Jack Mallers explores the Fed-Treasury alliance, stablecoins' growth, inflation's role, and Bitcoin's rise in a shifting monetary landscape. Insights on regime changes and financial strategies.
Timestamped Overview
[00:00:11 - 00:05:14] Introduction and Bitcoin Update
- Jack starts his show from a closet, sharing the current Bitcoin price at $117,340 and market cap of $2.33 trillion.
- He explains Bitcoin block time as an alternative to regular time for those interested in crypto basics.
- Discusses the Genius Act, a new law for stablecoins (digital dollars), and why it matters even if you don’t use them.
- Stablecoins help people in other countries access U.S. dollars easily, like a digital version of cash.
- Plays a clip from Treasury Secretary Scott Bessent praising the law for boosting the dollar globally.
[00:05:14 - 00:11:05] Stablecoins and Bitcoin Connection
- Jack notes he doesn’t use stablecoins but sees their value for others, like customers in Africa or Latin America.
- Shows a chart linking stablecoin growth (like Tether) to Bitcoin’s rise, as they often trade together.
- Explains that when Bitcoin’s value increases, more stablecoins are needed for trading, creating a cycle.
- If stablecoins grow to trillions, it could push Bitcoin’s value much higher, like to over a million dollars per coin.
- Introduces the idea of a “regime change” at the Fed, meaning big shifts in how money is managed.
[00:11:05 - 00:21:10] Fed Regime Change Discussion
- Shares a CNBC clip with Kevin Warsh calling for changes at the Fed to support economic growth.
- Warsh criticizes the Fed’s old models and suggests it’s not fully independent from the government.
- Explains inflation simply: it happens when the government prints and spends too much money.
- Jack highlights how the Fed and Treasury are “remarrying,” meaning closer ties to handle U.S. debt.
- Notes the Fed lost credibility by mishandling rates, leading to higher prices for everyday things.
[00:21:10 - 00:34:06] Attacks on Fed Chair and Historical Ties
- Discusses criticism of Fed Chair Jerome Powell over a building renovation, seen as wasteful.
- Plays a clip from Scott Bessent questioning the Fed’s effectiveness, like overpaid economists doing little.
- Explains fiscal dominance: government debt drives decisions, not just interest rates.
- Shows a historical chart where Fed-Treasury partnership during wars grew the Fed’s assets by 10 times.
- Links this to stablecoins buying short-term debt (T-bills) to fund the government without sparking immediate inflation.
[00:34:06 - 00:57:50] Bitcoin as Inflation Sink and Global Shifts
- Jack’s thesis: Grow Bitcoin to boost stablecoins, absorbing printed money without inflating goods like eggs or housing.
- Explains debasing the dollar (making it worth less) against Bitcoin or gold to manage debt.
- Notes Trump family buying $2B in Bitcoin and opening retirement accounts to crypto for everyday Americans.
- Discusses Russia using crypto for oil trades to avoid sanctions, signaling a move away from U.S. dollars.
- Ends with unprofitable companies booming irrationally and an NFL example showing inflation’s impact on earnings.
Notable Quotes
Bitcoin Price and Market
I'm talking to you all with a Bitcoin price of $117,340 that puts Bitcoin's market capitalization at $2.33 trillion.
Jack Mallers @jackmallers
Stablecoins and Bitcoin Growth
When Bitcoin grows, Tether has to grow. There is a direct relationship where if Bitcoin is going to be $20 trillion, then take whatever the ratio is today and multiply it by 10 for Tether.
Jack Mallers @jackmallers
Monetary Regime Change
We are living through a new regime change. I've said it for years now. The post-World War II monetary regime is over. It's dead.
Jack Mallers @jackmallers
Inflation Causes
Inflation is caused by printing money. Yeah, I know. Did you just propose that as a new idea, jackass? That's not a new idea.
Jack Mallers @jackmallers
Debasement Strategy
Debase the dollar against Bitcoin and gold. Are you guys following me now? That's the stable coin idea.
Jack Mallers @jackmallers
Bitcoin's Role
Bitcoin is the sink for stable coin liquidity. So stable coin is the sink for fiat inflation liquidity, and Bitcoin is the sink for stable coin liquidity.
Jack Mallers @jackmallers
Personal Responsibility
The only way to restore harmony in society is the renewal of personal responsibility. And so, Bitcoin rewards those that seek out personal responsibility.
Jack Mallers @jackmallers