Why Investing in Gold Is So Critical & the Future of Money (w/ Grant Williams and Josh Crumb)
Grant Williams: All right. Josh Crumb, co-founder and chief strategy officer of Goldmoney. Welcome back. Josh Crumb: Thank you. Good to be back. You and I keep bumping into each other in strange places. Yeah. It was Toronto last time. And then we bumped into each other in Hong Kong a couple of months ago, right? And now New York. And here we are in New York. Yeah. Yeah. I wanted to bring you back and talk with you because you and I had sat in a coffee shop in Hong Kong, just had a fascinating conversation. And I really want to get the chance to kind of pick over it with you for Real Vision audience. And so you and Roy have been on before. There's a great think piece that the two of you did previously. People should go back and watch that and find out a little bit about the background. Could you give us the quick and dirty for those of you that haven't seen it. And then we're gonna talk about religion. Yeah, that's probably the best way to start it. I'll try not to say the G word for the first 15 minutes of the interview. Well, you're OK with the four-letter G word. It's the three-letter G word. Just leave that out of it. OK? OK. So I can say God. I just can't say Gold-- Shh. All right. Well, we'll continue. So give us the really quick background, just so people get a sense of where you come from. And then we'll go down some path or other. Yeah, sure. So I'm an engineer by background. So naturally, not that good on camera or any of that. So if I start wandering and the complexity of my head's not coming out right-- I'll rein you back. Don't worry. --just bring me back. But yeah, so I have an engineering background. I also have an economics background. And I came from doing-- well, quantitative political risk was actually my Master's work, and how you try to quantitate political risks, particularly in the extractive resource sector. And for me, I'm, I guess in general, more of just a systems guy, whether it's financial systems, geologic systems, economic systems. Me and my co-founder and CEO, Roy Sebag, were just those annoying kids that just keep asking why? Why? Like, why does that work? Just never accepting the given answer or the accepted answer. So my background is really engineering, worked in the mining industry, and then I worked at Goldman Sachs. So try not to hold that against me. But I was the senior metal strategist in the global economics department. So I looked at the way things like copper and gold moved relative to, obviously, oil and the rest of the commodities, but also macroeconomics and fixed income macro assets in general. So I guess that's my bias and background. And so thanks to the complete lack of any political risk out there today, this is a great area for you to be in, right? Yeah. So you and I sit and chat in Hong Kong. And we get around to talking about religion. But we're talking about religion as relates to the precious metals complex. And both of us, I think, struggle with the same question, which is what is it that people have against gold? What is the visceral revulsion to it? Yeah, exactly. And that's how I actually usually try to start, whether I'm talking to mainstream media or-- I try to defuse this religious tone of, like, we want to debate the theories of money. We want to debate the view of whether it has value or not, subjective, objective, the money veil. All of these issues, you can debate them theoretically all you want. But the way that I came to gold was actually through that path of not really understanding or not liking gold because of the same religious context of does it have value? Objectively, it does. So I came to it realizing, OK, no matter what people are saying, there's a market. And this is what the market is telling us. So if you look at the market as it's telling us, then you have to figure out why. So you see the correlations. You see the price movements. And you're always comparing relative assets. Gold has this particular path and performance. Why? We know that it doesn't pay yields, and it doesn't do anything. If you hold gold for 100 years, it's still just gonna be an ounce or a gram of gold. That's the old Warren Buffett adage. But actually, that's probably one of the most important things to understand, is after 100 years, you'll still have an ounce of gold. Tell me one other asset in the economy which is the same. Even if you have an ounce of copper, is it the same 100 years from now? Certainly if you have a loaf of bread, it's not going to be the same 100 days from now. If you have a company, it's likely not going to be the same 100 years from now. So that quality of actually lasting is actually one of the most important qualities. And so this is the first thing that you kind of have to figure out. And this is what sort of Roy Sebag-- Roy and I both came from these questions from very different perspectives, him being in finance and a real Warren-Buffett-trained value investor and trying to understand the fundamentals of value and why things get off the path of fundamental value. And then I came from an engineering systems standpoint. And I tried to understand the macro economy-- so he's very micro. I'm very macro-- and trying to understand how these major, complex systems work to create price. But what Roy came to in his analysis was the physics of gold. He ultimately reconciled, through a microsystem, that gold is going to be the same 100 years from now because of the physics. It's this one element out of the periodic table that seems to resists entropy. So that's kind of the way he came to it. And so I think that's where we have to start with, is just the fundamental truths that you can't question. Well, so let's talk about those truths because you spend a lot of time talking to people who understand it. And they accept those truths for what they are. But naturally, you also speak to a lot of people who are skeptical or downright displeased with it. And neither you or I are trying to convert anybody. I just think it's a very interesting conversation. There will be people watching this who are long gold. There'll be people watching it who hate gold. So I would love to just have this discussion. Pick a side. It doesn't really matter to me. But I just think it's an interesting discussion to have just because of the different ways that people come at it. So when you talk to people who think gold's a worthless pet rock, what's generally the view that you get thrown at? Yeah, it's a great question. I think the pet rock view is that somehow, we're hoarding and wasting opportunity to be investing or doing something else. And I think there's two aspects to that. There's the investor that wants an outsized return. And they tend to forget that risk and return are typically two sides of the same coin. And then the different side is the economic doctrine crowd, which hates the gold standard and wants to be able to control the economy through some sort of mathematical levers and be able to control it. So they don't like gold because it's a system they don't believe they can control. Whereas the investor doesn't like gold just doesn't like the boring returns or the fact that it doesn't do anything. So there's no real story to tell around it. I think those are probably, if I'm gonna read the why. One of the stories I like to tell-- again, getting back to the objective reality versus the theoretical views or debates-- is I was having a conversation with a European Central banker. And he basically said-- again, right when I introduced myself, I said I'm from Goldmoney. And again, the religious alarm bells go off. And it's like, oh, I have my views on gold. And I think my-- I don't know. I was just particularly confrontational that day. And I just told them right back, you know what? You That's great. There's a market that has a view right back. It's called price. And so whatever your views are, there's a price. That's what I'm trying to understand. I'm interested. Did he go into what his views were, or did you not actually have that conversation? You can't go very far down the track. You start quoting all these theories and doctrines and mathematical models. But again, you're just, just kind put that all aside. Let's get back to what money is supposed to be-- store a value, medium of exchange, and the unit of account. And I'll kind of go through all of them. But the very first objective metric when it comes to valuation is store a value. So let's look backwards. We can't do anything about looking forwards, not yet. Maybe Elon Musk will solve that. But looking backwards, what we do know is that gold works as a store of value back to the-- we'll put that aside a second. 9.13 But we did a report for Back to the Futures. Marty McFly, 30 years from 1985 to 2015. And of course, during that time in 2015, there was all sorts of talks about hoverboards and automatically lacing shoes and all of the different predictions- - Cubs winning the World Series. All of these things were happening in speculation in the media. But people forget there's a few other concepts like money and the $50 for a bottle of Pepsi. So we actually looked-- how did money actually change during that 30-year time period? What did price levels change during that 30-year time period? And we basically gave Marty three options. He could take an ounce of gold with him in the DeLorean into the future. He could take a $100 bill. Or he could let money compound in a bank account for 30 years. And what does he have at the end of 30 years? So again, this isn't theory. This is what objectively happened looking backwards. And what we found is if you measure-- so we started with the Big Mac Index, The Economist's famous index for prices and currency values around the world. And we looked at the Big Mac Index through time. So if Marty brought his dollars, he could only buy one third of a Big Mac 30 years from now. If he let money compound in a bank account for 30 years, this socalled management by central banks of the store of value, he would have got-- let's say he didn't even have to pay tax on interest. Remember we used to have interest? And so if he let it compound for 30 years, he would have got about-- I can't remember the exact numbers, but it was, like, 89% of that Big Mac he would have got back. And then if he would have used gold, gram for gram, he could have bought the Big Mac. So we're like, OK. Well, that's very much a commodity good. So as a store of value, a Big Mac for gold, it works the test of time. Let's go through other aspects of the movie, other aspects of the economy. And we went from, like, his pickup truck, which, obviously, there's a lot of IP. There's a lot of engineering. There's a lot of manufacturing. But at the end of the day, a pickup truck or white goods, there's still a big bulk commodity component to it. His Toyota pickup truck 30 years in the future, same price. Measured in gold, same math when it comes to the dollar. Buy a third of a truck. Same math when it comes to compounding interest in a bank account for 30 years. And then we get all the way down to a pure service economy, like a movie ticket. You know the 3D Jaws from the movie. And if you look at the movie ticket over 30 years-- everyone complains about this, too. Movie tickets. It's so expensive to go see a movie with a family. No kidding. Gram for gram, gold price, movie ticket, same 30 years later. So we see objectively that the math, this works. Now, will this work over a two-year time span, a three-year, a five-year? No. When you're within an economic cycle, there's all sorts of backwardations, contangos. There's shortages and surpluses. It's information we're always trying to refine and figure out price levels. So it doesn't work on a short-term period. But with gold, prices revert. And a lot of the economics and models has always believed in these mean reversions. That's why we take out volatile food and energy prices from the CPI because when gold backed money, it used to mean revert. The problem is that doesn't happen anymore. So anyways, that's another topic. But one more story about this. And we can pick all sorts of items in the economy. But one of my favorites was I was at a hedge fund retreat, about a year ago from today. A lot of my former Goldman colleagues. Don't use hedge fund and retreat in the same sentence these days. Yeah, exactly. It's just a bad connotation. But the funny thing is we had a former Treasury Secretary there that is one of the advisers and talking about various things. And even this crowd was complaining about a $165 lift ticket at Vail. And I said, you want to make a bet that measured in gold, the lift ticket price is actually the same as the day it opened? So as I'm there, on Slack on my phone, I message my analyst. And he runs the numbers. OK, so 1965, Vail opens. $5 lift ticket. Measured in dollars today, that's $165 dollars. So the math works. And again, as you stretch it over time. It doesn't work within a cycle it works through cycles. So the store of value in a function of money, that's checked off. And I think, again, that's back to the physics, which we can or can't go into later. But the store value function works. Medium of exchange, unit of account-- anyways, I'll let you get some questions in. No, listen, you keep going. I always figure the less I talk, the more value the viewers get. So you keep talking. Sure. So the medium and exchange and unit of account functions-- medium and exchange, I think, is probably less important in today's world, particularly with technology. Now there's things like Bitcoin, which is probably the world's greatest medium of exchange that's ever been created, just absolutely very, very interesting exchange technology. It's got different store of value functions. Let's put that aside for the second. But the point is, in this economy, with so much communication and all of these innovations around medium of exchange-- whether it's the paper check or the ATM machine, the Visa or MasterCard networks, Paypal-- all these are not changes in money technology. They're the changes in how we message and communicate a settlement or medium of exchange. So I think the medium of exchange is less important now as long as you can get liquidity and fungibility in any currency. I can take my Canadian credit card, spend it here at a local merchant. No one cares that it's Canadian dollars. No one cares if it's Bitcoin backing it or gold or maybe an ETF stock index. And there's companies trying to do that. So the medium of exchange, as long as there's a settlement mechanism to go from one asset to another, I think is less important role of money in today's economy. The third one, unit of account-- so again, gold can be used as a medium of exchange objectively. We do it at our company, Goldmoney. We allow people to use gold as a transactional medium. And again, this is choice. We're not saying it's going to be the only one. Again, coming back to religion, there's always got to be this one right path. It's either got to be Federal Reserve, Central Bank management. It's got to be Bitcoin or cryptocurrency or gold, like one's just gonna win. No. We live in a world of choice and different preferences. And they all have different utilities. They all have different ways of working. And so we just created gold to be a transactional rail, as well. And I think also interesting about that aspect is I think still, if you go to seven billion humans on planet Earth and try to settle a trade, and you have the choice of any of these mediums, I still think on an absolute population number, more people will accept that gold to settle a trade than anything else. Obviously, that's weighted towards India and China and Southeast Asia. But it's medium of exchange function is not going away. And so that, I think, can be ruled out objectively. The last one is the unit of account, which I think we already talked about, as well, in the store of value and how things revert to the mean. And I believe that's actually, of the three qualities of money, that's probably the one that gets the least time, is the measurement quality. But I think gold's unit of account is probably its strongest quality and probably the one that the world needs more than anything right now because we have this completely subjective, manipulated measurement called fiat currencies, which they used to have rules. They used to have, we're going to try to manage them with the interest rate. We're going to try to control all the things that we can control so they maintain their store of value. Just as good as gold, as I think Milton Friedman once said with this new model. Meanwhile, it's lost 98% of its value since that time. But the unit of account is so important because that's the price when the physical economy clears. And that's the invisible hand of the economy that we want to be hearing what it's saying. If you go back to Adam Smith and moral sentiments and what the invisible hand was all about, it wasn't trying to justify the moral view of capitalism. What it was trying to say is there's a moral sentiment in humans that they're gonna do this no matter what system you try to force them into. So the invisible hand is a philosophy that decentralization call it, using some more modern terms. It's a philosophy that the decentralization works, and it tells you something. But if you don't know how to measure it-- imagine trying to build a house that the unit of inches or feet or meters or whatever changed every board meeting of the Central Committee on measurement. And maybe to stimulate more construction, we want to build buildings that are gonna fall down faster, just can rebuild them. So the central management of measurement is going to change the unit of a meter every month or every quarter. That to me is a real problem because people think their wage contract is $1. They think that dollar is something universal because it's in the denominator of the equation-- price divided by the unit. So if you don't have a good unit of exchange, all sorts of things go off track, which I think is actually the core problem in our entire economy and society right now. But again, that's another religious discussion. But it's interesting because this unit of account thing-- I want to dig into this deeper because there's two ways you can read that, right? You can read it in a pure accounting way, and you can read it as in holding somebody to account. And that to me is the reason why central banks dislike gold, because it holds them to account, to your point about what it does. You have this unit of account. And that's arguably the most dangerous thing. And there are 1,000 conspiracy theories about gold. Some of them are interesting. Some of them are ludicrous. Some of them it's harder to argue, it's really difficult to argue that they're not correct, but you kind of have to do it anyway. But it's this antagonistic relationship between central banks and gold that I find so fascinating because of exactly what you've laid out just there. It basically proves the damage that's been done to savers, to the middle class, to whoever by fiat currency, by wholly fiat system. So do you think, when you look through this through your engineer’s eyes, you at it through the eyes of your Goldmoney position, do you see-- what do you see the future looking like in terms of gold's role in a monetary system which feels to me like it's on its last legs. Yeah. I think whether we get some democratic consensus that gold or Bitcoin or some other alternative money is going to be the replacement, I think the history is that inevitably, these fiat currencies always fail. It's got a 100% track record of failure. And again, this isn't theory or belief. I'm not trying to offend anybody. That's just what's happened. And so I think that yes, naturally, as more people recognize these physics, these sort of first principles qualities of gold, it's always because of that role. It's always going to have some reversion to it. And whether that's in a decentralized manner, where people simply vote with their feet-- which is obviously our business model. We're not trying to force people on a gold standard. We're not trying to force some sort of central coercion. We're just saying, gram for dollar, whose product is better? If the central banks want to have a better product, have at it. Build a better product. But right now, you don't. You don't have a better product for savers. For someone that wants to borrow and has the access to borrow, fiat's great. You actually get paid-- so this is another aspect of central banking that a lot of people don't realize. And you can easily see the inequality in our economy because of this. So if you're rich, you get paid to use money. You get airline points. You get cash back. As long as you can access credit and the unit of that credit is decaying, you are getting paid by the rest of society to use money. And you get your free points. You get to use it. Meanwhile, if I'm paying cash, that merchants paying 3% processing fees, which is going back to pay you money. So the cost of goods are higher. So it's a monetary waterfall. The people closest to the center have less purchasing power decay from the system. They get paid to use money. And then people at the bottom, who are just wage earners, particularly if it's cash, have higher cost of goods, and they have to pay to use money. So the inequality's built into the system, whether they like it or not. And so that to me is a big problem. So getting back to the future of money, there's a lot of thought and a lot of writing about the history of money. But really, it's kind of the future of money that is important right now because we've been through these regimes before. I don't think we've ever had a purely fiat world monetary system, but we have one now. But unfortunately, it's the one that everybody has spent their entire lives in, essentially. And so this idea of a change of any sort from that is such a huge leap for people to make, which is perfectly understandable. So when you have these conversations with people, what's the closest argument you've ever heard that's made you think, oh, you know what? He's got a point. Or have you not even got anywhere close to that yet. I don't think I've gotten close to that point. Again, I think the future's choice. The future in just about every system seems to be more complexity and more choice. And whether it's social values, whether it's goods on the shelf at a grocery market, whether it's investment products, choice and proliferation and more complexity and chaos seems to be the order of everything. So I actually think that people that want to legally and rationally and in some safe system use gold or Bitcoin or dollars or maybe you like the Canadian dollar, and you want to run around New York using the Canadian dollar-- I think that that's the future until some of these key ones finally give in. And that world looks very different. And I don't want to necessarily speculate it and take it down the goldbug route. But I do think that choice is going to be a key part of this going forward. But we find ourselves in the middle of what people call the central bank bubble, the confidence bubble, the everything bubble, the mother of all-- we've heard them all. People seem to recognize that we're in some sort of bubble here. And generally speaking, when those bubbles burst, it takes away choice, and it takes away complexity. It takes away chaos. It creates it, but the response is, OK. We need to suck all that out of the system because of this chaos. We can't let it loose, which says to me when this bubble bursts, the control that's going to try and be exerted, the forces that are gonna be brought to bear to try and control that chaos, that complexity you talk about, will have to be of a magnitude far, far greater than we've seen at any point. I think so. But what is-- and again, I don't want to take this down an overtly negative or political path because I'm totally speculating here. But I think in some ways, this information economy, call it, is hopefully improved the situation where I think if something would have gone down that route in 2007, it probably could have been controlled through nationalism or some police state or military. And I'm talking about the West here. And by the way, I don't think that would have happened. I think actually, the economy would have healed itself much better. But let's say that all hell did break loose post-Lehman and letting them all fail, AIG and the rest. I think society would have been at a place where they maybe would've accepted some sort of new system of control. I think the difference this time is they're rapidly losing that power. They're rapidly losing trust in all institutions, whether it's political or rule of law, legal, or just this perception of everything being corrupt, this cynicism. I just don't know if someone is gonna obey this new dictate that, no, you know what? You're not allowed to have this element owned in the piece of earth. It's not backing our monetary system anymore. But I'm just not gonna allow you to own gold anymore. And you can’t own trees anymore, either. I just don't think society will accept that now. Uber, for all of the things they do wrong with breaking the rule of law, they blast an email to their community in a small town, they can vote out the mayor. Right? So I think people, when something provides utility to them, I think today, I hope-- again, this is probably more of the hope hat than maybe necessarily the rational path. But I do think that people will embrace choice. And hopefully views like ours or some from the Bitcoin community or elsewhere will have a seat at that debate without being ridiculed and belittled by some of mainstream economists, as they like to do, and just actually have a debate about these things. Well, let's talk about your business because you guys are in a unique position to really understand how sentiment's changing, how acceptance is changing. What are the trends that you're seeing in people's adoption of-- now you've given them this ability to use gold in a transactional way. How are you seeing that be adopted? Yeah. I mean, I think people that recognize it kind of have an open mind to it-- and it's growing every month. Our payments, our transactions-- we've got clients-- I think I've told you this story before-- the client in Singapore, that his son goes to school in Canada. He buys with Sing dollar. He buys gold in the morning, sends the title of it to his son, who sells and redeems to his Canadian bank account, same day. We have the time zone advantage there. But same day, he can go from one bank to another. And these are the kind of promises of the Bitcoin economy, as well, is that you have this sort of cross-sovereign asset that can be held and owned in both sides. And so it makes clearing happen a lot faster. So that one is gold just being a bridge. And that one works well. I use it. People do it. It's so much easier for me to buy gold and then sell it for moving from my Canadian bank account to my US bank account. It's just easier than using the federal bank wire system. And again, Bitcoin can do all these things. So I think there's that aspect of it. And then there's also the peer-to-peer side. That one's slower to be adopted, truth be told. And I think that's the same with the Bitcoin economy. What they're seeing, as well, is people want to buy and hold it or maybe borrow it. At least in our case, you can borrow against it and spend US dollars or something like that, like a line of credit. So there are other ways people use it. But again, we're not really forcing anyone to do anything. We're just building the tools so that they can be used. And so we are seeing that people that find them and use them, people are taking off. But what trends are you seeing geographically? Because you've got, as you said-- your earlier point-- you've got a big chunk of the global population who are positively inclined towards this asset. They're saving it for millennia. They use it transactionally. They gift it. It is a currency to them. And then you've got this side of the world where people just aren't using it. Are you seeing that adoption? I presume it's pretty solid out in Asia and China and India. But are you seeing any changes in central and the West. That's a slow ship to turn. And I will say that we have-- I'd say that most of the people that are on our platform typically knew gold or knew cryptocurrency. I think we created an accessibility layer that-- we did have lots of feedback when we sent out sort of a blast email to our early adopters. And there were a good percentage that had never used or never owned gold before because we made it very easy and safe and great UX, UI, all the technology aside, to actually sign up an account, buy $100 worth of gold or set a recurring payment to just deposit $100 a week or month or whatever. We built all these tools, so we made it very accessible. I mean, if you were only saving $100 a month in the past, it would've taken you a year to buy an ounce of gold. So having those tools, I think, has made it more accessible. But the knowledge barrier is still very high. So it is still-- for as fast as we're growing by just getting people onto the platform, it's getting some of my friends and Facebook colleagues or whatever just to sign up and use it, just trust me. This works. The math works. It's a slower sell. But you've been talking about this stuff for a long time, as has Roy. And you talk very eloquently about it. And this is what brings us back to where we started with this thing. There are a lot of very, very smart people in the gold space who are gifted communicators telling a positive story that's held true over millennia. And we come back to this religion thing. We come back to this wall that goes up where people just say, no. Don't even bother talking about it. I mean, how do you try, when you talk to people about this-- we've talked a little bit about it at the beginning. But how do you try and break that wall down? Things like this. And also, I think the very important thing is we're not telling you ever that gold is going to 5,000. We're not promising you riches. Although we try our hardest, we're not telling you that the government and society is going to collapse, even though most people generally, I think, are starting to believe that, even in the mainstream. That's not our sales pitch. And that's the one that still works, by the way, in a lot of these alternative assets. But we're trying not to do that. We're trying to just say, look, you're always even. And always even in this world is a pretty good place to be. Yeah, it's a good starting point. So that's what we're always trying to tell. And it's not an easy way to get people to sign up right away. But I think it's the truth. And so if we want to be building this business for 10 years, 20 years, 50 years, that's what we need to do. We can't take any shortcuts and try to promise something that we can't deliver. Now, your business started-- when I first met you and Roy in Toronto more years ago now than I care to remember, you were BitGold. You started in the Bitcoin and gold world. And this is another big debate that people go on. We've now not only got the people that prefer money over gold, it's Bitcoin over gold. To me, gold and Bitcoin can coexit perfectly happily. But talk a little bit about the nexus of those two worlds because you guys were right there. Yeah, that's what Roy and I recognized. So we actually started on this system, I think, before we were really interested in Bitcoin. I mean, Roy particularly was buying in Bitcoin very early, just diving into everything alternative and just, again, the contrarian. And so he was very early. And I remember him telling me about it. And I was like, yeah, that's really cool. Mathematically, that sounds like it makes sense. And of course, I didn't act on it. He did. But at some point, we were also talking about just having this gold custodian business. It had nothing to do with Bitcoin. So just, why isn't there one financial institution backed fully by gold? You've got Canadian-dollar-backed ones, USdollar-backed-- why isn't there one that just says, the math of gold works. Let's make a gold-backed institution? That to us seemed really odd, that there wasn't one doing it. So then we asked, how could we do it? And how do we build it? Is this some marble column bank and secrecy and all of that? But what we saw with Bitcoin-- and this is what really inspired the idea for BitGold. We were always about gold. But it was the use cases of Bitcoin. It was the nature of decentralization and distributed technology and trying to have more pieces and not just having, like, marble columns hugging all the customers. Don't go there. Just stay in our realm. I think that idea of Bitcoin really inspired us. And then not only that, the use cases, we looked at it. And we said, OK. All of these things-- the example I gave before about gold being the bridge between two currencies, whether you need it or not, it's a more logical system than OTC correspondent banking netwebs with some manipulated fix in London and a wire that goes missing for four days. Using a bridge sovereign asset is a better way to transact internationally. So we said, oh, well all that cool stuff that's happening in Bitcoin and the technology space, that's around, at the time, a billion-dollar asset class. In gold, you got a $7-trillion asset class with no innovation, no technology. So why don't we not necessarily copy the technology of Bitcoin, but the use case and the business model? And so that's really where it got started. But we also had this other key sort of-- the Canadian expression, you know you want to skate toward where the puck is headed. The other view that we had is whether the world goes into this crypto decentralized currencies, I'm really not smart enough to know. I like a lot of things about it. There's things I don't like about it. But I'm not smart enough to know where we're going. But what I do know-- again, back to the physics-- gold will be a store of value no matter what, in whatever world, whatever economy. And it's going to be demanded no matter what. So I want to be part of the interoperability between Bitcoin and gold. So that was another thing that we focused on very early. And then that was another reason why the name BitGold. I think it turns out that the BitGold name just really didn't achieve what we wanted to do. People thought, oh, is this a Bitcoin backed by gold, which we think is actually illogical? And obviously, Nick Szabo's white paper on Bit Gold, there was a lot of pushback for using the name BitGold. So there was many reasons why it just didn't make sense. So when we acquired Goldmoney, we just took the name Goldmoney. But yeah, we were inspired. And I think the world is learning a lot about money and the properties of money and the fundamental properties of sovereignty because of Bitcoin. So I think that's a good thing, no matter what happens. OK. So we began with religion. We kind of got back to religion. You showed us that the whole thing works. So just lay out and explain why it works. Why does this system work? That's the hard part. And I think that's where we're really getting into some new theory that Roy and I have been building, sort of independently, and then together for the last decade. But going back to this physics-- and for me, it was recognize the energy component. So probably the best way to explain it is maybe just walk through the path of how I questioned currency and everything else. So back to my political risk days and quantitative political risk, I like to take the first principles of valuation of any asset. So let's talk about a mine in Zambia. So a mine in Zambia, your first principle starts with the geology. What is the geologic inventory? And obviously, what's the uncertainty from all the drill holes? What are the mathematical models to quantify that uncertainty? That's the first principle of what your inventory is. Then you have to look at your fixed costs and your wages and your labor. But the other major component in any extractive industry is energy. What is the energy to put into the ore, to blast, to haul, to mine, refine, all of that? So any material coming from the earth has an energy input. So I'm not even talking about capital yet. I'm just talking about first principles, things that you can't change. It's quantitative. It's physics. So then you get that. And then you go line by line through your costs and all of this. And you can generally map it all out as an energy. There's one thing in the entire model that I actually have no understanding of the fundamentals. And that's what is the value of the Zambian kwacha? So that's the part where I started really questioning currency. That's the one thing I can't use first principles to figure out. And even my political risk analysis and how I want to create a discount rate or an effective tax rate or however I want to quantify the political risk, you can actually map out human systems and the risks of too many tax payments going to one agency. And you need to separate it. So there's all of these ways to mitigate your geologic risk, your energy risk, your political risk. But how do you mitigate the currency risk other than a big hedge or a swap? That's the one fundamental. So then I'm like, OK. Now I've got to figure out this currency thing. So I think that's where it all started. But to me, it goes back to those first principles of the economy, that-- and Roy came to the same conclusion-- everything that we touch, feel, consume, all of the tools for our information economy, all of it still comes from the ground. All of it has some cost of energy-- the energy input in versus what's the yield and what's the product coming out. So I like to map the entire economy based on these thermodynamic concepts of everything has a energy cost of production. And then everything has an entropy, or call it a rate of decay from a financial standpoint. And if you look at the contango in a commodity price curve, it's the same thing. So you're anchored by a marginal cost of production or expected marginal cost of production. And then you discount today's price by the cost of storage and decay. So if you go through the economy-- again, before we get into tertiary industries, let's start at the commodity economy. You have rates of decay in things that decay fast. You have electricity, natural gas, oil, grains, coal, and then you have base metals, precious metals. And funny enough, those rates of decay also is their financial volatility. So you look down that whole spectrum, and the highest volatility is in natural gas. The lowest volatility is in gold. So then I start thinking, OK. There's some physics, there's some thermodynamics to this whole economic system. And then we started trying to layer in, OK, so in this segment or this industry, how much is intellectual property? How much is IP? And what is the fundamental-- what's the first principle cost of labor? And the first principle cost of labor is still feeding yourself, shelter. There's still a very high energy component. So you'll talk to economists, and they'll say, we've moved way beyond the natural resource economy. Well, no, not really because most people-- and economies work in power laws. They don't work in normal distribution. So this is a Pareto concept. But most of the people are still closer to the commodity. Their main cost of living is very commodity-driven, whether it's going out to eat or putting a roof over their head, the cost of utilities and bills. It's still a high percentage, which is why they work. So labor still has a very high energy component in it, as well. So you've got energy and labor. You've got energy, obviously, in the natural commodities. So what is the decay of the services they create? What's the dissemination of information on their IP? So all of this, I still get back to these same models of rates of decay versus the replacement cost and energy. So I just model the entire economy that way. And gold is very interesting in that of all of the things you can create in the economy, it's got the highest percentage of energy cost because of its scarcity. Because it's so small and so value dense, because you have to mine so much rock. You have to crush a ton of rock to get a gram of gold, and then all of the refining and everything else. So it's got about a 70% energy replacement cost. So it's very tied to what's the value of oil in the economy and always will be because of that. But unlike any other commodity, it lasts forever. So it has zero rate of decay, but it has a 70% energy cost of production. So that anchor, that value anchor, will be constant, particularly as you stretch time and everything else decays. Then all that's left is the energy component, and then it's going to be constant 30 years later. So that's the model. That's the theory that we came up with why this works. And we're trying to mathematically, systematically prove that and falsify other theories. We're trying to do that while running a business, so it becomes-- You be careful going down that rabbit hole, my friend. There's a lot going on here. But that's why we found that gold always works. And we think this is a first principle. We don't think this is subjective. We think this is a very objective view of money. Roy has actually written some very good papers on medium, the natural properties of money and a number of others, as I have. And then we have our research that we're starting to put on your platform. It's on Bloomberg, at GMIR, Go, Goldmoney Investment Research. So we try to make all this accessible. But we are trying to wrap this into a bigger theory. Well, as I say, you and I met in Hong Kong and had a similar conversation to this one, that the first time I sat down with you and Roy, and I made a point to come in to see you when was in Toronto one time, was because I'd read the stuff you've written. I thought, these guys, they look at this a different way. So I'm just really happy that a lot more people are going to get a chance to sit down and listen to the way you guys think about it. Because it's an archaic commodity. But that doesn't mean there aren't new ways to think about it. And I think what you guys are doing in terms of getting these new ways to think about it across is an incredible service to people, hopefully. Whether we change anyone's mind or not, we just want-- No, I appreciate it. We just want to make people think, right, and say, OK, let me open my mind. Absolutely. And that's the best part. Roy and I both love the dialectic. We're out there picking fights on Twitter. And you know what? That's how I learn the most. And when I am proven wrong, it humbles you, right? And so you refine your-- but we've got this society that doesn't seem to want to do that. So you can debate theories and uncertainty and unprovable things. And again, that's the religious view. But you can't debate objective facts. If I say gold's a store of value, and you say, no, it isn't, you're just wrong. And that's sort of-- particularly when it's in the context of financial advice. And I see this on the media all the time. Gold is this. Gold is that. No, that's wrong. Gold is purported to be a store of value, but it doesn't hold up very well. That's wrong. That's bad financial advice, and that view needs to be punched in the face. That's how we need to frame this. And again if I'm wrong, right back at me. And so I think that's the approach we're taking because society needs to solve these problems. But while we're on this subject, let's quickly throw this in here. Jeremy Siegel's book, Stocks for the Long Run, he's the guy who said, over all this time, you've owned stocks. You were way ahead. You owned bonds, you're a little bit ahead. If you owned gold, you were down. Right. How do you debunk that? Is it just a question of timeframes? That's actually very easy. And I'm not sure if Roy's published it yet. I know he wrote this, actually, a long time ago, I think even before BitGold. But there's a lot of mathematical tricks, just like the CPI index, in that. So if you actually owned-- so Warren Buffett uses this, too-- if would have bought the Dow at the turn of the century. Actually, of those 100 companies, I think three exist still. Well, that's the problem with the Dow. So no, you bought an index. An index has to be managed. It has to be bought and sold. You've got to throw out your losers. And that takes fees. That takes friction. There's losses there. There's a decay. That's not a constant that just goes up. If you just own these companies, most of them die. And that's probably the biggest trick of the financial industry. And I've been asked the question, too, I can understand maybe if central banks got this all wrong. But why do finance guys get it wrong? And the incentive is to promise that unachievable spreadsheet index that you actually can't own. It has to be managed. And what happens when you manage it? You get paid. So the incentive is to get paid to manage that index. And I'm not saying that's good or bad. I still think that's a good thing. That's capital allocation. All of this is a good thing in the economy. But gold is boring because you actually don't really have to manage it. And maybe I'm giving away a business secret here, but it's not that hard to store gold. There's very good rule of law. I mean, you've got to understand the good providers and who's got good systems for risk mitigation and insurance and all of these things. But gold does not cost 40 basis points to hold like it costs in the gold ETF. That's a total friction and a loss of money. With us, it's-- well, under a kilogram, it's actually free. So that's the best storage, particularly for someone that can't afford a lot of financial friction. But even above that, we're talking about sub-20 basis points. So this isn't an expensive hold. And so that to me is a natural decay. Now, a barrel of oil, that's a much more expensive hold. A warehouse full of aluminum, that's a more expensive hold. So all of these things are fundamental. Well, look, I enjoy your Twitter dialogues, you and Roy. And if you're going to pick one fight on Twitter about gold, do me a favor. Just tweet @realDonaldTrump, gold is a store of value. Let's just see what happens. Yeah, yeah. Maybe he'll come back and pick a fight with you. Actually, this administration, I think, is probably biased that way. And I wouldn't say they necessarily have this deep understanding of it. But they do understand that it has worked historically. And that's the other part that I just don't understand, is when people just want to just kind of forget actual history and math and just call you a goldbug. Yeah, but it's hard-- I totally agree with that. But I think it's hard to forget history you never learned in the first place. And I think that's the big problem. Yeah. Josh, we've run out of time. I love talking to you and Roy. It's just so much fun. You guys just have a unique way of thinking about this. So thanks for taking the time in New York to come and talk to me. Great. Thank you. Yeah.