Why Ethereum Is My Biggest Position Right Now (Most Hated Mega Cap)

Transcript

and you know hope that the American people are just too stupid to understand what I'm actually doing and like this is how you print money from the short euro side and this is why I think the euroyen exchange rate tells us that both of these you know technical reasons why the Fed must increase money very very quickly is in play just like the streets of Manhattan I'm going to keep this quick over 70% of our viewers are not subscribers [music] yes you every week we interview some of the best entrepreneurs and investors in [music] the financial industry the easiest way to support our channel is to hit the like and smash [music] the subscribe button. Now, sit back, relax, and enjoy today's show. So, Arthur, let's talk your your portfolio, your your positions. You wrote you took the biggest position perhaps ever in

Ethereum. You still holding that longer term outlook there? You know, our audience is going to say that you're just going to sell Ethereum on our heads after the show. Prove them wrong. What's your thesis here? How, you know, how long you trying to hold your positions? What's your kind of portfolio? So obviously, you know, I think Ethereum is the most hated uh mega cap shitcoin, right? At the end of the day, if you want to strap on the most risk outside of Bitcoin and not be afraid that you're shit's going to dump 75% overnight because of some issue with the protocol, that's Ethereum. And thankfully, it's been the worst performing mega cap coin over the last cycle. Hasn't even out gotten past 5,000, its all-time high in 2021. So I think the riskreward setup is great for Ethereum which is why it's our

larger position going into this sort of liquidity rally and we also own some other things in the same sort of vein but obviously much smaller size like Ether uh Athena that sort of stuff. >> Yeah. Uh and so I I I actually want to build on a question that Andy asked around the timing of all this and you know also on the misallocation of capital point that you made earlier. Um cuz one thing that you said in your in your latest essay was that you know you were kind of explaining how euroy yen is kind of the one thing to watch because it's the only number that is a leading indicator of a short-term increase in the pace of dollar liquidity creation.

And so I think all everyone who understands the bitcoin thesis understands dollar liquidity creation. It's the debasement trade that is everything. But shortterm increase in the pace of dollar liquidity creation is the second derivative. that is the acceleration of money printing. And so why I mean there's one question about why the Euroyen is the leading indicator of that. Um I that that's probably like that's kind of the place to start. It's like why is that the thing that is going to tell us that they're going to start increasing the money supply at a faster rate?

And and also I guess the the second thing in that is is you know Bessant does a lot of signaling and the markets are forwardlooking and so you know there one of the things that he said in a recent interview was like potential energy and kinetic and so by him signaling to the market that they're going to do these buybacks on these long-term bonds. You know the market's going to frontr run that and that's a ton of potential energy. And so do you think we're going to end up in like a, you know, buy the potential energy, sell the kinetic when these buy the rumor, sell the news type of thing when this thing ultimately comes to fruition or the kinetic is ultimately going to back up what he's saying and we're we're going to see enough kinetic money

printing that is going to send the market higher than it thinks is is the amount of money printing we're seeing based on the signaling. So obviously right now, you know, we've increased our positions and things in advance of the Fed balance sheet rising at a very very you know COVID like 2009 like yeah it's still rising but it's not like going nuts relative to the past, right? Which is why Bitcoin has really just gone from like 63,000 to like 80. Okay, cool. Whatever. Don't care. Not a big deal. So how do you overcome the optics issues of the Fed balance sheet going nuts? You need a you need a real crisis. What is the real crisis on the on the yen side?

You know, long yen of the euro yen pair. It is GPIF is selling [ __ ] You know, Numera is selling [ __ ] Um, Mrs. Watanab is selling [ __ ] right? Because the Japanese government said, "This is what you must do." Okay? So, we need to lend them money. So, they don't sell it. They get, you know, repo it. That is one pillar of balance sheet expansion that makes the yen go up. What's the euro situation? The repo market. The large French banks led by BMP Pariba, Credit Agricol, and Society General, they are 20% of the repo market. This is from the Treasury.

If we get a Euro issue, the market that's going to feel the brunt of it is France because the Japanese own a lot of French debt. If they can't sell the American [ __ ] because, you know, Americans got like 50 [ __ ] military bases in their country, they can sell the European [ __ ] what are they going to sell? They're going to sell French stuff first. They're going to sell French OATS. They're going to sell French bank debt. Now, as the situation in France deteriorates, they cannot print money legally under the strictures of the euro. But the new politicians coming in are like, "Fuck this. I am the president of France, not the European Union. I am here to do what the French people need, what the French nation

needs. The French nation needs more money. The French nation needs to devalue within the stricture of the euro. So if I'm not going to leave the euro, then I just tell the bank to France to say, "Okay, [ __ ] it. I'm going to do QE in France, which is illegal under the EU's charter, but [ __ ] the EU. I am here for France. I need to save my bond market." And the EU says, "You know what? I can print euros and save your bond market, but you're acting real bad. So, [ __ ] you, Le Pen. [ __ ] you, Milan, because you ain't licking my [ __ ] boots. So, I'm not buying your [ __ ] And so, this is a self-feeding prophecy where a soft fxit has to happen because both sides are unwilling to compromise

based on the power structures that give them, you know, a right to be. And that's the short euro side. And so if the French banks are exiting the repo market, we already saw the the Fed switch to quantitative easing in December of last year to essentially backs stop the repo market. The repo market helps finance treasury bills. Who issues the most treasury bills now? Scott [ __ ] Bessen. And so it's all the same trade. So if euroy yen goes from I don't know 182 to like 140 120 there is going to be some serious issues in the French banking system that will have to be fixed with printed money.

Printed money means the end of the euro because you can't have France print money unilaterally and not have it come from the ECB in the center. And then if the French banks are getting owned because they're like, well, why would I want to be in France if I'm going to get capital controls and you know, I'm gonna get just this like pseudo euro lira, then I need to exit the repo market as a French bank. I need to concentrate my capital at home. And therefore, the Fed says, "Oh [ __ ] there's all this capital that needs that this balance sheet that I thought was there is no longer being offered by the commercial banks.

Therefore, I must increase reserve management purchases." And I'm already doing it. So it's not as if and I can you know wave my hands and talk about duration and you know why it's not quantitative easing why it's so technical and you know hope that the American people are just too [ __ ] stupid to understand what I'm actually doing and like this is how you print money from the short euro side and this is why I think the euroyen exchange rate tells us that both of these technical reasons why the Fed must increase money very very quickly is in play. Yeah, >> that's what gets us to $250, $500,000 Bitcoin, not just like Besson talking about what he's going to do.

>> Yep. Makes sense. Makes complete sense. Um, and you know, it also has political cover because again, they're repatriating capital and they're doing it for the good of France. So, yeah, you know, it's going to fly with their citizens. Um, and so, you know, then the the the US is going to reciprocate and and uh, you know, Bessing kind of seems like he controls the economic narrative. And I have a feeling maybe you nicknamed him Buffalo Bill Bessant because he issues a lot of bills. >> No, no, it's from the Silence of the Lambs. So, you know, Buffalo Bill, the serial killer, he's a serial killer of nations, right? You know, it puts the dollars on its skin or gets the sanctions again, right? You know, if you deal with Iran, we're coming for you like >> [snorts]