I am max kaiser this is the kaiser report max those days you are in las vegas a lot of political things are happening here lets get the lowdown states well we are in political season max in fact when you and i landed here in las vegas who was on the runway the president doesnt show him literally on the runway but is playing air force one was on the runway and that was our meeting our arrival here in las vegas saying air force one again weve seen it of 2 or 3 times on our travels and its very impressive its a great prop when youre running for president and thats some of the all that what you have when you are president is the bully pulpit and thats going to weigh heavily in this 2020 election well in the nevada debates there was something that Bernie Sanders said on stage when he was you know going back and forth with mayor bloomberg when mayor bloomberg imploded on stage you know they were talking about billionaires and the problem with billionaires and should billionaires exist i tweeted that him i said is the u. S. Federal reserve bernie you cosponsored an audit the fed bill talk about the cantillon effect how did bloomberg go from a net worth of 3000000000. 20 to 60000000000. 00 in 2020 at least half of that gain in my opinion is from q. E. The problem is that nobody really knows anything about money its hard to explain money remember back on this very show 7 or 8 years ago when we talked to activist groups like greenpeace about the money they had 100000000 euros in the bank and i was explaining to them you know the bank is just using that to lend it to exxon and in fact by you keeping the money in the bank youre doing a lot of damage that you say youre trying. Fight against but they the respondent from the head of greenpeace was well nobody understands money you know we cant really incorporate that in our in our material or descriptive of what we do because its too confusing and same thing with certainly the democrats i mean the republicans have a reputation as knowing a little more about money than the democrats but the democrats are always very confusing and so Bernie Sanders is just out of a tradition hes talking about socialism which again is a its a its a model based on a in comprehensible. Non existant theory about money you know this is obviously a theme over and over on kaiser report of the role of Central Banks in sowing. Chaos and discord that the democrats and their media keep on blaming on other nations so that cantillon effect which allows you know the printing of money that inflates asset prices like stock prices like bond prices like. Real estate prices especially at those the closer you are to the money printers and theres no bigger money printer than the new york fed so if you live near the new york fed your properties going to be expanding paris london all the big cities across the world hong kong maybe hong kong as might be falling apart now but that money printing is what is causing that sense of injustice of an in their thinking its an economic injustice when in fact its an a monetary injustice that is happening so i want to turn to this other thread that kind of went viral and you know its one guys take on some data that was released recently from the government so you know its one take but were going to look at this take because i think it brings up some good points its a tweet stream from orrin cass hes the executive director of American Compass whose stated mission is to restore an economic consensus that emphasizes the importance of Family Community and industry to the nations liberty and prosperity so there is that heres this 1st tweet im going to read some of them of this 16 thread tweet how is it that our Economic Statistics suggest workers have been making slow but steady progress in recent decades while popular perception is that their Family Finances are coming under increasingly untenable pressure ive been working on this and here is my answer punchline popular perception is correct in 1985 the typical male worker could cover a family of 4 as major expenditures Housing Health care transportation education on 30 weeks of salary by 2018 it took 53 weeks which is a problem as there are only 52 weeks in the year so i mean you can see from the chart here housing is memorising but mostly Health InsuranceHealth Insurance is a big component of these added costs and transportation and college is another big deal. Cost people talk about infrastructure and we think about infrastructure think about roads and bridges and tunnels but theres also the financial infrastructure and the financial infrastructure in america and much of the world is 18th century its a model that has not worked for more than 150 years and this can tell of a fact is the result of faulty money infrastructure where the money is printed in d. C. And is stopped simultaneously and pervasively distributed equitably throughout the economy it goes to bunch of intermediaries the primary banks the primary dealers on wall street except aurora and every time it goes through these layers it loses its potency and by the time the average person gets it theyre now paying 30 percent more for Health Insurance than they were the year before and thats a problem of distribution now in the block chain model youve got thousands of computers globally that are updated simultaneously that is an Infrastructure Improvement to the way money is just created and distributed big point being the best of the best but in the u. S. And around the world theyre still using this antiquated infrastructure that is like using plumbing or some other infrastructure from 150 years ago its obviously out of date but it serves the interests of a few folks well and they hold the keys to power and now we have this all feel system and its a command and control they call it capitalism but it is a form of command and control whereby the federal open Market Committee this committee of you know academics who on paper they try to organize and manage micro manage the economy so that this guy or in cas hes asking like how is this so wrong how are the media and political and financial elite how are they seeing the how it is for the rest kaname for the rest of the workers like how do they. How did the disconnect happen and obviously there is the issue of inflation because of course inflation has been very low they say theres always low inflation. So they do all those adjustments and have donek adjustments some people say its all a conspiracy but in a way its also just them in an ivory tower not understanding the world around them for example or in cast says our inflation adjusted data says that car prices have not increased since the mid 1990 s. Obviously thats not remotely true what economists are saying is that cars have gotten better so the higher Sticker Price doesnt reflect inflation it reflects Higher Quality again fair enough but we have to recognize that the median family must now pay for Health Insurance and will not use the cure last 20 years the typical Family Health care consumption has gone up by 2000 but their premium has gone up by 13000 no wonder they feel worse off you know in terms of this all the donek adjustment that goes on between you know from cars to health care to you know university costs you still need a car to get to work in most places in america. It still costs you more money but because its better theyre saying that you got more for at this this computer packs a whole bunch more power than it did 10 years ago and so they they they deduced that they deduct that from the inflation and the same thing with health care but its actually really eating into the cost but all the elite immediately its the corporate elites all those people who who are the 1st in on the console in a factory where they get the free money they dont feel this inflation to the same extent that everybody elses so again just like just like at the bottom people come up with conspiracy theories about Inflation Numbers at the top theyre doing the same thing theyre coming up with conspiracy theories of like why are the ordinary people so upset with everything that must be some sort of mind control via a means like that because the economy is doing great we know this because look at the data look at the look at the Inflation Numbers is all great right in fact theyre experiencing deflation because the council in effect means that the assets that are being bought lets say property in new york city as collateral goes up at a greater pace than even the money printing so if youre borrowing against your asset that was inflated due to money printing to buy food at the store youll notice that in fact the spend at the store is less relative to the appreciation of your assets so youre thinking well lifes great i guess everythings cheaper for me but in terms of these adamic adjustments i mean this represents a centrally an obtuse cation moat so theres a moat around the castle where the money printers live and they protect that moat through obtuse cation theyre saying that the computer is actually not this value its a different value of believe the word the greeks came up with would be solid cism misuse of language utterly and completely to confuse and distort Larry Summers is a brilliant orator and writer when he appears in the Financial Times he writes perfect jibberish but in a way that eh. Very academic motherhood due to flee like jim is larry but at the end of the day hes just protecting his moat was obvious cation well speaking of moat throughout. That last tweet of orange passes that i read you know where costs the health care consumption so actually how much health care you use in real life the average american over the last 20 years went from it has gone up by 2000 thats it your cost went up from basically suspend 700 used to spend 2122 in 1909 thats what the average american spent 2122 in Real Health Care costs now is 4380 average american actually consumes 4380. How much for your call actual premiums how much you pay the fire sector the you know finance insurance and real estate how much you pay to wall street for that well the average american in premiums pays 18764 you can see that gap you can see how that huge gap max this is the injustice happening this is the cantillon effect this is them getting all the money this is what people are upset about they could try to pretend that its some meaning that has undermined the faith. In institutions like the Federal Reserve like the treasury like the congress but that right there shows you that youre spending a whole lot more for not much more oh lets return to the subject of financial illiteracy the democrats and Bernie Sanders so your chart very graphically demonstrates that the cost of health care from a year would be approximately 4000. 00 and yet im being charged 18000. 00 so theres 814000 spread thats a subsidy government is allowing going to Health Insurance executives theyre getting a 14000. 00 per household subsidy if our Bernie Sanders i would show that chart on the screen and say elect me president and everyone who is a victim of this scam gets a 14000. 00 charitable donation against their taxes right because its a im making a chartable donation to the Insurance Company executives of about 14000. 00 a year i should get a tax write off i mean ok im willing to take that tax write off i need it in this in a high tax environment thats the argument Bernie Sanders would make it was shut bloomberg down immediately because not even bloomberg is financially illiterate to that level well. We have to take a break and when we come back much more coming your way so dont go away. Should we have a much better 17 years could we could have a much more prosperous iraq a stable iraq yes as their. Mistakes happen absolutely. Made things about time by far they Couldve Shouldve have made to bug out those not taken away from the flag. To romney. Participated. In the United States president ial candidates debate the future of the u. S. And the world. Dig into the burning questions of this election cycle. Every week. Student trade was money universal basic. And more catch up with running this sunday exclusively. Welcome back to the kaiser report imax keyser lets now turn to alex legal of layer one this is are going to be about Mining Mining as a huge part of the bitcoin ecosystem welcome to the show alex i thank you very much for having me all right and so you have just raised your company have just raised 50000000 dollars from billionaire investor peter teal for a layer one what is it youre dealing in taxes alex bunch of Different Things but effectively the approach that layer one takes is that of vertical integration. Which means that we have full control over every cost and profit lever in the because of my mixtec so that covers everything from manufacturing our own custom chips we build our own cooling and mining interests truck sure that is very scalable d and modular and plug and play and we have our own our procurement and development which means that we basically get the cheapest possible electricity at scale in the world and vertically integrated all of the different aspects of the big coin my mixed allow us to become the most efficient Equipment Company in the world so i read somewhere that the goal is to capture 25 percent of global big going mining right now youve got approximately 50 percent in china and so is that correct is that a goalie trying to capture maybe 25 percent of the global in mining market alex yeah absolutely i mean we would be doing this if we wouldnt have very Ambitious Goals and i think the distribution is even more skewed towards china so the numbers that we or over 60 percent. You and he kind of makes sense because they coined a sick start in 2013 and china is a very manufacturing driven economy whereas the United States is kind of a mass they didnt sell into a software and a nationalization based economy and for that reason because the last 7 or 8 years and the big claim i mean history were all about do i have the facts its chips do i have the most. Cutting edge Mining Machines in the fasten out of time well if they mainly get produced in china which they did and you had very Successful Companies like that main or cannot 4th come out. Well then the pass at least resistance would lead miners to locate in china where they could always source the most efficient mining of hardware. Faster than anybody else and also install them faster than anybody else but now because provably Development Cycles have been extended for that much longer and every 6 months a new generation of chips coming out it will now be a multiyear effort and Business Cycle the edge in a longer lies and do i have the fastest ships in the fastest amount of time thats relatively commodity at this point what truly matters is your operational expenses and those are trying merrily a function to see pricing hence your electricity pricing and the ability to take advantage of it efficiently if youre cooling is what matters most and we believe and factually at this point we know that the cheapest electricity in the well that scale is west. And for that reason. Its symptomatic of the nation see of the industry that it 1st started out in china but as it matures the Unit Economics and the business models. Underpinning that industry change fundamentally over time and its its a natural consequence of that because of work quickly one and others the hash rate will significantly. Shift towards being u. S. Based now this is actually theres 2 levels to this number one is the examination of the Business Case and then number 2 which is i think going to be exciting for any bitcoin are out there is that anyone who had questions about chinese having dominance and mining this is fantastic news because now the mining and the hazaras going to be distributed more geographically and so theres going to be more competition in this industry far as chips go and the seeking of cheaper electricity as you mention which makes the network more secure ways of alternately will make the price go higher and lets talk about the electricity 1st 2nd so youre saying its the cheapest in the world but from what i understand is the your equipment is also taking advantage of some proprietary cooling technologies which is a factor as well how for so 2 questions how how much cheaper is your electric tricity cost and what about these cooling it isnt that kind of an added cost or is that all factored in what do you think alex 1st of all read the beauty of economic incentive allotments theres a theres economic reasons for being hashed hour to the United States because you can make money that way and the secondary effect of that is that it actually improves. You know. Because of security and you know. Sort of distribution symmetry attash support so this is Just Economics one of the long recess which is the simple beauty of it and then in terms of the just the uprising in west texas well west texas or texas in general is the most deregulated engine market within the United States the biggest when Energy Market and 6th biggest solar Energy Market. It is a very mature market in terms of having multiple cycles within the Energy Industry it has a very mature and well established. Infrastructure pertaining to you know all types of services and skills d and crafts that are necessary to build the appropriate infrastructure also critically mining and for that reason and general prices. A very attractive market market price. And. The problem however especially in west texas is that its very hot and so in the summertime it can get over 100 degrees 110 degrees fahrenheit perhaps even more you have a huge temperature delta where in the winter we can also get extremely cold. So the task is to find a way to have high density high scalable and very robust cooling infrastructure that does not counterbalance any pricing advantage that you might get so for example it would absolutely be logistically possible to do air quote mining and in west texas however you would have to pay so so much more in terms of cooling your machine and running and maintaining everything that it would completely counterbalance any president that he would have because thats the market price. So what we use been developing for at this point. 3 and a half years now and you know thats part of. Intellectual property where one is also an English Point which. Is a plug and play high density liquid cooled mining Container Technology and effectively what that allows you to do is have your Mining Machines be conclude be unaffected by air temperature and it does so with minimal additional power draw so effectively as extremely efficient and allows you to take advantage of the very cheap pricing which. Will be having to pay that much more in terms of your maintenance i get the point about energy cost being low now if because it is viewed as a Strategic Asset by governments Going Forward as they do gold or other foreign reserves what about the risk if you can call it that of government subsidizing energy you know china could subsidize energy will america step in and understand this is a Strategic Reserve because right now theyre losing the battle with 5 g. Chinas running away the technology the u. S. Is not competing at all theyre trying to sanction people instead of competing so is that going to be an issue Going Forward i think it depends on how you frame it to the government so one way of framing would be you have because i mean be the 1st instance trubel digital star city in the world and theres nothing been like it before its its a truly scaurus and valuable resource that is currently sort of emancipating itself and fostering this very interesting. Ecosystem well. If it is going to be a source competition between china and us then it lies within the us best interest in order to generate as much cash rate and decline as possible if theres a nonzero chance a big one will be that much bigger future and the interesting side effect of. What we do in our business. Is with you can effectively think of each of these containers as an inverse battery. The reason being effectively in the real world in factory is in west texas or anywhere else it takes days or weeks to shut off power and electricity and if theres ever for example our short term. You know catastrophe where theres power loss etc things break literally so d the difference here being that we have a significant amount of power drop or container however we can do High Frequency trading off and on these machines because its effectively an instant software command where we just press the button so what happens is the. Truth of the bully and we get paid a premium for that by the market there is programs you can subscribe to where we actually act as a grid stabilizer because what happens is that we always keep a constant demand on the grid especially when for example in the winter time in the winter time when there is less electricity demand in texas however when theres ever a grid overload we can instantly turn off our machines and effectively free up that capacity for the rest of the market because you know its likely people suffer if they cant turn on the ac and its 110 degrees fahrenheit outside and so for this technology sounds great i mean a gap upright terry chips youve got proprietary cooling youre youre getting cheap energy a its the name of the companys layer one youve got a 50000000. 00 razor blade a 200000000. 00 valuation peter teal is certainly involved in a big way i think back to the future our friends over back to the future with simon dixon are allowing their users to have access to this deal so if you are back to the future. Or i would recommend you taking taking a look at that ive talked to mark hughes go up morgan creek about this d. L. Hes yet to get back to me yet mark hello words mark hughes go calling marcus go so let me just of final finish this up by asking a little bit. About the chips now were they manufactured were you manufacturing these chips you know absolutely were doing that with stems or. Theyre produced in taiwan and so that sounds good actually all right so alex legal thanks so much for coming on the show i know the start up of this nature you guys are crushed for time and i really appreciate taking the time to come and talk to us thanks for being on the kaiser report yes thank you so much for having me really enjoyed this thats going to do it for this edition of the kaiser report with me max kaiser and Stacey Herbert join to catch us on twitter its kaiser report until next time by. Is youll be a reflection of reality. In a world transformed. What will make you feel safe. Tyson nation community. Are you going the right way or are you. What is true. Is. In the world corrupted you need to descend. To join us in the debt. Or remain in the shallows. The. I. Had hopes for peace in afghanistan is the u. S. And the taliban signed a deal to end americas longest war pushing to expects to remove all of its troops from the country in the next 14 months after almost 2 decades of conflict and thousands of lives still. Clash with greek police on the countrys border with. Ankara and that would no longer prevent refugees from heading to europe. Is it a report alleging fraud fueling the believing election fall short on evidence president evo morales left his post amid mass protests supposed to regularise