🎙️ Crypto, Legacy, and Value | Mark Yusko

welcomes bankless where we explore the frontier of internet money and internet finance this is how to get started how to get better and how to front run the opportunity i'm ryan sean adams i'm here with david hoffman and we're here to help you become more bangles david excited about this next guest he is a seasoned investor on both the traditional finance side and also on the crypto side learned a lot in this episode uh tell us what we covered uh we covered so much and it's always

really good uh to get people's perspective like mark huskos where they know money they know finance also they are not tricked by some of the uh the uh shenanigans i would say is going on in the legacy market specifically with regards to the federal reserve and mark has a lot of very strong opinions with how the federal reserve has really dictated how the world works uh and and so that was that was just always a treat to to hear that perspective from somebody who is a seasoned legacy

investor who is also very attuned to what is going on in the world of crypto and getting more and more attuned every single step of the way and i think there's a lot of through lines between what mark values and what he sees as valuable and what we are seeing going on in ethereum and in the defy app player and i actually don't think mark has all gotten all the way there yet i don't think he completely sees what we see uh but that is kind of the the unique perspective that uh that mark brings is

that he sees things as valuable and he went through a list of things that he sees as valuable and what i saw is him rattling the loss of ethereum character rattling off a list of ethereum characteristics uh and so if mark represents uh the typical seasoned skeptical investor uh that is makes me very optimistic about the future of this industry yeah absolutely i there so there are three parts to this conversation the first part we talk about the the world as it is now what's happening in the macro world and mark absolutely tears

into banks he tears into uh central banks the federal reserve um talking about how the existing markets have become almost a ponzi game and then we got to talking about crypto and we asked him the question about eth basically the question is eth money and this is an interesting conversation because uh mark has partnered with anthony popliano and there have been many twitter back in fourths between myself david and anthony about this question um some people like pomp think that eth is uh not a money

that only bitcoin has established the ability to become a store of value asset of course bankless is much more open in fact sees the emergence of ether as a money in addition to bitcoin as money we've talked so much about ultrasound money uh and the future of ethereum it's it's just really hard for me to take a contrary viewpoint so we talked to mark about that and got his insight i don't think he completely agrees with his partner on this but he also doesn't completely agree with the

bankless idea on is eath money so uh that was an interesting conversation and then we ended with what are the tips for crypto natives so somebody who's you know crypto might be their first real investing experience there are some timeless ideas timeless concepts from traditional investing that somebody like mark can bestow so it's worth listening all the way to this end of this jam-packed episode david before we get to this conversation with mark we want to thank the sponsors that made this episode possible bankless is proud to be

supported by uniswap uniswap is a new paradigm in asset exchange infrastructure instead of a cumbersome order book system where trades are matched with other humans uniswap is an autonomous piece of software on ethereum which is what ryan and i call a money robot no human counterparties or centralized intermediaries just autonomous code on ethereum input the token you want to sell and receive the token you want to buy something brand new in the uni-swap ecosystem is the uniswap grants program is now accepting

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direction that you think it should go that's exactly what we did to get uniswop to be a sponsor for bankless and you can do the same for your project thank you uniswap for sponsoring bankless ave is a borrowing and lending protocol on ethereum and just recently released ave version 2 which has a ton of cool new features that makes using ave even more powerful with ave you can leverage the full power of defy money legos yield and composability all in one application on ave there are a ton of

assets that you can deposit in order to gain yield and all of those same assets can also be borrowed from the protocol if you have deposited collateral here you can see me getting a 200 usdc loan against my portfolio of a number of different defy tokens and eth i'll choose a variable interest rate because it's a lower rate than the stable interest rate option but i could choose the stable interest rate option if i wanted to lock that interest rate in permanently one of ave's v2 features is the ability to swap collateral without having to withdraw your assets trade

them on unit swap and then deposit them back into ave ave does all of this for you all in one seamless transaction so you don't have to repay loans in order to change the collateral you have backing them check out the power of ave at ave dot com that's aave.com bank bankless nation we are super excited to have our next guest mark yusko he is the founder and chief investment officer of morgan creek capital that is the traditional legacy side of investing and he's also a managing partner at morgan creek digital

assets which is the crypto side we're going to talk a lot about legacy and crypto and the bridges between them he currently manages uh close to 2 billion in assets how are you doing mark it's great to have you on bankless all right doing great ryan thanks for having me and uh although i guess is it ryan only or is it ryan sean oh wow i go i just go by ryan only on the podcast you know ryan john adams is there was a singer songwriter ryan adams you may be familiar with him he sort of he took my name first right so because i

came after i had to insert the middle name and uh that's what i'm doing now now i actually never asked that question before really i always use my middle initial and people look at me like why do you and i kind of know so my dad did it and so i do it yeah so i'm always mark w so yeah you have to have like um a unique identity i think because the internet is so large i'm i think i'm not even sure how many other ryan adams are there out there there's got to be hundreds there's probably orion adams out there listening to this podcast right now yes and there are not a lot of mark yusukos although there is one

up in greenwich connecticut and he is a dj uh for some small radio station and so i've had whenever i go up in the the east they're like oh i heard you on the radio like no yeah yeah so all right that's cool you got a dj i have a rock star it's you know yeah yeah yours is better well if we're on the same subject there's a dave hoffman lawyer out there who did an analysis of ico claims about vesting schedules and then he actually went into these smart contracts and looked at if the icos

the contracts investing contracts actually upheld what the actual commitments were and he found out that like 95 percent of them were not uh and that was dave hoffman the lawyer i love it well and and i think you should just go with with hoff right because hasselhoff uses that so that was high school yeah exactly we need to get the other david hoffman on the podcast smells it sounds pretty smart yeah all right mark let's talk about this we are going to talk about crypto as a wealth creation opportunity i think that's going to be the through line and

theme of this we also want your advice for the crypto natives listening to this podcast that's our audience mark for a lot of the crypto natives the asset class where they learn to invest is actually crypto right so there's some timeless things that i think you know that we want to transfer to this new generation we really want you to be sort of our sherpa our our bridge there are some things that are different in crypto there's crypto there are some things that uh stay the same but i want to start with the big picture the thing that affects everybody both in the

traditional markets and in the crypto markets and that is the macro landscape in uh 2021 what is happening in the macro world it feels like things are getting crazy we've got stocks at all-time highs we've just had uh corona um you know wreck things for over a year but stocks at all-time high is wealth inequality at all-time highs debt levels at all-time highs may be distrust in our current legacy institutions at all-time

highs i'm not sure what is going on uh money printing liquidity and to your point they're they're only at all time high stocks or only at all-time highs if you denominate them in you know the toilet paper we've created which is the us dollar and uh what's interesting is if you look at u.s equities uh since 2008 they appear to be up right the nominal prices is higher the index number is

higher however if you denominate by central bank assets by fed balance sheet dead flat okay so let that sink in for a second if you denominate in gold which is real money and has been real money for 5 000 years we're at the same level in u.s stock prices as we were in 1996. okay now if you were to denominate the s p

over the past uh few years in bitcoin it's ugly so it's all about your reference currency and this is called money illusion and it's been going on since 1913 and you know yes what's going on macro is the the plan is being executed flawlessly right the dictator playbook and the dictator gets to the top and surrounds himself with cronies the cronies own all the assets and then you devalue the currency and it's been going

on since 1913 and it was a plan hatched by amy aldridge john d rockefeller's father-in-law along with john d and and jp morgan his buddy and it's it's been executed flawlessly and and covid was an accelerant in literally it poured gasoline on this this paper currency bonfire that we've been having for the last hundred years and here's a crazy stat right i'm sure you've heard it right 39 of all the

dollars ever printed in the history of our republic were printed in the last 12 months and so we have this illusion that things are going up and you see it every day right housing prices went up the most ever quarter over quarter in first quarter 18 1 8 in one quarter housing prices went up you know collectible art they take the people right i'm not a fan you know no accounting for taste some people like it i don't like it but i

respect i respect what he did right i have not brushed my teeth every day for the last 13 years the dude created a piece of art every day for 13 years so i respect that and put it all together and created one and one of anything can be uh valuable now it doesn't mean that everything that has one should be valuable so not every nfd is going to be good but um anyway that's a long rambling answer ryan to to your question but it it's so important right now to to step back and

say okay this is a liquidity event well what does liquidity mean and i have this great chart and we don't have charts but just visualize if you will a straight line for 5 000 years and that is gold and for for 5 000 years literally one ounce of gold has bought a fine man suit which i guess now i say find person suit but but a fine man's suit from a suit of armor to a suit during the american revolution to a zoo suit in the 20s to a fine man's suit

on savile row today one ounce of gold now it was money for all that period and money is different than currency money means something that exists in the absence of a liability so gold has been money currency is different currency has liabilities associated governments issue currency by issuing debt and so governments perpetuate this myth that currency is valuable but what's really happening is it gets

devalued which creates the income and wealth inequality that you talk about and so in 1974 we untethered our world from the gold standard and we went to a fiat system which means money could be created by fiat by whim and that's when things started to get really ugly so if you look at income inequality wealth inequality racial all the things that get fomented when you divide the classes it all really accelerated in 1974

and that's the point at which uh we went to a fiat system so now the line changes color from gold to green well now in 2008 and it's not it is not a coincidence that bitcoin was released i won't say created but was we're not released at the depths of the financial crisis that was not an accident right it didn't just happen overnight they were working on it for a while again whoever he she they are satoshi came along and said okay i'm going to create this thing there's not

an accident that the genesis block as a reference to the chancellor's bailout none of that is accidental and so now it's the x factor so we got the x that fiat currency is going to slowly decline and cryptocurrency is going to slowly ascend so mark that is a really insightful answer and i think i've heard people articulate it um similar sentiments before but none as explicitly as as you did just now i think what you're saying is

basically a fiat currency modern monetary policy is the root of this warping effect that we see across all assets but you said something different and this is the part that was most explicit to me and maybe comes out in a tweet i recently read um from you which you said the fed has only one goal just one goal to transfer wealth from average citizens to banksters and the top one percent through stealth tax of inflation what you're

saying implies something a bit more insidious that sinister right that this has been all part of a um priest you know prepared plan since the early 1900s and it's now just coming to fruition it's not sort of a an accident of the system or a byproduct or an after effect this is very intentional is is that the case absolutely intentional come on and and people get all mad like how can you say this you know you're going to get put on some

target list and no i'm not look people don't care what i say um the reality is that jp morgan right was the original bankster and he created this incredible organization and there was a law passed well let's let's back even up further so banks were started by the medicis in the 1300s with this idea that you needed a central middleman to uh referee lending so in the good old

days right single entry accounting i would lend you money and i would write down that you owed me a hundred dollars and you had to trust me that i wrote down the right amount in my ledger so then these gregorian monks or something i remember who it was exactly came up with they said what if we had two ledgers so now both ryan and mark could write down what they owed each other and they actually used something called a tally stick right you'd break a stick in half and you'd carve a notch and if those notches matched up then you knew how much you you owed but you could fudge your notch maybe or or what if i wrote

down 200 and you wrote down 100 well the medici said ah we will sit in the middle and we'll charge a little fee and we'll have those accounts and we'll take care of your your money because then again the old days of money money was just a substitute for barter so you had chickens i had cows and we would drag our chickens and cows to market we would trade and we're like nah that's stupid why don't we just print little coins and you put chickens on your coins and i put cows on my coins and we'll swap the coins well then we got this big old sack of coins and i don't want to drag those all

the way to market so how about we deposit the coins in a trusted third party and they issue paper an iou that says you left your coins here and now you have this amount and the chinese invented that in the 1300s and they called it flying money i'm sorry the 700 700 and they call it flying money because they flew away in the wind right it's amazing if you didn't if you didn't hold it down and so all of this system was created by the banksters to control the wealth and so if i want to send you money

i have to have a bank account you have to have a bank account and they charge us a fee to send it and they're really happy and they built this great business so in the 1600s the rothschild said huh banks what about a central bank well create a central bank so they create a central bank in the netherlands and said we'll use this to finance our wars and our exploits and our and our uh accumulation of wealth and worked really well so the spanish created one and then the french created one and then the brits created one and then we created this little republic

in he called the united states and we said huh okay well let's let's borrow what the rothschilds did so we stole the word dollar from dolar which was dutch and we created this idea of a national bank we're kind of a central bank we have a national bank and so we chartered the first national bank it lasted 20 years chartered the second national bank the last 20 years and then andrew jackson came along and said whoa whoa these banks appear to be owned by the wealthiest european families and

i love this quote our most opulent citizens such a great quote right so it's basically the rich people own the banks and are owning everybody else so i'm gonna i'm not gonna renew the charter we're not gonna have a bank and so we went for about a 30-year period where there was no national bank and everybody issued their own money texas had its own money companies had their own money and it was a show i mean it was horrible and so in the 1890s they said yeah this

is a bad idea reconstruction all right we'll have a new bank and so they created banks and then they're like well to fix the problem of monopoly bank power will allow trusts to be created and few trusts start to grow and there's this trust called knickerbocker trust and jp morgan famously quipped i like a little competition and he said all right so that knickerbocker trust is taking our business away so i'm going to spread a rumor that they're insolvent they have a problem and we've all seen the picture

of the run on the bank of the men and women in their suits and ties and you know running to the bank with the umbrellas to get their money out and basically knickerbocker went down and jp morgan wrote a little check for 25 million dollars which is a lot of money back then and saved the banking system happy to buy all the assets it's like you know mr potter and it's a wonderful life he brought up everything that was on sale and fast forward his buddy he was buddies with john d rockefeller and johnny rockefeller's father-in-law uh it was amory aldridge amory had married off

his daughter to john d rockefeller to get some power and amy became the most powerful senator and they hatched a plan called the aldrich plan to create a central bank in the image of the rothschild central bank always goes back to rothschilds topic for another day um and so they hatched this plan in 1907 and it took six years to get it through congress but they did eventually get and i could not make this up they signed the documents to create the federal reserve

which by the way is not federal and has no reserves that's my joke that i stole from somebody on jekyll island right the creature from jekyll i mean you couldn't make that up right you know jekyll and hyde so they create this creature and there's this great book and i've i've done presentations on i've tweeted pictures of it there's this great picture of a guy wrote a book about the altar plan and how horrible it was going to be and it shows this octopus with these tentacles in everything in corporations and it's basically sucking money out of

everybody's coffers and then up chucking it onto wall street and that's what the banking system does and the fed is owned by the banks to make the banks rich that's what it does and that's why we bail out the banks at every turn and it's why inflation we've perpetuated this myth that it's good for you why is rising prices good who is that good for it's good for you if you own assets it's bad for you if you have a fixed

income if you're on minimum wage if you are retired and own bonds it's horrible for you so inflation is a wealth tax it is theft of your wealth and transferring it to the rich and that's why from 1913 to today income and wealth inequality has gone to the widest in history and it's why this this myth of of inflation being good for you and why that should be a goal of the central

bank it's just ridiculous but i don't feel strongly about that right mark you would fit right in in the bankless movement sir you know like look i mean this is what we've been saying since uh we started this thing is crypto and d5 more specifically is money by the people for the people it removes if it's done well if we get to a future that is decentralized then we don't need the banks in the middle anymore this is what the entire movement is about and why it's so important and i

think why people are uh you like listening to this and engaging in and and joining us in crypto can we talk about this i i feel like the the bankers would have a different take on all of this of course so their reframing of what you just said is like but mark the people really needed this the chaos the runs on the banks that were happening they asked us to step in to restore order and to restore calm chair powell gave a speech i believe uh yesterday depends on when people listen to this but um somebody asked him about

froth in the equities markets specifically about gamestop and um and uh yes uh they they asked him rather about uh gamestop in in dogecoin and um he made some statements about yeah froth in the equity markets i don't like what's going on like be careful like be careful out there but when i was hearing what he was saying i was just like do you realize you've created this you've turned the entire financial system into a ponzi game like people can't even buy

a house without having to engage in in rampant speculation as to what the price is going to be um is like i guess my question to you is mark what is the central bank's next move because the framing of the macro is we're in an era of money printing right um and we've been doing a ton of it what happens next how do we get prepared for this decade what's powell's next move no you could print more and look

the history on this is is very consistent um all empires fail every single one uh reserve currencies end and uh the final throws of those empires is rife with this type of cronyism this type of of taxation without representation so to speak this type of rampant inflation and money printing and and go

back to the roman empire right so the roman empire uh there's some quotes from from marcus aurelius right that could have been written yesterday i mean literally they just talk about you know rampant government spending and and lack of discipline and and people being too too lazy and not wanting to work and and when to pay people not to work and all the things we talk about today things like universal basic income what a crock modern monetary theory what a crock right it just means producing more of a wasting asset

um so roman empire had these daenerys these gold coins and then underneath it they had silver coins and and what they did is they they would clip the coins literally they would clip the edges and steal the silver that's why quarters have ridges on the side so you can tell if you've been clipped and so what happened to the roman empire failed and so then go to the ottoman empire or the british empire right british empire right sun never said on the british empire when we were an emerging market run by a gang if you ever seen the movie

gangs new york 1860s not a fun place to live the united states right you walk down the street you get killed i mean it was it was tough and uh british empire ruled the world until what happened 1913 they invaded mesopotamia incurred a bunch of debt pound sterling collapsed and uh the dollar send it took 30 years for the dollar to ascend to bretton woods and for us to become the world reserve currency and i know people are tired of hearing me talk about the world reserve currency but the world reserve currency was

historically held by the company with the most powerful navy so it started with portugal because they had the tallest trees so they're the fastest ships spain took them over got the trees taller ships and then france and then the netherlands and ultimately the steamship was invented and the uk became the superpower and then we invented nuclear and so we have subs and so we became the most powerful navy now what's interesting is uh world reserve currencies last about 70-ish years so our run is about over

and everybody says oh bitcoin's gonna be the next one no no there's a step between bitcoin i think and and uh the dollar uh which is the remnant b i think uh china figured out 10 years ago that uh the next war will be fought with chips not ships and i can't believe it took me this long to actually watch it but i've been watching mr robot for the last couple weeks oh my gosh blown away blown away at the genius of the writing the accuracy of the story

lines and this whole thing about china rules the world they do right ten years ago you had to choose what do you want to be best in and the united states decided we're gonna be best at social media and we rock at instagram and facebook we are the best china said you know what i think we're gonna be the best at ai and 5g one of these sounds more sustainable you know one of them sounds more sustainable one sounds more important and and so china has literally been ruling the world and they have this long plan this this

30-year plan so the previous 30 years from 1990 to 2020 their 30-year plan was a harmonious rise to drag 700 million people out of abject poverty into the middle class and a harmonious rise sounds very nice it doesn't sound very threatening well their next 30-year plan is to become a global superpower okay stated goal global superpower and so that's why all this cold war 2.0 rhetoric has popped up and why china's the enemy and now it also helps to have an enemy right

the military-industrial complex works better if you have an enemy um so we had the ussr back way back when you know and now we got we got china but it's really more about this that the next war isn't going to be fought with ships we fought with ships the next war is all about cyber it's all about technological prowess and it's why china will be the first with central bank digital currency they are way ahead in ai they are way ahead in crypto and you know americans suffer from this

this problem i i joke that americans are like notre dame football fans right you see my fighting irish picture in behind i'm a notre dame guy and notre dame fans think that we win the championship every year the fact there's been one since 88 it's a long time and if you talk to my father and i was like no we win every year i'm like no george when you were there we won every year because after the war we went overseas we got all the guys from army and navy to come back as 28 year olds and we had a pro football team for four years and we went undefeated for four years at notre dame in the 40s

and we won four national champ or actually went three they stole one but bottom line is you don't get to do that anymore except at byu so now you actually have to play the game with 20 you know 18 19 20 year olds and notre dame is not irrelevant but we're not or at the superpower now you have to cheat like alabama doesn't i shouldn't say they cheat and over recruit so um but they're the superpower and china has figured out that the the war

is going to be won in in cyber and and digital and so it all goes back to this idea of the american empire right which americans think that we rule we're 20 of crypto globally you know and maybe 20 maybe 25. it's not 100. and so we're important but we are grasping at straws from a legislative and regulatory perspective or you know talk about oh we're gonna ban bitcoin okay first of all you can't ban it's