American Consequences - May 2021

INDUSTRY LEADERS DUKE IT OUT EXCLUSIVE DEBATE

MICHAEL SAYLOR

FRANK GIUSTRA

GOLD BITCOIN AMERICAN CONSEQUENCES MAY 2 0 2 1 WHICH MINERWILL CLAIM VICTORY? E D I T E D B Y P . J . O ’ R O U R K E I D E A S T H A T M A T T E R

INSIDE THIS ISSUE

F or centuries, gold has been the showcase of wealth, a safe haven when the dollar waned or stocks tanked. Then along came cryptos... Has bitcoin upset the apple cart of currencies? This month, we delve into which currency will stand the test of time... Stansberry Research financial reporter Daniela Cambone takes you behind the curtain of the recent fantastic battle-of-the-billionaires debate between crypto king Michael Saylor and gold guru Frank Giustra. We’ve got plenty of material in this issue about our current leader of the free world... In “America’s Worst-Made Plans Come Home to Roost,” our editor in chief, P.J. O’Rourke , muses on the folly of government planning, including whatever Biden plans to do with $6 trillion of your money. Publisher Trish Regan dives into how the Biden administration’s barrage of spending and handouts has inspired Americans to do, well, nothing... Executive Editor Buck Sexton breaks down the first four months that President “Amtrak Joe” has been in office, and, unfortunately, it appears that the train is heading to Destination Nowhere... R.I.P. Bernie Madoff... The late financial swindler’s body count exceeds 40,000 investors. Executive Editor Kim Iskyan explains how Madoff (almost) pulled off the most sweeping financial fraud in history. Then, RealClearMarkets editor John

Tamny takes a contrarian approach in his Misunderstood Deficits piece, and writes that the panic often surrounding sizeable debt is a false alarm. John Tierney , a contributing columnist for the New York Times , looks back at the early COVID-lockdown measures in this must- read story, noting that what seemed like sound science at the time may have cost more lives than it saved. Fallen-from-grace Rudy Giuliani has been one of America’s favorite political clowns this past year... But it’s all gags and giggles until the Feds come knocking in this month’s Dunce of the Month. Former Car and Driver editor John Phillips III tackles electric vehicles in this fresh take on whether these plug-in cars will actually stick. Now, politician memoirs are typically good for very little... least of all, reading. But, according to P.J., former Speaker of the House John Boehner’s book exceeds expectations, proving an endlessly entertaining and quotable firing squad aimed at the idiocy of Washington, D.C. And the winner for worst award show goes to... actually, no one cares. Commentary magazine editor John Podhoretz shares how Hollywood, the Academy, and the Oscars- marketing monster are irrelevant in 2021, a self-inflicted casualty of #MeToo, wokeness, COVID, and digital content. Regards, Laura Greaver Managing Editor, American Consequences

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May 2021

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Past Guests include: STEVE FORBES JAIME ROGOZINSKI ANTHONY SCARAMUCCI

CONTENTS MAY 2021 : ISSUE 48

36

6

80

68 32

26

Inside This Issue BY LAURA GREAVER

44 Misunderstood Deficits BY JOHN TAMNY

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AMERICAN CONSEQUENCES

America's Worst-Made Plans Come Home to Roost BY P.J. O'ROURKE

52 Unplugged: Electric Vehicles BY JOHN PHILLIPS III

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Editor in Chief: P.J. O’Rourke Publisher: Trish Regan Managing Director: Jamison Miller Executive Editors: Kim Iskyan, Buck Sexton Managing Editor: Laura Greaver Creative Director: Erica Wood Contributing Editors:

60 Amtrak Joe:

10 From Our Inbox

Next Stop, Nowhere BY BUCK SEXTON

14 Bitcoin vs. Gold

BY DANIELA CAMBONE

64 John Boehner Book Review: Throwing HIs Book At Them BY P.J. O'ROURKE 68 Bernie Madoff: Lessons From a Financial Serial Killer BY KIM ISKYAN

26 Uncle Joe Wants YOU... To Do Nothing BY TRISH REGAN

32 Dunce of the Month: A Rude Awakening

Andrew Amundson, Daniela Cambone, John Phillips III , John Tamny, John Tierney Advertising: Paige Henson, Jill Peterson Editorial Feedback: feedback@americanconsequences.com Published by:

BY ANDREWAMUNDSON

80 To Hell With the Oscars BY JOHN PODHORETZ

36 Death and Lockdowns BY JOHN TIERNEY

90 Featured Contributors

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American Consequences

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From Editor in Chief P.J. O’Rourke

AMERICA'S WORST-MADE PLANS COME HOME TO ROOST

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May 2021

LETTER FROM THE EDITOR

The Biden administration has a lot of plans...

In his first 100 days in office, President Joe Biden has already proposed “The American Rescue Plan” ($1.9 trillion), “The American Jobs Plan” ($2.3 trillion), and “The American Families Plan” ($1.8 trillion). That’s $6 trillion so far. These plans... Do they mean families need to be rescued from jobs or your job needs to be rescued from you or you need to be rescued

But as the poet Robert Burns said... The best-laid schemes o’ mice an’ men Gang aft a-gley. (“Gang aft a-gley” being Scots dialect meaning “after taxes and inflation.”) Certainly one of the best-laid schemes of men (mice really didn’t come into it, though I’ve got some in the chicken coop) was the U.S. Constitution. And a notable feature of the Constitution is that it contains no plans . The Constitution guarantees our freedom, but – on purpose – it doesn’t tell us what to do with that freedom. We wouldn’t be free if it did. A leaky chicken coop and no pickup in which to haul away the old shingles aren’t making me feel more free than I felt before

from your family? I can’t quite tell... The Biden administration has a lot of

explaining to do – as the planning continues and the $6 trillion of your money gets spent. Six trillion dollars is about $18,000 for every person in the U.S. Hope you weren’t planning to do anything with that 18 grand... I was planning on buying a used pickup truck and a new roof for the chicken coop.

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Biden was elected. (And I have a flock of wet hens who are also pretty mad at the Biden administration.) The Constitution contains no plans, but it does have a design. The document is painstakingly organized to create a form of government that keeps certain parts of the nation from exerting undue power over other parts of the nation. In 1788, when the Constitution was ratified, this was a matter of balancing the interests of big states with small states, northern states with southern states, and the original eastern 13 states with the nascent western states of the future. Thus, South Carolina wasn’t allowed to plan New York’s Erie Canal so that it began in Albany but went to Charleston instead of Buffalo. Today, when states themselves are of somewhat less importance, it’s a matter of balancing indignant urban self-righteousness with hinterland righteous indignation. Thus the residents of Portland, Oregon, aren’t allowed to draw up the plans for my chicken coop... Which, if they had it their way, would be solar-powered, constructed from sustainable organic materials such as recycled cardboard bong packaging, cover six acres in order to meet minimum free-range poultry-raising requirements, and contain no chickens due to vegan concerns for the ethical treatment of animals. There’s another, even more important aspect of the Constitution’s design. This is to keep certain parts of the government from exerting undue power over... the government.

Today, when states themselves are of somewhat less

The executive branch is supposed to saddle the legislative branch, which is supposed to keep a tight rein on the judicial branch... which is supposed to halter the executive branch, which is supposed to tie the legislative branch to the hitching post and so on. This “separation of powers” political horse- wrangling was an attempt to prevent the federal government from stampeding. As I mentioned, my chicken coop is rickety and a wild Biden/Harris/Pelosi herd galloping through my barnyard could trample it. Amendments IX and X in the Bill of Rights are clear on the subject of “hold your horses:” IX. The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people. X. The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. importance, it’s a matter of balancing indignant urban self-righteousness with hinterland righteous indignation.

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May 2021

LETTER FROM THE EDITOR China quit borrowing? Or wise up and start charging the kind of interest rates that ought to be charged for a $6 trillion loan to a bunch of worthless nags bucking and rearing and busting out of their corral? Your legal tender is going to get tenderized and wind up about as valuable as a horsemeat sandwich.

In other words, we can make our own damn plans . We don’t need the Biden administration to do it for us. Indeed, it’s dubious on what grounds the Biden administration has the authority to take $6 trillion of our money and plan to do whatever it wants with it. In my opinion, this violates the 4th Amendment clause ensuring “The right of the people to be secure in their persons [and chickens], houses [and coops], papers [including pickup truck title and registration], and effects [eggs] from unreasonable searches and seizures.” Not to mention the 5th Amendment clause stating, “nor shall private property be taken for public use without just compensation.” Eighteen thousand dollars of my private property is being taken for public use in The American Rescue Plan, The American Jobs Plan, and The American Families Plan. I’d say just compensation for that would be... $18,000 (plus, of course, another $18,000 for my wife and $54,000 for our three kids). But you may be thinking, “They’re going to get that $6 trillion by taxing corporations, soaking the rich, and borrowing money from sucker countries like China. The $18,000 isn’t coming out of my wallet.” Take a look in your wallet. See that dollar bill? What does it say in small print up above George Washington’s right ear? THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE What happens when sucker countries like

And rich corporations? Where do they get the money to pay for a hike in taxes? By hiking the prices they charge you. And those soaked rich? Think they’ll be hiring you to towel them off? Maybe you’re under the impression that $6 trillion in government spending means you’re going to get $18,000. But as Abraham Lincoln pointed out in the Gettysburg Address, our government is “of the people, by the people, for the people.” You are these people... The Biden administration’s plans are $6 trillion of your money, spent by you, for which you’ll have to pay. When the Biden administration comes knocking on the door looking to get that $18,000 from each and every one of us, I hope you’ll join me while I take a seat on the egg crates dodging raindrops and saying, “Nobody in here but us chickens.”

We can make our own damn plans. We don’t need the Biden administration to do it for us.

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FROM OUR INBOX

will be. Thank you for reading and for taking the time to write! Re: We Need More Cancel Culture PJ is a genius... Nine is the new loneliest number. I will never again listen to luftballons. Thanks for making me woke. – Bill F. P.J. O’Rourke Comment: I’ll take it for granted that everyone gets Bill’s reference to “One Is the Loneliest Number” by Three Dog Night, which is such a staple of Oldies stations, piped-in music, and Alexa classic rock playlists that those three dogs are in serious need of being de-ear-wormed. But “Luftballons” may take some explaining to people who were too young (or too old) for New Wave when it was all new and wavy. The 1983 hit song “99 Luftballons” by the German band Nena is one of those poppy/ apocalypsey numbers of that era. It describes a cataclysmic war triggered by a festive release of party balloons – all set to a strangely upbeat tune. In 1991 during the Gulf War, I was with a convoy of journalists driving in between the flaming oil wells of Kuwait in the middle of the night with the sound of bombing and artillery all around us. We were scared shitless. So we put a cassette of “99 Luftballons” into the tape player of our Land Rover and cranked it up until it drowned the noise of armed conflict. Thanks for the memory, Bill. You can go back to sleep now.

Who wouldn’t love these reports from this publisher? Who wouldn’t love any platform that gave voice to Trish Regan? She is one of the most interesting, intelligent, and articulate journalists in America, and probably the world. It is no surprise that those who have such a fear of the harsh realities of truth want to censor her work. She lays out the facts in detail, and puts them in terms that a smart child could understand. The powers grasping for control certainly don’t want dumb adults to understand what they are bidding from us. What would happen if children knew too? – Phillip H. Trish Regan Response: Dear Phillip, thanks for that. I’ve always been a big believer in calling it like I see it, not overcomplicating an issue but instead trusting my gut. I take the time to examine all sides and am always open-minded enough to hear plenty of input but I’ve discovered in my many years covering markets, alongside political and economic policy, that my instinctive reaction to an issue or problem is most often the right one. I’m glad you enjoy how I explain it. I’ve noticed that too often some of those “in charge” love to overcomplicate issues with souped- up jargon. It’s all in an effort to elevate themselves over the reader, listener, or viewer. That’s never been my style. Instead I want to connect with readers and listeners – the more people that understand the most important issues of our time, the better off the country

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May 2021

Red-Whatever-They’re-Called-These-Days! [Miami went through all the predictable drama of having “Redskins” as the nickname for its sports teams. After much huffy virtue signaling the nickname was changed to “Red Hawks” or “Red Squirrels” or “Red, Red Robins Go Bob, Bob, Bobbing Along” or some damn thing.] See you in ‘22! Yours, Pat [As I was then called, until I switched to my initials in 1970 because – believe me – if you go through 23 years of being called “Pat O’Rourke” you begin to get some sympathy for those who, like Redskins, complain about ethnic stereotyping.] Thank you for a great essay! With that prompt to look back, my quarterly tuition at the University of Montana was about $187 per quarter for 12-18 credits, or about $560 a year, and textbooks could be had for $12.95 at the

Re: Dropping Out: The High Cost of Higher Ed Pat, As a fellow Classmate of yours at both DeVilbiss (H.S.) and and Miami University, your reminiscences of life on the Miami Campus in the mid ‘60’s brought back fond memories. I am blessed that I was listening to J. P. McCarthy’s (WJR Radio) noon “Focus” program in the early eighties when J. P. introduced and interviewed a guy from Toledo named P. J. I have enjoyed your writings since that re-introduction. Keep up the good work, and hopefully your DeVilbiss classmates will be able to shake your hand when we meet next summer (2022) to celebrate our 75th Birthdays.

Kindest Regards, Mike Muhn, DHS ‘65, Miami U. ‘69 P.J. O’Rourke Comment: As I wrote back to Mike – a star player on our high school’s formidable football team and a way cooler guy than me: Dear Mike, Great to hear from you! And thank you for the kind words. I think you and I had the good luck to go – when the going was good – to one of the best high schools and best colleges in America. Go Tigers! [our high school mascot] And go

university bookstore. After graduation in March 1978, I got my foot in the door as a seasonal biologist aide/ technician, hauling my gear to Wyoming, to Idaho, then back to UM for a couple non- degree graduate quarters in hydrology and other helpful subjects. That 1981-1982 period shocked me as books had become expensive enough that a number of profs would have copies of the textbooks available at the library for short- term reserve. Meal plans on

CHECK OUT OUR ONLINE ARCHIVE OF PAST ISSUES.

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FROM OUR INBOX

Thanks again. And who wouldn’t trade a few years of genteel, middle-class poverty for a chance to be a fish and wildlife biologist in the great American west? Re: America’s New Pastime: The Politicization of Everything The “Politicization of Everything” makes me wonder what would happen if the Democrats are successful in packing the supreme court, making D.C. and Puerto Rico states, and changing voting laws so that all votes can be purchased from citizens and migrants alike for a Big Mac. The motive underlying many Democrat ideas like open borders is to gain an edge over Republicans. What if Republicans were no longer a threat? Would Dems gain any advantage by further dividing the country by race? Would Dems find a new maturity in their role as stewards of the nation or would they use their power to exact revenge? – David S. P.J. O’Rourke Comment: David, you ask “what would happen?” Well... We’d get a Democratic president and Democratic majorities in both houses of Congress. (Sound familiar?) And then those Democrats would start tearing each other apart the way they’ve already begun to. (Check news of the New York City mayoral race to see what happens when there’s “only one” political party.) The thing I love most about Democrats is how much they hate each other. And, for that matter, themselves. Put two Democrats in a room and you’ll get at least three diametrically opposed political positions with no room for compromise.

campus were always expensive, so I went the cheap two-meal plan route. Our beer, when it was affordable, “It’s Oly when you live in the West,” even for low-paid fish & wildlife biologists. One gentleman I knew in Montana said his incredible good fortune was to be hired by a company that did not have a biologist classification on their pay scale, so he was placed with the engineers. Olympia beer in Montana, Generic beer (from Pearl Brewing in Texas) in Idaho, and “Vitamin R” Rainier in Alaska (Molson was cheap on the state ferry, a real treat). “Champagne living on a beer budget” had to give way to “beer living on a burrito and water budget”... (I never seemed to mind a siesta after lunch.) – Charlie B., tropical north Idaho Geoffrey Norman Response: Dear Charlie, Thanks very much for that. It tracks with what P.J. O’Rourke and I remember (dimly) from our own college years. A sense of almost agreeable poverty. Or frugality, at any rate. And why not? The beer was good enough for your still-untrained palate. The work was all indoors and there was no heavy lifting. When it was over, you missed it and you didn’t feel like you were carrying a heavy load of debt. You certainly didn’t feel like you were due a handout from people who had been driving trucks, herding cattle, building roads, etc. while you were living the college life. You did not rue those years and the burden of debt they had loaded on you. In fact, you kind of missed them.

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May 2021

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Re: Biden Calls It By Its Name: The Armenian Genocide

Kim, Thanks for taking the time to confirm the historical record about Turkey and the Armenians. My grandparents also saw the handwriting on the wall and emigrated to the US from eastern Turkey in the early 1900’s. Both of my parents were born in the US as children of emigrants from Turkey and finally settled in Fresno, CA where I was born. A personal note... I was in my 30’s before I learned of my “roots” in eastern Turkey. My grandparents never wanted to talk about the horror. The discovery was the result of a Master’s thesis prepared in the 1960’s by an Aunt of mine who wrote about the events. Another personal note... in 2004 I was in western Turkey as a result of a cruise stop. During a land tour I encountered a shop owner. The conversation went as follows: Shop owner... you look like you could be from Turkey. Me... well, yes my grandparents emigrated to the US from eastern Turkey. I am of Armenian heritage. The shop owner said nothing further and walked away. It seems the historical record prevails even at the local level to this day. Thanks again for your accurate portrayal. – Gary K.

Kim, I lived in California’s Central Valley for many years. There were many people of Armenian descent. There was a local delicatessen that had Armenian food. Delicious! I do not approve of Biden. Biden or Trump was just as poor a choice as Trump or Clinton. But I do approve of what I have always known finally being called what it is – the Armenian Genocide. – Tim P. Kim Iskyan Response: Tim, thanks for your e-mail. Armenian cuisine is simple and hearty and I really miss it (not many Armenian delis here in Dublin!). Food aside, though... Armenians have gotten the short, sharp end of the stick for generations – and I think it was fantastic for the Biden White House to do the right thing. Kim’s piece today was outstanding. One wonders what would happen if the US followed up by participating in an upgrade of the Armenian power supply system and distribution grid. – Dave C. Kim Iskyan Response: Dave, Armenians – and everyone else within a strong gust of wind of Metsamor, the rickety Soviet-era nuclear power plant that sits on an earthquake fault which supplies the bulk of Armenia’s power – would be very grateful. Unfortunately, I don’t know how the economics of it would work... and in a world where the United States has lots of fish to fry, I think they’ve already paid a lot of attention to little old Armenia. I’m not holding my breath on this front...

Click here for more Inbox on page 86.

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AD #0 MAY 2 0 2 1 GO BBITC WHICH MINERWIL INDUSTRY LEADE EXCLUSIVE MICHAEL SAYLOR

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May 2021

By Daniela Cambone

LL CLAIM VICTORY?

OLD COIN ERS DUKE IT OUT E DEBATE

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FRANK GIUSTRA

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BITCOIN

They both plunge into the darkness... armed with their respective hardware, digging through the earth or ether, each hoping for treasures yet or never seen. And whether hunched over a screen in their South Carolina suburban garage or on their knees scraping at the soil in the sands of South Africa, they’re connected by one cosmic unifier... They are miners .

And what they’re mining for is both from utterly opposing universes but ultimately the same: money. Except one’s invisible as the other one shines. One has existed for less time than a middle-schooler, while the other drapes over five millennia. Welcome to the bitcoin versus gold debate. No school versus old school. Digital versus Analog. It’s also two self-made billionaires with a lot to say... THE GREAT DEBATE: BEHIND THE CURTAIN If you haven't seen Stansberry Research's two-hour debate on YouTube – no worries. I’m here to take you behind the curtain and rehash the highlights. The piece features me moderating a discussion between Michael Saylor, CEO of MicroStrategy, carrying the crypto flag, while Lionsgate Entertainment

founder Frank Giustra spoke on behalf of the gold bugs. Michael evolved into a crypto folk hero by becoming the first CEO of a publicly listed company to convert a part of his company’s cash reserves into bitcoin. Meanwhile, Frank transformed investment bank Yorkton Funds into a global powerhouse of mining finance, and is the mastermind behind the creation of some of the world’s leading mining companies. Frank is also a serial entrepreneur, having founded Lionsgate Entertainment, Modern Farmer, and Domenica Fiore. He now dedicates most of his time to philanthropic work, most recently the Million Gardens Movement alongside Kimbal Musk. In my 15 years as an investigative journalist, I’ve become very familiar with the precious metals market, and I’ve known Frank for close to a decade. He’s such a pivotal figure in that world, and he knew that I had interviewed

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May 2021

VS GOLD

Since the pandemic, there’s been an uptick in the consumption and creation of financial content – people with idle time and money, reassessing their lives and careers, and looking to learn lessons in the stock market. And I love that. A few years ago, I felt like most people wouldn’t even know who the Fed Chair is – but now everyone’s so embedded into the world of money. And with that, I want to keep this gold versus bitcoin conversation going because I want our readers to educate themselves as much as they can. When Michael Saylor speaks, it's almost an act of non-violent offense – like Muhammad Ali shadowboxing alone in the ring. his comments with Game of Thrones and Madonna references. At the same time, Saylor’s straight-faced, almost like he’s just a conduit for the bitcoin gods. Since the debate, so many people have reached out to me – even my hairstylist heard about it. The feedback has been overwhelming... precious metals expert Jim Rickards, broadcaster Max Keiser, even Shark Tank ’s Kevin O’Leary. The Twitterverse is now asking that I moderate a debate with Elon Musk and Saylor next. It struck a chord with these powerhouses in the world of finance and everyday retail investors.

Michael Saylor on multiple occasions, as Saylor is one of the biggest names in the crypto space. Frank mentioned he was up for a debate with Michael, and vice versa, so I decided to pitch Michael the idea, which resulted in a series of calls followed by radio silence. I thought this debate wouldn’t happen. Until one day, my Twitter exploded... Michael tweeted a poll to his followers if they’d like to see him do this debate on Stansberry Research – and the Internet responded in a resounding way... an overwhelming, 90% vote for YES. Once we got the green light, we haggled around agreed- upon topics, and for most of it, I felt like I was mediating a very civil divorce proceeding. And I’m proud of that civility, that we avoided two talking heads shouting over each other, which comprises nearly all of “news” content today. Listen, these two gentlemen have nothing to prove – they’re at the top of their respective games. They wanted to talk about these two assets, not just because they’re experts, but because they’re passionate about it all... And they want to inform investors worldwide. In the context of the debate, Saylor was the Zen, existential philosopher, often seeming like he’s soliloquizing in a vacuum. When he speaks, it’s almost an act of non-violent offense, like Muhammad Ali shadowboxing alone in a ring. Meanwhile, Frank is the direct, pragmatic one, and came prepared with very strong punches. But he balances his delivery with a lighter, more casual approach, peppering

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BITCOIN

If you’re going to ask me who won the debate, you’re going to hate my answer... I feel like the audience was the winner (that includes you). And in meta-mining this historic conversation, I’m reminded that we’re all just looking for value in life. And hopefully, this content brings some to yours. BITCOIN: LAYING DOWN THE GAUNTLET From the first spark of making fire, human civilization progresses through channeling energy. And to Michael’s point, money is energy. " The ideal currency would be Godcoin – short of that, bitcoin's humanity's next best bet. " MICHAEL SAYLOR Money is essentially a store of value and technology that allows us to trade that energy over time and space. And if you look at humanity’s monetary timeline, we’ve gone from commodities to the coinage of those commodities to notes represented by that money to fiat currency, and now? Cryptography as money. Gold advocates say that gold is the ideal money, but Michael counters that it’ll be GODcoin ... Suppose an omnipotent being waved their hand to create a perfect bit of money. It

would be a manifestation of Luca Pacioli’s double-entry accounting principles circa 1494 – with units infinitely divisible by trillions each, floating in a magic space, settling everyone’s trade’s instantly, perfectly: accessible anywhere in the universe, never losing any information. And according to Michael, until GODcoin arrives, bitcoin is humanity’s next best bet. Bitcoin’s the most efficient monetary system we’ve yet to implement successfully. It’s at over 21 quadrillion transactions a day, storing the value and providing security to everybody on the network, effectively for free after those transaction fees. This crypto’s the most disruptive financial force this century. In just 12 years, it grew to $1 trillion in monetary value, beating out the growth of FAANG stocks in that window of time. Everything’s digitized now – so why wouldn’t our money be? Money is collapsing right now as inflation climbs, and we keep losing 1% of currency value every month. And according to Michael, gold’s not a solution... It’s not practical to distribute gold in small quantities to 5 billion people. But bitcoin can reach everyone, and it’s growing, spreading at more than 200% a year, adding 3 million users a week. For Michael, gold is a 19th-century relic, a glorified antique for the elites. In his mind, it’s time to mint its inevitable digital successor.

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May 2021

VS GOLD

Bitcoin transcends just being an asset – it’s a network and protocol: decentralized, permissionless, global, immutable, scarce, auditable, instantly transferrable, not seizable, highly divisible. Gold has a half-life of 30 years, whereas bitcoin has a half-life of forever. As Michael likes to say, everything that gold can’t do, the crypto can. Your mother could authenticate a bitcoin transaction instantly from her smartphone – it’s empowering billions of people and built right into Square and PayPal, allowing for transactions at the speed of light and looking to accelerate global commerce in the 21st century. But Frank contends that bitcoin’s yet unproven as a payment method – it’s too You can’t build a computer without silicon. You can’t construct a skyscraper without steel. You’re not going to survive if you don’t pick the right element. Crypto is the steel of the 21st-century economy. He claims gold is an ideal ornamental metal – indestructible, malleable, pretty. But that doesn’t make it the perfect monetary asset. You can inflate it, counterfeit it, and it’s immobile. (Have you tried lifting gold bars before?) " Gold is not designed to moonshot through the roof like tech, darling. " FRANK GIUSTRA

GOLD OPEN Frank finds the all-or-nothing, zero-sum ideology of the gold and bitcoin camps disheartening, as he thinks the two sides agree on 90% of everything – but fall apart when it concerns which is better. He claims this divisiveness is indicative of the ultra-polarized cultural and political discourse that’s become the baseline for America in 2021. That said, he’s not moving an inch on his argument. In his words, gold is eternal (echoing Michael’s GODcoin position) – what once adorned Cleopatra’s clavicle could now be the jangly golden necklace you’re wearing. Gold is a time machine with touchpoints throughout human history. It’s inextricably linked to the international cultural fabric and the global monetary system. Its stability as a store of value is vital in managing the central bank reserve currencies and providing protection against other fiat currencies. Central banks own 33,000 tons of gold, 20% of all the gold ever mined, and they’re furiously buying it every year – the same isn’t true for bitcoin. Gold is not designed to moonshot through the roof like some tech, darling. Its purpose is a store of value against inflation, the devaluation of currencies, and sharp equity downturns. When asked about what makes bitcoin the better asset, Saylor got elemental, as he’s apt to do...

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BITCOIN

volatile with no history. Yes, the crypto went through (and benefited) from the COVID- induced market dip last year, but as an asset, it’s never been through the stress test of staggering inflation or a proper financial crisis. The 17th century Dutch Tulip Bubble, the Crash of 1929, late 1970s inflation, Black Monday of 1987, the Tech Bust of 2000, the Recession of 2008 – gold has always been there. The metal thrives in turbulent markets, and gold’s doubled since the last crash 13 years ago. " Central banks go by the golden rule: they own the gold, they make the rule . " FRANK GIUSTRA Both men seemed to fall in line with generational-conflict tropes in their discussion – framing the new player as “inexperienced” while claiming the older one lacks vision. THE RULES OF RISK Swaths of investors hesitate on bitcoin due to its volatility, and when it comes to risk between the two assets, Frank doesn’t even think it’s close. He believes viewing bitcoin as a risk-free asset is naive at best... If you fail to subsume the entire value of gold, you’re left with nothing. From Frank...

The crypto army tries to weave a narrative for a higher bitcoin price, convincing everyone that gold is worthless, seeking to seep all $12 trillion of the metal’s value into the crypto. In that way, you can justify a $500,000 bitcoin price or a $1 million bitcoin price. Otherwise, why would anybody pay $60,000 today without that target in mind? Frank knows the real dangers angled at cryptos will come from governments and central banks. History shows that sovereign countries will go to militant lengths to protect their monopoly on currency, and in his mind, they will not tolerate a decentralized global currency. “Central banks go by the golden rule. They own the gold – they make the rule . They have $7 trillion worth of gold. They’re not about to allow bitcoin to take that over.” They especially won’t tolerate it if we have a dollar crisis, which appears more of a reality each day. Unlike gold, bitcoin is a potential threat to the U.S. dollar and America’s reign of having the world’s reserve currency. And he thinks if enough people on Capitol Hill share this idea, legislation could arise that bans bitcoin, pushing the crypto back underground. Frank also cites that if (when) war breaks out, gold’s the far safer option. It’s secure from cyberattacks on both the Internet and power grids, either of which would thwart bitcoin. He also thinks the crypto isn’t as un-hackable as all its disciples claim it is...

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has the same rights. A person with $100 of bitcoin has the same security as $1 billion of bitcoin. The crypto safely stores your property in cyberspace, unseizable by force, encouraging peaceful negotiations rather than coercion. Frank conceded the point that blood was spilled for gold but says that only proves his point that gold’s value is something worth fighting for and dying over. And who’s to say that by 2050, digital soldiers won’t be vying over bitcoin, with the casualties being personal data instead of human life?

If they can hack the U.S. Defense network with secret backdoors built into the hardware, who’s to say it can’t happen with bitcoin? But Michael fires right back, pouncing on the bloody history of gold, rattling off everyone from Alexander the Great to Cortes to Nixon, noting that gold always invites violent asset seizures throughout human history. He details that bitcoin security, transport, and auditing are nearly free. These processes are unregulated and egalitarian – everybody

INDUSTRY LEADERS DUKE IT OUT EXCLUSIVE DEBATE

It's the showdown that everyone's talking about...... MicroStrategy CEO Michael Saylor versus gold financier Frank Giustra in the ultimate bitcoin versus gold battle. Daniela Cambone moderates. CLICK HERE TO CHECK OUT THE ACTION

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W

understand how well it fares during high inflationary periods, e.g., in the 1970s, gold shot from $35 to $850. And when the pandemic hit last year, gold had a big initial dip down, but then central banks and jewelers swooped in and bought big. And when it comes to bitcoin’s performance, Frank again highlights its fledgling status, claiming that a mere 10-year history isn’t enough time to determine how well it will do in the future. In his estimation, he doesn’t see why anybody would invest in bitcoin if their objective is to preserve value. SUPPLY (BLOCK)CHAINS The crypto kings will always make the scarcity argument that bitcoin’s capped at 21 million coins whereas humanity’s constantly stumbling upon more gold. But Frank wants to clarify the gold mining industry as he thinks most people (including Michael) don’t grasp it. The average period between discovery and production of the metal is 10 to 20 years. And the grades are getting lower, becoming more costly and time-consuming to find these lesser-quality deposits. According to Frank, no one’s made a world-class gold discovery in the last 30 years. And he illustrates how mining production does and doesn’t affect the price of gold. In 1971, the global production of gold by mining companies was 1,500 tons, and gold was $35 an ounce. Scroll forward 50 years: Gold’s price has shot up 50-fold , 6,000%. The uptick in

PEAKING PERFORMANCES When it comes to pitching bitcoin’s performance, Michael first decides to give an abbreviated history of gold. Two thousand years ago, gold represented nearly all of money – and it’s slid ever since. Today, the monetary value of gold is around $5 trillion, and the total store of value in the economy is $250 trillion, i.e., gold is roughly 2% of all money.

Imagine bitcoin as Lebron James. Making gold... Michael Jordan?

Michael claims gold peaked this past August 10 – not coincidentally around the time he and his company MicroStrategy announced they bought $250 million bitcoin. In his mind, if he had chosen gold at that moment, he’d be down billions today over nine months versus bitcoin – a $4 billion choice. And he believes he chose wisely. While he admits bitcoin’s first decade was legendarily volatile, he believes the asset has matured, and the network has spread. The crypto’s growing up! He likens it to Lebron James at age 19. The best player is always the most volatile. So yes, think of bitcoin as Lebron. Making gold... Jordan ? Frank responds strong, noting that to grasp the heights of gold’s performance, you must

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production in that time? It’s only doubled. But in Michael’s mind, gold’s not a scarcity – it’s a glorified commodity. As the price goes up, the supply is constant. And he claims that all commodity businesses need a cartel to be stable, rattling off the Rockefellers, OPEC, and De Beers as exemplars. He says as gold’s price rises, its miners increase output, which weakens the jewelry demand – then bankers sell short on gold derivatives while investors fund more mining expansion. Miners then sell more gold, and ultimately the price gets so high the government stops buying gold. Then the metal’s sold or shorted, and its price drops. “That’s the problemwith having 90 kilotons worth of gold as jewelry and so many tons of gold sitting in central banks. It’s a damping feature.” On the crypto side of supply-and-demand, Michael says investors and companies buy bitcoin, but banks and governments can’t short it – because they don’t have it . They then take eco-conscious shots at each other... Michael reminds us that gold mining requires $100 billion a year in fossil fuels, labor, chemicals, and environmental damage in the never-ending struggle to inflate the gold supply and undermine the price. But Frank fires back, noting that the energy consumption bitcoin mining saps up is the same as the entire population of Nigeria. It’s safe to say neither gold or bitcoin mining

is the best for the environment, which makes one wonder why humanity’s harnessing of wealth almost always comes at the expense of the Earth.

MARKET FORCES AND WHO OWNS WHAT?

When it comes to owning these assets, both men fired at each other with accusations of speculative behavior. Michael even quoted Frank to Frank, citing his foil’s following, “What I do best is create and build mining companies. 10% of your portfolio should be in gold. Gold won’t keep going up forever. And rotate out of gold following the panic buy.”

Damningly, Michael asserts that gold miners don't believe in gold.

He followed that quote with another Peter Schiff nugget... “I don’t own much gold. I own more gold stocks – and a lot of gold companies don’t even have gold.” Michael claims these gold-mining behemoths are expiration companies trying to find their speculations. With $11 billion in revenue, Newmont Mining has $5.5 billion in cash. EBITDA of $5.7 billion last year paid a massive dividend of $1.45 billion. Damningly, Michael asserts that gold miners don’t believe in gold .

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the value of their traditional offering by injecting bitcoin into it. And then any big tech company can become a bank. How explosive is this? Well, I think we’ll see 150 new holders this year. I think you’ll see $500 billion of assets flow onto the network this year. He mentions that crypto-friendly PayPal, Square, and Coinbase alone have a $500 billion market cap combined. And there are top bitcoin drivers in Wall Street and Silicon Valley: Morgan Stanley and Goldman Sachs to Apple and Amazon. Michael contrasts this landscape with gold market forces, claiming Frank’s industry continues to market the myth of gold as money while mining in an expensive, dirty, dangerous fashion. It was clear at this point (if it wasn’t already) that neither of these men would change the other’s mind. THE MIC DROP When it came to closing remarks, Michael was undeniably on-brand with a Game of Thrones Live Action Role Playing (“LARP”) metaphor... If we contrast the golden knight with the bitcoin dragon, the golden knight’s got a 30-year life. It’s plodding, stupid, heavy, predictable, and stagnant. And he’s up against the immortal bitcoin dragon: teleporting, dematerializing, hyperintelligent, rapidly evolving, moving at the speed of light. He then pivots back to numbers, restating

“Gold miners don’t have any gold on their balance sheet. They could borrow $20 billion at 3% interest and buy gold if they believed in it. They don’t believe in it. Talk about hating gold.” In terms of charges that bitcoin is speculative, Michael’s rebuttal is that anyone with that take is a Luddite. “Technology spreads virally because it is a better idea – Uber, WhatsApp, iPhone, YouTube, Netflix – they all spread virally. People tell their friends because it’s a good idea.” Frank notes the disparity in crypto ownership: 2% of the owners have 95% of all bitcoin value. On the other side, Frank points out the disparity in crypto ownership (seemingly echoing America’s economic inequalities), noting that 2% of owners have 95% of all the bitcoin value. And Frank reiterated his point about gold’s resilience in dire economic times. When COVID hit in March of 2020, gold took an initial 8% hit as the markets dipped that month, but the asset recovered, breaking even. He points out that bitcoin simultaneously dropped 25%, and bluer financial skies only returned this past October. Michael waves this off and jumps into this pitch... The significance is any finance, insurance, or mutual fund company can 10 times

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that gold bugs always advocate having 10% of physical gold in one’s portfolio to protect against a crash. Which brings him back to his refrain: what about the other 90%? Again, he views bitcoin as the solution and gold as nothing but an obsolete hedge. And then he quotes General Patton (naturally): “Nobody’s ever defended anything successfully. There’s only attack and attack and attack some more. Gold is defense. Bitcoin is an offense.” Michael ends it by projecting his crypto’s growth, noting that bitcoin spreads at 200% a year. He claims it will reach 250 million people by the end of 2021 and soon... everyone. Frank fights back at the rosy crypto eutopia Michael and his ilk push, scolding him for potentially leading young, naive investors astray. He thinks the whole bitcoin community smacks of a digital cult. And he returns to one of his core arguments, the idea

that billionaires holding cryptos may make a killing, but it’ll leave millions of smaller investors as casualties. “In Michael’s world, all you own is bitcoin. That’s the only asset class you own. And that’s not the way that you’re going – it’s just never going to happen in the real world . It’s sheer fantasy.” Frank offers these words of caution: if you want to buy bitcoin, so be it, but you have to own gold as your insurance . And that utterance encapsulates the obvious eureka moment... You don’t have to pick the metal over the crypto . Even though most Americans (or investors) are allergic to this concept, it’s possible to have two opposing ideas in your head at once. Think of the two assets as Batman and Joker – they need each other. Which is to say, don’t pick bitcoin or gold. Choose both.

Think of gold as defense and bitcoin

as an offense. Which do you value more?

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TO DO NOTHING UNCLE JOE WANTS YOU

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By Trish Regan

Remember the old Uncle Sam posters fromWorld War I and II?

 CLICK HERE TO READ THE WEB VERSION

(I could have told them they were dreaming). Meanwhile, the unemployment rate shot up to 6.1%. Yet, there are more than 8 million job openings at present in the U.S.! So, what’s going on? Socialist-style policies that may be well- intended... but have negative effects... are creeping into every facet of our society. Earning Money to Stay Home Uncle Joe is paying $300 a week in unemployment benefits for Americans to sit home on the couch. States are paying, in many cases, that same amount or even more. Hey, 600 bucks a week to sit home sure as heck beats washing dishes, does it not? The reality is, people are making logical decisions... It’s human nature. We will do what’s right for ourselves and our families.

One of the most memorable images in American History, it depicts a commanding personification of America... Uncle Sam (initials U.S.)... pointing his finger at you, urging young men to enlist in the war and do their part for their country. These posters were designed to inspire a sense of patriotism and motivation for citizens to support America. Unfortunately, there’s a new poster that could be made today... “Uncle Joe Wants YOU!” ... to sit at home on the couch. Oh, how times have changed... How politics have changed... How our sense of duty and patriotism and work ethic have changed. Or have they ? I actually believe the American work ethic is intrinsic and hard to destroy. That said, Americans are realistic and logical. When Uncle Joe (aka President Biden) makes it quite compelling to sit home on the couch, they will. And, unfortunately, they are... Last month’s unemployment report showed the effects of offering such an attractive incentive to stay home. Just 266,000 jobs were created, as opposed to the 1 million jobs Wall Street economists had been looking for

Oh, how times have changed... How politics have changed...

How our sense of duty and patriotism and work ethic has changed.

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UNCLE JOE WANTS YOU TO DO NOTHING

This is partly why communism and socialism always fail and why capitalism has historically lifted more people out of poverty than any other system in the world. Americans are not stupid... They’re better off collecting Uncle Joe’s unemployment checks as long as they can rather than taking a job they don’t want. But is that really the right thing for the nation as a whole? As I’ve written before, the first round of stimulus checks was truly needed. Americans got caught flat-footed by the pandemic and required that extra support. The Biden administration has put enough incentives in place to actually create poor outcomes – in this But by the time then-President Trump was handing out ANOTHER round of checks, I grew skeptical. I knew that Americans were beginning to go back to work and more stimulus money could threaten their return. And by the time we were hit with Joe Biden’s $1.9 trillion stimulus package, the handwriting was on the wall. The Biden administration has put enough incentives in place to actually create poor outcomes – in this case, Americans are often choosing not to work because it’s more profitable to stay home. case, Americans are often choosing not to work because it’s more profitable to stay home.

Yes, I get that the White House wants to blame childcare issues, and of course those are real. But all of this is rooted in the same problem... Childcare workers aren’t going to work, therefore mothers and fathers who need childcare can’t go to work, and so the cycle continues. The Politics of This Moment Unfortunately, I worry that a lot of the poor policy decisions that are being made today are rooted in politics. I wish they weren’t... I wish that sound economic policy could be just that – sound economic policy. I wish we had better fiscal discipline and could keep government on a shorter leash... allowing it to protect us in ways that make sense while not intervening in our lives in ways that just don’t. But alas, that ship has sailed. The Left has become all about big government, the let’s make the “rich” pay their fair share... and they’re emboldened by a group of radicals who thinks it’s their “right” to take from those who earn and to give to those who don’t. As such, we’re living in a time in which you can actually see the breakdown in economies by state. Could it be that poor policy choices made by blue, Democrat-led states resulted in higher unemployment rates? According to the Committee to Unleash Prosperity, a group led by my friend Stephen Moore – former Wall Street Journal editorial board member and former tax policy advisor to the Trump administration – the answer is yes. The committee has pointed out that the seven states with unemployment rates above

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