Bitcoin vs. Real Estate -- Borrowing Against Bitcoin and Self-Paying Mortgages with CJK

never sell your Bitcoin never never never sell your Bitcoin and when it's time to sell your Bitcoin you won't need to you'll just borrow against [Music] it hey everyone welcome to the coin Stories podcast I'm Natalie Brunell and joining me this week is CJ constantinos he is the founder of the people's reserve a startup in the Bitcoin Community excited to hear all about it CJ thanks for joining me thank you so much for having me it's an absolute honor to be here I'm actually kind of a fan of yours I love how you go on

mainstream media and you just destroy those people with the best Bitcoin arguments that that come in a two three minute clip it's amazing thing that you do that's very nice of you I I try hopefully mainstream media will soon all be orange pilled um well let's learn a little bit more about you let's start with your your background where did you come from how'd you get into Bitcoin yeah so I've actually been in the industry for over a decade I started buying Bitcoin when it was around 150 bucks I come from a background of accounting

and finance and and man it was an orange pill session basically started out with mining learned about the difficulty adjustment got crushed by the having uh so one of those things where you I went down to the bottom of the rabbit hole I planted some more dynamite and went deeper set up a whole shop for everybody to come down and learn with me and ever since then it's been an amazing experience I've learned one thing nobody is a Bitcoin expert because it's just so vast of a of a discovery that the technological application is almost

in every facet of life it's an amazing uh Marketplace to be a part of and I couldn't be more excited what we're seeing happen today I think over my time in the marketplace I've seen Bitcoin as digital gold uh and then later on as pristine collateral uh and now with what's happening the monetization of Bitcoin the monetization of this asset class the reserve asset of the internet economy so I couldn't be more excited to see how fast Bitcoin is maturing and what that means for the future of Finance which we at people's Reserve is going

to be believe is going to be built around Bitcoin Equity wow so you've seen it go from $100 to 100,000 that is pretty crazy I'm very jealous that you obviously knew about it way before me um so tell me a little bit about um just within your Bitcoin Journey what got you to that point of saying even at $100 that you've got to invest in this that it's something everyone should take seriously because some some of the people that watch and listen to this they're still Maybe The Fringe or skeptical or have people in their

lives that are so how how how do you break down the the value of Bitcoin yeah and that's a great question because I think my journey started out pretty much like everybody else's I bought some and I thought I was going to like make a lot of money and be a great Trader you know I watch to go up to a$ thousand dollars and then fall all the way back down and that's when you're like okay I really don't know what this is I don't know what the heck I really own I got to take

a deep dive and uh that's when I got into Mining and I think even if you are somebody who is just beginning you should get into mining not to make money but to interact with the network and understand how these processes work because what that did for me is it helped understand bitcoin's cost of production which then helped me understand like the price Discovery in the marketplace because there's only 21 million coins and the only forc seller of those coins are the miners so the miners really set the margin and once you understand how the

price Discovery process works with Bitcoin and then the difficulty adjustment how it was engineered to strategically Leverage The Natural laws of economics and price Discovery process to empower us we the people who hold that asset the light bulb goes off and you can just you can't stop thinking about it Bitcoin is actually the only asset in the world it's the only commodity in the world that can raise its own cost of production Jeff Booth does a fantastic job describing how we have technological deflation and over times Things become more efficient and less expensive to produce

but the way Bitcoin was designed and engineered the more popular the network becomes the more value the network delivers the higher the cost to earn the subsidy of the block therefore the higher the miners have to sell those coins for in order to remain profitable therefore the higher the price to access the value proposition of the network and once you kind of understand that positive feedback loop it's no longer an investment it's a savings technology and it kind of just changes is your whole output on what it is as engineered money and then here at

people's Reserve how we can incorporate the savings technology into thousands and thousands of years old debt that hasn't been upgraded in forever right and that's because our system is based on having issue more and more credit that's what Jeff Booth talks about as well we know they're going to have to print and debase the currency and Bitcoin is always going to benefit from that injection of liquidity just to keep the whole system afloat so you want to own it because it's the best thing to Poss posibly own in a system that relies on more and

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five Jews per terahash by late next year now they're leveraging years of expertise in Data Center and Cloud management into high performance Computing through a partnership with Nvidia join bit deer in reshaping the world of Bitcoin mining learn more at bit deer.com and explore how they are pioneering the future today first of all introduce the the the audience to what the people's Reserve is and what problem are you trying to solve yeah so people's Reserve is a market maker for we the people uh I've been a market maker for the past eight years uh with

Bitcoin and decentralized finance so I do think that you know and I let me get this out of the way I'm a Bitcoin Maxi Bitcoin is money nothing else is money and anything trying to compete with Bitcoin is an absolute scam but things that are built around Bitcoin with Bitcoin being the pristine form of collateral of this new Financial Marketplace we have true free interest rates in other words interest rates based on the supply of money and the demand for loans and the risk of the counterparty versus a small group of men who use price

controls and state the rate of interest for anchor rates that's what's happening here we're seeing a new economy and it's the only economy in the world it's an aggregate economy of all the countries and all the peoples no one country can outc compete it or control it and it's an aggregate economy that allows us to price money without any centralized Authority telling us what a price point should be and the freedom that comes with that um creates better incentives than a a centralized price controlled economy and that's why we see what what's happening right now

that the time that we're alive Natalie is absolutely amazing because it's not just a new emerging digital asset class we are now experiencing the monetization of this asset class when the federal uh government comes out and whether it's by Trump's executive order or whether it's by Lumis law that we have a strategic Bitcoin reserve and then later that we're accumulating to that strategic Bitcoin Reserve that's how it happened with gold so that's what's happening now with Bitcoin so a lot of people might feel oh bitcoin's at 100,000 I'm late but you know at $100 I

felt I was late too so that feeling is never going to go away until you truly understand what this asset is and then once you understand the game theory that gets kicked off by the United States government the federal government starting a strategic Bitcoin Reserve well the federal government is not the state government so now the state governments are going to need to start strategic Bitcoin reserves and I I believe Dennis Porter said that next week he's going to be releasing an announcement which I think over 10 states are already moving forward with this legislation

and it's going to continue to compound but I'll go one step even further Natalie the cities don't have the same balance sheet as the state so if the state is benefiting from a strategic Bitcoin Reserve that doesn't mean the city is going to benefit so cities are going to have strategic Bitcoin reserves municipalities are going to have strategic Bitcoin reserves we already see small and medium-sized businesses with these reserves and of course on the personal level we have these reserves as well so we are witnessing the monetization of Bitcoin and what people's Reserve is here

to do is to give you the tools to benefit from the most pristine form of collateral in the world because right now a lot of bitcoiners we have a lot of wealth in the internet economy but if we want to bring that wealth back to the real world we have to borrow at it at absurd interest rates I mean it baffles my mind that I can go the banker and promise based off my cash flow that I'll pay him something in the future and I can borrow at four to 6% but if I'm going to

come to a a a company and borrow against my Bitcoin in an over collateralized fashion so it's not based on promise and there's no lending risk I'm G to have to pay 16% to borrow against my Bitcoin that means that that's that's to me that's value extraction and people's Reserve is not built with the Fiat mindset to extract value we are built with a Bitcoin mindset we're built for a Bitcoin standard where you have to deliver value and the way we deliver value is by offering you these tools that yet let you leverage your Bitcoin

uh not leverage in a way where you're trading against it and you can get liquidated but where you can borrow against your Bitcoin and unlock some of that trapped Equity to increase your standard of living and quality of life in today right now without having to sell and incur capital gains tax so this is what people's Reserve does and this is what our focus is is to deliver value to our customers with these tools that have never really been offered to the marketplace ever before such as our self-repairing mortgage and our Bitcoin bonds that enable

bitcoiners to benefit that Empower those who have been responsible to save the purchasing power of their time and energy in Bitcoin of savings technology I want to dig into these Solutions especially the uh the the mortgage side because I know a lot of bitcoiners who listen to this they want a house Carla um and I were just having this discussion on bitcoin uh Twitter because both of us really want a house you can't live in your Bitcoin so um I want to hear about your products but first can we break down very very specifically and

as simply as possible what you actually mean by Bitcoin monetization because some of the people listening to this might be familiar with the fact that we've monetized these um asset classes like equities and real estate to the point that the value does not match the price and and the home is now people's primary savings account but that's not a good thing because young people can't afford those homes and it's like falling apart but it costs a million dollars so for people that hear o monetization of Bitcoin that can't be good what do you actually mean

by that yeah so and and you you really sum that up beautifully but what we see is that these tools are available when you look at real estate you can borrow against your real estate Elon Musk part of how he paid for Twitter uh was barring against some of his Tesla shares so all of these this Equity value that we see trapped within certain asset classes you want to be able to tap into that value and use it as collateral because the foundation of Finance is built on collateral right now the world considers us treasuries

to be the most pristine form of collateral because it's risk-free and it's been classified as risk-free because the US government has the printer so there's no credit risk that's what they mean by that you're always going to get paid your money but what people in businesses have been finding out especially since 2020 is yeah I'm going to get paid my money but when I get paid my money I don't know what the hell I'm going to be able to buy so that's the inflation rate risk so Bitcoin monetization is redefining the risk Within credit markets

and the monetization of Bitcoin is simply the integration of Bitcoin into the traditional Financial system and the realization of what Bitcoin is as a collateral and what's amazing about Bitcoin is It's the Best of Both Worlds we went we were on gold of course your listeners know in 71 that was nixed but one of the biggest problems with gold underpinning the system was that sometimes it would cost more to secure and transport the gold then it would to borrow against the gold then it would be post the gold is collateral so now you have to

settle that debt with somebody else you have to transfer this gold across the world it cost more to do that than it did the borrow against it in the first place so the solution to that was treasuries because treasuries are digital right most money is not even printed these are just typed on a computer keyboard and those can be settled instantly within a centralized system so treasury solved that problem of security and transportation but it created a new problem which was the problem that gold solve which is hardness to the money because the treasury Supply

can be expanded at an infinite rate so you lost the hardness of gold but you gained the easiness of settlement with Bitcoin the reason we call it the most pristine form of collateral is because you get the best of gold with the best of the treasury it's the hardest asset that Humanity has ever known it has absolute digital scarcity but at the same time you have easy quick secure settlement within 10 minutes anywhere in the world so because of that we're seeing the evolution of the pristine collateral within our system transferring from gold to treasuries

and now to bitcoin and these tools are going to be popping up and people's Reserve couldn't be more excited to be a first Market mover in in building these tools so that bitcoiners can benefit from all that responsible saving they've been doing I love how you just phrased and explained that and I want to put an ex exclamation point on something CJ um highlighted which is that treasuries long seen as the risk-free asset they now carry two risks number one being the biggest I would say the duration risk the debasement the inflation the fact that

your money is just going to have its purchasing power destroyed but it also now increasingly has default risk as we continue to just abuse the money printer so really we need something better to underpin the system and what better asset than Bitcoin um we're still not there yet with people understanding it but it seems like with all these discussions of a US strategic Bitcoin Reserve maybe even America is coming around to this idea are you surprised by this do you feel like there might be a hidden agenda that we should be a little bit concerned

about or is it all bullish to you I'm completely blown away that the 15 years is a very short amount of time go look back and if you study Financial history what your listeners will find is the time it took to go from Yap stones and seashells to something else is way more than 15 years and the adoption of gold we're talking over hundreds of years and the integration of gold into a financial system thousands of years and Bitcoin has made this type of progress in 15 years so that that is really important to understand

how fast this is really moving it's moving faster than the internet and the base layer of demand for Bitcoin is growing faster than the internet so to see that happening is um it it kind of leaves me me speechless but the other thing that's happening is the Strategic Bitcoin Reserve is really important for the health of this country this country borrows $1 and spends it back into the economy and gets less than a dollar's worth of return we have a problem the Li ility side of our balance sheet is outpacing the growth of the asset

side of our balance sheet because we're expanding those liabilities to reinvest in economic growth but the economy is not growing at the pace that is taking care of these liabilities so the deficits grow and the the amount of inflation required to run the government continues to increase and we see that trickle through those duration risk you were talking about and what we need to do is we need to find something where we can put on the asset side of our balance sheet and it's amazing that uh Elon and and Vic with the Doge are going

to be working on the liability side because if we can decrease waste and fraud and become more efficient and and reduce the deficit and then at the same time we can take that dollar and instead of putting that dollar and reinvesting it fully back into the economy where we're getting less than a dollar well we can't put it into real estate because then you'll have an afford more of an affordability problem you can't put it into land resources and materials because those take billions of dollars of investment and plenty of years to actually pull the

product to Market but now you have this new magic internet money where you can put a dollar into it and get more than a dollar worth of return so the Strategic Bitcoin Reserve is part of I believe Trump's strategy to recapitalize The Republic and what's so amazing about it is that when the government buys those coins that if you read the law they put it into the reserve they can't touch those coins for 20 years and then if they sell those coins they can only sell 10% and then the proceeds have to go to pay

down the debt now that is very smart and genius legislation that I that I hope gets passed through immediately however I think we also need the Bitcoin recapitalization fund we need a small portion of what we're putting in our strategic Bitcoin Reserve to not have the handcuffs we need to be able to financially innovate we need to take engineered money and plug it into our economic fiscal and monetary policies in order to empower we the people because it's not the government's balance sheet it's our balance sheet we need to get there and make sure that

our balance sheet is working for us versus not doing that and that's what Bitcoin that's what I'm so excited about because it's not just the pace of adoption but it's the potential to completely swing the pendulum to the other side where we the people are being empowered rather than the government agencies this episode is brought to you by Casa as some of you know I recently updated my self- custody and Casa makes self- custody so easy even if you've never held your own keys or used multisig before Casa has a state-ofthe-art app and live experts

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risk set up a node and become the master of your own transactions and enjoy true autonomy and upgrade your cyber security and protect your online privacy like I did the Bitcoin way specializes in personalized one-on-one training to help you become fully self- Sovereign schedule a free consultation today all right back to the show so when the government borrows a dollar spends it into the economy I mean a voter might hear that and say that's that's a great thing you know we need more programs we need infrastructure we need better education um why are you saying

that when when it spends the dollar we're actually not getting an equal Dollar in return in terms of value and how does Bitcoin fix that yeah and that's best seen in our debt to GDP ratio because if the if the economy was outpacing the growth of our debt then that ratio would be looking better not worse but it continues to grow so we you hit a spot like I think if you look at government jobs one of the biggest things right now is hey what if Elon gets in there with Doge and starts cutting government

jobs well what does that mean for the Federal Reserve who's data dependent when all the job numbers aren't as puffed up as they would be because the government jobs are now disappearing does that mean they're going to have to PIV pivot on their uh their cutting cycle does that mean that the neutral rate is way higher and then what does that mean for duration risk can we see the 10-year which is a which is a prime rate anchor move up to the six to 8% range I mean if you think the net interest expense right

now is expensive wait to see what happens if they lose control of the yield curve there are big things at play right now that these decisions are going to uh could change the course of American History so we got to get in there and make sure the right uh decisions are being made and and by the way just one more thing because I really appreciate I I actually had the honor of being nominated uh to sit on rfk's Council of economic advisers so if you're listen ERS could you you could put the link below to

go uh vote and leave a comment for me because if I get in there and it's it's an honor to be included with some of the names like Ron Paul Katherine Austin Fitz Dr Peter Navaro and then CJ Constantino sometimes I look at the screen I'm like how'd that happen but it's I don't know any more about Finance money and banking than anybody else that would sit on the panel but I do know a lot about Bitcoin and I and I would be a voice for Bitcoin to make sure that we're leveraging Bitcoin in those

economic fiscal and monetary policies to take advantage and take the lead in the internet economy because if we don't do it brics is going to do it and we could lose control uh of of what we've had control of for so long it's the Ria Theory right we have we're re we're reaching that Arc for the first time in history that Arc instead of coming down can reignite back up to the upside uh and Bitcoin gives us that potential and we need to make sure we're taking full advantage of it oh that's really cool um

I was so impressed with RFK Jr's understanding of Bitcoin when I went to the last Bitcoin conference he really put in his homework his speech was so compelling and thoughtful um so I'm glad that he will play a role in in this new Administration um let's talk a little bit more about the self-paying mortgage sounds too good to be true and again I'm someone who eventually would love to have a dream home thanks to the appreciation of Bitcoin but yet I'm not supposed to sell my Bitcoin so what are what's what's your solution here yeah

absolutely never sell your Bitcoin never never never sell your Bitcoin coin and when it's time to sell your Bitcoin you won't need to you'll just borrow against it and that's what's so critical here that's why these tools are so important we don't want you to have to give up generational wealth to get shelter for just one generation so the self-repairing mortgage is really designed to empower those who have been responsible savers of Bitcoin to tap into that equity in order to um not have to worry about their credit score I mean when you come and

get a self-repairing mortgage there's no credit score because Money Talks so the Bitcoin that you bring to the table and I think maybe the best way to do is just a quick example let's say you want to buy a a million doll home and you're going to put $200,000 down you're going to borrow $800,000 well in order to initiate the self-repairing mortgage you're going to need to put down at least $800,000 the same amount of money you're borrowing so if you're borrowing 200 you got to put down 200 you're borrowing eight eight and so on

and now what happens is there's different thresholds for your loan to value ratio so if you're at 100% collateralization mean you borrowed 800,000 you put 800 ,000 down as Bitcoin collateral the first important thing to note is you're not borrowing against your Bitcoin the liquid we're not taking your Bitcoin and borrowing against it in the background or arbitraging a borrow rate with some other banking partner no you're borrowing from the reserve of money that's being used for we the people and you're going to be able to borrow at a rate that's relative to the supply

of money the demand of loans and the risk of the counterparty but what you've done by posting Bitcoin collateral to the tune that's equal to the debt is you've pretty much eliminated our risk if you default on your debt we don't have to go through that entire foreclosure process we just sell your Bitcoin and that's the only time you you can ever lose your Bitcoin so even if the price of Bitcoin goes down what happens is your loan to value ratio will decrease and you'll enter into a new interest rate threshold so your your interest

rate will actually increase as the value of your your Bitcoin decreases so if you post Bitcoin we go into a bare Market you don't have to worry about losing your Bitcoin because people's Reserve is not here to buy your liquidated Bitcoin at a discounted price we're here to empower you with new Financial products the world's never seen before the other thing that can happen is if the price of Bitcoin goes down you can just add more Bitcoin collateral knowing that it's not at risk unless you default on the mortgage in order to maintain that agreed

upon value so those are some of I'd like to attack the risk first before I go into the reward the more fun part but the reward is and this is why we call it a self- repaying mortgage if you post that collateral now the bit price of Bitcoin starts to go up let's say the price of bitcoin's 100,000 goes to 200,000 so you had 800,000 of collateral now you got 1.6 million well your loan to value ratio is going to going to be very healthy and the more healthy it gets the lower your interest rate

will go so we're going to be able to offer you interest rates right now if you're if you're in the market and you're a qualified buyer you can probably get around 6% to 6.25% on a mortgage if you came to people's Reserve we would be cutting that prime rate in half by 50% you'd be able to borrow at 3% so Bitcoin as collateral is making things more affordable for you Bitcoin as collateral is reducing the the the burden of that monthly payment because it's reducing our risk at people's Reserve as the market maker and if

the price continues to go up sometimes the hardest thing to decide is when should I sell my Bitcoin and of course I say never sell your Bitcoin but in some cases you know it might make sense on a personal balance sheet especially if you're starting out you're trying to get ahead well what you can do is you can dollar cost average out of your Bitcoin by customizing a setting between zero and 100% of your monthly mortgage payment so if bitcoin's in the middle of a bull run you can say you know what I want to

sell my $4,000 worth of bitcoin per month that way my cash flow from my my job doesn't have to be allocated toward that and now I can increase my quality of life and standard of living now I can go on a vacation or whatever it is that you desire to do but your bitcoin's benefiting you the other thing is is you can let the the value go up and you can just continue to get a lower and lower interest rate which also decreases your monthly payment finally you can liquidate part of your Bitcoin and close

out the debt with no penalty depending on the amount of money you borrowed saving hundreds of thousands of dollars in interest cost over the life of the loan okay that was a lot to take in extremely fascinating I am definitely someone who believes that Bitcoin is going to be blended into a lot of different credit products and Solutions in the future but help me understand something okay let's break it down super simply um because homes today for a lot of people including our generation Millennials geny um they feel so out of reach and the prices

are so bloated compared to what the value um really is the the the use case I mean I see homes sometimes uh I used to live in California it's like over a million dollars and this thing is Tiny it might have one to two bedrooms Max and you need you need to have seven figures for that um with today's interest rates that adds up to an incredible mortgage payment you you have to put down a lot in terms of down payment there are definitely people listening to this who maybe have no Bitcoin or just have

a little bit of Bitcoin so let's say someone wants to buy a $1 million house and they have one Bitcoin okay like break this down for me I I mean c can they afford that house um would they essentially put up that one Bitcoin and have like a how much would the mortgage payment on that be can you break down a little bit of the math for maybe the people who don't have a lot of Bitcoin yeah sure absolutely and and definitely the the best way to if you have a small amount of Bitcoin and

you want to buy you know if you have $100,000 of Bitcoin you want to buy a million dollar house you're better off just waiting because Bitcoin is going to compound at that 60% compounding annual growth rate even if that gets cut in half to 30% kager you won't have to wait that long in order to have the the amount of purchasing power you need so and homes are going up in value but not as fast as bitcoin's going up in value so that's to your advantage right yeah at in 2019 I bought uh my first

home for 100 Bitcoin and my neighbor goes hey uh just the other just this year on July 4th invited me over for a beer and a hot dog and was saying hey are you happy with your house like things are doing going great right I'm like I paid 100 Bitcoin for my house and today you sold 100 Bitcoins yes yeah and today see the products we're building here are the products that bitcoiners need these are the products that we need to leverage our wealth so I yeah I sold 100 Bitcoin because it to me it

was proportional to my to my savings and it made sense and now today I would be lucky to to to get 10 Bitcoin for my home I mean I be I'd be lucky to to do that so the Fiat price has gone up but I have crashed my the value in Bitcoin has absolutely crashed so that person who has one Bitcoin and wants a million dollar home just wait because the monetization of Bitcoin look we're we're at we might be at 100,000 now one million is not that far away it's not that far away this

is going to be this is not a a commodity cycle that in the gradual phase we are now seeing Global mainstream adoption which pushes us up the s-curve of adoption which is going to accelerate us into a repricing event Bitcoin is not that far away from being repriced based on its value proposition so yes the last couple Cycles through these having Cycles we've we've it's been a commodity cycle where you go from fair value or cost of production to a premium and then a discount but that price Discovery process is absolutely changing the Dynamics of

the cycle are changing with the monetization of Bitcoin with the acceptance and Global adoption of Bitcoin so price Discovery is going to change so you're not going to have to wait that long however if you've been a responsible saver and now you're on the beneficial side of that and the value of that collateral is equal to the value of the debt because that's what it's going to take to open the loan you could you could put if you borrowed 800 and put down 1.6 you're going to start at a minimal interest rate you're going to

be at an interest rate that nobody else in the marketplace has even if the Federal Reserve lowers the federal funds rate back down to zero to 0.25 we go into zero interest rate policy again you're still not going to be able to beat the prime rate because that the prime rate is the anchor rate for mortgages not the federal funds rate so that's what we're here at people's Reserve to help you who have been Savers in Bitcoin for a while and if you're not in that position now it's not going to take long uh for

you to get there and that's one exciting thing about customer uh customers of people's Reserve our customer base continues to grow along with the success of Bitcoin I still can't get over the 100 Bitcoin for the house wow um Nei so I'm alive on the outside but I'm dead on the inside so we live in this Fiat world um that is all based on debt and a lot of bitcoiners would argue that the Bitcoin standard is one of equity so how do these two worlds really blend because I've heard some in the community say we

don't need credit on the Bitcoin standard why would we even have debt um how how do you answer that yeah so that's when I first started out I always thought hey bitcoin's going to end the banks uh bitcoin's going to end this end this scheme but there's nothing wrong with banks in what's wrong is fractional Reserve banking that's what's wrong it's fractional Reserve banking it's that banking business model of fractional reserves being legal that creates the problems because that's what allows for the infinite issue of credit but if you have something that is nonf fractional

Reserve if you have collateralized credit markets like you see in Bitcoin in the free market internet economy of decentralized Finance now you have a healthy credit market now you have a credit Market that if it gets too far ahead of itself The Leverage in the marketplace is obvious and what happens is you get a credit wash out you get a reset I would I would actually say that that's exactly what happened just the other day bitcoin price went up to like $104,000 everybody and their mother decided they wanted to go long Bitcoin with leverage because

once we broke a 100 we're going to go to 108 and then 120 and 125 and then all of these this leverage credit Bitcoin drops all the way down to 92,000 all of that leverage credit gets washed out out and now we're right back up at 100,000 so see when you have a credit system that is tied to a collateral the credit can actually be destroyed it can be washed away and the mismanagement and the over leverage get washed away that's our biggest problem in fractional Reserve banking it's too big to fail we we are

not getting the negative side of the business cycle the natural business cycle has a phase where there are supposed to be destruction it has a phase where there's supposed to be deflation and prices are supposed to come back down you know what that does when prices come back down demand increases and that's where the economy can really start to rebound that's the that's the the Crux of the problem right now we are stuck in an inflationary recession everybody is waiting for a recession but they have said that a recession means prices equal lower well no

look look what happened in Venezuela they they did a demand destruction campaign that was so effective that people only wanted water and food but the prices still went up because the the source of inflation was not the economy it was the abuse of the currency it was the abuse of credit extension of those debt notes and that's what that's what's happening so those people are right in saying that yeah we don't need a fractional Reserve credit system that allows for infinite credit creation that's too big to fail with no reset I agree but we do

need a healthy credit Market that's tied to a pristine form of collateral that allows for and and mandates the destruction of paper Bitcoins look no further than Sam backman in FTX to understand if you're going to sell paper Bitcoins you can get away with it for a little bit but when the chickens come home to roost if you don't have the money you're going to be liquidated there's no such thing as too big to fail you're going to be destroyed and that's a healthy credit market and that's a healthy credit cycle and we can get

that going again if we Embrace Bitcoin especially with a Bitcoin recapitalization fund oh that's so true um everything you just said it's fascinating I mean I have friends who think that because of the outcome of the election suddenly all prices will will come down and we will see deflation and it's like no if you understood how the monetary system works you would understand that they need the inflation and once it hits a certain level it's very difficult for prices to come back down especially in the things that matter the most and they're going to need

to continue to print more um hopefully Bitcoin can bring some sanity into this whole situation but I'd love to get just your macro forecast because there are so many um moving parts to this and the macroeconomic background I think it can be confusing they tell you the economy is strong but yet they're creating jobs basically only in the the public sector um a lot of people are struggling um credit defaults are up uh everyone's putting everything essentially on credit cards just to afford life um how how does how is that going to work as this

Administration takes office do you expect things to sort of Crash up like some analysts say and how will the average person afford life if that happens so that's actually one of my biggest fears before the election that we were going to move from an inflationary recession to a hyperinflationary depression where prices were going to crash up and Things become so unaffordable that the economy just slows down to nothing it's like what happened in Venezuela I was saying they they only had the water and the food but prices still went up because the economy you can

destroy the economy it's not going to fix the the issuance of new currency units you have to you have to kill it where where it's coming from so before the election I was afraid that you know we would get into a situation where trust could be lost because the only real difference between inflation and hyperinflation is trust it's the trust of the people who are using the currency if they lose that trust there's nothing you can do to convince them that the economic textbooks would like to think oh once we hit a 50% month over

month that's hyperinflation no you cannot Define it with mathematics because it's a it's a social structure and it's and whether you're in Greece or Rome or Yar Republic when trust was lost that's when they moved from inflation to hyperinflation well I think with the new Administration coming in and with the Strategic Bitcoin reserve and potentially a Bitcoin recapitalization fund we're actually pivoting on that trust Trend the trend that you know how much have you trusted the government you trust the government more yesterday or more today the trend has been very clear trust has been being

lost but with this pivot and the Pendulum potentially swinging back to the other side we could rebuild trusts and now what we can do is we have two tools we have money and we have currency and people people mistakenly think that the dollar is money but it's not it's just currency it's just a medium of exchange so now it's like saying I have a nail and I have a hammer well they're both good tools but one without the other doesn't work that good when we use money and currency together we can actually move forward and

I think that's what we're going to do we're going to use Bitcoin as the pristine collateral borrow currency against the Bitcoin allow the government to try to spend the way out of its bad decisions but at the same time protect our balance sheet because the more money that they spend the more value is driven into the Bitcoin asset class and the more value that goes into that asset class the more value we have on the asset side of our balance sheet so finally we can we can expand currency units but then get a return that's

greater than the dollar expansion on the asset side of our balance sheet the economy wasn't cutting it so this this technology this savings technology isn't just for we the people but it it's actually applicable to businesses funds like the Social Security fund uh I mean pretty much everything that you see in the government budget can actually turn around if we properly design policy to Leverage The Power of Bitcoin and for that reason I I've never been more hopeful I really do think that this is the best chance we have to stop the ray Delio Arc

from falling and letting another superpower take control of the world of Finance uh and we could reestablish our dominance for another 250 years more yeah there are so many things that are un unfunded or under funded and they need an infusion of Bitcoin well this has been a very bullish conversation I'm really grateful anything you want to leave people with I know you've had some very very um optimistic price predictions out there well I definitely believe that the monetization of Bitcoin is what if we take 15 16 years to go from zero to 100,000 I

think it only might take 15 16 months to go from 100,000 to a million and it's going to be accelerated once Trump is inaugurated and once the Strategic Bitcoin Reserve becomes official hopefully it becomes official within the first 100 Days by executive order and then later by Congress passing the Lumis bill for the Strategic Reserve which will also require the government to start accumulating Bitcoin and then that is the official start of nation state game theory so the amount of Perpetual funds flow let me tell you the government doesn't care what price they're going to

pay for Bitcoin they do not care if they're going to buy 200,000 Bitcoin per year for the next four or five years to accumulate one million Bitcoin they won't care they're going to be like another Michael sailor he doesn't care he's happy buying the tops all day long because he knows it's a saving technology that turns that top over the course of time into the next bottom and for that reason we're going to have Perpetual funds flows not just from the United States federal government not just from United States states and then cities and municipalities

but from every other country in the world who's going to be forced to take action once the the US government is officially putting Bitcoin on their balance sheet so the the price predictions aren't really based on chart art or or just my feelings as somebody who's been in this industry for for quite a while and I've designed the Bitcoin fair value algorithm used by miners to properly manage their treasury based on that commodity cycle when Michael Sor says your models are going to be broken well this is a very successful model it's going to be

broken because we are not in the gradual commodity phase anymore we are now moving into repricing we are now moving into the s-curve of adoption so the entire Marketplace Dynamic is going to change so the price the price predictions are are always fun to talk about but what's what's more important than the tops are the bottoms and Bitcoin was strategically designed to keep putting in those higher lows and that's what makes it a saving technology and that's what's so exciting about it and that's why when you incorporate it into debt you can change the foundations

of Finance we've re-engineered money and now at people's Reserve we're going to re-engineer debt well that's a wonderful place to leave it I I hope everyone gives you a follow CJ constantinos um I think you're underf followed so uh so we got to give you some more followers we'll put your information in the show notes and thanks so much for taking the time to join the show oh thank you so much it was an absolute pleasure to be here thank you so much for checking out this episode of coin stories make sure you're subscribed to

the show and hit that notifications button so you never miss any new content also check out our weekly free newsletter at the newblock dos substack docomo should constitute as investment advice and you should always do your own research I'm always open to feedback and guest suggestions so please feel free to reach out at info@ talking bitcoin.com I'll see you next time