In Praise of Bitcoin, by Ben Hunt

One evening a few weeks ago, I was on a Zoom call with a bunch of academic, think tank and Fed economists for a Bitcoin discussion. A lot of names you’d know if you’re familiar with those circles, the most famous one being Paul Krugman (who, btw, I found to be charming, genuinely open-minded, and surprisingly humble about the entire enterprise of academic economics). I had been invited to be on the anti-Bitcoin ‘side’ of the discussion, but they needn’t have bothered. Because there was no pro-Bitcoin side.

Krugman led with a simple question – what’s the use case for Bitcoin? Not a theoretical thing, but an actual use of Bitcoin to solve a problem in the real world? – which led to an hour-long, extremely earnest and altogether unsatisfying conversation about financial transfers out of Venezuela, trade settlement and securitization on a blockchain, and Taylor Swift’s ability to control the scalper/resale market for her concert tickets.

All of which are real things. All of which are interesting things. All of which are good things. But none of which are what got 20 busy people on a Zoom call at 8 pm on a Thursday night.

None of which ARE Bitcoin.

Now, to be fair, there were no old-school Bitcoin maximalists on the call, or if there were, they were too intimidated to make an Austrian economics, hard money, neo-goldbug, Bitcoin-is-the-inevitable-global-reserve-currency argument in front of Paul Krugman. LOL.

But I finally couldn’t take it anymore.

Is this really why we got on the phone tonight? To talk about a novel form of digital rights management? To talk about payment transfers out of authoritarian third-world countries? Are these REALLY our questions about Bitcoin?

Answer: of course not. What got these academic, think tank and government economists on the phone that night was Bitcoin trading at $50,000. The question that everyone truly cared about, but a question that everyone danced around for the better part of an hour, was this: Is there any there there in the price of Bitcoin?

To which everyone, including the supposedly pro-Bitcoin contingent, said no. Not just no, but no, no, no. The price of Bitcoin was an illusion. The price of Bitcoin was the madness of crowds. The price of Bitcoin had no connection to any fundamental economic activity, just like gold had no connection to any fundamental economic activity, and thus – to this audience – could have no inherent value by definition.

I think this is very wrong. And I’ll tell you, like I told this Zoom call, why I think there is a lot of inherent value in Bitcoin.

Because Bitcoin is good art.

Or better yet, because Bitcoin is elegant and beautiful fashion, sitting at the intersection of art and commerce.

Most importantly, because owning Bitcoin has been an authentic expression of identity, an extremely positive identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy.

I’ve been saying that Bitcoin is art for more than six years, from The Effete Rebellion of Bitcoin (Feb. 2015) to Too Clever By Half (Feb. 2018, my most popular note ever!) to Riding the Cyclone (June 2018) to The Spanish Prisoner (July, 2019), and it’s been a very frustrating place to be. Frustrating because public stances on Bitcoin are almost immediately turned into cartoons – either you’re the grumpy grandpa “Bitcoin is worthless!” cartoon or you’re the laser-eyed cultist “Bitcoin will be the world’s reserve currency!” cartoon, with no room in between.

The value-deniers, like the Zoom crowd the other night, think I’m agreeing with them when I say that Bitcoin is art. I’m not. The true-believers think I’m trolling them when I say that Bitcoin is art. I’m not. The creation of good art is – in my opinion – what we are put on this earth to do. It is our highest calling. It is my highest praise.

There is lasting value in good art, because it is a very scarce thing and it never gets used up.

Bitcoin is itself an NFT, a unique digital art work instantiated on a blockchain. It’s the most valuable NFT in the world. I don’t mean a Bitcoin, obviously that’s a fungible thing. I mean THE Bitcoin … the 21 million Bitcoins that make up the Bitcoin Project. The notion that Bitcoin would ever “go to zero” is ludicrous. Good art is always worth something. But how do we measure that something … how do we put a price on the value of good art at this particular moment in time? It’s a REALLY tough question.

There are no cash flows to art. There are no fundamentals to art. There is no “use case” to art.

There is only story. There is only narrative. There is only common knowledge – what everyone knows that everyone knows – about the value of art, common knowledge that emerges from our social interaction with story and narrative.

In every respect that matters, Bitcoin IS Epsilon Theory.

The Epsilon Theory Manifesto (June 2013)

Our times require an investment and risk management perspective that is fluent in econometrics but is equally grounded in game theory, history, and behavioral analysis. Epsilon Theory is my attempt to lay the foundation for such a perspective.


So yes, I’ve been saying that Bitcoin is art for a long time now. But what I haven’t been saying – or at least not as loudly – is that bit about identity, and that’s the part that needs to be shouted today. So here it is again, this time a little louder …

Most importantly, owning Bitcoin has been an authentic expression of identity, an extremely positive identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy.

This, too, IS Epsilon Theory.

Clever Hans (Oct. 2017)

Trainers don’t break a wild horse by crushing its spirit. They nudge it into willingly surrendering its autonomy.

Because once you take the saddle, you’re gonna take the bit.


Why am I shouting about identity?

Because the artistic Bitcoin identity I admire and value has been subverted by the neutering machine of Wall Street and the regulatory panopticon of the US Treasury Dept.

Because what made Bitcoin special in the first place is nearly lost, and what remains is a false and constructed narrative that exists in service to Wall Street and Washington rather than in resistance.


Yes, the Nudging State and the Nudging Oligarchy strike back. They always do when it comes to money. Not with imperial stormtroopers or legislative sanction, but with golden handcuffs and administrative surveillance.

It’s not that the State and the status quo institutionalization of capital – call it Wall Street, for short – have any desire to ban Bitcoin. Why would they do that? No, far better to accommodate and swallow Bitcoin, like they have every other financial “innovation” for the past 1,000 years. Far better to neuter the censorship-resistant and anonymity-preserving aspects of Bitcoin, and turn it into another gaming table in the Wall Street casino.

In my dystopian vision, Bitcoin isn’t banned or criminalized. Pfft. That’s a rookie, weak State move. No, I see a future where everyone buys Bitcoin. Where you are encouraged to buy Bitcoin. Where Bitcoin is sold to you morning, noon and night. Where normie economists get on conference calls late at night because they’re Bitcoin price-curious.

Except it’s not really Bitcoin.

Instead, it’s Bitcoin! TM — a cartoon version of the OG Bitcoin, either a Wall Street-abstracted representation of the price of Bitcoin or a government-painted version of Bitcoin in Dayglo orange. Either way — abstracted or painted — your Bitcoin! TM is trackable and traceable, fully KYC and AML and FBAR and SWIFT and every other US Treasury acronym-compliant. Either way, your Bitcoin! TM has all the revolutionary potential of a bumper sticker and all the identity signaling power of a small tattoo on your upper arm.

Bitcoin!TM doesn’t stick it to the Man … Bitcoin!TM IS the Man.

Welcome to the MMXXI Hunger Games.

Hunger Games (Feb. 2021)

You’ve been told that the odds are ever in your favor. You’ve been told this for your entire life.

More and more, you suspect this is a lie.

This is no “democratization” of Wall Street. You’ve been played. Again.

The abstracted version of Bitcoin! TM is a Wall Street specialty.

What is Bitcoin! TM in abstracted form? It’s a securitization or representation of Bitcoin ownership that promises the price appreciation of Bitcoin without the hassle of Bitcoin ownership. It’s a casino chip that represents the price of Bitcoin. Michael Saylor, for example, is only too happy to sell you a MicroStrategy casino chip. Or maybe you’d prefer to play on the Canadian crypto ETF felt? Or try your luck at the wheel of a Morgan Stanley private fund?

Why does Wall Street loooove abstracted forms? Because there are no fundamental limits to how many of these Bitcoin! TM casino chips Wall Street can sell. It doesn’t matter if all the OG Bitcoin HODLers keep on HODLing. It doesn’t matter if the vast majority of all the Bitcoins ever mined never get caught up in the Wall Street neutering machine. There are an infinite number of games that can be created around the price of Bitcoin as a reference point, just like there are an infinite number of bets that can be made on a football game. There are an infinite number of rehypothecations and derivative representations that can be made off the millions of margined Bitcoins that have already been captured by Wall Street-custodied accounts.

The only limiting factor on how many of these Bitcoin! TM casino chips Wall Street can sell is the effectiveness of the narrative they have created around Bitcoin itself, that Bitcoin is a “hedge against inflation” and a “store of value” that is uniquely positioned to “protect your portfolio” against “dollar debasement” because it is “hard money” immune to “money printer go brrrr”.

It’s rather artistic in and of itself, right? Selling an unlimited number of Bitcoin! TM casino chips off a meme slamming unlimited fiat money printing? Creating an unlimited number of entertaining market games and venues where we can use our Bitcoin! TM casino chips?

If these narratives and casino games sound familiar, it’s because this is exactly the same process of abstraction, securitization and leverage that Wall Street has been using for the past twenty years with precious metals.

What is the GLD ETF? It’s gold! TM. What is a unit in an ETF basket of gold miner stocks? It’s gold! TM. They and their many kin are securitizations of gold ownership that promise the price appreciation of gold without the hassle of gold ownership. They are casino chips that represent the price of gold.

I’m old enough to remember when people bought and sold gold coins in private transactions. I guess we’d call that peer-to-peer today. I’m old enough to remember when well-meaning people would have earnest conversations about gold as a reserve currency, just like well-meaning people today have those earnest conversations about Bitcoin. I’m old enough to remember how quickly those conversations died out after State Street launched GLD in 2004 and took in a billion dollars in a few days. Turns out people didn’t really want the grumpy grandpa identity of owning physical gold in some Mad Max world as much as they wanted gold! TM in their financial portfolios as an abstracted insurance policy against central bank error.

It’s exactly the same with Bitcoin! TM today.

You think “institutional adoption” is driven by a spirit of personal autonomy, entrepreneurialism, and resistance to the Nudging State and Nudging Oligarchy? You think Paul Tudor Jones and Mike Novogratz want to BITFD? LOL.

The ONLY difference to Wall Street between gold and Bitcoin is that gold! TM is tired and Bitcoin! TM is wired.

The king is dead. Long live the king!

This is the artistic genius of Wall Street – the creation of new product to trade and new assets to manage, all through the alchemy of securitization and leverage. This is Flow.



It’s like Ash said about the chest-bursting xenomorph in Alien – you may not admire the creature itself, but you gotta admire its purity. Unclouded by conscience, remorse, or delusions of morality. Yep, that’s Wall Street.

Ditto the US Treasury.

If there’s a Western governmental institution that is more unclouded by conscience, remorse, or delusions of morality than the US Treasury, I am unaware of what that institution might be. But unlike Wall Street, which is motivated by Flow, the US Treasury has an entirely different (but highly compatible!) goal.

The goal of the US Treasury is to see all of the money in the world.



That’s really all it is. That’s what Anti-Money Laundering (AML) regulations are all about. That’s what Know Your Client (KYC) regulations are all about. That’s what Report of Foreign Bank and Financial Accounts (FBAR) regulations are all about. That’s what the Treasury-led Society for Worldwide Interbank Financial Telecommunications (SWIFT) is all about. That’s what the Bank Secrecy Act (BSA) is all about. None of these programs are really about taxes. None of these programs are really about catching crooks or fighting terrorists. All of these programs are really about information for information’s sake regarding the greatest source of power in the world and the raison d’etre of every government on Earthmoney.

The US Treasury is the Eye of 

— a gigantic panopticon tower that sweeps the world with its unblinking gaze, seeking out the owners of power, i.e. money.

The US Treasury can’t see Bitcoin. It can, however, see Bitcoin! TM.

The giant all-seeing eye of the US Treasury is primarily built on two regulatory structures — the Bank Security Act (BSA) to compel transparency and reporting by financial institutions on their clients and themselves, and the Report of Foreign Bank and Financial Accounts (FBAR) system to compel transparency and reporting by individuals on their financial institutions and themselves. There are a dozen more acronyms and programs involved here, all overseen by Treasury’s Financial Crimes Enforcement Network (FinCEN), but to keep things simple I’m going to refer to all of this as the BSA/FBAR regulatory panopticon.

Everything in plain text in the next two paragraphs is regulatory policy as it currently stands with the BSA and FBAR. Everything in bold italics is a new policy proposed in the past few months and expected to go into effect shortly. Taken together, I think it will be clear how Treasury uses the combined BSA and FBAR instruments to mark your Bitcoin with a DayGlo orange fluorescent paint and create their highly visible version of Bitcoin! TM.

BSA — If you are in the business of money in any way, shape or form (what Treasury calls a “money transmitter”), and you do any of that business in the US, then you are subject to the Bank Secrecy Act. Note that this money transmitter designation and BSA jurisdiction explicitly includes peer-to-peer exchanges that work with self-hosted wallets. If you are subject to the BSA, then it is your affirmative obligation to collect complete identifying information regarding clients who transmit or receive more than $3,000 over your systems, and to collect and immediately report to Treasury complete identifying information regarding clients who transmit or receive more than $10,000 over your systems – including any cryptocurrency (“convertible virtual currency”) transmitted to or from a self-hosted wallet.

FBAR — If you are a US entity (citizen or resident, any type of US-registered corporate or trust structure, etc.) and you have any sort of account (banking, securities, custodial, etc.) with any non-US money transmitter, anywhere in the world, and at any time during the course of the year, you have in the aggregate across all accounts more than $10,000 in value in those accounts – including the value of any cryptocurrency holdings (“convertible virtual currency”) in those accounts – then it is your affirmative obligation to report complete identifying information regarding each of those accounts to the IRS in a Report of Foreign Bank and Financial Accounts (FBAR).

I think the intent here is crystal clear. Whatever rules were in place yesterday regarding transfers of dollars or rubles or pesos through US-touching money transmitters or by US entities … well, now those exact same rules are going to apply to Bitcoin. As soon as your virtual currency holdings land in any financial institution that cooperates with or does business in or is regulated by the United States … BAM! your Bitcoin is painted DayGlo orange and becomes the Treasury-preferred form of Bitcoin! TM.

When these regulations go into full effect, as I understand them, the only remaining safe harbor for keeping your Bitcoin hidden from the BSA/FBAR Eye of Sauron will be to maintain a self-hosted wallet that never connects with a money transmitter that does business in the US.

That’s a safe harbor for the moment, but ultimately nothing is safe from the Eye of Sauron. While 2019 guidance explicitly states that “a person conducting a transaction through an unhosted wallet to purchase goods or services on their own behalf is not a money transmitter”, and so is not subject to the Bank Secrecy Act directly, the December, 2020 proposed rule-making doc also included this doozy of a comment.

The Treasury Department has previously noted that “[a]nonymity in transactions and funds transfers is the main risk that facilitates money laundering.”

The Financial Action Task Force (“FATF”) has similarly observed that the extent to which anonymous peer-to-peer permit transactions via unhosted wallets, without involvement of a virtual asset service provider or a financial institution, is a key potential AML/CFT risk in some CVC systems.

FATF members have specifically observed that unregulated peer-to-peer transactions “could present a leak in tracing illicit flows of virtual assets,” particularly if one or more blockchain-based CVC networks were to reach global scale.

Importantly, as explained below, while data contained on some blockchains are open to public inspection and can be used by authorities to attempt to trace illicit activity, FinCEN believes that this data does not sufficiently mitigate the risks of unhosted and otherwise covered wallets.

That last paragraph doesn’t mince words. Even if the blockchain facilitating a crypto currency allows for “authorities” to trace transactions, “the risks of unhosted and otherwise covered [i.e., hidden from the Eye of Sauron] wallets” are too great to let stand. LOL. I think we all see where this is going.

The response I get from the Bitcoin and larger crypto community to what seems to me to be the clear intent and path of Treasury regulations is always this: well, good luck enforcing that!

Unfortunately, that’s the evil artistry of panopticons like the Eye of Sauron or Treasury’s BSA/FBAR regulatory structure: we are driven to willingly enforce their discipline on ourselves.

A panopticon is an institutional structure that creates a permanent feeling of being watched. Maybe you are and maybe you aren’t at any given moment. But you’re never sure that you’re NOT being watched. And if you ARE being watched, then you better ‘fess up and cooperate before you get your head stuck on an orc’s pike. Did I mention that the penalty for a willful failure to make an FBAR report was the greater of $100,000 or 50% of the unreported foreign assets?

Moreover, a panopticon structure allows you to see the behavior of others. And they of you. If the discipline imposed by the Watcher includes obligations to snitch — and that’s exactly what the Treasury requires here, with obligations on money transmitters to report on clients, and obligations on clients to report on money transmitters — a panopticon sets up a classic Prisoners Dilemma game, where the only equilibrium is for both the money transmitter and the client to volunteer information about the other.

Once you start looking for panopticons in our modern world, you will find them everywhere. And of course there’s an Epsilon Theory note on this.

Panopticon (March 2014)

“Transparency” has little to do with freedom and everything to do with control, and the more “radical” the transparency the more effective the control … the more willingly and completely we police ourselves in our own corporate or social Panopticons.

You’re not opposed to “transparency” are you? Why would you be opposed to “transparency” unless you have something to hide? You’re not a … a … terrorist-lover, are you? No, I didn’t think so.

It’s not just that Wall Street and the US Treasury dominate policy.

Far more perniciously, they also dominate narrative.

And that’s why I’m writing this note.

Frankly, I doubt that the policy battle can be won. This has been my view since I first started writing about Bitcoin, and nothing has happened to change my mind. On the contrary, Treasury’s moves to make crypto visible and controllable have happened faster than I thought they would. I mean, I’m hopeful that we are at least at some point of policy equilibrium with the proposed rule changes to BSA and FBAR, an equilibrium that will at least allow self-hosted crypto wallets to exist in peace. But hope, unfortunately, is not a strategy.

Too Clever By Half (Feb 2018)

The inevitable result of financial innovation is that it ALWAYS ends up empowering the State. When too clever by half coyotes misplay the meta-game, that’s all the excuse the State needs to come swooping in.

Just as they did with Bear and Lehman in 2008. Just as they’re doing with Bitcoin today.

So, no, I don’t think I can help much in the policy battle.

But I think I can help a lot in the narrative battle.

Or rather, the Narrative Machine can help.

Inception (April 2020)

The systematic study of narrative, what we call the Narrative Machine, can be used for analysis, yes, but also as an active instrument to reclaim our autonomy of mind and our generosity of spirit.

Everything else is commentary.

I know you don’t believe me, but we’re going to change the world … you and me.


The Bitcoin narrative must be renewed.

Bitcoin has been an authentic expression of identity, a positive identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy.

It can be again.


Wall Street and Treasury are running a psyop with their creation of Bitcoin! TM, and it’s necessary to think about Bitcoin in those psyop/narrative terms if the goal is to preserve an active community with an identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy in the context of Bitcoin specifically and crypto more generally.

That’s my goal, anyway.

I’m not in this for Bitcoin-as-global-reserve-currency. I’m not in this for Number Go Up. I’m not in this for “store of value” against that gosh darn “dollar debasement”. I’m not in this for Flow. I’m not opposed to any of those things, and I don’t think you’re a Bad Person if those are your things. They’re just not my things. I’m in this for Bitcoin as good art and the inspiration it provides to a community that shares my values and goals for making a better world.

Phase 1 of this anti-psyop campaign is to identify Schelling points (game solutions that people arrive at by default in the absence of direct communication … also called focal points) so that people who share this goal of community organization and narrative reclamation can find each other.

I think that one of these Schelling points is maintaining a self-hosted wallet and the capacity for peer-to-peer connections away from the Eye of Sauron.

Starting today, Epsilon Theory will accept Bitcoin as payment for all annual subscriptions through our BTCPay server. It’s a plain vanilla Raspberry Pi set-up. We’re not holding ourselves out as crypto mavens. We’re signaling an identity of autonomy, entrepreneurialism, and resistance to the Nudging State and the Nudging Oligarchy in the context of Bitcoin.

Phase 2 of this anti-psyop campaign is to use the Narrative Machine to measure and visualize the narrative archetypes and story arcs of Bitcoin! TM. In exactly the same way that there are only, say, a dozen archetypal scripts for every TV sitcom episode ever filmed, or in exactly the same way that there are three acts to every modern movie screenplay, so is there an underlying structure and a finite number of underlying archetypes to the media coverage of every market entity.

We believe that we can measure these narrative structures and archetypes as they apply to Bitcoin! TM, and map those structural dynamics to market behaviors.

Seeing is believing, and I think there is no better way to prove the existence of Bitcoin! TM, in both its Wall Street-abstracted and its Treasury-painted form, than to show the psyop in action. I think this sort of analysis and visualization will get a lot of people who would otherwise be quick to dismiss our claims to take a fresh look at the ways in which we have been nudged.

Phase 3 of this anti-psyop campaign is simply to call things by their proper names. That starts with locating the value of Bitcoin in its elegant art and its ability (like all elegant art) to inspire great things away from the art itself. Yes, great things away from Bitcoin itself, so that even if Bitcoin! TM dominates financial markets (which it will), the story arc of Bitcoin doesn’t end there, but generates a thousand new initiatives to improve our world.

We don’t have to tell a story of price. We don’t have to tell a story of apocalypse. We don’t have to scold or “educate”.

We can tell an Old Story of autonomy of mind and generosity of spirit within a new context of Bitcoin and crypto.

You know, a couple of thousand years ago, a really smart guy — the most subversive, revolutionary guy you can imagine — had a good line. Render unto Caesar what is Caesar’s.

Bitcoin! TM definitely belongs to Caesar. It’s part of his game. But Bitcoin doesn’t have to be. It can be part of our game. Still. Again. And that will change everything.

Will Wall Street Ruin Bitcoin? Featuring Ben Hunt and Alex Gladstein

As traditional financial institutions line up to get into bitcoin, a debate on whether it can stay permissionless and censorship resistant.

For more episodes and free early access before our regular 3 p.m. Eastern time releases, subscribe with Apple PodcastsSpotifyPocketcastsGoogle PodcastsCastboxStitcherRadioPublicaiHeartRadio or RSS.

This episode is sponsored by Crypto.com and Nexo.io.

Download this episode

Ben Hunt is the founder of Second Foundation Partners and lead author of Epsilon Theory. Alex Gladstein is the chief strategy officer at the Human Rights Foundation.

In this conversation, they discuss one of the most important burgeoning topics of the year: In a world where bitcoin (BTC, +4.91%) goes mainstream with traditional financial institutions, can it keep its more renegade spirit? More important, can it keep its more renegade features such as permissionless access and censorship resistance?

Ben and Alex join for a good faith, spirited discussion of whether the bitcoin we know today will be preserved or whether it is doomed to be co-opted by the financial powers that be.

See also: SEC Commissioner Hester Peirce on a Bitcoin ETF, Custody Rules and What’s Next for the SEC

Creating Communities of Distributed Trust

39:04
up the down escalator no III think I
39:07
think there are real possibilities of
39:09
creating communities of distributed
39:14
trust right which is which is at the
39:17
core of the to in my mind the whole
39:19
effort right have now how do you create
39:22
a community of distributed trust and and
39:27
and what I’d like to see is that that
39:29
distributed trust is applied to areas
39:32
that are not so fiercely guarded by the
39:38
you know the the powerful you know
39:42
states governments and and and
39:45
businesses right because again it when I
39:48
think about how to play the long game
39:49
here I think that is possible to carve
39:53
out
39:55
areas of got resistance but what I
39:58
really mean is areas of sovereignty self
40:00
sovereignty over issues again they’re
40:02
not so fiercely guarded as money yes
40:04
about the state and and so again this is
40:07
an issue of tactics or other than
40:09
strategy right and and and so that I
40:11
would pursue a different tactical
40:14
approach to the I think the goal we all
40:17
or most of your listeners share with you
40:20
and I for sure it it does seem to me and
40:27
I want to bring this back to the run of
40:29
iris now right which is that everything
40:34
you’re describing whether it’s whether
40:36
it’s your tactical approach my tactical
40:39
approach I
40:42
I think it’s tempting to think oh the
40:44
instability that the virus brings is
40:47
going to be an advantage in fighting
40:51
this long game right I actually think
40:54
it’s it’s it’s it’s a very much
40:57
disadvantageous to both of us right the
41:00
both of our tactical approaches here and
41:02
and I don’t think you have to look much
41:04
farther than what happened in Hungary
41:07
right over the last two days where the
41:09
the Hungarian Parliament and this has
41:12
been building for a while right and
41:14
event but Hungarian Parliament in
41:17
response to the throne of iris emergency
41:21
and it is an emergency gave really
41:26
dictatorial powers to to Viktor Orban
41:29
the the Prime Minister where he now has
41:32
the ability ability to rule by decree
41:34
right don’t have to pass the law doesn’t
41:37
have to go to Parliament whatever the
41:40
executive says is law there’s no time
41:43
limit on this now in hunger there’s a
41:47
new law that if you spread false
41:49
information I think and use as the
41:53
executive describes this what at stake
41:54
or not you’re in prison for five years
41:56
and if you try to leave the areas of
41:59
confinement quarantine that they’ve set
42:01
up that’s in the this this is what
42:04
happens I think in weaker states
42:07
go back to some you know idyllic state
42:09
of nature where you know you can set up
42:13
your you know Kingdom of Wakanda you
42:15
know alright what happens is they’re
42:17
taken over by thugs they’re taking them
42:19
by warlords and by thugs and and you
42:23
know in Hungary is uh it’s a member of
42:26
the yeah I mean I mean it’s a core
42:28
member of Europe so when I when I think
42:31
about what’s going to happen in the next
42:33
year and a half in Indonesia what’s
42:36
gonna happen the next year and a half in
42:38
Egypt it’s going to happen in today
42:40
what’s happening right now in Iran for
42:42
God’s sakes I I don’t think it works to
42:46
our advantage
42:47
III think that the impetus in every
42:50
country and particularly in the weaker
42:52
States is going to be for reclaiming of
42:55
the physical of the violence of the gun
42:59
and so this is why I think it’s more
43:03
important than ever that we identify
43:06
each other in our communities of empathy
43:09
in our communities of our pack right so
43:14
that we can fight this long game this
43:18
long war and so we can support each
43:19
other so anyway that’s not I’m just
43:23
trying to bring it back to what’s
43:25
happening today and and how we should
43:28
think about this unfortunately I don’t
43:29
think it’s a great opportunity but I
43:32
think it’s something that we all need to
43:35
come together even more around so that
43:38
we can can stray stay strong or the the
43:42
dark times that are ahead and I do think
43:44
they’re dark times well never one to
43:48
mince words and and and I certainly
43:50
appreciate the perspective on I’m
43:52
slightly more optimistic for the reasons
43:56
that I outlined you know in the physical
43:57
realm but in the digital realm right is
44:00
the internet still a bastion of freedom
44:02
and can you ultimately get people to act
44:05
freely outside of you know some of the
44:08
more restrictive social media platforms
44:11
for instance but just any type of
44:12
peer-to-peer communication system
44:14
peer-to-peer digital realms would seem
44:17
if you’re more conducive for the silent
44:20
distance the quiet resistance yes and
44:22
that individual thesis but how exactly
44:26
we get there not not debating that it
44:29
could get ugly I want to change gears
44:32
for the the last a little bit that we
44:34
have and just talk about your
44:37
understanding of the investment you know
44:40
as I guess for this generation of
44:45
investors because one of your more
44:47
popular posts this is water and yeah
44:51
it’s still water it kind of talked about
44:53
this shifting mindset where deflation
44:56
expectations that were driven by
44:58
technology are now inflation
44:59
expectations there’s and this isn’t
45:02
necessarily new but I like the way they
45:04
laid it out the the globalism that had
45:09
permeated the the macroeconomy for so
45:12
long is now becoming more nationalistic
45:13
now in some respects that’s not a bad
45:16
thing because now you might have
45:18
countries that are more resilient in the
45:21
face of issues like pandemics when when
45:24
today you know we’re seeing just how
45:26
levered we are via global supply chains
45:31
you talked about the kind of shifting
45:33
from you know capital markets into you
45:36
know true market mechanisms just
45:38
political utilities and um and then just
45:41
overall how financialization is kind of
45:43
exacerbated you know all of those trends
45:46
what what’s what’s the what’s the next
45:49
step in in financial markets right yeah
45:51
if if you run out of the capacity to
45:53
print if you run out of the capacity to
45:55
spend let’s not even talk about the u.s.
45:58
let’s talk about some some country like
46:00
like Hungary they don’t necessarily
46:02
control their own currency it’s a small
46:05
but usually functioning democracy what
46:09
does a market system look like in a
46:11
situation like hungry and then how do
46:13
you ever get back to normalcy or how do
46:18
you set the reset button so that the
46:24
short answer is that for in a I’ll go
46:30
back to
46:32
I’m gonna go back 2,500 years yeah this
46:37
is the academic in me right I can’t I
46:38
can’t I can’t give you a straight answer
46:39
right what you’re asking has all
46:43
happened before like it’s all happened
46:46
before right so Peloponnesian War you’ve
46:52
got a thens and Sparta the big countries
46:56
you know fighting each other and then
46:59
the question is well what happens to the
47:00
little countries what happens to ya
47:05
you know magar you know all these these
47:07
these little city-states and the the
47:11
Athenians they’re trying to get their
47:13
their allies together in one of the the
47:18
little allies is saying well you know
47:20
but you know you’re asking us to
47:22
sacrifice everything is all for you I
47:24
mean this this sounds this justice out a
47:28
great deal and the Athenian ambassador
47:31
says you know it was ever thus the
47:33
strong do as they will the weak do as
47:36
they must strong do as they will the
47:39
weak do this they must
47:40
and nothing has changed in 2500 freaking
47:44
years when it comes to the ability of
47:49
countries to chart their own course to
47:55
deal with the exigencies of power hungry
48:02
will do as they must even weaker
48:07
countries than hungry will definitely do
48:08
is they must and the strong do as they
48:10
will so what they will when it comes to
48:15
Europe when it comes to the United
48:16
States when it comes to Japan which
48:17
comes to to China is that there are no
48:20
limits on you know printer Gober right
48:24
there are no limits on you know we we
48:29
haven’t even really touched yet modern
48:33
monetary theory in the notion that well
48:35
there’s not even a relationship between
48:37
spending and taxing right
48:38
you can run deficits as much as you want
48:40
go on go for it we’re just getting
48:43
started man
48:45
getting started hey we’re not at the end
48:48
game of this where yeah it’s like it’s
48:52
like this is halftime hey this this
48:55
isn’t the last few minutes of the fourth
48:56
quarter
48:57
with how governments are going to
48:59
transform capital markets and the fourth
49:01
key utilities with how they’re going to
49:03
you know transform the meaning of money
49:06
into what supports political power yeah
49:09
this is just half time so I I think we
49:14
really do have to take that long-term
49:16
perspective that the printer can go burr
49:20
for a lot longer and it doesn’t matter
49:25
who gets elected you know you know it’s
49:27
it’s it it’s all the same that the last
49:30
10 years have been the greatest transfer
49:32
of wealth – I call it the managerial
49:35
class then I really think anything in
49:40
history it has come through stock
49:42
buybacks through stock sales through
49:44
stock based compensation it’s all
49:46
happened in the last 10 years and it’s a
49:48
transfer of hundreds of billions of
49:50
dollars of wealth to managers not
49:55
entrepreneurs not founders not Shinya to
49:59
managers managers and when that much
50:04
wealth is transferred to that number of
50:06
people in such a short period of time
50:08
it doesn’t reverse itself yeah you know
50:11
you know people don’t the the cheese may
50:14
move but people still want their cheese
50:16
yeah and and and I just I just think
50:20
it’s so important to remember that we
50:24
really are playing that long game to
50:26
remember that the strong do is they will
50:28
and the weak – as they must and to have
50:32
in mind a set that that we’re just half
50:34
time right now and that we need to play
50:39
the game accordingly because what you
50:42
don’t want to do is you don’t want to
50:46
yeah you don’t want to storm an
50:48
entrenched machine-gun nest you know
50:50
with you know huzzah now is our time you
50:53
know then you you really do I think want
50:57
to play the long game
50:58
I think there
50:59
a real power of conviction and belief
51:03
that allows us to play a long game
51:06
mm-hmm and to keep it all together
51:11
of course people like you doing your
51:13
podcast it requires people like me doing
51:15
our writing and most of it all it it
51:18
requires a critical mass of people who
51:22
whose greatest regret would be to give
51:26
up and to be co-opted by the powers that
51:30
be rather than play the long game and
51:32
fight the long fight I can’t think of a
51:36
better way to wrap up this conversation
51:39
than calling for conviction and long
51:42
term ISM and a market remedies panicked
51:45
and and you know short termism generally
51:48
drills the day then where can people
51:51
find you on twitter I’m easy it’s it’s
51:54
it’s all epsilon Theory all the time so
51:56
at epsilon theory and epsilon Theory
51:59
comm it’s for you to read and love to
52:03
love to have you on board it’s a it’s an
52:06
excellent read always I’ve been
52:08
following you for years now and and
52:10
definitely appreciate your commentary
52:11
and watching it at all even as we get
52:14
into a slightly darker period and you
52:16
can tell for those that are tuning in if
52:19
you can hear the background noise that
52:20
naptime just ended so we we just wrapped
52:23
up with the most perfect time because I
52:25
just I just heard my kids wake up and
52:27
surprise that they haven’t run in here
52:28
already thank you for having me Ryan’s
52:32
really a pleasure anytime Thank You Ben
52:35
and stay safe
52:36
YouTube take care

Epsilon Theory Podcast: Bitcoin: Is That All There Is?

In this kick-off Epsilon Theory webcast, I’m joined by renowned cryptocurrency miner and trader @notsofast for a wide-ranging conversation on Bitcoin and crypto.

To put it in crypto and Epsilon Theory lingo, we talk about talk about DeFi, the “Saylorization” of Bitcoin, and brainstorm about how to keep the animal control officers focused on the huckster raccoons rather than us too-clever-by-half coyotes.

To put it more simply, we’re talking about this:

Can Bitcoin preserve its revolutionary potential after a Wall Street bear hug?
I’m highly skeptical, but @notsofast has some ideas on how to make this work. The end result of this conversation is a challenge and a research project for both of us … and for you!

Ben Hunt: Direct Personal Action: Covid-19 Masks: (Front Line Heroes)

54:26
Eric it’s not gonna stop then at some
54:29
point in this crisis I know things kind
54:31
of something snapped for you because we
54:34
got to the point where the government’s
54:35
basically not doing anything terribly
54:38
productive I know at one point I was
54:40
actually following a story where there
54:42
were paramedics in New York City
54:45
dumpster diving behind the hospital
54:47
looking for n95 masks because nobody had
54:51
their act together they weren’t able to
54:53
order the right ones at some point
54:55
something snapped for you and you just
54:56
heard about this stuff and you said I’m
54:58
gonna take personal action to get n95
55:01
masks into the hands of the people in
55:04
the front line who need them
55:05
tell us what is front line heroes but
55:08
more importantly how did it come about
55:09
and what was your experience I mean
55:12
you’re you’re a very comfortable finance
55:14
guy with a great career great reputation
55:15
I’m sure you never imagined yourself
55:17
starting a charity before this all
55:20
happened something happen for you and
55:22
all of a sudden everything changed tell
55:23
us what that was like you know what what
55:25
clicked for me Eric is that
55:28
I’ve been railing about our our trickle
55:30
down economy for so long right where
55:34
where the the policy fiscal policy
55:37
monetary policy particularly it’s really
55:40
designed to support what I like to call
55:44
the the naked sinews of power and it
55:48
really comes to a head in a crisis where
55:51
you reveal that this Pleasant skin of
55:53
democracy and capitalism that that we
55:56
all believe in and and once so
55:59
desperately for ourselves and our
56:01
children it’s it’s just a skin right and
56:04
then underneath it are all these
56:06
policies which are designed to prop up
56:08
and bail out and support the status quo
56:12
wealth and an economy of the of the very
56:16
wealthy and the very politically
56:17
connected and what really clicked for me
56:20
in this this come in nineteen crisis was
56:22
it’s the same thing with medical
56:27
supplies its trickle down its trickle
56:30
down Eric where the very well-connected
56:33
the very politically connected the crony
56:36
capitalism that we see in in our economy
56:40
it’s the same thing in our health care
56:42
where you know supposedly we have these
56:45
millions of n95 masks that are
56:48
stockpiled and unavailable and yet like
56:51
you there are there are horror stories
56:56
of doctors and nurses and EMTs and in
57:00
firemen and policemen and first
57:01
responders who are forced to put not
57:06
only their own lives but when you talk
57:08
to the to these these heroes right what
57:11
they’re really concerned about is
57:13
bringing this risk home to their
57:14
families and that’s what they are forced
57:18
to do in this trickle-down system we
57:21
have not just for wealth but for medical
57:25
supplies for protecting again we call
57:28
them frontline heroes the the doctors
57:30
the nurses the EMTs the firemen who are
57:34
who are responding who are fighting this
57:36
war for us so that that’s what clicked
57:40
you know what
57:41
snapped in me Eric was was to to find a
57:45
way not to compete with the federal
57:49
government and FEMA and the state
57:52
management authorities right not to try
57:55
to buy a million in 95 masks and drive
58:01
up the price and you know do all that
58:04
which is a real problem but I’ll be
58:06
damned if I was gonna wait for FEMA and
58:09
these state emergency authorities to
58:12
find the time to trickle down masks to
58:16
the to the people who need them so
58:18
desperately so that was that that was
58:21
the I say the inspiration for for our
58:24
effort and I’m gonna I want to plug it
58:27
right now right it’s frontline heroes
58:31
usa.org all one word frontline heroes
58:36
usa.org and though the way it came about
58:39
was this is the the crazy world we live
58:43
in right Eric we’re where social media
58:45
is both horrible but he’s so many ways
58:48
but it’s also wonderful at connecting so
58:51
many people I got a Twitter DM from an
58:55
epsilon Theory reader who works for
58:57
Intel and he said you know look we’ve
59:00
got we’ve got a ton of employees intel
59:03
does over in China and I reached out to
59:07
a couple of my friends over there you
59:09
know they can they can buy these these
59:11
in 95 equivalent masks they’re they’re
59:14
pretty they’re plentiful over there in
59:16
China you know they’re not that
59:18
expensive and so I’ve had a couple of
59:20
buddies to go online order some in 95
59:24
masks ship him over here to me and you
59:28
know a bag of a DHL bag of like a
59:30
hundred masks and then I’m giving them
59:34
to a local hospital or clinic that that
59:36
really desperately needs them he was
59:39
calling from he reached out from
59:41
Portland Oregon where you know obviously
59:43
the in the early days there was a lot of
59:46
need for the for this equipment
59:48
okay so listeners who want to help get
59:51
personal protective equipment in the
59:53
hands of our frontline heroes
59:55
by going to frontline heroes usa.org
59:58
they can make a donation on the website
60:00
that directly results in effectively I
60:03
don’t want to say this too bluntly but I
60:05
want to anyway bypassing FEMA and all
60:08
the of the federal government
60:10
and actually getting the stuff to the
60:12
people who need it right now that’s what
60:14
we’ve done Eric we’ve we’ve created an
60:16
end-to-end distribution system where we
60:19
are not only able to buy and source
60:22
these masks where they are plentiful and
60:25
where they are cheap which is typically
60:27
over in China we’re getting them in
60:29
small quantities we like to call it like
60:32
an underground railroad of PPE we get it
60:35
over here to the States we get it tested
60:38
at a at a Medical Center to make sure
60:41
we’re getting quality merchandise and
60:44
then we are getting it directly into the
60:48
hands of the individual doctors and
60:51
nurses and EMTs who then distribute it
60:54
to their teams we can’t get ten thousand
60:58
or a hundred thousand masks to a
61:01
hospital system that’s not what we’re
61:04
about
61:04
what we’re about is getting a hundred
61:06
masks 200 masks to a clinic in
61:11
Indianapolis to a hospital in New
61:14
Orleans all around the country we’ve
61:17
been able to make these direct
61:19
connections with these frontline heroes
61:22
who are in actual urgent need of this
61:25
equipment to date we’ve raised over
61:27
seven hundred thousand dollars
61:29
we have bought and distributed over
61:33
60,000 in 95 equivalent masks to more
61:37
than six hundred individual clinics
61:41
hospitals EMT departments you name it
61:46
all across the country and I gotta tell
61:49
you Eric we’re just getting started man
61:52
we’ve got a lot of entrepreneurs and
61:54
business people in our audience I hope
61:57
that your actions will inspire some of
61:59
them to think about what kind of charity
62:02
they could create what what words of
62:04
either motivation or advice would you
62:05
have to someone who’s considering doing
62:07
something like
62:09
maybe they’ve figured out a different
62:10
way that they’d like to help our
62:12
healthcare heroes or someone else
62:14
through this crisis well the the first
62:17
recommendation I have is just do it just
62:20
do it right if you’re waiting for
62:22
someone to organize you if you’re
62:24
waiting for someone to give you
62:25
permission you know that’s that’s what
62:30
we’ve been so ingrained and in custom to
62:33
that that’s what that’s what government
62:36
in big corporations that’s what they do
62:37
to you they make you think you you can’t
62:40
act unless you are being led or
62:44
organized by them and so my the first
62:47
thing and the most important thing I’d
62:48
say is that’s a crock you just get up
62:52
and you just do it you just do now when
62:55
it comes to actually raising money right
62:57
and it is important I think to operate
63:00
under the the 501c3 framework both to to
63:05
take in donations and and have it you
63:08
know enjoy that that tax advantaged
63:11
properties of it which is really
63:12
important but even more so it really
63:15
enforces and requires an element of
63:18
oversight and documentation that that is
63:22
so important when when money’s involved
63:26
now to establish a 501c3 from scratch is
63:30
pretty hard takes a lot of it’s not hard
63:32
it takes time what we were able to do
63:35
and I think what what many of your
63:37
listeners will be able to do to to
63:40
really I’ll say formalize this and to
63:43
get it started as a as a registered 501
63:47
C 3 is to find an existing 501 C 3
63:51
charity and in your community your
63:53
organization and partner with them to be
63:57
a program or initiative of that existing
64:01
501 C 3 organization so somebody who’s
64:05
already got the IRS letter designating
64:07
them as a 501 C 3 piggyback on them
64:10
partner with them and use their IRS
64:12
letter correct that’s that’s exactly
64:15
what we did and I think it’s a way to
64:18
get these programs up and moving more
64:22
quickly than
64:23
the delays in the red tape from from
64:25
getting your own 501 C 3 designation I
64:28
think it’s important to have that
64:31
designation and to have the oversight
64:33
and controls that that requires but I
64:36
also think that you can move more
64:38
quickly if you find an organization in
64:42
your community an existing 501 C 3 that
64:45
you can work with man I can’t thank you
64:47
enough for a terrific interview before
64:48
we let you go your epsilon theory
64:52
newsletter is one of the most popular
64:54
and one of the most fascinating in the
64:56
industry tell us briefly about that and
64:58
where’s the website and Twitter handle
65:00
so people can find out more sure well
65:03
it’s easy to find it’s epsilon Theory
65:06
comm and on Twitter it’s at epsilon
65:09
Theory you know it comes from the old
65:13
investment equation of alpha and beta
65:16
there’s a third term on there called
65:18
epsilon and usually you know epsilon is
65:22
efore error but honestly Eric that’s
65:25
that’s where all of the behavioral
65:27
economics lives that’s where all of I
65:30
think narrative lives we call it the
65:33
error term but I think there’s a lot of
65:35
information there so that’s epsilon
65:37
theory calm and at epsilon theory on
65:40
Twitter I thought you were gonna tell me
65:43
the e is for extraordinary monetary
65:45
policy and fiscal balance sheet
65:47
expansion a fantastic reading though and
65:50
in great insights so I highly recommend
65:52
it to our listeners we’re gonna leave it
65:54
there
65:54
Patrick’s our resna and I will be back
65:56
as macro voices continues right here at
65:58
macro voices calm
66:07
macro voices is a listener driven
66:10
program please email requests for
66:12
specific future interview guests to
66:15
requests at macro voices comm you can
66:18
email questions for the program to
66:20
mailbag at macro voices comm and we’ll
66:24
answer them on the air from time to time
66:26
in our mailbag segment we also welcome
66:29
your suggestions for how we can improve
66:30
the program now back to your hosts eric
66:34
townsend and Patricks resna eric goes
66:38
great to have been back on the show what
66:40
did you take away from the interview
66:41
well I thought the most important thing
66:44
that he said which echoes something I’ve
66:45
said before is the one thing that you
66:48
really almost have to get at least
66:51
mostly right in investing is you’ve got
66:54
to have a view on whether we’ve got a
66:57
backdrop which is deflationary or
66:59
inflationary or maybe it’s in between
67:02
and and you have a moderate view but you
67:05
got to have some kind of view because
67:06
the investments and the way you
67:08
structure your portfolio is either gonna
67:10
work or not going to work based on that
67:12
and I think we’re headed for a secular
67:15
shift that I don’t know Ben doesn’t know
67:18
none of our guests have been willing to
67:20
really you know put a stake in the
67:22
ground and lay out here’s what’s gonna
67:23
happen
67:24
because I don’t think anybody knows
67:25
what’s gonna happen but all the
67:26
ingredients are there over the next few
67:29
years for deflation to eventually end
67:31
and give way to inflation and I think
67:35
that the politics are gonna play a big
67:37
role in this we’re seeing all of the
67:39
different political parties seeming to
67:42
favor more what effectively is
67:45
monetization and you know it’s it’s
67:47
interesting how each of our guests have
67:49
different views on this we got a few
67:51
emails about dr. Lacey hunt making such
67:54
a big deal saying look the Fed doesn’t
67:57
have the ability to spend money all that
67:59
they can do is to loan money and provide
68:03
liquidity into the market and that’s all
68:05
based on this idea Patrick that when the
68:07
government engages in deficit spending
68:10
the Fed is not directly buying that debt
68:14
instead
68:15
it’s being sent and there’s you know
68:17
free market price discovery occurring
68:20
because a private sector party is buying
68:23
that debt from the government and that
68:25
allows the interest rate to be set at
68:28
market rates and the Fed is not allowed
68:30
to buy that debt directly from the
68:33
government well if that’s the whole
68:36
intention of the Federal Reserve Act but
68:39
in practice the way it works is that
68:41
debt has to get sold to a private sector
68:45
banker who is going to turn it around
68:48
two days later and sell it to the Fed at
68:51
a markup that that’s not you know
68:53
private-sector market price discovery
68:55
that’s just a sham that allows the
68:58
primary dealers to mark up what they’re
69:00
buying and sell it back to a guaranteed
69:03
buyer of the Fed who’s effectively
69:05
monetizing I don’t really agree with dr.
69:07
hunt and other people who say that the
69:10
Fed can’t spend money there they’re
69:12
indirectly doing so by working around
69:14
the intention of the Federal Reserve Act
69:17
and I think they’re already doing that
69:18
to a large extent anyway let’s get to
69:21
the postgame chart book Patrick you put
69:23
together another terrific chart Dec
69:25
listeners you’ll find the download link
69:27
in your research roundup email now if
69:30
you don’t have a research roundup email
69:31
that means you haven’t yet or registered
69:33
your free account at macro voices.com
69:35
shame on you you can remedy that by just
69:38
going to macro voices.com and looking
69:40
for the red button on the homepage that
69:42
says looking for the downloads Patrick
69:45
let’s go ahead and dive in here on page
69:47
two this looks like a chart of the S&P
69:51
but you got a bunch of other secondary
69:54
studies around the S&P what’s going on
69:57
here right so what we had was the sp500
70:00
we’ve been drawing on analog of what a
70:02
bear market would look like and going
70:04
through all sorts of storylines over the
70:06
last month but what what I really wanted
70:09
to touch on was what’s a growing thing
70:11
in the market is that everyone’s
70:13
focusing on the big behemoth stocks that
70:15
have been running like Amazon fresh new
70:17
highs and all these other mega cap
70:19
stocks that have been running and it’s
70:21
been driving the Nasdaq and when you
70:23
look at the Nasdaq which is the black
70:24
line on there we can see that it we
70:27
almost approach
70:28
the pre bear market high and really the
70:32
bigger question to ask is how did the
70:34
Nasdaq pull this off and what’s really
70:37
amazing is is that it’s just a handful
70:39
of stocks so when you look at the five
70:41
mega cap stocks the largest market
70:43
capital I stocks in the NASDAQ and the
70:46
S&P 500 and they just have a monstrous
70:50
weighting into the indices so in the
70:53
sp500 those five stocks make up 20% of
70:57
the weighting so that means the other
70:59
495 stocks in that index make up the
71:02
other 80% and therefore as go those
71:06
stocks goes the whole market and what’s
71:08
interesting is that when you look at the
71:10
indices that don’t have the market cap
71:13
weighting of those five stocks it paints
71:15
a much different picture so what I have
71:17
here is the Dow Jones which is price
71:20
weighted then you have the London
71:23
footsie in yellow you have the emerging
71:25
markets you have the Euro Stock 50 as
71:29
well as the Russell which is the small
71:31
cap indices and what you can identify
71:33
here is that once you take out those
71:36
five mega cap stocks the indices look
71:40
incredibly weak everywhere in the world
71:42
and this is what I continue to believe
71:45
is giving us the evidence that this is
71:47
still truly a bear market and a bear
71:49
market rally just because you have
71:51
enough market participants willing to
71:54
crowd into a few of these mega stocks
71:56
and drive their prices higher is not
71:59
really reflective of the underpinning
72:02
conditions from a breadth perspective
72:04
that of a very deteriorated equity
72:06
market once you leave those five stocks
72:08
and so to me it’s still a bear market
72:10
rally and it’s still rolling over
72:12
we’ll see certainly next week once we
72:14
get past the option expiration gamma
72:16
pins whether or not another round of
72:18
selling may be coming into June moving
72:21
on to page three Patrick looking at the
72:23
euro versus the dollar
72:26
boy this charts looking a little bearish
72:28
I guess you could call this either a
72:29
descending triangle or a wedge depending
72:31
on how you draw around that that late
72:33
march bottom there what do you make of
72:36
this well really you turn this chart
72:38
upside down and you got the dollar index
72:40
right and what’s amazing
72:42
a dollar index still has such a huge
72:44
waiting into the euro of 57% waiting and
72:48
so really as goes the Euro goes the
72:51
dollar index and so what we can
72:53
continuously see here over the last
72:55
month and a half every attempt the euro
72:59
has had to rally and make it stick it’s
73:02
lasted no more than a week and almost
73:05
immediately the selling comes back down
73:07
and and brings it right to the bottom of
73:09
the range and it’s just such a weak
73:11
price action now all you need is it’s
73:14
like a the euros at the edge of a cliff
73:16
and all it needs is someone to give it a
73:18
push and if it loses its footing here we
73:20
could be seeing a euro move down to 105
73:23
or 103 which would certainly be the
73:26
underpinning catalyst that will drive
73:28
the Dixie up towards that 104 target
73:31
that you’ve often referenced and so this
73:33
is a the must watch chart in my mind and
73:35
it has so many global macro implications
73:38
if it gives out so this is probably a
73:40
single big the most important chart to
73:42
watch in my opinion but I really don’t
73:44
want to highlight further if we go to
73:47
page 4 when we look at the dollar index
73:49
it really feels like the dollars been
73:52
doing nothing but really once you leave
73:55
the euro and you go and start looking at
73:58
the rest of the currencies around the
74:00
world and particularly when you move
74:02
into the emerging market currencies you
74:04
can see just how incredibly weak all
74:07
those currencies have been relative to
74:09
the dollar whether you go to Mexico
74:10
Brazil Argentina and the Russian ruble
74:13
here you have the South African Rand and
74:16
the Turkish lira all just so incredibly
74:20
weak and that just continues to support
74:22
that there is a fundamental US dollar
74:24
bull market underway and it’s being
74:26
disguised by the fact that the euro has
74:28
been pinned which makes the dollar index
74:30
look like it’s far more range bound but
74:32
I actually think the US dollar is in
74:35
full bull trend and in it’s just a
74:37
matter of time before the Euro gives out
74:39
and succumbs to that predominant trend
74:41
Patrick let’s move on to page 5 one of
74:44
my favorite charts of course is gold and
74:46
boy look at that breakout we’ve seen
74:48
just in the last couple of days all for
74:50
sure and and you were talking about it
74:52
and this is the big question right when
74:54
everybody is so convinced gold
74:56
going higher usually whenever you have
74:58
that kind of a strong sentiment usually
75:01
it means that the trade is crowded in a
75:03
backfills and so that and that storyline
75:06
makes sense but but you know when you
75:08
really look at the conditions around the
75:10
world and the size of the gold market is
75:13
it possible that it just keeps you know
75:15
punching higher and and making fresh new
75:18
highs I mean we’re right now only a
75:20
hundred or two hundred dollars away from
75:23
those 2011 highs it’s it will be really
75:26
interesting whether or not gold makes
75:28
the next push higher first before that
75:30
much awaited consolidation kicks in well
75:34
and that’s something I’ve been thinking
75:35
about a lot is maybe that’s the next
75:38
move is up to 1922 I think was the the
75:42
2011 that’s from memory so don’t don’t
75:44
hate me if I got it wrong folks we get
75:47
back to the the 2011 high and that’s
75:50
where we have a significant technical
75:53
correction maybe back down to 1500 or
75:56
1400 or something from there the
75:59
problems with this you know look that
76:00
you couldn’t ask for better long-term
76:03
fundamentals you know that the
76:05
politicians are gonna debase fiat
76:07
currency you know they’re gonna keep on
76:09
printing money to deal with the
76:11
coronavirus crisis and the next thing
76:14
after the coronavirus crisis is going to
76:16
be universal basic income in the various
76:18
social programs that some parts of the
76:21
the political economy would like to see
76:23
in place there’s got so many reasons to
76:25
be bullish but the problem is everybody
76:28
knows that and what propels a bull
76:31
market higher is when something causes
76:35
people to make new purchases and a lot
76:39
of them what could be the policy impetus
76:42
Patrick that causes everybody to say
76:44
okay this situation it’s more bullish
76:46
than we thought we got to double down on
76:48
our gold bets right here at this price I
76:50
mean look at what the Fed has already
76:52
done Patrick literally unlimited
76:55
monetary policy accommodation to the
76:58
tune of half a trillion dollars a week
77:00
or at least it feels that way and you
77:02
know for a while we were going a couple
77:04
trillion dollars a week in new fiscal
77:07
spending bills that Congress is talking
77:09
about push
77:10
you know that they’re going to debase
77:13
the value of paper money and it’s got to
77:15
be good for gold but how do you top all
77:18
of that how do you come up with the next
77:20
news report that makes the case even
77:23
more compelling it’s already priced in I
77:26
think that’s what got us up here so what
77:28
happens Patrick if the Fed actually were
77:30
to show some restraint and maybe
77:33
moderate the amount of policy
77:35
accommodation and what if we stopped
77:37
having two trillion dollar spending
77:39
announcements from the government every
77:41
week or two then maybe we get you know
77:44
the set up so we’ve come on awfully long
77:46
ways we’re overdue for a technical
77:48
correction I still feel like it has to
77:50
come at some point but boy this chart
77:52
still looks awfully strong the this
77:54
descending triangle if it had resolved
77:56
to the downside was the setup for maybe
77:59
a really significant correction and it
78:01
looks like it’s not happening we’re
78:02
resolving to the upside instead well you
78:05
know the one thing I’ll add to that
78:06
those I mean you took a very American
78:09
approach to that which is like looking
78:11
at what the Fed itself is doing in the
78:12
US dollar obviously is the world reserve
78:14
currency but the whole world is in an
78:17
incredibly deep recession and there’s
78:19
going to be a lot of currency debasement
78:21
in in almost every country in the world
78:24
and so why you know even if there might
78:27
be a catalyst that may not have that
78:29
gold demand from the US you have to
78:31
still think that that the the safe haven
78:34
element of gold will be incredibly
78:36
popular especially in a lot of those
78:37
other cross currencies anyway let’s move
78:40
on to page six where I just wanted to
78:43
touch on uranium we don’t talk uranium
78:45
too often and rightfully so riga rana
78:48
has been a stuck in a bear market for
78:50
many many years
78:51
and what is interesting is one of the
78:54
reasons behind that has been because
78:56
there was an oversupply and they needed
78:58
to work that through that oversupply
79:00
uranium that has caused it to trade
79:03
below its actual production cost and so
79:07
what what this co vid has done though is
79:09
is that it actually shut down a number
79:12
of mines and now the catalyst for that
79:14
supply to be worked off is actually
79:17
there and so we saw a pretty bullish
79:19
breakout in uranium and they’ll be
79:21
really interesting to see whether the
79:23
bull
79:23
can not only hold this or whether this
79:26
actually is the beginning of a new bull
79:27
market in uranium so it’s certainly
79:29
something we’re watching and folks don’t
79:32
forget Patrick does webinars with charts
79:34
like this almost every single day you
79:36
can get a free trial the information is
79:38
on page 7 to sign up for Patrick’s
79:41
trading advisory service now Eric before
79:43
we wrap up the show though why don’t you
79:45
give us a quick update on what’s going
79:47
on with the kovat 19 you know I don’t
79:49
have that much new to add this week as I
79:52
continue to learn and read more about
79:54
this there’s no you know huge
79:57
earth-shaking headline or anything but I
80:00
just see more and more evidence that all
80:02
piles up to me to say this is gonna take
80:04
longer than markets are discounting I
80:07
don’t mean the economy is gonna stay
80:09
shut down but the expectations so many
80:11
people have about a v-shaped recovery
80:13
and we’re back to normal like pre virus
80:15
normal you know three or four months
80:17
from now I just don’t see it happening
80:19
there’s no good reason to assume that
80:21
there’s going to be a vaccine for this
80:24
and there’s so many different variations
80:26
and mutations of the virus already that
80:29
if we did have a vaccine it might not
80:31
cover all the different versions of it
80:33
it could take many years before we get
80:35
completely back to normal and of course
80:37
we’re going to restart the economy what
80:40
we’re gonna get is close to normal as we
80:42
can but it remains to be seen how much
80:45
of a drag this creates and I I really
80:47
love to to get Stan Druckenmiller on the
80:49
program to go into more detail on what
80:52
causes him to say that maybe this
80:54
central bank enabled credit bubble is
80:57
finally going to pop and this would be
80:58
the catalyst to do it that would really
81:01
change everything and we could be
81:02
looking at an outright depression so I
81:05
don’t think it’s nearly as simple as
81:07
v-shaped recovery and folks we’re gonna
81:09
leave it there for today’s show this
81:12
episode was made possible by top traders
81:14
on plug com remember to get the ultimate
81:17
guide to the best investing books ever
81:19
written at top traders unplug com
81:22
forward slash macro guide for
81:25
information on sponsoring macro voices
81:27
please visit macro voices.com forward
81:30
slash sponsored info listeners be sure
81:32
to register a free account at macro
81:34
voices.com
81:35
the benefit to you as you’ll receive
81:37
our research roundup email which
81:39
provides you with all of the best free
81:42
content that we could find on the
81:43
Internet each week including downloads
81:45
associated with our guest appearances as
81:48
well as of course our postgame chart
81:50
books Patrick tell them what they missed
81:52
in this week’s research roundup well
81:55
this week you’re gonna find the
81:56
transcript for today’s interview as well
81:58
as a link to the charts we just
81:59
discussed in the postgame there’s also a
82:01
link of the David Tepper interview and
82:04
where he discusses that this is the
82:05
second most overvalued stock market he
82:08
has ever seen as well as a link to an
82:10
ECB article on negative interest rates
82:13
and the transmission of monetary policy
82:15
so you’ll find this and so much more in
82:17
this week’s research roundup so that
82:19
does it for this week’s episode we
82:20
appreciate all the feedback and support
82:22
we get from our listeners and we’re
82:23
always looking for suggestions on how we
82:25
can make the program even better now for
82:27
those of our listeners that write or
82:29
blog about the markets and would like to
82:30
share that content with our listeners
82:32
send us an email at research roundup at
82:35
macro voices comm or tag it with the NVR
82:39
our hashtag on Twitter and we’ll include
82:41
it in our weekly distributions if you
82:43
have not already follow our main Twitter
82:45
account at macro voices for all the most
82:47
recent updates and releases you can also
82:50
follow Eric on Twitter add
82:52
eric s townsend and myself at patrick’s
82:55
resna on behalf of Eric Thompson and
82:57
myself thank you for listening and we’ll
82:59
see you all next week
83:10
that concludes this edition of macro
83:13
voices be sure to tune in each week to
83:15
hear feature interviews with the
83:17
brightest minds and Finance and
83:19
macroeconomics macro voices is made
83:21
possible by sponsorship from big picture
83:24
trading comm the internet’s premier
83:26
source of online education for traders
83:29
please visit big picture trading dot-com
83:32
for more information please register
83:34
your free account at macro voices.com
83:37
once registered you’ll receive our free
83:40
weekly research round up email
83:42
containing links to supporting documents
83:44
from our featured guests and the very
83:46
best free financial content our
83:48
volunteer research team could find on
83:50
the Internet each week you’ll also gain
83:53
access to our free listener discussion
83:55
forums and research library and the more
83:58
registered users we have the more we’ll
84:00
be able to recruit high profile feature
84:02
interview guests for future programs so
84:05
please register your free account today
84:07
at macro voices.com if you haven’t
84:10
already you can subscribe to macro
84:13
voices on itunes to have macro voices
84:16
automatically delivered to your mobile
84:18
device each week free of charge you can
84:20
email questions for the program to
84:22
mailbag at macro voices calm and we’ll
84:26
answer your questions on the air from
84:27
time to time in our mailbag segment
84:30
macro voices is presented for
84:32
informational and entertainment purposes
84:34
only the information presented on macro
84:37
voices should not be construed as
84:39
investment advice always consult a
84:41
licensed investment professional before
84:43
making investment decisions the views
84:46
and opinions expressed on macro voices
84:48
are those of the participants and do not
84:51
necessarily reflect those of the show’s
84:53
hosts or sponsors macro voices its
84:56
producers sponsors and hosts Eric
84:59
Townsend and Patrick’s or Esna
85:01
not be liable for losses resulting from
85:03
investment decisions based on
85:05
information or viewpoints presented on
85:07
macro voices macro voices is made
85:09
possible by sponsorship from big picture
85:12
trading comm and by funding from fourth
85:15
turning Capital Management LLC for more
85:18
information visit macro voices.com
85:21
[Music]
85:32
you

THE MONEY GAME, CHEATERS EDITION

The coronavirus has thrown us into truly unprecedented times. Most countries have enforced a lockdown, and global travel has ground to a halt, and this, in turn, has had an enormous impact on the economy.

Stock markets all over the world experienced huge volatility. Wall Street suffered its worst day since ‘Black Monday’, oil prices went negative for the first time in history and governments all over the world have been implementing extreme fiscal and monetary policies.

Many analysts have suggested that rather than coronavirus being the cause of this economic downturn, instead, it was merely the pin that popped the bubble and the enormous debts that have been amounting since long before the 2008 global financial crisis was a disaster waiting to happen.

So, how do we get out of this mess? Who stands to benefit from government money printing? Who has to pay this money back? And, why the fuck is Steve Mnuchin, the Secretary of the Treasury?

To answer these questions and more, I am joined by leading finance experts: Andrea Ferrero, Andreas M. Antonopoulos, Caitlin Long, Ben Hunt & Raoul Pal. We look at the corruption and mismanagement of the economy by central banks and governments.

A Truth That’s Told With Bad Intent

That’s Isaac Newton in William Blake’s painting, one of the major villains in Blake’s philosophy. Why? Because Newton was a modeler, a proponent of Science with a capital S, the most repressive force in the modern age.

I think Blake was absolutely right.


Our narratives of COVID-19 are all lies.

They are lies of a particular sort, political narratives that have a nugget of truth within them, but are told with bad intent. They are told this way because it works. Because the nugget of truth hides a deeper, unpleasant truth. And a Big Lie.

Some are narratives of the political left. Some are narratives of the political right.

They are all narratives of betrayal, meaning that they seek to excuse or promote policies designed for institutional advantage rather than the common good.

Clockwise from Donald Trump, that’s Fox’s Sean Hannity, the CDC’s Robert Redfield, Surgeon General Jerome Adams, Speaker of the House Nancy Pelosi, Harvard President Larry Bacow, the White House’s Larry Kudlow, and Vox co-founder Ezra Klein. They all get their moment of shame in our magnum opus on the ubiquitous institutional betrayals here in the early days of the pandemic age – First the People.

How do you recognize a political narrative of betrayal?

It’s always based on a model.

A political narrative of betrayal is always a top-down application of social abstraction, where a behavioral model is treated as the thing unto itself, falsely elevated as the subject and object of policy, rather than relegated to the analytical toolbox where it belongs. A political narrative of betrayal will always use “model” as a noun rather than “model” as a verb. A political narrative of betrayal always BEGINS with a prescriptive model of mass behavior – a model that by the most amazing coincidence serves the institutional advantage of the narrative creator – and ENDS with a forced fit to the individual citizen.

All political narratives of betrayal start like this, with a disembodied, modeled abstraction like

  • “the American way of life” or
  • “the economy” or
  • “the market” or
  • “public health” or
  • “national security”.

An abstraction that is then defined for you in such a way as to logically require the willing abdication of your individual rights, first as an American and ultimately as a human being.

A political lie always starts by establishing a disembodied, modeled abstraction like “the economy”. From there, the political lie will then start talking about the “sacrifices” that we citizens need to make for this disembodied, modeled abstraction.

Nothing makes me angrier.

Nothing makes me angrier than a politician like Chris Christie, a man whose idea of personal sacrifice is a regular order of fries, shaking his finger at us and telling us how reopening the local Arby’s is just like fighting Nazi Germany, how OUR deaths then and now are a “necessary sacrifice” in order to  “stand up for the American way of life.”

The American Way of Life™ does not exist. It’s not a thing.

What exists is the way of life of Americans.

Start with the individual American. Start with their political rights. Start with the citizens themselvesThis is how a legitimate government acts in both words and deeds.

The government’s job – its ONE JOB – is to protect our individual rights in ways that we cannot do ourselves. That’s not an easy job. At all. There are trade-offs and gray areas, and clear-eyed/full-hearted people can disagree on how to accomplish that job. But it is the job.

Its job is NOT to create “alternative” facts like modeled seasonal flu deaths or modeled herd immunity or modeled COVID-19 deaths in nudging service to institutional goals. Its job is NOT to champion the rights of the politically-connected few and ignore the rights of the politically-unconnected many. Its job is NOT to deny the rights of any citizen in service to a politically convenient abstraction like “the American way of life” or “the economy” or “public health”.

When individual rights conflict in unavoidable ways or we are faced with an immediate and overwhelming threat to our system of individual rights, a legitimate government based on the consent of the governed may be forced to decide which citizens’ rights must be temporarily suspended. This is a legitimate government’s last resort.

Today it is our government’s first resort.

Today it is the first choice of our political leaders – White House and statehouse, Democrat and Republican – to decide which rights to prioritize and which rights to deny in service to THEIR conception of what society should look like. All wrapped up in a nugget of truth told with bad intent.

This is how an illegitimate government acts.

Like this:


Model-driven Narrative #1

Whatabout the Flu?

Dr. Sanjay “minor compared to the flu” Gupta 
Rush “it’s just the common cold, folks” Limbaugh
  • Political goal: COVID-19 threat minimization.
  • Truth nugget: The seasonal flu is a nasty (and mitigatable) disease.
  • Deep Truth nugget: We are shockingly blasé about all sorts of largely preventable deaths, and we warehouse our elderly parents in horrible places.
  • Big Lie:  This isn’t a big deal.
  • Policy prescription: Wash your hands, boys and girls!
  • Embedded model:   Laughably inaccurate models of seasonal flu deaths, designed to nudge popular adoption of annual vaccinations.

As the US death toll mounts, this narrative fades farther and farther into the background of our collective memory, but “Whatabout the Flu?” dominated the early weeks of American policy debates. And while it’s easy to find examples of this narrative from the political right, let’s not forget that CNN and Vox were beating this drum as hard as they could when Trump was shutting down some flights from China.

People don’t believe me when I tell them that we don’t actually count flu deaths, that the numbers thrown around by the Dr. Guptas and the Rush Limbaughs are taken from CDC models of pneumonia deaths. But it’s true. Basically we count pediatric flu deaths and hospitalized adult flu deaths, multiply by six, and intentionally generate an inflated flu death total. Why intentional? Because you need to be nudged into taking your annual flu vaccine.

If we compare, for instance, the number of people who died in the United States from COVID-19 in the second full week of April to the number of people who died from influenza during the worst week of the past seven flu seasons (as reported to dethe CDC), we find that the novel coronavirus killed between 9.5 and 44 times more people than seasonal flu. In other words, the coronavirus is not anything like the flu: It is much, much worse. – Scientific American (April 28, 2020)

On an apples-to-apples, counted deaths versus counted deaths basis, there is no comparison between COVID-19 and the flu. It’s pure narrative. Pure hokum. All based on a laughably inaccurate model. All geared towards the political lie of COVID-19 minimization.


Model-driven Narrative #2

Herd Immunity!

Anders “the death toll surprised us” Tegnell of Sweden 
Dan “more important things than living” Patrick of Texas
  • Political goal: Preservation of economic status quo.
  • Truth nugget: Massive unemployment is devastating.
  • Deep Truth nugget: Massive unemployment is particularly devastating to incumbent politicians.
  • Big Lie:  In the meantime, we can protect the olds and the sicks.
  • Policy prescription: Hey, you’ll probably be fine! I mean … probably.
  • Embedded model:   Laughably inaccurate models of COVID-19 infection spread and severity, designed to nudge fantasies of V-shaped recoveries in the stock market and commercial real estate prices.

Again, it’s easy to find examples of this narrative from the political right, but let’s not forget that the most prominent national example of “Herd Immunity!” policy is driven by the leftwing Social Democrats – Green Party coalition in Sweden. Again, the politicization of these narratives is not a left/right thing, it’s a power thing.

It’s a high-functioning sociopath thing.

What do I mean by sociopathy and division?

I mean the way our political and economic leaders beat the narrative drum about how this virus prefers to kill the old rather than the young, as if that matters for our policy choices, as if older Americans are lesser Americans, as if we should think of them differently – with less empathy – than Americans who are more like “us”.

I mean the way our political and economic leaders beat the narrative drum about how this virus prefers to kill those with “pre-existing conditions”, as if that matters for our policy choices, as if chronically ill Americans are lesser Americans, as if we should think of them differently – with less empathy – than Americans who are more like “us”.

I mean the way our political and economic leaders beat the narrative drum about how this virus hits certain “hotspot” regions, as if that matters for our policy choices, as if hotspot regions are lesser regions, as if we should think of Americans who live there differently – with less empathy – than Americans who are in “our” region.

And once you stop thinking in terms of trade offs, once you stop thinking in terms of probabilities and projected mortality rates and cost/benefit analysis and this expected utility model versus that expected utility model … once you start thinking in terms of empathy and Minimax Regret … everything will change for you. – Once In A Lifetime


Model-driven Narrative #3

Flatten the Curve!

Gov. Andrew “we need 40,000 ventilators” Cuomo  
Dr. Deborah “Trump is so attentive to the data” Birx
  • Political goal: COVID-19 threat maximization.
  • Truth nugget: Lockdowns prevent a surge in cases which can overwhelm the healthcare system.
  • Deep Truth nugget: When we’ve got everyone freaked out about staying alive, there’s no end to the crazy authoritarian stuff we can get away with.
  • Big Lie:  We can get R-0 down to zero.
  • Policy prescription: You’ll find these ankle monitors to be surprisingly light and comfortable to wear!
  • Embedded model:   Laughably inaccurate models of COVID-19 deaths, malleable enough to serve the political aspirations of both the White House and their opponents.

Of the three politicized narratives, “Flatten the Curve!” has morphed the most from its original form, as its early success in convincing even Donald Trump that lockdowns were necessary to prevent a healthcare system meltdown gave both its White House missionaries and its state house missionaries free rein to use this narrative to fill a wide range of policy vacuums.

The original goals of “Flatten the Curve!” – to prevent a surge in COVID-19 cases with the potential to overwhelm the healthcare system – were achieved. The flood in New York City crested … and fell. Other cities that seemed as if they might follow in NYC’s footsteps … did not. Mission accomplished! But in the grand tradition of other initially successful emergency government interventions (“Quantitative Easing!”, anyone?) “Flatten the Curve!” is well on its way to becoming a permanent government program.

Today, “Flatten the Curve!” has become the narrative rationale for a range of extraordinary executive actions – on both the left AND the right – that would make Lincoln blush. This is the narrative that will propel the Surveillance State into a permanent feature of American life. This is the narrative that will propel the final transformation of capital markets into a political utility. This is the narrative that will propel us into a war with China. If we let it.


If we let it.

Okay, Ben, how do we stop it? How do we turn this misbegotten process of political lying on its head? How do we reject top-down, model-derived policies and their narratives? How do we BEGIN with the biology of this virus and the rights of individual citizens and build a policy framework from THAT?

This virus is 2-6x more contagious/infectious than the seasonal flu (depending on environment), and 10-20x more deadly/debilitating (depending on whether or not your local healthcare system is overwhelmed). It hits men harder than women, and the old harder than the young. Those are the facts. They’ve been the facts since January when we first studied this virus. The facts have not changed.

Knowing these biological facts, what social policies would you design around THAT?

As a 56 year-old man in just ok physical condition, I figure I have a 1% chance of death or disability if I catch COVID-19 when my local healthcare system is in good shape, maybe 4% if my healthcare system is overwhelmed. Both of those odds are completely unacceptable. To me. Other 56 year-old citizens may feel differently. Other 25 year-old citizens may feel the same. Each of us has a right to life, liberty and the pursuit of happiness, and the legitimacy of our government is predicated on preserving those rights for each of us. Liberty and justice for ALL … imagine that.

Knowing these foundational rights, what social policies would you design around THAT?

If you’ve read notes like Inception and The Long Now: Make, Protect, Teach and Things Fall Apart: Politics, you know that I am a full-hearted believer in acting from the bottom-up, in bypassing and ignoring the high-functioning sociopaths who dominate our top-down hierarchies of markets and politics. I still believe that.

But it doesn’t work with COVID-19.

The core problem with any rights-based approach to public policy is dealing with questions of competing rights. Under what circumstances could your right to liberty and the pursuit of happiness come into conflict with my right to life? Under most circumstances, neither of us is forced to compromise our rights, because we have the choice to NOT interact with each other. If my laundromat requires you to wear a mask to enter, but you think wearing a mask is an affront to your liberty, then the solution is easy: go wash your clothes somewhere else. And vice versa if I think your restaurant does a poor job of enforcing social distancing and food safety: I’ll take my business elsewhere.

Let me put this a bit more bluntly. I think that COVID-19 deniers and truthers are idiots. I think that people who minimize or otherwise ignore the clear and present danger that the biology of this virus presents to themselves and their families are fools. And there’s no perfect way to insulate their idiocy and foolishness from the rest of us. But if these idiots and fools want to take stupid risks alongside other idiots and fools, if their vision of liberty and the pursuit of happiness is to revel in some death cult, but in a way that largely allows us non-death cultists to opt out … well, I believe it is wrong for a government to stop them. Yes, there are exceptions. No, this isn’t applicable on all issues, all the time. But I believe with all my heart that if we are to take individual rights seriously, then we must take individual responsibility and agency just as seriously. Even self-destructive agency. Even in the age of COVID-19. Especially in the age of COVID-19.

There are three common and important circumstances, however, where this choice to NOT interact doesn’t exist, where the rights of yes, even idiots, to liberty and the pursuit of happiness as they understand it will inexorably come into conflict with the right to life of those who understand all too well the highly contagious and dangerous biology of this virus.

Only government can provide the necessary resources and the necessary coordination to resolve these conflicts of rights peacefully and without trampling the rights of one set of citizens or another.

You have no idea how much it pains me to say that.

It pains me because I think there’s a snowball’s chance in hell that our government will do that.

Here’s how a legitimate government would deal with the three inevitable and irreconcilable conflicts of rights in the age of COVID-19:

Healthcare workers and first responders have no choice but to risk their right to life in caring for all citizens who are sick, regardless of the agency or lack thereof behind that sickness.

How does a legitimate government resolve this conflict?

By mobilizing on a war-time basis to provide personal protective equipment (PPE) to ALL healthcare workers and social workers and first responders and public safety officers and anyone else who must serve the sick.

Workers who believe that their employer does not provide sufficient protection against this virus have no choice but to risk their right to life in their return to work, as unemployment insurance typically is unavailable for people who “voluntarily” quit their job.

How does a legitimate government resolve this conflict?

By providing a Federal safe harbor to unemployment claims based on COVID-19 safety concerns, AND by maintaining unemployment benefits at the current (higher) CARES Act level throughout the crisis.

All citizens who use public transit or use public facilities have no choice but to trust that their fellow citizens share a common respect for the rights of others, even if they may differ in their risk tolerance and private beliefs regarding the biology of the virus.

How does a legitimate government resolve this conflict?

By mobilizing on a war-time basis to provide ubiquitous rapid testing in and around all public spaces, starting today with symptom testing (temperature checks) and required masking to limit asymptomatic spread, and implementing over time near-instant antigen tests as they are developed.

It’s just not that hard.

But it is impossible. Politically impossible.

So what do we do?

“I have no idea what’s awaiting me, or what will happen when this all ends. For the moment I know this: there are sick people and they need curing.”

— Albert Camus, The Plague (1947)

We do what we can. We howl our discontent. We resist. We help our neighbors. We make. We protect. We teach. We keep the small-l liberal virtues and the small-c conservative virtues alive in our hearts and our minds.

So what do we do?

For the moment I know this: there are sick people and they need curing.