the rebel capitalist show all right guys it gives me a great deal of pleasure to welcome someone back to the rebel capitalist show he is a great friend of mine and he is without a doubt my favorite or one of my favorite people to talk to in this macro space maybe my favorite person i’ll go out on a limb and just say that his name is jeff snyder jeff welcome back to the rebel capitalist show my friend thanks george and i have to say you know there’s lots of good people out there so i don’t take it personally if i’m not your favorite there’s there’s many people that you could be a favorite for so that’s good no but really no one out there understands the the complexities of the dollar funding market specifically like you do and that that really ties into everything in global macro so unless you kind of understand that or are cognizant of it it’s tough to really uh attach probabilities to any given uh potential outcome and so on that note uh what i wanted to dive into today and i think i’m going to get there in a really roundabout way and hopefully answer a lot of my own questions but is to try to determine if bitcoin is a panacea when i say bitcoin i’m talking about bitcoin blockchain distributed ledger technology is it a panacea if so why and if not why and to do so i wanted to start by going back to a story that you went over with emil the other day about solomon brothers and because i in my mind it kind of starts there because that’s where this whole thing takes off with the euro dollar market and trying to get this collateral as an arbitrage play to make a spread on who knows what it is you know a a a swap or some sort of derivative and the derivative market takes over and then that takes us to 2008 and that’s when we start answering the question you know is it possible for this new crypto technology to maybe solve that and then you know kind of get into the weeds there yeah there’s a lot you just went over and i think that’s you know that’s probably a good place to start the salmon brothers story to me was a profound one when i first heard it because it said hey it’s not that you know that’s when things started to change that’s when things had already changed to the point the entire character of the monetary system was completely radically different than anything you’ve ever been taught in you know the history books or economics textbooks for sure and so it was it was it was a moment we’re talking about the early 1990s where you can look at things and say look 30 years ago you had to start looking at things very differently or as you just described george you know you would you would be left in the dark about how you know so many important things this is not just about the plumbing or the specific nature of repo or collateral or anything like that this is about how those things impact everything else because as you pointed out it does impact everything else everything else flows from the dollar system and this was a a key part of the dollar system right so so going let’s go over the story of solomon brothers in case people missed it and then from from there i want to kind of try to figure out what this guy or several people uh were doing why they were doing it and then how that did that did that show that this uh the euro dollar market outside of the united states was growing bigger and bigger and bigger to where it was now um maybe even larger than what we knew domestically and what we still think is the center of the dollar funding market that’s of course the fed i mean was that the genesis and then and then where i’d like to go from there jeff is something that i’ve been thinking about a lot lately and that’s velocity as you know if you look at the velocity the way you know the fed measures it let’s say just whatever money supply measurement you want to use divided or taken into nominal gdp but you know one of my videos recently i said okay well if we don’t know the money supply this goes back to some of our conversations and then how do we know that velocity was increasing during the 1990s and maybe it was just the the catalyst the solomon brothers increasing the money supply in the shadows therefore when nominal gdp went up it was a result of increased money supply not necessarily velocity and if that is true that’s it exactly what the fed said was we’re we’re what we’re seeing is velocity rising but that doesn’t mean velocity was actually rising what that meant was given their statistics right their statistics that were outdated they said well velocity is rising what they knew velocity wasn’t rising what they were really saying is we have no way of measuring money and look at what’s happening here something’s going on with the system that’s telling us our ability to measure and monitor the monetary system is getting way way out of whack and what they said in the middle of the 1990s was especially alan greenspan if you go back to some of his speeches including the irrational exuberance speech in 1996 what greenspan said is we kind of hope that it goes back uh in the years ahead that you know we can start monitoring money again we hope this is kind of a fad and things get back to the way they were before but even then i think they knew this was brand new uncharted territory which was if you don’t know what m is you have absolutely no idea what v is and so if you assign an arbitrary m v is going to do whatever v does it’s not going to tell you anything other than that your numbers are all screwed up and you don’t have an accurate picture of the system so that’s really what happened in the in the 1990s so let’s go back and go over the story of solomon brothers and then i think we’ll be able to connect the dots for the people that probably aren’t following the conversation so far well yeah one of the reasons or one of the ways in which money evolved outside of the traditional m’s which goes into the equation of exchange obviously you know m1 rm2 was repo in fact there was a famous paper written by a economist named steven goldfeld in 1976 called the case of the missing money and what he said is essentially the same thing except he looked at it from money demand perspective what they said was in the 1970 remember this is a great inflation money money supply growth out of control what these what he said was we went back and looked at demand for m1 or m2 you know this traditional banked uh deposit types of money when he went back and looked at it we kept undershooting you know there there should have been more demand for these m1m2 types of money when obviously there was more demand for money someplace else and what that said was just as you know we’re just talking about is that the m1 and m2 statistics the traditional definitions of money were not meeting what the financial and monetary system were doing in other words the banking system itself had created all new forms of financial innovation which acted the part of money outside of what central bankers were aware of and so they had no idea this monetary evolution was going on and the way that they knew that it was taking place and because they could see the consequences of it and you know goldfell’s missing money this velocity puzzle in the 1990s and repo was a very big part of that transition because the repo market wasn’t just you know traditionally repo had been a way for securities and investment firms to finance their securities and investment business right if you’re a primary dealer you’re buying bonds from the government at auction it’s very nice if you could buy those bonds and fund them in the repo market it’s it’s a courtesy it’s a it’s a it’s an efficient way for primary dealers to meet their securities business uh capacities over time however especially with you know great depression error regulations in the 50s and 60s banking system and even you know corporate customers started to you know experiment with different ways to get around those regulations particularly regulation q which capped interest rates what happened was more and more the the banking system and their customers turned into the repo market to get better returns on money but also then to use those repo balances in the real world way corporations began writing checks on for example on their repo balances which meant that even though repo numbers these repo funds were outside of the m1 and m2 statistics they were being used in the real economy in a very real way and so if you don’t notice that the repo market has become a real monetary market you’re looking at just m1 or m2 you’re missing out on a tremendous amount of actual legitimate activity and of course that’s what you know stephen goldfeld said that and we get up into the 80s and 90s where repo only grew and grew and grew and expanded to become an even more crucial part of the monetary marketplace that’s really what we’re saying here and velocity in these m’s is you’re missing out on what actually takes place in the economy it doesn’t matter what your textbook definitions are it’s what the system actually does i mean it doesn’t who cares if it’s in your textbook if banks are out there using this money these monetary forms that aren’t in your textbook then your textbook is outdated and you need to do something about that so yes getting back to sleep there’s a there’s a portion of we’ll call it money that’s in the sunlight that everyone can see and everyone knows is there but then there’s another portion of of money that that is in the shadows that very few entities that they may know about but it’s almost completely unquantifiable and and what the the fed can correct me if i’m wrong what they they do just to give themselves the feeling of maybe having more control than they really do is they just completely ignore what’s in the shadows and kind of sweeping under the rug pretend it doesn’t exist and then just exclusively focus on what we can all see in the sunlight but in doing so it’s um you know it leads to uh bad data going into their economic models and therefore bad policy prescriptions to say the very least well first of all their models don’t really take account the monetary system or the financial system at all which is already a big red flag if you know anything about dsge and econometrics you know that there’s a huge blind spot to begin with but this is why you’re exactly right george there’s shadow money and you you said earlier is that larger than the the than the domestic sunshine money yes in fact even in the traditional euro dollar format you know euro dollar used to be a deposit of us dollars on in on account someplace outside the united states even just some of these traditional euro dollar forms forget the derivatives forget repo just euro dollars these deposit accounts outside the united states by the by the end of the 1970s there were already those euro dollar markets were already larger than the domestic money supply and i’m talking about m1 not just m1 but m2 by the 1990s they were a third to twice as large just euro dollar deposits so this offshore monetary system that’s already a shadow because it’s offshore it’s already in the shadows was far larger by the 1990s than the domestic system and what the federal reserve as you pointed out george what they decided to do was we can’t figure this money out we’re just wait we’re just too far behind we don’t have enough information there’s laziness some of it’s econo intellectual arrogance you know what the fed decided to do was okay we’ll take a step back from the monetary system we’re going to change the way central banks operate we’re no longer going to pay close attention to money instead we’re going to pretend and we’re going to move around the federal funds rate and we’re going to signal we’re going to try to drive the banking system the real economy’s expectations so that we can we can pretend that we’re in control but we don’t have to care about the details right we can control the banking system by moving the federal funds rate around if we if we raise the federal funds rate that signals to the banking system to tighten up we don’t know how they do it because we don’t know any of this stuff but if we raise the federal funds we expect the banking system to respond because we’re the big bad federal reserve and nobody fights the fed and all this other stuff and that’s really what it was it was the belief that we don’t have to know the monetary details because we’ll fly way above it we’ll send some signals into the banking system let the banking system take care of the details obviously the flaw in that arrangement was i mean it was obvious in 1997 1998 with ltcm and that you know the asian flu episode which was essentially a a precursor event to what would take place in 2007 and 2008 which was you better know something about the monetary system because if it starts to go awry you know these signals aren’t going to do you any good as we found out in 2007 2008 maybe you do need to know something about the monetary details which takes us back to the solomon brothers episode in 1990 1991.
Okay great so so let’s go over that let’s review that story uh because i think that’ll really start to that will really force the light bulb to go on in a lot of people’s minds as far as how that euro dollar system the dollar funding market the repo um the the swap market all of these uh kind of ways to eke out uh alpha if you will uh was being kind of financially engineered more and more and more which i i guess would take us to when it all kind of collapsed in 2008 but i think this story really um you know really shows us exactly what was going on there and why yeah we were talking about you know before you it’s qualitative expansion right it’s monetary forms that are evolving outside the tradition it’s not just quantitative expansion which we know that was taking place in even in the sunlight but qualitative all these different ways of of operating these funding markets and doing monetary things with with things that people wouldn’t realize hey this is a monetary form this is a currency-like system so in the early 1990s uh we had this primary deal called solomon brothers which actually one of the most famous uh primary dealers especially in the 1980s um they were maybe you know you think about michael lewis’s stories liars poker and the things like that they were written about solomon brothers one of the first shops to take over you know to to really embrace the quantitative aspects of some of these financial things but in terms of these what what was at issue was u.s treasury auctions and solomon brothers was bidding for complete allotment so the government would say i’m gonna i’m gonna i’m gonna auction off you know a certain amount of 10-year notes and here comes you know the solomon brothers auction desk saying we want all of them whatever your auction house we’re going to pay for them and this treasury said now you we really don’t want you to do that we got to spread this out a little bit and so they were kind of warned hey don’t do that except they kept coming back and saying we want all of this paper whatever your auction off will take it and they you know finally the treasury department said look you’re not allowed to we’re going to start putting position limits on because this has never happened before we’re just going to start putting position limits on the auction and the solomon brothers guy just started he kept ignoring it in fact he flagrantly violated these rules and it was kind of like why would he do that and this wasn’t a small thing because after a while he really pissed off the people in the treasury department not only did they name the rule after this guy his name was paul moser now that they named the the auction limit rule after this guy he kept doing it to the point where they’re like listen we’re going to yank your primary dealer’s status which would effectively be set up like fake accounts to do it or you do customers i mean it’s like they were giving away free gold or like they’re giving away free money so that’s really like okay well if they were giving away free money then then how like how was he turning it into right what’s the free money yeah right that’s that’s what people couldn’t figure out at the time i dare say nobody had figured out today either nobody could figure out why he would do this to the point where solomon brothers had to be actually rescued by warren buffett warren buffett had to come in to keep solomon brothers for getting the death penalty because treasury was really pissed they were going to yank their primary dealer status which would have put them out of business and so you know as you pointed out you know this guy was when the treasury started getting making noises about yanking their primary dealer business they started hiding some of their trade they didn’t stop bidding for treasury uh treasury paper they started using customer accounts and placing bids through customer accounts and making it look like these were indirect bids when they were actually for solomon brothers and so this triggered not only you know it triggered first of all you know this this congressional backlash where warren buffett actually had to go before congress and defend solomon brothers is you know this is the stupid actions of a rogue employee as as they put it except when you go back and read some of the literature especially the treasury department occ federal reserve got involved after the fact and said we need to kind of take a closer look at what’s going on here so they produced this really long i think it was 100 page report about what was going on they didn’t just look at treasury auctions they looked at mbs auctions agency options fannie and freddie those kinds of things too what they found out was this this kind of bid rigging and bid cheating was widespread i said i forget the number exactly i think it was 93 out of the maybe 100 dealers they surveyed had been caught doing this thing they were keeping two sets of books and so everybody was asking why would they do this because there didn’t seem to be any profit mode why would you buy why would you care about if you want wanted a few extra billion dollars in or 300 million dollars in recently auctioned treasury notes we can just go in the secondary market and buy it you shouldn’t need to cheat in order to get this this on the run auctioned off paper so there was something in the fact that these were on what we call on the run which is recently auctioned off securities why were these so valuable that dealers in both the treasuries and mbs were willing to essentially commit fraud in order to obtain this kind of paper exactly the conclusion has to be that they were making so much profit that on on doing this that it somehow justified the epic amount of risk they were actually taking so yeah and that profit wasn’t on the specific buying of securities right it was securing this the on the run treasuries that could then be used in the repo market to either lend securities or lend the treasury to other people who might want them but more so to fund your risky activities as you pointed out earlier in derivatives markets or any other thing once you obtain the best quality collateral you could you’ve essentially unlocked the most possible the highest possible leverage possible and that’s really what it’s about it wasn’t about speculating or corning the market on treasuries as it was getting the best repo collateral possible so that i have a stock of the best collateral that i can then use to expand my balance sheet to all sorts of risky activities because this is the best form of funding leverage possible and that was really what it was about it was this transformation from you know the old way of doing things department you know money and multiplier taking deposits and make loans and those kinds of things so this new wholesale global offshore format where you need collateral you need you’ve got derivatives we’ve got all this qualitative as well as quantitative expansion at which the collateral part of it is the key to everything right and but doesn’t that prove in an indirect way that the money in the shadows was exploding yes because by that it becomes so much and remember back then you know the government wasn’t auctioning off as much as it does now right right even though you know in the 1980s people complained all the time about you know the exploding deficits as we do now it wasn’t the same thing and so it was sort of a shortage of collateral at the same time that’s you know not part of the solomon brothers story but part of the story the 1990s in this qualitative expansion was the rise of something called securities lending which was this business of dealers taking in collateral but not just for their own purposes but then renting clatter out to other people and so what developed with these long collateral chains and re-collateral reuse replenishing rehypothecation that under underpinned and it supported this quantitative expansion in money throughout the entire world and so we had the 1990s supposedly the great moderation into the 2000s which we all know it wasn’t very moderate because there were acid bubbles everywhere there was money you know there was money being created in the shadows that was doing real world things and everybody said look you know it really does seem to be awfully bubbly doesn’t it but where’s the money behind it and you couldn’t you couldn’t make those two connections which is why the federal reserve got away with it for as long as they did because they could say well you know we’re under control we think everything’s fine but what had really happened was qualitative expansion that unlocked this quantitative expansion and it really had put a premium on collateral in the marketplace so where my mind goes is how much if if any of the dot-com bubble or the housing bubble can we pin on the exponential growth of this shadow money system that started way back in the call after bretton woods but really really started to take off in the late 80s the uh the dot-com bubble i think was more of a sentimental thing and you know look the economy is great inflation’s low the federal reserve has got everything there’s no risk and when you perceive that there’s no risk then it’s it’s easy to bid for any asset at any price but was there more liquidity available to go into the market as a result of the shadow money yeah and i think that was just an offshoot of it but wrote what you the second part of it is absolutely the credit bubble which was the key to everything the credit bubble really took off in 1995 which is again that’s when the stock market took off too and so i think it was really about the housing bubble in the united states and this credit bubble was not just a domestic thing it was a global thing in some ways it wasn’t even a bubble you know you’ll think about the the economic transformations of emerging market economies like china for example it wasn’t necessarily a bubble it was a really good thing we had enough you know credit and money hot money whatever you want to call it that was created in the offshore euro dollar system that allowed these economies to transform themselves at our expense but you know that was a good thing overall but by and large the credit bubble that took place especially from 1995 to 2007 this was completely financed by this euro dollar expansion okay so let’s go back and just quickly give an example of re-hypothecation uh just because we say that people kind of know what it is but you gave like okay this is how it would work step by step and you did that with your last podcast with a meal uh that i was just listening to this morning and so if you could just give a step-by-step example of how that would work i think it would give people a better picture of really kind of what’s going on here yeah and first of all there’s there’s different ways of doing this but the easiest way to to illustrate what we’re talking about here is george we’ll assume you’re a hedge fund manager and i’m your your prime broker dealer so you want to buy securities because that’s what you do you’re a hedge fund you’re trying to make a return and the way you want to do that is you want to be able to leverage your assets too because you lev more leverage means greater return so you come to me and say i want to buy a us treasury but i only want to put up a small amount of the purchase price i want to go in the repo market to buy the right or i need to fund the rest of the the treasury because that gives me the leverage and so i’m your dealer and you’re a good customer you know i want you with for a long time and lots of customers like you so i want to keep you happy so i’m going to do that so i take a small investment from you i go into the marketplace i buy the treasury for you but i don’t really buy it i i fund it in the repo market or i fund it on you know i get i lend you the funds on my own behalf or that i have so that you can you can quote unquote own this treasury even though you’ve essentially borrowed the almost the entire purchase price for it except for a little over collateralization so in other words you’re you’re borrowing the funds to buy this treasury and you get them you get those funds through me either i lend them to to you directly or i go into the marketplace and i borrow them on your behalf and why i do that why do i lend those funds because i want to make you happy but i also want to give you the best possible terms and so for in order for me to get the best possible terms and secure them for you the cheapest rates the best haircuts all these other kinds of things you’re going to give me the right to this treasury that you own that you have title to you’re going to allow me to reuse it or re-pledge it it’s called re-pledging so this treasury that you own i have custody of it i’m going to go in the repo market and i’m going to post it as collateral in a repo trade and so in a very simple plain vanilla relationship i’ve gone into the repo market on your behalf using your your collateral to do so well what happens it’s in reality it’s a much more complicated situation in other words i have you as a hedge fund client i have you know dozens of others i have other dealers that are clients as well and so i’m getting lots of collateral coming in and so it’s not a sort you know it’s not essentially a one-to-one where i’m not using your collateral on the repo to fund your trade what ends up happening is i have lots of collateral from you and everybody else coming in and i just use that collateral on everyone’s behalf to secure my own activities in fact a lot of my money dealing activities and derivatives and other things are based upon this pool of collateral that i’ve obtained that’s not mine i don’t own this collateral it’s it’s given to me with specific rights to reuse it and the way i reuse it is i re-pledge it into either repo market derivatives whatever whatever needs collateral i now have a pool of available collateral in my custody that i can use for my own activities because it benefits my customers that’s that’s the rationality here because the more i can do the cheaper i can do the better things that i can do i can pass along those things to my customers which they know that which is why they allow this stuff to happen because if you’re if you’re a hedge fund speculating whatever instrument and your broker dealer gives you the best possible terms and he says oh by the way i got to reuse your collateral hey go ahead knock yourself out that’s awesome and so that’s really what a prime deal a prime broker dealer’s business is in large part depended upon this collateral that it doesn’t own that gets reused and re-pledged and so how often does it get reused and re-pledged well damn near all the time some study it’s different for whatever study and you know the fact that we have to study this stuff tells you how how much of it it’s in the shadows to begin with we don’t know why don’t we know well we have to go back and certain people pick out you know dealer samples and say well 85 or 90 of all treasury for example they get re-pledged that’s a huge amount from dealer for all these dealers are taking collateral to get re-pledged and then it’s it’s not even you know i take the collateral from you i use it in my own activities so i re-pledge it to another dealer so now your collateral that you own has been re-pledged to another dealer who now has we both have this custody collateral that dealer then pledges it to another dealer who pledges it to another dealer next thing you know your collateral george has been reused six or seven or eight or nine times yeah yeah you guys have it on it gets reused six to eight times yeah which again we get these numbers from you know these intermittent studies every once in a while somebody goes back and says hey we should look at the collateral system and you know it boggles my mind and think why do we have to have studies where you have to sample deal why don’t we know this stuff for sure and the reason is going back to what we started off our discussion with central banks regulators decided a long time ago they didn’t want to care about the details of the monetary system and this collateral stuff re-pledging reusing is a huge huge huge part of it yeah i mean that’s probably what solomon brothers discovered and that’s why they absolutely take all that insane amount of risk to lose their license because they could make so much money uh re-hypothecating these uh this pristine collateral or just you know giving it or what you know however they were manipulating the system or you know creating these uh contracts that uh you know who knows if they’d hold up it it’s just uh that’s oh we’ve only scratched the surface here we’re just giving simple example we haven’t even talked about securities transfer collateral transformation and other you know the real meat and potatoes of the securities lending business i mean it’s just this reusing and re-pledging stuff goes and it’s horizontal as well as vertical i mean it gets you you know you reuse the same collateral all sorts of a number of times but it also use it’s also the basis for transformation where you take risky junk and make it look like it’s a u.s treasury right so you have this this you know it’s like a huge ball of collaterals you know it’s supposed to be owned by certain people but it’s ownership what does ownership really mean in this case it because it gets reused it gets it pledged there’s repo fails there’s all sorts of you know fuzziness that takes place in these in this collateral space which is enormous and as we said before this is underpinning the entire global financial system this is the key key point to the structure of the global monetary system whether it’s us dollars or not it’s it’s all across all currencies right but you know what i was thinking when you were talking about that with a meal and still what’s going to my mind because you always talk about there being a collateral shortage that there’s there’s not enough pristine collateral but i’m asking myself the question is that the problem or is it that the financial system is just way way way way way too big and it’s just trying to create collateral and therefore it looks like it’s a shortage but it’s the system that’s gone rogue and is out of control well that’s actually two different problems you’re exactly right and the the safe acid shortage is really it’s saying hey look the system as it actually is which may not be the system we really want because it doesn’t work but the system as it actually is does not have enough safe collateral that’s that’s definitely the but the other question is do we want this system they can’t create its own collateral and really that’s what uh collateral transformation and securities lending is about it’s trying to deal with this collateral shortage and bringing in other kinds and packaging them up and doing all sorts of training strange transactions to make it to increase the amount of safe collateral being re-pledged and reused and that’s really that’s kind of a weird thing right because we’re talking about you know there’s a collateral multiplier too it’s not just you know money more we have a collateral is a currency-like system all its own and you know it’s almost like a fractional reserve system because owners are detained you know you’re you’re owner of this collateral which is very currency like which you’re right that’s what solomon brothers figured out in the 1980s and early 1990s this was the real money here this is the money we want to get involved with and so if we have this multiplication through use and replenishing is that really something we want to take place is that i mean because think about what repo is supposed to be repurchase agree this is supposed to be collateralized lending the safest kind of lending when we’re talking about replenishing rehypothecation we’re completely redoing the whole thing and by the way since the since the financial crisis unsecured markets have essentially dried up and so over the last 13 years repo is now pretty much the only game in town as far as funding markets go so it’s not like we’re moving toward a solution to this problem we’re moving away from us we’re making repo eating collateral even more essential than it was before and so if there is a safe asset shortage given the way things are and there is what that means is the system is trying to deal with it and in some ways it tries to deal with this safe asset shortage is they’re not good using junk bonds for example to underpin these collateral transformations introduces more risk in the same way we saw subprime mortgages used in repo back in the in the pre-crisis days so it’s it’s introducing more fault lines and more potential problems than it is actually solving the issue how does what’s going on in the shadows or the with the repo market more specifically how does it benefit the real economy because i sit there and and think to myself okay the wealth in the economy is the the goods and services it produces and how does what’s going on how what we just talked about over the last 20 minutes and what we described how does that benefit the real economy well it’s it’s not it’s it’s not easy to see right because you think you know uh an importer exporter or somebody that’s building a factory in singapore you know they’re not really accessing the repo market right and so it seems like there’s a disconnect this repost stuff is for wall street and you know is is this really just is this something is this really part of the real economy and the answer is yes it is yeah because the the the person or the people are trying to build a factory in singapore where are they going to get the funds to do so they can borrow local singapore dollars but those are kind of hard to come by and they’re not maybe not the best way to do it instead i can borrow dollars from a global marketplace from really you know when when the euro dollar system is expanding we can borrow these dollars very cheaply and easily efficiently to allow us to build this this real wealth in the real economy and where does that where do those dollars come from well they come from these banking the banking system that participates in these financial markets including repo so repo is is is the key part of this global monetary system that greases the wheels for real economic activity all over the place so the the repo market is really the the key to the euro dollar system itself it is yeah absolutely and i i say you know the repo market to me is the lender of last resort not the federal reserve or any central banks when you have no other alternative because of some other things whether it’s commercial paper breakdowns or anything as we saw earlier this year you’ve gotta repo’s your last resort if you got collateral you can stay alive right right yeah so then i everyone always talks about velocity today and how you get velocity up how do you get velocity up you know that’s what the let’s say the government needs to create inflation and it goes back to what we’re saying here when you can’t uh measure the money in the shadows then you have nothing to divide into nominal gdp to figure out what the what that velocity is and you know going back to that video jeff we look at m2 money supply just going completely parabolic but we don’t know if the money in the shadows is going down at a faster rate than what we can see with m2 is going straight up yeah i think we have a good idea though right because markets tell us right that’s right you know in in the absence of statistics or data about the quantity of the shadow money we’re left with trying to decide okay what is what is you know there are participants in the shadow money system even though they don’t you know it’s not they don’t know particularly the particulars of the system they operate in but the banking system does tell us what’s going on in the shadow money system with you know yield curves you know money curves and things like that so they do give us an indication of what’s going on in the shadows and you’re right because the visible m2 like the federal reserve’s balance sheet and bank reserves has gone parabolic but we have to realize that in the shadows the banking system itself is telling us there’s contraction there’s at least offsetting stuff going on there and some of that’s technical and some of it’s not but really what we’re seeing is more deflationary shadow money pullback destruction whatever you want to call it then there is visible monetary creation through the old traditional depository ways so do you think friedman was right friedman’s right and wrong about a lot of things but do you think he’s right that velocity is consistent no i think velocity uh you know we’re talking about especially what you said earlier velocity is essentially a tautology if you don’t really know what m is then v is just going to move in opposition to whatever your m is because m is arbitrary and so when you have if you say you’re setting m times v equal to the other side p times q or p times y that’s an arbitrary equation it’s not a real equation it’s never been proved you’re assuming one is the other and in this case where you don’t know m what m is the v is just going to always move in the opposite direction of m because m and v don’t really impact p and q so velocity as a measure to me it’s completely meaningless and again thanks gets back to the discussion in the 1990s which even this you know greenspan’s fed knew that velocity was a meaningless concept what they were saying was it’s telling us what we already know which is we don’t know money is but is velocity a real uh a real uh function regardless of whether or not we can actually measure it yeah i mean that’s it’s if if i have a dollar and i give it to you and you give it to somebody else there is a real velocity but the question we have to ask is in this situation we have now what is velocity as a real concept in time when we’re talking about a global monetary system collateral repo and all these other things what are we really talking about when we talk about velocity i think it’s really about risk taking behavior versus risk aversion right because if we have a bank-centered monetary system if the banks are willing to take risk they expand their balance sheets they expand the money supply which also expands not just the supply of shadow money but also the redistribution of it which is a key part of this too it’s not just supply but also well i think what we’re talking about is velocity is redistribution moving money to all parts of the world that need these part they need these monetary forms and so it’s risk taking versus risk conversion and what the banking system has told us for the last 13 years is they’re more risk-averse than they are anywhere close to risk-taking and it doesn’t matter what central banks do you including you know europe or japan where they do negative interest rates which essentially tries to penalize liquidity and holding liquidity in other words i’m going to penalize you unless you do something in the real economy banks are saying we’re going to pay the penalty we’re not taking risk we’re risk-averse and i think that goes back to the concept of velocity because again a bank-centered system depends upon banks taking risks to create balance sheets space and then redistribute all these monetary forms across the world or maybe they’re just not taking the risks we want them to take if our objective is increasing productivity in the real economy yeah and i think that’s that’s a separate discussion too whether or not this euro dollar system was the most efficient way to achieve sustained economic growth i think we would all agree that it’s not because it created a situation was completely unstable and unbalanced even at the best of times you know in the the late 90s and middle 2000s that was not the way to create sustainable economic growth so that’s that’s that’s already one question i mean do we really want to go back to that kind of a system i don’t think we do so we’re really talking about two different things which i think is what you know your overall point is the system we don’t really understand the system as it is and even if even even though that’s the case we don’t want to go back to it we don’t want to fix what we have we want to move forward realizing where we are now let’s move forward into something that might actually work yeah i was just you know my point was are the banks taking their balance sheet capacity and using it to create a quadrillion dollars worth of derivatives or are they doing it to fund that uh factory in singapore or what they would say is dallas or something those two things are related it takes that many derivatives to do this and you know there is some legitimacy to that position because these derivatives are really balance sheet tools in the same way collateral is and so you know derivatives you don’t want to get focused on the the gross notionals and these huge totals you know half a quadrillion and derivatives and things like that what they’re really saying is this is a really complicated shadow money system and you some ways you have sympathy for central bankers a little bit of sympathy for central bankers because the fighting money is you know if we’re talking about these hundreds of trillions in derivatives and collateral all this fuzzy stuff i mean it’s really a difficult topic but that’s their job that’s why you don’t have so much sympathy for but the banking system would say we have these derivatives so that we can manage our balance sheets and do all of these things that the the global economy needs us the problem is the global economy needs this this this inherently unstable system to to work in the same way it has over the last 50 years that’s the problem we’ve got the wrong monetary system for the the way we want the economy to operate so let’s go back to the original topic of discussion how would bitcoin or blockchain or distributed ledger technology help us fix this problem or are there some things that it would fix and then other things it’s just we got to figure out a different solution or maybe there needs to be another iteration of some other uh cryptocurrency or maybe an iteration of bitcoin itself i’m sure you’ve given this a lot of thought so you know and i mean when you’re talking about the re-hypothecation you know what’s going through my mind of course is is the ledger would be able to tell exactly you know who actually owns what so at least you could see that and maybe it would uh be able it would give us a tool to quantify how much money is actually in the shadows i don’t know that’s right i mean to me us the solution is a stable monetary system because what we have now is unstable and what i mean by unstable just what you pointed out george is lack of transparency look let’s think for example for a second what what is a bank what is a bank in the modern setting i think most people when they think of a bank and i might be wrong but i think most people think the bank is something like the you know the 19th century where somebody shows up with gold coin and cash and then the bank you know puts it in a vault that’s not what a bank is nowadays a bank is nothing more than a glorified bookkeeper right you go to the grocery store you whip out your depo your debit card you put it in the machine and what you’ve done is essentially uh created a ledger transaction right the money will go from your account to the grocery store’s account it might take two banks for this transaction to take place but all it is is a network transaction right there’s no cash there’s no money involved it’s really bookkeeping and that’s that’s really banks are essentially two parts and the first part is what they mostly do is bookkeeping and so we ask us do we really need a banking system to take to to keep track of all just transactions no and that’s really the beauty of blockchain distributed ledger technology is that it can do all these things we don’t need the banks to do we don’t need a bank to take care of all this bookkeeping we can create as long as the blockchain technology is sufficiently robust that would replicate the bookkeeping functions of the banking system already i don’t think we’re quite there yet but moving forward i think that replaces the bookkeeping and where it comes where it becomes more complicated is what are the rules governing the amount of money and credit in the system so you talk about credit supply and money supply and then the redistribution of those things and i think you can the blockchain technology can do those too because right now as a bank centered euro dollar system what we’ve done is we’ve briefed privileged the banking system as bookkeepers but also we’re saying okay because you keep the books you’re allowed to decide how much money and how much credit gets created and who gets what and again i think you can replicate those functions in a blockchain digital currency system where we don’t need a banking system to tell us who owes what and how much how much additional supply or how much credit it gets created and redistributed throughout the system don’t think the blockchain can take care of i mean it’s it’s not i’m making it sound much simpler and straightforward than it would actually be i mean it’s going to take some really high power thought and some very elegant solutions to accomplish it but i think if we’re looking far enough forward blockchain and distributed ledger systems can replicate the functions of the banking system i think we want them to because we don’t want a bank centered system we want a monetary system that is transparent and stable so that we can concentrate on the real economy that’s where opportunity is it’s not not in in playing these funny games with the treasury auctions and trying to uh obtain illicit repo collateral it’s we want people to we want the financial system to work for the real economy and think about only real economic opportunities the way you get there is by having a transparent stable monetary system where everybody knows the rules we don’t have to wonder what’s going on with banks who’s creating what is the defense is the central bank printing money well is it on the blockchain no then it’s not money printing so i think in a very high level way that’s what i see moving forward is if you break down the functions of what banks actually do the first one’s easy the bookkeeping the bookkeeping function i think that could be i mean that might be closer than we think right because i think just the other day someone sent to me uh an article that said jp morgan had booked a repo trade on the blockchain an intraday repo trade so i mean that stuff is already happening it’s we take away the bookkeeping function then what’s left is we have to decide how can the blockchain take care of credit creation and redistribution i think they can i think it can be done right but so i want to unpack that a little bit because a lot of the people see uh the greatest benefit to bitcoin is its scarcity there’s only 21 million of them and they envision a world where there’s just 21 million bitcoin and the way people distribute uh more and more purchasing power is not by creating a a bitcoin iou it’s deflation it’s it’s through making it divisible right right representing and repricing yeah so i i mean i totally get that but i and i don’t want to put words in your mouth but i think you would argue that that’s that’s going to be very very difficult and ideally you’d have to come to some uh middle ground where you could create ious for lack of a better term on that particular bitcoin whether that’s decentralized or or not i would argue that that’s that’s that’s going to happen if bitcoin if we had a bitcoin centered system or not bitcoin but even just a a fixed monetary system you will absolutely have quasi money show up because fixed monetary systems don’t fit with a dynamic economy a dynamic economy that’s growing the central problem is always been and this goes back you know ancient times is is trying to meet and match money demand and money supply because there’s always money demand and it’s never stable it’s not the same demand each time it’s sometimes there’s money demand for good things sometimes there’s money demand for bad things so you got to intermediate which is good which is bad sometimes there’s more good than more bad and so you want a monetary system that’s at least dynamic enough that it can more efficiently match money demand with money supply and i don’t think a fixed system will work because as i said eventually what happens in a fixed system is the system will create other forms of money to work around that kind of shortage that kind of scarcity that artificially imposed scarcity and so i think the most elegant solution is to try to create dynamic rules on the blockchain technology or digital currency whatever for whatever form it kind of kind of ends up being that allows some kind of dynamic forces in the money supply and redistribution end of it so that it can what we hope best matches the dynamic nature of money demand we don’t want a strict limited monetary system because you’re just inviting danger inviting you’re inviting a disaster does it does it look like free banking with exit backed by bitcoin instead of gold that’s that’s really hard to tell because it depends on which direction you want to take it i mean free banking is the principles of free bracket i think are solid and i think you want to look at those and think and say yeah this this needs to be part of it we need to encode some of those you know even gold principles goldback system some of the best parts of these ancient monetary systems or the old monetary systems and say how do we write them into the blockchain system so that we have those kinds of principles without necessarily that kind of a format so it’s it’s really i don’t i think we want to be and we also have to look forward because we don’t want to limit ourselves to okay this is the way things are today it’s going to assume it’s going to be this way forever because if one thing this history has shown is that monetary regimes change fairly regularly and the reason they change is because they don’t stick with the times the times change and we’re you’re left with an old monetary system that breaks down you know bretton woods is the same way the classical gold standard was the same way also you know throughout history that’s always the case so you want to have a dynamic system that can at least to keep up with the way things are today and hopefully be able to continue to match the world that we live in which is constantly changing for as long as possible into the future it has to be stable and predictable that’s really the keys here what do you think about mises argument against free banking in in favor of full reserve implying that free banking was fractional reserve where he said that it would always uh inevitably create the business cycle and kind of a boom bust to whatever degree you you used as a reserve ratio you know and and that if you stuck with full reserve although you wouldn’t have as fast of growth over the long run it would exceed the growth that you have through kind of the smaller boom and bust of the fractional reserve system because you’re not misallocating resources that’s exactly what i’m talking about except not being as strict as he was what i’m saying is we want to most efficiently match supply and demand so that we minimize the boom boss cycle i don’t think we’ll ever be able to get away from them because human beings are human beings let’s face it that’s the key here it’s not the monetary system the monetary the wrong monetary system what’s the wrong kind of appetites but those appetites are always there human beings are always going to be excessive and then in times of danger and scarcity they’re always going to hoard that’s just the way people are i don’t think you know we’re not going to get away from that and so what we really want to do as he was saying is look we want to minimize or at least make the most out of the opportunity and i don’t think that’s being a strict limited monetary system it’s a dynamic system that when things are good and things are going well we reward the best parts of the most sustainable productive parts of it and allow them to continue to grow and flourish so that the the uh the overall boom bust cycle itself is a very you know we’re talking about narrowing the amplitude right so we have more peaks less valleys maybe more maybe having the more infrequently business cycles but still i mean there’s still going to be business cycles and i think the way that you do that is mo best most efficient matching between demand and supply and that’s not a a strict limited case i think it’s it has to be dynamic and i mean that’s that’s really what uh digital technology computers that’s what they’re good at they’re good at complicated equations and all we have to do is set up the rules that’ll that uh that govern the way that blockchain or the digital currency system works some of those rules could be you know increasing decreasing supply but then it still falls on our shoulder to keep the rules you see what one thing that i i said the other day in that video and i i said this to to raul we were talking about this i said that let’s just assume that that gold and or bitcoin is is perfect money but you’ve got perfect money that is owned by imperfect creatures in an imperfect world therefore how can we expect perfect money to behave perfectly we don’t we understand that people are inherently what we’re doing is we’re trying to make we’re trying to narrow the errors right right the euro dollar system we have now when it first started out those those errors were pretty small and they got bigger and bigger and bigger over time to the point where they made a huge problem and so what we’re doing is we’re trying to create a system where the errors can be it’s dynamic enough that it can move around and be flexible but hopefully with the rules i mean look once you went like the you know like bitcoin once you put in the genesis block that’s the rules the rules are the rules you can’t change them once that’s the whole point of blockchain once you put put the rules down in the in the genesis block it doesn’t change the question is whether or not you allow somebody to move outside the rules and that’s you know that’s something that’s always going to be a problem and that’s something that always to be considered and so again like i said before i’m making it sound much easier than it actually would be this is this would be an incredibly incredibly difficult challenge and it’s going to take an enormous amount of resources some of the smartest people on the planet to be thinking about it and the problem we have now is nobody is every all bitcoin that’s just some you know that’s some bubble over there in in technology or something you know and that’s that’s part of the euro dollar story that because it’s still shadow money people don’t realize what’s really going on and what needs to take place from that which is we need to start looking forward and take in taking solutions seriously and start thinking about them in serious ways because it doesn’t work the way things are now right right those great great points okay oh boy we’re getting short on time here one thing i wanted to go over kind of switch gears a little bit and we’ll we’ll that was kind of some high level stuff and that was really fascinating but we’ll make it a little more basic here and uh i always hear you and i’m sure all the people listening and watching right now hear you and other podcasts always say well this isn’t money printing you know when when where they’re doing qe it’s not money printing you know where the bank of japan is doing xyz it’s not money printing it’s not money printing so one thing i was thinking to myself this morning is i’m like you know what i want jeff to actually define what money printing is so so in jeff snyder’s terms what is money printing what money printing would be right now today would be shadow money expansion okay it’s really that simple right because what you told what you said earlier george is hit the dale right on the head if you see visible money or visible forms i don’t treat bank reserves as money but some people could bank reserves to me are not money they’re nothing more than tokens or clearing house certificates anyway but even even if we even if we treated bank reserves what the fed does is money they go up it’s what you don’t see going down that offsets it and more than offsets it really and we do have some statistics for shadow money too things like commercial paper repo fed funds markets and things like that and we do line them up even if you treated the federal reserve bank reserves as money the amount of money that’s the amount of balances that have come out of those things more than more than makes up for what the fed has tried to add back to the system even bank reserves for money so money supply growth is essentially essentially shadow money expansion which is bank balance sheet expansion and again that doesn’t happen until the banks decide hey we want to take risks yet and they’re not there there’s just absolutely no sign they want to take risks and this year more than more than most of the past 10 to 10 12 years right it hasn’t changed this year in fact anything has gotten worse yeah you know what i try to do and tell me why i’m right or wrong here is i just try to get fixated on the deposits in the commercial banking system or the commercial bank liabilities because everyone’s the reason you’re trying to figure out if if money supply is growing or if there’s money printing for most people it’s just to see if consumer prices are going to go up right they want to figure out consumer price inflation so maybe i’m over simplifying it but in my mind if i can just focus on the deposits or the liabilities in the commercial banking system because at the end of the day that is what’s chasing those goods and services am i oversimplifying it i think so and i think you’re leaving out the stuff that we talked about the beginning which you know repo market how corporations for example use repo balances to do real world activities they write checks against the repo that it doesn’t show up as a simple deposit it doesn’t show up in so i think if you look at the banking system more broadly instead of focusing just on deposits look at their entire balance sheet construction right because in a lot of ways crap lying between credit and money is blurred too so if you look at a bank overall and say okay it has some of this and some of that and some of this what is the overall how is the overall bank balance sheet being constructed internally is it expanding is it doing different things is it holding more liquid stuff less liquid stuff what does this liability structure look like i think if you look at it more holistically then you get a better picture of what the banking system is doing which gives us a proxy or at least a somewhat of a window into the shadow money stuff right okay so then another thought experiment i was trying to to walk through is just the the government sending everyone let’s say 10 million dollars right and so that obviously increases those deposits that we were talking about maybe it increases them enough to outweigh the destruction that’s happening potentially in the shadows and most people would say okay well that’s got to create consumer price inflation i’m guessing what what you would say and i’d like to hear your thoughts on this is it would initially but then at some point it’s going to kind of find an equilibrium point because it goes back and i don’t but does it go back to what friedman was talking about in the 1970s it was what the permanent uh income hypothesis and um if it does go back to the permanent income hypothesis because i was thinking about that then how do we reconcile that with what hume was talking about with the the price specie flow mechanism and i don’t if you’re not if you’re seeing how i’m connecting the dots there because you know hume i i believe would argue that if there’s an increase in money supply then people are going to go out and spend it that’s going to increase the the price of goods and services right away but how is that how are people seeing that in and of itself uh permanent income and if they’re not seeing it as permanent income then what was hume maybe maybe was that an oversimplification uh when you look at what friedman was talking about the 70s did you see heim yeah no i think you’re right and i think hume was oversimplifying things because the system was different then it wasn’t the same thing we’re talking about specie versus you know this this fuzzy shadow money that we’re talking about today there’s all sorts of different ways to think about it and when in hume’s day if you got a bunch of go if you found gold sitting on the side of the road you picked it up you were going to use it and at that point that gold was out of the monetary system it was out of the economic system it was sitting on the site it was physically outside the system right so you’re essentially picking up and putting it back into the system whereas that we’re not really talking about the same kind of thing today we’re talking about redistribution and things like that but going back to your original question if the government paid everybody 10 million would that be inflationary the real the issue of inflation isn’t really about consumer prices and you were right to point that out george it’s not we’re not really talking about consumer prices consumer prices are a symptom of what we want to see or what in the current case what central bankers want to see which is economic growth taking place that’s sufficient that it creates you know there’s enough money in the real economy that creates growth that allows companies to raise their prices because that’s that’s the natural way of things moving and so if the government decided tomorrow to pay everybody uh you know a million dollars or 10 million dollars would that be inflationary well no it would it would reset the entire system and it would reset the system such that the price of everything tomorrow would be you know 10 million times or you know whatever it’ll be some enormously big number bigger right and that wouldn’t necessarily be inflationary either that just might crash everything because nobody would have any way of analyzing predicting uh or thinking about what tomorrow would look like because what we would say is that tomorrow would be a reset and we have no idea what the other side of it would look like and i think in in that situation you end up with the same kind of deflationary stuff we see today where everybody just says we don’t know what we have to wait for everything to sort out before we do anything so people end up just hoarding deflationary in the sense of maybe not prices nominal prices but economic output right and that’s and again we let’s be specific about our terms you know consumer price inflation isn’t really the id isn’t really the issue on the other side and so on this side we talk about deflation we’re not really talking about you know 1929 style wholesale prices collapsing by 50 we’re talking about the curtailment of as you always point out george i love that you do this real wealth real wealth is not money real wealth is not the amount of dollars in your bank account or in your your prime your your schwab portfolio wealth is real economic and productive activity and so if we’re talking about deflation in real economic and productive activity a situation where the government says we’re going to pay everybody 10 million dollars what happens tomorrow you’re a producer do you win do you lose i mean i mean there’s so much uncertainty related to that you can see how it would end up being something like march and april everything just shuts down until we try to figure out what’s going on yeah right right okay man i i know i’ve kept you too long here one more question i want to ask you and it’s it’s completely off topic but i’ve heard uh grant talk about grant williams and bill fleckenstein and i know bill’s been trying to get this question answered for a long long time and i tried to think it through on a video and i i came to some conclusions that uh i thought were pretty accurate but it’s it’s the fact that the boj owns 60 percent of uh the japanese debt and so you’ve just got the electronic uh account that’s an asset on the balance sheet of the central bank and then it’s just a liability on the balance sheet of the government and those are really the only two parties involved so what happens to the yen what happens to the japanese economy what happens if they just wake up one morning and just hit the delete button or does anything happen do people even know why would that even be a realistic option though why would the japanese government say we want to we want to do something like why would we want to introduce that much uncertainty so i don’t think that’s a realistic option to begin with i think if anything his argument was just to lower their debt to gdp why i think you know that’s what i mean you look at mmt for example mmt is looking at the japanese example and saying see these these numbers about debt levels and gdp level they don’t matter and they’re right i think that’s you know the mmt people have that exactly right they have it wrong about everything else but at least that part debt to gdp doesn’t matter in this kind of a situation and this kind of a situation as we know is a monetary system that values what the government prints so you want to put it that way i mean the bank of japan or the government of japan is creating what the banking system wants it doesn’t matter if the bank of japan’s in there or not the banking system would buy that paper to begin with and so the government of japan the bank of japan they don’t care about that gdp because why would they 30 years later it hasn’t been an issue the japanese yen today is a little bit higher than it was 13 years ago before this qe stuff began i mean there is no in the way the current world is set up there is no consequence for these things and the reason is because they don’t work the you know with the bank of japan is supposedly printing money and monetizing debt the government of japan is spending recklessly doing all sorts of fiscal stimulus and it doesn’t do anything and so that only that all that does is reprioritize what the government uh what the government does in in lending in borrowing funds from the marketplace because it doesn’t work the economy never grows that’s the key here if japan was in any kind of situation where real economic robust sustainable economic growth was in any way realistic then you’d start to see things happen in those marketplaces but as long as japan is stuck and it’s in deflationary trap where there is no growth the government can do whatever the hell it wants for as long as it wants right so the conclusion that i came to and maybe this is kind of what you’re saying is is that the the consequence if you will is is not really what would happen to the yen or what would happen to the economy but the the consequences happened in the past and my point is that the the real uh negative effect was the government spending the money in the first place that got up to 250 debt to gdp because of the misallocation of the resources and i use the example of a heroin addict that takes out a hundred thousand dollars in debt to become an addict just if you give him a debt jubilee and he’s got another hundred thousand dollars to buy more heroin it doesn’t solve the problem because the problem was the spending the money for the heroin in the first place right making a bad situation worse the japanese economy got itself into a bad situation which the government the central bank came along and made it worse and the issue isn’t they’re making it worse it’s the fact that they’re in a bad situation and they can’t get out of it and i think that’s what the mmt people miss too they’re thinking that oh we can take the japanese model and reallocate especially the labor market in a optimal way that will create economic growth when really all they’re doing is recreating what japan has already done and you’re absolutely right once japan got into that situation that was the important point they got in that situation and the lesson for everybody else is don’t get in that situation it’s what i say about the zero lower bound zero lower bound isn’t a trap it only becomes a trap if you’re if you’re idiot central bankers allow you to get to the zero lower bound once you get there that’s the it that’s that that’s done that’s the problem don’t get to the zero lower bound and you’re fine all right so but let me hold you to it though what do you think would happen just as a thought experiment if they hit the delete button on the 60 of the japanese government debt well again i’ll say i don’t think that’s even an option but if assuming that they did do that i don’t think much would happen at all because again it’s just you’d have numbers go down in the bank of japan uh on their balance sheet have numbers go down in the banking system which is just useless numbers i mean i’m sure the government could figure out a way that we don’t we don’t call that losses um we’ll just offset it somewhere i mean that’s what the japanese have been doing since the early 1990s and papering over the back the bank the banking systems losses for all this time so it’s really just renumbering everything yeah yeah that’s what i thought all right jeff thank you so much for the conversation i know this was pretty much a selfish uh skype call and that uh i just wanted to get some of my own questions answered that i had in my head for so long so i really appreciate you hanging out and i appreciate your time but uh for everyone that wants to find out more about what you do and one of my favorite podcasts that’s making sense that you do with our good buddy emil kalinowski where can they check that out i know i’ve been listening to it on itunes but i know you guys have a youtube channel as well yeah alhambra investments our youtube channel there it’s it’s up every week to podcast um alhambrapartners.com if you if you don’t catch the the subscription if you don’t subscribe to those um you can everything gets posted on our blog at alhambra partners so uh many different podcast channels i know we’re on itunes and google and some of the other ones apple and so it’s out there all right buddy thanks again for your time can’t wait to do it again soon all right always a pleasure george [Music] thanks
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