Cryptobell.Live Interview with Anthony Scaramucci, Author, All the Right Moves

First of all, you got to call me Anthony because Mr. Scaramucci stole my dad. But anyway, thank you.

Well, you know, listen, I have had a 38-year career on Wall Street. I'm obviously a failed White House communications director, but I spent 30 years in presidential Republican party fundraising. So, I got to meet a lot of players in Washington. I think I've have a little bit of an understanding of how Washington works. And so I tried to take my life experience growing up in a blue collar family, having some measure of success on Wall Street and some observation of the economy and then what goes on in the political situation to write a story about how we created this anchor-based populism. And again, it's not a book about President Trump. It's a precursor. This is what we did in our society. Here are moves that we made, which I suggest are three catastrophic moves that we made that were well-intended. It was Republicans and Democrats. I'm not picking on any person. It's not a partisan book. It's just a political and economic observation of policy decisions that went against the United States when we thought they were going to work in our interests. And so, I outline what they are, I explain it, and then I say this is what caused this sort of K-shape going on in the economy right now where some people are doing incredibly well, but other people are finding themselves with lower living standards and in an affordability crisis. And so, I am just simply trying to explain from my worldview what happened. And of course, the last couple of chapters of the book are about how to fix it.

Well, it's not a big deal until it is. You know, if you can get the Fed windows open and you're able to charge people, people are willing to earn 5%, 5 and a half percent to give you money for 30 years and then you can keep this thing going forever. But what ends up happening is as you get to a higher and higher percentage of your GDP, we're now at about 120% if you can't factor in everything. As you get towards 200% you usually get into crisis levels. Now, I would stipulate to everybody listening, they're not worried about it because they'll just print money to pay it. So, what we've been doing is we've been paying the dollars back with dollars that are worth less than the ones that we borrowed, right? That's how inflation works. So, they're monetizing the debt. But the big problem with the monetizing of the debt, if you don't own assets and your job is denominated in US dollars, well, they're stealing your time and they're stealing your work ethic and they're stealing your money. Because let's say someone like my dad worked by the hour, got paid by the hour. If you paid him $1,000, you had 7% inflation, he's only got $930 of purchasing power. You hit him again with another 5%, you know, now he's down to $8.95, you know, and all of a sudden he's like, 'Wow, I'm really struggling here to make ends meet for my family.' And that's the crisis. So the debt can be paid back by the government. No question. They can print a $34 trillion coin or now it's a $40 trillion coin and pay it back. But you're going to destroy the savings of the people that have worked so hard here. And this is one of the reasons why I own Bitcoin. It's probably one of the reasons why you're on CryptoBell because, you know, we look at that and say, well, there's a finality to Bitcoin. There's an immutable nature to the supply of Bitcoin and it's technically very well put together where we can start to think of it as a savings account and or a store of value.

Well, you know, I put them in sequential timing order in the book, but I think by far the worst one was the Gulf War and going to war without a tax increase. And so we never went to war in the history of the United States without a full-throated tax increase to support the war. In fact, we did the very opposite. We cut taxes in March of 01. And we went into that war with a huge gap in terms of what we were spending and also what we were taxing people. And that started the hole in the deficit process. And by the way, I write in the book that we had it figured out. George Walker, George Herbert Walker Bush and Bill Clinton were adhering to this legislation called pay as you go. And so by the end of the year 2000, we were printing a budget surplus. We then had 9/11, this great tragedy which has totally impacted America over the last 25 years since it happened. And we put ourselves in this bind now where we're taking in 19% of the GDP in terms of tax revenues, but we're spending 27% of the GDP in terms of what we're doing at the governmental level. And that's in my mind not sustainable. A $2 trillion deficit tacking it on every year like this is just going to cause a lot of inflationary pressure and it's going to cause us to monetize that debt and people lose their living standard. So I think that's the number one thing. The other two just quickly, I argue that when we gave the money to the banks, we upset a lot of people. They felt like the banks got treated like fat cats and the hoi polloi didn't get treated to anything and that caused a very big problem in the country. You know, sort of the have and have nots that led to Occupy Wall Street, the Tea Party movement, all those other things. And then the first one which happened in the late 1990s was we allowed China to come into the World Trade Organization and I explained in the book it's understandable why we did that but we never checked China. China came in with emerging market status. They were able to send goods into our marketplace without tariffs. They were able to protect their marketplace from US and Western Europe which is typically allowable for developing nations. But as China was rocket shipping its growth, we should have checked China. We should have said, 'Okay, you've got to get treated like America or treated like Western Europe in the World Trade Organization dynamic.' And we didn't allow that. And that's malpractice on the part of our politicians. But those three things, if you shake those up, put those in a beaker or you shake them up, you know, that caused a lot of anxiety in the country. It separated the very wealthy from the middle and lower middle income people. And it's now coming back to roost on us. You've got anger-based populism on the left. You've got anger-based populism on the right. And I think unfortunately that's going to go unabated for a while until people calm down.

So, well, we've conditioned the American people. You know, we have a generation of politicians that have undertaxed the American people and over-delivered services. And so, you know, most people don't want their services taken away from them, right? You know, Medicare, Social Security, these are the sort of the third rails in politics. But, and I'm not even saying that we would need to do that. All we would have to do is put up the guard rails that we had in the 1990s. You know, we had this pay as you go legislation. You wanted to cut taxes, no problem. You had to find something in the budget to cut. You want more social services, no problem. You got to raise taxes. And if you do that and you corral the spending to some percentage of the GDP, you can still grow the governmental spending. You just have to grow it at a slower rate than the overall economic growth of the economy. And if you did that in 15 years, those numbers would look better. You know, the debt would be a smaller percentage of the overall GDP of the economy, which would make it sustainable. So, I think you're right. I think politicians do talk like that.

But I do think if you presented to the American people, this is not austerity. This is not me coming into your government with a chainsaw like Doge and trying to cut things into pieces. I'm just saying to you that we have to slow the growth of these things so that the economic growth of the economy will outpace government spending so that we can get these lines to make sense. And by the way, if we do that, you'll be helping out your children and your grandchildren if we do that. And I think that's the messaging. And I think that message would resonate. I think there's enough responsible people now that see the danger of where we're going that they would potentially go in that direction. But listen, cynics would tell you no, that wouldn't happen. But I'm an entrepreneur. Entrepreneurs try to take zero and turn it into one. Right? That's the thing. We need an entrepreneurial politician or political leader to come in and try to shake this thing up in a realistic way. Remember, I was with Jeb Bush. He said he was going to raise taxes. No one wanted to vote for him. I was with Donald Trump. He said, 'I'm going to balance the budget in four years when I take office in 2017.' He didn't do that. He created $8 trillion of additional deficit spending. And I submit I'm not blaming Donald Trump for that, by the way. That would have happened likely with a Republican or a Democratic president. I'm not blaming anybody. But I'm just saying his messaging was he was balancing the budget in four years. Jeb's message was I was raising your taxes. Who do you think won the election?

It's funny you mention that because I do discuss it in the book because that is tied to the deficit spending. So, when I talk about mistake number two, going to war without the tax increase, I do reference the August 15th, 1971 meetings at Camp David, which led Richard Nixon to lift us out of the gold standard and to renege on the Bretton Woods treaty. And so once our dollar started floating, we had skyrocketing inflation. And the dollar, I mean, this is a crazy thing, but you know this better than anybody, but it's worth repeating. When Nixon did that, $35 could buy you one ounce of gold. Today, it's $4,600. So, we destroyed the currency. You know, our purchasing power, a $100 bill probably has $2.30 worth of 1971 purchasing power. So, everything that I'm talking about is inflation embedded. And yes, you're right. I would have submitted that one as a bigger than the Gulf War, but we had in the 1990s a corrective process that we were working on. And I just want to remind everybody listening in the 2000 debate between George Walker Bush and Al Gore was about what they were going to do with the budget surplus. We had a $5 trillion CBO nonpartisan estimate for 2010. So they're sitting around in 2000 and said given how we're set up now budgetarily we're gonna have a five trillion dollar surplus. What are you guys going to do with the surplus? Bush wanted to cut taxes. Gore wanted to pay down more debt and spend it on the environment and things like that. And Bush won famously and narrowly. He cut the taxes. He didn't restore the taxes when the war started and it caused the problem. But yeah, that is a big problem. I think the Satoshi guys, whether it was one person or a computer programming team, looked at that, looked at the 2008 debacle and the money spent by the government and then also the balance sheet expansion by the Federal Reserve. Said differently, the money printing. They said, 'Okay, wow. We have to create a technological mechanism that's sacrosanct, that is not centralized like a central banker but it is decentralized so that we can trust it to have some permanent value for us as a civilization.' And you know if you read the paper one of the famous lines in the paper I don't have the time to explain this to you but if you get it you may want to buy a little because it could catch on. And so it's 17 years later, excuse me, now I should say this, 19, almost 19 years later and here we are where it went from half a penny or a penny to $80,000 a token thereabout. I mean it shot up to 126. But you get my point. This has been arguably one of the best investments in the history of the world because people do see the need to have a replacement asset for store value if we're going to continue to our fiat currencies. Again, America is better than most and you know this. Okay. How about going into an African country or a South American country and seeing the way they've maligned their currencies? You know, in many ways, Bitcoin is super important to us here in North America, but it may be exponentially more important in places like Africa or South America.

Such a good point. You know, I don't have the best answer for that. I can just really give you the meta. I can tell you that the course that we're on right now, Ray Dalio would probably be your best guest. You know what I mean? Because he would be able to explain to you that we could hyper cycle into a serious debt crisis and then people lose confidence in the dollar if that happens. You know, you get that whole Weimar Republic thing. So, I don't know if we're necessarily going to get there. I want to talk about it though, and I appreciate you bringing me on because I want to at least lay out for the younger people. This is where you're heading. Okay? This is what the older people did to you. It's a generational theft and this is where you're heading. And you know, but I'll make a prediction if you don't mind. I'll make a prediction on the show that you know, Bitcoin's going to 10x from here over the next 15 years because more and more people as these younger people get older, they're going to be like, 'Okay, wait a minute. I want to store my savings. I want to store my value in a finite asset.' You know, if an asteroid lands here, Elon Musk plucks one using SpaceX and plucks one from the belt and drops it here, you could drop $10 trillion worth of gold here on this earth and then all of a sudden gold becomes less scarce than it actually once was. You can't really find Bitcoin on an asteroid somewhere. You know, this is a very unique, very special asset.