SaaS Interviews with CEOs, Startups, Founders
Was Pomp Right about Bitcoin, Gold and Chinese Power?
13 Apr 2021
Chapter 1: What is the main topic discussed in this episode?
Good Tuesday morning to everybody. It's the 13th. Okay, I got one more episode for you guys on blockchain. Specifically, it's because it's a hot topic right now, and we were fortunate enough to get the two major players in the space on the podcast back over a year ago.
You just heard yesterday from Preston Pish, and now we're going to hear today from Anthony Pompliano, or Pomp, as you guys know him. Now, if you listen to... Pomp, you've made a lot of money because he's been right about a lot of things.
This interview I'm about to play for you, we recorded back exactly a year ago where he predicted some things related to Chinese power, corporate bailouts, the price of gold breaking 2000, which it did before coming back down. It's incredible to go back and listen to this today. So enjoy this oldie but goodie. Before tomorrow, we return to all of our SaaS programming. Enjoy.
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And you'll get interviews three weeks earlier from founders, thinkers, and people I find interesting. Like Eric Wan, 18 months before he took Zoom public. We got to grow faster. Minimum is 100% over the past several years. Or bootstrap founders like Vivek of QuestionPro. When I started the company, it was not cool to raise.
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Chapter 2: What is the significance of Bitcoin and gold in today's economy?
Or Looker CEO Frank Bean before Google acquired his company for $2.6 billion. We want to see a real pervasive data culture, and then the rest flows behind that. If you'd like to subscribe, go to getlatka.com. There, you'll find a private RSS feed that you can add to your favorite podcast listening tool, along with other subscriber-only content.
Now look, I never want money to be the reason you can't listen to episodes. On the checkout page, you'll see an option to request free access. I grant 100% of those requests, no questions asked. Hello, everyone. My guest today, you know, this is like one of those cool things. You just say Pomp. It's just a one name sort of deal. He's so well established. It's just Pomp.
That's all you need to know. You just go on Twitter. It's Pomp. It's good to go. But no, his name is Anthony and he's building an interesting media business. And more importantly, he's co-founder and partner at Morgan Creek Digital. Writes a daily letter analyzing crypto news for institutional investors. But more importantly, He's got a sub stack newsletter doing very well.
And his podcast, I've recently saw him have guests on that were not necessarily only in the crypto space. And I said, I want to, anyone who's interviewing people is usually the smartest because they get to interview and learn. And so I said, I got to interview this guy. So Anthony, thank you for joining me. Absolutely. I appreciate you having me. What did I miss? Anything there in the background?
I mean, you are a crypto guy at heart, correct? Yeah, I spend probably 50% of my time specifically on all the crypto stuff. Before that, I was in the military, built and sold two companies and worked at some of the large tech companies after that. But pretty much I found myself spending the majority of my time on crypto stuff now, Bitcoin specifically. Yeah. So let's jump into like today, right?
So we're recording this on the 3rd. This will go live in the next two weeks. So we can be really relevant with today. We were joking before we started recording going, man, if we ever got like a letter from the government, you know, the president going on CNN going, stay home or you're going to be fine. We would all be like, are you kidding me? This isn't like an authoritative country. It's free.
But today, stay home for the virus and no one asks any questions. Is this a scary kind of land we're venturing into? Yeah, it's one of these things where there's a health crisis. And so obviously that needs to be addressed. I think what's happening is an over-rotation on the health crisis, which causes the economic crisis.
And ultimately what ends up happening is people look around the room and they're trying to figure out who they should listen to. And obviously the government has a very authoritarian type position when it comes to stuff like that. And so they're asking people to stay home. They're at some points even finding people, giving them tickets.
I recently heard there's some restaurants in Illinois, I think it was, where cops actually showed up and arrested people who were inside of a bar that was operating, et cetera. So it's just a weird time. And I think we're kind of all figuring it out as we go through this together.
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Chapter 3: How does the current health crisis affect economic decisions?
So this is not my idea. But basically what they took this analysis, they should go one step further. And they said, is it just that every life is actually equal? Can you put the same quote-unquote dollar amount on a life of somebody at the end of life versus somebody who's 25 years old?
And I tend to think that it's unlikely that you would put the same value, especially an economic output standpoint, on every single life. So I don't know what the right framework is. I don't understand why. what equation you could use to kind of derive that value. But I think that's the first thing is you can't just paint like a broad stroke of every life is equal to the same amount.
Then second on top of that is, again, it comes down to what are we as a country, right? And I think that this is like a big existential question right now of if you're a 100% capitalistic society, do you optimize for the economic superiority and the economic output over the life of individual citizens? If you are a 100% socialist society, right, you optimize for the life over the economic output.
And so I think what ends up happening is the United States isn't either one of those. The United States is somewhere in between. And we're almost like in puberty to some degree. figure out what are we? Because I don't think that we actually have an answer to that yet.
And if we don't know what we are, meaning how much do we value the economic versus the life, like the exact question you're asking, I don't think that we can actually put it into execution. And so it's almost like we're figuring it out on the fly. And what you're seeing is literally healthcare officials are doing calculations on a virus and the impact on the loss of life.
At the same time, economists and the Federal Reserve, et cetera, are doing economic analysis, but there's not a lot of talking between those groups. Like we don't want to take economic advice from doctors, right? But I also don't want to take healthcare advice from economists, right? And so like, we just need to kind of work together, I think.
And unfortunately, this isn't something where we have the benefit of like, hey, this event's going to happen in two years. Let's put together a task force. Let's be prepared. Let's run, you know, kind of war game scenarios, all this stuff. Instead, it's like, oh, shit, we got to shut down the economy. You know, we've got three days to figure this out.
Like, cross your fingers and hope we get it right. I think that's kind of what we're seeing. And frankly, they're probably doing a pretty good job given the circumstances. Obviously, there will be people who complain about what they could have done better or what they should be doing.
But for the most part, there looks like a lot of the healthcare data is improving or at least kind of flattening, which is an encouraging sign. Obviously, the economic data is really, really horrifying. The saving grace may be that there is some sort of quicker than expected recovery. I tend not to believe that, but it's still a possibility. And so we'll kind of see where we end up here.
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Chapter 4: How does inflation impact asset values like Bitcoin and gold?
Is this the right approach? Well, there's two points on this for me. One is I call it Jerry stock picker. Is Jerome Powell going to go put on his stock picker hat and start picking individual securities and literally playing kingmaker? I'll save you, but you're going to fail. I'm going to save you. You're going to fail. I tend to think that's probably not going to happen.
But then again, this morning, they announced they're going to start buying ETFs and high yield, basically junk bond ETFs. So who the hell knows what they're going to end up doing? But I don't think that's a good strategy to put the Federal Reserve or even an asset manager in a position to pick individual securities. But that is one option that they could do.
The second piece of this is on the corporate bailout side. And so I think Mark Cuban and I see eye to eye completely on this, which is the reason why corporations are running to the government is because they believe that the government's the idiot in the room.
If you're a corporation right now, and you probably mismanaged your cash at some point, like the airlines mismanaged cash because they did all the buybacks. I'm not against buybacks. I think that they're fine, whatever.
Chapter 5: What role does government play in managing economic crises?
But now you can't then say, oh, we don't have any money. Well, you put all the money in the shareholders' pockets. So you have to now go to debt or equity markets to shore up your balance sheet. The difference here is that the corporations believe they're worth more money than the market believes. So the investment community is saying, I'll buy your company, right?
United Airlines, I will buy that company personally. Yeah, a big private equity company saying, I'll come in and save you, right? A million bucks, 10 million bucks, 100 million bucks, a billion dollar valuation. Whatever the number is, there's a market to be made there. But the corporate executives believe that the company's worth more than what the investors believe it's worth.
So there's a dislocation or disagreement on valuation. And so instead what happens is the corporation then turns around and says, oh, well, who's the dumbest investor that we could find? Who's going to give us the most attractive deal we could get? Well, the US government will.
And so literally that's where you end up with the Boeing CEO on television saying, I'll take the stimulus money, but they're not getting equity. Okay, well, the government's telling them to go kick rocks. Yep. Your company's going to fail. And by the way, if you want to shore up your balance sheet, you should have to go to the debt or equity markets and get the capital.
Like that's how, that's the cost of doing business. And so I don't think we want to get in this world where like corporations believe in the good times, take as much risk as possible, because if it goes wrong, I'll just run to the government and the government will bail me out.
Because you might as well just nationalize all the industries and all the companies and just say the government owns everything. And you know, that's how we operate. I just don't think that that's the right answer here. But, you know, again, are we a capitalistic society or are we trending more towards that socialist side where we don't care just about kind of the top dollar type metrics? Mm-hmm.
Yeah, I don't know the right answer either. It sounds like you're kind of ingesting like I am and maybe don't have the right prescription myself.
What I do say is if you do have the government going and giving these big bailouts, you've got to figure out a way for the American people to essentially own equity in those companies, including the 50% of Americans that don't currently participate in the equity markets because every bailout benefits people with financial assets and nobody else because that's where the bailout money is going.
There has to be a balance. Yeah. Absolutely. Look, the bottom 50% of Americans get screwed multiple times throughout these crises, right? They're the ones who are most likely to get their civil liberties and personal freedoms taken. They're the ones who are most likely to be sitting in cash because they don't have more than $400 for an emergency payment. They own no investment assets.
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