A lot of thoughts on CryptoEcon. One thing I wanted to quickly mention is that there's a great book called GreenPilt that Kevin O'Walkie and the folks in the GitCon community have been putting together that has a very good introduction to a lot of the concepts about how CryptoEcon can create regenerative systems and build structures that are positive sum in the broader world and can tackle large-scale problems. So I highly recommend looking at that whole meme complex and exploring the world of CryptoEcon through the lens of regenerative crypt economics, regenerative finance, and so on. And the core message of all of that is that at the end of the day, all of our macro systems and our governance systems and so on are about how to coordinate large groups of participants towards some set of shared goals. And of course, there's like tons of layers of complexity there when you think about different preferences and different goals and so on, different values. But it's all kind of coordination systems at the end of the day. So if you kind of step back and look at macro systems that way, you can then start kind of decomposing them and figuring out what structures can yield better coordination principles, better coordination structures to achieve better outcomes together. And the kind of like amazing promise of our time today, and this is kind of why I like thinking about it in terms of solving planetary scale problems, is that you can use these kinds of structures, these kind of CryptoEcon structures to have extremely large-scale impact. And just to give a sense of how large-scale that impact can be, just think of something like the Bitcoin network or the Bitcoin storage providers. In a very short span of time, these networks have assembled massive-scale computing power and massive-scale service provider. It's a massive-scale network with an enormous amount of resource consumption and utility provided and organized by a few mechanisms. So what I wanted to kind of, I want to spend most of the time today talking about a core component in these, which we're sort of describing as impact evaluators. I'm not familiar with this kind of mechanism description being applied before, so we sort of coined it. But I kind of wanted to dive into together as a group into potential designs for impact evaluators. And then if there's sort of like time at the end, I want to kind of then talk about kind of how you can use CryptoEcon systems to kind of solve larger-scale problems. I give a talk like this at the last CryptoEcon day that kind of goes into Bitcoin Green and looks at that as a project and as a system that sort of tries to tackle a large-scale problem, breaks it down into smaller and smaller and smaller components, and then tries to create incentive structures to solve each one of those problems to then sort of vault over time into a larger, more coordinated group, solving each kind of progressively larger problem. So as an example, if you want to decarbonize the planet, you can start by decarbonizing an industry, and if you wanted to decarbonize an industry, you could pick something like cloud computing. You could then create a subset and say, great, let's decarbonize first Crypto cloud computing and start with a storage network, and then from there start with the Filecoin storage network, and each time as you kind of decompose a problem, start with a smaller set that is much more achievable, figure out the system structures, create positive sum incentive structures to achieve that outcome, and then use that as an example for then the layer above, right? So if we can get to fully decarbonize Filecoin, then we can use that as an example to other crypto networks to decarbonize themselves. Once we achieve that and create a strong incentive structure to get all of these participants doing that, we can then vault that into talking to other industries and saying, hey, look, the crypto industry has now fully decarbonized. It is net green, this is totally achievable.  Once you get many more industries doing this, then you can slowly chip away at the problem. So I've come to think that CryptoEcon is kind of like the highest leverage set of tool sets that humanity has at the moment to solve some of the largest problems we have because it lets us break down systems, design mechanisms, and deploy them at scale quickly. And if they're working well, they can scale quickly into some pretty enormous scales. So the kind of picture that I want people to kind of consider is this, for any problem that you might be running into, try and understand what the incentive landscape looks like, try to think about what structures and mechanisms are causing, what kind of actions by what parties, if you are trying to get to a different outcome, think of the barriers in between, like what are the hills that are preventing, that are locking us into an inadequate equilibrium here and think of creating mechanisms and structures who warp the incentive field to get to that better equilibrium. And you can do this progressively, so you can start with one such problem space. You can think of using mechanism design as some tool that would let you either tunnel through a mountain in that incentive landscape or ideally you want to pinch the landscape and move it down, but that's kind of harder visual metaphor. And then over time, as you kind of solve more and more problems, you can progressively come up with other structures and so on and steer the planet into a much better condition. I think along the way what's different now about the world today post-blockchains from the world before is that what's really going on is that software is eating mechanism design. So think of the computing platform that we've deployed as building this extremely programmable environment where you can deploy any kind of software and deploy it to supercomputers running everywhere, including our pockets and our wrists and whatever soon to be all over. We have trillions of devices and so on and we have an extremely upgradable environment where individuals and small groups of people can dream up some new structure and deploy it out into the world and get a very high quality production feedback loop of whether or not that thing is good, how well it works and so on to the point where you can go from kind of dreaming up a superpower to then refining the superpower and enabling the world to have it very quickly, like in a matter of like a few years and that's unprecedented. Now when you can use that amazing software platform with like think of like CI CD and so on and what you're deploying is not just an app on your phone but you're deploying new coordination mechanisms for organizing groups of people at various scales. You get the ability to like rewrite the planet, right? You can rewrite what we're all doing and that's tremendously powerful. The current blockchain networks are just beginning to tap into the potential here. So this is why it's like super exciting to be studying and working on crypto problems. So I wanna kind of like talk through a very specific component that I've been, that a number of us have been like thinking about and so on and it's a very useful tool and we can use it in the blockchain community to potentially solve a bunch of problems. So there's a class of mechanisms that we're calling impact evaluators and the way that we sort of like this, we still have to kind of better formalize these but think of them as a simple mechanism that measures some impact and provide some reward. That's super general but that's kind of the point. These can have a different frequency so these can be like a one-time process or it could be periodic. This could have a scope that is proactive and or retroactive so proactive might mean that it assesses potential impact and looks ahead and places some bets and rewards it ahead of time. You can think of a grant system as an impact evaluator like this or it could be retroactive. So you can look at some outputs, measure those outputs, measure the value of those outputs and reward proportionally. You can think of composability of these systems. You can think of whether that reward schedule is fixed or variable. You can think of the incentive alignment between participants and very specifically the biggest crypto econ processes in the blockchain space are extremely simple impact evaluators that part of why they work so well is that they are very stable and whole industries can be built relying on their structure. So the Bitcoin Blocker Ward is probably the highest impact evaluator in the deployed so far and it's kind of like absurd how much happens through this. It's a very simple process. All it does and it's kind of complicated how it's implemented. Unfortunately, the Bitcoin community didn't kind of create a fully programmable environment and so on so you don't have like a really nice description of like here's an impact evaluator and like here's what it's gonna do. So you have to piece it together from what the protocol is doing but at the end of the day what's happening is that you have a process that is measuring the hash rate contributed per miner per block time and at every block time the IE is going to reward the miner with a probability proportional to the hash rate contributed and this is achieved by like doing the whole hash breaking and so on. And so in expectation miners are getting proportionally rewarded for their hash rate contributed and this impact evaluator alone has cost one of the wildest energy consuming processes on the planet. Unfortunately most of that work is wasted. We're building 5.0 and we wanna do really useful things with that kind of process but this gives you a sense of like how IEs work and so you can then assess kind of like what are the properties of this thing? Well it happens, it has like a fixed schedule, it happens every 10 minutes, it's running as part of the Bitcoin blockchain, nobody can change it, it's retroactive so it's not proactive and its variability is that it's an exponentially decreasing emission but it's kind of discretized and you can calculate it ahead of time so everybody knows what the entire reward schedule might be and everybody also has a view into all the hash rate contributed so far so people can make pretty reliable predictions as to what the future hash rate contributions will be from other parties and people can make pretty reliable predictions about their own contributions and so they can make very reliable predictions about their own reward schedules when you couple that with the Bitcoin price and so on then you get out of that the entire Bitcoin mining industry. In terms of incentive alignment this is zero sum so there's a fixed reward schedule and it just decreases over time. You could say that it's positive sum because there's a secondary process here where this IE is actually causing like the purchasing of Bitcoin so by feeding a lot of that economic activity into Bitcoin it's kind of like kind of positive sum but that's a whole other discussion. You can think of the Falkland block reward as a very similar impact evaluator. What it's rewarding is QA power contributor per block time. Here QA power is quality adjusted power that's where we include capacity and Falkland plus verified storage and it rewards a set of miners with that same probability and so over time in expectation the Falkland block reward is rewarding miners proportionally. The incentive assignment, actually there's the bug here it's mixed because of the baseline. You have again an exponentially decreasing emission in this case it's not discretized so it's every block or guess the discretized but every block is supposed to every four years and it's mixed because you have the baseline and the above the baseline behavior so underneath the baseline it's positive sum above the baseline is zero sum and so on. So what's really going on with these things is that there's a very simple control theory loop so if you are familiar with robotics or anything like that like you have a very straightforward structure for kind of there's some system that you can actuate and the output of the system is fed into a sensor. The sensor translates that into a feedback signal that goes into a kind of controller process and that gives some input into the system. So think of these kind of control theory loops as the kind of building blocks of impact evaluators where you can think of the system as like the network of participants the sensor as the measured output that you see directly in the information on the chain or something like that and then the controller here is the impact evaluator process that is deciding what the emission rate is or whatever. So this kind of like very simple structure could be used to reward all kinds of things in the network and this is one of these things that I think is vastly underutilized across our networks. So for example, and this is where I wanna turn it into more of a discussion with everybody I want you to think of different problems that we're dealing with in the FACMA network and think of starting to construct impact evaluators for these because once we have programmability, once FVM lands we can and even today we can start with Ethereum we can go and like create these in ETH and start rewarding directly that way.  Once you can frame it that way and declare it then you can kind of start releasing currency and at the beginning you're not gonna get much output but if it's reliable over time that will translate into a lot of impact. So maybe like think about some area of the FACMA network this could be like we want, hey maybe we want more crypto econ days maybe we want more crypto econ days to happen all over the world we want people to learn about crypto econ maybe we want other kinds of events maybe we want, we want to think about clients and client onboarding so we want to speed up the onboarding rate of the network maybe there could be an impact elevator around that there sort of is one already but it's not as powerful as it perhaps could be maybe we have, what's the data onboarding problem? Maybe we want to shuttle a bunch of drives from one place to another in physical machines how do we, could we turn that into an impact evaluator? Maybe we want more on ramp type things certain types of material to show up in the network could we create impact evaluators around that? And so to maybe take some examples I wanna kind of work with this group to take an example and break it down into something that we can create an impact elevator over because if we get good at this then we can steer the whole community towards larger scale problems so who has like a candidate problem that you wanna solve in the network? Raise your hand if you have a candidate problem you wanna solve, even if you don't know how to solve it yeah. I mean it's kind of one that you mentioned but onboarding and just to kind of put a finer point on it so we've been, me and Steph Makdalinski at the Valkyrie Foundation have been have been trying to work out some ways of understanding this and creating metrics for essentially for usability, right? So one of the things that's hard right now because it's not, we're not really incentivized directly to tackle it as an ecosystem as a whole is simply downloading, installing Lotus, setting it up and joining the network, right? It's hard and it's not, it's no one's fault that it's hard, right? It's just that like there is no thing in the system that specifically rewards that. One of the things that we can do and we do do and in some ways it's bad is we have multiple funnels to get to that point, right? If you search for how to install Lotus or how to get Valkyrie running you'll hit five or six different ways of doing it. So one thing that we can do is pull out like we have a measure, we can measure between those, right? So we could pick out something in those systems that says like one of them is like, okay, now going to this Valkyrie Foreset and pick up these things and we're like, oh, okay. We can now detect that someone is going through this funnel and we can also see whether it trails off. So anyway, that's 3% of the way through the kind of thinking that we would need to do that. Let's maybe, because that problem is very broad, let's try and like distill it down. How about like onboarding large clients? So there's some set of clients out there. Right now we don't know, we don't have like a measure in the chain of who are the potential clients. We could get that. So we could get some information to feed that into the chain. And we don't know what their user experience is, right? We don't have the way to rate the UX of onboarding the data into the network, the way that you get to rate a lift car or an Airbnb stay or something like that. So you could get some data, some like qualitative data, some quantitative and qualitative data from clients and then integrate that into some feedback signal and feed it into some periodic reward schedule. So how would we like, what's any ideas on how we would do that? How we, like what do we need to add to the system to create a structure like this? So we need some treasury with like some incentive to go towards some set of participants that are gonna demonstrate that they've helped onboard clients. We have, we need to get some data from clients somehow and feed it into the chain as well, some qualitative feedback output. So who can think through how to piece these things together? You need some verifiers to say for the people who report that they onboarded clients that they're telling the truth. Yeah, so you do need to be able to verify that the clients are telling, aren't who they say they are and are telling the truth. You can- There are some cases and resolutions later. Yes, yep. So you need, you need like the feedback signal that you're getting needs to be verifiable. So that's certainly true. But even like, even before we get there, how can we compose these signals to produce an impact evaluator? You can measure the savings and start your staff by switching in the blackboard. You can measure the savings, yeah. True, so that would be like a competitive analysis type of thing that one client, that you could advertise to the whole world. Once you're doing it well, you can advertise that to the whole world and draw more clients. I'm thinking even more basic than this. If I were to today start programming a thing, what do I do? What do I write? Let's break it down into the component system so that I want to get us all thinking in like algorithmic terms so that then you can start deploying these things. I'm curious to measure how many new clients onboard. Great, so we need a set of how many clients are there out there, potential clients or actual clients and what their rate of change is, right? So we need to know who the clients are. We need to track them in the chain. Right now we don't know. They're not on there, right? Like we know sort of, but we know through mechanisms outside. We don't know directly in the chain. So we need a set of clients and we need to know how much storage they have an interest in putting in or how much storage they have already put in. What else? I don't know, we know like the, let's say we treat the data cap allocation that went out as like potential interest on the line. And then you treat the throughput of how much data cap is being issued from a change perspective.  So you have two flows, the one with inflow of data caps after you're consuming the data cap. So it's how we expect that to be a funnel. So then we can establish, so let's say, So we have this like inflow of data cap of like potential clients' interest on the line, whether you went through this process, it get being captured on the chain. Maybe you're gonna onboard 10 petabyte. But at the same time, you also know how fast this data cap is being consumed, right? Like so, and you say, oh, how many deals landed on the chain and what is the percentage of that? But right now the data cap deployed to clients only sometimes is going to the actual clients, sometimes it's going to the SPs who are doing the work for the clients, right? So right now a lot of SPs are approaching clients and they're doing work with those clients and they're running the whole process for them, like all the following components. So we have to like get the actual intent from the client and how much search they might wanna bring in. Then if that's the case, I mean, I feel like we're moving off the protocol, then there are just a thousand, there's many, many ways to do that, right? Just like... I'm saying like, let's try and compose it into a protocol improvement. Like we could write a FIP someday and say, let's add these set of components to improve the storage onboarding experience. Sorry, I have a hypothetical, it could be wrong, like it could be off, but like maybe people can just like indicate their interest, right? Take some file coin and say, hey, I wanna bring this bunch of data onto the file coin network that could now have some indicator on the chain. Did anyone say something? So you have some indicator of interest and then you need to measure the output, like it happening and some signal, some qualitative or quantitative signal out and feed it, how do we do that? What might be a good way of like getting the feedback from the clients on how well that went? I have a different answer to a different question, which this reminds me of the Amazon affiliate program, right? Like you need some metadata there somewhere. This is sort of trying to cure the last thing, which was like, where does the data cap live? So right now we don't have anything on chain that says it came through this route, right? Like so maybe a tag that you would associate with data cap that was like it came through this funnel, right? So you have a destination. One of the larger meta points in a lot of what you're saying is that the client onboarding funnel is poorly instrumented in general. And we need way better instrumentation of how that data's coming in to then over time measure what things are providing what outputs and what quality, what quality, what kind of, where are people getting stuck and why and so on. So you have a point like maybe we should start by instrumenting the client funnel, figuring out all the different kinds of clients, all the different groups and getting reliable and robust information about their experience and how well they're progressing. And once we have that, then we can maybe piece it into something in fact about later. We maybe started with one that was like really hard. Important to us, but really hard. Yeah. I have a question on that. I mean, so in this case, the extra value that is created can actually be monetized in a sense, right? And it actually can be distributed across all the people who contributed. This is an easy monetization problem. One of the, I'm interested like, how would you do something like that if it's not as easily monetized? So, yeah, so that's heading in a totally different direction.  What I wanted this conversation to kind of get to is making things of this type because these things are super easy to deploy and once they're deployed and they're stable and people can rely on them and they have data about their performance, then people can start making predictions about the future and can start building entire businesses and industries over them. So, you wanna get to something like as simple and straightforward as this, deploy it and enable a large community of participants to bet on that not changing. So we gotta get to simple things like this. Maybe we can go from data onboarding to a different problem. All right, let's... What about the idea of like an auto renewal? Like if somebody's having a good experience, they just, oh, my 12 month contract is over, I'm just gonna auto renew the exact same thing. Like that would be kind of a vote. It seems like a verifiable mechanical thing that's happening that shows a vote of confidence or a thumbs up sort of thing. Yeah, so right now we don't have a good way of like getting after the fact feedback from individual participants and their experiences. And that's kind of like uncommon in blockchains, but very common in our day-to-day activity on tons of applications, right? Like car services, hotels, all of these things, browsers, like everything asks you for your feedback and like they start rating your output. And based on that, they use that signal to optimize their system somewhere. So maybe we should just, that might be like a very trivial ad. Like find a good way to contribute, to be able to pull participants for feedback. We have to make it verifiable in some way, to the point before. Like we have to make sure that data's of high quality, but that might give us a lot of signal. So how about, let's think about events. Suppose that we want to have, we're like planning next year's events and we wanna have tons of community organized events around the world. How might we design an impact evaluator to cause that? I guess you have to work out what you want from the events. And often it's about trying to bring people into community, hire people. So if you measure how many people you're actually hiring based on the attendance of the event, you can start to measure the impact. Yeah, so that's like a specific thing around, you have a certain set of qualities that you want to gauge about the event. You have one, you describe like one measurable output from events, like people hired. You can also measure attendance, you can also measure like locations, you can also measure like, yeah, do you wanna tell us a lot, you're more, yeah. Yeah, yeah, yeah, yeah, yeah. So attendance, other, other. Talk about media mentions. You can talk about recognizability of Filecoin or whatever the thing is that the event is. So we have a bunch of signals that a lot of different groups care about of what is a good event. And we need to be able to get some reliable enough measurement, it doesn't have to be perfect, but it has to be reliable enough to then feed back into a signal. So suppose that we can do that, suppose that we have these like set of measures and we can, after an event happens, go back and score them. For each one of these, I'm convinced that all of us can come together and come up with pretty good ways of getting that data out of the internet and come up with a score. Suppose that we now have a set of events that are happening with like some set of, you know, properties and their scores. How do we go from that into an impact evaluator? We look at the frequency that we're gonna measure it by. Yeah, exactly. So what frequency? Let's propose some. Probably directly before the event, directly after the event and, you know, like a month after. Yeah, so we could design an impact evaluator that as every event happens, measures that event. So you could have like a proactive grant-making thing that gives some capital for people to try putting on an event. You can measure the outputs and then reward it retroactively. How about we do something like what these block rewards do, which is kind of like, what's extremely powerful about these is that they're auctions. So the way that they work is that they basically walk, the impact evaluator walks up to an open network and says, there's this amount of reward. I will deploy this amount of reward in this unit time to proportionally to the overall total quality that I get out. And that is able to like enable all participants to put in whatever they think they want to add for whatever the reward is worth. I'm not saying that this, well, but like auctions tend to be like a really good way to kind of let participants in a network find like the best price. Yep. What kind of demand is like a lottery or something? So it's like, you want to maybe to be kind of as people that out of the speed back can enjoy this event. I had like this session, I didn't like that session. And the more feedback you give, the more like lottery tickets you get for some sort of reward at the end. So like might incentivize people to show up in the first place, might incentivize people to get feedback along the way. And it, everyone has sort of reminds me of the Bitcoin blocker or it's sort of like a, someone gets all the value, but everyone's motivated to take these actions. So that feedback would be all probably feed into one of the qualities that we're measuring about an event, right? So let's write that down. So I think we're talking about this in terms of like a very like automated system.  You want to just quickly go through a bunch of them. I'm thinking more about data onboarding right now. Verse, having something that is more programmed and automated that makes sure that you are not, like when humans are doing it, just like thinking about things, there's always the temptation to not be very stringent about what things you're evaluating. Where if you're doing it more programmatically, it's like more well-defined. What are your thoughts on that one? So I think that what's extremely useful about programmatic structures that are regular and dependable in the long term is that you decrease a transaction cost of entering into those conversations. However, they're much less friendly and forgiving, right? For example, in a grant program, there's all kinds of back and forth that are instrumental in refining grants into a good structure that is likely to produce really good value. So it's not clear yet that you can have a good automated grant-making thing that isn't like totally like, immediately produces like bad output and is like incentive misaligned and so on. So I think that there are a lot of things that do require a lot of individual involvement in kind of like human-oriented programs. But the transaction cost is very high. For each one of those things, you're gonna have a very high transaction cost of being able to interact, being able to describe the potential value and align together onto a good outcome. And what's extremely powerful about these like IE's in the cloud, so to speak, is that once you put them out there, participants can transact directly with the IE and you drop the transaction cost between all participants. And so you create a much more open environment. And so they don't work well for things that are very fuzzy and hard to quantify. So things that are really qualitative or where you are trying to align on like potential predictive value that they don't tend to work really well. But for very concrete things that you can turn into measurable, this like concrete quantified impact over time, they can work really well for that. So and I do think that we can, even with something like events that are so extremely qualitative, you can get some measurable outputs out of that and turn that into enough of a signal to know what events in a period of time were kind of like regarded by the community as like the most valuable, so to speak. And then out of that, you can like then create kind of an impact evaluator type thing. Relatedly, what are your thoughts? It's not just the ticker, but what are your thoughts on like overfitting then to data that is already measurable rather than creating new mechanisms of measuring? Cause you're sort of like always tempted then to just like use the- 100% of these overfit. So you get exactly what you reward. So like totally you like, you know, so the Bitcoin community did not want to maximize the amount of hash rate on the world, right? Like can't really speak for Satoshi here, but I really don't think Satoshi and the Bitcoin community sat around thinking, you know, how can we turn the entire plan into hash rate and like put every single computer into an ASIC. And so 100% of these overfit and that's a misapplication of an IE, right? Releasing this thing into the world created like this massive consumption of energy and like this wasteful process. And now it's like we have to fix that. And we have like this runaway process that we have to like go and fix. So we've learned since then, like we're making better things that are like now more attached to value. So for example, the Falcon Plus useful storage thing is like a huge upgrade on just like say just capacity or even that is a capacity is a huge upgrade on like wasted hash rate. So can we kind of like go to some things that like there are sort of some of the means where this kind of thing can be very helpful. There are many cases where they won't be and like you don't want to kind of incentivize something to overfit too much. But there are many problems with at enough scale that you can turn it into like a pretty good quantifiable output that you can then reward this way. They're not like what I think it's like for some problems you can use these for some problem, a lot of problems you can't. Yeah. Can we quickly just go back to Danny's question? And I'd love to hear your thoughts. Can this impact on boarding clients, right? Can we use like unique data set? Maybe we use some algorithm that matches and say if it's 80% different, it's a unique data set. And then the variability would be like increasing instead of decreasing because as you onboard more and more then it's harder to find unique data set. Would that be something that solves partially? Yes, so yeah, that's possible. I mean, I think like you could say, hey, there's a class of data that we want to onboard. Suppose that we say for the Atlas project that you'll hear about, you want to get like geospatial data onto Filecoin. And like right now you want to run an IE to get like pictures of the planet like added at different resolutions. So what you can do is like you can set up an impact evaluator to reward participants that contribute and that put into the network like pictures of the world taken between one time and another time. You end up in a hard problem where like you have to verify those things like you have to verify that was done correctly. But you can at that point reward all participants for bringing that specific type of data into the network and it will cause a lot of it to appear. But you better be good about like your verifiability because you're gonna get the wrong output. Like you'll overfit, like the network will overfit to what your reward says, not to the intent of your reward. Right, like this is where like the letter of the law really matters. If you get that wrong, like you'll get the wrong output. Thank you. For schedule? Yeah, no, no, we're good. No, no, I'm happy to like pause. I wanted to get people thinking about impact evaluators. I think like the non-trivial systems, what I kind of want to leave you with is like you can generally take these larger scale problems, break them down into smaller ones, and then if you can come up with a concrete way to measure the output and feed it into a periodic reward schedule, then you can like, then you can move mountains. But you better, to the point, you better like know what you're measuring. All right, thanks.


Welcome folks, this is Tom O'Brien of TFNN. We have five days a week, we go seven hours a day, we go 24 hours a day on the internet at TFNN.com. Always remember folks, whatever you think about, you bring about whatever. You focus on growth, so everyone's having a great day, safe day, make it a great week, folks. Serve the one you love.  Muckin' eyes, let's take a look at it out here. We have the Dow Industrial's up 42, Nasdaq up 69, S&P's up 16, gold contract on $7.30 straight in at 14.86 mounds. We have Silver Flat, $17.58. Silver's showing more strength than gold out here. Gold is down, you don't have any volume on the way down, but the bottom line, Silver is peeking its head higher. Oil, oil is down a half a buck trade and $53.35. We have light sweet notes and bonds. You get the 10 year down 13 ticks, 129, 20. 30 year off 27 ticks at 159, 12. Both of these down with dramatically lighter volumes. Pretty cool how this thing is shaking out actually. We're gonna take a look at the 30 year. You're gonna remember the 30th, what's it gonna be, that's gonna be next week.  You know, 30 year right now, we are down 161,000 contracts. And that's anemic contract volume. That's going into folks, 460,000 contracts. Big number, big number. Dollar, dollar bottom line traded flat out here today. What we have, dollar came down last week with conviction, bottom line five days. We went from 98, 645 to 97, 629. Dollar wants to make its way down to the swing low of the 25th of June. That number is 95, 843. Now, it was intriguing about the dollar. You can make the case, technically this is for sure, is that this dollar wants to trade all the way back down to February of 2018, which is 88, 253. You take a look at this, what you're gonna see out here is that we did break the trend. And that trend's been, that's a long time, man. I mean, the bottom line, that's February of 2018. And what you're gonna see here, and you broke this trend with conviction, you know? So in order to basically technically say that this baby's gonna get higher again, you know, bottom line, you'd have to, here, I'll make this a better looking one for you. So let's try this once again. So we get this trend line, set this baby up. And what you're gonna see is that we broke that and we broke it with conviction. You know, in order to get above the trend right now again, you'd have to get on the other side of 97,333. So the way this is set up on a longer term basis is saying that, yes, it can get down into that 88, 253 mark. Now, if we go over and we take a look at what could make that happen, you'd get into the euro first, bottom line, euro, you know, last three weeks, we just went from 108 to 111, euro had broken its downtrend, that they, there's a lot of downtrends, but this one is from 114. Euro looks like 114 is gonna be game and we'll see how it shakes out from that particular point. The pound, the British pound also bottom line, higher price, the pound took off like a rocket ship about two weeks ago from 121 to 130. This pound is set up to get into the 133 mark. It looks pretty, yeah, 133.88.  If you launch 133.88, there's no reason the pound can't get up to that 143. Now, there's no doubt they're still dealing with Brexit and all the above over there, but what we have found out technically is that it looks like as soon as the deal, any kind of deal gets signed, any kind of deal, you're gonna see the euro as well as the pound go to higher price. The wild card out here for us that are in the metals market is the yen. What we have with the yen out here, the yen is at 108.59, backed off the 108.94. You know, there's a swing point up here at 109.32 that if you are bullish in the gold market, you don't wanna see that basically get taken out. Why? Because the weaker yen sets up weaker gold. And the thing that's pretty incredible inside the yen is that the Bank of Japan bottom line, said that they're gonna basically continue to basically not try to weaken the yen, but the bottom line is that they certainly don't want it to get stronger. And they said for the first time in approximately 10 to 15 years, that they felt that they were expanding somewhat. And you think that right off the bat, that okay, that yen could get stronger, but the bottom line, it didn't. It's an inflection point right at that 109 area. That's the number you wanna keep a close eye on. Some of the higher volume equities out here today, and we will have a low volume market out here once again. You get Bank of America up 72 cents, Halliburton is up a buck. You get Apple, Apple's moving. Apple's got the composite going. Apple's at a new all-time high. Up $4.24, 240 bucks. 240 bucks, amazing. Boeing is down $14. Boeing is giving the Dow industrials a conniption out here. 13 million shares of monster volume. We did 13.5 million on Friday. And if we do go take a look at Boeing, what you're gonna see, how this setup is out here, is that you have a high volume low sitting. Let me pull this back a bit. You're gonna see the bottom of the consolidation. It's amazing how long it takes actually to come down and hit these sometimes. So the bottom of the consolidation is $292. Boeing has been laying at basically the same place now since January of 2018. We've bred broken topside, went 295 to 360, made an all-time high out here. March of 2019, that lumbar was at 446. Now it's making its way back down to the lower end of this. And let's see, so we get 10 days left. Even though what you have there at Boeing is this. Even though we have come down volume on the dailies, let me see what the weeklies are. The monthlies are still light volume here. Let me see this on a weekly. So on a weekly, you're coming into $16 million. We've done 13. Oh, it's only Monday. Yeah, yeah, we're coming down with some volume, man. We're coming down with some volume. No doubt about that. Boeing's got its own problems cut out for it. Stay right there, folks. We're gonna be coming back when we come back with our man, Mr. Dave Mazza. Dave is the managing director, head of product development at Direction Shares. And of course, we all trade these triples. Dave and I come right back, folks. Stay right there.


A short-term financial strategy allows a firm to maintain a sound liquid position. Short-term policy in this regard should give guidelines for managing investments in receivables, inventory, borrowing, foreign exchange, and risk management activities. A company's policy on short-term borrowing should focus on taking advantage of cost saving offered by any particular borrowing. There are certain sources of short-term borrowing available to a borrower. Like uncommitted lines of credit, it is a very unstable line of credit and extendable at the option of the bank as it does not require any compensation other than the interest thereon. Committed lines of credit, it is a regular and more stronger line of credit because of the bank's formal commitment and verifiable by an acknowledgement letter and it can be put noted by the borrower in its financial statement. Revolving credit agreements, the most strongest form of short-term bank loans, having formal legal agreements, defining the borrowing rates and compensations thereon, etc. There are certain short-term borrowing approaches like there should be the existence of a planned strategy to avoid any stuck in an uneconomical situation. The borrower must spend some sufficient time on developing a short-term borrowing strategy because the borrower should ensure that the firm is able to borrow at all any form of a borrowing source. There are certain objectives of short-term borrowing policy like there must be enough capability by the borrower to handle peak cash needs. There must be some maintenance of sufficient sources of credit to be able to fund the ongoing cash needs. It can be possible to ensure to keep the rates obtained are cost-effective and below the market averages. Certain factors are there to consider while borrowing. The first is size and credit worthiness. Borrower's size allows himself to get economies of scale of larger borrowings. Lender's size sets its lending limits. Borrower's credit worthiness will determine the rate, compensation or even loan. The second factor is the sufficient access of the borrower. If the borrower is a very demanding, very large borrowing, then the access to the alternative sources is better. Flexibility of borrowing options. The ability to manage maturity efficiently. Borrower needs active maturity management awareness of the market condition. The ability of the borrower to prepay loans when unexpected cash receipts are available with the borrower. Certain type of borrowing strategies are available to the borrower. The first is the passive borrowing strategy. It involves least activity with one borrowing source and type involving very much little planning. It is reactive only in response to instant cash needs. There is a routine rollovers of borrowing for the same amount each time without much comparison shopping. The second borrowing strategy is the active strategies, which is more flexible, need more planning, need reliable forecasting and seek the best deal in the market. These strategies are similar to the matching strategies where loans are scheduled to mature when large cash flows are available with the firm or the borrower. By asset-based loans, we mean the short-term loans secured against current assets of the firm, which are like accounts receivables or inventory. There is a concept of blanket lien. It is protection to the lender of the short-term asset-based loan on current and future assets of the borrower. Generating cash flows from accounts receivable. How borrower and lender can get cash flows from the accounts receivable under a lien agreement? The first approach is the assignment of accounts receivable. In this method, the lender enters into a lending agreement with the borrower where the borrower assigns its accounts receivable to the lender. But the collection of accounts receivable remains as the obligation of the borrower. The second source is the factoring of accounts receivable. In this approach, the accounts receivable are sold to a third party in order to receive cash immediately. In fact, the borrower is shifting credit guaranteeing and the collection process to the factor which is the third party. Similarly, there are ways where cash can be generated from the inventory by borrower and the lender. The first option is the inventory blanket lien. Here the lender has the claim on some or all of the inventory held by the borrower. But the borrower has a legal right to sell its inventory in the normal mode of its business. The second option with the lender is a trust receipt arrangement where the lender requires the borrower to certify that the goods are segregated and they are held in trust with proceeds of any sales directly remittable to the lender as the goods are sold. The third option with the lender is the warehouse receipt arrangement. It is similar to the trust receipt arrangement with the difference that there is a third party and that third party is the warehouse company. This warehouse company supervises the inventory position of the borrower. How we can determine the borrowing cost? There is a fundamental rule to make various forms of borrowings comparable. The rules is that compare a compute total cost of form of borrowing and divide this number by total amount of loan received adjusted by any compensating balance. In case of line of credit requiring a commitment fee, the borrowing can be determined by summing up the interest and the commitment fee over the loan amount. And if the loan is all inclusive means that the loan is also including the amount of interest therein, then we need to net off the loan amount by deducting the interest therefrom. So in that particular situation, the borrowing cost can be determined as the interest divided by the net proceed, whereas net proceed is basically the difference between loan amount and the interest thereon. And if there is a dealers fee and some other fees as well, then we need also to adjust these factors in our model to determine the borrowing cost like the model will be we need to divide the sum of interest dealers commission and backup piece over the net proceeds of the interest. So in this way we can determine the borrowing cost to be borne by the borrower under a certain short term borrowing plan.


Good morning on a Monday. This is the 9 o'clock clock. I'm Jay Fidel. It's Think Tech and we're talking about hyperinflation this morning. We ought to think about that with Gary Wilkins of MLA companies. Welcome to the show, Gary. Thank you. Good to be here. So tell us what your position is with MLA companies and and your qualifications to talk about hyperinflation, which is not an easy topic these days. Yeah, well MLA companies is they were a business service financial services provider in Southwest Ohio, but we serve our companies all over the United States and we provide what's called fractional CFO services, so small to midsize companies that can't perhaps afford or don't want a full time CFO, but need some high level financial expertise. We can provide that on a contractor hourly basis. So that's our role and my role inside MLA is I do operations, what we call organizational effectiveness. I do some client work when it comes to leadership transitions or developing processes, technology platforms, things like that, and I also then work on internal processes inside the firm as well. So that's that's my role in my background. You know, inflation, I wouldn't claim any particular knowledge except the general history and economics and being pretty close to small business owners that are working through these questions and are trying to think through some of the questions as well. So we've been having those conversations with them. So I'm glad to be with you today. Sir, I think very important, you know, and we're talking about pumping trillions into the economy. We're talking about tinkering with the tax system. We're talking about, you know, doing a lot of giveaways if you will. That changes the changes the basic arrangement economically and given country and and we have seen for one reason or another cases of hyperinflation in Europe in the I guess in the late twenties and thirties there was a significant type of inflation there. We've seen it in South America. I know that. So it is scary and I wonder if you could talk about, you know, where it has popped up in the past and what effect it has had in those places where it has popped up. Yeah. Yeah. You know, there's really no agreed upon definition of hyperinflation. And so we think of the extreme examples, you know, Germany before World War Two Argentina, where money essentially became worthless. And those are obviously most extreme situations we can think of recently. You know, some people would say, well, once you see, you know, sustain of a certain percentage over a certain period of time that it qualifies for hyperinflation. But the fact of the matter is it depends on where you feel it. Where does it affect you? And that causes the concern and the way that you want to deal with it. So it's not so much a question of what's the definition. It's more a question of how is this going to impact me and what steps do I need to take either from my business, my family, my retirement, any of these other questions to take that into account. Well, hyperinflation must be distinguished from ordinary inflation.  They don't hear about deflation very much. I guess we had that in the thirties. But, you know, the problem is where does it cross the line? Hyperinflation obviously can go in dangerous to more people and to the economy in general. But where does it cross the line where we need to be more concerned about it than ordinary inflation? Yeah. Well, that, again, that's something that there's some debate on. Really, that's often a historic question. So you can look back and say, okay, that's where it was, right? Now, we've been through two significant economic upheavals in recent memory, the 2008 financial crisis, 2020 with COVID. And, and interestingly enough, you know, there was a lot of talk at the beginning of COVID with what we'd learned from 2008. And one of the general consensus was the government didn't act fast enough or big enough, even though the amount of money they pumped into the economy at that point was unprecedented. Some of us will even remember back 9 11 and kind of the impact of that event on the economy as well. So, you know, as far as when it crosses the line into concern, there's other key factors for what you mentioned, government spending. Obviously that has tax implications. The United States is in the unique position of being a, you know, the dominant global economy. And, you know, there's many people who voice their concerns that were taking advantage of that, that if China or another consortium of nations, if for a while it was concerns about the EU, that's kind of dropped off because of some of the problems their member countries have been having. Obviously, China is the big one on the horizon right now. If the company decides to dump a lot of money into international markets or do something themselves, that could start to affect our position. Generally, our sense is, you know, the US dollar is still the standard of international exchange in most places. So there seems to be a little bit of a buffer before we reach some of those events. But we've been caught off guard many times before. And so I think it would be wise for individual business owners and citizens to take individual measures where they can in a reasonable way. Yeah. So one thing you mentioned that I'd like to pursue is this whole notion of traditionally inflation has been by country, if not neighboring countries. But now perhaps we're not limited to country anymore. Perhaps in one of the surprises of the inflationary surprise we can experience going forward. We're going to find out the world is really flat. We're going to find out it's all independent, all related. And we could have, am I right about this? We could have an inflation that was essentially global, even though you have various currencies and economies involved. Is it true? Well, you know, again, theoretically, yes, that's possible. You know, you look at even what's happened with cryptocurrencies and the incredible changes and values we've seen, like just astronomical increases. And and in one sense, that's all theoretical, right? But as soon as people begin to parade on that value or begin to trust in that value, it's just it's, you know, money is very much a psychological thing. It's very much an agree a societal agreement as to how we are going to communicate and assign value. And so psychologically, things can shift very quickly and in very unexpected ways. And so yes, it's foolish to take the attitude, well, this can't happen for X, Y or Z. It's necessary instead to say, well, here, you know, here are the indicators or here are the steps that would get us between here and there and how do we pay attention to those things?  But are there are there any other factors that could lead to inflation, particularly in this country? We know the government right now for good good and valid reason is pumping a lot of money into the economy. It's writing checks everywhere, trillions and trillions. And at the same time, you know, it hasn't really increased the rate of tax, which which was quote reformed and quote in January 2017. So so the question is if you don't have an increase in tax and you do spend print press money, is is there is that's a big factor, obviously. Nobody will argue that. But what about other factors that that would add to that and make inflation more likely, more dramatic? Yeah. Well, one is key interest rates, right? So the Fed sets interest interest rates that control the rates that banks can lend money to each other. The Fed can lend money to banks. And those have been almost impossibly low. Like we've been down to the point two five percent range, quarter of a percent range for a while. And that's been for quite a period of time, you know, it used to be around five percent that interest rate was kept. And that just that kept some controls on the supply of money. And it meant that there was room for that rate to dip down and then come back up. Well, we've kind of been in that emergency low mode now for quite a while. There was some effort around 2016 to start bringing it up again. But then of course, as soon as we hit COVID, one of the first things they did was drop the rate down. And the reason that's a concern is that when rates are that low, they can only go up. There is no room then to lower those rates. And if rates go up, then that means that, you know, A, the cost of money gets more expensive. The cost of borrow money becomes more expensive. Things that are like driving the housing boom stuff like that are affected. But at the same time, money that you possess now becomes less valuable because it's not being accounted for through this potential rise in interest rates. So it starts to play with the numbers. There's some positives from it, but there's also some implications of it. And so interest rates are a key thing. And you'll see that that's a headline, right? That's a regular headline. What's the Fed talking about related to interest rates? And there's been some statements back and forth. No changes right now, but it's always an option. It's something we expect to do again. Yeah, and some sometimes interest rates by the banks go up. You know, even if the Fed doesn't do anything, for example, I read recently that mortgage rates are going up. They're still not high. There's still a three and change, but that's not necessarily set by the Fed. It's set by the expectation of the bankers and their underwriting considerations in making mortgages and loans, for example. Yeah. Is there is there a process in this country now? Well, that's a broader question. Is there inflation now? And to what extent do we have inflation? And you know, my wife tells me that a loaf of bread costs more that safe way now. And her friends tell her the same thing. And yet, you know, maybe we don't look at enough economic reports from the government, but it seems to me and sort of as a street talk anyway, there is inflation in what you have to spend. Am I right? Yeah. So there's no question that we're experiencing inflation and you know, because you even your observation about mortgage prices, right? Even though that's not being driven by a Fed or an interbank rate, that's being fed by a demand. People are willing to pay more and so prices rise as a response. And so the second main category you've got got interest rates. You've got government spending and then the second, the third main category between those two is high demand for products and services, right? As soon as people want things they can't get, they're willing to pay more for it. Prices go up. Everything starts to be affected by that. And sometimes that's driven by the fact that we have all of this pent up consumption from the period during COVID when we couldn't buy or do certain things. Some of it may be that there's been huge disruptions and supply chains, you know, ship getting wedged in the Suez Canal of all things, right? All of these factors that just send these ripple effects through the economy and pretty soon prices start to rise and that is inflation and its most basic definition. So there's no question we are experiencing inflation now. There's no question that there are factors that could increase that rate of inflation. The check against that or the reason why we don't think yet it's time to take extreme measures is that there's just so much slack in the economy with demand for supplies and services and also in employment. You know, there's a lot of people that are seeing wages increase because jobs are, you know, it's hard to find good employees. At the same time, there's a lot of people still unemployed. And so we just haven't quite solved some of the logistical problems of connecting supply and demand. And we expect that once those problems are solved, some of these things that are inflationary will start to die down and will start to come back into line. But there's no question at all that we are experiencing an overall increase in inflation. But you're suggesting that once things come back into a kind of balance where, you know, people see, I hate to use this term, a return to the new normal or an old normal revised. It's like they at least flatten out rather than keep going up. But can we ever say that inflation actually reduces? In other words, so I have a certain rate of inflation going on. It's subject to a rebalance in the economy. And then one day we reach rebalance and the rate of inflation goes goes down. The price index goes down. Is it possible? Yeah, things and there's historic examples of where prices will begin to fall, right? And so, you know, we saw a little bit of a, we saw this with the housing market after the bubble, the 2008 and then the correction, right? So you see prices fall and there's a lot of talk now are we experiencing a new housing bubble because of the demand and all of these circumstances. And again, there's no question that house prices are going up, mortgage rates, costs for those kinds of things are going up. But the question then is, is there something unusual that can be addressed in the short term? Where things get into, you know, what becomes hyper inflation or extreme deflation is where the ability of either market factors or government intervention to control it are no longer effective and it's just, it's just feeding on itself and it's just a runaway thing. That's where a psychological shift has taken place in the public and they're just operating off different rules and different instincts at that point. So there's still a lot of things that are being solved in the short term by just logistical concerns figuring out supplying, you know, ports are expanding capacity. Ships are finding other, you know, other ways into harbors. People are finding other ways to get goods and services. Companies are offering other benefits as opposed to simply raising wages. There's just a number of different things that the market is doing to respond and that's the strength of the system is that there's opportunities for the market to respond first to these increases before we are dependent simply on government intervention in order to control something like inflation. So in the consumer market, it seems to me there's a kind of tension and that is that people feel, you know, we're reopening now, maybe they saved some money, actually saved some money during the, you know, the lockdown, the shut-in of COVID. So now they're coming out. They're going out to the restaurants. They're going out to the stores. They're buying stuff because they have money saved up and they feel a wealth effect, if you will. And when everybody feels a wealth effect at the same moment in time and you have a stable supply or a continuing supply without a, you know, account availing increase, then you have more people seeking more goods and then you have inflation. And so that's one side of the tension. The other side is whatever we can do to ameliorate that, to balance that, to get the two sides of that tension to work well. So you're saying we're in that process right now? Yeah, exactly. And again, we think back just at the beginning of the pandemic, there were all sorts of, you know, companies who could no longer sell their standard goods and services. Well, there was this huge demand for PPP, for personal protective equipment, right? So all of a sudden, you know, there, I mean, there was a story in the Wall Street Journal about a pizza shop in Chicago that was creating face shields because they had the temperature capability in their ovens to do it.  It caught my attention because it happened to be a restaurant that my wife and I would go to when we lived in Chicago. So I knew exactly where the story was taking place. And so, you know, and that's, in some ways, that's the beauty and the real strength of the American system is that people are so close to the problem who can make decisions. Small business owners are right there. They can make decisions on the spot and begin to divert resources and manpower and all sorts of things to try to solve these problems. And there's just no way that a centralized system, bank or government or anything else can respond in that kind of feed or creativity. It's one of the reasons why the U.S. system remains one of the most durable there is. So small business and small business owners their ability to pivot and be creative in the moment, take risk is really vital and is honestly our best defense against the historic hyperinflation that we've seen from the past which didn't have that kind of bull work in place in order to head it off. Yeah, that's really, that's a really important point about American capitalism and encouraging, encouraging. It's all about small, medium businesses. That's your market. That's what you specialize in. Yeah. I mean, it's a passion for us. We just, we see these stories again and again and are just amazed at what men and women can do and the ingenuity and the resources and determination they can apply. And I'm sorry, that just doesn't exist in a situation where you're working either in a more collective or even in a large business environment. It's just not the same. And the problems that get solved and the way things are responded to it's really amazing. It is very inspiring. So we're willing to talk about this subject simply because we have that confidence because we work with a good number of these small businesses and we see them solving these problems all the time. So a true acknowledge that the government has to step in. The government has to have sort of guardrails around all of this and that at certain points, certain, you know, indicators, the government needs to do something. And I, and I suggest to you that that's actually more complicated than it used to be. You know, they was used to say that economics is more an art than a science. And it's all a matter of, you know, testing and retesting and seeing if the solutions you come up with work in a given circumstance and sometimes they simply don't. So you have to try something else and government is on a trial and error basis when it comes to, you know, mechanisms to deal with inflation. Am I right about that? Yes. You know, there, you know, one way to think about it and this is somewhat pejorative. The government can certainly make it worse. And we're, you know, it's easy to throw stones, right? It's in Washington's direction or even in the state of the state in local directions, but unfortunately, the kind of tools they have can make it worse. The fact is, yes, with what's happening electronically in the markets with the way that things are being managed, you know, it does the speed of the electronic economy has pushed these things forward. And there are times where you would have you could rely on a window of time in order to kind of assess and gather information and make a decision. And now there are things in place that just start to happen and you really don't have control over that. So one thing begets the other thing and you have a chain reaction of economic events.   And and that's, I mean, that's real money. There are people whose retirements and livelihoods are invested in those markets. And now you have people treating it like it's a game and and treating it like they would a high state poker game in Las Vegas or online, right? So there's clearly problems there and the government is the one that it needs to solve that. They've created the context where that can happen. They're they're accountable to protect the system that we have in place. And so they need to identify that and isolate those things out. We're the opinion that, you know, it's best left to either business owners or the more local the government the possible if it can be decided at a municipal or county level let them figure it out only get the states involved certainly only get the federal government involved if there's a clear breakdown before that simply because those people are closer to the problem and can take regional considerations into account. There is so many considerations here. We haven't even touched the political side of this thing which may not always be rational. But let me let me go forward. Let me go further and ask you this the dark side question. Okay, hyperinflation is worse than inflation. Hyperinflation can come from you know an exacerbation of the various factors we've been talking about and maybe surprise factors factors like the government spending too much the government not putting guardrails on the capital entrepreneurial economy may not be quick enough in a given circumstance may have external geopolitical influences that may screw up the economy. You may have a a kind of lack of confidence and people feel they they have to spend whatever the market will bear and sellers will you know charge whatever the market will bear and so you know you could have a hyperinflation in those circumstances. So question worse case analysis scary. We do have hyperinflation a la Germany or Argentina. What happens? What happens to the country? What happens to the average people? Well it you know it would be devastating and we we can think just in recent memory of the you know that the disparities of income that showed up through covid and the way that those different resources were handled and the opportunities people had but I'll tell you one thing because of my you know part of my discipline is in the finance field part of my discipline is in the culture in the sociology field that the resilience of community I think really proved its value and people that are rooted in a relational community and this is true for businesses or individuals but people that had strong strong relational connections going into this did well and then often cases came out better because of that and so I think you know even something like hyperinflation where there's you know there's so many scenarios we could run out and come to so many different conclusions but the fact of the matter is we are still people and inflation is is contributed to by psychological factors there's very real economic factors that drive it as well but if if we have strong support and strong community resources around us our ability to to survive and to solve these problems to find ways to help others just goes up exponentially and so we must never forget the fact that we are human beings and we are connected to other human beings that is the most vital and important part about us and so you know it's it's right to resist if if things the government is doing seem to be encroaching on that that's that's the right place to resist but at the same time we have to always accept to build those relationships to invest in those communities because ultimately these other things are just the the creation of our civilization over time and what ultimately will survive will be our community and our relationships with each other yeah but commitment to each other sure so let me ask you this where is the press to fit in all of this might give you a country for example that's in a state of panic you know imagining wheel barrels of money imagining the you know the the devaluation of the dollar to the point where it's you need 10,000 of them to buy a loaf of bread how does how does the press play in all of that you you alluded to that a moment ago and I think if we we want to get on the same page and have the level of confidence and connection togetherness if you will community the press plays a role in all of that and the press can exacerbate panic or they can alleviate panic what should the press do in a in a state where we are worried seriously worried about hyperinflation what should the press do now about this yeah yeah you know that's a difficult question I mean there are many in the media that are doing good work on this and representing it that the difficulty is as a public we bear some responsibility because these are these are complicated issues and they can't be boiled down to a sound bite and yet that's so often what we're satisfied with is so often what we're looking for consumers so you know clearly there it takes more work but there there are you know publications print publications primarily that are still dealing with these hard issues and are worth the time to read them and to gain a broader perspective sometimes we just have to filter it's not helpful to know everything because I have decisions and situations that I need to focus on that are happening right in front of me and so you know the press can always you know they they have to balance that responsibility and they're doing that and in a difficult and a challenging time as well for them with their business model being upended and all kinds of other things taking a place of that with social media and other forms of communication so that's you know that those are complicated questions as well we also as consumers of that information have a responsibility to be thorough in our research to read broadly to to talk to people that disagree with us and to reason some of those things out those things take place in a community and they really don't exist outside of a community so there's certainly responsibility to be shared there between both the press and the audience to help manage these things in the more constructive way well this is sort of like market the marketplace we have to see it as the same process as the economic marketplace hopefully the right ideas will come out if people actively participate in the market well one of the thing is this last night one of our brain trust Zoom meetings on a given Sunday night we talked about this we talked about you Gary we talked about hyperinflation and I said well you know what how much should we'd be worried about this and my my my brain trust partner said not to worry about it because if there is an inflation a lot of people benefit by the inflation they they are going to make more dollars their homes are going to be worth more they may have to pay more for goods and services but there there are you know balance points where although they have to pay more they have more so inflation hits both sides of the what equality consumer the consumer balance and I said to him wait a minute if I'm retiring then I I don't make any more money in an inflation I my dollar becomes less valuable and there are a lot of people in this country just like that where do you come out on this should I be worried should I not be worried does it does it satisfy itself by raising all all boats or the some people left stranded yeah clearly some people get left stranded some people benefit you know again we've just we've gone through this very compressed economic event with COVID and one of the one of the clear things that came out of it was was people that at a certain education and income level will get much better and people below that level did worse and so where we used to think of a you know of a kind of a line of economic growth we now have this split line that looks more like a K and if you're below doing worse if you're above a certain point you're doing better that speaks to our humanity right can we look at other human beings who are worse off because of these events and say well I got mine so figure it out if we're if we really value community if we really value things that go beyond simply what's in our bank account and our own personal sense of security we'll take those things literally as well and and yet I would argue that these for those citizens or organizations to respond to those needs rather than the government intervening and saying well we are now going to tax and therefore redistribute because it just it just doesn't work and the the loss and the waste in that process is just too great to be worthwhile so again it's you know that this gets into a conversation about values about what we believe you know what's important what we still share as communities as a nation but there's still a great deal that is functioning well in that place and generosity has been up substantially through this period of time there have been many people I know both personally and I know through nonprofits and other organizations we deal with who have had substantial gifts given to them because people have said I've got more than I need and you are in a better position to use this than I am so take this money and put it where it needs to be used and we've seen that happen internationally we've seen that happen in local communities and across the country and so there's a lot to be encouraged about that doesn't often make the news right that's that's not the kinds of well true well true people want to hear about but that's happening and that is addressing the problem in tangible ways that's encouraging we need more of that I mean we need we need that globally you know we have to share and we have to be mindful of our brothers you know I am my brother's keeper in a larger sense so one last question and that is this you guys in your materials MLA companies talk about you know things you can do and you means the individual consumer wage earner would have you as well as small and medium sized companies in order to you know protect yourself against the possibility of increased inflation hyperinflation one of them I remember is the notion of dealing with cash reserves but you had three or four major categories and can you take a moment and tell us what they are and where and what they mean to us in terms of protecting ourselves from the possibility yeah yeah it's you know it's one thing to just have a list of numbers on a page it's another thing to understand what those numbers mean and where they come from and and cash reserve doesn't just mean what's the number in my bank account it means do I understand where and how money comes in to my company and do I understand how it leaves my company because it's that money that's moving through which is a microcosm of the economy itself and so understanding that having the right structures in place to do that and then the right reporting mechanisms out of that so that over time you learn oh this is what it means it's it's the difference between simply seeing a balance on your IRA and seeing the report that says well here's the investments here's how they perform here's the diversification of your portfolio it's a similar process and and so we really not only specialize but like I said we're very passionate about partnering with business owners to help them answer those questions and to help them develop those skills even teaching them those skills where necessary so that they can understand their business in that broader contact and therefore they're much better positioned to make those decisions than to take those risks and again we're just constantly amazed at at the generosity that that these men and women display with what they have they really consider of themselves stewards they see themselves stewards to a community of people to a supply chain that includes vendors and customers on the other side and then they feel a responsibility for that and the best of human of humanity comes out in those situations when they're given good information and the freedom to make those decisions Not good on all that Gary thank you so much for joining us this morning Gary Wilkins of MLA companies thank you so much maybe we can discuss this again I hope we don't have to discuss it in extremis I hope so too but it'd be great to talk again Jay Thank you very much Aloha


So guys you all heard about the UDP packet walked into bar it went unacknowledged All right, that was a network joke All right. Hello everyone. My name is John Gruber. I'm with F5 networks and I seem to be the perennial presenter for our vendor summit Today we're going to talk about being all in So I want you to get used to thinking of the thought about being all in because it wasn't something F5 got immediately This is your F5 mea culpa You saw in the keynote addresses where they talked about the difference between getting the technology and getting the community or getting the culture Well, we got the technology in fact last year we stood here and talked about our LBAS driver We have LBAS v1. We have LBAS v2. We talked about all these operational features We have in our agent nobody else has we talked about being able to scale out environments being able to differentiate environments all this stuff and Then we told you to go get it from dev central We told you it was a RPM or a Debian package and we said this is how you obtain our software and this is how you deploy these solutions It worked many of our customers followed us down this journey and they said we should do this and they started saying things like this Because they were asking a very fundamental question and that was did we actually get the culture and it turned out There needed to be a drastic change inside of F5 in order for us to say that we got the culture and I'm very proud to be able to say we got it Because we started a team in Boulder, Colorado started over we picked folks that had the mindset not of a enterprise networking company but had the mindset of more entrepreneurial thinking and We said our open-stack efforts needed to be seeded out of there Because we needed to be able to say something to you that we hadn't been able to say so far and that is we are Wow, I'm glad you guys can read now. What that means for you is that our software That you used to download and look like this Now looks like this. That's github That's better and it's a little more important than that because what you're gonna find out is all that code on github in The repos that are there that you can see we have supported code in that repo Which means you can call us and more importantly than that That means I can come out to you and we can make creative solutions together Simply by forking the repo doing the work doing a pull request against our repo get our Travis CI to kick off on this Do all of the testing if it gets in our master branch. It's now a supported solution. I Couldn't do that with you before and in fact, we're doing all of our development in github So you can even see really wonky things like When our developers, I don't know who that idiot is puts bad commits in It's all there and you can see it because once again, we figured it out finally and we're Wow, you guys are slow someone said on Alright, so let's talk about what that means that means we now have an aggressive roadmap for OpenStack That means we can start building the services with our customers That means our smart customers are now taking the feedback they have from us and they're pushing it back We have a lot of great plans and we're very excited by the way you can have the meeting We can show you this in detail and talk about in detail But we wanted to let you know that this is a cultural shift at f5 This is a change in who we are and how we behave with you and customers and it was OpenStack that pushed us there Now what does this mean? Well today? We have to adjust our products to be more like you because once again We've decided to be all in today if you went and got our software plants to say for a second You'd get it from downloads at f5.com. There's export controls. There's all this enterprise stuff on it There's all these images and what you would get is a very generalized Virtual appliance that was built to work on multiple hypervisors and do all these things nothing that's necessarily all in about this So what are we going to do? We're going to do what a good community member would do we're going to take heat Non-proprietary you can do this we're going to take heat. We're going to take a little cloud in it We're going to take that V and we're going to make it an OpenStack V and then we're going to put it into Your glance repository and then we're going to publish a nova flavors because you can orchestrate this stuff in OpenStack, right? And any vendor that's all in should and that's what we're doing. So We're going to do it based upon a policy file that's written in JSON because that's kind of an OpenStack thing to do Right and it's going to synchronize so you can decide what f5 software you want an f5 software you don't want Again, we're going to patch the images. We're going to publish them in the glance for you We're going to add specific nova flavors that look good. So you're not burning out your quotas running ADCs Now what that means is we've transitioned our products from being generalized to being ones That are really OpenStack specific they integrate with OpenStack. They pull metadata for your keys They do security integration right with OpenStack with Neutron All the network service integration is there when you launch the devices and we do our own licensing orchestration So that what you get when you start them looks like a fully active ADC in OpenStack Let's show you this again. Are you seeing anything proprietary here? Are you just seeing heat templates? They're heat templates and they're on get hub and they're visible and you can use them and they're supported because F5 figured something out and we are All right, who said it? I'll throw it to the center Up lousy shot. Okay, and you'll notice as these things build all we're going to do is launch a little instance read the policy file We're using cloud. We're losing a cloud in it instance to orchestrate this whole thing And you'll start to see all of our software show up in your cloud again. We're patching the images We're going to push them in To glance and then we're going to add your nova flavors all F5 software functionality is available in your OpenStack cloud. Let me repeat that all F5 software functionality is available in your OpenStack cloud So what this translates to you is we just gave you a Lego block and Let's ask how creative can you get with a Lego block? It's a block a little imagination later. It's a whole lot more, isn't it? And if you notice again, you don't have to publish all these things, but you see we're publishing all of our software So it's available to all your tenants. This is an admin task, but again, it's the Lego block Now Lego blocks are neat, but we should want more than red bricks Don't you agree? And F5 has a bunch of different colors of bricks. In fact in this example again We're launching heat template notice you're setting you're setting your your default accounts on your appliances passwords right here But we also do a bunch of other security stuff randomized passwords and other good things you should do in cloud In this case, however, we're not just building red blocks We're going to build blocks this time through the heat template and again fully open You guys can use these things that our web application firewalls These don't show up as just generalized ADCs notice some common security group things So we're not wasting a bunch of space notice the license integration These are showing up as our ASM product or the web application firewall You can launch these things in pods and we're doing all the orchestration for you It's all on GitHub. It's all done in an open-stack way now. We built a wall walls are cool But they're not the only thing you can do right F5 has made a living and helping applications be better Add a little neutron integration and a little more heat maybe a cloud in it script here and there and again all from us Even integration with our own management platform with big IQ and we're going to do one further step for you We're going to change from just doing things like walls or just doing things like load balancers To doing full clusters. Why because we know that's what people use F5 for they use the F5 high availability Which by the all the things you're used to seeing I'm going to ask how hard is true availability in a open-source proxy How hard is it? This is why you have vendors We do high availability. Do you think we should be able to orchestrate that whole high availability for you? Yeah, we can do it an active standard. We could do active active active. This is the kind of company because this is Really using the ADC for what it was built for and that is to be the platform on which you develop your application Which is the middleware that gives you all that functionality all that business logic all that stuff You've been doing with that five for all these years in your open-stack cloud and now again We've moved forward in our little Lego block history and now you have full clusters. You have pulled license management You have fully operational tenant networks coming up. Everything's ready to go You can put the initial config on the box You can do everything you want to do because again in this picture and we'll show it running to you You're gonna get sick of me saying this do you see anything proprietary here? No, this is all heat. This is all open source. This is a patchy to license This is supported because we figured it out because we are finally Yeah All these years I've been working to try to try to we open stack. We got it We finally got it and again watch this will launch it will flow flow that will put the whole cluster together for you We'll launch the various instances. You'll notice in this orchestration. There was only really one object that object represented the whole cluster Now with all the now to platform now you can build it And you'll notice when we look at the heat at the heat stack all of our heat stacks are built So on their outputs, you'll see the output here We output all the variables necessary to let a higher level orchestrator consume these platforms So if you have a higher level cloud orchestrator, it's just reading the outputs from heat and programming this now ADC platform you have associated with your application and again We're just left the floating a piece so we could log in and show you that we weren't kidding. It's actually all the way clustered It's all the way done. It's ready to go.  You all appreciate that, right? so we do Lego blocks we build them up and up and up and We can do things like add a separate controller for things like firewall control for centralized control of firewalls or WAFs and we can add this whole picture together. How many Know what Lego Mindstorm is? That's where you take your Legos and you add some neat things and you get this remote control thing for them And you can get them to automate and do really cool stuff, right? Well that automation is unique to Legos and sometimes the automation is unique to F5 So in this picture right here, we're going to take that same wall that we built before We're going to build it again But this time we're going to take those elements in that wall and we're going to register them with the centralized manager So what does this mean? That means a cloud provider can do things like launch a WAF inside of a tenant for them and manage it back at the sock Does that make sense? Because who really knows how to run a firewall probably the security guys in the enterprise They can launch these within the tenant and then manage them centrally in the sock and you'll see it We fired all up and again this time we're building draw bridges. Why because these things are automated I can move them up and down. I can change the policies I can do all of these things in a centralized fashion They're showing up in our orchestrator and everything's happening now I'm showing you our control panel the thing that was on that Lego Mindstorm iPad thing But all of the integration for the infrastructure remember the keynote address that said the infrastructure services layer all The orchestration with the infrastructure layers all done through heat It's all open source. It's all given to you because we wanted to make sure we were doing it in an all-in way Everybody understand that? centralized managed tenant ADC services But that's not the only thing we can do Inside of f5. We already have a technology to do declarative deployment of complex ADC services These are the l4 through 7 services that add the special things to your application This is the reason why you buy f5. This is the feature set that that keeps growing that we keep that we keep Adding to the feature to let specific things happen like building a mobile application where the tcp layer is tuned For mobile networks That's pretty neat. That's all stuff you can do with f5 now if we're giving you a library of functions and we have this advanced Templating language ourselves. What do you think we're going to do if we're a vendor who's decided that we're all in? We're going to marry it to heat We're gonna expose all of our iApp templates through heat Which means once again? You have full control of your f5 device. You have control of every l4 through 7 feature from heat Is that what you wanted? Let's see it now. This one's kind of an interesting one because because heat's composable What you'll see from us is we're going to launch the whole app and this is what you wanted You're going to launch the web servers You're going to actually launch the entire ADC cluster You're going to sit there and then proceed to use our iApp integration and we'll show to you This is the heat template notice I'm using a standard f5 iApp and inside this iApp you'll see custom f5 heat resources which you put on your heat engine There's the one right there that maps it to the iApp language for f5 and as you go through you'll see that you can do lots Of things here's wan compression. There's your TCP optimization for mobile This is for a mobile application as you go down you'll see SSL offloads on there You see cookie persistences to find Anything you can do there's message by message for web applications land optimized towards your servers all the good things You count on from us and you'll see it's a pretty simple thing There's iRules you could tax my rules in there if you want all your pool members all of this is exposed through heat So that you can build orchestration layers on top of this so that you can make this part of your application deployments in your cloud Look what we built now Something that'll do the Kessel run in 12 parsecs Out of Lego blocks those Lego blocks from the community and again to show you that we're doing this We already showed you the VIP we actually left the big IP Self IP attached so that bring the demo so we could log in and show you everything that's been exposed But this is what the heat template built you'll go through and notice the standard template There it is Look at all that config look at all that stuff that got exposed to the template. It's all there L4 through 7 services fully exposed to you through heat all of the features Now one of the thing I did want to show you is like all things because you should absolutely follow lifecycle management of Open stack when you're doing infrastructure as a service type deployments watch what happens when I delete it I just deleted the stack notices changing watch this what's going to happen to my oh, it's gone Why because I deleted the stack Isn't that what you wanted it should follow the lifecycle management for virtual functions from open stack You have every bit of software we have every bit of functionality the f5 has you have in your open stack cloud today supported through open source orchestration So whether we're talking to you about big old multi-tenant services like lbaz or lbaz v2 or taking over the else L3 router later this year or moving into the firewalls of service for the perimeter all those multi-tenant infrastructure services Or whether we're talking to you about single-tenant application deployments of your ADCs It's all there You have every bit of functionality we have and again it was all exposed Through open stack means because after all these years we finally figured it out And I'm very pleased to say All these solutions are open-stacky it's open-stacky because Thank God Took a long time, but we're all in Questions So so he asked a question about the ve if neutron breaks same exact analogous picture to your old data center if your switch broke This is why you have ha if you notice in the heat templates we use to launch our ve's We actually give it a parameter for let you put it in an availability zone So if you've set your availability zones properly, we'll make sure the ve's that are ha aren't aren't on the same Hypervisor so if that neutron instance goes poof If that that agent decides then that's that soft switch decides to go away It's the same case as you would in a physical data center if the switch went away and we failed over Make sense Any other questions anybody want to talk about anything hard we should be doing? Yes, sir So Mike asked about setting up users in f5 and the answer is heat will follow the authorization model the individual f5 things set Up as in the tenants themselves those are autonomous Those are autonomous to the tenant and there's some good reasons to have them be such on the multi-tenant stuff We need to talk there's some stuff coming but for the single tenant pieces those belong to the tenant Does that make sense their idea of what authenticates and what doesn't needs to belong to the tenant? Okay How does licensing work? It's a wonderful question. You just saw it's blitz right through that We have both at scale which is what we call our internet sass licensing Which means the boxes go out and talk to activate that f5.com and we have this thing called It's a pool manager. It's a pool license manager that gets set up as part of your infrastructure They heat templates themselves support both type of license orchestrations So if you decide to put in a base key so it's bring your own key And it goes against our sass service that works as part of the orchestration if you have it can point me to the license Server in there you put in the license server destination You tell me what pool you want it to be part of the heat template licenses the device right from there So all of the license orchestration in both license activation types f5 support are supported in our heat templates Does that answer it? You want us to do that. You don't want to do that. Yeah He wants us to pay for it too. Well, you know All things can we make the license server highly available? Haven't yet, but that would be heat template thing on my side Sounds like something you and I should fork the repo and get working and then we could give it back to all of these guys Because that's what it means to be all in that means Mike and I can make this happen Means I can go to you with the smart design I can fork the repo get it to work the way you want it to work and we can push it back up through the repo So we can give it to the rest of everybody else That's pretty cool We're waiting to do that for a long time Well, if that's it, I've got 50 seconds. I can give back so in 50 seconds. I'm just gonna throw hats Anybody rather have a kushmall. Whoa Hands up. Oh Got a question. Sorry. I'll see if I can do this both at once Yes Not yet But again something we could fork and something we do we have we have a couple at CD type integrations that are doing the exact Same thing there should be no reason we can't get that to work Everything is exposed through an API those APIs can you can follow the exact way? We're doing through our templates to get it to work Let's talk about what you want it to do and again, we can push it back up That's the power of what our culture change meant is that you and I can have that conversation. I think that's it