No One Understands What Is Actually Coming For Crypto… Raoul Pal

No One Understands What Is Actually Coming For Crypto… Raoul Pal

what is really screwed up is the world is massively in debt the workforce is shrinking population growth is slowing down it’s slowing down GDP growth so there’s not enough GDP growth to pay or service the amount of debts out there and what we found since 2008 that the answer to this debt issue has been printing of more money de basement of currency so this is the M2 money supply chart and if you go back here all the way till 1960 you can see this is a $296 billion we’re in the total circling supply of money and now we’re up to 2,827 billion of dollars that are in circulation that is just over 6 years that is unsustainable and this is exactly why the US dollar has lost 99% of its purchasing power over the past 100 years this is the problem that R Paul was talking about in that clip and he’s going to be talking about what is the solution to this problem going forward people think of it in terms of at first they think it’s going to be inflation as in the price of CPI goes up but it’s actually not it’s actually something much worse is Wages don’t rise but assets go up because optically you’re debasing the currency your future self is getting poorer because assets are all about storing wealth for future deferred consumption but what’s happening is you can’t afford as much of that now and so your future self is in fact poorer so a classic example is a 35-year-old now in the United States getting married having kids a house is very expensive now compared to when Peter and I were young it was relatively cheap three times incomes now it’s like 10 times incomes so there’s no real way of getting up the ladder the equity Market is much more expensive your kind of percentage share of the S&P is so so much less so the advantages that your parents had are not available to you so that’s a problem a problem for society overall is this issue of debasement of currency the governments are doing it because there’s no way of paying the debt so what you’re going to have to do is continue to print money so then if that is the case and I found out in this everything code analysis that I talked to you about what we found is since 2008 they reset interest rates it’s like a debt res set the debt Jubilee happened it was everybody was given the chance to not pay interest and everybody reset their debts on this three to 5year time Horizon and so four years is the middle and we’ve got this perfect 4year cycle all assets are now incredibly correlated with this cycle whether it’s Emerging Markets whether it’s the dollar whether it’s rates whether it’s crypto whether it’s gold whether it’s equities everything and the fouryear cycle is something we’ve seen historically for Bitcoin time and time again starting back in 2012 it’s very interesting that the rest of the markets S&P the NASDAQ they follow this 4year cycle so everything lines up perfectly with the having so did Satoshi know what he was doing when he set the having at every four years something to think about so if we’ve got a super correlated environment where asset prices keep going up because of debasement of currency I the Optics because the value of the currency is going down then your job is to find something that offsets it so the rate of basement by my calculation is about 15% a year on a globalized basis so your hurdle rate is 15% now equities have done something not far off that but that just means you’re not actually making any money you’re actually just standing still NASDAQ which is in a secular trend is actually beaten that 15% hurdle rate somewhat so it’s actually helped the traditional way of doing it would have been Golds and you know I’ve been a long-term gold investor always like gold but gold has not done particularly well in recent years against the base on globalized basis it still works beautifully well as a Global Currency and against Global debasement over time it works but the really strong debasement we’ve been having in recent years just hasn’t done well enough and many of us from the macro world started thinking okay we need to find what is this hedge what is the right way of doing this and that’s where crypto which I’ve been involved in for a long time started to really fit in here because it offers a bunch of ways that the financial system can use it in an overly the indebted system where you’ve got a collateral and then like 30 uses of that same collateral so nobody owns anything you own a fraction of what you think you own in an indebted system same with a bank you have money in a bank it’s not your money it’s actually the bank’s money and that’s been proven time and time again Bank bailin in Europe were particularly bad so we’ve got a broken Financial system and the blockchain rails are something that’s actually very useful we can figure out who owns what at any point with instant settlements so it reduces a lot of the risk of the settlement layer but also you got you gave the rise of cryptocurrencies which also have this supply and demand Dynamic that’s interesting there’s a limited Supply and it has the properties somewhat of digital gold and that’s worked very well if you look at that because you’ve got this technology adoption of the blockchain plus this store of value or this collateral layer it’s massively outperformed everything so it’s been a phenomenally good asset even with these massive draw Downs on Route we have enormous draw Downs monstrous and still it’s the best performing asset in all recorded history almost on any time Horizon so it makes it very difficult to allocate any money in anything else um and that’s why I’ve struggled I just do every chart against Bitcoin or every chart against the fed balance sheet and try and say okay well what goes up gold has actually gone down versus the FED balance sheet I don’t think I think that’s more of a temporary State of Affairs than a permanent State of Affairs again I’m actually not an anti-gold person whatsoever I just think when you’ve got technology plus goals call it that as a narrative you’re always going to do better and in our job to help people navigate this journey if you’re 65 years old gol does a great job for you if you’re 35y old you ain’t going to get anywhere so R basically saying gold is dead Bitcoin is in crypto is here to stay and I know a lot of people think Bitcoin right now trading at around $70,000 is too expensive I got into Bitcoin back in late 2016 and it was trading around just under $1,000 I remember it was retesting those old all-time highs like we’re doing right now and I was thinking Bitcoin is to EXP and I went and bought some Litecoin went and bought some xrp didn’t really know what I was doing back then coinbase only had a couple of cryptos on the exchange saw money go up really fast and come down even faster should have just bought Bitcoin over the long term it’s gone up and up and up if you compare Bitcoin to any asset this is the S&P as measured in Bitcoin this red line here is the S&P since 2010 the S&P has historically gone up here it’s up 346 over the past 12 years since 2011 11 but compared to bitcoin it’s gone down and down and down it’s not just the S&P you can check gold here gold has gone down and down and down as well anything you compare Bitcoin to bitcoin has outperformed and everything else has lost 90% of its value so Now’s the Time if you think you’re too late to bitcoin you’re definitely not we’re just getting started opt into Bitcoin opt into crypto opt out of the traditional Financial system because it’s a thing of the past let me what you guys thought about everything in today’s video make sure to check out our patreon I’ll leave that in the comment section below my name is Aaron from Bitcoin Bros I’m out I’ll see you guys in the next one have a great rest of your day [Music]

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