YouSaid · the spoken record

David Bailey

lines on the record: 68
first: 2023-04-19
most recent: 2023-04-19
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“With cash when I made these investments, now burning cash and now I'm being having to like pay out those customers. So like I think you can just like basically map out 2020 of who did well and you can correlate that to 2023 who's going to do poorly and the sequence of who's going to do poorly. And this is a multi-year process that's playing out. There's some pretty good graphs out there in terms of just like what is the net interest margin for these financial institutions. Like fundamentally, they have deposits that can leave at any time. I mean, that's the point of a deposit. And they have assets on their balance sheet that, you know, have some sort of maturity timeline to them. So until they can get the interest that they're earning on their balance sheet in aggregate to match what they need to pay out to their depositors, which is variable.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Okay, so what banks are under stress right now, the banks that banked tech companies, okay, the banks that banked crypto companies, the banks that banked real estate companies, I'm willing to bet you that where we see the next banks that are distressed are going to be like merchant banks that bank the companies that are having to refinance their debt, you're going to have, I mean, you just basically have to see where the cash came in. Then the banks had to do something with the cash. So they had to deploy it into, you know, held to maturity securities. They had to loan it out. They had to do something. So like I'm Silicon Valley Bank, my customers are tech companies. Now they're flooded with venture investment. They're flooded with cash from going public or whatever. And now I'm holding their cash. I'm having deployed in some way. And then now like I'm on the front lines of the change in interest rate policy of those investments that we made as a bank going underwater as well as my customers that were flushed.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“That was done well during that time. And when they dropped the interest rates to zero, junk bonds, like just the trash of trash companies were able to finance their debt, lock-in multi-year debt offerings at extremely low rates. And when everyone that was flushed with cash in their bank account, everyone wanted to buy real estate. So you had a massive pump and crypto tech real estate. Those were the things that most outperformed, let's say, of all assets.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Make it harder, right? I feel like actually the slowness of the payment system we have is a feature, not a bug from their perspective. So it's like, yeah, I don't, I'm just kind of a wait and see on how that works. I do agree with your opinion on in terms of where financial calamity is coming from that there's a fairly straightforward cause and effect of like okay the the government injected a lot of liquidity into people into the banks into certain people's bank accounts okay you can go through the list of people that benefited disproportionately during that time period so you mentioned ubi for individuals which was the unemployment checks there was the ppp program which pumped a ton of money into small businesses, medium-sized businesses. There was massive underwriting of junk bonds, of corporate debt.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“They're launching like Fed now. Let's see what happens with now. I think they'll find that they're going to suffer from all the same problems that every API-based bank suffers from. I think there's a reason why this problem hasn't already been solved. And just centralizing it at the Federal Reserve, which I don't know how many people work at the Federal Reserve, but I think that that's just like doom for failure.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Like 2017, 2016, Nigeria's, I mean, there's lots of donations that have ruled them out. Like you can't find one where they've been successful at all. Like it typically ends in them trying to ban Bitcoin and trying to force people to use CBDCs that it still doesn't work. So I don't know. It's hard for me to predict what is a practical policy outcome, a monetary policy for CBDCs if they can never solve the problem of how do they get the end user to have trust in the system.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“A bank account for whatever reason. Maybe there's currency controls. Maybe there is, they don't want to have the tax authorities tipped off. Maybe they want to buy unrestricted securities overseas. There's a whole list of reasons, but none of them come down to, oh, wow, the technology is just so great on stablecoins that I'm willing to give up what my bank can do in order to hold just IOU. That's just money sitting in a bank account somewhere else. So I think at the end of the day, Those are all use cases that I don't see any CBDC being like unless they were saying, hey, we're going to waive the restrictions that we applied and put on bank accounts in the first place, which we could just do, like why is someone going to be using CBDCs? You know, they would really need to keep you from using a bank account to force the adoption of it. And you've seen so many nations now, like people still think these CBDCs are just like purely in beta mode. But, you know, this stuff's been around for a while. I mean, China started working on CBDCs.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“You know, I have a hard time predicting what's going to happen with CBDCs because I still love the mindset that I think they're going to struggle to ever get them deployed into the market and get people to actually use them. I don't really think that there's a use case for CBDC from the perspective of the end user. And I think that a lot of the excitement that central banks have, well, okay, of course there's the totalitarian excitement of like, hey, we can have monetary policy tools that we currently don't have. They look at stable coins and they think that that's somehow like a validation of the idea that people want some stable digital currency. But in reality, the use case for stablecoins is actually regulatory arbitrage. Like stable coins are just a wrapper on a bank account. And so they pay no interest. They have no FDIC insurance. So they're really an inferior bank account. So why would anyone ever hold a stable coin? Well, they hold a stablecoin because they can't tell.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“A run on the reserve currency when you have a run on trust, the trust in the system itself rather than just the trust in a bank, but truly the trust in the dollar, trust in the United States government. Like that's impossible to recover from. Like you may be able to use an army to force people to begrudgingly comply with something, but trust is something that takes a long time to earn and is quickly lost.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I benefit from taking on excessive risk, having excessive returns. And if things go sideways, passing the buck on to the rest of society, banks will over time trend towards making riskier and riskier decisions under that pretext. And the problems and the costs that society is going to have to bear is just going to grow proportionately. And that doesn't even include the dislocations to what would be a fully functioning free market that we would have in the world, an economy that if capital was deployed as the free market actually needed it would flow much differently in a way that would maybe create more growth and more value for society. Like we're not going to see that. So that's the opportunity cost side of it. But then the behavior that we're going to incentivize is risk taking on a grander and grander level to such a point that eventually there will come a calamity that it won't be possible to fail your way out of. And I mean, I feel like that's really when you have a”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so you know, it's like people, the writing was on the wall and then everything accelerates as there becomes this social awareness that the writing's on the wall. And I think in large part, like, and this was already. All deposits of all banks in the United States are guaranteed. And so ultimately all deposits of all banks in the world are guaranteed. Because if you can have international banks fail, those international banks can bring down your domestic banks. So, you know, since they're all tied together, okay, now implicitly all the banks are too big to fail. And once you're at that point, it's like, okay, now we've nationalized the global banking system. Okay, well, what does a rational actor do in that scenario? They seek out risk. Like, okay, my downside is protected.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Time horizon of that adoption, but it's kind of like these bank runs. It's like the bank spleed deposits slowly. Started seeing the writing on the wall of what's happening. I don't know if you saw the news report that the month or two before Silicon Valley Bank failed, there was a massive amount of insider loans that were approved.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Socialization of cost across all the users of that system. And the Bitcoin system will see the good actors thrive and grow and benefit greatly from being a part of Bitcoin, the people who hold Bitcoin will thrive, their net worth will grow, their purchasing power will grow. And people will look at the two options. They'll say, okay, well, the US dollar may still be around, but I'm going to choose into this better system where I see people thriving. And I think that that's a long process and then a sudden process. And I don't know where we are exactly on the”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Good maybe example of this is like the United States versus the Soviet Union. And the United States, not that the United States was some shining city on the hill of capitalism, but relative to what was essentially controlled currency that the USSR used much more free market. And you saw one society decay and you saw one society relatively thrive. And I feel like if the USSR had ruled the world, it would have lasted a lot longer because there wouldn't have been that alternative like I guess the Tina, the Tina effect, like there has to be an alternative to compare your reality against. And so Bitcoin is just going to keep moving along, growing over time. The people who are a part of the Bitcoin economy are going to be insulated from different bank runs that happen, financial calamities that happen that will constantly require more and more reaction from regulators, which will require more and more”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But instead, it's going to be socialized across all Americans that are going to bear the cost and then the Silicon Valley Bank deposits. They're going to get some benefit put on them and get their deposits out. In terms of how does this kind of come to fruition, I think what happens is one system thrives and one system decays. And over time, the difference between the thriving system and the decaying system becomes overwhelmingly obvious to anyone who can pay attention at all. And right, it's already obvious to some people. But like as the difference, the divergence grows stronger, it becomes even more obvious. And so”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, I totally agree with you that it's sad when bad things happen to people. But there is no action that the government can do that is in any way saving people. It's just distributing the cost of what happened to other people. They're choosing who bears the cost and who doesn't. And so, you know, in the case of Silicon Valley Bank, it should have been the depositors of the bank that bore the cost, which sucks for the depositors.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And it's really about rather than trusting the free market, you're trusting that a set of politicians or a set of academics selected by politicians are going to make decisions that are better than the free market is going to make them. And I feel like when you boil it all down, that's just in essence. Like, are you long free markets or are you long essentially controlled economies? And I feel like that's a debate that's already been resolved. So yeah, I'm betting on capitalism. What about you?”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, well, it was actually, I was retweeting someone else where they asked what backs TCP IP. And the underlying message of that is like the value of TCP IP is really the value of the network of people that you're able to communicate and interact with, et cetera. And it's really in the same way that's what makes Bitcoin viable. Bitcoin's value comes from the 50 million plus economic actors that use it to engage in commerce and trade and economic activity. And that's what backs it. And if you take a long-term perspective on why is this something that I should buy in on is because what governs its value and what governs how it works is free market, individual actors acting of their own volition in a truly capitalistic sense. That's how currency and money should work. But money as it exists today has been bastardized to such a degree that money is really about control.”
2023-04-19 · We Study Billionaires · BTC126: Redeeming GBTC w/ David Bailey (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT