tv Cross Talk RT December 1, 2017 3:30am-4:01am EST
certainly we've seen you know some aspects of this story before as you mentioned you know after the dotcom bubble exploded in two thousand two thousand and one there were a number of winners that emerged from that area and a number of new companies that were born after that have done quite well you know big has already been declared dead several times in two thousand and eleven wired wrote an article saying the rise and fall of a coin we saw the crash in two thousand and fourteen yet it keeps coming back so wouldn't surprise me if we have another crash maybe a few more in front of us but it does seem that there is something important happening here with regards to the future of finance the future of money yeah well at least for a small number of people who become at least i guess technically in the cloud somewhere fabulously rich it's really an amazing story jeffrey i mean gary called this i think in an article a minor miracle is that it would you use the word miracle here let me go to jeffrey in atlantic i read that article and i have i appreciate the term actually kind of his nobody ever thought anything like this was possible before two thousand and eight before the white paper of two of october two thousand and eight we didn't
really have the means to do what the block chain does today just for background to block changes the real underlying technology of the coin in the real reason for its value going to just an expression of that logical value. allows us to do something we've always wanted to do something for world but never had the ability to do it thanks to these distributed networks and cryptography we can do it now you know mitigates against jeffrey kind of put it in the same plea for me because you know i was in finance for a number of years and there's always you know what's it backed up by you know you know what are the assets you know you know you always look at that and then but what jeffrey just said there kind of explains it it's the technology is the safety that's what backing it up here do you buy that because you know you can say this is a scheme it's a get rich but i mean there is something to it and people are making money here and it makes everyone interested to get involved in it if you have the means go go ahead mitch how do you explain it all. well i mean we need perspective i think
bitcoin has come about in a time where the central banks reckless central banks around the world has distorted every market and too much credit too much debt and too much leverage have created instability in the financial markets so we need to add perspective so we need to look at risk versus reward with bitcoin and in the bitcoin trade so bitcoin has gigantic volatility you're seeing thirty percent moves either way in a day or forty percent moves for so it's not for the faint of heart so you know my perspective from an investor and being in the banking community internationally for thirty eight years you look at the iconic figures like jamie diamond who said it's a ponzi scheme and it's going to zero these are totally wrong but the establishment banks and the way that the fractional banking system works people want to escape from that people want to escape from the establishment but what we've got going on here just to be clear is we've got inflation in every asset class stocks are
trading at stratospheric valuations apple has a market cap approaching eclipsing one trillion dollars facebook at six hundred billion so if you look yesterday a couple sorry if you look. recently you saw a pullback in the nasdaq the fang stocks facebook apple and all the technology issues they lost sixty eight billion dollars in market cap in a day where the market cap of bitcoin is what around one hundred sixty billion dollars so on a relative basis it's a much smaller move and it's a very emerging market so i think we've got to look at where we are in this in alternative asset class i mean you're looking at are a leonardo da vinci painting trade that run one hundred fifty million dollars so i mean we need to put it into the proper historical perspective now stocks are way overvalued so are bonds and so is property so people are looking to get out of the dollar system and i happen to agree you need to diversify but i think you should also get. some precious metals gold and silver which have been currencies for six
hours and years i mean dollar is backed by fundamentally not nothing ok let me go back to cambridge carol i mean there's a lot of people are saying that. large investors are getting involved in trysted in bitcoin is that distorting the price because they have the deep pockets that this price level to get into the market is there something behind that there that you know that because i having been in finance i mean this is this is speculation ok i mean that people are not buying on facts or buying on speculation right now go ahead in cambridge. right i think certainly the hedge funds the big whales that are coming in the billion the billionaires we read about you know are certainly influencing the price direction but i think there's still a lot of money on the sidelines i was at a hedge fund conference recently and less than twenty percent of of the funds in the room there are some pretty big funds in the room have taken a step into this space and i think the ones that have
a lot of them have done so as individuals rather than putting their funds in because you know it's still very difficult to short yep there's major counterparty risk a lot of the exchanges cryptocurrency exchanges will do things like reveal their financials or audited financials to fund so things that you know hedge funds are used to having in typical markets they trade in are not in place yet here but they're coming if see i mean nasdaq do come into the market with futures platforms you know if things like e.t.s. and you know other things roll out bring more regulation to the space then i think you will see even more hedge funds come in the price you know could go either way frankly i think the investment playing field has been a bit lopsided in favor of the bowls and that could level and a lot of the hedge fund guys are passionate about crypto and frankly they would probably i think from a psychological perspective prefer to make money if crashes on the way down the well that would certainly help them rationalize their lateness to the bartunek you know market you know jeopardy is very interesting is that it's i think one of the
interesting phenomena about bitcoin is that it's a lock of regulation and going back what mitch had to say here and we have to remember this phenomenon came into being after the financial crisis crisis of two thousand and eight which the banks were responsible for and so it's an element of that here is because that the freedom of here but the go ahead jump in go ahead . yeah you know there certainly is the i think of the success of big kind is in part attributable to the fact that it has not been managed from the center is not been regulated and that allows a lot of innovation and for people to try out things you know you want to talk about market caps you can talk about one hundred fifty billion for a big climb but really you have to look at the whole class of crypto assets right now and you're looking at last i checked those about three hundred fifty billion once you include all the various tokenized block chan's that are out there all the various the ferry i'm applications the various all coins and we're just beginning
to see things we're going to see things coming up within the next year like these lightning networks that are going to be used for small transactions that are going to fix the prevailing problems that exist in decline which is that the networks are vastly clogged right now and is very expensive to send and receive. it's going so hard so fast that it's almost become unusable just by itself for regular small transactions that. are looking for things like oh yeah that's the reason why i never really got into it because it's not easy to move around lease i'm not adept at doing those kind of things or you know mitch another the other people are saying that this whole thing with a big going it's really just an investment it's not really. a mechanism to buy and sell it is to park your money somewhere and leave it there because you don't trust the banks i mean it for it to be really universal you have to be able to be able to
use your wallet as they call it you know and buy things and sell things it's not that easy to do it's not widely accepted to the many more innovative people do say they accept the go ahead midge. it's part of you know it's part of a diversification strategy where you'd have some big going to just sit on it not worry about what your basis was and whatever losses are you're going to eat the losses and if you get a profit out of it fine but you know it when you have that much volatility you know i disagree that the big hedge funds will get involved in this when you have a thirty percent volatility swing each direction so from peak to trough and back up again down and up again i mean no investor wants to tolerate that kind of volatility and how can you manage that kind of volatility becomes very difficult so are the hedge funds and the banks going to jump in head first up at these levels probably not if we get a more bit a bit more stability into these markets you'll see more investment but also from that risk reward perspective you've also got to keep in mind that this is
a non regulated market that's the attractiveness from people but governments have overreach like we're seeing in the media right now the deep state runs america they're trying to rewrite history here with these statue wars and that's always a dangerous time so if too many people get on the bitcoin train and get on the crypto train the government could come in one day and say it's illegal in this country we're cracking down on everybody because right now when you open up an account they they demand the k y c know your customer information and they they will when it becomes bigger they will try to regulate it and they will try to control it it's difficult for the government to let anything come out of it's you know come out of its grasp the federal reserve prints willy nilly trillions and trillions of dollars since we went off the gold standard backed by nothing now that this is a ponzi scheme the government that's what my book is about the government debt globally is a ponzi scheme the governments can never repay this debt and we're about to hit a wall so should people invest in alternative asset classes absolutely is
a leonardo da vinci painting we're painting worth half a billion dollars is an apartment in midtown midtown manhattan worth six hundred million dollars i would argue no it's not and i would agree we should prices from when i went to university have gone up to. thousand percent yeah where real wages since the one nine hundred eighty s. are flat so how does that work out when i got out of school i could've bought a better match and they let me let me jump in here and fifty thousand that gentlemen know i have to go to a break in after that short break we'll continue our discussion on staying with archy.
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they could be a useful idiot i mean useful idiot you called me a useful idiot useful idiot useful idiots go expressing my opinions on t.v. there are thousands of us doing it behind his record is the same strategy we attack persons instead of talking about p.r. what's next why stop me from getting this close to the white house i'm with a group code pink why not ban the color pink one hour stretch beyond the right i should be sent to the town because i'm going to try to break me on the wheel but out with a long time of this sort of nonsense you don't scare me and i'll continue to voice my opinion i'll continue to speak out i'm in good company i'm in good company you going with me you want to do this because we're freezing cold. welcome back to crossfire where all things considered i'm peter remind you we're
discussing bitcoin. here let me go back to you in cambridge while it is a fascinating concept these crypto currencies there is the concern of accountability you know illegal drugs arms and other kinds of illegal activity can stay under the radar of the authorities i mean i think that's a kind of a downside also you know when people talk about it is being a new fear currency one day i mean you know people are buying big ticket items because they are avoiding taxation and things like that so i mean it kind of cuts both ways here i guess really the most important question will be if this kind of crypto currencies are successful what is the temptation of governments to step in to regulate it and would regulation kill it go ahead. right now it's been very interesting to watch the migration of regulatory interest across this space mean
first we had law enforcement with the rise of the silk road in the online dark web so use of big coin take an interest in the sector more recently securities regulators and with the up swing in prices i'm sure tax authorities are kind of next in line to to start getting involved with regards to law enforcement question you know it's a it's a double edged sword for law enforcement because on the one hand you know you know these these currencies do enable privacy on dark web transactions but on the other hand law enforcement when they catch a criminal who's been using big quiet and they get ahold of their wallet software they get effectively their books and they may have a good chance of recovering some of the funds and that's not something you get with the cash criminal where there isn't record keeping so you can use the block chain to prosecute cases and that has been done and law enforcement i think at least in some jurisdictions is steadily becoming more open to seeing crime committed with
with watching technology does give them advantage over cash crime ok it's a very transparent technology that sort of amazing plus for jeffrey earlier this week there was a san francisco judge putting pressure on a company that trades in these commodities and these currencies here they want to see their books they want to see names they want to see transactions here what kind of threat is that tube it going or can bitcoin evolve with this kind of supervision and regulation from the outside because my sense is or maybe you can correct me if i'm wrong the people that started this whole thing don't like the state they don't like authority that they really want to be on their own here we're going to see encroachment on this on these kinds of. currencies and you know alternative financial mechanisms go ahead you know the regulation of the exchanges began in the spring of two thousand and thirteen so far as i'm concerned it was a disaster. we would have been much further along without these regulations this is
the main way the government can control because it's not actually controlling decline what they're doing is controlling the traffic between national monies and crypto assets coming and going they can control that and the u.s. has some of the worst regulations in the world. crypto assets right now on these exchanges but why is that you know jeffrey why is that markets are global why is that what a lot why is that situation exists in the u.s. well because the regulators are trying to force a modern digital technology into an analog old world style regulatory framework and it's not working and all this doing is driving the innovation out of this country and other places you know you can buy because much easier and a place like israel then you can united states or in brazil you know i've i've i've been to exchanges all over the world most of them are very free and easy and there's a lot of entrepreneurship there in the u.s.
it's all about command and control it's a huge mistake for american regulators to be taking this direction because they're just going to drive the innovation and the capital outside the borders but he went and crypto assets in general are global technology if they don't care about the nation state ok mitch you know address that issue there because i mean the all mighty dollar it's a threat to a bit calling it all these other things are a threat to the the global domination of the dollar and it's obviously something the u.s. doesn't want to have happen i mean you're. right we're talking about u.s. dollar germany and you know my view is us the days of u.s. dollar germany are our very limited look before the united states became the reserve currency i think in one thousand and thirteen when they created the federal reserve which is a disaster that should be shuttered. the british sterling was the reserve currency of the world for three hundred years now was the united states responsible with the
petro dollar and going off the gold standard in the nixon era i would argue no i would argue that this is caused market distortion i would argue that the central bank policies in the last ten years have been more destructive than the good that they've provided because i don't see that we've created a growth for the trillions of dollars in debt that we've created now the as we saw in the last administration in washington big government is in right now so are our government is gargantuan and they want overreach with everything in every part of people's lives in america and to do that if you get an iron fist on the banking system and make people take away cash like one of the professors at harvard wrote a book to get rid of all cash make people put their money into the bank this is this is a very dangerous thing that's why people are migrating to other platforms so we're at a point in time in history that could be very pivotal pivotal as to how we move forward with this but you know the media is controlled and if you look at regulation they
don't regulate companies like amazon that dips their fingers into everything and every different business or facebook or google that have become oligarchies oligarchies and basically these are they're controlling the content the everybody sees and this is where the regulatory agency should be looking not to control people's currency movements or whether they want to buy gold or invest a bit in bitcoin they should look at controlling the facebook's the googles and looking at news the news and it is because news in this country has become opinion and political advantage see and this is a way for the liberal left to read. history which is extremely dangerous if we look mark thompson who ran b.b.c. during the jimmy seville pedophile scandal snuck out of london and came to run the new york times and people have forget about history and where people are and how they move around but the same establishment figures are running things well one hundred sixty companies used to control the media now it's down to six in can one of the things that can cambridge one of the things i find appealing about bitcoin
and i'm i can't say that i'm an expert on it by a long shot it seems to promote entrepreneurial ship which i think is a really good thing again you know people that want to get out of the system away from this is the way for regulation is it fair to say that this is crypto currencies would be good for innovation. i think absolutely i don't think anyone doubts and i think actually you know it's is you know i think people can argue about how bad the regulation is but in certain markets there's been a very pro cryptocurrency attitude because of the innovative aspects of it and people are taking a much lighter touch in switzerland in the u.k. even in elsewhere because of the amount of investment that's coming in because of the you know faster cheaper better ways we can do things with this technology and not just the technology itself but also the new funding channels that are opening up i mean the i.c.a.o. phenomenon which we have really talked about is on the one hand scary because there are some projects out there that you know clearly are fraudulent but out at the
same time you're also opening up access to early stage technology to seed stage technology to anyone around the world with internet connection this used to be something you had to be a rich p.c. be able to do now if you have a computer have a little crypto currency you can invest in early stage technology that has a lot of risks and it also has a lot of opportunities it's personally for me i think an exciting part of the story you know image you know. ok ok geoffrey go ahead jump in just i'm glad you brought up this point about the i.c.a.o. because they've been kind of smeared in the financial press as being. that it's true there are some there's some rackets out there but the truth is that this is an amazing innovation yeah that allows people to raise any business to raise raise money from anybody without using any financial intermediaries that mean that they're the amount of innovation the capital that's going to unleash on the planet earth is beyond belief i mean it's inconceivable what the i.c.l.
market could do to transform the nature of capital markets themselves over the next ten years mitch go ahead jump in. the issue the issue with the i.c.a.o. market as i see it it's an exciting market but it's the wild wild west in early days and what's going to happen is that the the propaganda bullhorns of the media and advocates for the j.p. morgans and the goldmans who are being infringed upon when these offerings come out and they're not going to get their fees so what will happen is they'll make an example out of one that fails like the media does the have you know blow it up into a epic proportion this is bad you're going to get ripped off don't do this give us your money only invest through something that we vet for you so there will be winners and losers and you have to keep the perspective like i said at the beginning there's perspective and risk and reward and don't you know don't go out mortgage your house and put everything in into bitcoin or i.c.a.o. but look you look at this is as a portion of your portfolio and have
a diversification in your portfolio and when you when you go into a high risk thing like an i c.e.o. do your due diligence do your own homework and like i say in my book don't ever invest in anything that you don't fully understand if you don't fully understand it and you invest in it then you deserve to lose what you lose but you know if you give it your best don't put all your money into it don't put all your eggs in one basket diversify put a little bit into it and if you take a loss on that and you make a profit somewhere else then you can balance out but your payout with some of these is going to be exponential as we we've witnessed before the problem comes in when you try to harness the volatility ok gary as we go back to you came in to give you the last word here what does bitcoin and similar currencies what do they have to do to create confidence in people that just see it is too risky what may be one or two steps they need to install. well i think you know similar to the mid to late ninety's during the dot com kind of right up we're in the infrastructure building phase for crypto currency crypto assets i mean yesterday we had three major
exchanges experienced significant problems two of those exchanges are going to be relied upon by c.m.e. for their futures market that simply can't happen you know on a regular basis like it does for this market to be taken seriously by institutions trusted by a broader class of individuals so more capital markets infrastructure is needed the right balance of regulation is needed and i think people absolutely need to understand that this is you know still very early stage very volatile i agree with you know the comments that have made about only put into this what you can afford to lose because it is still very high risk ok well it's been an interesting ride i'm sure we're going to see a lot more ahead that's all the all the time we have gentlemen many thanks to my guests a new york atlanta and in cambridge and thanks to our viewers for watching us here at r.t.c. you next time and remember. me
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the headlines on r.t. international the french president calls for military action against human traffickers in libya despite all the chaos caused by the last military intervention in the country plus. welcome to studio right in the heart of moscow where we are just hours away now from the draw for the fee for world cup finals that is when the thirty two remaining teams who they'll face in the group stage of next summer it is the day of the final draw for football's twenty eight team the world cup. joined by his football legend host for us special coverage you can find out who is in just a few moments. a new poll conducted in the united states reveals that the overwhelming majority of the country's young.