Mike Green – This Car Has No Brakes (But We’re Driving Uphill)

Published on
December 17th, 2020
Duration
40 minutes

Looking Beyond the U.S. and a Few Crumbs from the Fed Meeting


Mike Green – This Car Has No Brakes (But We’re Driving Uphill)

Daily Briefing ·
Featuring Michael Green, Ash Bennington, Jack Farley

Published on: December 17th, 2020 • Duration: 40 minutes

Mike Green of Logica Capital Advisors joins Real Vision senior editor, Ash Bennington, to share his market outlook as U.S. equities yet again reach all-time highs. Green breaks down the current market structure, looking at how changes to order book depth and inter-asset correlations present investment risks. Green and Bennington discuss commodities, passive investing, and the Fed’s latest FOMC meeting, with Green sharing his outlook on inflation and interest rates. Lastly, Bennington asks Green his views on crypto-assets and particularly Bitcoin, which continues to surge immensely. In the intro, editor Jack Farley jobless reports on today’s jobless claims, the status of U.S. fiscal stimulus, and Tesla’s looming entry into the S&P 500. The paper by Rob Arnott on Tesla, which Jack mentions, can be found here: https://www.researchaffiliates.com/en_us/publications/articles/819-tesla-the-largest-cap-stock-ever.html?evar36=eml_tesla-hero-title&_cldee=amFja0ByZWFsdmlzaW9uLmNvbQ%3d%3d&recipientid=contact-a2eae8d2e63beb1180f1b4c5161772f1-63905c439f0c42899407aad7822ace65&esid=0498153a-6840-eb11-80f1-b4c5161772f1.

Comments

Transcript

  • VH
    Virgil H.
    19 December 2020 @ 10:25
    Two dinosaurs talking about bitcoin - it’s hilarious. Neither of you have done enough homework on it, clearly.
    • JC
      John C.
      3 January 2021 @ 06:52
      Lighten up Francis
  • CD
    C D.
    23 December 2020 @ 06:16
    You're a superstar MG.
  • DS
    David S.
    18 December 2020 @ 06:56
    RV viewers would benefit greatly from a discussion between Mike Green and Dan Morehead on the topic of BTC; or between Mike Green and some other authoritative pro-crypto voice. Raoul Pal, and more or less the larger RV platform, is a veritable Pied-piper of crypto, leading us all to the Koppenberg Mountain of imagined cyrpto riches on the basis of their conviction, expertise and knowledge, in which we place trust and faith. An enormous amount of the RV crypto content, including the superb Crypto Gathering, is incredibly and infectiously bullish. Raoul's entreaties that we don't miss out on the "best investment opportunity of our lifetimes" is powerfully seductive. However, if we are to make informed and consequential investment decisions on crypto, it is essential that we hear the best substantive arguments for and against in A PROPER DEBATE, rather than in these unchallenged, siloed interviews. Mike Green's opinions are held in high regard, and his deep skepticism of BTC begs the question, "How would ______ respond to that skepticism?" or "How is this the best investment opportunity of our lives if Mike Green is so skeptical?" After all, Mike is essentially saying, "it's a bubble, so be careful not to get fleeced." It's only when we can weigh the merits of one argument against the other, in real time, that we can decide for ourselves the best course of action. RV, please consider hosting a much needed debate between the best pro- and con- voices on Bitcoin. That would be an incredible value to all of us who subscribe.
    • Hv
      Hannah v.
      18 December 2020 @ 07:09
      Yes to Mike and Dan please
    • DS
      David S.
      18 December 2020 @ 17:35
      To commenter, J L., who suggested Caitlin Long, yes, absolutely! She is one of the most knowledgeable, compelling and impressive guests I've seen on RV regarding the crypto landscape.
    • RH
      Ron H.
      18 December 2020 @ 20:51
      Those debates would be very welcomed. Regarding Mike's comments, we should first caveat them by saying that "everything" is a bubble, so really using that label is properly a linguistic question of relativity. On a relative basis in terms of magnitude, I think it's clear that the bubbles to worry about are elsewhere. To paraphrase Chris Cole, we are like fish debating the reality of water.
    • DS
      David S.
      19 December 2020 @ 07:08
      Why should Mr. Green want to debate something he does not want to invest in? Time will tell. Mr. Green seems quite happy for others to invest. DLS
    • JL
      J L.
      19 December 2020 @ 10:43
      Hear hear. A real debate on Bitcoin, with true heavy hitters on both sides, would be excellent. As someone who is convinced by the Bitcoin case, I would love to hear strong arguments against it -- to have the Bitcoin argument "steel manned," as Peter Thiel would say, by really and truly challenging it. To the extent that anti-Bitcoin arguments have been found wanting, it is because they aren't strong enough in my view, or they rest on outdated notions or empirically false notions. To suggest Bitcoin does not allow for commerce is simply a weak argument, for example, because the intermediary payments layer (think PayPal and Square) takes care of that. Or to suggest banks will push back against Bitcoin is to ignore the possibility banks will get involved with Bitcoin, joining the revolution rather than fighting it lest PayPal and Square and other Silicon Valley banking innovations take them over. The point here is that, at least from my perspective, truly hard-hitting anti-Bitcoin, anti-crypto arguments would be welcomed. I want to know what they are and have them explored. So far they haven't been -- the objections have been more handwaving or ponderous than substantive. It's like the Morpheus line in the Matrix: "Come on, stop trying to hit me and HIT ME!"
    • NN
      Nathan N.
      20 December 2020 @ 15:26
      Mike and Jeff Booth would be EPIC.
    • RM
      Rob M.
      23 December 2020 @ 02:47
      Nic Carter / Mike Green would be worthwhile also
  • JL
    J L.
    18 December 2020 @ 17:02
    "Bitcoin simply is not legal tender. You cannot settle your taxes with it at the end of the day. As a consequence, in my view, not money." That is an interesting argument. The distillation is that only a government can validate what is money via tax acceptance. But a simple thought experiment can prove this empirically false. -- Imagine a medium of exchange that everyone in a community accepts as having value. -- Now imagine this community contains a diverse array of goods and services providers. -- Now imagine that all of these goods and services providers accept and use the medium described. -- Now imagine the community is 100 million people. The medium of exchange as described in the thought experiment above is money. What else can it be? It is widely accepted and circulated as a means of efficiently exchanging goods and services. Taxes don't come into play. Or for another thought experiment: Imagine that, as a kind of grand experiment, a national government decides to end all forms of federal taxation. Instead of levying taxes, the government will simply issue bonds and print currency as needed, and influence monetary and fiscal policy through meanas other than taxes. In the second example, you have a national currency but no taxes. So how can taxes be the requirement of making something be money? One last thought experiment: Imagine a medium of exchange that is so widely accepted, on a global basis, that you can exchange it in liquid form for any currency in the world. Imagine that you can trade this particular medium for dollars, yen, francs, euros, escudos, whatever you want, because something like a billion people all use it and a substantial network of trading has built up around it. How could that medium of exchange not be considered money, if it is so widely accepted that it can be exchanged readily in liquid form for nearly all types of available fiat currency? If a medium of exchange is -- widely perceived as a store of value -- perceived as having a high degree of security (hard to counterfeit or steal) -- is widely circulated on a global basis, tradable in liquid form Then how does that not count as money? People acting in consensus, around a stable and secure framework, assign the value that makes something money. Apart from people, you need the transaction network and the intermediary payment layers. And then, at a certain point of viability, you cross the threshold into something being money, having "moneyness." Bitcoin is on the way to meeting all those requirements and then some. You don't have to be religious zealot or a maximalist to see that.
    • DS
      David S.
      18 December 2020 @ 18:51
      For now you convert Bitcoin to dollars and pay your taxes. Most would do the same with gold. A problem may arise if digital currencies are legally banned like in China. DLS
    • MB
      Mathew B.
      18 December 2020 @ 20:35
      "Taxes don't come into play ... In the second example, you have a national currency but no taxes. So how can taxes be the requirement of making something be money?" You're welcome to try persuading the IRS (or whatever tax authority you're under) of this view. The anarcholibertarian dream won't ever be granted by tax authorities - or courts. You'll end up in jail for tax evasion or bankrupted for non-payment of taxes.
    • JL
      J L.
      18 December 2020 @ 23:28
      @ Matt B You wholly miss the point of the thought experiment, which is to point out that taxes are optional for a nation state with monetary sovereignty. A federal government that borrows only in its own currency, and carries debts in its own currency and oversees a robust domestic economy, in theory does not require taxes to fund itself. At no point did I suggest a suspension of taxes was going to happen, or should (as taxes have use for other reasons).
    • JL
      J L.
      18 December 2020 @ 23:33
      @ David S Whether or not digital currencies get banned is a different argument than the one stated, which implied that ability to pay taxes is a qualifying feature of making something money. The tax argument is also odd because it implies that a foreign currency is not actually money depending on location, e.g. Americans can't pay their taxes in euros, therefore the euro is not money in the United States? But that would also mean the dollar is not money Europe, because Europeans can't pay their taxes in dollars, only euros -- and yet we know there is something very odd in saying the euro is not money or the dollar is not money. A more logical trait of "moneyness" would be widely available liquid exchange that can facilitate getting the currency one needs, e.g. if my taxes are due in Thai baht because I am in Thailand, and I can very and quickly exchange Bitcoin for baht instantly at the prevailing rate of exchange, that is moneyness on the part of BTC. The faster and easier it is to seamlessly transact, the less important the final form of payment is in terms of determining what has moneyness (money-like characteristics) and what does not.
    • DS
      David S.
      19 December 2020 @ 06:50
      J L. I understood Mr. Green was referring to US currency. Personally I think digital assets are better off not being legal tender. Can you imagine the laws and regulations the US would promulgate to control Bitcoin if it were legal tender? DLS
    • IH
      Ian H.
      22 December 2020 @ 20:27
      How you do sales tax? We have the equivalent called goods and services tax in Australia. All transactions would need to be calculated back to the base currency to work out the GST on that transaction and then paid when due. Possible with technology. On hard money backed systems, governments can't grow their reach further than tax base. Then only the best projects with the best return get nod. Ian
  • rm
    roland m.
    22 December 2020 @ 19:30
    Really liked the interview, including the skeptical view on BTC. Don't want to advocate pro or con Bitcoin but I had to chuckle @ the definitions of money: "You can't settle your taxes at the end of the day" "Money is that which cancels debt...to the Government that is taxes..." > check: https://www.bitcoinsuisse.com/news/canton-zug-accept-cryptocurrencies-for-tax-payment-in-2021 Zug is a canton in Switzerland and obviously we're not talking of widespread global adoption but BTC seems to be money in Zug:)
  • AK
    Ado K.
    20 December 2020 @ 23:22
    The cantillon effect has caused centralization of wealth that is beyond the charts. To claim that a environment where there is not a debt market would worsen this is complete madness. It would do the very opposite. I think a historical study of wealth distribution in hard money societies would be a good starting point for Mike.
    • DS
      David S.
      22 December 2020 @ 06:33
      Ado K. - Thank you for Introducing the term cantillon effect. After a couple of 8% microbrews, It will be better to do a little research tomorrow. DLS
  • TC
    Thomas C.
    21 December 2020 @ 22:41
    Great points Mike good interview Ash
  • BA
    Bruce A.
    21 December 2020 @ 09:04
    Go Mike Go
  • TZ
    Toomas Z.
    20 December 2020 @ 22:56
    Corporate capital in crypto will draw serious aggro from central banks/govt, eventually. Imagine it's peak cycle 2023, there's $3 trillion corporate/pension fund/private investor capital in crypto. The bear market comes. Does this mean that the Fed (or who bails it out? the market is not based in any country) HAS to bail it out or risk/guarantee a liquidity crisis and severe market crash/fire sale on most other assets? Even if the Fed only bails out the stock/bond market with printed money purchases, they are going to be really angry and will almost certainly result in attempts to kill bitcoin, with most companies put off from investments basically forever. When it is going up, everyone is happy, but most companies, particularly with modern day debt levels and just in time manufacturing/free cash flow/capital requirements simply cannot stomach 50%+ declines of their balance sheet. I think this whole SoV argument is looking for a use case where there isn't one, with incredible marketing and alluring gains attracting investors. It will come back to bite not only Bitcoin but the entire crypto industry in the next bear market, and rather unnecessarily. There are other, real legit use cases that are based on utility that would show slow, long term increases in a market not driven by Bitcoin that would eventually transform the way commerce is done. With S2F supply shocks the volatility causes addictive % gains that attracts so many people with promises of making life changing money, which it does deliver on, but in the next bear market with it probably being much more systemically ingrained, any significant price declines will need bailouts in a similar fashion to traditional markets, or risk collapsing the whole system. Many people will dislike this view, but I don't think it's one that has been thought about much. Welcome to constructive criticism, and if you believe I am wrong somewhere, please discuss.
    • TS
      Tao S.
      20 December 2020 @ 23:36
      so, what is your btc position? zero?
    • TZ
      Toomas Z.
      20 December 2020 @ 23:45
      I don't disclose my positions, but I am involved in the crypto space. Like I said, for this to actually happen in a few years that capital has to flow in and it justifies some of the price targets floating about currently, so until then ride the boat. As the bear market comes, it is a serious risk that must be considered, and it will be interesting to see how governments react. Would you still hold bitcoin/crypto if it was taxed at 70% (remember - taxes don't subtract inflation)? That is one way to really try and kill crypto. I think that is really unlikely to be tried or to even work if it was tried (the industry relocates/capital relocates), but if something like this does happen, governments will be really angry. Due to the fact that a bear market in something that is now so large would unleash a general liquidity crisis, and due to the fact that governments are losing their monopoly over money. I think the next bear market will be the beginning of a war between private & government currencies.
  • TS
    Tao S.
    20 December 2020 @ 23:32
    What's with that shirt Ash?
  • JV
    Jan V.
    18 December 2020 @ 16:16
    Great to have some pushback against the bullish crypto narrative. His arguments definitely made sense but they don't concern me.
    • JL
      J L.
      18 December 2020 @ 17:12
      I would go further and say Green's anti-crypto arguments are actually crypto-bullish, by dint of the fact he doesn't have better arguments available. I mean -- being skeptical because the banks and the regulators will push back? Really? That is like arguing circa 2003 that Amazon will fail because Barnes & Noble is too powerful and the big box retailers will have too much clout to let e-commerce take hold. And to the extent giant institutions are buying BTC, and brilliant Wall Street minds are already sorting through regulatory hurdles and building entrepreneurial bridges, the legal bridging is already happening from the inside out.
    • DS
      David S.
      18 December 2020 @ 19:22
      Giant institutions purchased and sold mortgage back securities to their best clients also. My only caveat with Bitcoin is someday, somewhere, somehow Bitcoin will be disabled by hackers - a fear of being right. Most investors have a much better understanding of the digital world. My assumption is based on human nature. The higher Bitcoin goes, the larger the incentive to disable or hack. Gold has its own set of problems. Nothing is completely safe. Size properly. DLS
    • AS
      Alan S.
      18 December 2020 @ 23:31
      DLS, Hack BTC, really?? Do you even understand what BTC is and how it works? How would one hack it, exactly? Since you comment multiple times on everything in the lower tier options, please explain, in very broad strokes, how BTC can be hacked.
    • JL
      J L.
      18 December 2020 @ 23:38
      Regarding the nonzero probability of Bitcoin being hacked (though it hasn't happened so far), one could add there is a nonzero probability of nano-molecular assemblers turning sand into gold. Point being, the hypothetical of Bitcoin being hacked exists, but the hypothetical also exists that sufficiently advanced technology could make gold (or any other physical metal) permanently non-scarce. Both hypotheticals are so far-fetched they aren't worth factoring into investment strategy.
    • DS
      David S.
      19 December 2020 @ 07:00
      I know you have 100% confidence that the foundations of Bitcoin cannot ever be hacked or destroyed. I hope this is true. It will be the first perfect thing that man has made. DLS
    • JL
      J L.
      19 December 2020 @ 10:38
      If you're referring to my comment, I actually said the exact opposite. I openly acknowledged there is a nonzero probability Bitcoin could be hacked in some unexpected way, e.g. a quantum computing backdoor. My point was not that Bitcoin's integrity is certain, but rather that nothing has true 100% certainty -- even gold could theoretically be hacked, in a sense, by nano-molecular assembly devices that could recreate any physical substance from sand. In a world where nothing is certain, all is probability. But if the likelihood of a given event is so close to zero as to asymptote above zero, it falls the threshold of bearing weight in a strategic calculation. This is not faith, it is the opposite. It is a commitment to mathematical rationality that goes beyond binary assumptions and embraces reality for what it is.
    • DS
      David S.
      19 December 2020 @ 21:03
      J L. - It is still my hope that Bitcoin is safe and all you wish it to be. Bitcoin is a great play on scarcity and technology. I have made a little money in Bitcoin myself. I am out and must suffer the consequences. The last time I sold I felt strongly it would continue to go up with all the solid good news. I did not reinvest because I cannot judge myself how safe it is. I am OK with other investments. At my age, my life is not built around increasing my account but protecting capital. “I have overcome my need to conquer the World.” The Virtues of War, Steven Pressfield. DLS
    • JL
      J L.
      20 December 2020 @ 17:07
      @ David S. Bitcoin isn't anything but a trade to me, albeit a very big one. Even the trade of the decade is still just a trade. It just happens to have more size and conviction than the others. My sense with a lot of Bitcoin skepticism -- not all of it but a lot -- is that people miss an essential aspect of probability relating to expected value. The basic concept of expected value is that the future is unknown, but the potential size of the upside, relative to the risk, matters a lot. If an asset has real potential to appreciate 10X to 100X in value, for example, that can merit a position even if there is a high probability of failure. This is simple expected value. One wouldn't bet the farm on something with, say, a 60% probability of failure, but if the potential upside is high enough it could certainly warrant, say, a wager of 1 or 2 percent of assets. This is another reason the weak criticism of Bitcoin seems so illogical to me. If one firmly believes without a doubt that BTC is going to be a failure, then ok, fine. But if one can see, say, even a 25% possibility that Bitcoin does what proponents think it could do, that warrants a small position simply on limited risk expected value terms. Tails you lose 1 percent, or even 50 basis points, heads you make 100X your money while owning something that could be low-cost insurance against a traditional meltdown in the financial system besides. People don't get probability frameworks I guess. But it's weird to me that many traders and investors wouldn't embrace something as bedrock useful as expected value, or the concept that, with enough embedded upside potential, even a low probability outcome warrants modest exposure.
  • VP
    Vincent P.
    20 December 2020 @ 16:37
    One of only a handful of guests that often keep my attention all the way through, Mike was at his best in this discussion. Objective and thought provoking. Thank you sir!
  • SS
    Sunny S.
    19 December 2020 @ 06:46
    Mike Green I'm surprised that you are so sceptical on BTC given the network effect. It doesn't have to be a store of value forever just long enough to life raft people out of harms way during the crisis. BTC's not perfect but neither is fiat or gold so it still has a place until something substantially more significant comes along. Some of your arguments could do with some more thought. Like money is only money if it can cancel out debt, which was interesting point. I think people haven't thought about this properly because gold used to be money back in the roman times in that it canceled debt and was used to transact but it was flawed because it had a limited supply. Then money became fiat because of the printing press technology but it was flawed because it has an unlimited supply. After which money became digital currency, balance sheets and custody regulation. Next money will be programmable blockchain crypto micro-algo managing your financial transactions under the instructions of our "non-corupt" elected government officials. I have a problem with the initial statement re money is only money if it can cancel out debt. Debt is the reason the world is in its current mess and there are only two ways out, devalue money to zero or debt restructure i.e. take bank depositors money... So if money is fiat you can have money, I'll have gold and bitcoin! Another argument you made was that stable coins are pointless as keeping real money in the real system is better if its propped up by the fed. One simple counter argument, stable coins only need to exist to get out of the unstable systemic nature of the financial system. The coin rate is not the primary issue, its loosing all your money in the banking system as I see it. Then when BTC goes down during a market crash you buy BTC using the stable coin and wait until the monetary system starts its new course. The value of the stable coins and USD may or may not go up or down during a financial system illiquidity crisis. The reality is it will probably stay the same just like all the other fiat but you just won't be able to access it. This strategy is better than risking all you dry powder going to zero under government fiat control.
    • AB
      Alastair B.
      20 December 2020 @ 14:06
      I can get 14% on stablecoins. It’s worth having some for this alone
  • SS
    Stephen S.
    19 December 2020 @ 22:52
    Most important takeaway from this video: do not flush paper towels down the toilet!
    • SS
      Stephen S.
      19 December 2020 @ 23:09
      In all seriousness, great episode.
  • PC
    Paul C.
    19 December 2020 @ 22:05
    Bit late to this one but can we please have an episode with Mike just discussing crypto? People often talk about getting outside of your echo chamber but most twitter celebs are just caricatures on one extreme or the other. Mike's analysis in this interview is objective and impartial, he assess the pros and cons with impartiality. Would be massively valuable to have 1-1.5 hours of similar content.
  • KF
    Kenneth F.
    19 December 2020 @ 16:40
    Mike just pissed off the Bitcoin cultists.
  • NB
    Nicholas B.
    19 December 2020 @ 10:22
    LOL, everyone getting triggered on BTC and typing lots of words. Like gold, it's a reserve asset, it rewards savers, miners benifits from price appreciation, it's a commodity, has value and you can't pay taxes with it. Unlike gold, supply is fixed and there will be an appropriate differential in price appreciation against any instrument with supply that can be manipulated. That's all you need to know, choose your weapon.
  • JS
    Jon S.
    19 December 2020 @ 01:11
    Mike, what are your thoughts on the liquidity provided by central banks worldwide. I believe they'll be pumping a combined 300 billion per month going forward. Won't this just continue to send markets ever higher? I don't see it stopping anytime soon.
  • HN
    Hassan N.
    18 December 2020 @ 22:54
    Few understand and can elucidate the inner workings of the current market as Mike Green. Thank you for another great interview!
  • OC
    O C.
    18 December 2020 @ 22:31
    "Money is that which cancels debt." Interesting statement. I have to think about this a bit more. I am not sure if I agree with it. Certainly, it makes sense if people trust sovereign governments and/or live in societies with strong rule of law. Implicit in this statement combined with the discussion around sovereigns is the notion that governments are bigger than markets. I am not sure if I agree with this as well. Lots to think about here. Regardless, I truly enjoyed this episode. I like hearing Mike's views and explanations even if I may not necessarily agree it. Thanks.
  • DS
    David S.
    18 December 2020 @ 19:01
    Thank you Mr. Green for being on the DB. You bring reason supported by facts to help us understand the markets. I know you are terribly busy, but a monthly update on the DB would be greatly appreciated. DLS
  • ar
    andrew r.
    18 December 2020 @ 18:01
    1st half is MG at his best -- really great. Not as much on the crypto section, but it's healthy to have different perspectives. Ash as usual is clinical as an interviewer.
  • HJ
    Harang J.
    18 December 2020 @ 17:40
    Insightful point that lower liquidity --> higher volatility in either direction
  • DD
    Darrell D.
    18 December 2020 @ 03:13
    at the time of this comment: 185 likes to 3 dislikes. I wonder what the 3 people were dissatisfied with...I guess at that ratio, it doesn't matter. Great job RV team and thank you Mike! Keep it coming!
    • JS
      Jon S.
      18 December 2020 @ 17:39
      The three dislikes came from three people expecting Mike to give the exact turn in the markets...time and price.
  • SD
    Sebastien D.
    18 December 2020 @ 17:04
    Actually, MakerDAO is issuing stocks (MKR) in case it endures losses in the lending (did that in March). Just like banks are issuing stock when their solvency is at risk. The stablecoin in Maker is DAI (more than 1B now). But amazed that Mike Green knows about Maker.
  • PR
    Peter R.
    18 December 2020 @ 16:54
    Mike Green knows everything. Every time he is on the platform, he provides a new and unique perspective. Specifically, his take on inflation and Bitcoin are both welcome counterpoints to the current narratives being heard on RV. And, Mike Green dropping knowledge on the difference between toilet paper and paper towel...I mean, what topic can’t he provide insight on?
  • JL
    J L.
    18 December 2020 @ 16:17
    Regarding his Bitcoin skepticism, Green should have a discussion with Caitlin Long. In her convo with Raoul she spoke directly and specifically to his skepticism around Bitcoin's integration into the financial system, describing how she is working with the state of Wyoming to develop favorable custody legislation that gives Bitcoin a safe harbor against liens as a kind of legal tender. Another big point in favor of BTC having utility in the financial system is the existing shortage of high quality collateral within the financial system. The system needs HQLA (high quality liquid assets) in a big way — there clearly isn't enough of it, that is to say, there isn't enough collateral — and Bitcoin has excellent potential to serve as collateral by dint of the fact so many long-term investors are willing to store their wealth in it and sit on it. In this sense, the rising demand for collateral strongly favors Bitcoin's integration because, simply, HQLA / collateral shortage provides a need and Bitcoin is a supply solution for that need. BTC has great potential to serve as an easily storable and transportable collateral asset. Figuring out the rules and regulations is a matter of paperwork, and there are very smart people working on that. Then, too, the notion that Bitcoin is "taking away people's ability to actually buy stuff or participate" seems empirically false based on the fast ramp-up of intermediary payment rails. Take PayPal for example, which has something like 22 million merchants in its global network. PayPal can make money as a BTC intermediary, running a massive internal trading desk as PayPal's ~350 million users transact in Bitcoin, or accept Bitcoin for services. This in effect means that PayPal can let you buy something with Bitcoin, through PayPal, in the same manner you can use your credit card in a foreign country and the currency conversion is done automatically. It also means that, if you are a merchant hooked up to the PayPal network, you will be able to accept Bitcoin payments via PayPal because PayPal will, again, do the conversion for you and earn a market maker profit in doing that. The whole same deal goes for Square, and for any other sizable financial player that gets involved with the intermediary payments layer, which in turn makes the argument that Bitcoin is an "off ramp" seem very offbase. The intermediary payments layer, and the incentive for large players to facilitate BTC transactions on their fast networks while holding BTC in bulk as a custody solution, means that BTC can very much function as a liquid transactional vehicle as well as a store of value. You don't need the ultimate security of your own keys for, say, buying something on the web with your Bitcoin, which is why PayPal or Square or whomever can and will grease the wheels there.
  • PG
    Philippe G.
    18 December 2020 @ 15:59
    Appreciated Mike G.'s healthy skepticism of bitcoin...important to hear opinions and thoughts outside of the crypto hype machine... No - I'm NOT a fiat cheerleader :)
    • Hv
      Hannah v.
      18 December 2020 @ 16:06
      Give us more contrarian please Mike.
    • MB
      Mathew B.
      18 December 2020 @ 16:17
      I am a cheerleader for law & legal systems. Fiat is backed by them; crypto is not. So, as a consequence, the upending of fiat by crypto is not (yet) going to happen. The rally in crypto is real; the destination is however far less certain than adherents want us to believe.
  • MB
    Mathew B.
    18 December 2020 @ 16:15
    Immensely insightful - and, yes, concur completely. What we see everywhere - from the crypto space through political ructions - is a gross lack of understanding of the legal system: both in terms of how law works, and the value thereof. All of society & commerce is underpinned by law; yet understanding of law is despairingly rare. Good job Ash & Mike on casting a legal shadow on crypto.
  • Hv
    Hannah v.
    18 December 2020 @ 16:05
    As for BTC’s bubble crashing, I’m reckoning a big drop’ll be around April 15 when retail traders realize huge tax bills. They’ve flocked to Robinhood’s commission-free trading desk bloated with stimulus cheques and boredom at quarantine time. My sights are on that next big dip.
  • MB
    Maxime B.
    18 December 2020 @ 12:39
    When TULIPS rule ... you only see TULIPS ... bitcoins ???
    • Hv
      Hannah v.
      18 December 2020 @ 15:56
      Tulips are scalable. BTC isn’t. As an aside, VISA is onboarding with Coinbase. That’s PayPal, Square and now VISA.
  • HK
    H K.
    18 December 2020 @ 10:37
    Great interview. Also was distracted somewhat by MG’s change in appearance. Dude’s been working out
    • JC
      JESSICA C.
      18 December 2020 @ 15:49
      MG is on low carb diet. Looks like it is working. Yay!
  • JS
    Jon S.
    18 December 2020 @ 08:26
    I also appreciate that despite ash being opengly bullish about BTC and defi he has been the most respectful interviewer ever and let Mike explain his antithesis. That can only great Interviewers do. Ash splendid interview and Mike explains everything so clear amazing to watch
    • AB
      Ash B. | Real Vision
      18 December 2020 @ 15:36
      Thank, Jon. Much appreciated.
  • VS
    Ville S.
    18 December 2020 @ 15:20
    Ash always has sirens in the background...
    • AB
      Ash B. | Real Vision
      18 December 2020 @ 15:35
      Ha. Yep.
  • JC
    JESSICA C.
    18 December 2020 @ 14:33
    Mike Greene is an amazing analyst. I am always appreciative of what he has to say. He is an opposite of Jim Cramer and the guests who are on CNBC the Bullshit channel.
  • AP
    Adam P.
    18 December 2020 @ 13:13
    If I hear from Mike Green, it’s a good day.
  • JC
    John C.
    18 December 2020 @ 10:58
    To me, Mike’s dig on BTC was not the bubble, but the lack of acceptance/interplay with fiat finance: reminder to the maxis to play along with the big boys and find ways to sink hooks into the legacy system...
    • WW
      Will W.
      18 December 2020 @ 12:36
      I always appreciate Mike's take, but to the extent that BTC is a bubble, I would disagree with him on this, is the growing consensus that the current system is broken, and capital searching for an asset, store of value..... that is beyond the dominion of governments to f up, and where I agree with could be one of the pitfalls.
  • KS
    Kim S.
    18 December 2020 @ 09:18
    Great interview as always with Mike. I wish Mike should be "fact checking" charts more often :)
    • JS
      Jon S.
      18 December 2020 @ 10:09
      Bring this on plus please
  • JS
    Jon S.
    18 December 2020 @ 08:23
    Splendid Mike - we need more- please bring him on RV Plus for more! What is his background educational and professional does anyone know? Great one!
    • CR
      Christopher R.
      18 December 2020 @ 10:01
      Check out the interview "Dumbest Man Alive (guest: Michael Green) - Market Huddle Ep.104" on YouTube - he covers his career in quite a lot of detail at the start and it's a really good listen.
    • JS
      Jon S.
      18 December 2020 @ 10:08
      Thank you 😊
  • NL
    Nikola L.
    18 December 2020 @ 01:18
    Just finished watching and thank you Ash and Mike. This was great great interview. I’ve been buying S&P500 shorts in Sydney starting yesterday and today (bought few more just before Futures dipped). I know it is foolish but at least makes sense – hence why is foolish, I guess. Fundamentals don’t matter – gains baby, only gains matter. lol
    • TN
      Tim N.
      18 December 2020 @ 09:38
      There is no logic or sense except that central banks and policy makers have many tools to manipulate markets to support the status quo - particularly as they are coordinating their actions. There will only be a correction when they run out of tools which seems unlikely until the population realise they have been turned into slaves or the global coordination breaks down (ie war). Betting against the S&P/Fed is like betting against the housing market in Australia. I am more comfortable watching from the sidelines.
  • AP
    Alex P.
    18 December 2020 @ 05:21
    Mike is the man! I’m glad he called it what it is at the end. BTC is a bubble and bubbles always do what they do.
    • KK
      Kyle K.
      18 December 2020 @ 07:18
      get yuuge and ask for a bailout
    • Jv
      Jasper v.
      18 December 2020 @ 09:38
      Everybody who bought BTC before 20k is in profit. There is no assetclass on earth who gives you these returns. Ohyeah, one more thing, everything is a bubble when you manipulate currencies (exponential). Thats why we need BTC
  • GJ
    Gino J.
    18 December 2020 @ 08:20
    What a class act. As always Mike is insightful and thoughtful about his views. Great job, Ash!
  • DG
    David G.
    18 December 2020 @ 07:44
    I have to respectfully disagree about gold not being money. Green's definition is too simplistic. Money is a medium of exchange as a primary function. So long as humans on this earth are willing to exchange gold for the pieces of paper that sovereigns and Fed agents will accept for debts and taxes, gold is money. Human's relationship with gold hasn't changed in 5000 years, I'm not going to beg that MMT changes that relationship. The second most important characteristic of money is, money is a store of value over time. Fiat currencies clearly are not. Wages have not kept up with inflation. So in the setting of extreme or hyper-inflation, the ability to pay off debt is going to become every increasingly difficult for most. Without going on about what you already know, Imho you are arguing semantics, and ignoring the practical reality of gold. If you save gold over time, aside from a deflationary crash, that causes a secular reduction in the monetary supply, owning of gold will increase the ability to pay today's debt tomorrow, once it is exchange it for an increased amount of tomorrow's inflated Fed notes. The possibility of secular deflation or the inevitability of default induced deflationary shocks, is the only reason not to more aggressive on gold. Also the confiscation potential.
  • MT
    Mark T.
    18 December 2020 @ 07:26
    Great video. Mike brings real insight and clarity.
  • MH
    Muddshir H.
    18 December 2020 @ 05:15
    Great work Ash and Mike.
  • Hv
    Hannah v.
    18 December 2020 @ 04:53
    The forgiveness of unpayable debt seems to be an ultimate compassion of society. I’ve not heard this as a counterpoint to the faceless, trustless offerings of Bitcoin’s strengths. Our systems are meant to help run our societies. I wonder if Bitcoin’s ambivalence and simplistic nature will grief equally as much as it deigns to promise? What else do you see, Mike, that hasn’t been thought through? In terms of the wealth divide, here in Victoria, the city park along the ocean is filled with tents; unheard of in our Socialist Canuckistan. And we have senior women panhandling outside the grocery stores. I’ve NEVER seen that before. A nice loaf of bread is $9.00 now. Ok, so it was woodfire-baked, organic and kneaded by virgins, but that’s the way we ate for 100000 years. It’s almost worthy of a Hogarth.
  • JS
    John S.
    18 December 2020 @ 04:43
    Bravo to Ash for pulling out the tidbits of wisdom and keeping the conversation going. Mike Green knows a lot about everything, and pacing the momentum of thought is a real treat.
  • DP
    Duane P.
    18 December 2020 @ 04:42
    I haven't been a fan of the RVDBs lately but this one was excellent. He presents original thoughts, original data, and original perspectives that aren't the same old rehashed bear or bull points that become tireless to listen to. I'm surprised Mike Green thinks Bitcoin is a bubble. However, it's nice to have a sobering voice on the crypto space. The never ending unskeptical cheerleading of all things crypto on RV is not a healthy dynamic, to use Mike Green's favorite word.
  • NL
    Nikola L.
    18 December 2020 @ 00:31
    if Mike can do it so can I. Going on diet.
    • Hv
      Hannah v.
      18 December 2020 @ 04:26
      He’s done a great job recreating that last-century athlete’s bod ;) That’s hard to do.. looking real sleek and fine, Mike. Oh.. great talk; love Ash’s not so subtle commitment to the crypt.
  • CC
    Charlie C.
    18 December 2020 @ 04:00
    Mike is powerful & persuasive on passive investment & China. On digital currency, he has an opinion. It's a shame to have wasted that time
  • JD
    Jesse D.
    18 December 2020 @ 03:39
    Love Mike. I’d like to have a beer with him. While I really like his market commentary, his other commentary on politics, life, etc is just as insightful.
  • SB
    Sebastian B.
    17 December 2020 @ 23:28
    Why does Mike Green always look like he's a ghost? haha, weird settings.
    • DT
      David T.
      17 December 2020 @ 23:48
      :))
    • sw
      shaun w.
      18 December 2020 @ 01:16
      Towards the end he talks about FOMO: "When you talk about fear of missing out, nobody wants to miss out on the afterlife, I mean thats nirvana"
    • RK
      Robert K.
      18 December 2020 @ 03:35
      One of my favorites, but RV needs to help him up his Zoom game. Multiple issues, angle, green screen...
  • ds
    durgesh s.
    18 December 2020 @ 03:18
    Mike Green is too good , is there any way to get all his presentations and writing beyond Real Vision and His own site ?
  • SP
    Shay P.
    18 December 2020 @ 02:53
    I like Mike's view on the markets but on crypto he believes its a 12 year bubble..do bubbles last that long? Bitcoin has no utility like Uber owns no cars or restaurants, Twitter/FB/Instagram/Snapchhat produce nothing....yet they all have enormous valuations....and millions and or billions of users..thats its value...are they all bubbles?
  • RD
    Rui D.
    18 December 2020 @ 02:46
    Big take away for me was the last minute about if someone takes on religious fervor, the potential for mass FOMO exist. That one is worth lots of money for me.
  • JT
    John T.
    18 December 2020 @ 02:32
    Mike Green is my favorite speaker.
  • AT
    ALAN T.
    18 December 2020 @ 02:32
    Terrific
  • AC
    Andrew C.
    18 December 2020 @ 02:27
    Fantastic as always, thanks. I am wondering how this new fad of 'direct indexing' (customizing your index) prolongs the passive indexation. Taking the SP500 and removing companies you don't like is active management, I would surmise. (though it is still "if I give you money, buy")
  • RB
    Richard B.
    18 December 2020 @ 02:15
    Interesting But USD Raoul?, Hugh Hendry ??? Silence.
  • IN
    I N.
    18 December 2020 @ 02:12
    That was great! Always great to have Mike Green. Afterlife is a bubble. Not going to get to hang out with Bertrand Russell on the other side. I am always interested in shorting it.
  • KP
    Kaushal P.
    18 December 2020 @ 02:06
    I love listening to mike. He is the right mix of witty, knowledgeable and humble.
  • CB
    Clifford B.
    18 December 2020 @ 00:37
    Wonderful RVDB guys. Mike G gets it. Great insight into crypto space filling in the holes the googley eyed fan boys love to gloss over. Also point of note on debt being used for crypto. Microstrategy is doing convertible debt offerings to buy BTC which is supporting prices. Second point of note. Trade volumes on btc actually less now than at 2017 bull run. I wonder what would happen if Microstrategy had financial issues and had to sell en mass. Ponzi much....
    • GF
      George F.
      18 December 2020 @ 01:31
      Not sure I fully understand your analogy as a Ponzi. I think what you mean is you don't understand what societal value people and institutions are seeing in it, therefore it must be completely made up, built off hype, and has no value which you call a "Ponzi". That is absolutely your right to not understand it or want to but that doesn't make it a Ponzi. To your other statement, if Blackrock decides to take a position out of a company they own, I assure you the price will fall just from one entity removing their interest but that's a free market. Bitcoin is no different. Lastly, I would suggest taking a look at the price of each block transaction vs. 2017. A block can only be created every 10 minutes so the "Volume" stays steady. IMO, you're looking at the wrong metric.
    • KP
      Kaushal P.
      18 December 2020 @ 02:03
      Literally none of what you said is true. Dollar volume traded daily is way higher than before. 40-60 billion get traded everyday. You think MSTR probably buying off exchange for 1% of daily volumes makes the price go up 30%? I agree that it’s euphoric but no more than all the other risk assets.
  • RG
    Ryan G.
    18 December 2020 @ 01:56
    Mike Green has become my favourite on Real Vision. Thanks for your thoughts Mike.
  • JS
    Jon S.
    18 December 2020 @ 01:43
    MG is simply the smartest guy in the room. He was so grounded in March/April 2020 timeframe with his explanation of the pandemic as simply accelerating the trends that were already in place.
  • PB
    PHILLIP B.
    18 December 2020 @ 01:29
    Fantastic. Thank you.
  • NL
    Nikola L.
    18 December 2020 @ 01:18
    Just finished watching and thank you Ash and Mike. This was great great interview. I’ve been buying S&P500 shorts in Sydney starting yesterday and today (bought few more just before Futures dipped). I know it is foolish but at least makes sense – hence why is foolish, I guess. Fundamentals don’t matter – gains baby, only gains matter. lol
  • vf
    victor f.
    18 December 2020 @ 01:17
    Fantastic interview!!! Has anyone tried to quantify the g/cm3 of MG's brain???
  • MC
    Mark C.
    18 December 2020 @ 00:39
    Great Show. Love the points of view. Lots to think about.
    • AB
      Ash B. | Real Vision
      18 December 2020 @ 00:54
      Thanks, Mark. Much appreciated. I enjoyed this one, too.
  • DS
    David S.
    18 December 2020 @ 00:29
    MG's wicked smart....always taking notes and paying attention
    • DS
      David S.
      18 December 2020 @ 00:33
      This what DB's should be about and behind the paywall....period.. Actionable intelligence.
  • TC
    Tim C.
    18 December 2020 @ 00:27
    Mike is always awesome to listen to. Amazing command of history, economics, finance, math and modeling - with a sprinkling of wit.
  • NN
    Ninh N.
    18 December 2020 @ 00:15
    markets make us feel good and feels like everything is ok..... until they're not. Great RVDB today guys.
  • BK
    Brian K.
    18 December 2020 @ 00:11
    Sovereign issue and Bitcoin - Classic Mike Green. Keep up the good work.
  • BK
    Bruce K.
    17 December 2020 @ 23:56
    BRAVO MIKE! Fabulous observations and insights on a myriad of topics, including the 'minefield' that is cryptocurrencies. Great work, as usual.