Blockchain Cryptocurrency & Smart Contracts W/ Ryan Orr Chairman & Co-Founder of Chronicled

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Ryan Morfin:

Welcome to Non-Beta Alpha. I’m Ryan Morfin. On today’s episode, we have Ryan Orr, the founder of Chronicled, talking to us about digital assets. This is Non-Beta Alpha. Ryan, welcome to the show, thanks for coming on.

Ryan Orr:

Hey, thanks Ryan.

Ryan Morfin:

Well, I wanted to ask you a little bit about blockchain and cryptocurrency and where it’s going and talk a little bit about your company on today’s episode. Maybe, could you tell us, where is blockchain today?

Ryan Orr:

Sure, yeah. We’re 10 years into what’s going to be a multi-decade renaissance with this new technology empowering a whole host of new blue sky type use cases and possibly also transforming mainstream financial services and many other industries like buying your tickets for an airplane or watch video content, could transform the backend of the file storage industry and be a real competitor to AWS and Google Cloud. So yeah, a lot is happening. It’s finally at a point where the projects and the teams are maturing, that we’re starting to see some real adoption and a big challenge the last 8 or 10 years. It’s been figuring out the infrastructure and with the Parity Substrate project, the Filecoin project, with things like Chainlink, which is a network of Oracle’s to connect real world data about weather or stock, trading histories on different stock exchanges into blockchain networks. A lot of that infrastructure now is available and so applications and things that you and I can experience on our mobile phones, new kinds of applications are really starting to become possible and I think the next five years will be very exciting in terms of the growth of the space.

Ryan Morfin:

You said the space is starting to mature. Is it starting to get a standardization in terms of approach and like you said, the infrastructure is starting to get systematized globally? Or is it still fragmented like the Japanese and Chinese do it one way, the Europeans and Americans do it a different way?

Ryan Orr:

Yeah, still highly fragmented and still rapidly evolving. It’s probably the fastest evolving technology space that I’ve ever been involved in in my lifetime. The generations from Bitcoin to Ethereum, SmartContracts platforms to revisions of Ethereum’s SmartContracts platforms. Now with Parity Substrate and Polkadot. The Darwinian competition and the half life of these projects has been very compressed and so it’s been frankly, a lot of carnage in the space as the next generation of technology is disrupting the prior generation of technology, which was only 18 months old and so yeah, still highly fragmented in that regard but we’re starting to see the building blocks of information sand maybe some real winner just beginning to emerge. Of course we have Bitcoin from 2009, 2010 and everyone knows about that but using the technology, its backend, might eventually become available through something like Charles Schwab, is still in its nascent stage.

Ryan Morfin:

I remember early on, electronic medical records or financial files, things like that, are all potential use cases. Maybe you could talk a little bit about Chronicled and how you guys are using blockchain to provide value to supply chain.

Ryan Orr:

Sure. You bet. So the way a supply chain works, you have, in the pharmaceutical industry, manufacturers of prescription medicines, then you have wholesalers, who have regional warehouses that keep thousands of SKUs, basically, in inventory. Then we have hospitals and pharmacies who are dispensers of prescription medicines and it’s a relatively standardized, routinized flow of you have the product moving down the chain and then you have all of these documents like POs and invoices and chargebacks and rebates and credit memos and recalls and then you have got a payments layer on top of that with payment for these products moving back and forth in the supply chain, typically via wire transfer with someone like JP Morgan. So with blockchain supply chain, we’re compressing all three of those layers and we can track the product moving, manufacturer to wholesaler to dispenser, all those documentary flows can be automated and then the credit transfers can be automated and basically keeping realtime credit for each of the trade partners in the supply chain and then they can settle up once per month or once per quarter via maybe conventional fiat currency transfers with JP Morgan.

Ryan Orr:

So basically automating the cross-company business processes, which used to be done by email and EDI and a lot of headcount in middle offices and back offices of these companies, so we’re creating protocols that are like business rule enforced standards that the blockchain is enforcing each transaction to follow the rules that the companies agree upon for all of these different workflows and yeah, the potential is to automate the backend of the supply chain of a major industry and potentially then many major industries.

Ryan Morfin:

And that’s interesting. I mean, I think I understand it but is that going to reduce headcount in some of these companies to make it more streamlined, it all lives in the cloud and it’s all encrypted so that humans can’t mess it up?

Ryan Orr:

Correct, yeah. It could be a significant efficiency gain for a company that might have hundreds of thousands of people reconciling manually chargeback transactions and if that’s automated… The last 10 or 15 years, a lot of the focus within corporates has been on efficiency within the four walls but cross-company business processes are still the wild west. There’s never really been a platform to automate across company because of the trust gap between the companies, so you had to do a lot of manually checking and verification as emails would come in, in invoice or PO or something but if that’s a protocol that’s blockchain enforced, we can automate the cross-company flows and trust the blockchain enforced [inaudible 00:07:16] rules and it’s a whole new efficiency gain for the big corporates that have supply chains.

Ryan Morfin:

So CFOs really need to get up the curve on this because this is going to really impact AR and AP departments in the future.

Ryan Orr:

Correct, yes.

Ryan Morfin:

Very interesting. I think it’s fascinating what could come of it. You mentioned earlier, settling up maybe once a month or once a quarter going from crypto to fiat but are cryptocurrencies moving, you think, in the next 20 years, 50 years, 100 years, to replace fiat and what’s driving that conversation right now?

Ryan Orr:

Yeah. That’s a great question. I think that we’re at a level of maturity with the technology that central banks are looking seriously are issuing digital fiat or digital tranches of the fiat currencies. Certainly China’s very far ahead in that regard and the whole conversation around a cashless society has really picked up momentum with COVID. Cash is quite expensive to move around and it can be dirty and can cause public health risks. A lot of people, at the same time, are quite nervous about losing cash in the society and that’s a whole different conversation but certainly in places like China, they’re sprinting aggressively towards digital, cashless and issuing digital tranches of the currency. That could be quite interesting from a systems management standpoint, say if you’re at the Fed, because you’d have visibility into that true velocity of money, all the transactions.

Ryan Orr:

If there were analytics available on the velocity of money through the economy… We can’t really see that today. The Fed doesn’t have data on how money flows through the economy so it’s hard to know what true economic activity at a micro level really is. There are these macro theories and then micro, black box, what’s getting on in the economy but if you had analytics, you could see that. There’s also the possibility to tax every transaction like a VAT in an automated way, and do away with the income tax, which would be much simpler. There’s also the possibility to do helicopter drops of currency from the Fed directly to everyone’s digital wallet in the society and to bypass the banks who take the big blocks of money from the Fed window and go off and trade it and use it to support hedge funds and you see the stock market go up every time the Fed prints money and you wonder about the linkage between those two events.

Ryan Orr:

So if the Fed was able to do helicopter drops directly to everyone’s wallet and bypass the commercial banking system, a lot of people think that that could be advantageous, or at least it would be a new method of quickly providing stimulus. In the case right now, they’re trying to drive inflation. This would do it because it would be-

Ryan Morfin:

Yeah.

Ryan Orr:

Yeah. So digital fiat is probably coming. Central banks are experimenting with it. China’s probably the leader to watch. There are a few other smaller economies. There was a bill, end of the Congress, I think a week or two weeks ago proposing such an idea. I don’t recall the number on the bill but I’m sure if you looked on Google, you could find it. It’s not couched as a cryptocurrency bill but this would be the technology that you’d have to use to implement such a thing.

Ryan Morfin:

What are the arguments for keeping cash? I mean it’s not intuitive to me. What are people saying about that?

Ryan Orr:

I think it’s people that don’t want to be monitored and Big Brother and privacy and fear of being totally locked into a system that if there was ever severe misuse of data about our transactional activity, that could be compromising to each of us as individual human beings. I guess liberty, freedom and trust of big institutions.

Ryan Morfin:

That’s interesting because I think the other side of the coin too is, how good is the cybersecurity and the encryption in the future where quantum computing may be not too far from the future?

Ryan Orr:

Yeah, there’s certainly concerns that in a quantum world, proof of work blockchain like Bitcoin, it might be possible to gain all the compute power on the network and do a 51% attack and basically compromise the integrity of the network. Up to this point, the defensibility of the Bitcoin network has been a huge investment in ASIC miners positioning those ASIC miners close to cheap sources of electricity and it’s very energy consuming, so you’d have to find either vastly cheaper energy or you’d have to vastly improve the speed of the computing and quantum computing would do that on the compute side, if you wanted to try to aggregate greater than 51% position in the network or just have a vast amount of money and buy your way in. I mean, it’s a multi-hundred billion market cap now so I guess… But the problem is, if you do that, if you try to buy Bitcoin it causes the price to go up, so it’s maybe much more expensive than it looks to just try to buy your way into a 51% position.

Ryan Orr:

So yeah, quantum’s a risk for sure. At the same time, within the community there’s a lot of work on post-quantum revisions to the protocols to basically extend the complexity of the cryptographic hashes and the different algorithms so that you’d need mini orders of magnitude additional compute that would keep up with the advances of the quantum compute race, if you will. So probably with the post-quantum cryptography, you can address that concern and transition through such an event should it occur.

Ryan Morfin:

I think that’s 100% right. I think as we move into the quantum age of computing you’re going to have that compute power to also come up with new technologies for cryptography. How far are we from that, do you think? How far are we from the dawn of quantum computing? Do you think we’re close by?

Ryan Orr:

You could check out Rigetti Computing and join their mailing list if you want to track that project. There are a couple of other projects that are quite advanced as well. You hear of things that vary in tone from, we’re quite advanced to, we’re still early days. I’m not an expert in post-quantum, sorry in quantum computing, apart from kind of just reading in the consumer news. I’ve a few friends that are invested in the space and track these projects closely. So I hear a little bit from them sometimes. But even from them it’s kind of hard to discern if we really are making substantial progress and headway or if it’s still kind of fundamental R&D that we’re doing. For example if you’re trying to build a quantum computer on the theory of…

Ryan Orr:

There’s a theory that was created that was the basis of the atomic clock in the way that you keep time with a zero or a one with crystals. That same approach can be used to create zeros and ones at kind of a quantum level and a whole new basis for the computer. Is that R&D actually progressing so that you can harness that new method of creating zeros and ones? Or are we kind of somehow stuck in some part of the process of rebuilding the very base level of the computer? It’s something to watch. I can’t share much more than that.

Ryan Morfin:

Well what about… You sort of mentioned China, that they’re ahead of us in terms of central banking and digital currency. What are they doing? What makes them ahead of us?

Ryan Orr:

They have national programs that recognize the potential of blockchain. That kind of in conjunction with very large monopoly players like WeChat, ubiquitous use of WeChat through the society for payments, for e-commerce. I think they’re just more programmatically focused on exploiting this new technology advantage in the society, in the economy. Or at least experimenting with it at scale. And so compared to the US where we’ve got a patchwork of regulation, a lot of crypto experiments maybe at an individual company level but nothing to the kind of programmatically coordinated… Maybe not to the same extent coordinated in a programmatic way with large governmental institutions.

Ryan Morfin:

And that’s possibly because they’ve got central planning to some extent. Do you think we should do that as a government here in the US? Should we try to create some standards around this to take advantage of it? Or do you think the private sector is going to have to get organized to try to embrace the productivity gains from this?

Ryan Orr:

I think that the government probably should get involved, if this is a direction that the world is moving, going beyond just the regulatory function through the SEC and the CFTC and the other regulatory agencies to actually experimenting with the technology, becoming familiar with what it can do. Starting to build expertise and hiring personnel with real technology expertise. It’s coming and so you probably don’t want to have your head in the sand.

Ryan Morfin:

That makes a lot of sense. That makes a lot of sense. Well you mentioned you want to be near cheap energy if you want to do mining or quantum. But doesn’t Bitcoin consume a lot of energy? How is that maybe healthy from a climate standpoint? Can that be synergistic?

Ryan Orr:

Yeah, Bitcoin does consume a huge amount of energy. With climate risk and sea level rise and so forth upon us, it’s not clear that Bitcoin’s a healthy contributor. Unless all of the energy sources that were running the Bitcoin network or true renewable energy, if we’re hooking up Bitcoin miners to coal fired power plants, there would be a direct contribution of the Bitcoin network to greenhouse gases and so forth. So I think Bitcoin could be a clean, green network. It could be a very dirty network depending on what types of energy sources are being used. The positive thing about the Bitcoin network is I think it creates a great incentive system to innovate on lower cost forms of energy. Because if you have cheaper energy you can mine more Bitcoin. And so in the same way that the DARPA Grand Challenge was an incentive system to drive an autonomous vehicle across the desert in Nevada about 10 years ago, and that led to the whole autonomous driving movement, which is becoming a real thing now, the incentives created by the Bitcoin network, I think will possibly lead to real positive innovation and low cost renewable energy.

Ryan Orr:

The old public utility model, with guaranteed 10% return on the rate base, that was not an incentive system for innovation in terms of cheap capital base to create cheap, low cost, renewable energy. It just wasn’t an effective incentive system for where we want to go with humanity. Bitcoin may be a DARPA Grand Challenge or Nobel Prize type of incentive.

Ryan Morfin:

That’s fascinating. That’s fascinating. It’s a byproduct because it’s going to drive really wealth creation by getting your energy costs lower than the competition. That’s very interesting. That’s very interesting. So can you talk a little bit about proof of stake, blockchain models and what’s an alternative to proof of work models?

Ryan Orr:

So proof of work does use a lot of energy. It’s also part of the security of the network, because it would be hard to replicate that much energy to 51% attack or to create an alternative network that would be as secure. So it’s a very positive part of the security model but moving beyond proof of work, there are different proof of stake configurations that have been experimented with for five or six years now that are really gaining adoption and usage and basically, it’s a protocol whereby all the different holders of the token are staking the token and that contributes to the security of the network and in return for providing that staking function, which contributes security to the network, the protocol pays those individuals some protocol inflation or yield and so you can actually make 5 to 10% cash yield, which is a lot better than a municipal bond or a treasury bill, for providing this valuable function of staking your crypto token to contribute to securing the network. Yeah, there are probably a dozen or two dozen projects yielding north of 5 to 6% for providing this stake.

Ryan Morfin:

What does someone have to do to provide that service, a staking function to help the security of the network?

Ryan Orr:

Buy the cryptocurrency, run the software to basically stake the currency from your wallet and typically that involves running a full node or being connected to someone that’s running a full node to be able to perform the staking. Maybe in some cases, a little bit of IT expertise.

Ryan Morfin:

Given that the security’s evolving, getting better, do you think cryptocurrencies and digital assets are a good investment opportunity today?

Ryan Orr:

The space is certainly continuing to grow. I’ve been following it closely for almost 10 years and we’ve been trying at Chronicled, to leverage blockchain for real world use cases and applications but I’ve certainly been watching this wild west of cryptocurrency evolve and go through many different stages of Darwinian evolution and it’s a space where the growth rates for some of the projects can be a lot like the returns of investing in oil and gas or mining exploration or pharmaceutical drug discovery where there are many different examples of 50X, 100X returns on early investors into projects. It also tends to be highly volatile, however, and so you really have to manage that volatility risk carefully. There’s also, frankly still because it’s very much a wild west type environment, in projects around the world and those can be accessed from an Internet portal, so it’s not like a single regulatory regime.

Ryan Orr:

You can access things that are regulated in Malta or in Seychelles or Hong Kong or Singapore or other parts of the world and you may not necessarily, as a retail investor, know what you’re getting yourself into and so certainly you can find plenty of Ponzi schemes and rug pulls and frauds and you read about then every day on CoinDesk and you do need to be very careful.

Ryan Morfin:

It’s interesting, Square and Jack Dorsey came out with some news, can you share that with our viewers?

Ryan Orr:

So Square just committed a substantial portion of their corporate treasury reserves to Bitcoin as a new component of the Square treasury. There have been a couple of other companies that have made similar announcements. I think if that picks up as a trend, that likely drives the Bitcoin price quite a bit higher. I think that there could be, with US dollar environment, with additional stimulus, the dollar could drop down another leg if people are flocking to gold. There’s been a lot of talk if Bitcoin… if corporate start to put 50, $100 million blocks of treasury reserve into Bitcoin, that would be the impetus, I think, for our next move up.

Ryan Morfin:

What are some of the top coins globally that you think are the most stable or the most sought after?

Ryan Orr:

The top 10 is always evolving, just like the Dow, the top 30 on the stock exchange continues to dynamically evolve. Ripple has been a big project with connecting all the banks with XRP cryptocurrency. The Ethereum project is, I’d say, quite beleaguered now trying to launch Ethereum 2.0 but from a performance and scalability standpoint, it’s really struggled. The new kid on the block that could be a replacement to Ethereum is Parity Substrate with Polkadot network, which if you want to get into the nitty gritty technical, you could look up the concept of heterogeneous sharding, which is in contrast to Ethereum’s homogeneous sharding model and possibly that’s a pathway to mass scalability and high performance of all the different apps running in the Polkadot ecosystem.

Ryan Orr:

The EOS projects is another project that’s tried to offer an alternative to Ethereum with better performance characteristics but it still, I think, edges 30 or 40 transactions a second. You can go on their blockchain explorer and keep track of how the network is running from a transaction per second standpoint. I think Ethereum’s down to .4 transactions a second now. It’s a far cry from thousands of transactions per second that you’d need to run mainstream economy use cases. So its infrastructure issue has been beleaguering, slowing down the progress of the space. Let’s see is Parity Substrate with Polkadot, the interoperability of many different blockchains in an ecosystem to support many different use cases can be a solution. Other projects that are exciting.

Ryan Orr:

A lot of people like the Algorand project from a staking standpoint. It provides a staking yield. Filecoin just launched and could be the backend of file storage. It’s exciting because in the present model, all the people that want to use a music file would probably have it locally, unless it’s streaming of course, but traditionally a lot of files end up with 100 different people all have the same copy of the file. Basically Filecoin allows us to have a single content addressable address on the network for a file and then hundreds of people can all access it from that location. It’s really a sharing model for sharing files and has a huge amount of momentum. It launched just a couple of days ago. It’ll be really interesting to see how the ecosystem evolves. If you go on YouTube, you can watch probably 100 different videos that the Filecoin community have created over the past 30 days. I mean the pace of app development within this ecosystem, I think there are probably 400 different storage miners.

Ryan Orr:

To contrast it with Bitcoin, it’s proof of work mining [inaudible 00:29:43] electricity, in the case of Filecoin, you have to prove that you’re storing files and prove that you’ve continued to store the files in order to win the block reward and you’re actually doing a very valuable function for society as opposed to just consuming energy and so a lot of people are really excited about Filecoin and it being a really positive way to secure one of these networks in terms of doing something useful for humanity, which is incentivizing sharing, which in a selfish world is not easy to overcome. It’s not easy to overcome selfishness.

Ryan Orr:

So if you have one of these networks incentivizing sharing, you get compensated for contributing to a network that facilitates sharing of files and content and maybe eventually you can meter access with micropayments to video or to other types of files and you’d end up with a whole new economy for accessing content on top of Filecoin. Maybe eventually a whole new component of the Internet that would be tens of thousands of websites that would run on this decentralized backend without file servers where you can have censorship on a file server, you can have Big Brother watching, Google, Facebook, surveillance economy that people are nervous about, could all of that be replaced with a decentralized backend and a whole new way of building websites on a whole new decentralized backend. The company that’s trying to offer a gateway to the Filecoin network to quickly and easily host a website on this new decentralized backend is called Fleek. F-L-E-E-K. The other two infrastructure providers in this network that are really catching on, one is called Textile and the third is PowerGate. I’ve myself wanted to dig into all three of those in the next week or two to learn more about what they’re doing and what role they could play.

Ryan Orr:

It’s been really amazing, Ryan, the pace of evolution in the last year or so. The 2017 kind of boom in crypto is largely investor driven and maybe the 2001 bubble in the Silicon Valley community with the .com bubble and the stock market. If you think of the 2017 bubble as similar to that 2001 .com bubble and then after that, 2002 to 2007, a lot of the big companies on the Internet like LinkedIn and Facebook were born and then you had the scaling time for companies like Google and I guess Amazon and Ebay and so forth. I would say we’re kind of in that same, maybe 2000… In some ways, we’re in 2001 to 2007. In other ways though, we’re still earlier than that because the infrastructure’s still getting sorted out. So yeah, it’s a really messy space but certainly it’s coming along.

Ryan Morfin:

That’s a fascinating question. We’re either in post DARPA, the Internet is just being born, or we’re in the late ’90s. Is it one of those tow scenarios?

Ryan Orr:

Yeah. I would say we’re certainly somewhere between 1989 and 2004. Different parts of the stack are at different levels of development and if you end up having to redo the whole infrastructure layer because we’re not delivering performance and scalability, that sets back all the application layer stuff but the progress is being made on the application layer, such that when the infrastructure gets figured out, it’ll just be rapid explosion of progress, success, potentially adoption. The other part of the space to watch is the whole identity piece. I mean the big role the banks played was keeping bank accounts for account holders and doing KYC and onboarding humans into the financial system. So in the crypto markets, you basically have dozens of small companies that are figuring out how to do identity verification. It’s called KYC, know your customer. And anti money laundering verifications and using AI on the backend to review people’s social presence and so forth. To confidently onboard individuals into these networks. Eventually that just replaces the role that the banks play altogether.

Ryan Orr:

I mean the banks are using the technology and have contributed to innovating in this area I suppose as well but the banks contributing to it plus the need for it in crypto, there’s going to be some really big success in the identity area. As an investor, I think I would watch closely who those early winners are in terms of aggregating user base because those likely become very, very important players in these new networks.

Ryan Morfin:

Very interesting. Very, very interesting. So the crypto market, you said it’s a few hundred billion of market cap. How big do you think it gets in the next five years?

Ryan Orr:

A trillion?

Ryan Morfin:

And if the banking system start to embrace it or China starts to issue digital tranches, is this a way for China to maybe move past the US dollar hegemony that we have today in international trade and oil prices?

Ryan Orr:

Yeah, there’s been speculation that this could be a strategic maneuver in terms of maybe breaking the strength of the dollar. I’m not sure I’ve seen any validation of that idea yet. I think that a lot of people like to hold gold. More people are holding Bitcoin in concert with gold as a [inaudible 00:36:14] value in terms of protecting against inflationary monetary policy. I think that digital tranches of the currency probably start in a relatively… Let me pause there. I’ll turn it back to you. We [inaudible 00:36:40] just three or four minutes. I was going to go into something that would take a little longer, so-

Ryan Morfin:

Well maybe we’ll have you come back on and explain that next piece. No, I think it’s interesting from an asset class, Schwab, Fidelity, all the big custodians are starting to embrace digital assets and figure out how to custody these assets. We had a speaker on from London who does a lot of the custody of digital assets. As you guys are creating that infrastructure layer and the protocols of the winners, we’re starting to see the banking community and the custody community start to dip their toe in the water, I guess, because a lot of clients are holding it and they’re holding it all over the place, so they’re trying to get a standardization. It’s interesting. It’s definitely top of mind. I think the SEC is starting to put together some regulatory frameworks for financial advisor and wealth management firms of how we should be interacting with these assets and so there’s still a lot of to be desired from a government standpoint. I’m hoping the government does come in with at least some visibility, embraces the industry, brings people like you in to help write the laws that will govern it but it is definitely a growth asset class.

Ryan Morfin:

I was going to ask you, we have this final part of the show here called the human factor and it’s where we go ahead and ask you six questions real quick. They’re usually yes or no but if you want to put some context around your answer, by all means. So the first question is, would you take a COVID vaccine if it was available today?

Ryan Orr:

If it was through stage three trial and it was science supporting it, yes.

Ryan Morfin:

Who do you think wins the election in November?

Ryan Orr:

I think Biden’s probably the favorite at this point.

Ryan Morfin:

What type of economic recovery are we in today? Is it V shape? U? K?

Ryan Orr:

Gosh. It’s V so far but it’s very hard to predict what the next leg is going to look like and that’s going to be driven by stimulus and Fed action and that’s ultimately a congressional negotiation and may depend on the election.

Ryan Morfin:

I totally agree with that. Is there anything you achieved this summer that you’re particularly proud of while you’ve been on quarantine?

Ryan Orr:

Doing a lot more hiking and spending more time with the family.

Ryan Morfin:

Where are you hiking at?

Ryan Orr:

San Bruno Mountain is a lovely hiking spot. I go out to two or three of the other State Parks in the Bay Area. Yeah.

Ryan Morfin:

That’s awesome. Are there any silver linings that you see in the US economy for 2021?

Ryan Orr:

I think that the economy hasn’t quite functioning. Because we’re all at home, people feel that things have changed so dramatically but people are still buying food, they’re still doing the essentials and the basics. Some people have been affected by COVID but for the most part, 99. Something percent of people are healthy and contributing to this digital economy through these devices that Apple and other providers have made available to us. It’s a very different kind of an economy and I think more study needs to go into what has become the economy but I’m actually kind of less [inaudible 00:40:25] that just because behavior has changed, that the economy has been wrecked or ruined. I mean people are still smart, they’re still engaging in entrepreneurial activity.

Ryan Orr:

It’s evolving and shifting, surely, and a new digital core of the economy is becoming the backbone of it but I mean, if we all lived in outer space and we all lived in space colony type housing and we didn’t have shopping malls and you couldn’t go out, that would be, I guess, a place where the kind of an economy that we have now would… It would be normal and so maybe it’s partly our own human expectations about what the economy should look like based on what it’s looked like in the past and we’re evolving as a species. Our economy is evolving. The same number of smart human beings with creativity an economic activity, it’s all still there.

Ryan Morfin:

There’s a lot in that answer to unpack but that’s a whole other show. We’ll maybe take you up on that. That’s fantastic stuff. Anything you’re watching or reading or listening to today to help you form your global view?

Ryan Orr:

I’ve always been an Economist reader. I love to read CoinDesk. Maybe those are the two that I spend the most time on.

Ryan Morfin:

Do you listen to a podcast or are you still reading books? You listening to books?

Ryan Orr:

I do a ton of YouTube videos.

Ryan Morfin:

Interesting.

Ryan Orr:

Yeah, I’m constantly on YouTube every day.

Ryan Morfin:

Are you watching technical discussions about different technology conversations or philosophy? What are some… That’s the first answer I’ve had for YouTube videos.

Ryan Orr:

All of these blockchain projects have communities and the communities are releasing videos and so that’s… The old idea of industries I think will be replaced by the new concept of ecosystems and ecosystems built around networks and so YouTube videos is becoming kind of a leading way for the people that are establishing these networks, establishing these ecosystems, to put content out and communicate and yeah, if you want it straight from the founders and creators, that’s where you go and they’re [crosstalk 00:43:05]-

Ryan Morfin:

Fascinating.

Ryan Orr:

… as well.

Ryan Morfin:

Well, Ryan, what’s the website? Where can people find you and follow you online?

Ryan Orr:

Chronicled.com is the business that I’m working with a team of co-founders, I’m building. I have a personal Twitter. I’ve never been a big Twitter user but I guess you could always contact me there.

Ryan Morfin:

Fantastic. Ryan, as usual, every time we talk I learn so much. This was fantastic. I took a lot of notes. I’m on page 10 right now. That doesn’t happen often but this is an emerging space and I think people in our industry need to wake up and start to pay attention to it. Thank you for coming on and sharing a little bit of your insights.

Ryan Orr:

Hey, yeah, you’re welcome. This was a lot of fun. Look forward to the next chance to connect and interact. Really admire what you’re building with Wentworth and anything that I can do to help your team or network, look forward to doing so.

Ryan Morfin:

Thanks a lot. Speak soon.

Ryan Orr:

Take care, bye-bye.

Ryan Morfin:

Thank you for watching Non-Beta Alpha and before we go, please remember to like and subscribe on Apple Podcasts and our YouTube channel. This is Non-Beta Alpha and now you know.

 

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Ryan Morfin: Welcome to Non-Beta Alpha. I'm Ryan Morfin. On today's episode, we have Pini Althaus, CEO of USA Rare Earth, talking to us about the supply chain glut in rare earth minerals. This is Non-Beta Alpha.

Ryan MorfinPini, Welcome to the show. Thank you for coming on today.

Pini AlthausThank you for having me, Ryan. Good to be here.

Ryan Morfin: So you're an investor and a miner in rare earth minerals. Can you share with our listener base, what are rare earth minerals? Why are they important and why is there a geopolitical race going on globally?

Pini AlthausYeah, I mean, rare earths are an extremely ubiquitous part of all advanced manufacturing or technology manufacturing today's day and age. Several years ago, I had not heard too much about rare earths myself. I was not that familiar with it and being involved in this sector, in this company, for the past few years has given me an education of course. And I mean, I was sad to hear that 50% of all imports into the United States contain are earth elements and it runs the gamut from consumer electronic devices that we use every day. Our cell phones, our laptops, most communication devices, medical equipment. So there's a tie with COVID, which we can touch on at your discretion. Electric vehicles, defense equipment. So pretty much anything or everything high tech today has a rare earth element or critical minerals contained within them.

Ryan MorfinAnd what are some of the names of some of the more important rare earth? I know there's lithium for batteries, but what else is considered in this category, critical?

Pini Althaus: Yeah, so lithium is a separate category to battery material. The rare earths are 17 rare earths. The four, let's call it, key rare earths that we're focused on at our company, the four rare earths that go into the permanent magnets. And these are the magnets that are found, there are a number of them in your back of your cell phone or an iPad. But if you look at an F35 striker jet, you've got about a ton of rare earth magnets in those. And we've got two heavy rare earths and two light rare earths is part of the permanent magnets. You've got dysprosium, ytterbium are the heavies, and then you've got neodymium, praseodymium as the two light rare earths. So those would be key rare earths that are the focus.

Ryan MorfinAnd you use these in, I guess, in military applications as well, but historically, where has the United States sourced the rare earth for supply chain?

Pini AlthausYeah. And that's the shocking part. We've been securing those materials from China. So China controls the rare earth sector and has done so for the past 30 years or so. And it was a significant misstep on the part of the United States, allowing China to have this control. And actually this wasn't a question of China coming in and doing anything nefarious as far as stealing IP or anything. The US government made a conscious decision about 30 years ago to allow China to come to the United States and acquire the processing capabilities for rare earths. So just as part of some background, you've got the rare earth materials containing various mining projects, but once you extract them, you have to then process them and they go through certain phases before they get to the magnet phase. And China, the thought process was let China do the mining, let China do the processing.

Pini AlthausWe don't need to do that here. And we'll buy the materials from China cheaply and the premier of China at the time, Deng Xiaoping made the comment, he said, "The Middle East has oil. China has rare earths." And unfortunately we weren't smart enough to understand what he was saying. And the Chinese understood that the future of manufacturing is going to revolve around control of the rare earth and critical mineral supply chain. So if you think about it today, Ryan, we cannot build... Forget about consumer electronics and medical equipment. We cannot build the equipment that the US Pentagon or the US armed forces require, whether it's F35 fighter jet, Tomahawk cruise missile, communications equipment, without going to China and obtaining those materials. And it's obvious to all that this should be extremely alarming. We've seen China use this as a weapon, if you will, as far as how it interacts with other countries back in 2010, when there was a dispute between China and Japan on the East China Sea.

Pini AlthausSo China cut off rare earth exports from Japan for 40 days. Japan obviously being a significant user of rare earth elements for their high-tech manufacturing sector, that was stopped after 40 days. But in fact, it was President Obama that first made the United States aware of this, formed a division within the Department of Defense to handle this issue, but not much has happened. And we continue to be relying on China for these materials. And what has been made about trade war with China and whether the trade war is really the impetus for China withholding rare earth exports. And that is a huge misnomer. Whilst China had been talking or implying that they would cut off rare earth exports, the truth of the matter is that China, under it's made in China, 2025 mandate, its belt and road initiatives and others. And you seem to control the critical minerals and rare earth supply chain so that it can continue its dominance as a manufacturer or a global supplier of these materials and finished products.

Pini Althaus: It's the backbone of its economy. And in fact, China has become a net importer of rare earths from different countries like Miramar and others. So with that, they are decreasing the exports to countries like the United States, Japan and others.

Ryan Morfin: And was it ever a risk that the Chinese were going to turn off the exports of rare earth to the US during the trade war? How close were we to that? And was that ever some saber rattling that went down during trade negotiations?

Pini AlthausYeah, I think it was saber rattling. I think it would be paramount to an act of war. I can't say with any authority that that would not happen, but it would be probably, aside from war itself, it would be one of the most significant acts of war cutting the United States off from the ability to procure rare earths. But that being said, I mean, if you look at, as an analogy, the oil and gas sector and the reliance of the United States had for many, many years on OPEC countries to supply us with the oil. And we had embargoes and we had price manipulation by OPEC. This is far more significant given the ubiquity of where these rare earths go. And yes, we're always under the threat that China can cut off exports under the guise of a trade war or for any other nefarious reasons.

Pini AlthausBut I think even more importantly, to just as the natural run of the course of things with regards to their business and their desire to maintain themselves as the global leader in manufacturing and exporting of goods, China is in a position now where it actually requires these materials for their own domestic consumption and can legitimately cut off rare earth exports by stating that they need it for manufacturing and that would actually be somewhat correct. So we're in an extremely dangerous position here with this reliance on China. And it wouldn't just be China. If it was another country, it would be similar issues, not to the same extent, but reliance on one country for these materials is dangerous.

Ryan Morfin: And it's been mentioned in the past that in 2010, China flooded the market to really kill all the competitors in the rare earth mining industry. Where was the World Trade Organization during this period? And how did that play out and how does that set the chess board for China to run the tables?

Pini Althaus:

Yeah. So the WTO stepped in when China cut off rare earth exports from Japan, I think it lasted for about 40 days because the US and Japan protested the WTO, and they stepped in and China resumed exports. While I'm not an expert on these trade matters, one thing that I am aware of is that one of the reasons why China had to resume the export of rare earths was it did not legitimately need all the rare earths for domestic consumption. So therefore it was a nefarious act, if you will, to cut off rare earth exports. Now that has changed, which means China have to cut off rare earth exports today, they have a legitimate case to say that they require these materials. There's a shortage of these materials and they require them for their own domestic purposes. It is the backbone of their economy and there's very little we could do about this today, which is why it's becoming an even more urgent issue.

Ryan Morfin:

And the US government started stockpiling some of these after that incident. Can you talk a little bit about what DOD and DOE has done to start making sure that there's not a critical supply shortage going forward, and is it enough?

Pini Althaus:

Yeah, again, there is a national defense stock pile, and there are materials still that the United States needs to procure in order to shore up its stockpile. There are magnets, the finished magnet products as well, the United States government needs to stockpile. Again, there's a limited amount that the United States government has. It requires approval from Congress, whether it's in the NDAA or other approvals from Congress, to allocate monies for the national defense stock pile of these materials. That being said, there's no endless supply of these materials. And unfortunately, the apparatus, the way it's set up right now with the US government, it's going to continue to require having a secure supply chain of those materials for many, many years to come. So it's not a question of stockpiling for 10 or 20 years, and then this complacency and saying, we'll kick the can down the road. But keep in mind as well, Ryan, that US government accounts for low single digits of overall rare earth imports into the United States.

Pini Althaus:

We're talking about defense contractors, we're talking about the manufacturing sector. The direct impact this has on the economy, jobs, the automotive sector, and others is significant. So it's not just limited to the United States government. If you look at over the past couple of weeks, the sanctions that China have put on Raytheon, Boeing, Lockheed, et cetera. I mean, the question is where are they going to get those materials? And if we go beyond that, you need rare earths for the 5G network. Now that Huawei has been banned from installing the network, not only in the US but other countries, we have to have the ability to get a secure supply of these materials as well. Which currently, again, trying to control the hundred percent. So it runs across the board, both for government, defense and manufacturing in this country.

Ryan Morfin:

Well, and so help me paint a picture for our audience. Does China have all the mines for rare earth, or they're the only ones who started mining it? Or are their mines globally dispersed and nobody's been doing the actual infrastructure to do the mining?

Pini Althaus:

Yeah. So finding rare earth projects or rare earth elements is not the difficult part. It's finding them in significant quantities that makes a project economically viable. And part of that consideration are the environmental rigors that companies in the West have to adhere to. And China, even by their own admission, have had a complete disregard for mining these materials and even for processing these materials. And in fact, just the last week or so, the BBC did an expose on this, 60 Minutes has done an expose on this. But the Chinese have not denied this and have talked about cleaning up their act, but it has an effect on the bottom line for what the costs of mining and processing are if you have no environmental standards to adhere to. So China have exploited those rare earth projects they have, primarily in inner Mongolia, and have brought a number of projects online and quite quickly, and in a significant way, with a complete disregard for the environment.

Pini Althaus:

So it was seen as an environmental no-no in the West for many years. Now, what's happened over the past few years is you're starting to see rare earth projects in different parts of the world sprout up. You've got the Mountain World project in Australia owned by Linus, which is a producer of Nd and Pr, neodymium and praseodymium. So two of the light rare earths. They may have some heavy rare earths coming online at some point in time. And you've got Arafura, which is another company in Australia that we're working with to assist them with their processing so they don't have to send the materials to China for processing. But really these are a drop in the bucket for what the requirements are for the United States. And certainly what the requirements are for allied countries, the EU, et cetera. So there is a race, if you will, worldwide to start bringing projects online. The Chinese are very active in trying to secure assets outside of China.

Pini Althaus:

So in Africa. They have ownership of a project in Greenland. So there is somewhat of a race. The Australian government has stepped in and has started limiting the ability for China to own, or have ownership in, or off takes for the Australian rare earth projects. And that's part of the strategic Alliance between Australia and the US. Canada, similar thing as well. There are a number of projects that are looking to come alive, but these projects are, for the most part, will take many, many years to come online. We have to expedite the process. We have to assist with a [inaudible 00:14:41] supply chain and the domestic rare earth sector, because previously investors have been scared off by things like China flooding the market, which is not a possibility at this point in time, given that China can't actually afford to flood the market. They are already very heavily subsidizing their mine to magnet supply chain there.

Pini Althaus:

This is more now a case of being able to get production from non-Chinese sources so that the United States and allies have a viable, secure supply chain of these materials. And it's a concern worldwide. We speak to governments all over the world, and we're all facing the same issue. Some more than others, especially countries like Japan, that don't have their own rare earth projects there and are reliant on Australia where they've made some investments there. And in the United States, they've made an investment recently in Africa. So there is this race, if you will. And I think we've got a five-year window here to at least stand up a few projects worldwide. Otherwise we've lost this race and we will be dependent on China for many, many years to come. And Ryan, it's a bit of a hypocrisy. If you look at it where you've got materials going through clean, green energy applications, like electric vehicles, wind turbines, et cetera.

Pini Althaus:

That we're sourcing these materials from China, where they've, again by their own admission, has been complete environmental devastation to water bodies around these mines and processing facilities, to the communities. People have been getting sick around these projects yet we're putting these materials into our electric vehicles or wind turbines. It makes no sense at all. And people are starting to wake up to this. And that's why the sector is starting to see a lot of support come out of Congress and bi-partisan support. And in fact, it's one of the only bi-partisan issues right now in Washington. And it's good to see that some things decided to move in the right direction.

Ryan Morfin:

And is there a special process? You talk about the expense, is it really difficult to mine these? You have to go through a special chemical process to extract and clean and purify. Is it a lot harder than, say, gold or silver or some of the other, we'll call, more traditional elements?

Pini Althaus:

Yeah. It's all about the processing to some extent. So if you look at MP Materials in California, which used to be Molycorp before they went through their bankruptcy. They are a miner of Cerium and Lanthanum, which are two of the light rare earths, the lower valued light rare earths. Given that they do not currently have processing technology, they are sending those materials to China for processing where China is tariffing those heavily. Linus is also, they're doing their processing work in Malaysia and elsewhere. So it's really about the processing at this stage. One of the things that we've done, after we put out our PDA last year with our upgraded resource, which now includes a significant amount of lithium. We make a decision that, based on the test work that we had done around our processing methodology, that we were not going to send our materials to China. That it's paramount for us to do this work in the United States and in a collaborative effort as well.

Pini Althaus:

We've been asked by some of our investors, "Well, why would you be looking to help other projects with their processing?" And the answer is simple. There's no one project or one company that's going to put China out of business or make a dent, or somehow be able to take care of the overall demand worldwide for rare earths and critical minerals. And it's very important for us to have processing capability in the West. So that was the impetus for us opening up our own rare earth and critical minerals processing facility earlier this year, which we did in Wheatridge, Colorado. And in fact, we've made some significant progress on the method that we're using for this. And we're starting to collaborate with Australian companies, Canadian companies. We're currently talking to a group over in Europe as well, because this has to be a collaborative effort.

Ryan Morfin:

How does Europe solve for these problems? Do they have this better under control than the US?

Pini Althaus:

No, they're in a far worse position than we are. The EU commission recently put out a report, I think, a couple of months ago that the requirement for rare earths is going to increase tenfold within a short period of time. Lithium 18 times. They don't really have rare earth projects. Again, there are the Greenland projects, which people have heard in the news recently. Those need to further development work so they don't have rare earth projects ready to come online there. There are a couple of lithium projects that are spread around Europe, but for the most part, Europe is in an even more precarious position. If you look at Germany with the auto manufacturers, you look at the big companies like ThyssenKrupp and others, all these countries and companies are looking for alternatives to China, because we've already seen in the news about China withholding or reducing exports of some of these rare earths that are required for these industries.

Ryan Morfin:

And you mentioned earlier the regulatory posture of the US makes it difficult to mine. Is it becoming a more bi-partisan issue that we need to maybe relax some regulation around the mining exercise, to incentivize private sector to come in and start producing this? Or is the Republican party versus the Democratic party on two separate pages of music?

Pini Althaus:

Yeah. Good question, Ryan. I mean traditionally the Republican party is obviously being more pro-mining and in favor of less regulation when it comes to these things. With regards to our project, we're on Texas state land. So we don't trigger federal environmental permitting at this point in time. And obviously Texas being Texas, a mining state and oil and gas state, things are a lot easier in Texas than they are on projects on federal land where the Bureau of Land Management controls the environmental process around that. But the thing is here, and I don't want to step into what other companies are doing, et cetera, but we do need to be reasonable about allowing projects to come online if they're adhering to environmental standards that are acceptable worldwide. And what we do know, is that China is destroying the environment and cities and water bodies around their mines and processing facilities.

Pini Althaus:

We have standards here in the United States, and I think what we need to do is make it easier for companies to mine, while at the same time protecting the environment. And there are ways to do that. And we're definitely seeing buy-in from Congress, from both sides, with regards to looking how we can stand up a secure supply chain. And, obviously under the Obama administration, they had very strict regulations when it comes to mining. And that's changed under the Trump administration. Hopefully what we start to see is some normal middle ground that'll allow other projects to come online.

Ryan Morfin:

And typically in these rare earth mines, is it amalgamation of different minerals that are all consolidated together and you have to separate them out? Or do you ever find pure play, Europium, I can't even pronounce some of these. Gadolinium, Cerium. I mean, are they all mixed together and you've got to filter and sift them through, or are they pure play mines?

Pini Althaus:

No, they're generally they have a mix. So they're polymetallic projects. They have a number of different materials. Some projects, you more to what we call the light rare earths like MP in California or Linus in Australia. Our project is actually on the opposite end of the spectrum. We have a very high concentration of heavy rare earths. That being said, we do have to go through a process of separating these materials. But the case of our project where we've got 30 materials. We're not going to produce 30 materials. We're not going to market 30 materials. So what we're doing is we're focusing on the key materials that are marketable, that we need for permanent magnets, lithium as well, and working on the separation and the optimization of those materials in particular. But we're all faced with the same processing challenges and that is something that can't be set.

Pini Althaus:

There's no easy way to do this. There are different technologies that have been used in different parts of the world. So predominantly there's a process called solvent extraction, but it's big, it's bulky, it's not benign. It's a bespoke solution for one particular project. So it doesn't work for feedstock from other projects. What we've done is we're using a processing technology that's actually been around since the 1940s. It was part of the Manhattan Project. It's called continuous ion exchange. In fact, the Chinese use it to increase the purities from 99.99 to four nines, five nines, and even six nines. So for some applications you require higher purity levels. It's a far easier processing method to scale up and to take feedstock from other projects. In fact, we've demonstrated for the Department of Energy that we can take coal waste from Pennsylvania and do high purity separation of rare earths using our processing methods. So it's not a step that can be skipped unless one needs to send it to China for processing, which is not going to help us with our objectives here.

Ryan Morfin:

How many other, we'll call it, going concerns on any other businesses that are doing this, that are trying to, I guess, start the development of these mines. Are you guys one of a few or are you one of many? And is it an international or just a US game? Who's leading the charge at going after this?

Pini Althaus:

Yeah, well, I'd say the Australians are leading it outside of China right now. You've got some really good projects in Australia. Again, more skewed toward the light rare earths. There's one more heavy rare earth project in Australia, which is not yet producing. The United States, you've got MP Materials, you've got Ucore in Alaska, you've got the Bear Lodge project in Wyoming, which is also another light rare earth project. So as far as a heavy rare earth project that looks like it will come online in the near term, that would be our project. In Canada there are a couple of projects there as well, and again, more skewed toward the light rare earths. But we really need to get as many of these projects online as possible. Because again, I don't see it as competition. We all have a problem doing supply agreements or offtake agreements for our materials.

Pini Althaus:

In fact, one of the things that we're going to have to consider is looking at potentially scaling up our production, based on the demand that we're already starting to see. And I think other companies would find that as well. So it's all about the economics of the project. You have projects that were economically viable back in 2012 or rare earth prices with 35% or so higher than they are today, and are not necessarily viable today. So that's the challenge as well, economically viable projects. And we've got to get as many of them online as possible. It takes many, many years. I mean, our project has had over $70 million put into it to get to where we are today, and we're close to getting to the production scenario. It all revolves around processing at this point in time.

Pini Althaus:

We'd be very happy to see another couple of projects come online, because this is extremely important for national security and for the economy as well. I mean, if you think about it, Ryan, if you've got a billion dollars of rare earth materials, that translates into a trillion dollars or I should say trillions of dollars of finished product. So you've got a magnet in your phone there that's worth a couple of dollars and the cell phone's a thousand dollars. And electric vehicles and defense applications even more.

Ryan Morfin:

Yeah, everyone has one of these iPhones now, and there's tremendous amounts of rare earth on the circuit boards here. And I think people take it for granted that that supply chain is not secure right now. So one question for you, there's talk of this maybe medium term to longterm, but there's talk about mining in space. Do you think that's a feasible option in the longterm, medium term? What are your thoughts on that?

Pini Althaus:

No, that's just ridiculous. I mean, we're trying to find ways to make mining on earth economically viable. I think the cost of going up to space would be more than what our capex will be bringing our entire project into production. I mean, we've got about a 350 to $400 million capex to bring 130 year mine life into production. I'm not an aerospace expert, but I think sending a rocket, building a rocket ship and sending it up, I think maybe on the fuel alone, you could bring a couple of projects into production. So unless we have a fortunate situation or an asteroid lands on earth, and fortunate if it lands somewhere where we don't care, I don't see how that happens. And if it's big enough, it's a problem as well. It's nonsense. And even, options aside of the deep sea mining for rare earths, I mean, you've got all sorts of environmental issues around that as well. I think we need to look at projects that we can bring online, that can be done so in an economic way, that can be done so in an environmentally responsible way.

Pini Althaus:

I mean, one of the things that we've done at our project is we've got in excess of 60% of the materials that have come out around top, will have a clean green energy applicability to them. So we're using the benign processing method. We're going to be using renewable energy on site. In fact, we will likely be putting a solar farm on site as well. We've talked to a couple of companies that have approached us about that, and we'll be a net producer of power for the surrounding area. So there are ways to do it which don't affect the environment. Obviously if there's a project that's situated on a sensitive area, that's a unique situation for that specific project. We've seen it with the Pebble project, which is not a rare earth project. The Pebble project in Alaska where their environmental concerns is we've been recognized by both Republicans and Democrats, but we have to be reasonable about the projects that don't have environmental concerns.

Ryan Morfin:

So Pini, in season two, we ask all of our guests a series of six questions. They're usually, yes, no questions, but trying to take a survey of our conversations. And if you want to add a little context to the yes or no, feel free, but here goes the first question. If there was a COVID vaccine available today, would you take it?

Pini Althaus:

Yes.

Ryan Morfin:

Who do you think is going to win the election?

Pini Althaus:

Which election?

Ryan Morfin:

The US election.

Pini Althaus:

Well, I think it looks like Joe Biden's going to win it, but I think what happens, if we go past January six from my understanding is that the house will vote on it and it's one vote per state. But I don't know if I see it getting there at this point in time. I really don't have a crystal ball.

Ryan Morfin:

Third question. What type of economic recovery are we in? What type of shape is it taking? A V-shape, W, U, L?

Pini Althaus:

Yeah, I think 2021 is going to be challenging. I think we've been, and rightly so. I mean, we've had no choice as of almost every other country. We've been printing money for the past year because of COVID. And I think we've got to brace ourselves that, at some point in time, the chickens come home to roost. It was a necessary step. People needed it on an individual level. Businesses needed it as well, but I think we've got to do whatever we can to stimulate the economy, give people confidence to go out and work again, employ people. So I think we've got to watch ourselves, especially in 2021. And I have some concerns, but long-term, I think the approach in the United States is a healthy one.

Ryan Morfin:

During lockdown this summer and quarantine, was there anything in particular that you accomplished that you're particularly proud of?

Pini Althaus:

Yeah. A great amount of family time, which, if you would've asked me a few years ago if I could sit at home and be at home for six months, I would have told you absolutely not. I wouldn't be able to do it for six days, but it has... I'm sure it's done this with a lot of families as well. It's brought families together. We had a baby actually last year on Thanksgiving. So I was doing a lot of travel at the time and thought I wouldn't get to see my daughter in her first year or couple of years too often. And being home with her every day is actually been just the most amazing experience. So thankful at least for some silver lining in COVID.

Ryan Morfin:

Are there any silver linings that you see in the economy going into 2021?

Pini Althaus:

Yeah, I think we've gone through an absolute beating and it looks like we've got the ability to come out of it. And I think that's a testament to how strong the economy was built up in the years preceding COVID. So overall I remain an optimist. I mean, we are a country built on opportunity and going out and making it happen. And we're not a socialist country sitting and waiting for people to send us paychecks or wealth distribution or anything like that. I think the American dream still lives on. I think if you go out and you're willing to work and put your head to it and heart in it, I think we do have the ability to climb out of it. So if we look at what the economy is doing over the past few weeks, it looks like it's starting to rebound. And to me, that's assuring because it could go completely one way as well.

Ryan Morfin:

And the last question is, is there anything that you're watching, or listening to, or reading today that has been impactful on your thinking that you'd like to share with our audience?

Pini Althaus:

Yeah, that's a good question. I think it's been more personal stories. The news, I sort of take that in context or with more than a grain of salt. In some cases stay off the news channels for a number of days at a time, it became quite repetitive. But I think on the personal side, talking to friends, my family's all back home in Australia, they've just come out of 110 day lockdown, which we can't relate to that. It's been very trying on them and seeing the fortitude that they've had to come out of that and stay intact. I think the mental health issues that will come out of COVID are going to have a far longer effect than the economic issues. I think we're going to have to focus on mental health issues in this country for a long time to come.

Pini Althaus:

The impact on kids has been significant with regards to lockdown or remote schooling, et cetera. But to see people come through it. I think it's a testament to people in general and to the country and other countries as well, to see got that fortitude and survival instinct to try to get through whatever adversity we can. So hearing the personal stories, the challenges that people have gone through, I think it's made me a lot more aware of things that I have to be thankful for and where we can help out other people as well. I think we have to be united going forward because there are things...

Pini Althaus:

I think one of the things that COVID has shown us is we can get into this complacency and life goes on and we go one day to the next. And all of a sudden we get hit by something that affects everybody equally. I mean, COVID, whilst there were groups of people, whether it was the elderly or people with underlying health conditions, that got hit the worst. I mean, we all got hit in some form or another. So really, this should be something that unites us, not divides us.

Ryan Morfin:

Well, Pini, I appreciate you coming on today to talk to us a little bit about the supply chain crimp on rare earth and we'll definitely keep an eye on it and would love to have you back in the future.

Pini Althaus:

Thank you, Ryan. Thanks for having me.

Ryan Morfin:

Absolutely. Thank you. Bye-bye. Thanks for watching Non-Beta Alpha. And before we go, please remember to like, and subscribe on Apple podcasts and our YouTube channel. This is Non-Beta Alpha, and now you know.

 

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