, and you borrow from me. You know,
forget the barter bullshit. It's not bullshit, it's not real.
But anyway, Bitcoin people, and I'm not really asking you
to go back and like be really like ourcane, but

(48:40):
bitcoin people subscribe to the Torontalist theory of money, and
government is trying which is no, which is no, which
is not stay controlled. Government is trying to take the
Torontalist money and adapt itself to it, and it's really
getting fucking torturous.

Speaker 1 (48:59):
Anyway, it's really interesting you bring this up, and I'm
going because I've mentioned this in a couple of other
podcasts that I've done, And I don't know if you
watched the one hour roundtable on July first between Powell, Bailey,
l Guard at thecb Uwaita, and the guy from South Korea,

(49:21):
but the first fifty minutes of it is mostly boiler
blite nonsense. It's the last ten minutes that matter, because
that's where they wanted to get Jerome Powell on record
about whether or not the cafe between him and Trump
is real or not. And he was asked first about
the changes to the SLR, the supplemental leverage ratio, which
came long and I discussed the significance of in episode

(49:42):
two thirteen, which is still very much valid today, and
Powell said, are you asking me if I agree with
the thing that the FMC voted on and voted in
overwhelming approval of Yes, I support that, so shut out.
That's so basically close the fucking door. And then number two.
The next question was about stable coins, and we got

(50:05):
the only three answers that matter of course, because Japan
and South Korea do not matter. And this is the
Bank of England, the Bank, the ECB, and the UH
and the FED. And Andrew Bailey at the slovenly fucking
limy pricked that he is, and you know, went on this,
you know, kind of typically you know English limey sort
of well, do they did these stable cleans even become

(50:28):
rights to the value of the definition of money or not,
and blah blah blah. Yeah, basically I think they're both
basically translation, I think they're bullshit because they are competition
to our our foundational market share, which is in the
core ex markets. So the Bank of England was like, no,
Leguard was very clear. She said, I believe that money

(50:52):
is a public good and it's my job as the
head of the u c B to regulate this public good.
And okay, very clear. Which is the king control? Right?
First state control? And then there was Powell who said,
oh no, I'm working with the Trump administration to create
all of these these legislative initiatives and we've got these,

(51:13):
We've got these led the legislation moving through the Congress
right now. We tried to engage the Bidens he said this,
We tried to engage the Biden administration and drafting these
rules during the Biden administration, and we were rebuffed directly.
So Powell, Yes, Powell said.

Speaker 2 (51:30):
This, I don't like Trump abides a fucking moron.

Speaker 1 (51:34):
Yeah, but no, what he said was we're working, We're
working towards it. And what it held me flat out,
and this was the last statement of the entire hour
was Powell's like, no, we're doing this. It's happening, and
we at the Federal Reserves, our job is to support whatever,
you know, whatever the government of the United States is
basically wanting to do. And we tried to get ahead

(51:55):
of this because the market clearly wants these things. And
this is a reversal where was they five years ago
where he said, I have right problem with bitcoin because
it's a commodity, but stable coins are a problem. Now
go back to what now, go back to what you
and I tell you what you and I've discussed many times,
and what I've talked about, which was back in the
back in twenty twenty two when all the stable coins

(52:17):
got executed Carol una ftx blah blah blah, and I
kept saying over and over again to everybody. I'm like,
this looks like a FED operation to me. But we've
we've left one stable coin, basically Peather, which we have,
which we basically owned because you know, they got a
slap on the wrist from Letitia James.

Speaker 2 (52:40):
A stable coin cause the stable coin risk too.

Speaker 1 (52:43):
Exactly, it was, yeah, exactly right. So what it seemed
to me was like, no, Powell was against these stable
coins proliferating, yep, but because they were outside of the
purview of what the FED and the Treasury Department could control,
and we did and have regulations for them. And so

(53:03):
this is not to say that that the FED is
a good guy or a bad guy.

Speaker 2 (53:06):
Here.

Speaker 1 (53:06):
The FED is trying to protect its business right and
has a business and you know at some point if
that gets outside of their control, well okay. So again,
this is part of the reason why I keep saying
all of this discussion is a precursor to where where
what's the Fed's role going to be into the future.
But that's a different podcast. I think we want to
have that podcast with Caitlin Long next week when she's on.

(53:29):
So okay, so let's get back on topic. But that's
for the future.

Speaker 2 (53:33):
I want to. I want to you know, uh, uh
you said something I hadn't thought of, but uh pal
ah ah kind of benignly orchestrating, uh, the the consolidation
or the collapse of a lot of a lot of Yeah,

(53:56):
you know, there's a point where you say, how's the
story going. Uh, they laugh at you, they mock you,
and they embrace you.

Speaker 1 (54:06):
First first, ay, first ignore you, then they mock you,
then they fight you. Then you win.

Speaker 2 (54:10):
Yeah, okay, so so so. I think the mark of
a good uh techno crowd or bureau crowd or everyone
describe me is is when you realize that it's not
going away, whether it's because of popularity or because of innovation,
you have to get past the after laugh. It's like,

(54:32):
you know, you don't fight it, you fucking stress, You
work with it. You embrace it on your terms, which
is which is exactly what we're doing. And I'm saying this,
you know, for the public. I'm sitting on your side
at desk with Powell. I'm not anti Powell. I am
anti Fed in general, but I think Power was very

(54:52):
good at his job, aside from the one big mistake
he made. But the point I want to make is
that I can imagine sitting at a desk, and I've
done this with much smaller things like fuck, this isn't
going away. Well we may as well see that's separated
good from the bad, right, And there you have it,

(55:14):
so stress tested. Let the free market. They're very free
market oriented in this way. Everyone else dies into free
market except for JP Morgan and their buddies. But the
point is if you can survive, then you should survive.
That's the mindset. So so I think there was I
think your I think your point is valid in the
sense that they knew was coming, they knew couldn't get
rid of couldn't get rid of it, and they were like,

(55:36):
let's see what they threw. They threw stable coins in
the deep end of the pool. Basically, that's it.

Speaker 1 (55:42):
Anyway, And and but but what they did was they
all what they also did was get rid of we
were clearly obviously money laundering operations for ng O money
and for the Euro dollar system to push that push
that money on shore and then and use it for

(56:02):
the nefarious domestic operations like that was the that was
the primary point of things like FTX and terrible and
a lot of this stuff, and you know, maybe I
don't know about Silicon Valley Bank. I think if we
if if Caitlin was Long was here, she'd probably argue

(56:23):
with us a little bit and pushed back, which is
perfectly reasonable. I know she has a slightly different perspective
on this, but this was something that will come up
when I when I chat with her about this. But
this is important to understand that you know, we don't
We're not solving all of the This is not our
complete Colombo here, Like you know, I'm not like a
Colombo moment. I am smoking a cigar and mostly dress

(56:47):
slovenly because that's what I do for on a daily basis,
because this is an audio oly podcast and I can.
But it is to say the signs point in this direction.
The circumstantial evidence is very is pretty compelling.

Speaker 2 (57:00):
Yes, but no, they they create a portfolio of solutions
and they work on them all whatever works they work with,
like cbbcs were in the portfolio. Then they got asked,
you know that type of ship. I'm sure at one
point they were like going, uh, you know, I might
have to go with gold, I mean, and then they
may still yeah, but I don't think they have to
I think I think, uh, we should talk about the

(57:24):
risks rather a little bit, just a little bit touch
on the risks, because I do believe before I get
into the risks that that I researched risks aside, it's
going to happen, and it's going to happen for the
geopolitical reasons. People will arms and legs will be cut
off to save the body, you know, That's what's going

(57:45):
to happen. And unless something better comes along. Okay, So
should we do that now? Like touch with Why not?

Speaker 1 (57:52):
Absolutely? I think we've beaten the rest of the Russian
law you know, stuff to death because the.

Speaker 2 (57:57):
Parallel with the money markets is a good one, all right.
So the risks that come with all the pros, right,
so the treasury is pushed to use them to absorb
debt that may backfire by creating and this is the
yield curve stuff us they're going to use. This is like,

(58:18):
this is the problem, not tomorrow, but this is where
you have your problem. Stable coin prevalence will create a
bigger buy in the short end of the yield curve, right,
and and it can create quoting my own notes here,
an over reliance on short term funding and it could

(58:41):
invite invite instability if redemption surge, and okay, that's that's
that's true. You know, otherwise they're just going to keep
rolling it. So I think, I think, I think that
that problem is real. But I think ultimately they become
like muti rolls, Like a lot of people with money
will do muty roller, which is basically thirty day or
ninetyday meetings they keep rolling over. So I think it'll

(59:03):
be something like that. But they don't ever have to
sell them because they can. They have them in they
can put them into something else, right, So so that's
that's that's that's a problem, and I think it's going
to be resolved. Then the next problem is US based
US It's not a problem, it's not our problem, it's
their problem. US dollar based stable coins threatened monetary sovereignty

(59:26):
right prompting backlash from non US central banks, which is
happening right now. And to your point about the interview,
their par value can easily break now easily as a
relative term. But you saw it break with the who
is the SVP stable coin us DC.

Speaker 1 (59:49):
I don't think so. I think it was an I
don't remember to be honest with you.

Speaker 2 (59:53):
Okay, So it's either tether USDC I forget. But there
was a there was a big there was a big
stable coin there wait might be USDC UH regular. And
this is listed in the reading that I've done as
a problem, but I don't see it as a problem.
Regulatory oversight is weak, with vague licensing standards and limited
enforcement capacity. Now that's viewed as a risk. I view

(01:00:17):
that as intentional to your point about letting see you
know which which which stable coins pass. And that's why
I say legs are going to be cut off. You know,
the only the only real risk UH comes back to
the money market risk. I think that without a two
tiered settlement system, stable coins can't I'm talking from their

(01:00:41):
point of view, not yours, and mind can't ensure monetary singleness,
that's the word singleness, leading to fragmentation, centralized counterparty risks.
You know, the people who are I'm speaking to Caitlin here,
the people who are going to hate this or are
going to push back them there, they're going to say

(01:01:01):
each stable coin is tied to its issuer like private
banknotes in nineteenth century free banking era. Okay, and that's
what she's going to have people like her are going
to have to defend against So stable coins lack that
vertical structure. And I'm not saying they need the vertical structure.

Speaker 1 (01:01:20):
But that's we're not. I think the bigger, bigger I
think the bigger week or the bigger threat here is
the fact that we have never lived as as as
economic actors, we have never lived under that scenario and
we don't and so the possibility for fragmentation, arbitrage, YadA, YadA, YadA.

(01:01:40):
I think that is the issue here. And you know,
and I think it's more. I don't think Klein will
push back against us. I think Christine Legard is the
one who's absolutely you know, that's completely.

Speaker 2 (01:01:53):
Know I'm saying, but but Caitlin's got to defend. People
like Caitlin have to defend against that.

Speaker 1 (01:01:57):
Yeah, no, I agree, No, agree, without a doubt. So,
but that just gets down into are they going to
be over capitalized? How do they handle their the capitalization?
And if you know, the and the weakness then becomes,
you know, can you use that mix of assets to
stay relatively over capitalized. One of the things about Tether

(01:02:19):
that you would argue is that Tether's got a portfolio
making around four percent, which is why they diversified into
gold and bitcoin and other things as well. Now, yeah,
you could argue that bitcoin is collateralizing bitcoin tether trays,
but Tether's growing far beyond just being a liquidity asset
for bitcoin for private bitcoin exchanges. It's now moved into

(01:02:40):
an actual, you know, usable and used currency version of
the dollar in places all around the world. Now, was
I literally was talking. I've said this before and other
other venues, but I was talking to I was at
a bitcoin conference in uh in June in Tampa, and
I was talking and I'd met up with a a
a subscriber couple that would just got back from Peru

(01:03:02):
and they're like, yeah, I went to the freaking market
and you know, all the fruit at the market was
you know, price and teather. It was like right there. Yeah,
like it was right there. And that's so what's happening.
It's happening all over Africa right now, which is why
all of these formerly French colonies of you know, in
the Sahel region of Africa that used to have to
use the CFA Frank and I replacing that with heather.

(01:03:24):
And then you know, overthrowing the French installed, maintained VC
governments and you know, viceroys, and you know that's amazing.

Speaker 2 (01:03:35):
Wait, so so I'm an African. I'm really thinking this
out out here, right. So I'm an African. I don't
want to use the French issued currency and I can't
use the dollars, so i will price it into French
currency and I'll throw the tether amount of there because
people have it. But in doing that, I mean, but it's.

Speaker 1 (01:03:53):
The reason they can't get dollars is because there's no banks,
and then none of them having a capital to actually
own a bank, have a have own a bank account
and all the rest of it. Teather is introducing the
dollar to to to people around the world who can't
be banked.

Speaker 2 (01:04:11):
Bank dollar. Yes, So basically it's tether introducing the dollar.

Speaker 1 (01:04:17):
Yeah whatever, we build your roads, Yeah yeah, exactly. The
Chinese fucking tether in Africa over four hundred million users
they've got, They've got Teather kiosks going up all over Africa.
This Caitlin was talking about this two months ago on
the podcast. When she was going over this, I was
just like, Jawn hit the ground.

Speaker 2 (01:04:39):
Right, and it's it's a digital dollar, right, it's a
digital dollar.

Speaker 1 (01:04:42):
Di say so that's why Ripple Labs introduced r l USD.
Why because they were like, well, we're already settling on
the Ripple network at thirty percent of tether's trades. Why
don't we just issue our own stable coins. This is
like literally the words right out of brag garlingd House's
mouth back in December, like we're already using Ripples, already

(01:05:03):
settling so much of this, this this real tether trade.
Why don't we get on this business only is the
exact goddamn thing with the same setup, and we're already
seeing it and r l usd's market cap is rising. Again.
It's not an investment, folks, This is not These are
stable coins that where they work a dollar. Okay, the

(01:05:24):
companies that issue the coins are you know, the bigger
question is as they fully yield off of their their
portfolio of assets that's backing their their their coins, you
know they're going to have to buy fewer treasuries because
they're over capitalized. As long as you understand what I'm

(01:05:44):
getting at here, like this is where you know, this
is where, but it's also ensures that or indemnifies them
and insulates them from bank runs because they've got so
Tether has one hundred and six there's one hundred and
sixty one billion dollars in market cap roughly, maybe it's
one sixty two today of tethers out there in the world.
But tether's balanced, it's got to say, one hundred and

(01:06:05):
seventy five billion dollars worth of assets on the balance.
There's a bank run on Tether, meaning the whole bunch
of redemptions of tethers back, you know, through Big the
Bitcoin networker in some other way, in order to try
and break Tether, try and break the peg they've got.
You know, they're over capitalized by ten percent. In effect,
it's no different than coverage ratio of a reates dividends.

(01:06:29):
You know how we like look at a RED or
an MLP, we look at we look at is the
dividends stable? Well, I always say to people, well, check
the coverage ratio. The definition of the coverage ratio is
EBATAH divided by the amount of dividends put out on
a quarterly basis. So if ebatah's sixty billion dollars and
you paid out forty five billion dollars worth of of dividends.

(01:06:52):
Your coverage ratio is one point twenty five or one
point three or whatever the number is right, and you
once as long as that number is high above like
one point one or one point two. I would always
recommend to people that the dividends the stable and you
can buy the You can buy this stock for the
yield and christ the yield is clear. If the coverage
ratio is zero point nine, well then they're not making

(01:07:14):
enough money to cover the dividends. And you know, and
especially in something like a REACH or an MLP which
is financially strapped because they have to pay out ninety
percent of their profit right to unit holders, you know,
is the dividends. This is where we get into this situation.
So it's again think of stable coins. If you're a

(01:07:35):
RED investor, or you're an MLP investor, you already understand
the balance sheet dynamics of these stable points companies.

Speaker 2 (01:07:44):
There's it's not an analogy. It is an analogy, but
it's it's based on my career and I want to
I want to let's see if this rabbit hole fits,
because I think it does. Math aside, which makes sense,
you're saying that because they have one hundred and sixty

(01:08:04):
billion dollars and they essentially have one hundred and sixty
billion people holding it, they don't have central counterparty.

Speaker 1 (01:08:11):
Risk other than the value other than the value of
their portfolio. But remember, as long as we're defending the
price of the dollar through the short term treasury market,
the yield on their portfolio may go up or down.
That that cuts interest rates ever, but a dollar to them
is a dollar because they're going to be able to
sell that T bill and get a dollar for it. Right.

Speaker 2 (01:08:31):
Well, what I'm getting at is is is they're I mean,
of course I'm simplifying, but they're not a bank issuer,
and so okay, so their risk is diverse in a
sense that here let me just let me just say
the situation when I was, when I was a trader

(01:08:53):
on the floor, I worked up on commodities, and we
had an operation of the equity side. And in the
equity side there were specialists, And a specialist is the
centralized guy who's responsible for making a market. So a
specialist is centralized control over the market. Whereas in the
commodity pit, it was completely it was complete chaos, but

(01:09:16):
it was ordered to it. But the point is, I
remember witnessing, you know, as a young trader in the
gold options ring that a whole company, you know, a
cold company that Let's say there's like a thout. Let's
say there's two hundred traders in the options ring, right,
and a whole company would go under, but the market

(01:09:36):
wouldn't matter. The market wouldn't care. And what I mean
is like up the two hundred, the bigger companies had
multiple traders in their three, four or five, and so
they were just gone the next day and the space
was filled in. What I'm getting as is is this analogy.
I mean, you can push back if I'm wrong, or

(01:09:57):
where's the flaw in this analogy? If the exchange is
the guarranteur and the market participants are diverse, then the
exchange's risk is also diverse. There's no centralized counterparty risk,
so they do have to have risk management, right. But

(01:10:19):
if a specialist industry is like a bank, and the
specialist goes out of business, the whole thing trickles down vertical.
I guess what I'm saying is stable coins create decentralized
counterparty risk, not just decentralized distribution exactly.

Speaker 1 (01:10:37):
I think so, I think that I think that's I
think that's clear.

Speaker 2 (01:10:41):
The distribution is the counterparty risk. You're a hub in
the wheel, but you're not the wheel.

Speaker 1 (01:10:48):
M hm, you're not the wheel.

Speaker 2 (01:10:52):
Yeah, okay, the network's worth more than the.

Speaker 1 (01:10:55):
Product, Yes, I think it is. And that's also and
so as so, what's the real risk of this entire
the real risk for this entire edifice that's being erected?
US fiscal policy?

Speaker 2 (01:11:12):
Are you asking me?

Speaker 1 (01:11:13):
I'm just I'm not. It's actually both. I'm going to
my what I think is it's US fiscal policy.

Speaker 2 (01:11:19):
Yeah, yeah, it is? Is it is? Ultimately because just
before we go, because I want to I want to
hear we have to stay on that. But the risks
that I just described, I looked at them all and
I went, you know what, all those things could happen,
and will let them happen. We're going to fix it
after breaks. But we're going to go with it because
we have to go with it because otherwise, if we don't,
bet will break. And it's how we protect the dollar globally.

(01:11:41):
But how's the fyscal policy and.

Speaker 1 (01:11:43):
The fiscal policy is that that's where that's where we
get to where where if we have a stable fiscal policy,
then everybody can pay. Then we know, then the world
knows that these companies who are issuing these dollars stable
coins will be solvent because we are backing the prop

(01:12:03):
we're backing the t bills that are backing the disable coins
with better fiscal policy. It's not just a matter of seeing.
One of the things that really bothers me about a
lot of the analysis that I've heard out there around
this and I is that. And it goes back to
the big beautiful bill Trump wanted both a why did

(01:12:26):
Trump want this thing to pass so badly? And the
five trillion dollar raise to the debt ceiling. Well, the
CBO report said, I think wrongly that it's because he's
going to increase the deficit by some ridiculous amount of money,
and therefore we have to go to forty two trillion
dollars worth of debt. I don't see that. What I

(01:12:48):
see is Trump is setting up a massive demand for
US treasuries that's out there, and we have to raise
the limit simply because we're going to be will to
sell so many fucking treasuries that we need to be
able to raise the debt ceiling without having to go
to Congress to be able to liquefy the demand for

(01:13:09):
the fucking US treasury market.

Speaker 2 (01:13:11):
I certainly hope that's the outcome, and I'm not going
to say it won't be the outcome, but you could
definitely see that as a supply is being increased, the
potential supply is being increased, the demand is being lined up.

Speaker 1 (01:13:22):
Yes, what I'm getting at is this is this goes
back to my old arguments, and it goes back to
even Martin Armstrong's ancient arguments about them, about Austrians and
in general, everybody is focusing on the on the quantity
theory of money, only looking at the supply side of
the equation, and he goes, but there's another side of it,

(01:13:43):
which is the demand side. You have to be able
to look at both of those things in concert with
one another and see if they're in any kind of balance. Well,
the same thing goes for American the American balance sheet,
only looking at the liability side and never looking at
the asset side. Right, And it's the same argument. And
what I've been I've been trying to like not disaggregate

(01:14:05):
those things, but like balance those two those two conversations,
And like, if you're if you're only talking about the
liability side of a company's balance sheet and you're not
talking about, you know, their potential to raise the asset
side of the balance sheet through growth and planning and
opening up new markets, then it's an incomplete analysis. I'm
not saying that those that are only talking about deficits

(01:14:29):
are only talking about the debt aren't also are wrong.
But until you actually do and to look at the
the asset side of the balance sheet as well, your
analysis is incomplete and therefore your conclusions are incomplete. And
to be honest with you, Vince, what pisses me off
more than anything else is how everybody falls for this

(01:14:49):
fucking gas lighting of only talk about the liabilities and
only talk about the money supply, right, And who's fucking
This is where I get really fucking angry. Who's who is?
Who is empowered by that narrative? Who benefits from promulgating

(01:15:09):
that narrative? Is it the United States? Or is it
all of the United States's financial competitors? Financial competitors, what
are they going to do? What do you do when
you're in a financial war? You highlight your opponent's weaknesses,
and you try and hive off and and neutralize their advantages.

(01:15:35):
Right right, this isn't hard, folks. Guess what, We're in
a financial war with the City of London and Europe
and to a lesser extent, China, Russia and everybody else.
We are in a financial war with these people. And
so until you start making that argument in total, to me,
I literally am not going to listen to you anymore.
I don't care who you are. I don't care. I

(01:15:56):
don't care who you've been interviewed by. I don't care
how big your portfolio is, I don't care how many,
how much your assets under management are. If you're not
willing to do both sides of that analysis on a
regular basis, you're dead to me, period. Like that's where
I am, And I'm like, I'm at the point now
where if you ask the basic question of why there's
only certain people on the podcast on a regular basis,

(01:16:16):
it's because I don't want to have uncomfortable conversations with
people who I don't whose arguments I don't respect. So
I keep having the same people on the podcast over
and over and over again, because well, there are people
with brains, or not running an agenda.

Speaker 2 (01:16:30):
Not running an agenda.

Speaker 1 (01:16:32):
Yeah, sorry, you know that was that was a little
rant that probably should.

Speaker 2 (01:16:36):
You know, we needed one of those. We need we
needed one of those, right, No, But I mean it's true.
I mean Cold War two. I mean it's kind of
like the if you want to draw that parallels the Yeah, yeah,
Cold War two point zero or the World War is
a financial wall? Is a financial war?

Speaker 1 (01:16:53):
Absolutely? It was, absolutely it was. So now I want
to bring this right all the way back around to
I opened the podcast with which is gold and why
gold is actually central to all of this? Because I
think gold is very central to all of this.

Speaker 2 (01:17:09):
Well, I mean as as do why. I mean, I
think that's that's uh, that's a given. There's there's there's
You're talking about gold in the context of stable coins.

Speaker 1 (01:17:22):
I'm talking about gold in terms of national balance sheets.

Speaker 2 (01:17:26):
Oh yeah, yeah.

Speaker 1 (01:17:27):
Oh, and I'm also talking about gold in terms of
exactly what you and I talked about and the when
we were when we when we identified the arbitrage between
New York, between Chicago, London and Shanghai. Going back to
that podcast I reference at the beginning again, I will
put that in the show notes, because you y'all need
to understand the dynamic there, because what was the big

(01:17:47):
news of the week. You wrote about it? We all
we all commented on it, Russia saying we're going to
open up a gold exchange in Saint Petersburg, and everybody
was like, what does this mean? Well, I think I
know what it means, but I want you know.

Speaker 2 (01:18:03):
Well, thank you, I forgot what the biggest news was.
There's so much fucking news this week. I was what
was the big news? I guess it's big news now. Okay, So,
so all this conversation about stable coins, nothing has changed
for gold, and in fact, it's become it's going to become.

(01:18:25):
Gold is going to Well, first of all, nothing has
changed for gold, the decentralization of standards of gold. So actually, okay,
I got my barriers. Now we're going back to when
we said that one of the things that underpins the
dollar strength is the fact that all commodities are priced
in dollars, and one of the tools that we use

(01:18:48):
to gird that support is exchange pricing, gold, silver, oil,
what have you. Back then, the conversation went like this,
the supply chain has moved the East. The demand is
in the East. First of all, start with this comment.
The pricing of commodities is controlled by the region of demand,

(01:19:12):
not of supply. Okay, And if you have to know why,
the answer is because commodities don't do shit. They just
sit there. It's who once and that determines the price.
It's not a supply demand thing. It's a demand demand
thing because supply can be pulled from multiple countries. So
now you go to the East, and starting in two
thousand and nine, but more growing in twenty fourteen, and

(01:19:35):
becoming obviously obvious in twenty twenty after COVID, the East
pulls the gold. The demand is in the East. So
I'm the American Bank, and I set up an office
in the East, and so I set up a supply
so little by little, the whole supply chain goes. By
the way, I'm talking about gold. And if this bores you, well,

(01:19:56):
that's what happened with rare earths. That's what happened with
Manu factoring. They were China was making the little plastic
when it goes on the shoelaces. Now China's making the
whole high tech sneaker.

Speaker 4 (01:20:08):
You know.

Speaker 2 (01:20:08):
So that's the supply chain moves east. So the demand
goes in the east, the vault goes in east. Hey
I bought gold, I want to store it here. And
so you work your way up that supply chain. It's easy.
It's actually more interesting in silver because silver is more industrial.
And then you say, all right, the demand is in China,
the price is higher in China, we want the price.

(01:20:31):
And of course the gold is reevaluating itself against the dollar.
So eventually you're going to see. This actually brings it
home to the very first Tommy talked about this. The
thing that I have been contending and that you have
been supporting and corroborating me with, is that eventually the

(01:20:53):
dollar will lose its pillar of support from commodity pricing.
That oil we know about right is being dealt with
in y Wan, and that's going to increase. But gold pricing,
which is transparent to the world, is moving to the east. Now.
If they start if we start watching this is before
we're not even talking about Russia yet, and we start

(01:21:14):
pricing gold in you want and you see the a
CNBC ticker, that's it. The dollar's doomed. And just as
a quick footnote, that's one of the reasons we don't
give a shit that gold's going up, because we're moving
on to something else. If we don't, we're screwed because
we don't control the gold.

Speaker 1 (01:21:30):
Well, well, it was gonna say, and you're all that
commentary is very important to understand, where you know what's
happening and what's been going on, and I think you're
but I was hoping you would, you would see what
I was rushing. Well, I know where you're going. But
what I'm saying is, I think this is very simple.
It's very more elemental than that to our original conversation,
which is that gold is moving back towards the monetary

(01:21:52):
system right as collateral. Okay, so if you want to
have a global market for gold to be able to
settle and account for trade imbalances and people have the
option of holding them in gold, you cannot have the
scenario that we had in the fall of twenty twenty
or twenty twenty one, whenever you and I first fort

(01:22:13):
talked about this, where we've noted the forty dollars arbitrage
between Chicago and Shanghai that wouldn't close, and you made
the very very salient point which I have never forgotten,
which is that when you see an arbitrage, it doesn't close.
It's because someone's restricting supply on the one side and
versus demand over there, and there's no way to close
the arbitrage. Well, guess what if you want gold to

(01:22:34):
re enter the monetary system, you have to democratize the
pricing the price discovery system for gold. You have to
have you have to have gold exchanges that are deep
in the liquid in every major market around the world
in order to take it away from London. And this
is happening for all commodities. So the LM. Why did

(01:22:56):
the LEM get sold to China all those years ago
because they thought they were going to be able to
move the price the pricing of the metals to China,
but still controlled them right and she rolled them. And
the city of London has pissed off about this same
thing's going on. So why would Russia open up an exchange,
a gold exchange in Moscow? Two reasons. One because their

(01:23:18):
central bank is fucking unbelievably dysfunctional. That's one, restricting the
supply of rubles. I was thinking about this the other day.
With nineteen percent interest rates when and I said, you know,
what's happening in Russia with Nobulina holding interest rates at
twenty percent, has opened up the opportunity for private debt issuance,

(01:23:44):
for private debt to occur, and private business loans and
everything else for the banking for the economy of Russia,
like all of a sudden, like well, I can get
money from the from the Central Bank of twenty percent.
But hey, dude, I'll own it to you for eight percent.
Go build that that car park factory, go build that
you know that you know that lead smelter or whatever
the hell it is, a tool and die shop, whatever

(01:24:05):
you guys need, I'll loan it to you for eight percent.
We'll do We'll do a quote unquote private deal, right,
but private debt deal, private equity deal or whatever. Evidence
that there's a evidence that the Russian economy is improving.

Speaker 3 (01:24:19):
Now.

Speaker 1 (01:24:20):
When I made that point kind of you know, in
a podcast one day, then I have like five people
turned like email me and DM me and say, yes,
that's what's happening. And then I did you know, simple
like started to do some searches to figure out what
was going on, and sure, shit, the private debt markets
in Russia are rising. The longer that Nobulina holds onto

(01:24:41):
ridiculous interest rates, the more the private debt markets in
Russia are are doing turnover. Well, guess what that means
that it's the same same thing we're having here in
the United States. If Powell continues the whole rates too
high above the neutral rate, we'll see private lending come in.
You know, in the United States, it's only gonna be
fifty basis points. It's gonna be is m as twelve
or thirteen percent, right right, but it'll still be there.

(01:25:05):
And what that's doing is it's getting rid of the
arbitrage between you know, the central bank, which is creating
a price or a price ceiling on rubles and going
and grabbing and watching rubles, you know, circulate in other ways.
In order for the stable coin market to do to

(01:25:28):
you know, look at look towards gold as a potential
collateral asset, to compete with the US treasuries, to compete
with bitcoin, to compete with other sovereign data or anything else.
We have to have better gold pricing mechanisms. We have
to open those things up. So the Russian financial system,
by them stating that now is telling me, the Russian
financial system is walking up the ladder of becoming a

(01:25:53):
real financial system as opposed to one retarded by ruin
a central bank policy. That's and that's why the FED
is under sincere pressure by Trump and why the FED
is having to bend, as you in your words, as
opposed to being broken.

Speaker 2 (01:26:12):
Yeah, that's actually that actually makes a lot of sense
because Russia. See I didn't look at see I didn't
look at it that way at all. But I wasn't
going to mention that at all. I was just going
to mention let me just say, let me just respond
to what you're saying. That's kind of what China did.
Not exactly what China did, but Russia is bringing everything

(01:26:34):
along a uh huh uh. Gold's your international currency for
the bricks. They need that, and he has that. And
I think what Russia is doing is is no. I mean,
I'm agreeing with you. It's like it's like right, right,
they're they're they're bringing it along slowly. It's kind of
like in China they have these regions, economic regions they're

(01:26:57):
doing it with. They're not doing it if I read
in Russia, they're doing it by commodity, right, peer me out.
The first commodity they did it with. China goes in
this region everyone can play for fun and for fair.
Russia is building on the success of natural gas. They
did this with natural gas first. They did this what

(01:27:20):
they're doing now with natural gas. For USK, they listed
natural gas because I think they consume seventy percent of
natural gas they make that make a shit ton of
natural gas, and it want to be held to the
US standards. The APIs right, and so that succeeded, and
now they need to do it with their money, and
so they're doing it with gold first.

Speaker 1 (01:27:40):
It's interesting. I didn't even know about that with natural gas.
If you want to put more color on Evin, I'd
be happy to listen to this.

Speaker 2 (01:27:46):
Well, I mean it's it's I mean, it's the same concept,
but it goes like this. Russia makes a lot of
natural gas, and the US uses its It's about standards.
The US uses its standards to weaken to marginalized players.
So I'll give your audience an example of a standard,
a standard of abuse. There's a basket of oil, right,

(01:28:08):
and that and that, and that basket is a mixed
ten percent of this oil temperature, and that's the basket
that trades in the world. Right, who's the company who
frank crude?

Speaker 1 (01:28:18):
Right? The bren crew contract.

Speaker 2 (01:28:20):
No no, no, no no, not bread, not bread, the
bread basket, the break. So these baskets are these are
basically it's a basket, is what they talk about with oil.
But it's an index. So it's ten percent of t I,
forty percent Brent okay, ten percent Nigerian sweet sour, all

(01:28:42):
the you know urals oil. It's in the basket, and
that's the basket they use as a standard of measure.
Plats plats oil own kind of right, right, okay, but
because because the basket is American. Okay, you can look
this up. During one of our crises between twenty one
and twenty four about oil, what the US did was

(01:29:06):
the US changed the mix in the basket they produced.
They added WTI to it. So at the point like
for example, like think about this, Biden wasn't swamp, but
someone was. At the point that the US was pumping
spr oil out trying to influence the rest of the

(01:29:27):
world's oil prices. We were only making a number of
ten percent of the basket. Who gives a shit, So
we changed the regulations that made the basket fifteen or
twenty percent, so we increased the multiplier effects. So Russia
understands this and they're like, look, I'm trading my natural
gas with everyone in the world listening to the US standards.

(01:29:50):
Let's start think about this is what's going on. Well,
let's start our own you know we have we aren't
just a supply. See that's the key. We're the ahead
of our own natural gas. Okay, So they created their
own standards and they eventually they essentially split the standards
of the world, and their standard is now the standard

(01:30:11):
for everyone who buys natural gas from them. Right, it's
the it's the Cold War gold. The gold product makes sense.
And I wasn't thinking of the way you were, but
now I am. I was looking at it simply like this.
Uh gold has gone east. Uh you're gonna I'm looking
for a dollar point of view. You're taking out support
on the dollar. The uh uh you you split the

(01:30:33):
standard like you do with natural gas. The lbm A,
the LBMA is dead. I'm just gonna say that, right,
the l b m A is dead. And the only
reason exists because there it's an it's an unwind and
and and or at least it's becoming weaker all the
banks to make up the l B m A. They're
trading in China now, you know, and they're going to
be trading in Russia if we clear the shootout. So

(01:30:54):
that's where the whole the Russia exchange thing is going
to be. Russia is the second biggest producer of gold
in the world and China's the first, and China is
the biggest buyer of gold in the world. And Russia
needs to take gold as payment because indirectly, because that's

(01:31:16):
their currency now and they want to trade internationally, and
so they need to take if you want to take
the pricing. Look we're taking go back to the exchange concept.
China's exchanges in volume are eclipsing, not eclipsing, but getting
pretty big relatives to the US. So there's sixty percent
of US volume. Let's say I'm make a number, right,

(01:31:37):
but it's close, but our open interest is dropping and
their open interest is going up. Then you got the
DGCX which is exploding Volue Dubai Do Bay exchange. So
they've got the futures contracts handled and now they're trying
to standardize the physical contract. See the Russian exchange. You know,
people are pulling metal out of Africa and refining it.

(01:32:02):
It's China standards. Now, you know it's not going good.
LBMA Bars, who gives a shit about the LBMA anyway,
I went that a little bit.

Speaker 1 (01:32:09):
No, it's really important. But no, that's that's all really important.
And the only thing I was trying to say was that, look,
we have to have a democratized gold pricing system so
that mercantilism can actually.

Speaker 2 (01:32:22):
Work, right or go away?

Speaker 1 (01:32:26):
Well first go first, go into effect right, right, and
then start to go away because ultimately we're but no, no, no,
I think the mercantilism argument stole holes and that there's
going to be trusted intermediaries, that money is going to
flow in but only come out, only flow out through
trusted intermediaries like we discussed about the United States. Remember

(01:32:47):
get rid of the comax move all you're right about again.
And the same thing for the Russians, like the people
who do business with them, if they're as good as
there were, and they are you know, and and and
everything else. As they build trust with their trade partners,
then they will be people will be able to hold

(01:33:08):
their wrapped gold that they traded on the Moscow Exchange
in a and a and a and a stable and
a gold stable coin that you know, we'll be able
to move from one to the other. But as long
as the gold, the global gold holdings are democratized, which
is why all the central banks are buying gold, because

(01:33:28):
they can see what we're going here, right, and that
I think is a very important plaint. So in order
to build this stable coin infrastructure that we're talking about
isn't just about US treasuries. It's actually about settling global
trade in whatever asset class. The person on the receiving,

(01:33:49):
the doing the receiving the money decides they want to
hold it in and all you need is a translation
layer of all of these currencies that bypasses this and
we don't even need the central banks to provide the liquid.
This is I'm telling you, this is all about doing
away with the old British central banking system. Dudes, I'm

(01:34:12):
telling you this is where this is.

Speaker 2 (01:34:13):
Going, right. Well, that's it's funny. It's funny. I mean
that a lot of look, starting with the East, you
know stable coins with Look, I want to get people
to use the stable coin. I need to make sure
that it's attached to an asset that is extremely safe. Exactly,
Let's try gold. It's like if you have a transporter
and you're watching a Star Trek episode. You don't test

(01:34:36):
it with a person. If you test it with gold
or something.

Speaker 1 (01:34:39):
Tested with you tested with the last night's left over dinner.

Speaker 2 (01:34:43):
Right right? No, But I mean, I mean you tested
with something that's going to be transported, you test it
with gold. What I'm saying is the stable coin is
not going to be something that's gonna let's put you know,
board apes in it. Maybe they will, I don't know.
But HSBC here here's one that you'll probably enjoy. The
two British centered banks that operate in Hong Kong, and

(01:35:06):
HSBC have just announced their stable coin push. At the
same time, Standard Torotter just put out a very nice
report saying gold should be owned. I can hear now
gold should be owned with our stable coin. HSBC already
has the stable coin now, So gold will benefit from

(01:35:29):
attaching itself to the stable coin network, and the network
will benefit from attaching itself to a stable asset. So
it's extremely bullish for goal, extremely because I'll accept I
won't accept your stable coin over international boundaries. If it's
got golden it, I will, you know.

Speaker 1 (01:35:50):
So, yeah, all right, No, I mean I think that's
a I think that puts a wrap on all of
this stuff. I think we want to leave it there.
I want to leave something for me in Caitlin to
talk about. But but what I will say is as well,
the one thing we haven't even begun to touch on
in all of this is no, no, never mind, I

(01:36:13):
don't remember what I was gonna say. Yeah, there's a
lot that we haven't touched on yet. This is just
the beginning of this conversation, not the end of it.
There's so much, so much more to that. That's that's
that's that's the compent.

Speaker 2 (01:36:26):
To be continued, I guess is the way to the
way to edit right.

Speaker 1 (01:36:29):
Always always right. Otherwise why I wouldn't need to have
Vince comeback on the podcast. So as always, Vince, you know,
do the plug thing. Let's get your let's get you
out the door and ready to Yeah.

Speaker 2 (01:36:39):
Here's the plug thing. The plug thing is uh D
b L Goldfix or Goldfix dot substack dot com U.
That's the newsletter. We put out content, multiple pieces of
content daily, so it's kind of a big tent uh
active trading, deep dive research and everything in between. The
other thing is, well, it's not an announcement. I just

(01:37:03):
let my subscribers know. So I'm taking awful week. I'm
partnering with one of the legendary editors from from dal
Jones News, Terry Wooden, and I'm going to be writing
a book finally, so my subscribers will get samples of
it as it's going out. Excellent.

Speaker 1 (01:37:24):
So you know, if your love with you, if you
love Vince, and you should because Vince is awesome, then
you should, you know, consider the subscribe and all of
that stuff. He's soaring the k on Twitter. I am
I am TfL seventeen twenty eight. You guys know the
drill Patregon slash gold goes the guns. We'll do this again,

(01:37:44):
you'd be well, you take care, We'll talk soon. Keep
your stick on the eyes

Speaker 2 (01:38:03):
Or not beyond

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Episode #223 - Vince Lanci and What Lurks Beneath Stablecoins

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Episode #223 - Vince Lanci and What Lurks Beneath Stablecoins