YouSaid · the spoken record

Matthew Pines

lines on the record: 80
first: 2023-03-22
most recent: 2023-03-22
sittings or episodes: 1
sources: podcast

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“So, like, we will not, like, these decisions aren't made in a vacuum. And when push comes to shove, like the U.S. has strong influence on Japanese monetary policy for the very reason that it affects US monetary policy. And these decisions about who gets to run the Bank of Japan will not like they pick this guy, I think I'm not going to pronounce his name because I'll butcher it. I'm not a Japanese speaker. And it was like a surprise pick. The guy who they thought they were going to pick like turned it down.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I find it fascinating. Yeah, no. And this is where I connected to like the geopolitical stories that these sorts of decisions aren't made in a pure vacuum on like what's best for the Japanese bond market, right? Like what I think is what I read between the lines and some other smart people I follow read between the lines is that Japan is critical to any military scenario involving China. We have been aggressively pushing them to expand their military formally, right? They don't have a military, but like they've made changes to the constitution in the past, allow them to expand the military. They're going to sort of double their military budget. They're going to increase basing access for Marines to be able to do significant military operations in a Taiwan scenario. Are bases inside Japan? I think maybe you've been maybe even based there at one point in your career have strategic consequence for our ability to project force in that region.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Structural inflation sort of being embedded in the system because Japan is a net energy importer and now they're a structural competitor for LNG imports from Europe that's cutting off their dependency on Russia. And so now we as sort of the net sort of gas provider to our geoeconomic allies and both sides of Oceania, mainly Western Europe and Japan, it's kind of okay who's going to feel more pain in trying to balance the pain across those two things. But structurally speaking, this means that there's just inflation in Japan for the first time ever in decades. And that's why you're seeing these caps on the yield curve being tested. And so that is why so many people pay attention to it because if that goes away, then the ripple effects to the U.S. Treasury market can be asymmetric.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Like premised on Karota, the man. He was like a unique personality. He was this kind of somewhat comical character in the central bank world, and he was running for the past 10 years the most aggressive, most innovative experiments in central bank monetary policy. The first one to do quantitative easing at scale, then quantitative and qualitative easing QQE, then ZERP, and then NERP, and then all of these different yield curve control policies of bringing different parts of the curve down. Like he was this aggressive, we're just going to keep doing keep antying up. And that worked up until really Ukraine.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And those markets essentially freed. And we saw that in March of 2020, where there was just like no bid for off-run trench securities. And so that was really what precipitated this crisis response by the Fed, among other things associated with the pandemic, but like trillions of dollars of QE very quickly. So this is why I paid very close attention to the Bank of Japan because what they do on the margin can affect liquidity in the treasury market like we saw and also affect yields. And this is sort of mechanical transmission of the Bank of Japan's policy. And we're seeing potential changes in that structurally with Karota leaving and his successor potentially being not quite the same guy. So I follow a really great analyst. He's super hilarious named Weston Nakamura. I think is at Real Vision. He used to be a Goldman Sachs and a trader as well. And he's like laser focused. So all this stuff I sort of steal from him about Bank of Japan. He's done some really good analysis, not just the incoming leadership, but like the policy signaling that we really was.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Basically, drawing the conclusion that a lot of that was driven by Bank of Japan or Bank of Japan related selling. So like Japanese institutions, insurance companies essentially selling their treasury portfolio to get liquidity. And that was why we saw the move index reach levels that were potentially dangerous and why Yellen came out and said we're acutely monitoring liquidity in the treasury market, which for them is like a major red alarm, right? They've had issues in the past where the off the run, meaning like the sort of not freshly issued debt securities in the treasury market require this sort of smooth plumbing of dealers and sort of collateral transformation using those debt securities where everyone is willing to essentially hold it as effectively money good. But whenever there's like a sort of a run in that shadow banking collateral transformation system for liquidity, they sell treasury securities and the collateral transformation sort of plumbing gets clogged.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so that structurally means there's like a there's a net bid that's coming out of Japan for US debt, which has kept all things equal, US debt yields lower than they otherwise would. There's an extra bid for them. And so this is how the mechanical flows of how Bank Japan monetary policy effectively”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Japanese saver in yen into saving in dollars mainly U.S. Treasury securities, but also other dollar-denominated corporate debts.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think Japan is very critical to this overall geoeconomic competitive dynamic for lots of reasons, but in particular the role that the Bank of Japan plays, I think, is a case study in how important Japan itself is to this. You can zoom in on the monetary dynamic, and that is a good way to understand how there's a similar dynamic playing out in these other domains, whether it's technology, whether it's military, et cetera. These are all interrelated from a strategic point of view. But just from the monetary perspective, Bank of Japan is very critical for the bumper sticker is that essentially Bank of Japan's yield curve control has been de facto US yield curve control because they, by running essentially yield curve control on their domestic savers, they've suppressed essentially financially repressed their domestic savers. So those domestic savers who hold yen have to look for other ways to get yield on their assets. So they need to convert those yen into dollars and then go buy dollar denominated debt assets that can give them a slightly better yield. And so that structurally has meant a flow of capital from the”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“globalization. And Fundamental dynamics starts to change, then that's going to have ripple effects to everything else, including Bitcoin. I mean, that is. It's hard to think it's going to stay in isolation like that”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And this is, uh, yeah, it hasn't gotten better. We've seen things like export controls, like investment screening, this sort of reverse Cifius proposal come out, a whole bunch of things on sort of pressure campaigns to our allies like the Dutch and Japanese and South Koreans to restrict semiconductor technology in China. Yeah, so there's a lot there, but it is generally speaking, we are more elements of relationship, what's my call, like a sort of geoeconomic war, right? It's not just trade war, it's sort of a securitization of lots of different policy that affects technology flows, capital flows, even people flows. And it just generally speaks like this tension is growing. And it's sort of this mutual suspicion about does China have larger ambitions for Taiwan? And what does that mean for U.S. strategic posture globally? This is why this is the central geopolitical anchor for how the world might shift in the next five or ten years, why so much attention is on it, is because China is still at the heart of”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“They want to try to capture the industrial sort of leadership and globally, which is a real strategic challenge to the United States. And so that is this competitive dynamic, which is one moving potentially from this one where it's like you're in a race and at first you're focused on just running faster than the other guy to then realizing the guy's catching up to you. And so you want to try to throw some sticks or some rocks back to slow him down. To like, at the end of the stage, is you just stop running and you try to tackle it so he doesn't run. So it's like we're in that kind of, I'd say we're in that second phase right now, right? And at each step of the escalation, you're willing to take more personal costs in order to prevent the other guy from winning, right? And that's, I think, where we've seen the relationship shift over time. Like strategic competition, strategic rivalry to strategic enity. We're like ruling to impose costs on ourselves and our allies in order to make sure China can't advance.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And that's like when your job is to basically be the global security guarantor and you're the hegemonic power, that is the thing that keeps you up at night. And so that is what is generating a lot of the underlying anxiety. And now it's manifesting in the overall, what you might call it, securitization of the relationship. So from the trade war under Trump, which was kind of a blunt instrument across just overall economic trade, has now spread into a lot of different very specific areas where we're trying to aggressively restrict China's ability to keep up with the technological frontier, in particular in domains that we think are sort of dual use, according to sort of China's civil military fusion strategy. So things like AI, broader semiconductor technology, quantum information systems, even moving into things like biotech, synthetic biology, these are the strategic technologies of the future that China has aggressively put out a roadmap that say we want to be the global leaders in these technologies. And it's not just those, it's also broader energy renewable technologies, a whole suite of things.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Strategically equivalently went up the chain. And so those went into things that you would expect, like their military modernization. And so they aggressively accelerated their military modernization, especially when Xi Jinping came into the office in 2013. That is usually where people mark as like the major turn in the strategic relationship being one of potential competition, but still kind of in this friendly globalized world to one of more rivalry. And the acute sense of anxiety in the West and the US in particular about that rivalry is only gotten worse and worse as China's, like the pace at which they close the gap, especially in the military domain, has been really fast. And so I think there's now this anxiety in the West.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Which a high level sort of schematic view was basically how can we leverage this sort of low cost labor to produce the consumer goods that the American consumer wants to consume? And in order to do that, we have to basically send dollars to China. China is going to accumulate those dollars and they're going to recycle those dollars into back into the United States economy, in particular our assets, in particular our sovereign debt. And that chimerica system, right? Like surplus matching deficits. consumption matching savings like this was the system that like from an economic perspective kind of balanced what we've seen over the past 20 years is that that system generated more and more imbalances so more and more surpluses and more and more deficits on each side more and more ownership of our assets by china and more and more debt obligations to china from us as well as as china got richer and got wanted to climb the value chain their ambitions for where they wanted to move”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Which, if I had to simplify it, went from one of really close and almost strategic alignment in the Cold War era, where we saw them as a strategic partner to support our containment strategy for Russia. And that was, or the Soviet Union. And that was really effective. And, you know, we had Biden and Deng Xiaoping sign intelligence agreements when he went over to Beijing in the late 70s. worked out like intelligence sharing partnership basically through the through the 80s we had like ci and nsa nls station in the you know the remote parts of china with chinese like pla sign analysts helping to jointly monitor russian missile launchers like that was a close working relationship and through the 90s you know this turned into okay how can we bring china into the global market and so bringing them and sort of giving them the most favored nation trade status giving them you know helping them get into w2 in 2001 and then really try to like hypercharge this sort of globalization machine”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yes, this is a complicated question. I won't give the full historical analysis. And it is kind of a, you get into this game of security dilemmas where one person's defensive move is perceived as an offensive move from the other side. And so attributing like who's to blame as an analyst and as a consultant is sort of not my job, it's just assessing the dynamics at play and understanding where they're going to go. And the dynamics we are in is like in a clear deterioration of the US-China relationship.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Several years ago, it was kind of this tail risk that didn't really have to have a plan for or a contingency work it out. Now they do. A lot of them are thinking they have to do this. And so that's a lot of what's happening now is more and more companies are waking up to this fact is this is not a risk they can ignore and it's complicated for each business. And so we're seeing that start to shift. But some folks are further along. I mean, with the Russia thing, some companies were like, yep, we're out. Other companies were like, even after the invasion, we're like, well, we've been here for 20 years, nothing's going to change. We're like, okay, good luck. You know, you do your thing. So everyone's in a different spot. And for the folks that I think that window is moving broader.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“A more messy world, right? Where they just have to have more redundancy in terms of their supply chains or they have to recognize the fact that China's really interested in their IP. So as like a cyber threat, they have to be really sort of postured against China for particular reasons. Just in terms of their particular technology, all the way to the more acute scenario planning, which no one really expects is like the central case, but now has to be sort of increasingly looked at as a plausible scenario to assess is like acute risk of a conflict, right? Like a Taiwan-style scenario where that would be a very disruptive event to many multinationals.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But I'm curious, it's definitely a spectrum. Some companies, some multinationals have identified this risk early and actually came to us and like, we know this is a problem for us. How can you help? And it really depends on the nature of the business, right? Like some are professional services firms where it's mostly like a matter of data flows and sort of critical IP and client information. How can they still deliver? How do they sort of have a China strategy versus a global strategy? Some have made like deep capital investments in China. They've got billions of dollars of physical plan and infrastructure and local partners and relationships and upstream and third party vendors. And that's a harder thing to just relocate. And China is not an easy thing to just like replace globally. It's not like a China equivalent. You could just go to the, oh, like the better, like the less risky China doesn't exist. Different companies that either are faced more direct or more indirect risks from China in various ways, whether it's they're posturing more for just a”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“But then everyone sort of shifted to China. China's like the elephant in the room here because China is the locus of globalization. I mean, that was really what globalization was built on was bringing China into the globalized economic order. And every multinational had to have a China strategy for the past 20 years. And so all the C-suites that are sort of running these companies in their mental model, China was the sort of the growth engine. China was the next big market. And that was often how they built their careers, or at least how they thought about this globalized world where it was just a matter of sort of arbitraging inefficiency and maximizing shareholder returns. That's all I really had to focus on and making sure they were on the cutting edge of technology, product development, et cetera. Now what's really coming into the boardrooms and the C-suites that we are helping to engage is really, one, like that world is not going to exist anymore. It basically broke. It's just sort of in the process of shifting and no one quite knows exactly where it's going to go.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it has not come up. Bitcoin, CBDCs, has been the subject of zero of these engagements. The driving, I'd say, friction turning into potential fracture that a lot of companies are trying to assess and then recalibrate themselves to Israel the US-China dynamic. I mean, we were involved a lot in sort of the acute response and sort of warnings about the Ukraine invasion. And that was much more acute response. How do you exit Russia? How do you lock down your critical IP? How do you handle kind of this disruptive effect on your overall organizational strategy?”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Like loss of trust in trust itself as a stabilizing force in a global order that had an unquestioned hegemonic sort of status quo power that was going to set the rules and enforce the rules sort of with unquestioned capability. When that starts to be called into question and when sort of the monetary commons that that sort of security monopolizer has sort of created in the post-war era starts to become gated and conditionalized, then you see potential avenues for folks to start to hedge against that sort of weaponization being used against them. And that's where I think about where geopolitical actors can start to have a vote in how the global monetary arrangement is structured. And this is like the lesson in history is that things look stable until they're not. And then everyone constructs a rational explanation post hoc that tries to make it seem inevitable. But in the real time, it's very hard to predict.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And so that's where I pay analytic attention to Bitcoin because it is potentially one of those, I think the last functioning smoke alarm, right? It is highly sensitive to even sort of marginal changes. To first order to liquidity, but on a geopolitical layer, I think it's also potentially going to become another indicator in the next few years about this potential fractures. And then, yeah, that opens the door about how would you interpret changes in Bitcoin relative to sort of the larger shifts at play? But yeah, I don't think it's as simple as loss of trust in the dollar. I think it's a combination of overall”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Are nonlinear systems. Like I studied physics as an undergrad, you're not going to just plot the line and say this is where you're going to be in five years. You're really trying to figure out are we hitting some critical threshold points where aggregated hedging behavior leads to sort of vicious feedback loops, right? And this is where you get to sort of dangerous states in that graph, right? Where certain destructive jumps can happen that would be sort of unthinkable if you were just looking at the past history.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I see these different indicators of stress in the global system, not just in the monetary system, but in the global geopolitical order, kind of the whole set of arrangements, institutional sort of frameworks and sort of modes of thinking that have sort of grown up in the post-war era and sort of evolved over the course of kind of really the last 20, 30 years of unipolar hegemonic dominance in the United States and sort of neoliberal kind of globalization is like reaching what we think of as like this potential instability point. And so events like the sanctions on Russia's central bank reserves I see as like indicators along that sort of overall trajectory of larger hitting different threshold points for instability. And so Bitcoin, I see in that larger context. So like what happens to Bitcoin, I think, is indicative of, or you're sort of looking using it as a measure potentially of these stresses that are really hard to get a handle on in the global system, which are really interdependent, hard to pull apart.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I mean, this is where I think through in terms of historically speaking, right, like monetary regimes are somewhat downstream of geopolitical regimes. And monetary regimes are hard to dislodge, right? So there is a certain stability, at least in terms of human lifespan, right? Like there's a certain generational existence that people become accustomed to. This is the unit of account. There are sort of periods, I'd say you call like punctuated equilibria, right? So you use like the evolutionary analogy where there's like long periods of stability that sort of breathe their own instability as a result of those long periods of stability, sort of latent frictions and stressors build over time and they create conditions for a more disruptive rupture. And that's usually where you see those more chaotic dynamics that in the past we've associated with like phase transitions in terms of both the monetary regime, but as well as like the geopolitical regime.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“At least tentative, rigorous analytical thinking to like those different what ifs. I did a lot of scenario analysis in my time, lots of different emergent technologies, and I just didn't see that being applied to Bitcoin as an emerging not only technology, but emerging sort of social phenomenon and emerging kind of macro asset class and transmission system for her value globally. So that opened up a lot of different possible avenues for questions that, you know, I just like to go into. That's kind of what got me into it.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“As relevant on the geopolitical stage. I think even folks that were really bullish about Bitcoin five years ago, you know, still that was a very speculative kind of far out into the future idea that Bitcoin would have a sort of macro and even a geopolitical sort of role to play. And so that's really where professionally my sort of analytic background and my sort of experience thinking through kind of these different questions and the sort of dynamics at play started to be applied to thinking through how Bitcoin could play a role. And I think that's been sort of where I've been focusing the last year to two years is starting to try to apply some more”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I've been curious about lots of emerging technology for a while, kind of that nerdy streak. I actually though came across Bitcoin through like a college buddy of mine who I think was like really into the kind of crypto ICO phase back in the day. And I remember having conversations with him or and kind of various kind of friendly gatherings. And I was like very ill disposed to it initially, right? Because I just got a very scammy vibe and I really didn't dig too much into it. I sort of read all the major flood pieces and I was like, all right, this thing is dead after this sort of bubble fades. And it didn't fade. And so I paid more attention to it over the years. But like my professional career was mostly in the sort of national security kind of thinking through kind of bigger challenges to the US government across lots of different dimensions, whether it's counterterrorism, where it's sort of nation state, whether it's emergent technology forecasting. And so Bitcoin was never directly involved in that. It was only in the past, I'd say like a year and a half or so have I sort of started to think through more about Bitcoin.”
2023-03-22 · We Study Billionaires · BTC122: The US Treasury May Need Private Stable Coins w/ Matthew Pines (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT