The Fed Is Trapped: Why Double-Digit Inflation Is Inevitable | Lawrence Lepard

**Lawrence Lepard** (0:02)
And the Fed, there should be no Federal Reserve. We should have a sound money unit that we all transact in, and the price of that money should be set by the free market, and that's called the interest rate, period, nothing else. And there should be no bailouts, if you fail, you fail. The chairman sets the tone, and the descents, even the descents are somewhat planned. I mean, it's all kabuki theater to make it look like, oh, we've got these 12 wise people trying to figure out exactly what the monetary policy should be. And they're so thoughtful and deliberate, and they're going to get it absolutely right. And since 1913, they've done nothing but fuck it up. What they're going to do, in my opinion, is this decade, and I've said this for a long time, this is going to be a decade of inflation. It started in 2020, we're six years into it. We're not anywhere close to the end of it. By the time this is all over, we'll have double digit inflation. We almost had it last time, we got to nine. We're going to get double digit inflation. The good news is, you know, the economy will probably be cooking and unemployment will be relatively low.

**Danny Knowles** (1:00)
How are you doing anyway, sir?

**Lawrence Lepard** (1:02)
I'm doing great. No complaints. It's all good.
Looking forward to a sound money future.

**Danny Knowles** (1:11)
Well, yeah, me too. We were just saying before the show, the sentiment in Bitcoin seems incredibly low right now. I'm hoping that's a bottom signal.
I think even during the FDX crash, it was a better sentiment than it is today.

**Lawrence Lepard** (1:26)
Yeah, I'm trying to remember that. It was pretty bleak then too, but probably the most amazing thing about this one is you got Bitcoiners eating Bitcoiners, and that just drives me nuts because we're all in the same team.

**Danny Knowles** (1:39)
100 percent. It's funny, but then everyone banded together because that was kind of like, although obviously hugely impacted Bitcoin, it was kind of a shit-coiny thing that was fraud, SBF doing its thing over there. It didn't really impact us, and it felt like everyone kind of, all the Bitcoiners were on the same side there, whereas now there's so much infighting, they're fighting over sale, they're fighting over one turn.

**Lawrence Lepard** (1:59)
It was a sleazeball, trashed and blew up, and so all crypto got thrown out, including us. Yeah, no, you're right. I mean, we were all in it together, and hey, it's 15, it's down hugely, but so what, right?
And I think a lot of people really bought into the narrative. We hit 100, we hit 126, we're on our way to 200, and then it didn't happen, and so you've got a recipe for disappointment and anger and so on and so forth. And nobody ever said this was going to be easy. But I'll tell you one of the things I really take comfort in, Danny, is that if you look at all the drawdowns, if you look at any asset class, you look at the history of the asset class, if you look at the drawdowns in Bitcoin, I mean, what do we have 90, 75, 80? I mean, they're all big, I mean, over 60%. And as painful as this has been, October we had a high 124, 126, I think the low on this one is 60 So just a tad over a 50% drawdown, I mean, hey, this is nothing.
And to me, that speaks to the institutional adoption. There's a strong bid at the low end of the power law is how I see it. So I'm just not worried. Like everybody else, I'm impatient. I'd like to see it go to 200 tomorrow, but if that happens next year, so that's okay.

**Danny Knowles** (3:20)
Yeah. I mean, if you'd have told me five, six, seven years ago that we're only going to have 50% drawdowns, I'd have bit your hand off for it. So I guess we can't complain about this.

**Lawrence Lepard** (3:28)
We're moving in the right direction. I mean, if 60 is the new 15, all right, I can live with that, because I know what that means when we do get into the upswing phase, that we're going to 180 or 200 or 240 or something. That's going to be much higher than it was the last time around. So here we are.

**Danny Knowles** (3:45)
Yeah. Bitcoin will continue to win. But I want to talk to you about everything that's just happened at the Fed, because Kevin Walsh just had his first meeting.
There's loads of stuff I picked out a bit that I thought were interesting. I think it seems like he wants the Fed to change course on some of the stuff that they're doing. But before I get into my thoughts, I want to hear your thoughts. You'll know this far better than I do. So what was your general take on it?