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Balaji's Prediction: Bitcoin Is Going From $26k To $1M in 90 Days (#434 Pt.1)

Episode 434 Part 1: In part one of today's show, Sam Parr and Shaan Puri are joined by entrepreneur and Bitcoin investor Anthony Pompliano to talk about the failing banks situation, Balaji Srinivasan's Bitcoin bet regarding banks, and…

Shaan PurihostSam ParrhostAnthony Pomplianoguest

Mar 21, 202352mWatch on YouTube

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Transcript

55 min read · 11,407 words

0:00 – 3:21
Intro
1. SPShaan Puri
  So Balaji comes out and he says, "I will take that bet. You buy one Bitcoin, and I'll s- I'll send $1 million to an escrow." To be clear, this is 40 to 1 odds, so he's basically saying not only is this unlikely to happen, like if this was even odds, it would've been like, dang, Balaji's gonna lose a million dollars, 'cause Bit- Bitcoin's not likely to be worth a million dollars. Then he added in 90 days, which is already a radical move. Then he said, I'm... And by the way, the million dollars versus one Bitcoin, Bitcoin's currently at 26,000 at this, at the time he made this bet. He goes, "That's 40 to 1 odds that I'm laying you." [upbeat music] All right, we got an episode here with Pomp, Anthony Pompliano, who you may know as the Bitcoin guy. He's huge all over YouTube, Twitter, everywhere else. He, uh, came on. We're actually gonna do this as a two-part episode, because at the beginning it was all business. We were business in the front. We were talking about this crazy million-dollar Balaji bet where he's betting that Bitcoin is going to a million dollars in the next 90 days. We talk about that, why Balaji thinks it, what we think about the bet, and Pomp does a, you know, I don't know, Econ 101, where he explains what's going on with the banking system from his perspective. That was good, and then the second-
2. SPSam Parr
  But here's the thing, though. In that episode, the whole episode is about something that's gonna happen inside the next 90 days. So if you're gonna, like... I- it is a little fearful listening to it, and so actually listen to the whole thing, because, and do it now, because we're talking about something that's happening in 90 days. And then go ahead. The second episode was way more fun, and it was pretty wild. Go ahead.
3. SPShaan Puri
  We talk about his business empire, you know, what he's building and why he's building it that way, why he gave back all the money from his fund and shut that down, why he's-
4. SPSam Parr
  It's huge
5. SPShaan Puri
  ... turned off all his advertisers, millions of dollars of advertisers, what he's doing instead. So we talked about that, and then we talked about... And then it went off the wall, and, uh, the, the pod got a little crazy, but in a great way. I think people are gonna, you're gonna love part two.
6. SPSam Parr
  He broke down, like, all of his businesses and how they work. It's very impressive. It, it was pretty wild. Um, and, uh, it was, it was... He's, he's impressive. He's significantly more impressive than a lot of people think, I think, because there's way more behind the scenes.
7. SPShaan Puri
  And he tells pretty funny stories, which Pomp is usually, he's pretty buttoned up on his, on his main channel, 'cause he's talking finance, he's talking serious, but he tells some pretty funny stories. So the second, uh, part two is the more fun episode. Part one is the more serious episode. I think you'll like them both.
8. SPSam Parr
  And we have to remind you guys that our episodes, we work really, really hard, and unlike every other type of podcast out there, our stuff's not free, but you don't pay with money. All you have to do is go to our YouTube page. We call this the gentleman's agreement. What is it? The ladies' understanding.
9. SPShaan Puri
  The ladies' understanding.
10. SPSam Parr
  You go to our, you go to our YouTube page, and the reason it's called that is because it's an understanding. It's an agreement. We can't be there behind your screen to check this, otherwise we would, but everyone's doing it, so just go ahead and do it and click subscribe on YouTube. And then just go ahead and do that on Spotify and iTunes, because the more you do that, the more our volume goes up, and we get more downloads, and we can do, keep doing this type of stuff. Pomp ain't gonna come on to episodes like this if, if we don't have a big listenership. Same with all the other guests.
11. SPShaan Puri
  All right, enjoy.
12. SPSam Parr
  [laughs] Um, Pomp, we're live, by the way. We, we always just jump right into this thing. No small talk.
13. APAnthony Pompliano
  Let's go. What do you guys wanna talk about?
14. SPShaan Puri
  Dude, you're, I'm so glad you're here. You are,
3:21 – 6:45
Who is Pomp?
1. SPShaan Puri
  you are the Ryan Seacrest of the, of the industry. You are the hardest-working man in content entertainment. [laughs] I'm so glad you're not doing your, like, 5:00 AM show anymore. Um, d- I'm sure you're also pretty glad you're not doing [laughs] that every morning. How does it feel to get some sleep?
2. APAnthony Pompliano
  I've always slept, uh, pretty well, but the content stuff is, um, is the best way in the world to learn. You put i- information and ideas out there, and the people who agree or have, like, things to add, they're super constructive, and they respond to emails. They tweet at you. They do all that stuff, and then the people who vehemently disagree, they make their voice heard, you know, very well. And so you, like, quickly figure out, like, good ideas, bad ideas, and then you also get all these, like, rabbit holes to go down. And I think that probably the reason why, you know, you two, myself, and many of the other people that we all know and spend a lot of time talking to, we enjoy it. Like, the internet is this amazing thing that we all get to use on a daily basis, and so, uh, creating content, I've found, is just this great way to, uh, to elicit like-minded people and, uh, and to learn.
3. SPSam Parr
  So I was, uh, uh, Pomp, I... We have a lot to talk about, and we'll do, like, a proper intro in a second, but I was talking to my friend Jason Yanowitz, who, you guys used to work together. He worked for you. Now he has his own company, and Jason works pretty hard. He told me that you were the hardest-working person-
4. SPShaan Puri
  Wait, Jason Yanowitz used to work for you?
5. APAnthony Pompliano
  Uh, he, he, uh, him and his partner, Mikey Pulido, they were, uh, the two guys who helped me start the podcast initially. They, uh, they tricked me. They literally came to me, and they were like, uh, "Hey, you should have a podcast." And I was like, "What's a podcast?" And they were like, "You know, like all these other examples." And then I was like, uh, "I don't know how to do that." They're like, "Well, we do." And little did I know they had no clue what they were doing. They instead convinced me to do a podcast, and then they DM'd, I'm pretty sure, Gary Vaynerchuk, like, podcast guy, and was like, "Hey, we're gonna start a podcast. Like, what equipment do we need?"
6. SPShaan Puri
  [laughs]
7. APAnthony Pompliano
  [laughs] So, like, kudos to those guys. That was pretty smart.
8. SPSam Parr
  Good hustle. And now they have a media company that does tens of millions of dollars, whatever. It worked out, and Jason works pretty hard. Um, Jason told me that you're the hardest-working person he's ever been with. He said that they used to work at your office seven days a week and that you just were nonstop. But then when I went out to dinner with you recently, you told me your schedule. It didn't sound very hard. It sounded just normal.
9. SPShaan Puri
  [laughs]
10. SPSam Parr
  So which is it? Uh, wh- which is true?
11. APAnthony Pompliano
  Uh, I think it's probably both. So one of the things, uh, I always use as a framework is, uh, there's kinda gas and brakes in life, and so at certain points, you need to hit the gas, and other times, you can kinda, like, let your foot off the gas, coast as the car, and then other times, you need to hit the brake. And knowing when to hit the gas, when to hit the brake, uh, is pretty important, actually. You don't wanna kinda be hitting the gas when there's a wall in front of you. Like, you wanna make sure that you, uh, are able to kinda go all in when, uh, when it's necessary. But the second thing is you gotta last, right? You can't just sprint all the time. No matter how athletic you are, you gotta have some level of endurance, and so that's probably one of the things that I've really, uh, uh, learned to do over the years. Uh, I wasn't great at it at the beginning. Now I'm probably pretty good at it. But, you know, we're recording this on Monday. Yesterday was Sunday. I record a podcast Sunday morning at, you know, 11:00 in the morning after I did a two-hour meeting with a friend at 9:00 AM. And a lot of people are like, "That sounds crazy." But I'm like, "No, what did you do? You, like, went and did all your hobbies." I have no hobbies. I literally hang out with my family and I work, but I do it because I enjoy it. And so if you enjoy doing it, like this isn't hard. I'm, like, looking forward to today talking to you two 'cause I'm like, "You know what? They're probably gonna be ridiculous, probably gonna have a lot of fun, and we're gonna learn something from each other."
12. SPShaan Puri
  [laughs]
13. APAnthony Pompliano
  Like, how lucky are the three of us?
14. SPShaan Puri
  Two out of three ain't bad.
15. APAnthony Pompliano
  Right.
16. SPShaan Puri
  So [laughs] let-
6:45 – 16:50
Balaji bet
1. SPShaan Puri
  let's, uh, we gotta get to this crazy Balaji bet, and then I'm gonna ask you what you're doing with your life after that, 'cause I think you're-
2. APAnthony Pompliano
  Well, uh, do, do, do you need to set the-
3. SPShaan Puri
  ... you've got an interesting little empire
4. SPSam Parr
  You have to set the stage for who he is, right?
5. SPShaan Puri
  Sh- uh, who Pomp is? Okay, so let's start with who Pomp is. [laughs] So, uh, I think you're known as, like, the Bitcoin guy, I would say. That's the, that's k- kind of how you've built your brand. You've obviously done a lot more than that. Before that I think you worked at Facebook and even Snapchat for a little quick l- lunch. And, uh, and, and so you worked in tech. You, uh, started to build a big following on Twitter s- or around crypto and Bitcoin. Uh, built one of the bigger, like, newsletters and brands in that space, and since then launched a bunch of, like, you know, uh, businesses around it. So you had a, you had a VC- you sort of had your own, you know, VC fund, or you worked at a VC fund then launched your own. You, uh, have like a kind of like a crypto jobs company. You have a bunch of things in that ecosystem. Since then, I think you've, you've, you've made some changes now, so, so I wanna hear about those in a, in a bit. But then we have this Balaji bet, and, uh, Pomp, why don't you just give us the quick 60 second on who Balaji is, and then we'll, we'll frame what this, what this crazy bet is. And then I have some inside info also.
6. APAnthony Pompliano
  All right. So I don't wanna be a spokesperson for Balaji, so any- everything I say is my opinion, uh, this is my description of him, this is my description of the bet. Um, but Balaji Srinivasan, uh, is probably best known now, uh, for being one of the more, uh, kind of public figures to have predicted a lot of what happened for COVID. Uh, he was very early calling out, "Hey, this is a risk. If this risk becomes a reality, here's how bad it could get." And, you know, again, as with predictions, a lot of it was right, some of it was wrong, but generally I think people point back and they're like, "Man, we should've listened to that guy." He then went on, like, a two or three year heater where he kept making predictions and kept being right about a lot of things, and so the internet kind of, uh, rallied around this idea of, like, the worst words to ever hear was Balaji was right. And so when you build that type of, uh, kinda following and that type of, uh, reputation, now people put a lot of weight when you say something. And so his latest thing is Bitcoin is going to hit a million dollars in the next 90 days, which sounds absolutely insane. Bitcoin's trading at $27,000. It's, like, you know, whatever, 40x from here, and to do it in 90 days, like we've never seen an asset really ever do that before. Now, I don't agree that that is highly likely. I would put it at, like, maybe, I don't know, 5% chance? Which is actually much higher than probably most people would put it. Uh, but to me the most interesting part is, like, the reasoning behind why he's saying this. And, um, you know, I think it's important to call out that Balaji's bet is, like, the best meme of 2023. He was able to essentially create a meme that has caused millions of people to now talk about this idea of hyperinflation, bank failures, uh, and Bitcoin, and I think that's ultimately what he was trying to do. So if you asked him in a private room, like, "Hey, do you really think Bitcoin's gonna be a million dollars in 90 days?" He's putting $2 million on the line, so, like, he definitely thinks there's a chance, but I don't know if he's at, like, 99.999% likely or if he's-
7. SPSam Parr
  What, what's, what-
8. APAnthony Pompliano
  ... trying to call attention
9. SPSam Parr
  ... what's 2 million to him? Is that a big deal or no?
10. APAnthony Pompliano
  It's hard to tell. Um, so Balaji, before he became known as the, like, Balaji was right guy, uh, he built and sold a number of companies. Uh, I think at least two that I know of had nine figure exits. Like, he's, like, real, right? He, he's a great entrepreneur. Uh, he worked at Andreessen Horowitz for a while. Uh, he was at Coinbase as the CTO. Like, he's a very real entrepreneur and investor, and so he, he, he's done well for himself financially. But, like, I don't care how rich you are, like, you don't go publicly bet people $2 million on, uh, Twitter unless you have some degree of confidence. Because in some way, like, two million may or may not be a big number, but, like, your personal reputation is, you know, quote unquote, "priceless." And so, like, that's basically what he's staking here is he's using the money to draw attention, uh, to what he's saying, but really he's staking his reputation on something that a lot of people think is absolutely insane at the moment.
11. SPSam Parr
  And the bet started because this guy Metlock, I actually don't know who, I, I forget his first name, but he basically tweeted something and said, like, uh, "Hyperinflation is not going to happen." And then Ba- uh, B- Balaji replied and said, "I actually think it will happen, and in fact I'll bet, I, I'll take your million dollar bet that hyperinflation's gonna happen i- in the next 90 days." And this is related to the Bitcoin. I th- or that's another bet on top of the Bitcoin one. Then you wo- wrote this post, and you had one line in... You had a couple lines in there that I hated. And by hated I mean, uh, it was like it stung me. Uh, one of them was you quoted, uh, Lenin, you know, uh, uh, one of the folks who ran the Soviet Union. You said, "There are decades where nothing happens, and then there are weeks where decades happen." You said that, and then you had a few other lines, and I started reading this and I got scared. I, like, I was legitimately scared, and I texted you and I was like, "Is this real?" And you're like, "Um, maybe, maybe not." I, I forget exactly what you said, but, uh, you wrote this in such a way that I was, I, I was fearful.
12. APAnthony Pompliano
  Yeah. So I definitely don't wanna fearmonger, but I do think that, uh, there have been two points now in the last three years where it's, like, kind of a shake people and wake them up and be like, "Hey, pay attention right now." The first was, uh, during March of 2020. Uh, I wrote a couple of different pieces. People had similar reactions to it. And, uh, you know, one of the pieces was like, "I-" I, I basically was arguing that unemployment was going to be double digits and millions and millions of people were gonna lose their, uh, jobs. And I had people, like, privately emailing me and be like, "You are insane. Please stop fearmongering. Like, this is crazy." And then the next week, 6.6 million people filed unemployment claims, right? And so, like, i- if Balaji is, like, A+, I'm like D- maybe in, in [laughs] analyzing some of this stuff. Um, but at least what I wanna do is call attention to like, hey, this is serious, and like you should pay attention. Um, because if this goes the wrong way, uh, it could be catastrophic, not only for people, uh, with their personal finances, but also, like, as a nation. And I think it's also important to call out that, like, yes, it is important, but I don't think most people want this stuff to happen, right? Like, the United States of America is this amazing place. There's millions of peoples around the world that try to come to this country, and it's because we have democracy and capitalism and stability, and like all the things that we know make this country great. If we were to lose some of that stuff, like this isn't about a financial product or an asset going up or down in price. It's like if there is complete chaos in a country, people don't care about what currency they're holding. Like, they want guns, right? And like that's not a world we wanna live in. And so I think it's less about, uh, kind of finance and, and kind of investing, and it's much more about, like, pay attention to this serious situation that's playing. I think that's what Balaji's doing with his bet. That's what I tried to get across with the piece that I wrote, uh, last week.
13. SPSam Parr
  You also had this other line where you said, "Bodies keep floating," or, or you said, uh, "A friend yesterday told me bodies keep floating to the surface," meaning the Silicon Valley Bank, that's just one body, and we're gonna keep seeing more bodies. And so you, like, used a language that I, I'm fairly un- I mean, I have a high-level understanding of this stuff, so nowhere close to a lot of smart people, but you used language that, that stung me. And when I see people who, like you, who write like that, it's almost like, this is how I describe Malcolm Gladwell. When I read his books, they're so convincing. Tucker Max is another guy who does this. He's... They're so convincing because they're such good writers, and they're so, so good at just explaining their points, that I have to remember that when, like a Malcolm Gladwell book, it's like, dude, this is all just a, a, a, a theory, and I could probably find lots of examples of why he's wrong. But he's so good, and you are so good at writing about it, that I, I begin to believe you, and I have to, like, pinch myself sometimes and be like, "Wait, this is just his opinion," and there's actually people that are probably equally smart and equally experienced that have a different opinion. And I find that to be, that whole thing, though, I find to be very confusing and, and I, and unsettling.
14. APAnthony Pompliano
  It's, um, this viewpoint that, like, you want to argue ferociously one point of view so that the response, both the critiques and the support, is as ferocious back, right? If you write a piece, and if people are just like, "Eh, whatever," like, you know, "I've heard this 100 times," like nobody even takes the time to respond. But on the internet, like you kinda have to go all in and really argue a point. But if you are intelligent, hopefully if you get new information or you see a critique that you're like, "Oh, that's actually a great point," and you're willing to change your mind, then you can very quickly iterate your way closer to the truth. It's hard to always get to the truth. Um, but I think that's kinda why I write that way, is just argue ferociously, and then you'll get the ferocious response, and that will help you get to the truth faster.
15. SPSam Parr
  What's the best... Let me ask one more question about this, Shaan, really quick. What's the best argument as well as the best person that you like to read that takes the opposite stance of you that you can see, that you can, you would say, "If I'm wrong, I think this could be true"? Like, who do you, who do you like to read that thinks you're wrong and they could be right?
16. APAnthony Pompliano
  So it's different on every topic, obviously, and, and even in individual situations. I have friends who I agree on 95% of the stuff with, and then there's that one thing that they, like, vehemently disagree with me on. And I actually pay attention more when they disagree than to the person who disagrees with everything, right? It, it's like once somebody has shown that they're a clear thinker, and somebody's able to actually, uh, think through individual ideas, and they don't just succumb to, like, "Oh, Sam and I are friends. We always agree on everything, so like, on this new topic, I should just agree with him." Actually, I wanna surround myself with people who they are very clear when they agree, and they're very clear when they disagree. And what you want to look for is, like, volatility in agreement. So the more that somebody agrees with you, you pay attention and put weight on when they disagree. And then the more that somebody disagrees with you, uh, that you wanna pay attention when they actually agree. So it's that volatility or that kind of reversion, uh, away from the mean that ends up being important to pay attention to.
17. SPSam Parr
  But who, who, who, who are those people in this case? Is there anyone?
18. APAnthony Pompliano
  Uh, right now, I would say, so it's less about, like, individuals. I think there's a whole co- cohort of people. Uh, everyone has kind of a little bit different view. But let me explain first kinda what's happening, and then it'll help me under- uh, explain why I think that there could be a, a counterargument to it as well.
16:50 – 33:33
Failing banks
1. APAnthony Pompliano
  So the main argument is that if you go back to the beginning of 2020, uh, the economic and financial system was, like, pretty good, right? Unemployment was pretty low. Inflation was under 2%. Like, we were kinda chugging along. We'd been in a decades-long bull market. Everything seemed fine, um, if not good. Uh, obviously, COVID happens, and the first kinda big shock to the system was all the government lockdowns, right? So across the world, people said, "Hey, go sit in your homes." When you do that, what's called the velocity of money or, or the amount of commerce goes down. So if you used to go to the bar, or if you used to go and buy stuff at the store, like you're just locked in your house now. You're not spending as much money. So when velocity of money goes down, people get scared. And when they get scared, and they're fearful, there ends up being something called a liquidity crisis. And the best way to think of a liquidity crisis is just, like, you look at your portfolio of assets, and you're like, "I want dollars. I want safety." And so you just sell everything that you can to try to get dollars. So people didn't care if it was stocks, bonds, cryptocurrency, if they had liquid, you know, real estate assets they could sell, commodities, anything. They just sell everything, and they want dollars. And so if you go back and look in March of-
2. SPSam Parr
  Li- lit- literally meaning cash in a checking or savings account.
3. APAnthony Pompliano
  It, so that's like step one. And then if you remember during, uh, March and April of 2020, people didn't know what's going on. Like, I went to the ATM, and I pulled out a bunch of cash. And people were literally pulling physical cash out and they're like, "Well, just in case," right? Like, who, who knows what's gonna happen. They also were, like, buying toilet paper and doing all, like, the crazy stuff 'cause fear takes over. And so when these liquidity crisis happen, uh- All assets go down and the dollar becomes stronger. And central banks and governments have to make a decision. They can say, "Hey, we believe in the free market and we're just gonna like let this play out. Yeah, it'll be painful in the short term, but like the free market'll kinda figure it out over time." Or they can, what they normally do, say, "We are gonna intervene. We're gonna step in. We can't let our people suffer." And so of course, like politicians and central bankers, they're very short-term optimized because there's pain that millions of people experience, uh, on a day-to-day basis, and it's hard to sit by and watch people suffer. So it makes sense from like a human viewpoint as to why they would step in, uh, although I disagree that many times they probably should not step in. And so that's what they did. They stepped in. They basically dropped interest rates to 0%, which just made it incredibly attractive to borrow money, right? If people are borrowing money, that means they're going and they're spending it. They're buying houses, they're buying all this kinda different stuff. And then they also pumped between the central bank and the politicians trillions of dollars into the economy. One key thing that a lot of people missed, including myself initially, is that regardless of how the money got into the system, the money ended up in the banks. So if they gave $1,200 checks to individuals, whether they bailed out the airline industry, whether they created all sorts of stimulus packages, whatever, when people received the money, whether they spent it or they held it, someone, an individual or a company, put that money in the bank. And so the deposits of these banks exploded. Silicon Valley Bank is a great example. They had about $60 billion of deposits to start. They ended up having about $190 billion of deposits. So kinda 3x growth, $130 billion or so. But what does the bank do when all of a sudden people show up and like, "Here's $190 billion"? They're in the business of making money. And so in a zero interest rate environment, they can't buy short-term debt, right? All that means is like they're buying treasuries that are three month, six month, nine month, 12 month, two years, whatever. But all of that basically has no return because interest rates are at zero. So instead what Silicon Valley Bank did is they went and they bought 10-year bonds, meaning that they're gonna buy a bond today. If they hold it for 10 years, they'll get back their principal plus whatever the return on the bond is. Now, that bond that they were buying had about a 1.5% return, right? So you buy it today, you hold it for 10 years, you're getting your principal plus the, the 1.5%, uh, type return over that 10-year, uh, period.
4. SPSam Parr
  Which is a conservative play.
5. APAnthony Pompliano
  Super safe, super conservative, backed by the US government. Like everyone looks at treasuries and like that's the safest thing to buy, right? Now, that is all good and fine if the environment continues how it is. What ended up happening is that all that money got pumped into the system, inflation exploded. We had the highest inflation in 40 years. And so now all of a sudden inflation's at nine plus percent and the central bank's like, "Oh boy, this is not good. We have to bring inflation down." Because inflation actually doesn't hurt rich people. Rich people make money on inflation 'cause they own assets. It's the poor people, the bottom 50%, they're the ones who get hurt by inflation. So let's try to get inflation under control. And so the way they did this is they jacked up interest rates from 0% to about 4.5%, and then they started selling assets off their balance sheet. They sold about a trillion dollars of assets. When they do that, basically they are tightening financial conditions, making it harder and less attractive to borrow money-
6. SPSam Parr
  What, what-
7. APAnthony Pompliano
  ... and spend money.
8. SPSam Parr
  What did they sell? What did they sell?
9. APAnthony Pompliano
  The central bank, uh, this is actually a crazy statistic. They had about a $900 billion, uh, balance sheet coming out of the global financial crisis. They 10-bagged it. They literally went from $900 billion to $9 trillion between the global financial crisis and 2022, right? So they expanded by buying all sorts of debt and treasuries and, and various assets, and that's how they get money into the system, is they exchange the dollars for these assets. And then when they contract or they try to make tighter financial conditions, they sell all of those assets, right? Or, or a good portion of it to kind of get, uh, to pull liquidity out of the system. But when they did this, the banks are basically left holding the bag. And what I mean by that is the banks took that, you know, Silicon Valley Bank, $130 billion, 80 billion of it, they bought these bonds that earn 1.5%, which is great in a 0% interest rate environment. When they've now increased interest rates to 4.5%, that bond that you bought previously is no longer good. It's actually cheap. And so it trades lower. So if you spend $100 on the bond, now if you were to sell it to someone, maybe you could sell it for 80 cents. So you'd lose 20% on that bond. The reason why that doesn't matter historically is because the banks actually get special accounting treatment. So let's say that Shaan has a, a portfolio and in one of them, uh, he bought a stock and he spent $100 a share, right? So he s- he bought a stock for 100 bucks. If he goes to the bank and now the stock is trading at $80 and he wants to use that stock share as collateral, they don't give him credit for spending $100. They're like, "Hey, moron, it's worth 80 bucks. Like, you get credit for $80, not 100." But the banks have a special accounting treatment where they can actually take some of the assets on their balance sheet and they can put it in a special area, and they call it hold to maturity. Hold to maturity basically means we get to count what we bought it for, not what it's worth today. And the reason why they're allowed to do this is because they can hold the bond until the maturity, the 10-year period, and they'll get the principal plus the return. So as long as they don't sell it before it matures, then it ends up being worth what they paid for it. The only time that this does not work is if all of the depositors want their money back at the same time, because now the banks have to sell all those assets and take that money to give back to the depositors. And that's what happened to Silicon Valley Bank, is basically there was a bank run. When the bank run caused the bank to sell assets, they lost billions of dollars, which then scared more depositors. So then they went and said, "Hey, give me my money back." And it just became this reinforcing cycle, and in 24 hours, $42 billion was drained out of the bank, which caused them to eventually be insolvent, and the government took it over.
10. SPSam Parr
  And ultimately, great ex- explanation. That was awesome. You killed it there. Balaji and a few other people are betting that that's gonna happen to other more consumer-based banks in the next 90 days. Is that right?
11. APAnthony Pompliano
  So it's already happened. Like, this isn't just a Silicon Valley Bank thing. Like, a lot of the politicians, they, this was like a, a softball served up to them down, you know, right down the, uh, plate. They were like, "Oh, great. The crypto and tech companies are a bank customer. It must be their fault." But, like, Silvergate Bank, Silicon Valley Bank, Signature Bank, now Credit Suisse, like, these are not, you know, crypto banks or, or just tech banks. This is a complete global financial, uh, system issue, and now there's reports coming out that hundreds of banks are actually underwater in terms of holding these assets. And so that's why you've seen the central bank and the governments around the world step in and say, "We will backstop a lot of these deposits," because they don't want people to be so scared that they go and they try to take their money out of the banks, because if everyone goes to do that, that then basically creates a cascade of bank runs. And so Balaji's argument and why he's making this bet is that when the government steps in to protect the depositors, that is an inflationary pressure, and it's going to take trillions and trillions of dollars to do it. And so at the same time you're getting trillions of dollars of inflationary pressure, you also are getting this psychological awakening and people are saying, "Wait a second. Maybe the dollar isn't as strong as we thought it was. I should look for an alternative." And when those two things happen, hyperinflation can occur. Doesn't guarantee it, but it can occur. And I think really if you kind of boil down his entire argument and why he's created this essentially meme with the bit signal, is that people in the United States, we've never worried about this, but this is not new globally. There are people listening to this podcast right now, they, they'll tweet at us afterwards. They'll be like, "Dude, I live in Argentina. Like, inflation's like 70, 80% year over year. I live in Venezuela. I live in Zimbabwe. I live in all these countries where they live with hyperinflation on a day-to-day basis." It's just that in the US, we've never thought about it. And then two is like, you com- uh, you add complexity because the United States dollar is the global reserve currency. So if we screw this up so bad that we hyperinflate the dollar, I don't even understand and I don't think a lot of people understand, like, what happens globally when the global reserve currency hits high inflation or hyperinflation. So again, it goes back to, like, we don't want this to happen, but damn, people should be paying attention right now to make sure that they understand what's occurring and kinda how to prepare for it.
12. SPSam Parr
  [upbeat music] I can't find this client info.
13. SPSpeaker
  Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned. No out-of-sync spreadsheets or dueling databases. HubSpot. Grow better.
14. SPShaan Puri
  So let me, uh, add a little color on, on what you just said. So, um, there was a- Balaji tweeted this out. It was just a, a, a, an, like a memo or a note from the Kansas City office of the Federal, Federal Reserve, and they had said there's kind of this, like, one section that he highlighted which it said, um, "At year-end 2021," so basically two years ago, "only four community banks were below the kinda 5% ratio of, uh, of their, of their assets that they had available." So they were basically only four, four banks would be at this threshold that we would be worried about. Um, fast-forward to today, that's now 333 community banks in the United States. So 333 community banks are essentially insolvent is what this, what this means, and could be if there was a bank run on any one of these, we would have the same problem that we had first at Silicon Valley Bank and then what was about to happen on, you know, last Monday or whatever, where everybody was gonna go to, you know, I know here in California, First Republic Bank was, like, you know, the domino that was ready to fall before they came in and said, "No, no, no, everything's, everything's safe. All your deposits are guaranteed. Don't worry," um, to try to stop that from happening because there are thir- 333 banks just in the United States that they say are below that ratio. Now, what that would do to the next tier, who knows? And also, uh, overseas, because the u- the dollar is the, the, the reserve currency, overseas there's a bunch of banks that hold, um, dollars, and they're, they're worried about, "What if there's a bank run on us?" Um, and so like, you know, just last night overnight on a Sunday night, you know it's bad when they're sort of working on a Sunday night and sl- you know, making these announcements, uh, where they're like, "Oh, we're, we're establishing this, like, swap line." And it's like, what's a swap line? Swap line is basically, "Hey, we'll bail you out, too. So if you need dollars, the Central Bank of the United States will give it to you to European Central Bank and all these other places." So they basically established this overnight back channel which said, "If you need dollars 'cause you're gonna get hit with a run, we don't want you to fall over and cause this cascade of fear and panic and, and withdrawals, so we will also backstop you just like we backstopped, uh, you know, the community banks in the United States." So that's, to, to Balaji's credit, I think he's correctly identified, just like he did with coronavirus, that, "Hey, this might be a lot worse than you think." Um, and there's actually data to support that the conditions are worse than you think. Now, what's funny is Balaji actually did this twice. So he had like a V1 of, of trying to spread the word, Sam. I don't know if you saw this one. So the fir- V1 was he goes, "The bit signal." He goes, "How do you raise, ring the fire alarm on the internet? How do you show it's not a false alarm? I'm putting up the bit signal." He goes, "I'll put a million dollars in Bitcoin to alert people about this stealth financial crisis. I'll give $1,000 to the best thousand tweets that show a reply with a graph, a stat, a meme that will bring attention to what's happening, because the central bank, the banks, and the bank regulators have bankrupted us. They're h- trying to hide the insolvency of the banks to you, the depositor." Where P-
15. SPSam Parr
  Which is a weird thing to do, right? That's like it's helpful that he's, he's trying to help, but it, sometimes that doesn't help, right?
16. SPShaan Puri
  So, so this was a pure giveaway, right? This is not a bet. He said, "I'm giving away a million dollars To the th- I'll give $1,000 to the thousand best tweets that will spread the word. This tweet did pretty good, 13,000 likes. Um, and he tried, but then he, he hits you with just, like, a bunch of, like, you know, things that Balaji is, like, light reading, but to the rest of us is like, oh man, like, I gotta, you know, I gotta hook up to an oxygen tank just to intake this amount of information. So it's like this, uh, this crazy thing. So he'll tweet this table of, like, you know, 45 currencies that have done hyperinflation. He'll tweet out a thing that basically shows some random meeting minutes from the Fed in tw- 2022 that show that they knew something, right? Like, all these, these data points. But it wasn't really going viral until this guy James Medlock comes out and he goes, "I'll bet anyone a million dollars the US does not enter hyperinflation." And James Medlock, by the way-
17. SPSam Parr
  Well, I, I think, by the way, he had it, it was even scarier. I think he said w- everything that we're talking about, by the way, it's in within 90 days of, like, last week, right?
18. SPShaan Puri
  Well, no, no, first it was James Medlock just said, "I'll bet anyone hyp- hyp- $1 million hyperinflation doesn't happen." Okay? That was just, that was that guy's tweet. Balaji just takes this random r-
19. SPSam Parr
  By the way, I, I interrupted you. Say who he is. Say who he is
20. SPShaan Puri
  ... D- I don't know who this guy is. [laughs] I don't... His bio says social Democrat, markets, [laughs] market- market socialist in the sheets. I don't know what this guy's talking about. This guy's like... It's a meme account it looks like. So, um, [laughs] you know, like he's got a picture that I, I don't know who this is.
21. SPSam Parr
  Memelord with million-dollar bets
22. SPShaan Puri
  ... So anyways. Yeah, exactly. Like, he, you know-
23. SPSam Parr
  Just a guy
24. SPShaan Puri
  ... his email is @mastodon.lol. Okay, so like [laughs] let's be real about what's going on there. So Balaji comes out and he says, "I will take that bet. You buy one Bitcoin, and I'll s- I'll send $1 million to an escrow." To be clear, this is 40 to 1 odds, so he's basically saying not only is this unlikely to happen, like if this was even odds, it would've been like, dang, Balaji's gonna lose a million dollars 'cause Bit- Bitcoin's not likely to be worth a million dollars. Then he added in 90 days, which is already a radical move. Then he said, um, and by the way, the million dollars versus one Bitcoin, Bitcoin's currently at 26,000 at this, at the time he made this bet. He goes, that's 40 to 1 odds that I'm laying you. And he says, uh, all we gotta do is find so- you know, a mutually agreed on, like, escrow or custodian. Um, and he, again, he tweets out this bit signal graph. And so he's like, you know, I'm doing this again. Now, this th- this tweet goes viral. This one gets 11 million views because it's more provocative, it's, it lets anybody, and at fi- at first the wave of tweets, myself included, was like, Balaji's nuts. He's gone crazy. Uh, like, this doesn't make any sense. And, uh, and so you know, 'cause it was like not only was the bet unlikely to prove in his favor, it was a perfect bet for Mr, yeah, James Medlock over here, the social, the Democrat in the streets and the socialist in the sheets. All he had to do was buy two Bitcoin, right? He could buy one that he's putting up for the bet, and if he's wrong and Bitco- and the dollar does hyperinflate and Bitcoin becomes worth a million dollars, all he had to do was buy a second one. So if he could, for $52,000, he could guarantee himself a million dollar payday. So it was, like, an absolute
33:33 – 38:19
Balaji's Reply to Shaan
1. SPShaan Puri
  no-brainer and, and, you know, the poker player in me was like, Balaji, what are you doing? That's a, you've given this guy, like, a, you know, a no lose bet. And so I messaged him and I was like, uh, you know, "Hey, Balaji, this is crazy. What are you, what are you thinking?" And he, [laughs] here's what he, here's what he replied. I, I think I can share this 'cause it's not, uh, not anything that he's not tweeting out. He's tweeting all this stuff out anyways, so it's not, it's not overly crazy, but here's what he said. So he goes, [laughs] he just replies, "All the banks are insolvent." [laughs] That was the first, first reply. He goes, "Have you seen The Big Short where one guy figured something out early and everybody else thinks he's crazy? That's what, that's what's happening here." He goes, uh, "People think this was a sil- single bank issue," like Silicon Valley Bank. "It was a central bank issue. All the banks are dead. 10 da- days ago, there were no dead banks. Today there are five, and if people p- realize this and they'll pull, they'll start to pull their money out, they'll realize that the banks don't have it. It's Uncle Sam Bankman-Fried, not Uncle Sam."
2. SPSam Parr
  [laughs]
3. SPShaan Puri
  Uh, which is what, basically what happened with FTX was people realized the money's not in the, [laughs] the money's not in the, in the bank with, with FTX and [laughs] then that caused, uh, you know, the, the extreme crash. Um, and then he tweeted out a bunch of stuff and he goes, uh, he goes, "I'm not doing..." He goes, "Yes, I'm not doing this to make money," 'cause I pointed out that the guy could just hedge and win the bet. He goes, "Yes, I'm not doing this to make money." He goes, "If I had the beliefs that I do and I was just purely selfish, I would simply just take the million dollars and buy 40 Bitcoin. I would take, you know, another million dollars, buy another 40 Bitcoin, and I'd do it quietly because I believe that the US, the, the, that the million dollars is gonna be worth zero in 90 days. I am doing this to alert innocent people and to send a message. Get to the exits." And so I wanna bring up a couple of, like, cases here. So that, that's the bet.
4. SPSam Parr
  Hold on, real- really, really quick, there was also this o- other thing. Apparently right around this time, it, there's a picture of him. So this guy Balaji-
5. SPShaan Puri
  [laughs]
6. SPSam Parr
  ... he's, like, has this, like-
7. SPShaan Puri
  We gotta throw up the picture-
8. SPSam Parr
  ... stereotype this-
9. SPShaan Puri
  ... on the YouTube video. Gotta throw up the picture
10. SPSam Parr
  ... [laughs] so he's got this stereotype of being, like, you know, like the forgetful scientist of, like, he's just this guy who only cares about being brilliant, and oftentimes he's right and he's eloquent, whatever. There's a picture of him, it looks like he's giving a seminar at, like, a university, and the, someone tweeted, he goes, "Balaji's, uh, saying get the F out of the US, and it's, and it's very scary." And he's sitting there giving this presentation in front of, like, a class, and he's wearing pajamas, like, a pa- like a pajama-looking hoodie, d- uh, basketball shorts, and Nike Air Jordan flip-flops with his laptop sitting on top of, like, two cardboard boxes. And so if you needed, like, this, this, any more of this stereotype of this, like, brilliant, like, you know, of this, uh, the, the, the image that we have of Mark Zuckerberg, you know, just sitting in a hoodie, coding, eating pizza, and drinking Red Bull, Balaji's going all in on that image. Uh, and it, that, it almost makes it worse when I see this picture.
11. SPShaan Puri
  But, but I think a lot of, um-
12. APAnthony Pompliano
  Why he has so much credibility is that he has been able to identify a number of these, like, exponential, uh, situations. And if you really think about, uh, what he's saying here, it's almost an exact overlay to COVID, right? He saw very early on, uh, a couple of data points, and he was able to extrapolate from a couple of those data points, "Hey, this isn't a linear line. Like, this is literally an exponential curve, and the top of the exponential curve is really scary. Like, let me go yell, scream, and, like, call attention to it." He's doing the exact same thing here, and I think that's, uh, what Shaan was reading about, like, "Hey, 10 days ago there was no dead banks. Now there's five." Like, he's just trying to put a couple of data points and be like, "If this goes exponential, like, this is really bad." And I think that one of the, the components, uh, that's important to call out is, like, I don't know what the percentage is of Americans, but most Americans don't know that if you go and you deposit your money in the bank, it's not your money anymore, right? Like, just that alone, like, the, the lack of financial education of the average American is astonishing. And so yes, there's FDIC insurance. That covers up to 250K. Like, there's all these different things, but if you go look right now, like, the FDIC does not have enough money to backstop every bank in America. It's like $170 billion or something.
13. SPSam Parr
  I think they used 20... I think it, like, 20% of it was used to help Silicon Valley Bank.
14. APAnthony Pompliano
  Yeah, that's like one bank.
15. SPSam Parr
  And Silicon Valley Bank... Yeah, Silicon Valley Bank is, like, the 20th largest bank in America.
16. APAnthony Pompliano
  Yeah.
17. SPSam Parr
  So it's, like, not, not very big compared to the big, big ones.
18. APAnthony Pompliano
  One, one other thing that I think is important to understand about these situations, um, is this idea of, like, a digital catastrophe, and this is a concept that, uh, frankly, I struggled a little bit to come up with, like, a good name for it, but I think digital catastrophe kinda really articulates it, uh, as best as I can, which is you need to understand this concept because it is going to become very, very common in our lives over the next, you know, 20, 30, 40 years.
38:19 – 46:20
Digital catastrophes
1. APAnthony Pompliano
  But the way that I define a digital catastrophe is it's an event that occurs that is negative, usually plays out in the analog world, kinda the real world, but it is drastically accelerated by the speed of communication and action online. And so Silicon Valley Bank is, like, the prime example, right? If you think about what happened there, on Wednesday afternoon they made an announcement. By Thursday morning, people were scared. By Thursday afternoon, $42 billion had been withdrawn from the bank, and by Friday morning the bank was dead, right? So, like, in 48 hours it was the second-largest banking failure in the United States' history. But in the old days what you would have to do in order to have a bank run is, like, Shaan would walk over to Sam's house and be like, "Yo, Sam, did you hear, like, the bank's probably not doing so hot?" And then, like, Sam would be like, "Huh, that's kinda crazy." And you would walk, ride your horse, maybe get in a car, and, like, show up to the bank physically, wait in line, and be like, when you get to the teller window, "Can I have my money back?" Like, that takes a lot of time, effort, energy, all that type of stuff. Now, you can literally open a new tab on your browser, click a couple buttons, and move your money. And so when the speed of information occurs that it does on the internet, millions of people, whether you're a customer of Silicon Valley Bank or not, like, Twitter knew that the bank was insolvent by, like, noon on Thursday, right? And so if that happens, that's how you get $42 billion withdrawn from a bank. That is a digital catastrophe. It's the speed of information, the speed of action online has real world cons- consequences. And so another way to think about it is, like, the internet was weaponized to create the second-largest bank failure in history, but it was in response to the knowledge of an insolvent bank that was caused by a fractional reserve banking system and an increasing of interest rates that basically left the ba- uh, the bag holders as the banks. And so people were just operating out of personal incentive to get out of the way.
2. SPShaan Puri
  Yeah, th- there's a, there's um... It, it was kind of amazing. Like, Thursday morning I remember waking up, and in our group chat, Sam, there was, like, somebody posted Silicon Valley Bank's stock was going down. Uh, it was down like 30 or 40%. And it was like, "Oh, wow, must've had a bad earnings call," right? Or, you know, that was kinda my assumption. It w- w- wasn't anything too, too bad. Uh, you know, by 11 or noon I'm scrolling Twitter and I start to see... You know, if you scroll s- uh, th- this is just a general truism. If you scroll social media and you see four or five different sources talking about the same thing, your brain is just, like, wired to be like, "This is now a b- this is a big deal. Topic X is a big deal." Marketers use this to their advantage when they want you to, like, bunk over a product or know about a movie that's coming out or whatever. They do the same thing. That's why they get, why influencer marketing's a big deal. But it also works just organically. If five people say the same thing on, in one Twitter scroll, I know that something's up. And so I remember being on the phone, and basically in the manner of, like, 15 minutes it was like I'm on the phone. We're not even really sure what to do. It was like, "Uh, let's just be safe. Take it out." Sent an email s- to, you know, sent an email saying, "Hey, we're taking it out," opened up a new tab, clicked wire the money, took a screenshot of the wire, sent it back into six group chats, then went ahead and tweeted out a, a thing. D- [laughs] it's like, wow, like, in 15 minutes I just, like, propagated this more than I could've done if I, if it had been my full-time job, you know, 20 years ago, which is kinda what, to, to your point. And, uh, and the funny thing is people are mad that, like, um, they're like, "Well, if there wasn't a bank run, there would've never been a problem." And it's sort of like, uh, it's, you know, they, they use this example of, like, what, what's it called? Like, screaming fire in a movie theater or something like that. It's like then everybody runs to the exits. Well, the reality is if there's no fire in the theater, um, everybody running to the exits and getting stuck there, then, you know, trying to get out, like, it, it's not that big of a deal. There was actually a fire. And so [laughs] like, you know, I don't know how the blame gets shifted to the people who successfully gotta, got out of the fire versus, uh, b- pointing out that, hey, somebody caused this thing to catch fire, which is kind of Balaji's point. Balaji p- he tweets out this graph of the, like, the, the balance sheet or whatever. It's basically, like, goes up, up, up, up, up, which is, like, during the money printing era. Then the last year, year or so, it's been trying to tighten, so it's been going down. So contracting, and then, like, overnight, it just goes straight up vertical, like no graph you've ever seen because this $2 trillion was basically, of liquidity, was added to the market. Now, some people say, no, it wasn't really cer- like, put into the supply. Like, Pomp, you might have an idea about this. Some people say, well, that $2 trillion has not really been given out. It's not going into the supply. It's kinda just there as a borrowing facility in case the banks need it in order to, like, prevent any panic. Um, and other people say, money printed go brr, that's the same thing, so you know, what, what are you talking about here? I don't know. Do you have an opinion on that?
3. APAnthony Pompliano
  You know when you're in, like, high school and, uh, there's the, like, but actually kid in class who, like, sits there in the corner, and no matter what anyone says, they're like, "But actually," and they try to tell you about something they read or this or that or whatever?
4. SPSam Parr
  It's actually called Barcelona.
5. APAnthony Pompliano
  [laughs]
6. SPShaan Puri
  [laughs]
7. APAnthony Pompliano
  Exactly, right?
8. SPSam Parr
  Oh, you mean bruschetta?
9. APAnthony Pompliano
  [laughs]
10. SPShaan Puri
  [laughs]
11. SPSam Parr
  No, I mean bruschetta, Karen.
12. APAnthony Pompliano
  [laughs] Like, that is those people on the internet, right? These people who, uh, they're the same people during COVID that were like, uh, "But actually," and then they would go on some rant, right? Like, no, the government locked us in our homes and literally printed trillions of dollars and created 40-year high inflation and absolutely screwed millions of people. I don't care what but actually you have to say. And then you look at the same situation as, like, they were like, "But actually, inflation will be transitory, and it will come back down," right? And then you're like, no, that's not how this works. And so ultimately, what you end up having, which makes markets, so, like, this is a part of capitalism, is you have theory meet reality. Sometimes theory is a great primer and overlay on reality, and other times it's not. And what I've learned over time is that the more complex the system, the less likely it is that the theory overlays perfectly on reality. And, like, there is no more complex system than the economic system of America, let alone the world. And so all these people who are like, "Oh, uh, inflation will come down because the Fed will do this or that," well, like, the Fed isn't the only thing that contributes to inflation. There's supply chain disruptions. There's geopolitical war. There's, like, all these different components to it. And so I think that you've gotta be very careful just looking at theory and trying to impose theory onto reality. But the other thing that I would say a- throughout this entire, uh, kind of cycle or, or, or, uh, new- you know, kind of news development, man, are we lucky we have the internet. Like, the internet is the greatest place in the world, and, like, Shaan did a great job explaining, you know, you can propagate some of this information. But imagine being in the 1950s or '60s and, like, you basically could read the newspaper, and maybe you watch, like, the nighttime news. And you have to listen to the talking points from the, like, public narrative or, like, the, you know, the, the government or, uh, the Fed or whatever. On a daily basis, there are things that are said by, uh, those who, who kind of set the public narrative, and within seconds, people on the internet destroy the narrative. And they're like, "Nope, that's not true. Here's these five points." And, like, I don't care necessarily who's right or wrong every single time as much as it's like, I want both sides. I want what the people in charge are saying, and then I want the people who, like, think the people in charge are idiots are saying. And then I'll kinda, like, think for myself.
13. SPShaan Puri
  Right.
14. APAnthony Pompliano
  But the internet is what has empowered that, and so, like, wow, what an amazing time for us to be alive to have that ability because literally, two generations ago, they didn't have... Like, what are you gonna do, go to the encyclopedia and look up, like, what is a bank run, right? Or, like, how does central banking work? It's just amazing that we now have this capability.
46:20 – 52:38
What are you doing in 90 days
1. SPSam Parr
  So to- I think we should wrap this segment up, and I wanna wrap it up by each of you in just a couple sentences saying what do you think is gonna happen in the next 90 days, and what are you, are you guys doing anything?
2. APAnthony Pompliano
  Shaan, you go first.
3. SPShaan Puri
  Okay, so I'm gonna say, uh, two things. I think in the next 90 days, um, I, basically, I think Balaji is actually correct on everything except for his 90-day point because I think that's too hard to know. And, uh, he might end up being correct that it, something happens in the next 90 days, or it might take 900 days, and I think either way, the important part is he was right. It's just the time fa- the time window, I think makes things impossible. But the good news is you don't actually need to know the time window to act accordingly. Uh, I've said this for a very long time, and I think what Balaji's saying is a much louder, better version of that, which is for a long time, people thought, um, if you're buying Bitcoin, you're trying to make a buck. And from the beginning, once I started to understand what is this, I was like, oh, this is not about making money. It's about saving money. It's a savings technology, which is basically to say even when inflation was only 2 or 3%, if you just look at 2 or 3% over a 40 or 50-year period, the money that you have in the bank will still, if you put $100,000 in the bank, it'll still look like $100,000, but it will only have the buying power of something that's $60,000, for example. And so why would you ever save your money in something that is designed to lose purchasing power? You wouldn't, like, you wouldn't do that, and so I don't think that it's a, uh... I, so I've always thought Bitcoin's, the core value of it is it's a savings technology. It's a currency whose one big feature is it doesn't inflate. [laughs] And so, you know, if you wanted to save your money, you'd rather save your money in something that doesn't inflate, cannot inflate versus something that either infla- inflates slowly or quickly, right? Low inflation or high inflation. I don't want any inflation if I'm saving my money. And so anyways, I think that he is correct about if you're going to save money, you should do it in a hard currency that's not gonna inflate. I've already been on this bandwagon, obviously been the kind of crypto person that's, uh, you know, obviously a believer in crypto, created The Milk Road 'cause I believe in crypto, still believe in crypto, and so nothing has really changed there. In the next 90 days, I would guess that Balaji looks like a fool 'cause people are gonna point out that it didn't happen in that time period. But in the next 900 days, I think that he will be proven correct.
4. SPSam Parr
  In 30 seconds, Pomp, what do you think, or 60 seconds?
5. APAnthony Pompliano
  I think that Balaji is correct, similar to Shaan. The timeline is hard to get there. I will put a higher probability on the 90-day timeline than most, because I do think that there's tail risk, and mainly it's because when hyperinflation happens, it happens very fast. Like, in episodes of hyperinflation, everything's fine. 90 days later, there is hyperinflation. So it's less about, like, has this ever happened, and it's more about, like, is it going to happen? Uh, again, I'm, like, maybe 5%, because I do think there's very systematic, uh, problems and issues currently in the global financial system. I do think that the banks or, or the central banks, when faced with save the banks, save the dollar, will save the banks, which will lead to inflationary pressures. Uh, but I would not bet a million dollars that Bitcoin will be a million dollars in 90 days.
6. SPSam Parr
  Whoo. Are you guys hyped up or what?
7. SPShaan Puri
  [laughs] Well, we-
8. SPSam Parr
  I'm ready to go get in a fight.
9. SPShaan Puri
  By the way, we should say, say one thing, which is the, the, the, the, the other take that people have on this, which is that if Balaji has, like, $100 million of Bitcoin, he doesn't need to be right for this to be a profitable bet for him. So if he's got $100 million of Bitcoin, already Bitcoin's, I don't know, Bitcoin's up, like, 20% last week or something like that, but it's up, like, you know, 4 or 5% right now. Um, you know, he basically would only need to move it by, like, 3%, or it'd only need to move up by 3% in order for him to be profitable losing 2 million USD if he's got $100 million of Bitcoin, which I suspect that he does have $100 million of Bitcoin. I, I think he now has moved 90- I think he said this. He's moved 99% of his net worth into crypto. Um, and so, so I, I, I don't think... I think he can be directionally, I think he can lose the bet and still make money and be doing the thing that's i- you know, to his beliefs, the right thing to do, which is alert people that the, that the banking system is, uh, is currently broken. And, um, and he, you know, he is the Michael Burry of, of our industry, so we'll see if he's correct.
10. SPSam Parr
  Dude, I just feel like I drank, just drank, like, a liter of Mountain Dew. I'm just, like, drinking buckets of Dew. I'm just, like, hyped up right now.
11. SPShaan Puri
  Well, people wanna know, Sam. When Pomp tweeted out that he's coming on, people wanted to know, how are you gonna sit in a room with the two of us and still be sitting there in cash, ETFs, and not own any crypto? At the end of this segment-
12. SPSam Parr
  Well, hold on, hold on, hold on
13. SPShaan Puri
  ... you need 51 minutes of hell. Are you in on-
14. SPSam Parr
  Listen
15. SPShaan Puri
  ... are you gonna go buy Bitcoin or what?
16. SPSam Parr
  I own Bitcoin. I own, uh, uh-
17. SPShaan Puri
  Oh, not that, "I own it from 2015," a small percentage of my portfolio.
18. SPSam Parr
  [laughs] No, no, no, no, no, no, no, no. I, I've made purchases. Uh, and, um, I don't s- have cash. I have real estate, and I have... But here's the thing, though, which is in hyperinflation periods, I own equities. Those also go up. The, I don't... You know, to get to a million dollars, Bitcoin right now is at 27,000. You know, that's like, uh, what's that? Like, 50x or something? I don't know if equities will 50x, but I, I mean, they, they will go up.
19. SPShaan Puri
  Yeah, maybe, but also, all those businesses run in dollars, and all their earnings are in dollars. If dollars are not useful anymore, right, like, the wh- the whole system, that's, that's the thing. I'm a Bitcoin bull, and you don't wanna see this happen because the world will, will be chaotic, absolutely chaotic. It will be bad for a lot of people. I think everybody, even who's the biggest Bitcoin bulls, you said this for yourself, Pomp, you're not rooting for, for it to happen this way. A slow transition is really the only thing you want. A fast transition would create a lot of damage, and so you, you don't really want that to happen. [upbeat music]