The Future of Bitcoin with Travis Kling on The Pomp Podcast with Anthony Pompliano

Check out this Episode and Show Notes

Key Takeaways

  • The U.S. will hold China responsible for the Coronavirus epidemic and demand a full account of the facts
  • The Coronavirus is the Great Accelerator: in the next ten years the Euro will be extinct and the US digital  dollar will become reality
  • Trump ran on a Make America Great Again platform – the Coronavirus will accelerate his policies
  • The stock market has become more of a representation of central bank actions
  • De-globalization will help with inflation because the U.S. now understands the hazards of having critical supply chains offshore
  • “The older fund managers still think Bitcoin is magic internet money for drug dealers to buy drugs on the internet” – Travis Kling
  • The US dollar being the world currency is a “pain in China’s ass”
  • This generation could shift the world reserve currency from the U.S. dollar to non-sovereign currency, (Bitcoin) governed by open-source computer software
  • Prediction: Disposable personal income for 2020 will be up 0.5% from 2019 thanks to stimulus dollars

Intro

Travis Kling (@Travis_Kling) is the Founder and Chief Investment Officer at Ikigai Asset Management, a crypto hedge fund

Host: Anthony Pompliano (@APomliano)

Coronavirus = “The Great Accelerator”

  • The Coronavirus is the Great Accelerator: it accelerated trends already on the way
    • E.g) Working from home
  • The economic fallout caused by the virus also exposed shams like the over-valuation of companies
  • It exacerbated the dollar shortage already in place before the virus hit, especially in the capital markets
    • One of the reasons why the Fed acted quickly and with so much money in 45 days was to solve a liquidity crunch
  • “We crossed the Rubicon so rapidly that things previously thought unacceptable, were now okay” – Travis Kling

The U.S. Dollar’s Role in the Macroeconomic World

  • The U.S. Dollar is the world reserve currency
  • Countries around the world transact in the U.S. dollar because it’s stable
  • The dollar shortage has been going on for at least one year
  • In March when the crisis hit, countries around world couldn’t get enough U.S. dollars
  • The $ 7trillion (total) stimulus released in March/April dwarfed the $2 trillion spent during the 2008-2009 financial crisis and the dollar index (DIXIE) didn’t change – that’s how short the world was of US dollars
    • Dixie – dollar index, dollar weighted against a basket of currencies
  • Prediction from Goldman Sachs: Disposable personal income for 2020 will be up 0.5% from 2019, possibly because of massive amounts of stimulus
  • The way to urge recovery, is to weaken the dollar by flooding the market with currency

The Stock Market’s Performance Reflects Increased Liquidity from the Central Bank

  • The stock market has become more of a representation of central bank actions
  • It’s hard to walk back the stimulus, some people are making more money being unemployed than working their regular jobs

How Much Political Posturing Plays into Policy?

  • It’s disappointing how political the response has become. I’d hope we could have done better” – Travis Kling
  • The fighting over the stimulus is just posturing – the choice is between an unbelievable amount of money to a really unbelievable amount of money

Deglobalization Will Help Promote Inflation

  • The US government is searching for an inflation rate of 2% – so they’ll keep doing more in terms of monetary and fiscal stimulus
  • The Coronavirus is a deflationary event
  • Other deflationary factors:
    • An elderly population
    • Oil price pullback
  • Unprofitable companies pose a problem because the market allows them to issue debt for businesses that don’t generate cash flow – it’s like throwing capital into a hole that isn’t producing GDP
  • Deglobalization will help with inflation because the U.S. now understands the hazards of moving critical supply chains offshore like pharmaceuticals, PPE, microchips
  • It will take $300 billion to bring back supply chain from China AND in the process create more jobs in the U.S.- it will help inflation and fight communism
  • With the 2008 financial crisis, inflation never observed
  • “Right now, everybody’s in worst shape then we are, the Euro and the Yen”-Travis Kling

Geopolitical Impact of the Coronavirus

  • Trump ran on a Make America Great Again platform – the Coronavirus will accelerate his policies
  • Many of Trump’s policies appear to be driven by Steve Bannon who understands the geopolitical landscape but who Travis believes is “hawkish”
  • The U.S. will hold China responsible for the Coronavirus epidemic and demand complete disclosure of facts
    • Intelligence agencies are all over it already
  • Conservatives view the Chinese government as a bad actor
  • The US is about to put the screws to China in a bunch of different ways – then we’ll see how strong their economy is -Travis Kling
  • It is unlikely that conflict will emerge between the U.S. and China. Experts say China does not have an interest in a physical war
  • Some think China itself might be on the verge of a breakup

Currency Comes Down to Trust

  • The transition of world reserve currency happens in times of upheaval
    • Last time was after WWI when the British pound was wrecked
  • Between wars, both the pound and dollar were used
  • After WWII, the U.S. dollar became the world reserve currency standard

A Post-U.S. Dollar as World Reserver Currency World

  • This generation could go to non-sovereign currency, governed by open-source computer software” Travis Kling
  • Other countries may get tired with US-China economic battles
  • But the U.S. government says it has infinite money

The Generation Gap and Bitcoin

  • The older generation thinks the younger generation shouldn’t complain about their government
  • But people want transparency – in the last 90 days new investors are looking into Bitcoin and the crypto community
  • In uncertain times, investors can do four things:
    • Hold gold
    • Hold dollars –  but it can devalue in the long term
    • Hold land
    • Hold Bitcoin
  • The same parties that drive gold and real estate will drive Bitcoin
  • If the S&P goes up, Bitcoin will benefit
  • Anti-fragility is a key part of Bitcoin
  • Bitcoin was down 50% on black Thursday but the magnitude of the bounce-back was just as impressive led mostly by U.S. retail buyers
  • Look at monetary systems, it is a belief system, and no group believes its currency more than Bitcoiners” – Anthony Pompliano

Expect Greater Institutional Adoption of Bitcoin

  • Big fund managers own bitcoin personally but don’t have it in their institutional portfolio
  • But that’s starting to change – doubters are aging out of the job over time: “The seventy- year-olds still think this is magic internet money for drug dealers to buy drugs on the internet” – Travis Kling

Predictions

  • As we move through the 2020s, we can expect huge changes
    • The Euro will be extinct
    • Africa will be home to the largest potential growth in the next ten years
    • The digital dollar is coming
  • “The internet is going to break the Fed because it is dependent upon 50% of Americans not understanding how monetary policy works. People will say this is a rigged system”
  • A year from now, there will be all-time highs and accumulation will be happening in Bitcoin
  • Helpful Data Point: How much leverage is in the bitcoin price discovery process, and how much in longs and shorts
Pomp Podcast : , , , , , , ,
Notes By EWerbitsky

More Notes on these topics

Top Insights and Tactics From

31 Best Podcasts of All Time

FREE when you join over 12,000 subscribers to the
Podcast Notes newsletter

No Thanks