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160: Bull Markets in the Least Ugly Economy in the World!

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Buck: Welcome back to the show everyone. Today my guest on Wealth Formula Podcast is Tyler Jenks. Tyler as you may recall was on a few months ago on Wealth Formula Podcast and Consensus Network and Bitcoin at that time was lingering you know was lingering right around 6,000, 6,200 bucks maybe 64 but it was really really stable for months and in fact some people were joking around that it was actually more stable than Amazon. A lot of the major players in the market like Mike Novogratz and you know some of these other hedge fund guys we’re talking about how you know this was the bottom and admittedly I kind of had drank the kool-aid and then Tyler was on the show and he told us that there was gonna be a big correction and that he saw a significant fall happening and then literally within a couple weeks, I was on a Twitter feed watching Tyler as he almost did in a babe ruth’s fashion point out it was coming that like very quickly and this was after the whole Bitcoin Cash debacle and the next you know we fell down to down to 3,100. Now this was a big surprise to most people wasn’t to Tyler and as you may recall he’s been in traditional finance and markets since 1971 with a distinguished career as a portfolio manager and chief investment officer during that period of time, so he’s you know he’s seen a lot of stuff. He’s managed hundreds of millions of dollars for institutions charities pension funds high net worth individuals and he’s currently president and chief investment officer of Lucid Investment strategies. Tyler it’s great to have you back on the show again.

Tyler: Well thank you very much I really enjoyed the first time around great questions and great conversation covered a lot of material in a fairly short period of time but you’re exactly right the timing of this couldn’t be more important not just talking Bitcoin but everything what in the world is going on stock markets and currencies and the price of gold and politics it’s unbelievable this is one of the most exciting times in world history in my opinion.

Buck: Well so you know I was going to focus on Bitcoin but now that you bring up you know you talk about you know your background you’ve Bitcoin is you’ve been doing this since 1971 Bitcoin has only been around for a decade let’s back up a little bit and talk about you know the markets at large and what’s going on and what your view on that is because as you as you just pointed out you know we’ve got I think we’ve been you know it looked like it was we were back to a bull market but then now you get the Chinese tariffs 25% tariffs etc yeah what is going on Tyler what do you expect to have happen here?

Tyler: Well I sure wish I knew and you know you’ve got to be humble at times like this there’s no one in the world that knows not all the head of the central bank in the US the Federal Reserve that Mario Draghi no politician everybody’s got their own sense of things but we know a couple of things that are factual and to me it’s those couple of things that are factual that we need to all consider in Bitcoin plays a big part of this. And those two things are over the last 20 years what has happened to world wealth compared to what has happened to world debt. Just a very simple concept. If you’ve got you know $100,000 of the total wealth in the world and you owe a hundred and fifty thousand dollars, there’s trouble ahead. Well the same is true with the municipality or a corporation or a union pension fund but particularly true with the country. You can get away with it for a period of time but the reason I said this is one of the most exciting times in world history is because the problem of world debt compared to world wealth. Now in the last 20 years right up through today, the total amount of wealth in the world has grown by approximately a hundred and thirty seven percent, which sounds really good and actually it is pretty good. The problem is that over the same time period the total amount of debt in the world has grown by almost three times that much, over three hundred percent three hundred and thirty some-odd percent. And what that means is that in a very short period of time and we’re talking weeks and months maybe a year maybe a year and a half, for the first time in world history the total amount of debt will be greater than the total amount of wealth. And that simply means that this problem must be solved. And so all of the things that I just talked about stock markets and currencies and Bitcoin and gold play into all of this confusion by people, they know what the problem is they just don’t know what the solution is.

Buck: Right well let’s let’s let’s talk about you know this in perspective of some of the things that I’ve heard you say recently and recently meaning in the last month or two. One thing I saw was that you became completely bullish on theS&P500. How do you reconcile becoming completely bullish on the S&P500 and the markets with this idea of you know significant debt issues how do you how do you reconcile that because are we looking at two time frames what are we because obviously there’s this whole world out here which particularly in real estate real asset land we have a lot of people who are always waiting for the you know waiting for the sky to fall, we hear that all the time but you hear that in the context of also saying we’re in a bull market where does that leave an investor?

Tyler: Very probably completely confused. And put in for very good reason one of the five solutions to the debt problem that I outlined in an article in medium called The Long and Winding Road to 10 million dollar Bitcoin, I outline 5 theoretical solutions to the debt problem. One of them which I believe is one of the least likely is growing out of the debt problem by having world GDP growing faster than interest rates and inflation. By definition what that would mean is you’re growing faster than the interest rates therefore you can pull away from them and slowly eat into the debt. Unfortunately no country in the world is doing that except the United States and the United States has only been doing it for a very short period of time and this is not a political statement but it started about the time that Donald Trump was elected. That might sound political but it’s not because it’s purely an economical observation on my part that by cutting taxes by ignoring trade agreements and alliance agreements and redoing trade agreements with China and Mexico in Korea trying to redo it with China trying to back out of world groupings that cost a lot of money even though many people or most people believe in them is a way of a country and it doesn’t have to be the United States any country pulling back and getting its own house in order. And to the extent that we’ve only got two and a half years of a record of that we find that the strongest currency in the world as of this afternoon is the US dollar and has been for the last number of years, the strongest stock market in the world for the last 11 years has been the US stock market. The fastest reduction of sentiment in the world has been in the United States or even France or Great Britain it would not be a solution to the world problem but we’re talking about the largest economy in the world with the largest stock market in the world with the highest productivity in the world which means maybe but not probably but maybe the US can help pull on other countries up to the extent that they can get their GDP growth even slightly above inflation rates in their interest rates and if that can occur then maybe we buy ourselves another year or two years or three years or four years or five years before this debt problem comes home to roost.

Buck: So what so the debt problem itself when you when you talk about it coming home to roost what exactly in your view does that look like?

Tyler: Well what it means is if you can’t pay off your debts and you can’t make payments on your interest you have to beg for some sort of reduction in your interest rate on a credit card, you’ve got to renegotiate a mortgage, or you’ve got to increase your income by getting a second job. If you don’t do those things people get upset because the opposite of the debt side or the counterparty is owed money you owe money to someone or some institution or some country. And there’s wiggle room but there’s not wiggle room for very long, you’ve got to solve that problem. The same is true for a corporation that gets deep into debt or a municipality and we’ve got plenty of them or a pension fund or a country. If the whole world is in that situation then what happens is you get two thousand six seven eight and nine where when one party in this case someone with a lot of junk bond mortgages couldn’t make payments to a counterparty ie Bear Stearns, Lehman Brothers, AIG, Merrill Lynch and when one domino went somebody wasn’t getting paid and because that someone wasn’t getting paid they couldn’t make payments to the next somebody and the entire house and cards collapse and then it spread worldwide and we came this close to having to face the debt problem eleven years ago. This time around the central banks that pulled us out of that last one don’t have the ammunition to do it. It’s all been spent. And that’s not theoretical. That’s because prior to 2006 interest rates in the United States were 10%, excuse me 6% and today they’re at 2.3 8% on the 10-year US Treasury. Why does that matter it matters because to stimulate an economy, a central bank or the Treasury or Minister of Finance needs to lower interest rates to be able to get people to borrow more and to make it more profitable for certain types of institutions it’s called net interest margin, the difference between what a bank can borrow from a central bank and what they can lend out to you and me. Okay, when you’ve got 6% you can cut it to five and then five two four four to three three to two we’re now at two, and we were at zero. At zero you can’t cut any more we thought. Now we know that’s not true because 22% of all the currency in the world is from a country that has negative interest rates, below zero which means if you put your money in the bank in Japan, in the UK, in Germany, you have to pay them interest to keep it, they don’t pay you interest it’s a negative interest rate. Therefore the central bank can’t cut it they can’t lure it anymore and now we’ve got the problem that has been growing at 300%, ten years later a much much worse problem than we had you know six or seven or eight with no ammunition left.

Buck: So one of the alternatives in that situation might be to let inflation climb right and so that you can effectively you can effectively decrease the amount of nominal debt by debt essentially making it worth less, right? Isn’t that one of the options that countries like the US are looking at and why they target having a certain level of inflation every year?

Tyler: Yes but that target is about two percent and they can’t achieve it they’ve been trying for eleven years to get up to a two percent inflation rate and they haven’t been able to do it we’re at about 1.7 percent right now and that’s true worldwide we’re not talking about an inflation problem we are talking about an inflation problem in Zimbabwe and Argentina and Venezuela and in Turkey but those are localized problems where you can create, print more money and more money and more money and more money which is what inflation basically is and with that money people think well I’ve got more money now I can buy more things but what’s really happening is the money is getting more and more worthless relative to those things, the goods you want to including including money including money. And what I mean by that is we went through an 80 year period it started in the early 1940s of interest rates and inflation increasing and an increase in increasing for 40 years. And that got us into the 1970s where Nixon closed the gold window which was Bretton Woods in 1944 had set up to say that every currency in the world can be converted into either the US dollar or into gold and by doing that the US dollar and gold in every other currency including Zimbabwe Argentina Venezuela was pegged to those things going up and down. The problem is the US started running deficits which is what you’re talking about inflating back in 1960 and so from sixty to seventy one under Kennedy and then under Johnson what happened is we were running big deficits for the first time in US history. And when you run a deficit, your currency goes the other way because you were printing more money that’s what a deficit is, is you ran a deficit so you make it up by printing some money. Now Nixon realized that this was not going to last very long so he shut down Bretton Woods closed the ability for people to convert their currencies and to go over the dollars and that ended what we know as the gold reserve currency of Bretton Woods and ever since then everybody can print as much as they want and some do and they get into deep trouble and then everything collapses but the big developed countries don’t or they try not to accept over a very long period of time which is why those figures I gave you are so important. So I’m not trying to be a historian but it’s important to understand that the only way to stop what you are now suggesting was done by Paul Volcker in 1979 when he became the Federal Reserve Chairman in the United States. At that time you and I could go to a bank, put our money in it and get paid 20% interest on money market funds and you could buy a US Treasury bond and get paid fifteen and a half percent interest on it. Why? Because inflation was 21 percent from in the 70s and that’s why the price of oil went up the price of gold went up the price of silver sugar all commodities went up and the value of the dollar kept decreasing and decreasing. So what he did is he said one man did this I mean yeah he had an open market committee and there’s other people sitting around the table basically one man did this he said I’m going to kill inflation in the United States once and for all. So he jacked interest rates higher and higher and higher and higher and put us in to very deep recessions in 1980 in 1982 and lo and behold he killed inflation and from that date remember that was 40 years of interest rates and inflation going up from that date we’ve had 40 years of interest rates and inflation going down right up through today and that’s why it’s so impossible to get inflation and interest rates up we are in a deflationary world now not an inflationary one.

Buck: So how do you put that in getting back to the initial concept of how do you put the issues that you’re talking about a deflationary world you know with all of the debt that we have how you how do you put that in context with being bullish on the S&P; 500 right now?

Tyler: Because as long as the US economy remains strong relative to other countries money flows from those countries into our not only economy but our start work as long as our stock market continues its eleven and a half year bull market the longest in the US history which is true right up through today as long as we can go another day another week another month another year that puts the problem off I am ready at the drop of a hat to get out of this market but the signals are not there as of this afternoon they were there on two different occasions last year. Now what happened in 2018 was that in 2017 the stock market was up 21% hitting new highs in twenty 18 we hit a high and then we dropped 10% then we went up in September and hit another high and we dropped 20% into December of last year since then we’ve gone all the way back up to a new high just three weeks ago so during that period of time that night 2018 I got 25% out of the stock market as it was going down then I put the money back in as it was going up then I got a hundred percent out of the stock market going into December and it stopped going down and I put 50 percent back into the stock market when I say I click in what I’m talking about is I managed money for a number of people and I consult to a number of people we made those decisions for their accounts. Now since then I was only 50% in the stock market up until April the 1st of this year. April the 1st of this year I got signals again when I say signals I use technical tools that I’ve built myself and a lot of other people have built that I use their systems, you know on April the 1st I went 100 percent back into the stock market. Now since then we did go to new highs but over the last two weeks we’ve begun to slip again. So what I’m telling you is I’m not dogmatic. I’m very practical that the problem is so big and the result of that problem coming home to roost and I’ll tell you briefly what I mean by that is it’s going to be worse than oh six or seven or eight no nine in terms of banks real estate stock markets on a worldwide basis much worse, therefore I’m not I holding a couple of sticks of dynamite, somebody’s lit both of them and I’m watching very carefully as the wick gets smaller and smaller but I’m still holding that dynamite.

Buck: Yeah well let’s you know in in terms of what you just mentioned there were we’re big in this program not necessarily so much in the equity markets but real estate and these sort of things certainly a bull market continues there as well the question I guess from your from my perspective is that what do you see, I mean you’ve effectively said the reason that we keep rising is that the US economy is the least ugly economy in the world right I mean that’s the idea is that okay things aren’t good but compared to other places where we’re doing much better we have a better economy or a stronger stronger economy in general and so we’ve got flight coming in why how what do you see that could change that and what kind of time horizon do you expect I mean is it something in the next year could it be something that continues for another 5 or even 10 years or how do you see this how do you gauge that because it seems like a you know one of these things that it’s not like it’s this problem started yesterday so what makes it what makes it imminent to go off?

Tyler: Well what is the trigger point for the wick burning down till it’s actually enough to explode? And the answer to that is in a macroeconomic sense what we don’t want to happen is what happened in oh seven and ‘08 which is an accident somewhere it starts the ball rolling down the hill some people call it a Black Swan event or a long tail event on on a bell curve something unexpected happens somebody goes to war with somebody else some bank fails some brokerage firm fails and that starts a chain reaction there’s no way to predict when and how that would occur so the second possibility is that the powers-that-be meaning not the policymakers but the central bankers of the world the IMF and the World Bank that know everything that I have said in great detail they’re gonna talk about it publicly all the time because you don’t want to cause a panic which then is a Blacktail event in itself. So I and many other people that know what is going on from an economic point of view understands how delicate their situation is but that doesn’t mean that they haven’t been spending years coming up with solutions none of those solutions are going to be good the only one that is the one I just talked about growing out of the problem which is the least likely and they all know that that’s not going to occur so they want to put it off as long as possible. The reason I believe that our central bank our Federal Reserve backed off under pressure by Trump, it wasn’t Trump who did that they know what was going on they know we can’t let the US slip into a recession. And it was becoming evident by their raising interest rates over and over and over again over the last three years where we’ve gone to zero to the ten-year going up to 3.30% that it was beginning to take hold and slow down the economy Trump was saying it in public but they knew it because they know all the numbers and they backed off in December of last year that was the bottom of the stock market. It wasn’t coincidence they said okay okay okay we aren’t going to raise any time in 2019 we promise you and we might not do it in 2020 and now they said maybe our next move is going to be to cut interest rates. So let’s just stipulate that there’s a lot of smart people pulling a lot of levers that know the problem we’re talking about. So if they know that’s the problem and they know they can no longer make the payments that are needed to counter parties worldwide one of the other four solutions I have has to be done one of them which is the worst but I think the most probable without an accident occurring is for the governments to get to get there and default on the debt. It’s happened a couple of times with horrible consequences Russia did it with the ruble Argentina did it at one point with the peso and every other country in the world jumped all over and wouldn’t do business with them until they cleaned up their act and and they paid off their sovereign debt in both cases that happen. Venezuela is right on the border of doing that they’ve been having to sell gold illegally in order to pay pay their debts. That’s not what we’re talking about it’s not a localized problem it’s a worldwide problem and all the big players worldwide know it. So they all get together here is a solution horrible for everybody but it solves the problem and you say that all banks are closed worldwide starting at you know Friday night at five o’clock UTC time and reopening on Monday morning and on Monday morning all debt the debt you owe on your mortgage to get you on your credit card the debt you thought was credit because you bought a US Treasury bond and the US government alone the US government $50,000 and got a Treasury bond that is you are the creditor the US government is the debtor. The hundred thousand dollars you thought you had on Monday morning is 50 thousand dollars. That’s all they will pay and that’s worldwide and that solves the debt problem. Now what are the consequences of that?

Buck: And you’re saying this is the most you think this is the most likely?

Tyler: Yes that’s the most likely because every day that goes by the problem is worse and every day that goes by and they haven’t done that or they haven’t done number one or number two which is going to Bitcoin which there is the least likely other than growing out of the problem today it won’t be in the future but there the world is not ready for Bitcoin as a world standard today. The other thing they can do and they should do and they need to do before it’s too late is to go back to a gold standard. And they could do it the same way I just described solving the debt problem by defaulting on the debt by saying okay nobody can buy or sell gold over the next 72 hours all exchanges are closed all bouillion dealers are closed all futures markets are closed all option markets are closed yeah you can sneak around and buy gold coin from your neighbor just don’t let us see you do it. And then we have closed all the gold markets we have another Bretton Woods that only takes hours instead of the 22 days it took back in 1944 because everybody can talk to everybody instantaneously over the Internet they say Monday morning we are going to peg gold at twenty thousand dollars an ounce. That solves the debt problem. Why? Because they just created out of thin air an enormous amount of wealth. Today there’s only seven have trillion dollars in all the gold in the world, all of the gold the gold on your ring finger the gold in your teeth gold you got in your safety deposit box and all the gold by all the central banks in the world plus all the jewelry and everything else seven and a half trillion dollars. Well I said that the total amount of debt is running out very close to 300 trillion dollars. But if you all of a sudden make all that gold worth many many many times more than it’s worth right now that means that central banks that have gold have now got the reserves necessary to pay off their debt. What are the consequences? If you own gold you made it. If you don’t own gold everybody else that owns it has made it, you haven’t. I don’t mean just individually or corporations or hedge funds or mutual funds like countries. Who owns the most gold in the world, the US.

Buck: And actually we are seeing a fair amount of activity in terms of you know Russia and China buying up a lot of gold do you think that that’s in sort of an anticipation of something like this type of event?

Tyler: Absolutely you’re exactly right over the last seven years the three biggest buyers of gold in the world have been China India and Russia and even with that the u.s. owns more gold this afternoon than the three biggest countries in the world that own gold and they don’t happen to be China Russian India. France is right up there at the top Italy believe it or not is right up there at the top so you can divide everybody up by who’s got the gold today and the question is, the powers that be the central bankers and the finance ministers of their countries if they see what Russia China and India are doing and they know where the US is you should be seeing an enormous increase in the dollar value of gold, and you’re not it’s not going up.

Buck: So explain to me why that is because this admittedly Tyler the last and my listeners know this they’re probably chuckling right now but I have been very critical in general of owning gold just because for a variety of reasons am but namely that is some of the things that people talk about as as you know the virtues of owning gold the fact that it is a real asset. My argument to that as well real estates are real asset too and if inflation is a hedge to the input as a hedge to inflation well real estate is also a hedge to inflation. So help me understand you know what is your recommendation at this point or not recommendation but is it is it you reckon that’ll only of gold just to to hedge this potential catastrophe I mean how likely do you think in your view is it that we go back to a gold standard I’ve been looking at this is really something of an unlikely scenario.

Tyler:  I think it’s a very unlikely scenario of all they do is go to a bold standard and peg all the currencies against that gold and some price let’s call it a thousand dollars which is two hundred and seventy four dollars less than it is right now but it’s a nice round number and it’s carried on the books in the United States at $35 not still we don’t carry it at market value in Fort Knox or at the Federal Reserve in New York. It’s carried at the old the old rate. So $1,000 would be a tremendous increase if that if all currencies were pegged that but it wouldn’t do anything to the different wouldn’t do a thing to the debt problem. You need to increase the total world wealth overnight and the only way you can do that is by taking money out of certain things and putting it into something else that increase it tremendously in size. And what would that be what it would be is wealth in the form of stocks mutual funds sovereign wealth funds pension funds central banks buying that thing, let’s call it Bitcoin in this case, which is what gets Bitcoin up to five or ten million dollars per Bitcoin because those players need to take something that is only worth a small amount two hundred billion dollars today in Bitcoin and other Kryptos dollars in gold and make that go much much bigger. But you don’t do that on credit you’ve got to take something from something in other words from stocks from corporations from cash from bonds and put it into that thing to make it grow very quickly and they could do that with gold they cannot do that with Bitcoin because they cannot regulate Bitcoin they can’t say tomorrow morning Bitcoin is going to be a million dollars per Bitcoin. Why? Because nobody can control the price of Bitcoin except you and me if I sell it to you at a higher price then it is trading right now and you’re willing to buy it the price goes up. They can do it if they are the purchasers. Now they are not ready to be the purchasers in Bitcoin or any of the crypto because every other week some new fraud comes along and shows how porous the infrastructure of the crypto market is and that’s why we had the bear market that took us from 20 thousand dollars down to three thousand. Not because of the intrinsic worth of what Bitcoin is and can be, just because there’s no way for me to get it to you safely through an exchange or even through a wallet without being hacked, that’s changing but we need time to change it with lightning and tor and snore and the satellite that has been put up and all of the things that are being developed will take care of that problem technically and logistically but we ain’t nowhere close to that at this point. Gold is gold is ready to go it’s been done before over and over again centuries. It’s sitting there now China India and Russia know it. Their smart people know that it is one of the possible solutions to this problem they’re getting the heck out of it the US has already done that by holding as much gold as we have. So that’s why I say the most probable if the governments have a choice and aren’t forced into it by an accident or a domino starting to fall and they get ahead of the problem I think gold is what they will end up doing.

Buck: The other the other thing that I’ve heard people talk about is you know injection into economies you know because you have the central banks essentially tapped as you said with the interest rates and everything but getting the Special Drawing rights involved you heard of this theory with the SDR?

Tyler: Absolutely and what’s interesting about it and you know I’ve talked an awful lot of people that didn’t put two and two together here but the IMF International Monetary Fund in the World Bank were created in 1944 at Bretton Woods what happened at Bretton Woods is not only changing the entire world landscape in terms of reserve currencies the US dollar in gold against every other currency that’s why oil is designated in dollars and that’s why almost every commodity around the world is designated in dollars and had been since 1944 is because it was set up that way. When Nixon closed the gold window in 1971 and broke that thing apart. He left two important things still there the IMF and the World Bank and they’re still with us today. What you’re talking about is called a special drawing right or the SDR which is basically worth one guess what it is dollar. Each SDR is one dollar. And that’s what is used by the International Monetary Fund when they make a loan to Ghana or to Venezuela or to Malaysia it’s all through these Special Drawing rights they say okay we’re going to give you a billion dollars what the country gets is a billion SDRs. So it’s almost like a token it’s almost like a stable coin it’s almost like what JPMorgan just did coming up with the Chase coin which is simply a stable coin that stays at $1 it’s an easy way to move money around within a banking system. Well the IMF and the World Bank have that now here’s what people don’t realize. Since 1944 the head of the World Bank is always an American. The head of the IMF is always a European. Now what people also don’t realize is that out of all the 220 countries in the world only one of them has veto power over what everyone else wants to do and that’s the United States and it’s written in the agreements all the way back in 1944 that anybody can have the to power with one condition you have to have 15% of world GDP. Only one country does the United States. And because of that the US is in a position because the head of the World Bank is always an American, David Malpass was just nominated weeks ago from the United States that again why do I talk about the US growing and the US being the most powerful in the US having to be the one that’s got to pull everybody else. It’s ingrained within the world economic macro system and it’s the engine it’s not because I’m a patriot which I am waving a flag which I do, it’s because of the structure of how world economics works and because of that yes there is what I’ve added as a fifth solution to the problem which is overnight over a weekend all of a sudden this instant wealth that could be created with Bitcoin or with gold can certainly be created with SDRs and how do they do it they simply say remember when we said we were going to do a dollar per SDR starting Monday morning it’s a thousand dollars that takes care of the problem.

Buck: Well and I bring that up because in many regards the SDR seems to me because of the ability to control that situation and potentially being less disruptive than a gold standard or some of the other alternatives that the SDR might actually be the most likely scenario but why wouldn’t it be?

Tyler: Well remember one country has veto power only one right so the question is the US in a position historically politically at this point in time to give up all sovereignty to the World Bank and the IMF because that’s what you would be doing and beyond the US what about every other country. There are a lot of people who for a very long time have gotten their hackles up about the fact that a global world government doesn’t make sense. It’s great in theory and it looks good on paper but the differences between the various cultures and the various political systems all being run let’s take the United Nations as an example how well is that doing what it is supposed to be doing? Well we can debate that and there’s people on both sides but the United Nations has very little power over sovereign nations. The World Bank in the IMF have total control over central banks around the world that seemed to be acting in concert more and more so I don’t know the answer but you’re right it would be the simplest thing to do and I think with the most horrible consequences of all the other possible solutions actively creating world money at that point.

Buck: Okay so let’s go all the way back and circle back to Bitcoin because now we’ve got you know the whole scenario in front of us we understand that you know markets may you know in your perspective continue to go up just because we’re the least ugly economy in the in the world but at some points something may happen and trigger some event and Bitcoin at that point comes into play and as this is this the scenario although extremely unlikely admittedly at this point where you talk about the case for a ten million dollar Bitcoin.

Tyler: Yeah the reason I called it the long and winding road is it will be exactly that I don’t think it’s going to be difficult in the next bull market which might have started already I don’t believe it has but a lot of people do that a very very smart they think since we broke through 6,000 from underneath and ran up to 8400 and now we’re messing around seventy eight hundred eight thousand that that could be the beginning of a new bull market. That is a possibility. I don’t think it would be difficult if this is a new bull market for us just within our own little world meaning the crypto world and there aren’t many of us but there’s enough of us I think to get the price up to a hundred thousand dollars by ourselves without institutions without banks without hedge funds without mutual funds without ETFs just us. Why do I say that? Because so many people that are interested didn’t get in for the run from a thousand up to twenty thousand. And those that did get in and stayed in all the way down to three thousand, not a hundred percent but believe me the vast majority. I say that because I’ve talked to thousands of them through my vlogs and through Twitter and we do webinars and stuff and I always ask everybody I talked to on a one-to-one person when were you interested how did you hear about it when did you first invest in it when did you get out and the answers are all the same well we heard about it and 2015 didn’t do anything until 2016 it had been going down in 14 and 15 we were afraid finally in 2017 we got in and when we got in oh my gosh it changed their lives. And we could see our future going on forever and we were crazy wealthy and then we rode it all the way back down. Now luckily some of them say we wrote it back down to we heard you say get the heck out and some people did at fifteen thousand and twelve thousand ten thousand eight thousand and then we started screaming six thousand it’s not going to hold it’s going to break it did, it broke from six thousand down to 31 hundred. Now a bunch of people are irritated because I was calling four thousand I’m still calling for a thousand and I’m doing that on a fundamental basis as well as a technical basis the technical basis is a thing called high palade which calls for a thousand on the fundamental side we’ve already discussed it. The infrastructure is a mess. The regulator’s are getting closer and closer to shutting down a lot of things and sending a lot of people to jail and they need to do that and once they do that, wherever the bottom is will be the bottom. Now some very great analysts are saying 3,000 was as far as we needed to go now we’re going up. I for the first time in the 17 months bought Bitcoin for my self and my clients in my family between six thousand two hundred and six thousand eight hundred. We didn’t buy that on the way up we bought it on the way down. We put orders in at sixteen eight hundred sixty-six hundred sixty-four hundred sixty two hundred when we were up at eight thousand two hundred we had the flash crash that went from eight thousand two hundred down to six thousand two hundred and it filled all of our orders so we are in. So I’ve told everybody in our vlogs and on Twitter for the first time in 17 months I have bought Bitcoin, didn’t touch it in between those periods. But very few people have done that. Some people that didn’t get in the first time are now getting in which is great because they’re getting in at potentially very low prices meaning anything less than ten thousand dollars all the way down to one thousand dollars in my estimation personally is going to not be significant in the future if you buy it at one thousand and three thousand or seven thousand or ten thousand it’s not going to matter because it’s going to go so high under the right conditions. Now let’s say that is where we are right now we’ve started a bull market what I think is going to happen is we’re going to stall out somewhere between eighty five hundred and ten thousand right now and then retest drop back down again for a bunch of reasons we don’t have time to talk about. But if and when it can get above ten thousand one hundred and eleven thousand one hundred I think it’s got a very good chance of getting back to old highs at twenty thousand. We could be talking days or weeks, I’m not talking five years from now I don’t believe that’s going to happen but it’s a possibility that’s why I’ve told everybody I will never ever under any circumstance short Bitcoin. I didn’t short it when I was at twenty thousand even though my signal said it’s going all the way back to a thousand. Why? Because tomorrow morning it could be at a hundred thousand its that got that kind of potential no other asset class in history has that kind of potential, you don’t want to bet against it. It doesn’t mean you have to be in it but don’t ever bet against it bet against all the other cryptocurrencies if you want short them all they’re all going to zero at some time, bitcoin won’t. Now if we can get above twenty thousand we will get to fifty thousand very quickly because of all the people that wanted to get in that didn’t they say finally it’s here and fomo will take it as unbelievable prices I think it spells out around a hundred thousand a hundred thousand is very important to Bitcoin that puts it at one quarter of the value of all the gold in the world right now it’s not even one tenth of one percent  but at a hundred thousand all of a sudden it’s one quarter of it and a four hundred thousand it’s equal to all of the gold in the world and at that point it becomes an obvious choice for everybody outside of the echo system banks and corporations and hedge funds and family offices they don’t want to be left behind if it is the asset that is killing all the other assets, which bitcoin has done as of today from its beginning point no asset ever in history has appreciated to this extent over that shorter period of time. So the difference in between making a call on where we are and what the potential is is night and day and I just want to make that very very clear but that’s a great question because if and when it’s time for it to go. It is not going to have a problem pulling in everybody from the outside and then it can take its rightful place

Buck: I think you know I wonder what if we hit $100,000 before as you’ve talked you know about some of the fundamental problems with Bitcoin before we’re ready for primetime does that mean we go back to you know it’s just another huge bull run followed by…

Tyler: I’m afraid so and I say that because that’s I don’t want it to happen and be fun and if people know what they’re doing they can get out at the top there’s tools to allow you to do that but then you’ve got years and years after the fact of it coming down and going lower and lower and going through this whole nightmare and so many people have gone through but there’ll be a whole lot more people involved in it and that could keep it down for a long time. So I don’t want that to happen what I want to happen with bitcoin is an s-curve not a bubble not a hyper wave but an s-curve where it goes up and then the higher it goes up its adopted more and more and more until it gets to a point it doesn’t have to go up any more and it’s basically pegged at that point. I put it between five and ten million dollars it can be half of that two and a half million to five million if and this is what I would hope to happen I’m trying to finish an article on it right now is that governments are smart enough to realize they can’t control Bitcoin they can’t control gold and if they go to a gold standard but everybody else in the world wants a Bitcoin standard the Bitcoin being brought up by everybody else in the world will kill the gold standard so here’s a solution: let’s do a 50/50 split. Let’s make all the currencies of the world reliant on two reserve currencies, not the US dollar and gold but Bitcoin and gold. The government’s would accept that because they’ve got gold or have access to it and they would realize that if they also had it pegged to Bitcoin and let’s call it two and a half million dollars which they aren’t going to force on us but we will drive it up that high because it will be a valuable asset that everybody wants and then peg all currencies in the world to that couplet gold and Bitcoin I think it works and it’s acceptable and it solves a good problem.

Buck: At this point just just sort of wrap it up. When you call this the long and winding road and and also specifically you’re you’re not saying that this is highly unlikely in fact you’re saying this is pretty likely to happen right to have multi-million dollar Bitcoin when what’s the time horizon you would say I mean I know you I’m not this could happen very quickly but would you say that if you had too bet either ten years from now or not you think that this is a phenomena that happens within the next decade or is this two decades three decades?

Tyler: To me it’s dependent on the overlying problem how long can we put that off we can put it off for ten years then I think Bitcoin can take those kind of numbers in that period of time if it occurs before that if something blows up in the next couple of years bitcoins not ready and it’s not going to be part of the solution. So again my argument about why growth is the best way to go keep everybody keep your fingers crossed that this experiment that’s going on in the US continues to work long enough to help enough countries to get their act together and maybe adopt some of the same principles of lower taxes not higher taxes spurring business so profitability increases employment increases all that sort of stuff just basic economics which nobody seems to grasp anymore even though they’ve got a great example of it going on here. So my guess would be that within the next ten years we will either have a gold standard Bitcoin will have taken a place in that standard or if the gold standard comes very quickly meaning the next 24 months Bitcoin will drop below a thousand and stay there for many many years. So I am not saying it’s inevitable I’m saying it is preferable I want it to happen I believe it’s going to happen but it’s a long and winding road to get there a lot of things have got to fall in place for Bitcoin to take that place.

Buck: Tyler tell us a little bit more about Lucid Investments how we can follow you and you know if you’re about your consulting business.

Tyler: Yeah I appreciate it very much we’ve got a website called lucidinvestmentstrategies.com all one word believe it or not lucidinvestmentstrategies.com and it tells you about everything we do and what webinars we have what workshops we have and it’s also linked to all of our vlogs we’ve done 150 of them and all of our Twitter feeds it’s all there and basically what we do is we consult one-on-one with individuals that have questions like all the questions we’ve added a person has questions they can go onto our website and log on and set up a consultation and it’s all explained right there and the other part of what we do is we actually manage money almost none in the crypto space it’s all in traditional markets but more and more I will be putting in Bitcoin probably through GBTC for a while the Bitcoin investment trust which is in security it doesn’t have to be moved around exchanges in the infrastructure and maybe in two or three weeks Fidelity is coming out with a monster program which might be one of the reasons we look like we’re in a bull market right now I would take a long time to describe it but I’ve worked with them for 35 years it’s a privately held corporation it’s got seven trillion dollars of assets it is well regulated and understands the regulators and the regulators understand them they’re gonna open it up to institutions to be able to buy and sell bitcoins stored Bitcoin deep storage cold storage all right at Fidelity very exciting news.

Buck: Fantastic so Tyler again I want to thank you so much for all your time today.

Tyler: It’s been a lot of fun. It was both times great questions thank you Buck.

Buck: We’ll be right back.