Episode 86 Rich and Anthony Scaramucci
Brian Kruger:
Welcome to Richard Helppie’s Common Bridge. The fiercely nonpartisan discussion that seeks policy solutions to issues of the day. Rich is a successful entrepreneur in the technology health and finance space. He and his wife, Leslie, are also philanthropists with interest in civic and artistic endeavors with a primary focus on medically and educationally under-served children.
And welcome to the Common Bridge. We’re recording this on Inauguration Day 2021. And we coincidentally have a very special guest who has some insight into the operations of the outgoing administration. Rich’s guest today is Anthony Scaramucci. Now Anthony Scaramucci is the founder and co-managing partner of SkyBridge Capital. And he’s also the author of four books, including the Wall Street Journal bestseller Hopping Over the Rabbit Hole. In 2016, Anthony Scaramucci was ranked 85th in Worth Magazine’s Power 100, the 100 most powerful people in global finance. But in that same year, he was also named to President-elect Trump’s 16 person presidential transition team-the executive committee-and in June 2017, he was named the chief strategy officer of the EXIM Bank. And in July of 2017, he served as the White House Communications Director for a short time. Now this is a really informative, but no holds barred, interview that spans from Trump to Biden to the economy and then finally to Bitcoin. We’re going to join this conversation in progress, and it starts with Rich and Anthony Scaramucci reacting to the pardons that Trump signed just hours prior to this interview. So here’s Anthony Scaramucci.
Anthony Scaramucci:
But Rich, if we’re on the record, which I’m assuming we are, let me just say this to you. Some of the 143 people were a smokescreen for others of the 143 people, meaning somebody like Kwame or names on that list that you don’t know, they were just thrown on there. And I’m absolutely convinced that people were paid to get access to that list. I mean, that was a list of corruption. And of course, the bigger ones were Elliott Broidy, and Steve Bannon. And that’s classic Trump to the end, a total corruption, a total violations of the Emoluments Clause, tens of millions of dollars, if not hundreds of millions of dollars made during the presidency by himself and his family. And we’re here now, and then he couldn’t even bring himself to admit that he lost the election. Yet to think about how despicable of a guy this guy is, that he would want to turn 50 million Americans against themselves and their country. It was never America first. It was always Trump first. And so he told this very, very big lie and he perpetuated it, and then him and his acolytes planned and conspired to create a violent insurrection at the Capitol building. So sit and stop and think about all of that for a moment and think about what a despicable Cretin this guy actually was.
Rich Helppie:
I concur that the second impeachment was earned and that he violated the oath of office by not respecting the results of the election, by the nutty idea that somehow the vice-president could overturn that. And then encouraging people to do what they did. And I don’t disagree at all with the second impeachment.
Here’s my framework, Anthony, from a guy somewhat distant. And I said this from the beginning of the primaries in ‘16, and I have not seen any reason to change and I’ve said it repeatedly. My framework for Donald Trump is three points. Number one, not qualified to be in the office of the President of the United States. Number two, either unwilling or unable to learn the job of president, and number three, massive personal problems. Everything he’s done, basically, you can follow that framework. So we have the result that we have.
Anthony Scaramucci:
Well, let me react to that because I had an insider’s view there during the campaign. Obviously I worked on the transition. I had that ill-fated 11 days in the White House, but remember I was with him for a year. I did 71 campaign stops. I was a lifelong Republican, and so I was trying to stay loyal to the Republican party. Everybody goes through the same arc with Trump who have said nasty and critical things of him. Mike Pompeo, Lindsey Graham, Ted Cruz, Marco Rubio, you pick Kellyanne Conway, Mark Meadows. You pick anybody around him. There’s nobody that said nice things about him in the beginning. And then they tried to like him in the middle. And then of course, everyone ends up hating him in the end, myself included. I think I called him a low life hack. And I think I said he would be president of the Queens County bullies association. I think I said that in 2015. So my bad for going to work for him but here’s what happens. He’s got the momentum, you’re trying to be loyal to the Republican party. So you say, okay, I’m going to go work for him, he wants me to go work for him. Now you’re traveling with him and he is a flawed guy, but as a raconteur and as an entertainer, and as somebody who doesn’t think he’s going to win the presidency. Believe it or not, he was pretty loose in that environment and you’re like, okay, this guy’s not so bad. And you’re starting to like him and you’re like, okay, this guy can win the presidency. And then you start transposing things on [inaudible] and that’s the big negative you say, okay, this guy is 70, he could be a post-partisan president. He could be somebody that transcends the current acrimony in Washington and the polemics. And man, did I get that wrong. I mean, I got that as wrong as anybody could get something wrong. But like I tell my kids, and I’ve got five of them, if you get something wrong, admit that you’re wrong, but don’t stay wrong. You can’t be wrong and know that you’re wrong and then stay wrong. And so once I realized how wrong I got it, I got out there and said, Hey, I got this wrong. I apologize for getting it wrong, but this guy’s going to lead us into a disaster. I said that in July of 2019, and then as you well-stated, he called me, I think, an unstable low life. I think he called me a Cretin, I think he called me a disaster or whatever that he was writing on his Twitter feed, which I personally could care less about.
But he had the psychological problems that you’re mentioning. But the big thing about him is he had no executive management skills, and combine that with massive insecurity and you’ve got the four years of the Trump administration. So an expert like H.R. McMaster walks in, he’ll reject him out of hand because he’s insecure. John Kelly knows more about the military-no, I’m smarter than you and all the generals. Anthony Fauci tries to tell him what to do with the pandemic-no, my uncle went to MIT. He was a professor there. I’ve got great genetics and I’m a smarter epidemiologist than you. I mean, can you believe this shit? I mean, this is…
Rich Helppie:
I remember one of the briefings. They asked them what about the metrics about the pandemic? And he points to his head and said I got the metrics right here. He has no executive chops whatsoever. And it’s New York style negotiation all the time which is-start way on the extreme really, really loud and hope you can kind of bully the other side into a better deal for yourself. And then, like yourself, I’m a computer programmer from way back and an investor and a business builder, so I’m above average at pattern recognition. So from a distance you saw the pattern: so-and-so’s great guy, great guy, and then at the end, completely 180-worst human being ever in whatever way he wants to frame it.
Anthony Scaramucci:
You should see the way he shits on his kids. I mean, he doesn’t like his kids. Anybody tells you that he likes his kids, they don’t know him.
Rich Helppie:
Well, there’s two things that I’m curious about if you care to comment on them. I’ll put them both out there. I don’t think they’re related topics. One is I’m baffled by the Democrats, that their hand that they got after the election in ‘16 would have been much easier to play if they would’ve acted like adults, stepped back, let people see what got elected and let him stumble on his own. I just don’t get these fake scandals and such going on. It basically could have made Trump somewhat of a sympathetic figure. And I can tell you this, so Anthony, I’m from a blue collar area and my blue collar union friends were on board with Trump early on. They had enough of the Democrats not doing anything for them. And a lot of them got back to work in the Trump economy. What I don’t get is the Democrats just made it so fricking hard by their behavior. So that’s one thing. And then another thing-and I’ve met him a couple of times, Vice President Pence, not when he was vice president-I suspect 10 years from now there’ll be a book out that this was the guy who was the hero in this, that maybe kept some of the crazy contained.
Anthony Scaramucci:
Well everything you’re saying is like spot on. What town did you grow up in, if you don’t mind me asking? Part of my family’s from Ferndale, Michigan.
Rich Helppie:
No kidding. I grew up in a town called Wayne, Michigan out by the airport.
Anthony Scaramucci:
I know exactly where it is. I’m one of the few Northeasterners that have been to places like Traverse City and Mackinaw Island. And I’ve been all through the state as a result of my dad’s two sisters living in Michigan, one of which is still living, thank God. So I get the area, I’ve been in the area with the president or when he was candidate. I’ve been all through Ohio with him and yes, blue collar people gravitated to him because they have felt left out of the system. At the end of the day if you want to have one indictment of establishment politics, Republican and Democratic establishment politics over the last 30 years, there’s been a vacuum of advocacy for those people that you and I grew up with.
And I’ll tell you something about me, which is a mortal sin in some ways, because I ended up growing up with a crane operator as a father, he was an hourly worker. I went to Tufts and Harvard Law School, Goldman Sachs, built two hedge fund businesses, short stint in the White House. But I lost my way a little bit, if I’m going to be brutally candid with myself, because I started detaching myself from the ecosystem that I grew up in. And so what happens to you, is you start to get the confirmed biases-you talk about pattern recognition, Rich, you start to get the confirmed biases of the people you’re hanging out with. So if I’m at the World Economic Forum and with wealthy hedge fund people, or wealthy individuals and different salons of wealth, you start thinking and acting and thinking like that.
And so there was a revelation for me that is painful for me to admit, but it was on that campaign with Trump in 2016, I was like, wait, whoa, wait a minute. These are people I grew up with. These people are struggling. In 30 years we went from aspirational, working class families in Ferndale Michigan, or my dad’s family in Wilksberry Pennsylvania, to desperational working class families. And again, some of that’s globalism, some of that’s a failure of political leadership, some of that’s the educational system, some of that’s just the natural forces of what’s going on in the business community around the world, but it’s painful. It was painful to see it. And it was very eye-opening for me. And I was imposing-superimposing on Trump-wishes that he would be a transformative political leader to help pull those people out of the muck. And by the way, he never did that. Of course, they still stayed with him, 74 million people voted for him because he was an avatar of their anger. He was a proverbial finger in the eye of the elite Wall Street, the media, the Democrats, the radical left, none of which those people like. But he didn’t provide them with any economic or social policy solutions.
Rich Helppie:
Hillary Clinton made one campaign stop in Michigan, did not go to a union hall. The cradle of organized labor, home of the UAW, Walter Reuther, and that’s how tone deaf I think the Democrats were in ‘16.
Anthony Scaramucci:
No trips to Wisconsin.
Rich Helppie:
She had zero.
Anthony Scaramucci:
Zero trips to Wisconsin, think about that.
Rich Helppie:
In Michigan 75,000 votes Democrat down ballot-either blank POTUS or voted for Trump-that’s a 10,000 vote margin. Any insight into Vice President Pence. He seems just to be the rock in the middle of this, trying to hold things together.
Anthony Scaramucci:
Well, I had a great relationship with him and I still have a very close relationship with his staff. People are very critical of him and they’re very critical of Steven Mnuchin. And what I would say to people about those two guys, knowing them as well as I know them, you should thank God every day that they were in the muck with President Trump. Because, for whatever reason, their personalities were such where they were able to diffuse that sociopath at times. And for whatever reason, they were able to get some things done that were helpful to the American people. Mnuchin in particular, as it related to the necessary stimulus related to COVID-19, but also the selection of Jerome Powell, who’s turned out to be a very credible, very capable federal reserve chairman. So you got the left and the radical left, they’ll go after Mike, they’ll call him a sycophant, they’ll say he was overly loyal, but he was literally a pin in the hand grenade and he kept just pressing down on that pin, keeping the pin in the hand grenade. And so maybe someday he’ll tell the truth about it. Maybe he won’t.
Another person who did an amazing job, and somebody I started out with in a bad way because he fired me-the son of a bitch-was John Kelly. And so John Kelly, over 18 months and I’m not exaggerating, probably stopped the war, at least one war, probably stopped some kind of insane attention getting thing that Trump would have done that would have even further damaged our prestige globally. John and I have a good-are very close. Last Monday I went with General Kelly to Iowa to speak at the Iowa Land Expo. And so the two of us have done a joint presentation together five or six times since we both left the White House and we’ve become close friends. We realize how much in common that we have with each other, how much love we have for our country.
There were people in the mix that were really trying to stop a catastrophe. And so as I watch President Trump depart from Washington, the sore loser that he is, that he couldn’t sit for the inauguration. He had to tell his supporters that was a fraudulent election, when there was absolutely no fraud, even members of his own party-like what are you nuts? There’s no fraud here. You sit and you’re relieved. All I can say is, thank God. I literally got up this morning, had a rough night sleeping, frankly, because I was doing some of the British morning shows, which were 3:00 AM on the East coast. And so I was on a rough night’s sleep and it was like, my God, this guy-knowing everything I know, and his willing acolytes-guys like Cruz and Haley, these seditionist, traitorist human beings-knowing everything that I know, the fact that we’re here and we’re lucky enough to have survived this thing is a testament to our democracy. And I said something this morning on Twitter, so I just want to share with you, I said, this is a day, one of the biggest days since the civil war-I’m not exaggerating that. We had our first real systemic threat to our democracy. An authoritarian was at the gates of our democracy, literally telling supporters to crash the Capitol building. And so the fact that we were able to survive that, I think it’s tied with VE and VJ day, and it could be the most important day in US history since the end of the civil war. So we have to celebrate today. We have to be relieved today. We also have to know that this is a battle that we’ve won, but it’s not a war that we’ve won. We’ve got a very large group of radicalized people. Mr. Trump is the leader of a domestic terrorist organization. I predict he will be convicted in the Senate. I don’t think that there’s any way they could let him off the hook for what happened on the 6th of January.
Rich Helppie:
If Trump took advantage of fissures in the electorate, and I put a paper up on my website about this, and now Joe Biden’s elected, not because people said all we need is Joe Biden as president. I think the electorate said, we don’t want Donald Trump as president anymore. It was more a vote against Trump, just like ‘16 was more a vote against Hillary Clinton. But what we still lack in this country is a major party that’s not dysfunctional, neither the Democrats or the Republicans are dealing with policy. The game seems to be, I’ve got to be less worse than the other party. And that’s fueled by a reporting industry that is all about alarmism.
So by way of example, we do not have a healthcare system in this country. We have healthcare methods. So I started the Common Bridge to say we’re going to talk about policy. And we are going to bring in people that are knowledgeable about policy. If you count me as one of them, we’ve had six healthcare knowledgeable people, all coming from different perspectives: from public health lens, through a hospital industry lens, through a libertarian lens and we all arrive at the same conclusion about how to restructure the healthcare financing system. We’re not the people elected and paid to do that, but there’s no gain in Washington or in many of the state capitals, with getting solutions. There’s gain in beating down the other side. So we can all admit Trump was a horrible president. My humble opinion-we were due for a crappy president because we had two crappy candidates from each of the major parties. Without going in too deep, notice what happened to the Clinton Global Initiative and the Clinton Foundation after Hillary lost the election-their money dried up. And then we get Trump. And then we have a reporting industry that says, gosh, why won’t you believe me after one story after another that they flogged that turns out just not to be true. That’s what I think we need to correct, is we needed to get to policy and we need to get to real news reporting. And that’s what we’re trying to do in some small way here on this Common Bridge podcast. I don’t know if any of that makes sense or not, but that’s what we’re doing.
Anthony Scaramucci:
Well, no, I think it’s beautifully stated. I mean, I’d love to get you on Mooch and the Mrs. so you could articulate that to the people that are listening to my podcast. I think it’s beautifully stated and I think it’s unbelievably necessary. And I think weirdly, the orange wrecking ball, the manifestation of Trump and Trump-ism, I think weirdly is going to help us get to that goal. Weirdly.
Rich Helppie:
I hope so. We’ve got to get people to understand that the Republicans winning, the Democrats winning, doesn’t make a difference if we don’t deal with solvable problems like healthcare, like immigration, like guns, like student debt, like big tech and their power. These are solvable issues if people demand that the political system works on them and if people quit consuming reporting that isn’t really news. I would love to be a guest on your program. And if you want to, we can run through firearms. We have a policy on that that I think would work. The centerpiece around that is graduated licensing. Just by way of example, we don’t give a 16-you have five kids-they get their driver’s license, they don’t get to jump in the wheel of a semi truck and take off. They have to drive with a responsible adult and so forth. And eventually they get more privileges. Yet, in some states, an 18 year old can walk into a gun shop, buy a semi-automatic rifle and a thousand rounds of ammunition and walk out. Does that make any sense at all?
Anthony Scaramucci:
No, I mean, it’s disgusting. Thank God there are people like you that are doing what you’re doing, but I think the country is so exhausted by the hate and so exhausted by the nonsense of Trump, I think we’re ready. I think we’re ready for what you’re doing. And I said this this morning on the BBC, they had me on as Trump was helicoptering out of the South Lawn. I said that in a weird way, he’s a unifying figure, Rich. And let me just explain why. He managed to unify a very large portion of the population against him. And now that his approval rating was blown to pieces by the insurrection that he inspired, you’ve got a good two thirds, 70% of the country right now, unified against him and relieved that he’s gone. And so I think that creates an opening for the project that you are working on.
Rich Helppie:
I agree, but it’s not just a Trump phenomena. Trump did not parachute into the scene where everything was perfect in America. We had a lot of underlying divisions and we, the people, put the man in place. And what happened before Trump that made it possible for Trump? And I look at what the Democrats did in ‘20-way smarter than what the Republicans did in ‘16. You remember Trump was winning those early primaries with 20-22% of the vote and the 17 others, all with their sugar daddies funding them so they could stay in, kept diluting the vote to the point where Trump’s kind of last man standing. Democrats are facing a similar situation and they, I don’t know how they did it, but they all stood down so that they kind of anointed-Joe’s going to be our guy. But I think they played their hand a lot better.
Anthony Scaramucci:
Well, I’m hoping and praying that it works out that way. I’ve got one of the cabinet officials, while I’m talking to you, texted me. And this is a former Trump cabinet official that I’ll unfortunately have to make nameless here. He sends me a text and he says, thank God, this is over. And, by the way, I would have gone to Andrews to see him, but I had to rake my lawn. I basically said on Twitter, I’m having my fingernails pulled out so I can’t go to Andrews to see him. He invited all of us, imbecile. But here it’s a new dawn, but we also have to limit socialism on our doorstep. So you’ve got crazies on both sides, Rich. And I think what you want, and I think what I want is a centrist building, consensus building, not left or right policy, but right or wrong policy. Like what is the right policy for America as opposed to the right or wrong policy? Do you see what I’m saying?
Rich Helppie:
I am tracking you a hundred percent and that’s why I’m doing the Common Bridge. It’s to demand better policies. You can’t call something a mostly peaceful protest while people are injured and killed and buildings burned, and call it a riot when people are injured and killed and buildings burn. And I’m not making a comment on the righteousness of one view versus the other. We have things like a pandemic that has ripped the mask off the healthcare system. And I spoke on this back in March. I said that the health system is not ready for a pandemic and w look what happened. And we still don’t have any way of saying, in this zip code, so many people live and we’ve had so many infections and so many vaccinations. There’s no methodology now put in place to beat this down. There is none at this point.
When we look at firearms-on one side, it’s like, we’re going to go confiscate 320 million weapons in private hands. Good luck with that. On the other hand, we’re not going to have any restrictions because it’s the slippery slope argument. I’m saying there’s a reasonable plan in there that says, if you want to get your first firearm, get tested and you use a revolver, or you can use a hunting rifle with three rounds in it. Get more training, more experience, demonstrate to an instructor that you’re capable. Now you can move to the next level, kind of the way pilots do it. Rarely do you have a pilot with some kind of psychotic break and it’s the same structure. Nobody’s losing a right. You can own any firearm with the proviso that you can handle it safely, that you can store it properly, and that some qualified person’s looking at you and making a determination that you’re not going to be a problem with this. These are not radical concepts. We got to get people to move off the edges.
Anthony Scaramucci:
I would like to explore this more with you beyond just this podcast, because I think you’re right on where we need to be. And we can blame all these other things that have happened over the last 30 years to get us to where we are, and I think we both agree that Trump is a symptom of it. Remember, you can’t be a leader like Mr. Trump, unless there’s a population that bubbles you up and allows you to be their leader. Some of us made a mistake, myself included, but others really were chanting for that nationalism and that sort of level of populism, if you will. And what you’re suggesting is a more inclusive America, a fairer system in America. I’m not for equal outcomes Rich, but I do think America needs a broader and sturdier platform of equal opportunity.
I didn’t pick my parents. They were humble people, but very hard working and they had good values and they helped me get my start. But you didn’t pick your parents, you didn’t pick the location of your birth. And so many people are starting at different positions on the starting line, the starting box. Some people are 10 feet behind, other people are a hundred feet behind, some are miles behind. And we have to build our systems so that some of those people can feel that they can participate and that there can be this platform of equal opportunity, which will lead to higher aspiration. And obviously with that higher aspiration, it dials down anger.
Rich Helppie:
So I’m sitting here in Southern California and I’m looking at wage rates, and I’m looking at where the first rung of home ownership is. And how do we go to a young person and say, you want to improve your marketable skills, you want to exercise some thrift, you too can own a home someday. The numbers thwart that and we need to address those kinds of things. How do we develop your marketable skills so that you can earn more, so that you can get to that first rung of home ownership? We can’t make the healthcare delivery system as arbitrary as it is. And we need to make sure that we are dealing with our environment and climatic issues. These again are very, very solvable problems, but I think I could sum it up like this. The Republicans don’t have an answer. The Democrats don’t have an answer. We, as a people, need to provide a third option. And the option, in my humble opinion, needs to be around policy. And it needs to be around actual reporting again, and kind of wipe out this party battles and wipe out this alarmism and what passes for news reporting today.
Anthony Scaramucci:
Rich, I got to tell you, I love the rough and tumble podcasts too, where people are going after me. You know what I mean? I feel like you’re giving me, on this great Inauguration Day, you’re giving me an easy podcast. Usually I’m getting my head hit like I’m one of those whopper boppers that come out in the amusement park.
Rich Helppie:
On my podcast, I give guests an opportunity to speak about their area of expertise. And they’ve commented on that. I don’t do gotcha questions. I want people to be informed. I don’t care if people are influenced or not. It’s just so that we can get information out. By way of example, I had two people on-one an advocate of the electoral college, another on the national popular vote, and I instructed them beforehand. I said, I’m not going to fake a kumbaya, but you don’t need to win points. You’re both going to get an ample opportunity to present and bring your rationale and your conclusion. It turned out to be one of my more popular podcasts. There’s enough shouting going on. I told a friend who’s a staunch Democrat, I’m very left leaning. I said I don’t watch Rachel Maddow because I know what she is going to say. I don’t watch Sean Hannity because I know what he’s going to say. But I tell you what, if Hannity and Maddow were on a show together, I would be recording that. Absolutely. Because I think that would be interesting.
So Anthony, you’ve been really generous with your time and I hope we can publish some of this, but I really did invite you to talk about Bitcoin and what you’re up to, and I’m happy to keep going on this track or shift over to Bitcoin.
Anthony Scaramucci:
If it’s okay, let’s talk about Bitcoin for a few minutes. Bitcoin is a monetary network. You could look at Bitcoin when it first started and say what is that? It’s a series of encrypted codes up over the blockchain. Why would that be worth anything? And then you read Satoshi Nakamoto’s white paper, or the group that created Bitcoin. And you’re like, okay, well, wait a minute, why would that be worth something? And then the answer is it would be worth something if it could beat all of the competitors and robustly become a digital ledger on the internet. And then when you think about the evolution of our technology, technologies transformed in some ways make better everything. Whether it’s our ability to communicate, our 4k televisions, the fact that I can have a costless phone call to anywhere in the world, all of those things have been major transformations in uptakes and productivity. We went from a horseless carriage to a car. We invented an airplane, but what could technology do to improve value transfer in our society?
And then Bitcoin is invented in 2009. You then know there’s going to be competitors for it, Rich. At $400 a coin in 2014, the Winklevoss brothers came to see me at my [inaudible] conference. I listened very carefully what they were saying. Obviously they’re two visionary guys. And I said, that sounds like it would work. I’m not ready for it because I’m an institutional investor. And if what you’re saying happens, that’s great, but it is in fact not yet happened. But as that monetary network expands, if it reaches escape velocity, I’m going to be there. And so I’m watching this thing. I get blown out of the White House. I go to back to the firm. I registered the URL site SkyBridgeBitcoin.com. I’m doing some more research, Bitcoin crashes-big full on retail crash, watched that. And then I watch it re-materialize from the ashes. And I realize now that we’re going to start to digitally store it in places like Fidelity or places like NYDIG, and I’m like, wait a minute, this is now ready for prime time. There’s 140 plus million users. It is a full on monetary network. And I would submit to you tonight, if we destroyed Bitcoin, we could recreate it the same way if we destroyed Coca Cola, we could recreate it. In the sense that as Warren Buffet said, you can take every plant and manufacturing, Coca-Cola, wipe it out. You could still get money for Coca Cola because it’s a brand. Bitcoin is now a brand. There is now a Bitcoin standard.
And I would suggest to people that really understand that, do the homework. It is now a decentralized ledger that allows for value transfer between individuals. It’s fully scripted on the blockchain. And therefore, like Amazon is a robust network for retail, and Facebook is a robust social network, and Google is a robust search and advertising network, Bitcoin is emerging as this monetary network. And when you stop and think about it that way, and you look at it from a store of value perspective, or you look at where gold is at $10 trillion in terms of its market cap, Bitcoin at 700 billion, you could see this mature over the next five or 10 years and easily be $5, $6, $7 trillion on that monetary network, on that monetary platform. And for those reasons I want to be involved. Last point I’ll make, if you looked at an Amazon chart, and you were 12 years into Amazon, you say, whoa, I missed it. And yet if you bought Amazon 12 years from its inception, you had a 64 X move in Amazon over the subsequent 12 years. So I think we’re in very early innings, very early adoption cycle for Bitcoin. And it took a lot for me to get over the hump, but we’re here now and we’ve got Fidelity storing it for us, Ernst and Young keeping an eye on the accounting for us. And I can provide this in scale to clients. And I started it with $25 million with the firm’s capital. We’ve got $60 million in the fund now, two weeks from its start. And I bought Bitcoin across my platform for my clients. So the firm now has about $375 million of Bitcoin at its current market prices.
Rich Helppie:
When people think about Bitcoin, and I did some trading and currency, mostly through Axel Merk, for a period of trying to find a way to get around some of the currency printing. But you’ve got the United States Federal Reserve, European Central Bank producing their own currencies. How come the world needs Bitcoin?
Anthony Scaramucci:
Well, that’s a really good question. I would say to you that there’s scarcity and stability in Bitcoin, I would say to you with 21 million coins produced, probably 2-ish million left to be mined, and maybe 3 million lost in the early inception. It’s a small number of coins. And so what we know about human nature is that people like scarce things, they buy art-irreplaceable art-or they buy irreplaceable memorabilia. And this is sort of irreplaceable digitization, if you will. And so when you’re proliferating money around the world, like the United States is doing, let’s just talk about the US for a second. Our central bank has produced 23.2% more US dollars in the last six months than we had prior. So we have a 244 year old country and six months ago we had 24% less dollars floating around. Now you’re a student of this, but I’m going to explain it to your listeners quickly. Those dollars are creating a social engineering havoc in the society because you have people that own assets. Well, if you’re creating 23% more dollars, guess what happens to those assets? They go up in value. We’ve got a global pandemic, you’ve got 26 million people out of work. Wages are not going up. You’re talking about the UAW. What do we know about core inflation? You’re not going to get core inflation unless you get wage growth. I can prove that to you looking at 180 years of data. And so you have no wage growth, but yet you have asset inflation as a result of all this monetary supply. So I’ve almost gone out to my blue collar buddies-guys that are clamming out here on Long Island and guys are putting an auto glass, my cousin has an auto glass shop-buy a little bit of Bitcoin because the US dollar that’s in your savings account, if the government goes out to stimulate again, let’s say the Biden administration will likely do that, and you’ve got another one to $3 trillion of stimulus coming. That’s more money production. Your store of value using the US dollar as a store of value becomes trickier because it’s subjected to the whims of politicians. Bitcoin is not. And unlike gold, Bitcoin has been made and it’s never being made again. And so you have a fixed supply of those coins.
Rich Helppie:
So Bitcoin, could it be a stabilizing force against these currency collapses? And I’ve read some of the material from SkyBridge about Bitcoin as a monetary life raft. I mean, could it have an effect of reigning in maybe some of the excesses of the central banks?
Anthony Scaramucci:
I do think it will. I don’t think it’s scaled enough to do that, but I do think it will do that, meaning that I do think that there’s an opportunity for Bitcoin to have that presence. If it’s a $5 or $6 trillion market cap, then all of a sudden it does that. I’ll tell you something very radical. Imagine if you were one of these countries in Africa that have had this wild spiraling inflation, imagine, if you tied your currency to Bitcoin, think about what that would do. And think about if I was right about the move in Bitcoin, that it’s a 30-ish thousand now to 40-ish thousand on its way to a hundred, to 200,000 per coin. So, it’s almost like a weird way where you could put your country-if you were bold enough-on the Bitcoin standard, I think it would have a very powerful effect in terms of stabilizing that currency.
Rich Helppie:
Imagine getting individuals to participate in the Bitcoin or digital currency world. Retail, should they look at something like Coinbase for more sophisticated investors, like as part of their asset allocation? When you think about the risk/reward of any investment, if a person doesn’t invest in Bitcoin or digital currency, what risks are they running?
Anthony Scaramucci:
If we take it as a store of value, if I can convince your listeners that this is a store of value and it’s akin to gold, the risk that they’re running is as we touch upon this massive proliferation of fiat currency, this massive production, if you will, you would want to have one to 3% of this in your, in your pocket, because as that’s happening and that dictates inflation, and that dictates it increase in other assets. Bitcoin being scarce, it will start to expand and it’ll start protect your assets. So yes, I would tell people, and I’ve been telling people, this is sort of a one to 3% sort of a thing.
Rich Helppie:
We’ve got this entire generation whose business careers have been in an environment of low or no interest, or even now, negative interest rates. I remember we used to think about things like playing the float and managing our cash. And I know in some of the material that SkyBridge’s research points out that the fed killed the 60/40 portfolio because of those interest rate manipulations.
Anthony Scaramucci:
Made it impossible in the bond market, right? You’re saving for your retirement, or let’s say you’re a middle income person, and you’ve got savings in your community bank. You’re going to earn 90 basis points on it. How are you going to get ahead?
Rich Helppie:
Exactly it’s impossible. And if people wanted to take the wager: are interest rates going to be increased by the federal reserve or try to hold them artificially low? I haven’t done any recent calculations, but when you borrow $1.9 trillion and you go from virtually 0.9% interest to 2%, the country just can’t afford it. So I think all the pressure’s going to be about keeping the interest rates down, which of course, helps Bitcoin.
So Anthony, people can invest in a fund like SkyBridge. What’s different about SkyBridge’s approach? And are there competitors out there that go at this a different way? I guess I’m asking in a way, why choose SkyBridge versus another method: ETF, or another fund, or Coinbase, or something?
Anthony Scaramucci:
There’s no ETF. You could buy it at Coinbase and you could store it at Coinbase. But I would ask people to really study that because there’s been some concern about the storage capability of Coinbase. And Coinbase, even a week ago, they were taken off the grid and they were shut down. And so you couldn’t get access to your account through the internet. The other problem is, you get phished on Coinbase. And so, unfortunately I can’t tell you the number of people that an email comes in, it looks like it’s from Coinbase, they give up their account name and then the next thing you know, their account has been evacuated by somebody on the internet that’s going after their account. And so I would tell people, in scale and size, if you want to own this stuff, you want to store in a place like Fidelity, but Fidelity has a $5 million minimum. And so you can buy into our fund for the $50,000 minimum. In fact, we accept $25,000 that people are making a commitment to scale in up to $50,000. And so now we’re aggregating at a smaller number for people, and then we’re putting it at Fidelity for them. You’ve got that cold storage there. It’s taken off the internet. It’s totally not hackable. All of that stuff is usually positive. And then the second reason why you would use us, is that because, because there’s no ETF and the SEC has frowned upon Bitcoin for right now, the regulation around Bitcoin is not sedimentary yet. It’s not foundational. And so there’s a company called Grayscale that got $20 billion in Bitcoin. What they did was they put the Bitcoin in like this closed end fund wrapper that trades on the OTC pink sheets. But if you go look at the Grayscale Bitcoin situation, it’s always at a 30%, 25% premium to what the underlying coins are trading at. Why? Well, there’s a demand for people to own Bitcoin. People like me that see Bitcoin going to 200,000, they don’t mind paying the 20% premium. But if you buy the SkyBridge fund, you’re getting the NAV of the Bitcoin without the premium. Now you have to stay in our fund. We don’t have that trading liquidity. But you can get out of our fund at the end of three months. Why is it three months? That’s the shortest distance that we can create in terms of duration for it to be perceived as non-tradable. You can’t trade a limited partnership in the US for tax reasons. So I tried to, with my team, engineer a product that was user-friendly, easy access. The Grayscale trust that has that 20% premium is charging 2%. We’re charging 75 basis points. So it’s at a 60% discount to the Grayscale situation. To me that’s the reason why we’re taking in about $3 million a day since we opened, and that’s not anywhere to what Grayscale’s doing, but Grayscale’s a mature company, 10 years old. But I think as people look at our thing and say, okay, wait a minute. I’ve got people that are selling the Grayscale fund at that 30% premium and rolling that money into the NAV of Bitcoin into our fund. And then they’re picking up the one and a quarter points of asset management fee savings as well.
Rich Helppie:
What didn’t we cover about Bitcoin or SkyBridge that we should be discussing?
Anthony Scaramucci:
Well, I don’t want to humble brag, I’ll just be very direct with you. I’m 57. This is my 34th year on Wall Street, less my 11 day fiasco in Washington. I built two successful companies. I’ve been at Skybridge, less those 11 days, for 16 years. I founded the company on March 7th, 2005, we’ve got $8 billion under management. And we have gone through the ups and downs, the global pandemic, the financial crisis, varying impacts in the financial world, and my senior staff has been with me for 15 years. And so it’s something I’m very proud of. And so there’s of core stability there and we sell our products on the FA channels, the RA channels, we sell it direct to the consumer. And so I guess what I would say to you is I’m very proud of that. I’m very proud of the brand that we built. And listen, we don’t have perfect performance, who does, but we’ve got very good long-term performance in our core products. I think this Bitcoin fund is going to be very, very successful for us.
Rich Helppie:
And would a middle income investor or saver think about having some mix of equities and perhaps real estate, leave bonds out for the moment, but always have some cash, some gold, some Bitcoin or would Bitcoin effectively replace that savings account that’s not producing any returns?
Anthony Scaramucci:
So I would definitely say because it’s a new frontier for people and I want them to be cautious, that they think of it as pizza-when they cut a small slice for themselves-with Bitcoin. I wouldn’t want them to overdo it in Bitcoin because I do think it’s going to be volatile as it marches upward. You could have bought it at a $42,000 a coin two weeks ago. It traded at $30,000. It’s now $35,000. And so I wouldn’t want to get people too worked up or too scared of it.
Rich Helppie:
But Anthony, you’ve been very, very generous with your time today on two very important topics. Are there any closing thoughts that you have for the listeners of the Common Bridge?
Anthony Scaramucci:
Have faith in your country. That’s all I would say. And listen to the Common Bridge, got a great podcast, God bless you. And the good news is the country’s got another chance here to big reset. And hopefully we learned a lot the last four years and I’m very optimistic.
Rich Helppie:
I think truer words never been spoken. This is Rich Helppie with our guest today, Anthony Scaramucci, discussing the political landscape in the country and discussing Bitcoin and how that works. Remember it’s about policy. It’s about accurate news reporting. We can make a better future if we join together on the Common Bridge. This is Rich Helppie signing off.
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