In this short clip, Patrick Bet-David, Michael Saylor, Tom Ellsworth and Adam Sosnick talk about whether storing money in banks is a mistake.
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If you're trying to use money that Requires Banks you can't trust the banks Right you certainly can't trust the Banks in Africa and South America and Most of Asia it used to be Americans Thought they could trust American Banks Now they're realizing that they can't Trust American Banks so the first order Impact of the banking crisis is people Think well maybe the money I had in the Bank's going away and so I ought to put It in a bank in cyberspace that isn't Controlled by the government or by the Bankers and that's Bitcoin the second Order impact Is the solution to the banking crisis is Print more dollars and if you print more Dollars the actual monetary inflation Rate goes 10 percent fifteen percent Twenty percent so you think Why do you think those bonds crashed You know because they're actually claims On dollars Do you really want to hold a billion Dollars of Zimbabwe dollars What if I offered you 10 billion Zimbabwe dollars I mean the answer is It's going to a nickel okay so if the Current if the paper currency keeps Crashing then you can't own anything That's currency related you can't own a Currency derivative you need to own Something that politicians can't print More of
Okay what is oil that's land but the Problem is try hauling a hundred Thousand barrels of oil from where you Are to London where you want to be How are you going to do that I'll give you a billion dollars of land In central Africa and then someone takes Over with machine guns and declares that Everyone with large amounts of land now Loses it That happened in Zimbabwe You got to pick up the land on your back And carry it to France So it's kind of it's simple if people Lose faith in the banks they lose faith In the currency when they lose faith in The currency they lose faith in the Government when you lose faith in the Bank the currency and the government and Someone says what do you what can you Trust The answer is you can trust Bitcoin Because you can custody your own asset You can run your own node and at the end Of the day even if the Chinese want to Shut it down they can't if the Russians Want to shut it down they can't if any Nation state wants to shut it down they Can't if the U.S wanted to shut it down They can't and so everybody wants Something that they can trust that is Beyond the reach of a corrupt politician A corrupt corporate executive or they Have to be corrupt they can just be well
Meaning trying to do the right thing in A misguided fashion and meddling with Your economic life if there's ever been A time for you to make that argument and Make it aggressively and scream it off The top of your lungs is right now Especially the fact that three out of The four largest banks that ever gone Out of business in the history of America were done in the last uh 90 days You got WAMU was the biggest which was September of 2008 307 billion First Republic was 212 billion that was May 1st Silicon Valley Bank March 10th 209 billion Signature Bank March 12th 110 billion And the next one closest one to it is IndyMac If you remember Indie Mac was only a 31 Billion Auto Company back then in 08 so Someone may be listening to this and say Oh my god oh man this guy's right maybe Maybe I would start moving my money out Of my bank as soon as possible and you Know Jamie Diamond I know these guys are Trying to get people not to take the Money out of the bank and have too many Bank runs because if they do that and You know some are taking their money out Of their bank and putting in the money Market is is Michael saying take my Money out and put him put it in Bitcoin Are you saying maybe taking them put in A bigger Bank I'm a little concerned
Michael you sound smarter than me what Should I do the average person's Thinking that right now so are you Saying that These three out of four largest bank That went out of business that happened Last 90 day 90 days there's more to come And things are going to get uglier than What it's been last 90 days are you just Saying the fact that if you keep your Money in the bank at any point they can Make that decision and control your Money I I'm I'm saying that Money is a store of value but and there Are multiple monies and they're not Created equal so let me give you the World's worst money The worst money in the world is like Argentine pesos or Venezuelan Bolivars Or Zimbabwe dollars or Nigerian naira Weak money that my then the official Inflation rate in Argentina is 105 Percent But that's the official rate which is Which is that understates it the actual Inflation rate would be higher and if The inflation rate is wanting a hundred Percent that means your money is losing Half of its value every 12 months That means that within 10 years you have Nothing Okay so bad money bad currency or bad Money loses all of its value over the
Course of a few years and Venezuela you Lose all your value in 36 months and Argentina and 10 to 20 years the Argentine peso was one to the dollar 21 Years ago If you had uh if you had a million Dollars 21 years ago the Argentine peso Right now is about 480 to the dollar So that's not a 99 loss that's a 99.8 Loss right in how many years 20 21 years Okay so what I'm saying is you don't Have money if you have weak currency now Let's take strong currency well the Strongest currency in the world is the Dollar that's not money you're losing 99 Of your wealth over the course of 90 Years in the in the US dollar maybe more The US dollar the only difference Between the US dollar and the peso is Whereas it takes 20 years to lose your Family's fortune in the peso it takes About 90 years to lose your family's Fortune in the dollar Right that my my house in Miami Beach Was a hundred thousand dollars in 1930 It was appraised at 46 million dollars a Few years ago Do the calculation it's on a path to be Worth 100 million dollars which means That the US dollar will have lost 99.9 of its value over 100 years Warren Buffett knows this Charlie Munger Knows this basically your the bottom
Line there is your money in the bank Isn't money Okay so the answer is you shouldn't have Any money in a bank right you're you're Basically losing seven percent of all Your wealth every year in a good year if It's the dollar you're losing 15 of your Wealth in a not good year if it's the Dollar you're absolutely losing all your Money over the course of a decade so That's that's kind of weak money awful Money is developing World money the Lebanese pound The Lebanese pound got devalued I mean You would have lost all your money in Five years if you had the pound the Strongest money and decent money okay Money was gold but not great the Strongest money in the world is Bitcoin Because Bitcoin is absolutely capped to 21 million it is global money you could Take a billion dollars of Bitcoin across A border you can transfer it to a Counterparty and no government can Interdict that and nobody can inflate to That and so so my my answer there would Be you can't trust any Bank You can't yeah you certainly can't trust A bank in Lebanon read about Lebanese Banks you can't trust a bank in Africa You can't trust a bank in Asia Michael But if you call Chase their customer Service is amazing how is the customer Service with Bitcoin when you called the
1-800 number Albany Working at the bank of Bitcoin to steal Your money I can't do nothing for you you got to Make the decision yourself but I just Want to say hi to you but you know Bitcoin is a bank in cyberspace run by Incorruptible software it's going to Keep your money if you were incompetent Then you're going to suffer the Consequences but let's think about what What banking Executives in the US do the U.S banking system is the best in the World here's what they do you put a Hundred billion dollars into the bank They have the deposits they turn around The the Federal Reserve interest rate Short-term rate was Zero And these guys went invested a hundred Billion dollars of those deposits in in Mid-dated long-dated sovereign debt that Was yielding 1.8 percent interest The Federal Reserve took the interest by The way would you would you loan me Money for 30 years At three percent interest rate Like can you imagine that if the Inflation rate was eight or ten percent Would you loan money out at three Percent interest rate for the rest of Your life not in a million years okay That's what the banking Executives in The U.S did
At the sing at the point when when the Uh Silicon Valley Bank all of them right Pretty much all these guys not just not Just the ones that went bankrupt right There's there's a host of banks I I think they had what was like 800 Billion dollars of unrealized losses or Something a host of banks went and Anybody that bought mid-dated or long Dated uh bonds At the you know at the bottom of the Market when interest rates were zero They were loaning out money Forever at Two percent interest or three percent Interest or one and a half percent Interest And um and as soon as you redeem what Happened of course is the Fed raised Interest rates from 25 basis points Actually the rates went from zero to 500 Basis points in 12 months about that's The sharpest increase in interest rates In in memory that in itself is I'm not going to say what it is it's rep You know it's just horrific terrifying To think that any public servant would Do that but it's equally terrifying to Think that if I was your money manager And if you had given me all your money When interest rates were zero and I and I said well I guess interest rates will Say zero for the next 30 Years And so I'm going to loan it out as a Bond and lock in a price of two percent
You know you would have thought I was Crazy no there is no individual no Corporation no rational Corporation no Economic actor that would loan money Forever for three percent interest when Inflation is running double or triple That so the question is that who would And the answer is a bureaucrat Uh either a governmental bureaucrat Someone that is coerced by regulatory Policy where they're forced to For example a bank can't buy Bitcoin But a bank is almost obligated to buy Treasuries Right so the politicians create a set of Rules that strongly encourage you to do Certain things and strongly discourage You to do other things and generally They encourage you to do the thing which Is probably least economically viable By the way there are probably local Local organizations and Banks and Foreign countries that own their own Local currency right like would would You buy you know an African currency With inflation rate of 200 percent a Year no but people do why because the Government controls or owns The Entity And so they force that so uh just to Finish this topic before we move on When you said all these guys that are Given you know their money for three Percent over 30 years or whatever There's a lot of them Silicon Valley
Bank's not the only one signature's not Doing there's a lot of these guys most Of the banks most of the banks remember That chart exactly 64 who was above it And then JP Morgan was 14 at the yeah so The point is don't trust your money in Any bank that's basically betting it on But what's your investment you say Something like that as a guy that's That's a billionaire the average guy's Not a billionaire the only thing they Know what to do is walk up to the bank So it's a different scenario you're on But the question the question I want to Ask you is the final one are you saying There's going to be bigger banks that Are on the line right now that we could See popping up that they're in the same Situation because if most of them are Doing it you know Powell's not lowering Rates and they're saying he's not going To do until December so how many how Much longer can these guys handle these Types of conditions yeah so let me just Answer two questions what do I think Will happen in the banking system and What do I think a person should do what I think happens to the bank and system Is all of the regional Banks you know The small mid-sized banks are at a Massive disadvantage right now because The government is is showing that They're not going to bail out those Those Equity holders so there's a
There's a migration of deposits from the Small Banks to the big Banks you know I Think the you know the JP Morgan's the Bank of Americas the the mega banks will Continue they'll be just fine they'll be Supported by the government the small Banks are going to struggle and that's What that's what you see going on right Now if you're a depositor I mean you'll Probably get bailed out by the Government if you're a bondholder in the Bank or an equity holder the bank you Won't get bailed out right and so There's a crisis for investors uh Whereas whereas everybody that's a Depositor doesn't want to sit around and Take the risk right I mean who wants any Anxiety So I so I think that to the extent that You rely on banks clearly Um the world is waking up and the U.S is Waking up and they're thinking I want to Be with big Banks I I wouldn't have my Money in a bank anywhere outside the U.S In a weak country right you you need you Need to be in a rich strong country with A rich strong bank with regard to what Individuals should do Um I I think the The Logical answer is For expenses if if you have expenses in The next three months you have your Expenses in the local currency which is The peso the Niara the whatever because It's legally obligated for you to pay in
The local currency for the next three Years of expenses or one to three years Of expenses you put your your wealth and These a strong the strongest world Currency in the world that's the dollar Right now but you make sure that you Have that currency either self-custed or You have it in a bank that you trust That's hard Find a bank if you were in Lebanon right Now can we trust you babe if you in Lebanon right now you wouldn't put your Money in any Bank you would actually put It on the Bitcoin blockchain for for any Amount of money you want to keep the Rest of your life if you if you want to Give it to your kids if you want to Actually retire on it anything that's Investable asset you would put it in Bitcoin you wouldn't put you would put It in a in the strongest possible world Currency the global the global money and That's Bitcoin you're not going to get Rich investing in dollars and You'll lose all your money if your Dollars are in a weak bank and if your Dollar is in a strong Bank you'll just Get poor slowly and you're going to get Four you're going to get poor rapidly if Your money is and not the dollar but a Weaker currency and you're going to get Completely bankrupt if you trust a weak Bank And so microstrategy by the way has
We're like 90 million dollars we had Four Plus billion dollars worth of bitcoin So go figure right 98 percent Of our assets are actually in the strong Money two percent Is in the world's strongest currency in The in a good bank and a strong and one Of the big four Banks right and uh and That's about as much exposure as I want To a currency so if you like this clip And you want to watch another one click Right here and if you want to watch the Entire podcast click right here Foreign
