[9.53] Implosion of FTX and Crypto

• I don’t understand crypto, and I’ve always been skeptical of it.
• Jamie Diamond, CEO of J.P Morgan Chase calls it pet rocks.
• In the early 60s there was a fad where people were buying the rocks in a box.
• FTX thinks of them as a bank and that was supposed to be a place where you can keep your digital currency safe.
• A material amount of crypto currency is used by bad guys.
• A book by a guy who invented Silk Road Website: Silk Road Book
• It talks extensively about how all that illegal commerce was conducted in Bitcoin
• Sam Bankman Freed who was the architect of the whole thing – there’s a decent man who ends up incarcerated.
• There has been value destruction because of crypto currencies.

[16.15] History of Currency

• The fundamental value of paper money was it was convertible into gold
• And now our currency is backed by the government
• At the end of the day, the government has taxing power, they have transparency.
• You know how much currencies and circulation etc.
• With crypto you really have no idea.

[22.06] $94,000 DEBT

• The government could basically print deficits and finance it by issuing more debt at relatively low cost
• You’ve to do one of three things

1. Raise Taxes
2. Cut Spending
3. Figure out how to inflate your way out of

• The third option in many respects is most dangerous
• The latest inflation number was six and half percent
• I don’t think we’re going to see price increases

[36.03] Unemployment

• Most of what government actors do is discourage growth in terms of regulations
• There is no big reward for taking the pain upfront
• Economy generally muddles through and corrects
• Two plus there’s been an acute shortage of workers
• The part of the reason there’s acute shortage of workers is during Covid – people were paid not to work
• My advice is to be cautious
• For most people I wouldn’t be taking on a lot of debt
• Pay down your highest rate debt first
• A lot of economy lives paycheck to paycheck

[42.22] Tax on Businesses

• There’s an industry litigating against companies for a whole variety of reasons
• A popular perception:  All businesses are evil
• Santa Claus Mentality:  Because business exists it makes too much money
• The government discourage businesses in general

[50.01] Enlightening Thoughts

• USA is moving more toward a European Model
• The European model comes with higher government spending etc.
• Risk money was available for a wide variety of purposes
• I’m not optimistic about the market
• Wall Street Journal: Hopes for a market’s recovery hinge on big drop inflation
• Barry Shore: Hope is not a strategy for business
• You’ve to plan to be conservative

Peter Nolan founded Nolan Capital, Inc. in 2014 as the holding company for his family office to make long term investments in growth oriented companies.

Prior to founding Nolan Capital, Inc., Peter joined Leonard Green & Partners (“LGP”) as Managing Partner in 1997 along with Jon Sokoloff and John Danhakl. Under their leadership, the firm completed approximately 100 principal investments and grew Assets Under Management from $500 million in 1997 to over $38 billion today. In 2019, Leonard Green raised approximately $15 billion for its most recent funds. Peter transitioned to his current role as Senior Advisor to Leonard Green & Partners in 2014.