Stablecoin Revolution To Make The Dollar More Dominant Than Ever? | Brent Johnson
Summary
US Stablecoins: Extensive case that dollar-pegged stablecoins are programmable, instant-settlement digital dollars that can outcompete SWIFT/Eurodollar plumbing and be shaped to U.S. policy objectives.
Re-dollarization: Contrary to de-dollarization narratives, stablecoins could dramatically expand global dollar usage by enabling anyone with internet access to hold and transact in dollars, including the unbanked.
Strong Dollar: Brent reiterates his core view that the dollar likely strengthens versus other fiat as the system transitions, with stablecoins potentially amplifying capital flows toward the U.S.
Gold: He advocates holding gold as a system hedge, arguing a strong dollar often creates stress and chaos in the system where gold historically performs well.
Market Plumbing Shift: Stablecoins could cannibalize Eurodollar/SWIFT settlement, migrate activity to rails with greater U.S. visibility/control, similar to LIBOR-to-SOFR transition dynamics.
Policy and Control: Programmability enables sanctions, toggles, and granular oversight; domestically it could mirror CBDC-like controls even if issued via Treasury or licensed entities.
Banks and Intermediaries: He posits fewer traditional banks may be needed if Treasury-issued or licensed stablecoins become dominant, reshaping financial intermediation.
No Public Tickers Pitched: No specific listed companies were recommended; discussion centered on macro currency architecture, policy power, and hedging via gold.
Transcript
The dollar is already the ring of power in my opinion and this is a way to just entrench it even more. And it's and the craziest thing in the same way that the Euro dollar market built the Euro dollar prison that the that the world is now in >> stable coins is a way to turbocharge that >> and not only turbocharge it but give the US more control over it. Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Tagert. Welcoming you here to Thoughtful Money from the New Orleans Investment Conference. Uh I'm joined by Dollar Milkshake theoretician himself, Brent Johnson. Brent, how you doing? >> I'm good, thanks. >> Uh thanks so much for joining me here, Brent. So, I first want to uh give a big shout of thanks to Russ Gray and the team at Main Street Media. They are building a network of podcasters to develop content uh that basically will help advance the prosperity and liberty or the P&L of Main Street America. I think it's a great cause. Go check out mainstremedia.com. >> All right, Brent. Um we've got our our panel tomorrow, the future of money that you're going to be on, I think for the first time this year. Yeah. Um it's going to be good. And as I was telling you earlier, um I'm going to I'm going to let you lead off on that panel. Um, basically using you as the grenade I'm going to pull the pin on and then walk away and watch what happens. >> Why is this always me? >> Yeah. Yeah. Well, first off, we've got some some characters on the panel with you, Peter Schiff, uh, Larry Leard, um, who, uh, are not short of opinions anyways, but I think in general, uh, or in response to your your idea, which we're going to talk about in a second here, I think they're going to have some really strong opinions on. So folks, um Brent just published really one of the most like mind-opening reports I've read all year. Uh and it's on stable coins and um stable coins are something that I think most people have kind of heard of but don't really feel like they understand. And they think of it as sort of like a corner of the crypto market and you think it's much bigger than that. We're going to talk about that in a sec, but just to drive home the point of big folks. So, I'm not a huge guy, but I'm I'm tall enough. I'm I'm about 6'2, maybe just a hair under that. So, Brent here, um, I've been interviewing him for many years. Um, the first time I met Brent, I was shocked because for two reasons. One, when I interview you, how good looking I was. Is that what it was? >> Not that. I mean, you're just [laughter] even so much more in person. [snorts] But no, when I when I used to interview you, your camera was kind of above your computer, so you were kind of looking up at your camera. So, I kind of had the impression that you were kind of a short guy, right? Um, you're not. And we're sitting here, and folks, if you're watching us, we probably look like we're about the sameish height. >> Brent, stand up with me here for a second. >> Let's do it. [snorts] >> Don't get on your toes. >> Yeah. Yeah. I won't. I went either. But, as you can see, this guy is all legs. What are you? 65. >> 65. >> Yeah. Yeah. Okay. Well, thanks for thanks for uh entertaining me on that. But it's it's so fun because folks obviously when you get to meet the folks that that you see on video in person, um it's it's always, you know, a much more rich experience. And with Brent, I probably got about seven or eight inches more than I [laughter] expected. [gasps] But anyways, my friend. All right. So, stable coins, um, if we can, let's start with you just describing really briefly what a stable coin is, just so we know, you know, the terminology, and then I'll ask you why you think they are part of a much bigger potential new monetary regime than most folks might be appreciating. >> Yeah. Oh, essentially a stable coin is a digital token that has been issued by some either financial firm or some some uh company and the idea is that it is going to be stable against a certain asset. So, think of a US dollar stable coin should be stable versus the US dollar >> and when you say stable you mean like stable in price. >> Stable in price. Not this has nothing to do with the value, right? and and and it's it's not a token that is expected to appreciate greatly versus uh whatever it is uh representing. So in other words, there could be a gold stable coin. >> It would track the price of gold. It wouldn't go up more than the price of gold and it wouldn't fall more than the price of gold. >> Uh but a US dollar stable coin is not supposed to make you rich. It's not supposed to make you poor. It's just supposed to be stable against the US dollar. And it's a way to have a digital dollar that you can send, spend, transact with that settles instantly anywhere in the world, uh, across the world. Um, and you don't even need a bank to do it >> to do it. So, one of the reasons why stable coins were invented, correct me if this is wrong, is when Bitcoin first came out, it was touting itself as a cryptocurrency, right? store value, but it's also going to be this new currency that that that's going to supplant the dollar at some point in time, right? That was sort of the initial um hype around it. The Bitcoin community has largely kind of backed off the currency part of it, right? They've been talking about more of a store of value and and something that appreciates, you know, has appreciated extremely well over the past, you know, 15 years. Um, but the reason why it hasn't taken off as a currency is because of its price volatility, right? it it it goes up a lot, but it also goes down a lot when it goes down. It's had periods of time where it's lost almost upwards of 80% of its value, right? And so people are really nervous about transacting in a currency that is that volatile, right? I don't I don't want to enter into a contract where you're going to pay me in Bitcoin where there's the potential that Bitcoin might go down 80% over the next year and I'm getting much less than I expected, right? So people wanted a stable solution where they had confidence that okay, if we agree I'm going to get paid x amount of whatever, I'm going to get x amount of whatever in the future. Is that pretty much why they came up with it? >> That's exactly right. And when you think about stable coins, you shouldn't think about, you know, this coin competing with perfection. >> It's [clears throat] competing with other fiat. It's it's not supposed to try to keep up with gold. that's not supposed to try to keep up with Bitcoin or Ethereum or any of these other digital assets or even the stock market or real estate market. It's really just a way to use the US dollar as a transactional currency but in a form that is much easier, more efficient and cheaper than the traditional methods. >> So you you used the term earlier and I just want to see if if if it's an exact term. So is a US stable coin a digital dollar? >> Essentially, yes. >> Okay. All right. So, you know, you got a dollar in your wallet. Uh, a US stable coin is essentially the digital version of that. >> Yeah. And the the reason that it's called a stable coin is it is supposed to be anchored to the dollar, >> right? >> Um, you could have a gold stable coin that would be anchored to gold. It's think the probably the best way to think of it is when the US dollar was on a gold standard, >> the dollar equaled gold at that point. And so this in this case, it's a token, a digital token that equals $1. >> Equals $1. All right. And folks, we're we're going somewhere with this. So So just just follow with me here. We're gonna we're going to build our way here. Um Okay. So, uh another important thing about stable coins is like I have dollars in my bank account and they're essentially digital dollars, right? I don't get my hands on them. I can spend them, right? I can transfer them to somebody else, but I have to go through the banking system, right? With the US stable coin, I don't, right? What are the benefits of not having to go through the banking system? >> Well, as of right now, you don't have to. You might you might be able to. It It's very possible. And I haven't got I should say I haven't got this all figured out, and I initially missed this. Stable coins have been around for six or seven years, right? Um, and I was very skeptical of them initially, and we can go over the reasons why that is, but as it's further developed and I've seen the possibilities of them, I've come around to the fact that not only did I miss >> it, but everybody else who I think is continuing to miss it. >> And even those who are big advocates for them, I think are missing the real play. >> Right. Right. So, um, if if stable coin, US dollar stable coins have hit somebody's radar in the past month or two, it's probably been around the topic of um, okay, the the the new Trump administration is trying to help encourage the development of the US dollar stable coin ecosystem because uh, to track the dollar, these stable coins hold US bills basically, Right. Um, which is dollar debt. I mean, they're they're dollars, correct? Right. >> Um, so, uh, um, you know, we we've got a, uh, uncomfortably high debt service cost right now, uh, with how much debt the country has and how much interest rates have gone up. And so the thinking is is well the more stable coins there are out there that are buying Treasury bills on the short end of the curve that'll let the US Treasury refinance some of its debt that's maturing at um the the lower short end of the curve especially as the Fed is is starting to bring down interest rates right so it's another marginal buyer in the US Treasury market that is helping to soop up all this Treasury reissuance that the US Treasury has to do this year. Correct. >> Correct. And and I think that's actually correct. And I think that will help the United States Treasury or government, however you want to define that. But I think that's really a secondary benefit. And I actually am of the belief that the US would not have that much trouble selling T bills if stable coins didn't exist. >> Didn't exist. Okay. >> Um but I'm not but but but that has been the focus >> and and you've even seen uh Bessant has made comments about stable coins. You've seen Putin make comments about the US dollar stable coin and I think some of the reasons that these other countries are making comments about US stable coins and they typically will make it in some kind of a negative sense >> is because they're scared of it and they should be. >> Okay, so this is this is where I think it starts to get interesting folks. So, um, okay. So, uh, I'm guessing we've just covered probably most of what 90% of the viewers have known about stable coins up until this point. >> Now, another topic that's been going on for the past couple years, but it's been gaining a lot of traction in recent years, right? The world is is weaning itself off the dollar, right? It has seen how we have been running big deficits. We've run our debts up. Um, it saw how we froze Russia's financial assets uh following Russian invasion of Ukraine and that freaked a lot of countries out who said I need to be less dependent on the dollar. And so for a whole bunch of reasons uh the headlines have been full for a couple years now of the world is is doing the best it can to to depend less on the dollarize. You actually think the tide is going to go in the other direction that the world will red dollarize and US dollar stable coins are going to be at the heart of that. >> I do and I've thought that ddollarization was largely a myth already. >> And it's not that there's not desire for deollation. It's not that there's not attempts for ddollarization. It's not that there won't continue to be attempts for deolarization. It's just my belief that the system is much more robust and entrenched than the ddollarization folks think it is. Um, and I've believed that to transition from whatever system we have now to a new system would involve the dollar going higher versus its peers >> versus lower versus its peers, >> which is your your fundamental dollar. >> That's my fundamental. And this is why I I have to say I'm a little embarrassed that I didn't understand this earlier. Um, and perhaps part of the reason that I didn't gravitate to it earlier is I think the early issuers of stable coins had some very shady practices to say the least >> and that probably deterred me from looking into it. >> And this was like the Tether didn't want to be audited. >> That's right. That's right. And we know that there was problems with Tether early on. Now they're still around and they're the biggest and um you know they're in some ways you could argue argue they're in partnership with the United States now because they custody it um Caner Fitzgerald and you know the head of Caner Fitzgerald is the comproller of the currency of the commerce department and so >> um you know it's there's definitely been some uh I don't know if you want to say a partnership but the two have gotten closer together. Mhm. >> Um but the the the fundamental issue I think is that the US can now use these stable coins from an official standpoint. >> And whether they officially sanction it or they use benign neglect to let it flourish, I think the result is the same. And that is at what you just said, the red dollarization or dollarization of the world rather than ddollarization. >> Okay. So, we're going to talk more about the details of that, folks. Um, and if you if you're not completely tracking the why yet, don't don't worry. We'll I think we'll get there. Um, okay. So, uh, where to start on this one. So, um, one of the things, so folks, I don't know if Brent's right here, and I think I I applaud Brent for thinking this out publicly in in real time. Um, so I'm stuck because I've got like 20 questions to ask you and I'm trying to figure out the right way to progress on this. But, um, uh, I, if why would somebody outside the US want a US dollar stable coin? >> So, it's a great question and this kind of gets to the heart of the whole dollarization versus ddollarization argument. Um, I think a lot of times anybody who gets interested in this topic from kind of an intellectual standpoint as opposed to just I'm going to go live my life standpoint, they get into this topic because they understand the some of the failures or the shortcomings of fiat currency and then they start looking for other forms of currency, whether it's gold or bitcoin or digital assets and then they then they stumble on stable coins and they're like, well, that's just another form of the dollar. Why would they want to? >> But the reality is in the real world, not the digital world and not not the not the world that we want, uh, people all over the world clamor for the US dollar on a daily basis. Um, that's why you can go into a bizaar in Istanbul and trade any currency in the world for dollars >> or buy anything in those bizaars for dollars, >> right? That's why we have a Euro dollar market and why it is so huge. >> Yeah, exactly. And so this probably let me let me address that >> that word Euro dollar because >> again now some people who start studying they they stumble onto the Euro dollar market which is what I did and it's like what the hell is this thing you know and it's not euros and it's you know uh but it's >> and it's not limited to euro >> and it's not limited to Europe um and it's not issued by the United States. So this is where it gets really interesting is so we have a system a debt-based monetary system where money gets loaned into existence and post world war II we had the Brettonwoods agreement where the dollar was the global uh reserve currency. it was established as the global reserve currency. Uh and during uh those postWorld War II years, the Soviet Union was still having operations and they were they were receiving dollars from trade. Uh and they had they needed to do something with these dollars, >> but they didn't want to put them in a US bank because they could be confiscated much like they were two years ago. Right? So these were not unfounded fears by the Soviets. And so they started put placing these dollar deposits into European banks. The European bank sat on them and they were like, well, we could use this as collateral to make new US dollar loans. And that was kind of the early days of the Euro dollar market. And so this US dollar as a global currency outside the United States proliferated and grew a lot from let's call it 1945 to 1970. And then when the United States uh convinced Saudi Arabia to price all their oil in dollars, it made the rest of the world need dollars even more even though we kind of simultaneously left the the gold standard. >> And that shot the the the Euro dollar market kind of went on this exponential run. So the size of the Euro dollar market, which is the market for dollars outside the domestic United States, is orders of magnitude larger than the market for dollars inside the United States. So the world runs on dollars. Whether you think it should, whether you think it shouldn't, whether you think it's a dumb idea or a good idea, it's just a fact. It is far and away the most used currency in the world. And it's not even close. >> Okay. So I want to get back to the banking system for a second. So if you want to transact in dollars outside of the US, you have to be plugged into this system called the Swift system. Can you just describe real quickly what Swift is and how generally it operates? >> Yeah. So, the Swift system is kind of like the central nervous system for the global financial system. >> Um, it's essentially a messaging system between global banks and financial institutions and non-bank entities that say this is how we're going to settle at the end of the day after all these transactions go back and forth from bank to bank and firm to firm. This is how they're going to settle. um and that it's kind of a centralized network. It's it's a centralized network with many decentralized nodes kind of all over, but it's essentially a way for global banks to interact with each other and come up with a uh a recognized way of settlement by the end of the day that we all agree about. >> Okay. Um but basically it's it's something you got to kind of apply to be in. You got to be in the in club to use. you can be denied it if we don't like what your country is doing. And contrary to popular belief, it is not like owned and and controlled by the US. Correct. We're influential in it. >> No, it's a it's a it's a European system. And again, it this is also kind of an outshoot of the Euro dollar market. You know, as the Euro dollar market grew, all of these European banks needed a way to communicate with each other to settle this now ever growing system of US dollar credit. And so the Swift system, you know, basically was birthed to meet that was birthed to meet that need. >> Okay. All right. Um, so two two points I want to make here hopefully to turn the tumblers in people's heads and really start seeing this through through Brett's lens. >> So first off, a US dollar stable coin system with its own rails. And by Rails, I'm just gonna say that it it's the code, the technology to just make it work, make it work seamlessly and easily. >> The plumbing. >> The plumbing. Yeah. >> Um it could be a lot more cheap, fast, and efficient than the current Swift system and the current uh you know Euro dollar. >> That's right. >> Creation system. Correct. >> Correct. And not only that, it could be a system via which it's it's programmable. I mean, this is computer code. >> Yeah. >> So, it's programmable. So, it it you know, it can be turned off and turned on pretty easily. >> Yeah. Let's hold that for one second. Um, but but but an offshoot of what you're saying there is it is a system that America would control. >> It wouldn't be a European system anymore, right? It would be a system that we built. >> Or at least it could be. It isn't yet, but it it very easily could be. >> Could could be. Um, and I'm realizing I I I probably should have started this conversation uh on the thing that governments care the most about, which is control. >> That's absolutely. >> So, we'll we'll bring it >> I was hoping you were going to get there. >> We'll bring it we'll bring it to that. I should I should have put that I might have put the cart before the horse here, but we're still now that we're deep enough in it. Let's finish it. Um, okay. So, so basically this US dollar stable coin system just could be just such a compellingly better way to do this than we currently do it right now. Right? So, that's for anybody who's invested in having to work with Swift or depending upon Euro dollar type loans and things like that. Okay. Now, let's talk about just the average person. >> Yeah. >> Right. You live in Venezuela, right? I mean, you don't live in Venezuela, but assume you live in Venezuela. What do you want to hold? Local currency or dollars? >> You would absolutely want to hold. >> You would absolutely want to hold dollars. Okay. Venezuela is kind of a disaster country at the moment, right? Let's go to a more legit country, but one that still has some inflationary problems. Turkey. >> Sure. >> Would you rather hold Turkey national currency or the dollar? >> You would absolutely want to hold the dollar. >> You'd absolutely want to hold the dollar. So already there you've got a big chunk of the countries in the world where the local populace would absolutely if given the chance say what do you want to what do you want to earn in what do you want to transact in what do you want to spend in they're all going to say dollars maybe they'd say they'd spend in their local currency but they all they all want to earn and transact in dollars right >> and many of them again I'm not making a store of value argument but versus their local currency the dollar is seen as a store of value >> right yeah >> yeah um which which is why they want to earn it. >> Exactly. [laughter] >> Yeah. So, right now it's just really hard for them to do so because either their country is, you know, a closed country, uh it's not in the Swift system, um or it's just there's just a lot of friction, you know, even in a, you know, European country. Uh there's just a lot of friction in trying to earn and transact in dollars inside a European country. >> Well, yeah. Yeah, that's right. And and the reason is is because governments don't want the populace operating in a currency they can't control, >> right? >> Because that erodess their own sovereignty, >> their own sovereignty. And we'll I'm just going to put a pin on that, too, because we're going to get to the control thing in a minute. But but basically, >> in your mind, best guess, just finger to the wind. What percent of the global population outside of the US if given the chance would choose to earn and transact in dollars versus anything else? >> Easily 50 and probably 70. >> Okay. So essentially that is what the U that's the opportunity the US stable coin unlocks. >> It's enormous. >> It's enormous. And once this is running it's kind of instantaneously available anywhere there's an internet connection. >> That's right. And see here, I I don't want to jump on to your topic of we're going to get to in a second, but this is where >> if if let's just use Turkey as an example. If if you are a Turkish uh uh person and you let's say you you run a little food stand uh a food cart, right? and you earn uh when the tourists come, you know, maybe sometimes they pay you in dollars, sometimes you get paid in LARA, so maybe sometimes you get paid in euro. Um, if you want to hold on to that in some form, you either hold on to the physical cash, >> which which many do, but if you actually wanted to have a bank account that was you you would have to find a bank that would let you hold euros or dollars in that bank. But then if you hold them in that bank, then that bank and the government itself can put a control. They can say, "Okay, first of all, you have to find a bank that'll let you hold dollars." So let's say let's say you have $10,000 in there. Well, then all of a sudden the Turkish l starts to fall in value. Turkish economy starts to go down. >> They're going to put controls on whether or not you can take that $10,000 out of that account. >> Y >> and so first you have to find the bank. Then you have to, you know, put put the money in it and then you have to be able to get it when you want it. And when a currency crisis or something, they put that clamp down, right? So even under the best case scenario, it it it's it's inefficient to go get that cash from the bank. So either you end up putting it under your mattress, which some of them do. >> Um >> but but this is why it's it's not an efficient system, right? And this is also why when you change money physically, there's a bigger big ass spread than if you're just sending it digitally, >> right? And I guess another complicating factor there too is let's say you wanted to get paid in dollars for your services inside a country. There's no mechanism there for you to invoice, right, you know, another company in dollars and for them to find a way >> unless you're on the Swift system, right? Yeah. Yeah. Yeah. Exactly. So the but but this all goes back to the the point I'm trying to open in people's minds, which is >> there is all this friction in the system, a system where the vast majority of people, if they could, would prefer to be transacting in dollars and all of that barrier goes away >> just like that. >> Just like that with the launch of a stable coin. And you know, we know, we both know George Gammon, um, who did a video, what about a year ago where he went down to Venezuela with >> It was Chile. >> Oh, was it Chile? >> It was from Chedro from Chile to to Buenosares. Okay. >> From Santiago to Buenosares. >> Okay. But anyways, so he he went down to some of these South American countries that were experiencing a lot of inflation, lines outside the banks, that type of stuff. And basically tried to see if people would, you know, if they preferred a dollar, if they preferred gold or if they preferred Bitcoin. And like the contest wasn't even close, right? Like almost nobody wanted the dollar in bitco the golden bitcoin, right? >> Everybody wanted the dollar, right? That's just the way the rest of the world thinks, right? Right. >> So from a red dollarization standpoint, >> it is pretty amazing. It's oh my god, you you you get all the euro dollar market and all the swift stuff already and then on top of that, you get some massive probably majority of transactions happening in the rest of the world that instantaneously would switch the dollars if given the chance. >> That's right. So, so not only and not only not only the people that kind of already have businesses that would prefer to do business in dollars, but you also get like all the global unbanked, the people that don't even have a bank. >> Right. Right. >> And just on that, so that's an argument that the Bitcoiners make a lot, which this is why Bitcoin's great. you know, you can use it in country X because, >> you know, the the hunter that runs your country right now is confiscatory and this is a way for you to get your wealth out or to, you know, if you're unbanked, you you can make a little bit of money, right? >> Yeah, you could still do that with Bitcoin, but if given the choice to do it in dollars, a huge chunk of them, maybe the vast majority would pick dollars for the reasons we mentioned at the beginning of this discussion. And what would that do to demand for Bitcoin? >> I don't really It could help Bitcoin. I I I don't really know. But to me, this is not a this is this is >> I know it's not a versus Bitcoin versus Bitcoin thing, but but you know, you you >> My point is just it's additional lunch for the US stable coin to use. >> Absolutely. Absolutely. Absolutely. Yeah. I I do think that there would be some people who would put their money that currently use Bitcoin that would use the US dollar instead. >> Yeah. Um Okay. So, hope hopefully folks now you're kind of getting the size of the opport the scope of the opportunity. In fact, I'm not even sure I'm still fully appreciating the scope of this opportunity if you're correct. >> It's kind of crazy. >> It's kind of crazy. So, okay. So, now the skeptics watching this are going to say, "Well, Brent, the other countries are just not going to go along with this, right? They'll just, you know, somehow shut this down." So, again, I should have started here, but this is essentially what a sovereign entity is, right? That's right. It is an entity that exerts control over a population within a geographic region. And one of the main ways they exert that control is to get everybody to use a common currency that they print themselves. U maybe I can you can talk about senorage and some other stuff in just a moment. But um this is the grand game of of thrones that the world plays right and you have given a lot of great presentations I've seen where you know you you kind of compare the global monetary system to a prison >> and at the end of the day what is the currency of the realm in the prison and it's basically what the biggest guy is willing to accept as currency. Right. >> Right. Um and right now on that world stage it's it's America. Right. And some people think, well, you know, China's going to displace you and it's going to, you know, maybe back the the buy gold or whatever. We can talk about that in a moment. But at the end of the day, it is about exerting control, keeping control or increasing your your sphere of control. And what you're talking about here is a way for the America to dramatically increase its already substantial unfair advantage over the rest of the world. And so it begs the question, why wouldn't America do this? Right. >> Right. >> And and I know you've talked a lot about this in our previous conversations where you're like, look, >> the world the the the the anti-doll people may be completely all their concerns may be completely right and valid about the evils of American monetary policy and what we're doing with our currency. Um, but there are the the bag of dirty tricks that the US has is large and deep and we probably haven't even reached in it all that far yet. And I I think a lot about um >> the uh the Star Wars uh trilogy, right? Starts off with New Hope, you know, where the the rebels, you know, they they blow up the Death Star, they get their first big win, but then what do you have, right? You've got uh uh the Empire Strikes Back and this may very well be a mechanism by which the Empire Strikes Back. >> Absolutely. Um and I think that that that's a great example and it's funny I've used that before because I think it's so great like at the end of the first movie they blow up the Death Star, right? That that's a huge victory >> and >> we created Bitcoin and it's achieved escape velocity or whatever. >> But the next eight movies aren't about peace and love in the galaxy. The battle continues, right? And so the idea that, you know, the US is just going to roll over because this this is what's funny to me is like a lot people tell me the the US is the is the the great evil in the world or it's the global bully or it's, you know, it's it's it's designed the system that enslaves the world through taxation and theft via inflation. >> And then they also tell me that, you know, they can't possibly win the next round. I'm like, they just enslaved the whole world by your own admission, [laughter] but they're just going to roll over and the next round's going to go to the next guy. >> Um, so, you know, without question, there's going to be a battle. And I don't know exactly how this is going to play out. And the other countries will without question fight back because they have to. If they don't fight back, they will cease to exist. So, they will without question, they will fight back. I think there's a few countries that will be able to do so uh from a much stronger position than many others. Um and I think the the sooner the the more stronger countries start to fight back, the better because the longer it allows to go unchallenged, the the more entrenched the dollar will become. >> Okay. So, I know we're we're still in the realm of the academic here. Um, but how how uh defensible is a country against this? Because basically, sort of like Bitcoin, as long as you have an internet connection, you can take advantage of the US dollar stable coin rails. >> I don't think there's a lot they can do other than crack down really hard uh legally within their jurisdiction. And listen, like the reason governments exist is because they have a monopoly on violence. And I hate to bring that up, but that's that's the truth, right? And so if they if they throw people in prison or if they, you know, take their businesses or confiscate their assets that that that will deter people from breaking the law, quote unquote, in that country, but it won't stop everybody. Um, and like I said, the bigger, stronger countries who have stronger economies, like like well, let's just use China as an example. within China. Um, you know, I think the Chinese citizens are probably buying gold because they don't really trust the yuan, right? But I think within China, they they use the yuan pretty freely and probably much more than the dollar. So, and and China is a big strong technologically advanced country. They can probably introduce their own EU or whatever it is. And internally that probably uh is is better at defending against the dollar stable coin than perhaps Turkey or Egypt or you know Afghanistan or Venezuela would be. But I don't think it will be perfect and I I I think it will still >> um it it it's like water. It just seeps in, right? It's like you can't it's hard to like keep it completely out. So that's a China which is very centrally controlled and both the government and the people are used to really heavy-handed tactics like this, right? What about like a France or a Germany? I mean Europe is just in so much trouble. I I just don't know how else to say it. I I'd like to be more polite about it, but you know, they you know, Lagarde was out last week talking about the the eur the euro or the digital euro, >> and she should be talking about it because they're trying as hard as they can to maintain control. >> And and we we we touched on this earlier, but people need to understand this. Whether you think that money is the, you know, most marketable commodity that's chosen by the market or whether you think it is the tribute or the token that's demanded by the king for tribute. Maybe it's both, maybe it's one or the other, but it is a form of control. It it is a tool that governments use to control their citizens that you know they raise taxes, they lower taxes, they they increase regulations, they decrease they try to influence people to to take certain actions by using money. So the idea that a country is going to give up that control either well they certainly won't give it up willingly uh but if it's taken from them anyway their control on the situation starts to erode pretty quickly. And this is why whenever you've seen a country go through a currency crisis typically the government falls shortly thereafter because if you lose control of the currency you lose control. >> Well so I mean just think about this. We we we [laughter] we've just gone through this reshuffleling of global trade, right? We're still going through it, right? Where basically Trump kind of forced everybody to pick aside team America or team China, right? >> What does this do over time to everybody who chose team America? >> Well, I think they're going to get dollarized. I I I I this is the conclusion I've come to and I I can't really figure out how they don't if and here's here's the thing. Do do we do we turn our allies into adversaries through this process then? >> It >> how long is how long is Great Britain going to sit there as we take more and more of their currency. Sure. >> Well, this is the thing is like if somebody if if you influence somebody to come to your side, are they your ally or are they your adversary? >> It's a fine line, right? >> Or are they doing it because they have to? Are they doing it because they have to or are they doing it because they choose to? >> And I think some people, countries will come willingly, some will come because they're coerced and some will leave, >> right? >> Or at least try to leave. >> And you know, watch Game of Thrones. Sometimes this ends up very well and sometimes it ends up really badly. I I I I don't like to be too alarmist and too, you know, >> I know, but my brain is going to some of these things, >> but this is the big game. We've talked about this before. Before we ever talked about stable coins, we're talking this is the big game. Like this is, you know, China versus the United States, East versus West. >> And that's what I want you folk to take from this, folks, which is like US stable coins, if Brent is right, perhaps becomes the ring of power in the great game, right? I mean, it becomes the thing that lets you take the entire risk board, at least monetarily. or not only that, it's like the dollar is already the ring of power in my opinion. And this is a way >> to just entrench it even more. And it's and the craziest thing in the same way that the Euro dollar market built the Euro dollar prison that the that the world is now in. >> Stable coins is a way to turbocharge that and not only turbocharge it, but give the US more control over it because with the Euro dollar system, the US has more control than any other country. But they don't have full control. They don't have full visitability. It's a very opaque and ar in some ways arcane system. It's kind of the Rube Goldberg. >> Yep. >> This is the the stable coin system is very elegant and very controllable and highly transparent for for whoever is programming. And so I think as of now they're just kind of letting it develop on its own in much the same way that the Euro dollar market developed. >> Y >> but they could very eat. But here's the other thing is if let's say they were to say to if they if they were to say we now want to transact with our trade partners in the US >> give me a sheet of paper here. I I keep going keep going. Um, if if we're going to if if if major US companies or the US government were to say with our trading partners, we would now like to receive payment via this new stable coin system as opposed to the traditional Swift system. you're now cannibalizing the traditional Euro dollar plumbing system >> and it's moving over to a system that the US has more control over more visibility over >> etc. And the the example I've used in my paper is this is our they they've done this before like >> for years the liebore market right >> was the interest rate for the euro dollar system. The US had some influence over it but didn't have total control of that interest rate >> and for sure we wanted that control just couldn't find our way in. Y >> but you know over the last six seven eight years they were able to transform that you >> the library scandal they used that to their advantage. use that to their advantage and they use their political pressure to their advantage and they've gotten a change to a sofur the secured overnight funding rate which is a US-based rate and which they have full control over and so you know and the other thing I would say is this idea of using money as a weapon or a means of control this is not a theory that Brent Johnson came up with this is this is literally in the army handbook like they know how to use >> and you actually cite this in I mean, this this is doctrine. This is again, this isn't theory. This is doctrine. >> These are the rules of the game. >> These are the rules of the game. >> And they've been doing this for a long time. And so, it's it's not that big of a jump to say >> if the army knows how to deploy this when they go into action in another country, wouldn't be that hard for politicians in DC to, you know, use the same method, you know, over these stable coin rails, >> right? So folks, if you don't like this, right, [laughter] you know, the the the the point to take away from Brent just said there is is you got to think about it in terms of the way the world works and at the sovereign level it is if it gives me more control, >> I am going to do it unless there is a cost to it that somehow is too large. But here >> unless and I will say there will undoubtedly be push back. There will undoubtedly be unintended consequences. There will undoubtedly be countries, corporations, entities that do not like this and there will be a battle when when it when it becomes confrontational. I don't know exactly how it's going to play out. Again, I'm sure there will be some unintended consequences and I don't expect the US to just push a button and it's like >> everything's totally under their control, >> but this is about as an elegant way to invade another country without even people realizing it that I've ever seen. >> Seen. Yeah. Yeah. >> Um, and it's again, if you if you're angry at the US for potentially doing this, is there any country on earth that wouldn't do it if given access to the same technology? >> I don't think so. And here's the >> when you really step back at it, right? Like >> countries have fought over resources and money and treasure for all of history >> since before history. >> I don't think that we are so elevated intellectually that we no longer think that way. In many ways, I think street gangs and governments are very similar. The people in the middle like to think of themselves as, you know, more intellectual, but at those two levels, it's very similar. >> Um, and so the idea that the the that the it's like when let's go back to the ring of power. When Boromir is like talking about the ring, he's like, "This is a gift, right? Why would we not use this?" And only Frodo is able to withstand that, right? Well, I don't think we have a Froto. >> Froto. Exactly. [laughter] Maybe it's Antarctica, but yeah. Yeah. >> Um, all right. So, I had to ask these gentlemen to to give me um some paper to write these down before I forgot because again, when when you start tugging at the string, folks, you just start realizing there's so many massive layers to this. So, okay, we've just talked about this as a way to red dollarize the rest of the world. >> What happens domestically? >> Well, it's again, it's a >> Does the US stable coin become the coin of the realm here, too? >> I think it does. And [clears throat] we're all in a digital dollar. >> And how is that different from a CBDC in people's? >> Well, it's because it's not issued by the Fed. It's issued by the Treasury. >> Well, yeah. And that [laughter] and that's going to go to my next question, which is do you need a banking system after this? >> Okay. So, that's okay. >> There's so many layers to this. >> My my my podcast this last weekend was titled financial battlefields because this opens up so many battlefields >> and >> it's hard to get your head around how many different battlefields there are, but the Essentially, if you have a US dollar stable coin that's issued by the Treasury, you don't really need the banks. >> Right. >> Right. Right. You certainly don't need a Fed and you Well, you certainly don't need 14,000 banks. Maybe you need 10 or 20. Right. And this is I don't know exactly how they're going to do this. I don't know if they're going to issue a U official US dollar stable coin. if they're going to grant licenses to 20 different entities and then they create their own stable coins. Or maybe they'll just let anybody issue their own stable coin so long as they follow the rules that are outlined in the Genus Act. >> Um but regardless of which way they go, new battle lines are are drawn and and people are going to compete for for for for that territory. And uh ultimately I do think that the the the US dollar stable coin and and I don't think it'll work that much differently internally than it already does. You know, think of it like you know for a long some people still use cash but most people just use a card, right? And so now maybe people stop using their card and they use their phone and they just boom, >> right? But then I mean all the fears that people had around the CBDC, right? >> Oh, I think they're back on the table. >> The government knows exactly what I'm spending it on. uh all of a sudden I don't have cash to be anonymous with. They don't like what I'm doing. They can shut down my >> So I think we'll all So I think well okay so this is where it gets really interesting too is because >> I mean the battle lines are countries financial citizens. >> This is potentially a way and I haven't got this perfectly thought out. It's potentially a way to separate a domestic US dollar from a Euro dollar. Like right now they're very >> funible >> and maybe the idea is to keep them funible but it's also potentially a way that they could separate the two. >> And but but again going back to your point do all the things that we feared about a central bank digital currency come back on the table. Yeah. >> I mean they want to control us too, right? Like we're not going to be spared in this. >> Yeah. I mean so Brent this has been you know just like I said a mind-blowing discussion. Um, I I think you really hit a gusher here when when you wrote this report. I'm very curious to see sort of where it goes, but you know, I still feel like I'm I'm I'm still just wrapping my brain around it. >> I I'm going to I'll ask you and I'll ask anybody who's listening, if if you think I'm on the right track, you know, thank you. If you think I'm not, tell me. Yeah. >> If you think I'm missing something, tell me that, too, >> because I I don't have this completely figured out. I think I have a pretty good handle on it. Y um and and and the interesting thing is since I've put this paper out, I've gotten >> a lot of feedback on it and some people have said this is exactly what they're doing. >> Now whether those people are right or not, I don't know. But >> um I'm just curious any of those people been like I'm a person in the know and >> these are pretty smart people. >> People Yeah. [laughter] I mean not surprising to me because I think you're a smart guy. Scary to me because again >> it is scary. >> Yeah, it it is really pretty scary. So there probably a bunch of folks here that we we we might be creating some sleepless nights here, Brent, but I I I very much value the fact that you had the courage. Well, you had the intellectual brain power to to put these pieces together, the courage to, >> you know, put it out in the world and to be, you know, taking the pin wax that people will be taking at you here. But hopefully that's just going to hammer help hammer the picture into clearer shape here as we go. >> Um, you're definitely going to take some of those piñata wax tomorrow uh at the conference [laughter] from the Peter Schiffs of the world. >> That's what makes it fun. >> Yeah. And I don't know how you're going to summarize this for the audience in like the three minutes I'm going to give you to do so that we have time for >> after the panel then I'm going doing a whole speech on it. So I'll just say tune in later. >> Okay. Okay. Good. Um so anyways folks um please uh do me a favor and [clears throat] show your appreciation for Brent in the comments of the video. Um also just to let him know too how much you appreciate it, hit that like button as many times as you can as well as the subscribe button below and that little bell icon right next to it. Brent, as we start to wrap up here, um, you know, I want to say what kind of investing strategy comes out of this, and I'm not even sure one does, but um, I mean, look, if you live in the US, you're going to be swimming in dollars no matter what happens for the most part. If you're in the rest of the world, maybe this is a real convenience for you, but it's an inconvenience and maybe a threat to your country. But, you know, a lot of people are going to choose the dollar anyways. As just sort of a a US investor that that sees this, is there opportunity here to seize or is there a way to >> Well, I think this is one of I I think this is what I would say is, you know, >> you brought up Peter Schiff and I listen, Peter's a friend of mine. I I love Peter. He drives me crazy, but I love him. Right. Um, Lawrence Leopard Leard is another one. and you know all of the people who are telling you that the dollar is going to die and you need to get into hard assets and you know the dollar's going to you know its days are numbered sure get into real assets you know have some exposure to those things fiat currency loses value over time but the people who tell you that the US cannot possibly win this trade war or cannot possibly extend their you know empire or cannot possibly uh last as a global hedgeimon for another decade or two decades or whatever it is like temper that a little bit like you're you you're if if that is your belief you are betting against immeasurable power >> power and let me ask you this your dollar milkshake theory basically says look the way the system is set up that the US has an unfair advantage and especially when the world gets into trouble but even not capital will seek the US that's right >> and that will keep the dollar strong and and again folks should have said this at the separate in your mind strong dollar versus other fiat currencies versus the dollar's purchasing power versus real things. You can have a strong dollar via other currencies that is losing purchasing power versus real things. That's right. >> So when Brenda is talking about a strong dollar, he generally is meaning >> the the the former which is the dollar versus the other world currencies. But this US dollar US uh dollar stable coin system once it pervades the rest of the world is it that is it sucking capital in on steroids is is this a way to bring even more foreign capital to support our economy and markets? >> I think so. Yeah. >> Yeah. >> Yeah. >> So it it takes the unfair advantage and and even makes it more unfair. And it and it may even help those economies thrive or or grow better than they are now. >> Well, especially some of the ones that just have terrible, you know, monetary management. >> Exactly. Exactly. So I mean this is the thing is the if you're a free market person >> a lot of the people who gravitate towards gold, Bitcoin, hard money, you know, sound money, they're free market libertarian minded people. >> Yeah, >> the free market has already chosen the dollar as a global currency. You might not like that, but it did. And um I think this stable coin is a way that the free market will dollarize the world. >> Okay. And ju just in wrapping up, I want to make sure folks understand because I've known you for a good while, Brent. Um you're not a dollar lover. >> No. >> You're you're a guy who's >> This scares me to be honest. Like this is Yeah. >> Yeah. Um you you are just trying to help people understand the world as it is and as it is likely to be. And for people that say, "Oh, well then Brent hates gold and Bitcoin stuff." You're not you're actually a fan of owning >> art assets. >> This is a great reason to to own gold >> because gold is like a put on the whole system, right? And so I don't know that this is going to go well. I don't know that it's going to go perfectly. It may very well cause chaos. And gold probably does well in a world where there is chaos. But the dollar to me there's nothing more bullish for gold than a strong dollar because a strong dollar kind of wrecks the system and causes chaos. >> And gold does pretty well. >> Gold does pretty well in chaos. Yeah. And I'm just curious too, so as more and more foreign capital converts itself into US stable coin and if the US adopts its own domestic US stable coin, whether it's the same thing or you know domestic version, does that just mean increasingly more and more currency supply and therefore you want to honeart assets against that as well? >> Probably. >> Okay. >> Probably. >> Yeah. I'm still trying to think through this as well. [laughter] >> Yeah. So, in other words, this may just be a multiplier for why you want to own art assets, right? Chaos aside, right? Yeah. >> Yeah. All right. Well, um, Brent, look, I can't thank you enough. It's been so fun to do this with you in person. Huge thanks again to Russ Gray and the folks at Main Street Media Network for letting us use the booth here and everybody else. Thanks so much for watching.
Stablecoin Revolution To Make The Dollar More Dominant Than Ever? | Brent Johnson
Summary
Transcript
The dollar is already the ring of power in my opinion and this is a way to just entrench it even more. And it's and the craziest thing in the same way that the Euro dollar market built the Euro dollar prison that the that the world is now in >> stable coins is a way to turbocharge that >> and not only turbocharge it but give the US more control over it. Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Tagert. Welcoming you here to Thoughtful Money from the New Orleans Investment Conference. Uh I'm joined by Dollar Milkshake theoretician himself, Brent Johnson. Brent, how you doing? >> I'm good, thanks. >> Uh thanks so much for joining me here, Brent. So, I first want to uh give a big shout of thanks to Russ Gray and the team at Main Street Media. They are building a network of podcasters to develop content uh that basically will help advance the prosperity and liberty or the P&L of Main Street America. I think it's a great cause. Go check out mainstremedia.com. >> All right, Brent. Um we've got our our panel tomorrow, the future of money that you're going to be on, I think for the first time this year. Yeah. Um it's going to be good. And as I was telling you earlier, um I'm going to I'm going to let you lead off on that panel. Um, basically using you as the grenade I'm going to pull the pin on and then walk away and watch what happens. >> Why is this always me? >> Yeah. Yeah. Well, first off, we've got some some characters on the panel with you, Peter Schiff, uh, Larry Leard, um, who, uh, are not short of opinions anyways, but I think in general, uh, or in response to your your idea, which we're going to talk about in a second here, I think they're going to have some really strong opinions on. So folks, um Brent just published really one of the most like mind-opening reports I've read all year. Uh and it's on stable coins and um stable coins are something that I think most people have kind of heard of but don't really feel like they understand. And they think of it as sort of like a corner of the crypto market and you think it's much bigger than that. We're going to talk about that in a sec, but just to drive home the point of big folks. So, I'm not a huge guy, but I'm I'm tall enough. I'm I'm about 6'2, maybe just a hair under that. So, Brent here, um, I've been interviewing him for many years. Um, the first time I met Brent, I was shocked because for two reasons. One, when I interview you, how good looking I was. Is that what it was? >> Not that. I mean, you're just [laughter] even so much more in person. [snorts] But no, when I when I used to interview you, your camera was kind of above your computer, so you were kind of looking up at your camera. So, I kind of had the impression that you were kind of a short guy, right? Um, you're not. And we're sitting here, and folks, if you're watching us, we probably look like we're about the sameish height. >> Brent, stand up with me here for a second. >> Let's do it. [snorts] >> Don't get on your toes. >> Yeah. Yeah. I won't. I went either. But, as you can see, this guy is all legs. What are you? 65. >> 65. >> Yeah. Yeah. Okay. Well, thanks for thanks for uh entertaining me on that. But it's it's so fun because folks obviously when you get to meet the folks that that you see on video in person, um it's it's always, you know, a much more rich experience. And with Brent, I probably got about seven or eight inches more than I [laughter] expected. [gasps] But anyways, my friend. All right. So, stable coins, um, if we can, let's start with you just describing really briefly what a stable coin is, just so we know, you know, the terminology, and then I'll ask you why you think they are part of a much bigger potential new monetary regime than most folks might be appreciating. >> Yeah. Oh, essentially a stable coin is a digital token that has been issued by some either financial firm or some some uh company and the idea is that it is going to be stable against a certain asset. So, think of a US dollar stable coin should be stable versus the US dollar >> and when you say stable you mean like stable in price. >> Stable in price. Not this has nothing to do with the value, right? and and and it's it's not a token that is expected to appreciate greatly versus uh whatever it is uh representing. So in other words, there could be a gold stable coin. >> It would track the price of gold. It wouldn't go up more than the price of gold and it wouldn't fall more than the price of gold. >> Uh but a US dollar stable coin is not supposed to make you rich. It's not supposed to make you poor. It's just supposed to be stable against the US dollar. And it's a way to have a digital dollar that you can send, spend, transact with that settles instantly anywhere in the world, uh, across the world. Um, and you don't even need a bank to do it >> to do it. So, one of the reasons why stable coins were invented, correct me if this is wrong, is when Bitcoin first came out, it was touting itself as a cryptocurrency, right? store value, but it's also going to be this new currency that that that's going to supplant the dollar at some point in time, right? That was sort of the initial um hype around it. The Bitcoin community has largely kind of backed off the currency part of it, right? They've been talking about more of a store of value and and something that appreciates, you know, has appreciated extremely well over the past, you know, 15 years. Um, but the reason why it hasn't taken off as a currency is because of its price volatility, right? it it it goes up a lot, but it also goes down a lot when it goes down. It's had periods of time where it's lost almost upwards of 80% of its value, right? And so people are really nervous about transacting in a currency that is that volatile, right? I don't I don't want to enter into a contract where you're going to pay me in Bitcoin where there's the potential that Bitcoin might go down 80% over the next year and I'm getting much less than I expected, right? So people wanted a stable solution where they had confidence that okay, if we agree I'm going to get paid x amount of whatever, I'm going to get x amount of whatever in the future. Is that pretty much why they came up with it? >> That's exactly right. And when you think about stable coins, you shouldn't think about, you know, this coin competing with perfection. >> It's [clears throat] competing with other fiat. It's it's not supposed to try to keep up with gold. that's not supposed to try to keep up with Bitcoin or Ethereum or any of these other digital assets or even the stock market or real estate market. It's really just a way to use the US dollar as a transactional currency but in a form that is much easier, more efficient and cheaper than the traditional methods. >> So you you used the term earlier and I just want to see if if if it's an exact term. So is a US stable coin a digital dollar? >> Essentially, yes. >> Okay. All right. So, you know, you got a dollar in your wallet. Uh, a US stable coin is essentially the digital version of that. >> Yeah. And the the reason that it's called a stable coin is it is supposed to be anchored to the dollar, >> right? >> Um, you could have a gold stable coin that would be anchored to gold. It's think the probably the best way to think of it is when the US dollar was on a gold standard, >> the dollar equaled gold at that point. And so this in this case, it's a token, a digital token that equals $1. >> Equals $1. All right. And folks, we're we're going somewhere with this. So So just just follow with me here. We're gonna we're going to build our way here. Um Okay. So, uh another important thing about stable coins is like I have dollars in my bank account and they're essentially digital dollars, right? I don't get my hands on them. I can spend them, right? I can transfer them to somebody else, but I have to go through the banking system, right? With the US stable coin, I don't, right? What are the benefits of not having to go through the banking system? >> Well, as of right now, you don't have to. You might you might be able to. It It's very possible. And I haven't got I should say I haven't got this all figured out, and I initially missed this. Stable coins have been around for six or seven years, right? Um, and I was very skeptical of them initially, and we can go over the reasons why that is, but as it's further developed and I've seen the possibilities of them, I've come around to the fact that not only did I miss >> it, but everybody else who I think is continuing to miss it. >> And even those who are big advocates for them, I think are missing the real play. >> Right. Right. So, um, if if stable coin, US dollar stable coins have hit somebody's radar in the past month or two, it's probably been around the topic of um, okay, the the the new Trump administration is trying to help encourage the development of the US dollar stable coin ecosystem because uh, to track the dollar, these stable coins hold US bills basically, Right. Um, which is dollar debt. I mean, they're they're dollars, correct? Right. >> Um, so, uh, um, you know, we we've got a, uh, uncomfortably high debt service cost right now, uh, with how much debt the country has and how much interest rates have gone up. And so the thinking is is well the more stable coins there are out there that are buying Treasury bills on the short end of the curve that'll let the US Treasury refinance some of its debt that's maturing at um the the lower short end of the curve especially as the Fed is is starting to bring down interest rates right so it's another marginal buyer in the US Treasury market that is helping to soop up all this Treasury reissuance that the US Treasury has to do this year. Correct. >> Correct. And and I think that's actually correct. And I think that will help the United States Treasury or government, however you want to define that. But I think that's really a secondary benefit. And I actually am of the belief that the US would not have that much trouble selling T bills if stable coins didn't exist. >> Didn't exist. Okay. >> Um but I'm not but but but that has been the focus >> and and you've even seen uh Bessant has made comments about stable coins. You've seen Putin make comments about the US dollar stable coin and I think some of the reasons that these other countries are making comments about US stable coins and they typically will make it in some kind of a negative sense >> is because they're scared of it and they should be. >> Okay, so this is this is where I think it starts to get interesting folks. So, um, okay. So, uh, I'm guessing we've just covered probably most of what 90% of the viewers have known about stable coins up until this point. >> Now, another topic that's been going on for the past couple years, but it's been gaining a lot of traction in recent years, right? The world is is weaning itself off the dollar, right? It has seen how we have been running big deficits. We've run our debts up. Um, it saw how we froze Russia's financial assets uh following Russian invasion of Ukraine and that freaked a lot of countries out who said I need to be less dependent on the dollar. And so for a whole bunch of reasons uh the headlines have been full for a couple years now of the world is is doing the best it can to to depend less on the dollarize. You actually think the tide is going to go in the other direction that the world will red dollarize and US dollar stable coins are going to be at the heart of that. >> I do and I've thought that ddollarization was largely a myth already. >> And it's not that there's not desire for deollation. It's not that there's not attempts for ddollarization. It's not that there won't continue to be attempts for deolarization. It's just my belief that the system is much more robust and entrenched than the ddollarization folks think it is. Um, and I've believed that to transition from whatever system we have now to a new system would involve the dollar going higher versus its peers >> versus lower versus its peers, >> which is your your fundamental dollar. >> That's my fundamental. And this is why I I have to say I'm a little embarrassed that I didn't understand this earlier. Um, and perhaps part of the reason that I didn't gravitate to it earlier is I think the early issuers of stable coins had some very shady practices to say the least >> and that probably deterred me from looking into it. >> And this was like the Tether didn't want to be audited. >> That's right. That's right. And we know that there was problems with Tether early on. Now they're still around and they're the biggest and um you know they're in some ways you could argue argue they're in partnership with the United States now because they custody it um Caner Fitzgerald and you know the head of Caner Fitzgerald is the comproller of the currency of the commerce department and so >> um you know it's there's definitely been some uh I don't know if you want to say a partnership but the two have gotten closer together. Mhm. >> Um but the the the fundamental issue I think is that the US can now use these stable coins from an official standpoint. >> And whether they officially sanction it or they use benign neglect to let it flourish, I think the result is the same. And that is at what you just said, the red dollarization or dollarization of the world rather than ddollarization. >> Okay. So, we're going to talk more about the details of that, folks. Um, and if you if you're not completely tracking the why yet, don't don't worry. We'll I think we'll get there. Um, okay. So, uh, where to start on this one. So, um, one of the things, so folks, I don't know if Brent's right here, and I think I I applaud Brent for thinking this out publicly in in real time. Um, so I'm stuck because I've got like 20 questions to ask you and I'm trying to figure out the right way to progress on this. But, um, uh, I, if why would somebody outside the US want a US dollar stable coin? >> So, it's a great question and this kind of gets to the heart of the whole dollarization versus ddollarization argument. Um, I think a lot of times anybody who gets interested in this topic from kind of an intellectual standpoint as opposed to just I'm going to go live my life standpoint, they get into this topic because they understand the some of the failures or the shortcomings of fiat currency and then they start looking for other forms of currency, whether it's gold or bitcoin or digital assets and then they then they stumble on stable coins and they're like, well, that's just another form of the dollar. Why would they want to? >> But the reality is in the real world, not the digital world and not not the not the world that we want, uh, people all over the world clamor for the US dollar on a daily basis. Um, that's why you can go into a bizaar in Istanbul and trade any currency in the world for dollars >> or buy anything in those bizaars for dollars, >> right? That's why we have a Euro dollar market and why it is so huge. >> Yeah, exactly. And so this probably let me let me address that >> that word Euro dollar because >> again now some people who start studying they they stumble onto the Euro dollar market which is what I did and it's like what the hell is this thing you know and it's not euros and it's you know uh but it's >> and it's not limited to euro >> and it's not limited to Europe um and it's not issued by the United States. So this is where it gets really interesting is so we have a system a debt-based monetary system where money gets loaned into existence and post world war II we had the Brettonwoods agreement where the dollar was the global uh reserve currency. it was established as the global reserve currency. Uh and during uh those postWorld War II years, the Soviet Union was still having operations and they were they were receiving dollars from trade. Uh and they had they needed to do something with these dollars, >> but they didn't want to put them in a US bank because they could be confiscated much like they were two years ago. Right? So these were not unfounded fears by the Soviets. And so they started put placing these dollar deposits into European banks. The European bank sat on them and they were like, well, we could use this as collateral to make new US dollar loans. And that was kind of the early days of the Euro dollar market. And so this US dollar as a global currency outside the United States proliferated and grew a lot from let's call it 1945 to 1970. And then when the United States uh convinced Saudi Arabia to price all their oil in dollars, it made the rest of the world need dollars even more even though we kind of simultaneously left the the gold standard. >> And that shot the the the Euro dollar market kind of went on this exponential run. So the size of the Euro dollar market, which is the market for dollars outside the domestic United States, is orders of magnitude larger than the market for dollars inside the United States. So the world runs on dollars. Whether you think it should, whether you think it shouldn't, whether you think it's a dumb idea or a good idea, it's just a fact. It is far and away the most used currency in the world. And it's not even close. >> Okay. So I want to get back to the banking system for a second. So if you want to transact in dollars outside of the US, you have to be plugged into this system called the Swift system. Can you just describe real quickly what Swift is and how generally it operates? >> Yeah. So, the Swift system is kind of like the central nervous system for the global financial system. >> Um, it's essentially a messaging system between global banks and financial institutions and non-bank entities that say this is how we're going to settle at the end of the day after all these transactions go back and forth from bank to bank and firm to firm. This is how they're going to settle. um and that it's kind of a centralized network. It's it's a centralized network with many decentralized nodes kind of all over, but it's essentially a way for global banks to interact with each other and come up with a uh a recognized way of settlement by the end of the day that we all agree about. >> Okay. Um but basically it's it's something you got to kind of apply to be in. You got to be in the in club to use. you can be denied it if we don't like what your country is doing. And contrary to popular belief, it is not like owned and and controlled by the US. Correct. We're influential in it. >> No, it's a it's a it's a European system. And again, it this is also kind of an outshoot of the Euro dollar market. You know, as the Euro dollar market grew, all of these European banks needed a way to communicate with each other to settle this now ever growing system of US dollar credit. And so the Swift system, you know, basically was birthed to meet that was birthed to meet that need. >> Okay. All right. Um, so two two points I want to make here hopefully to turn the tumblers in people's heads and really start seeing this through through Brett's lens. >> So first off, a US dollar stable coin system with its own rails. And by Rails, I'm just gonna say that it it's the code, the technology to just make it work, make it work seamlessly and easily. >> The plumbing. >> The plumbing. Yeah. >> Um it could be a lot more cheap, fast, and efficient than the current Swift system and the current uh you know Euro dollar. >> That's right. >> Creation system. Correct. >> Correct. And not only that, it could be a system via which it's it's programmable. I mean, this is computer code. >> Yeah. >> So, it's programmable. So, it it you know, it can be turned off and turned on pretty easily. >> Yeah. Let's hold that for one second. Um, but but but an offshoot of what you're saying there is it is a system that America would control. >> It wouldn't be a European system anymore, right? It would be a system that we built. >> Or at least it could be. It isn't yet, but it it very easily could be. >> Could could be. Um, and I'm realizing I I I probably should have started this conversation uh on the thing that governments care the most about, which is control. >> That's absolutely. >> So, we'll we'll bring it >> I was hoping you were going to get there. >> We'll bring it we'll bring it to that. I should I should have put that I might have put the cart before the horse here, but we're still now that we're deep enough in it. Let's finish it. Um, okay. So, so basically this US dollar stable coin system just could be just such a compellingly better way to do this than we currently do it right now. Right? So, that's for anybody who's invested in having to work with Swift or depending upon Euro dollar type loans and things like that. Okay. Now, let's talk about just the average person. >> Yeah. >> Right. You live in Venezuela, right? I mean, you don't live in Venezuela, but assume you live in Venezuela. What do you want to hold? Local currency or dollars? >> You would absolutely want to hold. >> You would absolutely want to hold dollars. Okay. Venezuela is kind of a disaster country at the moment, right? Let's go to a more legit country, but one that still has some inflationary problems. Turkey. >> Sure. >> Would you rather hold Turkey national currency or the dollar? >> You would absolutely want to hold the dollar. >> You'd absolutely want to hold the dollar. So already there you've got a big chunk of the countries in the world where the local populace would absolutely if given the chance say what do you want to what do you want to earn in what do you want to transact in what do you want to spend in they're all going to say dollars maybe they'd say they'd spend in their local currency but they all they all want to earn and transact in dollars right >> and many of them again I'm not making a store of value argument but versus their local currency the dollar is seen as a store of value >> right yeah >> yeah um which which is why they want to earn it. >> Exactly. [laughter] >> Yeah. So, right now it's just really hard for them to do so because either their country is, you know, a closed country, uh it's not in the Swift system, um or it's just there's just a lot of friction, you know, even in a, you know, European country. Uh there's just a lot of friction in trying to earn and transact in dollars inside a European country. >> Well, yeah. Yeah, that's right. And and the reason is is because governments don't want the populace operating in a currency they can't control, >> right? >> Because that erodess their own sovereignty, >> their own sovereignty. And we'll I'm just going to put a pin on that, too, because we're going to get to the control thing in a minute. But but basically, >> in your mind, best guess, just finger to the wind. What percent of the global population outside of the US if given the chance would choose to earn and transact in dollars versus anything else? >> Easily 50 and probably 70. >> Okay. So essentially that is what the U that's the opportunity the US stable coin unlocks. >> It's enormous. >> It's enormous. And once this is running it's kind of instantaneously available anywhere there's an internet connection. >> That's right. And see here, I I don't want to jump on to your topic of we're going to get to in a second, but this is where >> if if let's just use Turkey as an example. If if you are a Turkish uh uh person and you let's say you you run a little food stand uh a food cart, right? and you earn uh when the tourists come, you know, maybe sometimes they pay you in dollars, sometimes you get paid in LARA, so maybe sometimes you get paid in euro. Um, if you want to hold on to that in some form, you either hold on to the physical cash, >> which which many do, but if you actually wanted to have a bank account that was you you would have to find a bank that would let you hold euros or dollars in that bank. But then if you hold them in that bank, then that bank and the government itself can put a control. They can say, "Okay, first of all, you have to find a bank that'll let you hold dollars." So let's say let's say you have $10,000 in there. Well, then all of a sudden the Turkish l starts to fall in value. Turkish economy starts to go down. >> They're going to put controls on whether or not you can take that $10,000 out of that account. >> Y >> and so first you have to find the bank. Then you have to, you know, put put the money in it and then you have to be able to get it when you want it. And when a currency crisis or something, they put that clamp down, right? So even under the best case scenario, it it it's it's inefficient to go get that cash from the bank. So either you end up putting it under your mattress, which some of them do. >> Um >> but but this is why it's it's not an efficient system, right? And this is also why when you change money physically, there's a bigger big ass spread than if you're just sending it digitally, >> right? And I guess another complicating factor there too is let's say you wanted to get paid in dollars for your services inside a country. There's no mechanism there for you to invoice, right, you know, another company in dollars and for them to find a way >> unless you're on the Swift system, right? Yeah. Yeah. Yeah. Exactly. So the but but this all goes back to the the point I'm trying to open in people's minds, which is >> there is all this friction in the system, a system where the vast majority of people, if they could, would prefer to be transacting in dollars and all of that barrier goes away >> just like that. >> Just like that with the launch of a stable coin. And you know, we know, we both know George Gammon, um, who did a video, what about a year ago where he went down to Venezuela with >> It was Chile. >> Oh, was it Chile? >> It was from Chedro from Chile to to Buenosares. Okay. >> From Santiago to Buenosares. >> Okay. But anyways, so he he went down to some of these South American countries that were experiencing a lot of inflation, lines outside the banks, that type of stuff. And basically tried to see if people would, you know, if they preferred a dollar, if they preferred gold or if they preferred Bitcoin. And like the contest wasn't even close, right? Like almost nobody wanted the dollar in bitco the golden bitcoin, right? >> Everybody wanted the dollar, right? That's just the way the rest of the world thinks, right? Right. >> So from a red dollarization standpoint, >> it is pretty amazing. It's oh my god, you you you get all the euro dollar market and all the swift stuff already and then on top of that, you get some massive probably majority of transactions happening in the rest of the world that instantaneously would switch the dollars if given the chance. >> That's right. So, so not only and not only not only the people that kind of already have businesses that would prefer to do business in dollars, but you also get like all the global unbanked, the people that don't even have a bank. >> Right. Right. >> And just on that, so that's an argument that the Bitcoiners make a lot, which this is why Bitcoin's great. you know, you can use it in country X because, >> you know, the the hunter that runs your country right now is confiscatory and this is a way for you to get your wealth out or to, you know, if you're unbanked, you you can make a little bit of money, right? >> Yeah, you could still do that with Bitcoin, but if given the choice to do it in dollars, a huge chunk of them, maybe the vast majority would pick dollars for the reasons we mentioned at the beginning of this discussion. And what would that do to demand for Bitcoin? >> I don't really It could help Bitcoin. I I I don't really know. But to me, this is not a this is this is >> I know it's not a versus Bitcoin versus Bitcoin thing, but but you know, you you >> My point is just it's additional lunch for the US stable coin to use. >> Absolutely. Absolutely. Absolutely. Yeah. I I do think that there would be some people who would put their money that currently use Bitcoin that would use the US dollar instead. >> Yeah. Um Okay. So, hope hopefully folks now you're kind of getting the size of the opport the scope of the opportunity. In fact, I'm not even sure I'm still fully appreciating the scope of this opportunity if you're correct. >> It's kind of crazy. >> It's kind of crazy. So, okay. So, now the skeptics watching this are going to say, "Well, Brent, the other countries are just not going to go along with this, right? They'll just, you know, somehow shut this down." So, again, I should have started here, but this is essentially what a sovereign entity is, right? That's right. It is an entity that exerts control over a population within a geographic region. And one of the main ways they exert that control is to get everybody to use a common currency that they print themselves. U maybe I can you can talk about senorage and some other stuff in just a moment. But um this is the grand game of of thrones that the world plays right and you have given a lot of great presentations I've seen where you know you you kind of compare the global monetary system to a prison >> and at the end of the day what is the currency of the realm in the prison and it's basically what the biggest guy is willing to accept as currency. Right. >> Right. Um and right now on that world stage it's it's America. Right. And some people think, well, you know, China's going to displace you and it's going to, you know, maybe back the the buy gold or whatever. We can talk about that in a moment. But at the end of the day, it is about exerting control, keeping control or increasing your your sphere of control. And what you're talking about here is a way for the America to dramatically increase its already substantial unfair advantage over the rest of the world. And so it begs the question, why wouldn't America do this? Right. >> Right. >> And and I know you've talked a lot about this in our previous conversations where you're like, look, >> the world the the the the anti-doll people may be completely all their concerns may be completely right and valid about the evils of American monetary policy and what we're doing with our currency. Um, but there are the the bag of dirty tricks that the US has is large and deep and we probably haven't even reached in it all that far yet. And I I think a lot about um >> the uh the Star Wars uh trilogy, right? Starts off with New Hope, you know, where the the rebels, you know, they they blow up the Death Star, they get their first big win, but then what do you have, right? You've got uh uh the Empire Strikes Back and this may very well be a mechanism by which the Empire Strikes Back. >> Absolutely. Um and I think that that that's a great example and it's funny I've used that before because I think it's so great like at the end of the first movie they blow up the Death Star, right? That that's a huge victory >> and >> we created Bitcoin and it's achieved escape velocity or whatever. >> But the next eight movies aren't about peace and love in the galaxy. The battle continues, right? And so the idea that, you know, the US is just going to roll over because this this is what's funny to me is like a lot people tell me the the US is the is the the great evil in the world or it's the global bully or it's, you know, it's it's it's designed the system that enslaves the world through taxation and theft via inflation. >> And then they also tell me that, you know, they can't possibly win the next round. I'm like, they just enslaved the whole world by your own admission, [laughter] but they're just going to roll over and the next round's going to go to the next guy. >> Um, so, you know, without question, there's going to be a battle. And I don't know exactly how this is going to play out. And the other countries will without question fight back because they have to. If they don't fight back, they will cease to exist. So, they will without question, they will fight back. I think there's a few countries that will be able to do so uh from a much stronger position than many others. Um and I think the the sooner the the more stronger countries start to fight back, the better because the longer it allows to go unchallenged, the the more entrenched the dollar will become. >> Okay. So, I know we're we're still in the realm of the academic here. Um, but how how uh defensible is a country against this? Because basically, sort of like Bitcoin, as long as you have an internet connection, you can take advantage of the US dollar stable coin rails. >> I don't think there's a lot they can do other than crack down really hard uh legally within their jurisdiction. And listen, like the reason governments exist is because they have a monopoly on violence. And I hate to bring that up, but that's that's the truth, right? And so if they if they throw people in prison or if they, you know, take their businesses or confiscate their assets that that that will deter people from breaking the law, quote unquote, in that country, but it won't stop everybody. Um, and like I said, the bigger, stronger countries who have stronger economies, like like well, let's just use China as an example. within China. Um, you know, I think the Chinese citizens are probably buying gold because they don't really trust the yuan, right? But I think within China, they they use the yuan pretty freely and probably much more than the dollar. So, and and China is a big strong technologically advanced country. They can probably introduce their own EU or whatever it is. And internally that probably uh is is better at defending against the dollar stable coin than perhaps Turkey or Egypt or you know Afghanistan or Venezuela would be. But I don't think it will be perfect and I I I think it will still >> um it it it's like water. It just seeps in, right? It's like you can't it's hard to like keep it completely out. So that's a China which is very centrally controlled and both the government and the people are used to really heavy-handed tactics like this, right? What about like a France or a Germany? I mean Europe is just in so much trouble. I I just don't know how else to say it. I I'd like to be more polite about it, but you know, they you know, Lagarde was out last week talking about the the eur the euro or the digital euro, >> and she should be talking about it because they're trying as hard as they can to maintain control. >> And and we we we touched on this earlier, but people need to understand this. Whether you think that money is the, you know, most marketable commodity that's chosen by the market or whether you think it is the tribute or the token that's demanded by the king for tribute. Maybe it's both, maybe it's one or the other, but it is a form of control. It it is a tool that governments use to control their citizens that you know they raise taxes, they lower taxes, they they increase regulations, they decrease they try to influence people to to take certain actions by using money. So the idea that a country is going to give up that control either well they certainly won't give it up willingly uh but if it's taken from them anyway their control on the situation starts to erode pretty quickly. And this is why whenever you've seen a country go through a currency crisis typically the government falls shortly thereafter because if you lose control of the currency you lose control. >> Well so I mean just think about this. We we we [laughter] we've just gone through this reshuffleling of global trade, right? We're still going through it, right? Where basically Trump kind of forced everybody to pick aside team America or team China, right? >> What does this do over time to everybody who chose team America? >> Well, I think they're going to get dollarized. I I I I this is the conclusion I've come to and I I can't really figure out how they don't if and here's here's the thing. Do do we do we turn our allies into adversaries through this process then? >> It >> how long is how long is Great Britain going to sit there as we take more and more of their currency. Sure. >> Well, this is the thing is like if somebody if if you influence somebody to come to your side, are they your ally or are they your adversary? >> It's a fine line, right? >> Or are they doing it because they have to? Are they doing it because they have to or are they doing it because they choose to? >> And I think some people, countries will come willingly, some will come because they're coerced and some will leave, >> right? >> Or at least try to leave. >> And you know, watch Game of Thrones. Sometimes this ends up very well and sometimes it ends up really badly. I I I I don't like to be too alarmist and too, you know, >> I know, but my brain is going to some of these things, >> but this is the big game. We've talked about this before. Before we ever talked about stable coins, we're talking this is the big game. Like this is, you know, China versus the United States, East versus West. >> And that's what I want you folk to take from this, folks, which is like US stable coins, if Brent is right, perhaps becomes the ring of power in the great game, right? I mean, it becomes the thing that lets you take the entire risk board, at least monetarily. or not only that, it's like the dollar is already the ring of power in my opinion. And this is a way >> to just entrench it even more. And it's and the craziest thing in the same way that the Euro dollar market built the Euro dollar prison that the that the world is now in. >> Stable coins is a way to turbocharge that and not only turbocharge it, but give the US more control over it because with the Euro dollar system, the US has more control than any other country. But they don't have full control. They don't have full visitability. It's a very opaque and ar in some ways arcane system. It's kind of the Rube Goldberg. >> Yep. >> This is the the stable coin system is very elegant and very controllable and highly transparent for for whoever is programming. And so I think as of now they're just kind of letting it develop on its own in much the same way that the Euro dollar market developed. >> Y >> but they could very eat. But here's the other thing is if let's say they were to say to if they if they were to say we now want to transact with our trade partners in the US >> give me a sheet of paper here. I I keep going keep going. Um, if if we're going to if if if major US companies or the US government were to say with our trading partners, we would now like to receive payment via this new stable coin system as opposed to the traditional Swift system. you're now cannibalizing the traditional Euro dollar plumbing system >> and it's moving over to a system that the US has more control over more visibility over >> etc. And the the example I've used in my paper is this is our they they've done this before like >> for years the liebore market right >> was the interest rate for the euro dollar system. The US had some influence over it but didn't have total control of that interest rate >> and for sure we wanted that control just couldn't find our way in. Y >> but you know over the last six seven eight years they were able to transform that you >> the library scandal they used that to their advantage. use that to their advantage and they use their political pressure to their advantage and they've gotten a change to a sofur the secured overnight funding rate which is a US-based rate and which they have full control over and so you know and the other thing I would say is this idea of using money as a weapon or a means of control this is not a theory that Brent Johnson came up with this is this is literally in the army handbook like they know how to use >> and you actually cite this in I mean, this this is doctrine. This is again, this isn't theory. This is doctrine. >> These are the rules of the game. >> These are the rules of the game. >> And they've been doing this for a long time. And so, it's it's not that big of a jump to say >> if the army knows how to deploy this when they go into action in another country, wouldn't be that hard for politicians in DC to, you know, use the same method, you know, over these stable coin rails, >> right? So folks, if you don't like this, right, [laughter] you know, the the the the point to take away from Brent just said there is is you got to think about it in terms of the way the world works and at the sovereign level it is if it gives me more control, >> I am going to do it unless there is a cost to it that somehow is too large. But here >> unless and I will say there will undoubtedly be push back. There will undoubtedly be unintended consequences. There will undoubtedly be countries, corporations, entities that do not like this and there will be a battle when when it when it becomes confrontational. I don't know exactly how it's going to play out. Again, I'm sure there will be some unintended consequences and I don't expect the US to just push a button and it's like >> everything's totally under their control, >> but this is about as an elegant way to invade another country without even people realizing it that I've ever seen. >> Seen. Yeah. Yeah. >> Um, and it's again, if you if you're angry at the US for potentially doing this, is there any country on earth that wouldn't do it if given access to the same technology? >> I don't think so. And here's the >> when you really step back at it, right? Like >> countries have fought over resources and money and treasure for all of history >> since before history. >> I don't think that we are so elevated intellectually that we no longer think that way. In many ways, I think street gangs and governments are very similar. The people in the middle like to think of themselves as, you know, more intellectual, but at those two levels, it's very similar. >> Um, and so the idea that the the that the it's like when let's go back to the ring of power. When Boromir is like talking about the ring, he's like, "This is a gift, right? Why would we not use this?" And only Frodo is able to withstand that, right? Well, I don't think we have a Froto. >> Froto. Exactly. [laughter] Maybe it's Antarctica, but yeah. Yeah. >> Um, all right. So, I had to ask these gentlemen to to give me um some paper to write these down before I forgot because again, when when you start tugging at the string, folks, you just start realizing there's so many massive layers to this. So, okay, we've just talked about this as a way to red dollarize the rest of the world. >> What happens domestically? >> Well, it's again, it's a >> Does the US stable coin become the coin of the realm here, too? >> I think it does. And [clears throat] we're all in a digital dollar. >> And how is that different from a CBDC in people's? >> Well, it's because it's not issued by the Fed. It's issued by the Treasury. >> Well, yeah. And that [laughter] and that's going to go to my next question, which is do you need a banking system after this? >> Okay. So, that's okay. >> There's so many layers to this. >> My my my podcast this last weekend was titled financial battlefields because this opens up so many battlefields >> and >> it's hard to get your head around how many different battlefields there are, but the Essentially, if you have a US dollar stable coin that's issued by the Treasury, you don't really need the banks. >> Right. >> Right. Right. You certainly don't need a Fed and you Well, you certainly don't need 14,000 banks. Maybe you need 10 or 20. Right. And this is I don't know exactly how they're going to do this. I don't know if they're going to issue a U official US dollar stable coin. if they're going to grant licenses to 20 different entities and then they create their own stable coins. Or maybe they'll just let anybody issue their own stable coin so long as they follow the rules that are outlined in the Genus Act. >> Um but regardless of which way they go, new battle lines are are drawn and and people are going to compete for for for for that territory. And uh ultimately I do think that the the the US dollar stable coin and and I don't think it'll work that much differently internally than it already does. You know, think of it like you know for a long some people still use cash but most people just use a card, right? And so now maybe people stop using their card and they use their phone and they just boom, >> right? But then I mean all the fears that people had around the CBDC, right? >> Oh, I think they're back on the table. >> The government knows exactly what I'm spending it on. uh all of a sudden I don't have cash to be anonymous with. They don't like what I'm doing. They can shut down my >> So I think we'll all So I think well okay so this is where it gets really interesting too is because >> I mean the battle lines are countries financial citizens. >> This is potentially a way and I haven't got this perfectly thought out. It's potentially a way to separate a domestic US dollar from a Euro dollar. Like right now they're very >> funible >> and maybe the idea is to keep them funible but it's also potentially a way that they could separate the two. >> And but but again going back to your point do all the things that we feared about a central bank digital currency come back on the table. Yeah. >> I mean they want to control us too, right? Like we're not going to be spared in this. >> Yeah. I mean so Brent this has been you know just like I said a mind-blowing discussion. Um, I I think you really hit a gusher here when when you wrote this report. I'm very curious to see sort of where it goes, but you know, I still feel like I'm I'm I'm still just wrapping my brain around it. >> I I'm going to I'll ask you and I'll ask anybody who's listening, if if you think I'm on the right track, you know, thank you. If you think I'm not, tell me. Yeah. >> If you think I'm missing something, tell me that, too, >> because I I don't have this completely figured out. I think I have a pretty good handle on it. Y um and and and the interesting thing is since I've put this paper out, I've gotten >> a lot of feedback on it and some people have said this is exactly what they're doing. >> Now whether those people are right or not, I don't know. But >> um I'm just curious any of those people been like I'm a person in the know and >> these are pretty smart people. >> People Yeah. [laughter] I mean not surprising to me because I think you're a smart guy. Scary to me because again >> it is scary. >> Yeah, it it is really pretty scary. So there probably a bunch of folks here that we we we might be creating some sleepless nights here, Brent, but I I I very much value the fact that you had the courage. Well, you had the intellectual brain power to to put these pieces together, the courage to, >> you know, put it out in the world and to be, you know, taking the pin wax that people will be taking at you here. But hopefully that's just going to hammer help hammer the picture into clearer shape here as we go. >> Um, you're definitely going to take some of those piñata wax tomorrow uh at the conference [laughter] from the Peter Schiffs of the world. >> That's what makes it fun. >> Yeah. And I don't know how you're going to summarize this for the audience in like the three minutes I'm going to give you to do so that we have time for >> after the panel then I'm going doing a whole speech on it. So I'll just say tune in later. >> Okay. Okay. Good. Um so anyways folks um please uh do me a favor and [clears throat] show your appreciation for Brent in the comments of the video. Um also just to let him know too how much you appreciate it, hit that like button as many times as you can as well as the subscribe button below and that little bell icon right next to it. Brent, as we start to wrap up here, um, you know, I want to say what kind of investing strategy comes out of this, and I'm not even sure one does, but um, I mean, look, if you live in the US, you're going to be swimming in dollars no matter what happens for the most part. If you're in the rest of the world, maybe this is a real convenience for you, but it's an inconvenience and maybe a threat to your country. But, you know, a lot of people are going to choose the dollar anyways. As just sort of a a US investor that that sees this, is there opportunity here to seize or is there a way to >> Well, I think this is one of I I think this is what I would say is, you know, >> you brought up Peter Schiff and I listen, Peter's a friend of mine. I I love Peter. He drives me crazy, but I love him. Right. Um, Lawrence Leopard Leard is another one. and you know all of the people who are telling you that the dollar is going to die and you need to get into hard assets and you know the dollar's going to you know its days are numbered sure get into real assets you know have some exposure to those things fiat currency loses value over time but the people who tell you that the US cannot possibly win this trade war or cannot possibly extend their you know empire or cannot possibly uh last as a global hedgeimon for another decade or two decades or whatever it is like temper that a little bit like you're you you're if if that is your belief you are betting against immeasurable power >> power and let me ask you this your dollar milkshake theory basically says look the way the system is set up that the US has an unfair advantage and especially when the world gets into trouble but even not capital will seek the US that's right >> and that will keep the dollar strong and and again folks should have said this at the separate in your mind strong dollar versus other fiat currencies versus the dollar's purchasing power versus real things. You can have a strong dollar via other currencies that is losing purchasing power versus real things. That's right. >> So when Brenda is talking about a strong dollar, he generally is meaning >> the the the former which is the dollar versus the other world currencies. But this US dollar US uh dollar stable coin system once it pervades the rest of the world is it that is it sucking capital in on steroids is is this a way to bring even more foreign capital to support our economy and markets? >> I think so. Yeah. >> Yeah. >> Yeah. >> So it it takes the unfair advantage and and even makes it more unfair. And it and it may even help those economies thrive or or grow better than they are now. >> Well, especially some of the ones that just have terrible, you know, monetary management. >> Exactly. Exactly. So I mean this is the thing is the if you're a free market person >> a lot of the people who gravitate towards gold, Bitcoin, hard money, you know, sound money, they're free market libertarian minded people. >> Yeah, >> the free market has already chosen the dollar as a global currency. You might not like that, but it did. And um I think this stable coin is a way that the free market will dollarize the world. >> Okay. And ju just in wrapping up, I want to make sure folks understand because I've known you for a good while, Brent. Um you're not a dollar lover. >> No. >> You're you're a guy who's >> This scares me to be honest. Like this is Yeah. >> Yeah. Um you you are just trying to help people understand the world as it is and as it is likely to be. And for people that say, "Oh, well then Brent hates gold and Bitcoin stuff." You're not you're actually a fan of owning >> art assets. >> This is a great reason to to own gold >> because gold is like a put on the whole system, right? And so I don't know that this is going to go well. I don't know that it's going to go perfectly. It may very well cause chaos. And gold probably does well in a world where there is chaos. But the dollar to me there's nothing more bullish for gold than a strong dollar because a strong dollar kind of wrecks the system and causes chaos. >> And gold does pretty well. >> Gold does pretty well in chaos. Yeah. And I'm just curious too, so as more and more foreign capital converts itself into US stable coin and if the US adopts its own domestic US stable coin, whether it's the same thing or you know domestic version, does that just mean increasingly more and more currency supply and therefore you want to honeart assets against that as well? >> Probably. >> Okay. >> Probably. >> Yeah. I'm still trying to think through this as well. [laughter] >> Yeah. So, in other words, this may just be a multiplier for why you want to own art assets, right? Chaos aside, right? Yeah. >> Yeah. All right. Well, um, Brent, look, I can't thank you enough. It's been so fun to do this with you in person. Huge thanks again to Russ Gray and the folks at Main Street Media Network for letting us use the booth here and everybody else. Thanks so much for watching.