Andy Edstrom and Ansel Linder: Swan Signal Live E8

Swan Signal Live Episode 8 was broad­cast live on April 29^th. It featured a lively discus­sion between Andy Edstrom, author of Why Buy Bitcoin, Ansel Linder, host of the popular Bitcoin and Markets Podcast, and Cory Klipp­sten, Swan Bitcoin CEO. The episode was hosted by Swan’s Brady Swenson. Topics covered included geopo­lit­ical landscape, current macro-economic environ­ment, credit defla­tion, and Central Bank monetary policy.

Subscribe to the Swan Signal YouTube channel and Swan Signal podcast.

Transcript

Brady:

Welcome to the Swan Signal Podcast. A produc­tion of Swan Bitcoin. Swan is the best way to accumu­late Bitcoin using automatic recur­ring buys at swanBitcoin.com. I’m Brady, Head of Educa­tion at Swan. Every week I host a conver­sa­tion with Bitcoiners, along with our founder, Cory Klipp­sten, sometimes, our co-founder Yan Pritzker joins us. We broad­cast these live and then we publish the audio here on this feed. We call these sessions Swan Signal Live. It’s a group of Bitcoiners hanging out, talking about the latest Bitcoin and macro­eco­nomic news and musing about Bitcoins future.

Brady:

This week, we are joined by Andy Edstrom, finan­cial advisor and author of the book, Why Buy Bitcoin, and Ansel Lindner, longtime Bitcoiner, and host of the Bitcoin & Markets Podcast. Be sure to follow @SwanBitcoin on Twitter so you can tune in live whenever you’re able. We also broad­cast on YouTube, Facebook, and Twitch. If you can’t do it live, you’ll always be able to catch all the Swan Signal Live conver­sa­tions here on this podcast. Glad you found your way here. Hope you enjoy.

Brady:

All right, we are live. Welcome back to Swan Signal Live. This week we’ve got two great guests. First, I want to give a quick shill about Swan. Swan’s the best place to buy Bitcoin. You can set up a recur­ring buy, you can auto stack weekly, every other week, monthly. Best way to buy Bitcoin, dedicated to Bitcoin educa­tion, got a great tea. Our builder, the biddler of Swan is here, Yan Pritzker with us. We also have Ansel Lindner of the Bitcoin & Markets Podcast. Ansel is a personal favorite Bitcoiner of mine. I credit Ansible with red pilling me back in 2017. A Bitcoin & Markets must-listen. In my mind, in your Bitcoin rotation, Bitcoin podcast rotation. We also have Andy Edstrom. He’s a finan­cial advisor. He’s an early Swan investor. He’s the author of the book, Why Buy Bitcoin. A book he wrote to explain to his clients, Why Buy Bitcoin. So, welcome, Andy, welcome, Ansel. Glad to have you guys here.

Ansel Lindner:

Thanks for having me.

Andy Edstrom:

Pleasure is mine.

Brady:

All right, let’s dive in. I think we’ll just set the scene with getting you guys’s takes on the general macro-situa­tion we find ourselves in right now. There’s so much going on, and it’s changing week by week. So, just something that we need to address every week on this podcast. Andy, why don’t you kick us off. Give us your take on the macro scene here.

Andy Edstrom:

Yeah, wow. Wild times to be alive. I’ve spent an almost two decade career in finan­cial markets, and it’s crazier than it’s ever been. It’s even crazier than in the global finan­cial crisis of 2008 – 2009 and the Fed and other central banks had pulled a lot of the same tricks out of their hats, only at larger scale and some new ones also. It looks like, as Jim Bianco says, the Fed and the Treasury Depart­ment have effec­tively merged. So, indepen­dent central banking, which was always doubtful and shaky… any notion of that being real has more or less gone away? Yeah, it’s just a bizarre time with the Fed printing infinite dollars. We used to joke about QE infinity, and now it’s reality, and we’ve never seen govern­ment deficit spending in this quantity. It’s hard to imagine a better setup for Bitcoin. So, I think I’ll leave it there with that short summary, as I see it.

Brady:

Yeah. That’s great. Andy, thanks for that. Ansel, what’s your take, man, on this crazi­ness that we find ourselves in?

Ansel Lindner:

Well, I believe that we are in a general credit contrac­tion and a debt default cycle, so a large defla­tionary environ­ment is where we find ourselves. Even after, what, 11 years of money printing and rates at zero, we don’t see massive price increases, we actually see prices falling in every­thing that really matters like commodi­ties and stuff that you would measure against money. So, yeah, I think that there’s something different going on here. A little bit beyond the Austrian business cycle theory. So, I’ve been studying a lot in the euro-dollar stuff, and I don’t believe that we have a hyper-infla­tionary collapse coming. I think it’s going to be a defla­tionary collapse or a Japan­i­fi­ca­tion until there’s a new system, and I think we’re pretty close to it, like five years away.

Brady:

All right, man, let’s dive into that. I know that that’s probably a different take than most Bitcoiners have. Like you said, it’s a little different take than the Austrian theory might propose. Obviously, we see lots of Bitcoiners on Twitter and podcasts talking about the coming inevitable hyper­in­fla­tion of the dollar eventu­ally, and other fiat curren­cies before that. So, why do you see a longer-term defla­tionary cycle, and what do you mean by a new system?

Ansel Lindner:

Well, a new global system for inter­na­tional trade and settle­ment, like a gold standard. Then, we had Bretton Woods. Then we had the euro-dollar standard, which we’re still on now. I think that it has been dying ever since 2008, roughly. So, I just see that this is not a US dollar standard. We’re not on a global reserve currency on a US dollar standard. We’re on $1 standard, and the vast majority of dollars are outside of the United States and not fiat. They’re not attached to the Fed or the US govern­ment, they’re completely in an anarchic system outside on banks balance sheets outside the United States, and they have taken over the world, they have taken over the standard.

Ansel Lindner:

So, yeah, I think that they have stopped lending. We know that they’ve stopped lending, the liquidity is stopped. So, the system is failing. It’s been failing for 10 year so it can’t be too long until we go into a new system. They can’t continue this for 20, 30 years, I’m talking 5, maybe, 10.

Brady:

Okay, so in this euro-dollar theory, the other countries that are using dollars, they’re not actual… they’re just $1 denom­i­nated loans, essen­tially. They’re not neces­sarily backstopped by physical Fed dollar. In that theory, I think, the idea is that if the Fed is printing, it’s increasing the quantity of dollars effec­tively. It’s not actually going to be able to fix that problem, right. It’s not going to be able to fix the problem of, let’s say, banks in Japan or Europe lending in dollars denom­i­nated terms.

Brady:

So, what it’s actually doing is, it’s essen­tially propping up the dollar locally… or not propping up but increasing the quantity of the dollar locally, trying to pump liquidity into the system. But, that liquidity is not making it out to those banks. Is that what you’re saying?

Ansel Lindner:

Yeah, the liquidity is sitting on the balance sheet of the Fed as a liability. So, it’s not actually increasing the money supply. The govern­ment stimulus from the Treasury, you could consider that increase, or you could consider that money printing, but it’s still less than the overall defla­tionary pressure, the credit contrac­tion in the rest of the world. So, the net total is not money creation, the net total is money destruc­tion and contraction.

Andy Edstrom:

Can I jump in here? So, I, basically, agree with all that. I think one footnote to the euro-dollar system and the problem with the Fed printing dollars and they’re only here in the US is, the Fed does do its best to distribute dollars in the world, even though it’s not really in their mandate. They do have direct swap lines with foreign central banks, not with China, at least not yet, and maybe not ever. But, they do have some facil­i­ties in place. Those facil­i­ties were put in place in the finan­cial crisis in 2008 and 2009. They’ve been doing the same thing, this time around. However, I agree with Ansel that the net effect basically, of all this stuff, is still defla­tionary, at least, in the short-term. I don’t neces­sarily agree that it will be so in the long-term, but we can talk about that.

Ansel Lindner:

Yeah, just a note, too, on swap lines is, those are on a term. So yeah, they’re pumping dollars, but they’re increasing demand for dollars in the future. So, they’re just increasing demand for dollars by doing a swap line. So, they’re not actually increasing the money supply long-term. Those things have an expira­tion date.

Andy Edstrom:

That’s true. Although, so did the quanti­ta­tive easing. The idea was that they were going to remove all the money from the system, and it never happened. I definitely agree. They have maturi­ties, and the long-term imple­men­ta­tion of those is more tenuous, because, obviously, it’s a lot harder to justify handing your domestic currency to foreign govern­ments and foreign countries if it’s not benefiting you directly as the United States. So, yeah. But, we’ll see.

Ansel Lindner:

Well, there is a differ­ence between QE and those term loans, because QE is direct purchases of assets. Yes, they intended to wind it down, but it wasn’t on any fixed term or anything like that. They just been sitting there on the balance sheet. So, there is a slight bit of difference.

Brady:

Oh, they did start to wind down, right. The balance sheet was shrinking a little bit going into what, really, arguably may have caused this crisis, is them trying to roll back the QE, essen­tially, right. Then, because all of this started way before Corona… Corona maybe exacer­bated the problem, but we saw the repo issues, all that going into the crisis. So, what’s your take on that? I think Parker Lewis, and his Ender’s Game paper… I don’t know if you guys have read that, but he showed what had been going on the last 10 years. He, essen­tially, wrote… and I think this is in 2016, or 2017, he wrote this was going to happen as soon as the Fed tried to tighten, that all Hell was going to break loose, and they were going to just, basically, have to restart QE, which is what we saw happen. Do you guys subscribe to that theory? Do you agree with that as what has played out?

Andy Edstrom:

Yeah, I do. It was always going to be hard to reverse that giant machine that had been set in motion essen­tially. As we know, some of us on this call have become Austrians. Some of us always were, and some of us have become more recently. I wish I had become an Austrian econo­mist much more earlier than I did. But, yeah, when you start printing money and you start lowering interest rates that causes more debt in currents, which makes it all that much more diffi­cult to reverse it all. So yeah, we got stuck in this feedback loop between easier money and borrowing more, and then requiring easier money to keep the game going. So yeah, it was, probably, set in motion decades ago, arguably. I guess we could argue about, when was the moment when it became irreversible? Who knows? But, it’s been hard to escape, I think, for a long time.

Ansel Lindner:

Well, I don’t think it’s a coinci­dence that happened at the end of the bank’s fiscal year, the repo explo­sion that happened back in September. So, I think the tight­ening damaged the system or impaired the system enough that, then, at the end of the year, that’s when everyone had to pay the piper and rates exploded. So yeah, I think it’s all connected but it’s bigger than just the United States.

Andy Edstrom:

Agreed.

Brady:

You said there’s a defla­tionary contrac­tion, but, at the same time, we see big pumps in the stock market, right? The stock market is poten­tially decou­pled from reality, we have massive job losses, stocks keep going up. What’s your take on that? Is that infla­tion? Should we think about it as infla­tion or is it something else?

Ansel Lindner:

Well, it could be infla­tion. There is money creation happening… or, it’s not neces­sarily expan­sion of the money supply net, right. But, there is money creation happening which has distor­tions in the market. But, defla­tion also has distor­tions in the market so defla­tion doesn’t have happened like a general decrease in price level. You can have higher prices in some things and lower prices in other things.

Ansel Lindner:

So, we don’t know. We can’t say that, oh, look at stocks are going up, that’s infla­tionary. It might be a defla­tionary effect. We really can’t tell that. If people are searching out, trying to sell their bad debt and get into something that they think is a good bet, it might be the US stock market, right? So, they might be selling some of this bad collat­eral that they have and buying stocks with it. We just don’t know.

Andy Edstrom:

Okay, so I have a frame­work and I wrote about it in the book, which I’ll shill shame­lessly. Basically, it goes back to the Austrians and, specif­i­cally, it goes back to Mises, right? So, Mises, in Human Action, wrote about three primary classi­fi­ca­tions of goods. Consump­tion goods, that’s food and clothing and all the stuff we use day-to-day. Capital goods, which are the goods that produce more of the useful stuff like the consump­tion goods. Then, the monetary goods, of course, money. The idea was, well, if more of the monetary good is created, more money is printed, then it flows into capital goods, and it flows into consump­tion goods.

Andy Edstrom:

So then, we look at those two categories. Well, in the capital goods category, which includes paper claims against the actual produc­tive assets, right, stocks and bonds and all that good stuff. Well, those prices go up and that’s what we see happening. So, more money gets printed, some of it flows into the stock market, etc. Yan, as you suggested.

Andy Edstrom:

Now, on the consump­tion good side, it’s a little more compli­cated, because, although, it should be infla­tionary, right… if I hand you more dollars, and everyone on this call more dollars, we should be inclined to spend a little more. There’s also a couple of defla­tionary factors. One is the ongoing march of technology, right? That’s the, stuff gets better, faster, cheaper. Histor­ical periods like the latter half of the 19^th century, were like that, where, basically, there wasn’t gener­al­ized CPI infla­tion. Stuff actually got cheaper and people were better off. So, there’s the techno­log­ical factor, and then there’s also the free trade factor. This is the one that’s in reverse, big time right now, right? This is, we shipped all the jobs to China, and Asia, and Mexico, and Latin America. I’m gener­al­izing here, right. Because, the labor was cheaper.

Andy Edstrom:

That is in reverse, essen­tially, now after having expanded for a period of about… especially 15 years, between 2001 when China joined the World Trade Organi­za­tion, until, basically, Trump’s election. So, that’s a cost push infla­tion, which is happening right now. There’s differing opinions on how long it’s going to last, or how far it’s going to go. I have a couple clients who are, no, eventu­ally, we’ll go back to making stuff in foreign countries because it’s cheaper, and that’s the ultimate economic imper­a­tive. That may be true 10, 20 years from now, but it’s hard to see, right now, how the geopol­i­tics and the pandemic dynamic don’t force us to, basically, on-shore, re-shore all this produc­tion. That’s going to be expen­sive, it’s going to result in increases of price of goods.

Andy Edstrom:

So, when I think about Ansel’s model, which… by the way, none of this is really refutable, right? Basically, we’ll just see how it plays out. Ansel has a strong case, which is, there are very signif­i­cant defla­tionary forces and we can look to models like Japan and see, well, yeah, sure debts high in the US now, and, sure, we’re printing a lot of money, but look at Japan, where the govern­ment debt is 100’s of percent of GDP. Right. And, it’s been that way for a long time. They keep printing money and the house of cards continues onward.

Andy Edstrom:

But, I think we’re at an inter­esting point where the cost-push infla­tion is coming. The techno­log­ical defla­tion is ongoing, some would argue it’s even accel­er­ating. Then, we got the money printing. So, what’s the net effect of all of it? We’ll find out. I’m not sure we know. I definitely agree with Ansel that it’s going to be defla­tionary for some period of time. Then, the question is, will it ultimately be infla­tionary? I have a few more things to say about that but I’ll stop there.

Ansel Lindner:

I think it’s inter­esting that some goods can go up by 500%, still in a defla­tionary period, because the supply chains are broken. So, you can’t get certain goods, almost, for any cost, right? Then, you have the reverse of that, like oil, where it’s negative in price, where they can’t give it away. So, yeah, it’s really hard to trace the effects. You’re talking about this cost push with jobs coming back here, that’s not neces­sarily infla­tion. That’s just a change in consumer behavior, right. So, I don’t think that’s neces­sarily an argument for infla­tion versus deflation.

Brady:

You don’t think that-

Andy Edstrom:

Yeah, go ahead.

Brady:

You don’t think that it will push up consumer prices if we bring produc­tion back here where it’s more expensive?

Ansel Lindner:

Yeah, I think it most likely will, but that’s not infla­tionary effect. That’s just a change in demand. Infla­tion, techni­cally, being increase in the money supply, which then causes an increase in prices. So, these prices aren’t caused by an increase in the money supply. We could have a totally fixed Bitcoin world, and prices would still increase in that case, because, just, costs are going up. Consumer behavior is changing, it’s not inflation.

Andy Edstrom:

Yeah, I think it’s possible to get lost in the termi­nology too. Some of the Austrians would say infla­tion is just the change in the quantity of money, period. Whereas, the Keyne­sian econo­mists or classical econo­mists would say, infla­tion is the change in the purchase price, on average, of the consumer basket of goods as measured in the most common medium of exchange. So, we should, maybe, avoid tripping over ourselves on that point, but yeah-

Ansel Lindner:

Seman­tics.

Brady:

We’re talk about supply infla­tion versus price infla­tion, because I do think most people don’t think about infla­tion in Austrian terms, and would be confused by that.

Ansel Lindner:

Well, they do if they’re talking about the berming, right. That is, directly, a monetary expan­sion argument. So, I think more people, at least in Bitcoin space, they see it that way. Also, there’s a lot of things that can cause prices to go up and down, they naturally fluctuate. A storm can cause prices to go up and down. So, by looking at prices, is a very hard way to tell if there’s infla­tion or defla­tion. I think you can look at trends, maybe. Look at the commodity space right now. Every­thing is been going down for two years. I just wrote about this in my member newsletter, this last time. I looked at live cattle, I looked at carbon steel, I looked at copper, I looked at aluminum, and every­thing is in a two-year bear market. The dollar strength­ening against every­thing. There is no infla­tion in that respect.

Andy Edstrom:

I’ll definitely back up Ansel on the concept that there’s a very large basket of goods. Number one, you can’t really measure it with that much accuracy. Number two, there’s different factors going on in different parts of the basket. Yeah, those are some issues that we face when we’re even talking about the cost or the price of the average good that we consume.

Andy Edstrom:

Oh, and then there’s also, of course, substi­tu­tion over time as certain things go obsolete, consumer prefer­ences. See Cory joined.

Cory:

Hey, every­body, how’s it going?

Ansel Lindner:

Hi, Cory, nice to meet you.

Cory:

You as well, Ansel. Big fan of the show, and really glad that you came and joined us today.

Andy Edstrom:

We’re debating economics, we’re talking infla­tion, defla­tion, and, yeah, that’s where we are.

Ansel Lindner:

Just the usual day in the Bitcoin sphere.

Cory:

Usual day, just a nice little 10 or 11% pump. Today, the news stories will all be about how corre­lated it is with the S&P and then something else will happen tomorrow, and we’ll just keep on showing four-year green candles.

Andy Edstrom:

That’s right, that is my favorite, is the 10-year candle or whatever it is.

Cory:

Also known as the sover­eign flag of Bitcoin, which is just a green bar going straight up on a white flag.

Andy Edstrom:

It’s a vertical flag rather than a horizontal one.

Cory:

Exactly. There you go. That’s actually a good point.

Ansel Lindner:

That was my same thought when I saw the green candle on Bitcoin and the S&P was, “Oh, crap, now we got to hear about how it’s all corre­lated again.”

Brady:

Yeah. So, Cory, I think you probably have something to weigh in on here with the infla­tion versus defla­tion stuff. I don’t know how much time you have though so I wanted to hand it over to you to-

Cory:

We can continue the conver­sa­tion, I’m here for the duration. We’re good.

Brady:

Okay, great.

Cory:

Lock the kids out and everything.

Ansel Lindner:

Beautiful.

Brady:

Awesome. Yeah, so the conver­sa­tion, like I said, has been about infla­tion and defla­tion, we have… Ansel’s take is that we’re going to be in a defla­tionary environ­ment for longer than most Bitcoiners think, or Austrian econo­mists might think, mainly because there’s just so much debt out there that we can’t really print enough. So, there’s got to be some wind down for quite a while. Andy’s, essen­tially, agreeing on the same part, but I think the timeline, probably, is a bit different in Andy’s mind.

Cory:

What’s the range that we have? What’s the the long end and the short end of the duration so far?

Ansel Lindner:

Good question.

Andy Edstrom:

I said five years, because it’s… the euro-dollar system is coming to an end, I believe. I think it’s been, pretty much, stalled for 12 years. So, we only have a short time left and I don’t know what that system is going to be, but there’s probably going to be some Plaza Accord or Bretton Woods 2, something like that.

Cory:

Yeah, it seems like they’re certainly going to have to try something like that to patch this whole thing together. Other­wise, 10s of trillions of dollars needed to backstop every­thing in the current system and nobody’s going to, really, print that. You’re already starting to see people in the govern­ment and the Fed sending signals that this cash train won’t go forever. There’s a place at which it may stop so I tend to agree with that.

Cory:

I’ve probably heard… I listen to all these macro podcasts and every­thing on the short-end, six to 12 months of defla­tion and, then, flip to the long awaited move to an infla­tionary period. Then, yeah, something more like three years, five years, something like that. I’m probably in the latter camp with you, Ansel, I think it’s going to take a little bit longer to work all this out. There’s just so many defla­tionary pressures with what’s going on with the economy and how unemploy­ment is off the charts. There’s a lot of things pushing things down.

Andy Edstrom:

All right, so I’ll go on record because I did recently in another channel. So, I sent a memo to my clients recently, and what I said was, when I wrote the book, which was published in September, if you’d asked me how long it was going to take to realize signif­i­cant infla­tion, I would have said sometime in the next decade, but I don’t know if it’s 2 years or 10, basically. Then, the pandemic hit. So, what I told them was, now, I think it’s probably 5. It’s funny that we all have come to this five-year view. I suppose, Ansel, you’re suggesting that, maybe, that’s the inflec­tion point from defla­tion to, maybe, neutrality. I’m suggesting that, maybe, by then, we see mid single-digit CPI in the US, and all the way up. But, sounds like there’s some consensus here, although, I guess, I’m, maybe, a little more aggressive.

Ansel Lindner:

Yeah. If you look at 2008, through, say, 2010 or 11, we did have a recovery, but it never got back to previous growth. Right? It was stagna­tion a little bit, if you will. This time, I think we will have a recovery, but that growth will be flat just like in Japan, zero percent growth. And, that’s a global standard. So, how long can the world polit­i­cally and geopo­lit­i­cally stand with zero growth? I don’t think the CCP will make it, I don’t think the the EU will make it, and those are dramatic effects. Like I said, all those things, probably, within five years, we’ll see how many come true.

Andy Edstrom:

All right, so I’ll play devil’s advocate a little bit on Japan. I agree. A lot of people look at Japan and they say, look how far down the road they’ve gotten and the system’s holding together. A couple differ­ences between, let’s say, the US and Japan. One is, just, obviously, cultur­ally, which is they have more… let’s say, they all pull in the same direc­tion to a greater degree than we do here in the US. So, that’s number one.

Andy Edstrom:

Number two, a huge amount of the bonds are held domes­ti­cally, right. So, in other words, as long as they… say, Mrs. Watanabe keeps buying govern­ment bonds they can prop the thing up. Then, the third is, the demographics over there are different than ours. We have better demographics. We still have a little bit of immigra­tion. Granted, that’s in reverse right now, but there’s some infla­tionary pressure from that. So, I would say, comparing the US to Japan, there’s some signif­i­cant differ­ences. That’s one.

Andy Edstrom:

The second is, this is a real logical fallacy to say… let’s say, Japan can get to govern­ment debt to GDP of 350%. There­fore, the US can get there. All it takes is a change in expec­ta­tions, right. Or investors say, okay, it’s been good in Japan for a long time, but now every central bank in the world is doing it. I wonder if there’s a limit to that. By the way, you could hit the breaking point in Japan where there’s reversal, the currency plummets, the central bank base case to buy old bonds, which they’ve already been doing, but they’re not there yet. That doesn’t mean that people look at Japan and say, oh, they got to 350% govern­ment debt to GDP. Then, at 351%, it all came down. So, if we can get to 350% we’ll be safe. But, if we go past that, it’s going to change.

Andy Edstrom:

No, it could be a complete change in expec­ta­tions. That’s the human psychology element that is, just, totally absent. At what point does the public say, oh, the Feds printing X dollars versus X plus one, and people look around at each other and there’s a shift in senti­ment. That’s, basically, completely unknow­able. None of us can predict if or when that happens. So, we just have to have some humility about human psychology and the unpre­dictability of that.

Ansel Lindner:

Yeah, I agree it’s depen­dent on a lot of those things. I think the piece that’s missing there is that there’s no other system to go to. So yes, people might want to change, people might want to drop the dollar, they might not want to denom­i­nate inter­na­tional trade and settle­ment in US dollars, but what else do they do? There’s a first mover disad­van­tage here. Like, in Bitcoin, there’s a first mover advan­tage, you buy early and you huddle and you benefit the most. But, in these systems, or in the dollar system, the first person to leave, loses the most. So, nobody wants to leave and there’s nothing to move to.

Ansel Lindner:

You could say gold, but there’s no system setup. That’s going to take a long time. You could say Bitcoin, but Bitcoin is too small. So, right now Bitcoin is too small, it’s going to grow, of course. But, yeah, that’s what’s going to keep us on the dollar standard, and that’s what’s going to be able to keep us going to 300%. Not because Japan has done it, but because there’s nothing else to do. That’s the only option there is.

Andy Edstrom:

Yeah, I guess, I’ll push back on that. As we know, almost every asset has some monetary compo­nent. It might not be large but I can imagine a world which already looks like some other countries… I don’t know, Argentina… pick some country where it’s not neces­sarily hyper­in­fla­tion, but it’s signif­i­cant infla­tion, 20, 30, 40% a year. The velocity of money goes up. People decide, well, if my liquid net worth is, pick a number, 10 grand, I would have been comfort­able holding the fiat currency of land in that, quote, unquote store value, but now, maybe, I’m going to hold something else. Maybe, I’m going to hold some consumer good.

Andy Edstrom:

So, toilet paper… you can talk about monetary metals and coins and gold and stuff, but I think you can see a substi­tu­tion effect, essen­tially, between fiat… and we talked about it, the dollar versus other fiats. That’s complexity there. But, I could imagine, that people just decide to, as I said, hoard less money and hoard other stuff that is somewhat liquid, partly substi­tutes. It’s not as good as holding dollars, obviously, but we could see some of that going on.

Ansel Lindner:

Yeah, that would lead to massive defla­tion. Right?

Andy Edstrom:

I don’t follow that logic, but tell me more.

Ansel Lindner:

Well, if money’s not circu­lating, people can’t pay their debts, that credit is destroyed.

Andy Edstrom:

On the contrary, that’d be higher level of monetary circu­la­tion because that’s the, as soon as you pay me pesos, I want to get those out of my hands as fast as possible. The govern­ment will still pay people’s paychecks in pesos so you’ll have that constant push of the fiat that way. To the extent that compa­nies and individ­uals can get away with paying people in pesos. They will, that’s what we saw in Argentina. That’s what Wences Casares, founder of Zappo, somewhat early Bitcoiner, talks about. When he was growing up, his mom, I think, worked for the govern­ment. She got a paycheck and they would sprint to the grocery store, right? Get rid get rid of those hot pesos as fast as they possibly could to buy, liter­ally, anything.

Andy Edstrom:

So, I think that’s the scenario where, actually, the velocity of money goes up. That is, infla­tionary… Well, again, I don’t want to get caught in the seman­tics, but that’s what I’m talking about.

Ansel Lindner:

No, I was specif­i­cally speaking, if hoarding goes up… I guess, you were talking about hoarding of other assets. So, yeah.

Andy Edstrom:

Yeah. Exactly, no, you made a good point about hoarding. I’m talking about, it’s, basically, a substi­tu­tion effect. Although, I agree, you could view that as hoarding.

Ansel Lindner:

But also, those things are less liquid, right?

Andy Edstrom:

Yeah, totally.

Ansel Lindner:

So, you have that effect as well. If politi­cians can help it… if Chairman Powell, if Presi­dent Trump, if they can help it, they won’t let that happen. They will meet all the defla­tionary pressure with infla­tion, to keep it at 0% growth, basically. For short periods of time, they might be able to get some positive growth, but as soon as growth goes negative, they’re going to turn on those money printers and try to keep that defla­tion from happening in the system.

Andy Edstrom:

Well, there we definitely agree. I wrote about this in my book, which is, in May of last year, some new language popped up in the FOMC, the Federal Reserve Notes, basically. The announce­ments they’re putting out. They started talking about how the infla­tion target is, quote, symmetric, right. What that means is, they’ve been under­shooting their target as they measure it, and as stated, for years now, and there­fore it would be okay if they overshot the target for a while. Now, they may fail to reach the target, just like the Bank of Japan has failed to meet their infla­tion target, but they’re going to try real hard. So, there we agree.

Cory:

So, to put that in very simple terms, they’ve, basically, been targeting 2% for a long time and always stayed on under it. Since they were under it, now they’re saying, oh, well, we’ve got all those years that we were under 2%, we can add those up, and go over 2% now.

Yan Pritzker:

I still don’t under­stand, how do we think about prices in non-consumer goods? Like you guys said, and we all agree, consumer goods, actually, should be defla­tionary. The prices should be going down due to the effects of technology. So, we don’t know what the actual defla­tion should be if we were on a Bitcoin standard, and there was no distor­tion in the measuring stick, right? We don’t know what the actual effects of technology should be. So, to say that we should be at 1% or 2%, it’s an arbitrary number. Yet, other things in the system, like educa­tion, housing, the stock market, those things are going up a lot. How can we say that there is overall defla­tion just by looking at consumer goods? It seems to me like it’s missing the entire picture because we don’t know what the infla­tion and consumer goods should be, it’s completely arbitrary.

Yan Pritzker:

Whereas, the things that we actually need, like absolutely need… we need housing for the most part, we need educa­tion, and those things are going up a lot. So, how do you think about the price rise there with regards to this conversation?

Andy Edstrom:

So, I’ll take it for a sec. I think, Yan, you cut to the nub of it, which is, in a functioning economy, there should be defla­tion in the price of consumer goods. That is to say, on average, consumer goods should go down because of the techno­log­ical effect. Let’s forget about free trade and stuff, just exclude that for now. So, that’s the way it ought to be. But, for whatever reason, our central banks and their wisdom have decided that, no, we should have positive infla­tion for the price of goods.

Andy Edstrom:

So, they pump out all this money, which, to some degree, counter­acts the defla­tionary forces and consumer goods. Then, as we said earlier, some of it just flows into the capital goods, jacks up their price… it causes people to incur debt because there’s an invest­ment oppor­tu­nity. If you’re going to lower interest rates, so that I can leverage up my house or my stock portfolio or whatever. You give me free money, I’m going to take it, right. I just refinanced my mortgage last week. You lower the interest rate, I’ll take the cheaper money. Never­mind, that price is a whole gener­a­tion of poten­tial home buyers out of the market.

Andy Edstrom:

But yeah, I think that, right there, is the crucial, central error that this whole central bank, fiat monetary system is built on and the damage it’s done is huge.

Ansel Lindner:

Yeah, I’ll just add to that. Every­thing’s inter­con­nected, so the defla­tion from technology is, actually, likely, a result of some stimulus, or, at least, a lot of it. So, you get stimulus in the economy, you invent new technology, there’s lots of entre­pre­neur­ship because it’s all stimu­lated, and that leads to higher produc­tivity, and, eventu­ally, defla­tion. So, every­thing is weirdly connected.

Ansel Lindner:

Yeah, I agree that we don’t know what the defla­tion rate should be. We just have to go back to first princi­ples and say, this is the result of this. This is on a global scale, what’s happening, and then let people figure it out under­neath that.

Yan Pritzker:

I’ve definitely heard it argued also, that certain… the way that our economy is with the amount of stimulus that we do have, there are certain types of compa­nies that wouldn’t even exist. If you look at an Uber, that required billions of dollars to really spin up, would that have worked in a hard money environ­ment? Would investors have partnered with that much capital to have this thing lose money forever just to grow? Possibly not.

Yan Pritzker:

So, that’s an inter­esting counter­ar­gu­ment to the Bitcoiner thesis that if we all earn hard money, we would just invent really great stuff, and we would all wait for the right oppor­tu­nity to invest in something really, really inter­esting. Yet, you have counter-examples of modern-tech compa­nies that have to burn billions of dollars to get profit to profitability. Or, sometimes never see profitability, and yet deliver a useful service. So, I think that’s a very inter­esting thing to think about as well, just to play devil’s advocate on the Bitcoiner thesis.

Andy Edstrom:

I do, too. I want to marry those two ideas, which Ansel suggests, that, look, if you force capital into innova­tion, you may actually get some useful stuff out of that. If you capitalize more compa­nies, some number of which are innov­a­tive, then technology advances more quickly, and there­fore, you get more defla­tion, which is good for the consumer. Then, the counter argument is, what you’re talking about, Yan, which is, you also push a bunch more capital to businesses that liter­ally shouldn’t exist, or, at least, they should be constructed more efficiently than they had been. So, you get a huge misal­lo­ca­tion of capital. So, which factor is greater? I think the Austrians would argue that the misal­lo­ca­tion of capital swamps the other factor and that the conceit that some Board of Gover­nors can, centrally, plan and set the time cost of money or time value of money, is bound to lead to ineffi­cien­cies, overall. But, man, it’s hard to measure and quantify all this stuff.

Brady:

In a system like that, I don’t think that… a company like Uber wouldn’t exist, right? I just think it wouldn’t exist at that scale, I think you’d have a lot smaller and local compa­nies that provide that service, and, maybe, you’d have some merging of those compa­nies over time. But, yeah, an Uber wouldn’t be able to scale as fast as that kind of capital. But, that idea, I think, would arise, and then you’d have smaller compa­nies that would be able to maintain profits, right, with their smaller scale.

Andy Edstrom:

By the way, then you might have less dominant monop­o­lies, ultimately in the economy, with pricing power that get to extract rents from us all. I keep reading about what a great guy Bill Gates is because he’s pushing all this money toward finding a vaccine and toward treat­ments. That’s all true. We just have to remember that the reason he has the money to do that, is because he’s extracted those monopoly rents out of everyone in the world who uses a computer for the last 30 years.

Andy Edstrom:

By the way, he hasn’t really innovated all that much along the way. Yes, Dos… Dos was, I guess, useful and innov­a­tive. Windows was a copy of what Apple did, which was a copy of what they did at Xerox PARC. But, since then, there hasn’t been a lot of innova­tion coming out of Microsoft.

Brady:

He bought Dos, too, from some one else.

Andy Edstrom:

Good point.

Ansel Lindner:

You guys are destroying my child­hood here right now.

Brady:

Yeah, so I have a note here to go back to this idea. Ansel, you mentioned that we have this system, they’ll be a collapse of the euro-dollar system at some point. You’re saying, maybe, in the next five years. Then, what do we go to, what system do we go to? Gold, there’s no estab­lished system to go to. Bitcoin’s, maybe too small. Who knows if it’ll be too small in five years or not? But, you also mentioned this idea of a Bretton Woods agree­ment. What would the world agree on? What kind of money would that be? What would that look like?

Ansel Lindner:

I don’t know. I don’t think the central bankers have any idea. I think the hair on the back of their neck is standing up, and that’s why there’s so much interest the central bank digital curren­cies right now, because they think that there’s something there to replace the system. But, I don’t know, I don’t think they would go back to gold. There’s a possi­bility that they could do some… exactly like they had before, Bretton Woods. They could even do something like the Plaza Accord where they just devalued the dollar versus every­thing else. But, I don’t know the mecha­nism, they would go about doing that. So, we don’t know. I wish I did know.

Yan Pritzker:

I’ll, firstly, go to a digital dollar, right, and make sure that every­body has… there’s no more cash in the system and then they press the button. There’s your deval­u­a­tion right there.

Andy Edstrom:

Yeah, that’s definitely possible. The question is how long the banking lobby can hold them off from that? I think that the bank CEOs who take daily calls from Steve Mnuchin… maybe hourly calls, at this point, would have… who have clearly captured the govern­ment and their regula­tors, are going to push hard against any dollar that I can hold directly outside of the banking system. But, that doesn’t mean that it won’t eventu­ally happen. I think they’ll hold that off for a while. But yeah, as we look out five years-plus, who knows what that new monetary form could be?

Andy Edstrom:

I could also imagine consor­tiums of foreign countries. The central banks have been buying tons of gold in the last decade. I could imagine some consor­tium of nations which posts some bag of collat­eral, which includes gold, could include some other assets and, maybe, it’s mostly backed or partly backed. Granted, you got to depend on the court rule of law of these upstanding world citizen govern­ments. But, we could see some new stuff that looks like what Libra… what Facebook tried to launch in some slightly modified form. Yeah, it could get really inter­esting. There could be some new models that are tried.

Ansel Lindner:

Yeah, I think China could take maximum pain and just try to set up a system on their own. They’re going towards that, setting up their trade network, setting up all these… the Belt and Road type initia­tives. They had a competitor to the IMF, but for Asia. I can’t remember the name…

Andy Edstrom:

It was the Asian Devel­op­ment Bank. I can’t remember if that’s the right one. But yes, it’s a new entity.

Ansel Lindner:

Yeah. So, they’re setting up all these different things, these inter­na­tional type things, and they might be able to… since they’re so author­i­tarian, like North Korea, they might be able to enforce this austerity on their people and leave the dollar standard. Then, we have this bipolar world of a western monetary standard and an eastern monetary standard. That’s mostly China, because there’s not going to be a lot of people that are going to ditch Japan and the west for China and their author­i­tar­i­anism. So, I can see something like that, maybe, being the impetus behind going to some new system. Maybe, having some sort of debt Jubilee at that point, I don’t know.

Cory:

On that China point, I’ll just chime in because I just finished listening to the China Chapter. It’s Chapter five or six of Peter Zeihan book, Disunited Nations. I’ve been following Stratfor and George Friedman, and Peter for a long, long time, since ’05 or something. Yeah, that perspec­tive, which I probably share, and I think a lot of people are starting to under­stand China a little better as they become more impor­tant. Probably, the last four or five years has been pretty eye opening for a lot of people here in the States.

Cory:

That ain’t happening. They do not have sway over the neigh­bors, only a overvalued Yuan has bought their way into some of these relation­ships with, essen­tially, enemies in their region who don’t want to be part of any China system. This goes for all of South­east Asia. No one in India wants anything to do with them, the Central Asian republics, unless there’s tons and tons of free money coming with it, they’re not going to play ball, let alone Taiwan, Japan, Korea, nobody wants anything to do with it. So, I don’t see any Pan-Asian, China-centric, thing coming to pass. Frankly, it’s not going to happen.

Cory:

We’ll see what happens. China probably has to just play ball. Like, Japan has learned over the last couple of years, the best thing you can do is, just, give the US every­thing that you can possibly give them and hope that they’re nice to you. China can’t exist in its current form. A unified China can’t exist without the current global system. It’s a creature of the global system that’s under­pinned by the US military and the dollar and every­thing else, too. It’s just been our manufac­turing district, so they don’t have natural resources to support their popula­tion or their economy, and they have to get all that shipped in, and they don’t control the sea lanes. So, they’ve got to play ball too.

Cory:

Or, basically, close the gates, social credits, all that scary 1984 stuff that’s already well underway. I think they’re playing both because they don’t know which way it’s going to go. They’d prefer to stay under the US system somehow, while still stealing as much as possible from IP, economy, whatever. But, they also know that it might just be shut in their face, and they’ll have no say in the game. In which case, they would have to shut down and they’re just going to be trying to figure out how to maintain control in Beijing when everyone down south would rather play global trade as they always have. In the same way that we look at the last five millennia and say, oh, there’s only been 100 years of, just, pure fiat.

Cory:

So, this is an aberra­tion that we’re hopefully coming out of with Bitcoin. China’s a similar story. This is just the cliff notes of Stratfor, Peter Zeihan, and stuff in the last 15 years. Basically, saying, this last couple hundred years of a mostly unified China, is absolutely the total aberra­tion. This is 5% of their history. It’s been warring states and Sun Soo and all that kind of stuff throughout their entire history, and it’s never been cohesive except for very recently. It’s basically the economic boom brought on by a US led system post-World War 2, that has let China flourish and let them ship without having to pay for a military to ship their goods all over the world and to have raw resources sent their way from the Gulf, etc.

Andy Edstrom:

So, I’ll jump in. I’ve been dying to read Peter Zeihan’s book. I haven’t got around to it. I’ve heard him on a few podcasts, so I’ve heard part of his thesis. I, gener­ally, agree with it. The one unknown variable for me, is tech and, specif­i­cally, software and AI. It could be a minority within the Chinese Commu­nist Party that has seen a poten­tial out for them, which is hey, if we can basically advance the border or the frontier of AI and actually, basically, move to the forefront. I’m not saying that’s going to happen. Our tech compa­nies are pretty damn good at what they do here in the US, but I could imagine a scenario in which China achieves some level or some headstart… I don’t want to say supremacy. But, let’s say, they do very well in AI and software and cryptog­raphy and they figure out good ways to attack the nervous system of foreign militaries. It’s one thing to have carrier groups in the water, it’s another thing to success­fully control them.

Andy Edstrom:

So, that’s one risk. It’s a minority risk. It’s a lower proba­bility risk that I think about as it relates to China challenging the US led world order. So, I’m not losing sleep over it, but I think it’s one thing that’s worth consid­ering. I hope I’m wrong. I’m a proud American. I like our system and our way of life, despite all its flaws, and I’d rather live under an American World Order than several others that I can think of.

Brady:

Yeah, well, if… Sorry, for some reason, Zoom’s not going over to me when I start talking. So, if this bipolar world emerges… Maybe, it doesn’t as Cory was saying. Even, if we get to a point in five years or so, where this euro-dollar system fails, and the world is scram­bling to try to replace that system with some semblance of order. We’re all not sure exactly what would fall back to. I’m thinking it will be Bitcoin. That will be the moment that will spur, I think, a move to Bitcoin. I think the narra­tive of fiat money is just dead at that point, right. Bitcoin’s been talking about this for a long time. Austri­an’s been talking about it for a long time. If this happens, and there’s just massive pain around the world, people are going to look to other ideas. Like, who has had ideas that are alter­na­tives to this idea that has utterly failed, right? So, I don’t think the trust will be there to estab­lish another global fiat system.

Andy Edstrom:

I tend to agree. Getting a bunch of countries, all, to pull in the same direc­tion is near impos­sible. We’ve seen it with other global issues, and it hit super hard.

Brady:

Yeah.

Ansel Lindner:

Well, going from one system to another is nearly impos­sible unless you have an, already, estab­lished alter­na­tive. So, from the pound to the dollar standard, you had a spectrum there or it slowly faded into $1 standard. Then, with the Bretton Woods into the euro-dollar standard, the euro-dollar system had been up and going since early 60s. So, that gave it 10 years to build in. At this point, we’re at a different situa­tion because there is no major alter­na­tive that would enable a smooth transi­tion. If there’s a force to transi­tion, then we’re talking 50% of the world’s GDP is gone. I don’t think that that is going to be polit­i­cally accept­able to anyone.

Ansel Lindner:

So, they’ll just continue printing and continue trying to prop up this system with zero growth until they can agree. They might be forced to agree. I wasn’t saying that China, neces­sarily, would be successful in setting up a competing system. I was saying that North Korea views the world as a bilat­eral world. It’s North Korea, and then there’s everyone else, and they’re fighting the system, or trying to devolve into the same thing where they just separate themselves from the world. They feel like they’re fighting big, bad United States or something. The US might not see it as a Cold War, but I bet China will in the future.

Ansel Lindner:

So, maybe, at that point, that’s an excuse for everyone to pull in the same direc­tion. Because, once you get China off the chess­board, it’s much easier to get every­body aligned, you know what I mean? So, we will focus all of this negative pressure against China, getting every­body on the same sheet of music, and then we can set up a new system. Something along those lines.

Brady:

Why not Bitcoin, man?

Ansel Lindner:

Why not Bitcoin? Well, I do think Bitcoin will happen, eventu­ally. But, my timeframe is five years, maybe 10. But, yeah, it’s too soon-

Andy Edstrom:

Five years is a pretty good outcome. Are you talking hyper­bit­coiniza­tion in five years? I’ll take that.

Ansel Lindner:

Well, no, I’m thinking that this next run, we might get to a trillion-dollar market cap or 2 trillion, but that’s still too small. So, we’re going to have to wait another cycle. At that time, that would be right in the ballpark of when they’re having these talks in my mind. Okay. In my predic­tions. So, it’s possible. Say, the market cap is 10 or 20 trillion at that point, Bitcoin will definitely be in the conver­sa­tion, 100%. But, it just won’t happen this time. You know what I mean?

Andy Edstrom:

Yeah, I don’t disagree with that.

Ansel Lindner:

It might take another 10 years after that, something like that.

Andy Edstrom:

That’s a very reason­able predic­tion. I agree 100%, Bitcoins not ready for prime­time to be global currency yet. We’re still building out on-ramps, like Swan and others. We’re still building out wallets and inter­op­er­ability. The good news with all the money printing, is that more and more people in foreign countries that have really weak curren­cies are looking to Bitcoin, or they’re looking to stable coins and that will get them comfort­able with tokenized money, then, maybe, they’ll look at Bitcoin after that.

Andy Edstrom:

Yeah, I think that’s timeframe of a decade… it’s hard to see Bitcoin just taking over in five years. I agree with that completely. Possible, but, yeah, a couple more cycles.

Brady:

Yeah, I think there’s a world where this transi­tion is smoother than we think because the existing system lasts longer than we think, and Bitcoin has longer to mature than we think. Maybe, that’s the best of all worlds. So, we have a slow transi­tion. I always think about Bitcoin as a parallel system. I don’t think it replaces the dollar overnight, I think every­body starts saving a little bit of Bitcoin. Pretty soon compa­nies have a little bit of Bitcoin, pretty soon govern­ments have a little bit of Bitcoin. Then, when every­body’s got a little bit of Bitcoin, then it totally makes sense. But, we’re far from that point.

Brady:

This system that we’re in now, is enforced by some very powerful struc­tures. They’re not going to go down without a fight, I don’t think. Even, if we think that the pressures in the economy are such, there’s all kinds of things that the govern­ments will do to hang on to the power, especially the United States. It’s going to fight for the dollar system at all costs.

Andy Edstrom:

100%.

Ansel Lindner:

I really think that trust is such a big factor here, though, that we’re under­es­ti­mating. I think that since Bitcoin is this grass­roots movement, this organic adoption of a new money, to me, once trust fails, and it’s happening right now, in fiat money, then there’s going to be this organic move to Bitcoin. A money, that’s more trust­worthy, right? Then, you have demand for Bitcoin in other ways, not just to buy and hold as a store of value, you have demand as a medium of exchange, because producers are going to start saying, I don’t want this fiat money, I don’t trust it anymore, I want to make Bitcoin so I’m going to ask for Bitcoin.

Ansel Lindner:

Then, the parallel system just starts to take over in this organic way. I think it’s going to happen through a medium of exchange, which is what Austrians talk about in the moneti­za­tion process.

Brady:

Yeah, that’s a real good point. But, trust can be backstopped by other agencies, and most people don’t care. Most people believe the headlines. So, the smart people will slowly trickle into Bitcoin. Then, we might use it on a small scale, right, like some local trade or online trade, maybe, even for content or something like that. There’s some economy or dark markets, of course. But, to replace inter­na­tional trade and settle­ment, we’re talking hundreds of billions of dollars trans­ac­tions in a single trans­ac­tion. Sometimes, maybe, or, at least, a billion. So, that’s a big step from paying $1 to read an article or something like that online. That takes a lot longer for people to trust Bitcoin. They might lose confi­dence in the system, which probably will take longer than we expect, like Yan was saying. But, it takes a lot longer than we expect for people to gain this humon­gous amount of trust in Bitcoin that’s needed.

Andy Edstrom:

Especially, when the supply is limited and you get, there­fore, no elasticity of supply and the prices moves up and down. I think this gets Ansel into… what every one of us on this call probably agree on, which is, educa­tion is impor­tant. Because, you got to get people to wrap their heads around… or, at least, you got to get enough people to wrap their heads enough around how Bitcoin works and why it’s secure and why it is trust­worthy. That’s an uphill battle. I guess, time is our friend on that one. We all have done our parts here to try and help educate people, whether, through talking or writing or what have you. So, that’s just an ongoing effort that we’re all pursuing here. In addition with coming dead simple ways for people to accumu­late Bitcoin over time and get some skin in the game.

Yan Pritzker:

I think there is a Lindy effect here, right? The longer that Bitcoin goes on, the easier it is to tell a story. Because, it’s hard to tell a story now about a new money that’s only 10 years old, or 11 years old, it’s going to be easier to tell that story to our kids who will have 25 years of this money existing behind them and all these major kinks worked out. It was definitely too early. I agree it’s impor­tant to be educating people, but we also have to realize that we’re only going to be able to reach the people who are listening. Not every­body is ready to listen to this right now. Which is fine, because it does need time to mature. Even, if we wanted to and even if we were wildly successful in our educa­tional efforts and our onboarding efforts to bring in 100 million new people into Bitcoin, the infra­struc­ture is not really there to support it. The user experi­ence isn’t there, the apps aren’t there. There’s so much stuff that needs to be built out and it’s going to take time. I fully expect it’s going to be a gener­a­tional effect for that to really play out.

Andy Edstrom:

So, we’re going to all get rich slow on Bitcoin rather than get rich quick, is that what you’re trying to say, Yan?

Yan Pritzker:

We’re going to get free, slowly. Bitcoin is freedom money.

Ansel Lindner:

I like that.

Yan Pritzker:

It’s not about getting rich.

Ansel Lindner:

Yeah, with the euro-dollar, it started… I don’t know, when it was first… when the term was actually coined, but somewhere in the late 50s and then it… I think Milton Friedman talked about it in 1970. People didn’t under­stand it, and it had already been over 10 years old, functioning out there in the global economy. So, Bitcoin is similar like that. It’s been under the radar… well, it was under the radar for the first four or five years. Recently, it’s become more mainstream, but it’s going to take a long time before people even under­stand what’s happening.

Andy Edstrom:

There’s going to be euro Bitcoins too. Effec­tively, a euro-dollar is just a liability created out of thin air, denom­i­nated in dollars. There’ll be credit in the system, there already is with Bitcoin. I guess, anybody who issues a Bitcoin claim that’s not a minor, right, who can actually print the stuff, is, basically, issuing euro Bitcoins. Maybe, there’s a new term here. It’s kind of, unwieldy so I don’t know think it will catch on.

Ansel Lindner:

I think wrapped Bitcoin on a theorem-

Andy Edstrom:

Well, there you go. Exactly. Yeah.

Ansel Lindner:

Or, even liquid Bitcoin, maybe. All those are a little bit more auditable, but in the future, it might not be. People, probably, won’t demand that all the time. I go back to this all the time with people that I talk about these matters with, because not very many people are inter­ested in this stuff. But, I say, most people don’t care, they’ll just follow whatever the govern­ment tells them to do. That’s how all these problems like Venezuela or any of these hyper-infla­tions happen, people just… they don’t see what’s happening because they don’t think about it. It’s over their heads, and we are definitely in the minority right now.

Andy Edstrom:

Sad, but true. Fortu­nately, hopefully, a number go up and people pay attention.

Yan Pritzker:

Yeah, the one of the one issue with the number going up, is that people sometimes pay atten­tion for the wrong reasons. So, like you said, get rich quick is a very common theme with mainstream views on Bitcoin. So, when the number goes up, all the articles are about how it’s going to go to the moon, and then number goes down, it’s all about Bitcoins dead, and that’s a very volatile narra­tive. I like that there’s a new narra­tive emerging around Bitcoin as a savings tool, or as a new type of money, but I think it’s still very early in the minds of most people. They still don’t under­stand. They just think of Bitcoin as this other… maybe, it’s an asset, especially if you’re in the US or another liberal democ­racy where you might not be concerned with your currency hyper-inflating. You might not be concerned with the govern­ment imposing capital controls. While, for you, Bitcoin is a rich quick or slow thing right. It’s a specu­la­tion. You’re just going to put it into your portfolio and see what happens.

Yan Pritzker:

Most people don’t really know what they bought, people who have bought their Bitcoin on some exchange and left it there. They don’t know what they have. They just got a number. So, I do think we have to be very careful with those number goes up memes which are great for our inner circles but, a number goes up, it attract lots of people. But, if they don’t know what they’re getting into, and they’re not asking the bigger questions, then I don’t think we’ve done them a service. I do think we have to keep these conver­sa­tions going, about the nature of money and nature of our finan­cial system and how Bitcoin’s different. I do think the passage of time will help with that, and, obviously, people will start asking those questions.

Yan Pritzker:

But, yeah, that’s our job here-

Andy Edstrom:

To educate.

Yan Pritzker:

Educate.

Brady:

Yes, it is. Cory, do you want to talk about the latest member of our team?

Cory:

Yeah, well, this was an oppor­tune timing for having this gentleman booked on the podcast. So, Andy… we’re proud to announce that Mr. Andrew Edstrom is joining the Swan team as Head of Insti­tu­tional, so welcome to Team Swan, Andy.

Andy Edstrom:

Yeah, pleasures mine. I’m so happy to be a part of the team. I’ve only made one Bitcoin company invest­ment and that’s Swan. I met you, Cory, last year, and there’s no team that I found that’s better aligned with my hope and vision for the future of Bitcoin which is help people save it over time, system­at­i­cally, without trying to time markets and trade it, just accumu­late, plus the educa­tion compo­nent. So, I couldn’t be happier about doing my small part to get the word out there about, both, Bitcoin and Swan. Obviously, I come from the dark side of finance, from the insti­tu­tional side, and I’m doing my part to educate folks on that side. Those are mostly people with money who are investing, coming at it from a portfolio perspec­tive. Sorry, Yan, this isn’t-

Yan Pritzker:

There’s nothing wrong with that.

Andy Edstrom:

This isn’t the average common person, but all roads lead to Bitcoin and the more we educate and get people to adopt steady accumu­la­tion, and DCA, the better. Sorry, I cut you off there, Cory.

Cory:

No, I wanted to hear the Andy chat. I thought that was fantastic. So, what we’ve been noodling on is, one, we’ve already announced that we’re going to pursue some Swan IRA in partner­ship with Prime Trust. This is going to be a custo­dial IRA out of the gate. We’re also in the early stages of working on some check­book LLC trust type IRA, where you can actually hold your own keys. We’ve been talking to Jeff Vandrew and KeyKeeper IRA about that for quite a while and his custo­dians are figuring out how that flow would be. But, it’ll be a while to turn on the fully self-custody IRA, and it’s a lot more expen­sive for the user.

Cory:

So, turning on something that, at least, right now, today, before the price goes bananas, can let people start loading their IRAs into something that’s 90% lower pricing then Bitcoin IRA, which is just the behemoth in the space and totally egregious the way that they just soaked people, both, on the way in and the way out is just wrong. Swan exists, basically, to right wrongs done to Bitcoiners. Yeah, so we’re going to get that out.

Cory:

Then, the other thing that we’re really excited about, is figuring out how to open up the finan­cial advisor channel and make it really, really easy for FAs to put their clients into Bitcoin in a way where they’re getting good advice, it’s part of a portfolio strategy and attack that channel with Swan. I think having Andy, both, as a partner in WESCAP, and a long career in managing people’s money, and then also being a Bitcoiner, then now being part of our team as well. He’s not leaving WESCAP, he’s, as we call it… he’s Elon Jacking it, and will have two jobs for the foresee­able future.

Cory:

But, I think it’s just going to be awesome to have you in both those roles in under­standing the problems that you’re trying to solve for your partners and for yourself and then for FAs and RAs around the country. Then, obviously, we’re talking about not being able to educate people directly but you have to educate someone who, then, is going to turn around and educate somebody else. So, it’s almost like sales training and multi-level… leading things to like, pass the telephone game so it’s a different skill set, that, we, as a company, are really excited to develop in partner­ship with you. Basically, just by you telling us what you need to make the sale and then we’ll go do it, and you’ll tell us that’s good enough, that sucks, and we’ll go back to the drawing board. So, awesome to have you, man. Thank you.

Andy Edstrom:

Pleasure is mine. Looking forward to AB testing some tactics there. I hope that Swan is as successful as Elon and Jack’s companies.

Cory:

Yeah. Since you talked about why you like Swan, I’ll just say, when I fell into a Bitcoin bromance with Andy was, we were supposed to meet for lunch for the first time and ended up getting double-booked with the goodbye lunch for a VC I’m friends with here in Los Angeles. He’s moving to New Zealand and he had 15 or 16 people at this lunch and Andy came with his book, and his maximalism. He’s not unshy.

Andy Edstrom:

Cory, had to hold me back a little. He had to hold me back.

Cory:

I absolutely did not do that at all. We, basically, just ran roughshod and made a 16-person conver­sa­tion about 50% Bitcoin over the course of the lunch.

Brady:

Nice.

Cory:

Sorry, Rob. I hope you’re having fun down in New Zealand but, at least, this came out of it.

Brady:

All right, we got to wrap this thing up. Andy, super excited to have you as part of the team, really excited about the IRA projects. The finan­cial advisors network is, I think, an amazing resource, I guess, of networks to tap to bring in Bitcoiners. Ansel, I want to give you a chance to tell us where we can find more about you, where we can find Bitcoin & Markets, and just sign off here.

Ansel Lindner:

Yeah, you can follow me on twitter @AnselLindner. Bitcoinandmarkets.com is the website for the podcast. I try to release, not mainstream stuff. Like this defla­tion, infla­tion euro-dollar topic, I’ve been doing a series on recently, so I try to go a little bit outside of the box. I am also going to be releasing a book here talking about educa­tion. It’s going to be a refer­ence book, a Bitcoin dictio­nary. That should be coming out in the next month or two. Get that wrapped up. But, thanks for having me on. It was a blast.

Brady:

Yeah, thanks for being here, man. Really appre­ciate it. Excited about that book. Andy, tell us where to find your book, and where to find you on Twitter and do a little sign off here.

Andy Edstrom:

Yeah, of course. Cory, taught me to show often and show early, early and often. Here’s the book, it’s called Why Buy Bitcoin? It’s avail­able on Amazon. That’s the main channel. You can also get it on Apple through their books. Then, follow me on Twitter. It’s edstro­man­drew… is my handle. Then, yeah, my firm is WESCAP group. The website is wescapgroup.com and I do Wealth Manage­ment there. Of course, I should have done the disclaimer that all these opinions are my own and not those of my employer. They might be those of Swan though, or, at least, some of them now are.

Andy Edstrom:

So yeah, I’m super psyched to join all you guys. Yan, and Cory and Brady. Ansel, it’s been a real pleasure meeting you and I can vouch for Ansel’s ideas. He’s a good contrarian to listen to so I recom­mend his pod. Yeah, I’m just psyched to be part of the team guys.

Brady:

Awesome. Yan, Cory, you guys have any closing thoughts?

Yan Pritzker:

I want to shill as well. My book, Inventing Bitcoin, is now out on audio book, and a shout out to Guy Swann from the Cryptoe­conomy Podcast, for narrating it. He did an awesome job. It’s about a three-hour listen, it’s pretty short. So, if you’re looking for a good intro book for your friends and loved ones, Inventing Bitcoin is on Audible. Also, you can get it on Amazon. Go out and grab a copy. Not for yourself, spread it, give it to other people.

Brady:

Here, here.

Cory:

I’ll just chime in and finish that. I’ll say, if you’re putting in a couple hundred bucks a month with Swan or another dollar-cost-averaging platform, within a year or two, regard­less what happens with price, and you hold that forever, you’re forever going to be in the top point 1% of Bitcoin holders. It doesn’t take that much. So, if you’re not stacking or if you just waiting for some weird thing to happen with price, don’t do it, just secure your future, it doesn’t take much, and just pull the trigger. There, I shilled.

Brady:

Love a shill. All right. It’s hard to time the market. Just use Swan, it’s super simple. Set up a plan, save, set it and forget it, accumu­late Bitcoin. Bitcoin has become, as Yan said earlier, to be known more as a savings technology and Cory likes to compare it to the two other main assets that Ameri­cans will save for their retire­ment or for down the road. One is your mortgage which you contribute to… the equity, on a regular basis, and the others to your 401k.

Brady:

Think long-term about Bitcoin, save a little bit. 10, 20 years down the road, I think, you’ll be happy about that. Thanks, guys, appre­ciate your time. This has been another great episode of Swan Single Live.

Brady:

Thanks to Andy and Ansel for joining us. Follow Andy at edstro­man­drew. That’s @ E‑D-S-T-R-O-M-A-N-D-R-E‑W. Check his book, Why Buy Bitcoin. Also, follow Ansel at AnselLindner.com and A‑N-S-E-L-L-I-N-D-N-E‑R, and subscribe to Bitcoin & Markets Podcast.

Brady:

On behalf of the Swan team, we’d like to thank you for joining us. We hope you enjoyed this episode of the Swan Signal Podcast. You can join us live next time. Jump into our Swan Signal Telegram chat room at t.me/swansignal. We have a lively crew there that chat during our conver­sa­tion, ask questions of our guests, live. It’s a lot of fun. Swan Signal’s a produc­tion of Swan Bitcoin. Swanbitcoin.com, it’s the best way to buy Bitcoin. The easiest setup, automatic buys. We’re focused on stacking sets, not trading, there’s no distrac­tions. You’re forever Bitcoin only. You can even set up automatic withdrawals to your own wallet which we absolutely encourage, and we are committed to Bitcoin educa­tion. Follow us on Twitter @SwanBitcoin, subscribe to this podcast at swansignalpodcast.com. That’s it for this week. Thanks for joining us.

Other Episodes

Episode 8 –Andy Edstrom and Ansel Linder

Episode 9 –Rockstar Devel­oper and Jeremy Rubin

Episode 10 – Bitcoin TINA and CK Snarks

Episode 11– Gigi and Knut Svanholm

Episode 12 –Adam Back and Preston Pysh

Episode 13 –Alex Gladstein and Matt Odell

Episode 14 –Robert Breedlove and Tuur Demeester

Episode 15 –Isaiah Jackson and Max Keiser

Episode 16 –Gigi and Udi Wertheimer

Episode 17 –Aleks Svetski and Jimmy Song

Episode 18 –Stephan Livera and Marty Bent

Episode 19 –Mark Moss and Ben Prentice

Episode 20 –Samson Mow and Parker Lewis

Episode 21 –Lyn Alden and Jeff Booth

Links

Swan Bitcoin

• Swan Bitcoin — the best place to buy and invest in Bitcoin
• Swan Bitcoin on Twitter
• Swan Signal on YouTube
• Swan Signal on Facebook
• Swan Signal on Twitch
• Swan Signal Podcast
• Swan Signal Telegram Chat Room

Ansel Linder

Bitcoin and Markets Podcast

Ansel Linder on Twitter

Ansel Linder on Linkedin

Andy Edstrom

Andy’s Personal Website

Andy’s Twitter

Andy’s Linkedin

Why Buy Bitcoin –Andy’s Book