Caitlin Long is the founder and CEO of Custodia Bank. She was previously a managing director of Morgan Stanley and a member of the Wyoming Blockchain Task Force.

It Usually Begins with Jeffrey Tucker

Contents

Max Raskin: You must consume a huge amount of information each day. How does your daily routine begin in terms of what do you read in the morning?

Caitlin Long: I channel surf on the mainstream news channels just to see what the narrative is. And of course, I check both CNBC and Fox Business for the business narrative. When I wake up, I check the bitcoin price on one of those business channels.

I'm on a lot of economics newsletters and I fly by ZeroHedge to see what the headlines are.

MR: How early do you wake up in the morning?

CL: Usually 5:30 or 6:00.

MR: Is there anyone on Twitter you get a kick out of?

CL: Oh, Autism Capital is a fantastic account to follow. And I follow the crypto critics too because one of the most important things is to understand what the critics of your beliefs are saying.

MR: What does your political journey look like in terms of your own ideology? Where did you start and where did you end up?

CL: I grew up in a Democratic household. I remember my grandpa, who was a farmer in South Dakota, eighth grade education, was so happy to be able to vote for a woman on the 1984 presidential ticket with Geraldine Ferraro. And then I started studying economics in college and went in a more conservative direction.

After the 2008 financial crisis I realized what I’d learned in school wasn't the answer either, and started to look for better answers by studying the full range of economic schools of thought. All the way from modern monetary theory, which is a reincarnation of chartalism and which is like catnip to the uniparty in Congress because it argues debt doesn’t matter, to the Austrian School, which emphasizes sound capital structure. I don't think any economic school of thought is perfect.

There’s nuance to everything, but really a lot of things started making sense as soon as I started reading the Austrian School. Especially some of the things that happened during the 2008 financial crisis — it all started making sense, and I realized the root cause wasn’t what mainstream media told us it was. I think that's where you and I crossed paths way before bitcoin.

Studying the Austrian School is what enabled me to be early in having bitcoin served up on my daily news feeds. Jeffrey Tucker introduced me to bitcoin way back in 2012. He sent an essay to one of his private newsletter groups, liberty.me, and then I really dug in and started having “aha” moments in 2013.

MR: In terms of political philosophy, was there a book or a speech or an essay that you were like, "Oh wow, that just changed my life," or that changed my outlook on things?

CL: Yes. It was after the 2008 financial crisis, the book called When Money Dies by Adam Fergusson. He's a historian, so he's talking about the Weimar Republic hyperinflation in Germany and Hungary. I think it's a wonderful piece to understand that economic history. The stories in that book are just heart-wrenching. And of course we know the impact of that moment in time on what came after. And boy, it’s worth dedicating your life to preventing a repeat of that history by working on monetary and financial system stability.

MR: You live in Wyoming — do you have any of the survivalist streak in you? Are you a prepper?

CL: Not really. But one of the cool things about Wyoming is its food freedom law. You can buy food directly from a rancher, and that's what I do. I buy my meat directly from a rancher and it doesn't have to be processed through a USDA processing facility, so they don't have to bother to pay for the organic label. I know where those cows were raised — just a few miles from where I am right now, with no roof over their heads. So I appreciate that. And it wasn't until I moved back to Wyoming that I started hunting big game for the first time.

That was such an experience — and boy, did it give me respect for conservationists and for the whole concept of when I'm eating the meat of an animal, that animal gave its life. You don't think about it when you're buying it in the grocery store, but when you're doing it yourself, boy, it's a very different perspective.

MR: What prompted the move back to Wyoming?

CL: It was a couple things. I grew up in Wyoming and always planned to go home after living in NYC. My significant other was number two at a family-owned manufacturing company and did not get the top job in 2019, so he was open to the move and how he’s thriving in Wyoming. I worked remotely so could have worked anywhere, and of course I had come back to Wyoming to work on some of the legislative sessions back in 2018. We didn't move to Wyoming until 2019 full time, but just the cost of living and taxes kept going up. We were living in Connecticut at the time, so it was just the environment. I felt like it was time to go back home.

Dome on the Range

MR: You must just get a deluge of text messages, emails — how do you stay on top of everything?

CL: First of all, I’m a total workaholic. And I probably get 50 different requests for my time every day — mostly through direct messages on social media, especially LinkedIn. I finally ended up having to get somebody from the company to help me manage that. The company is run on a lean startup model, so no one in the company has an executive assistant, myself included. We're jacks of all trades. We're all the proverbial janitors and the executive assistants, and we all just roll up sleeves and do it all.

MR: Do you have any apps on your phone that people have not heard of, either productivity apps or anything that you use that you like using that people might not have heard of?

CL: Oh, we have a “honey-do” list shared services app, which is great for list makers. The other app that not a lot of people, very few outside of our circle, know about is the Nostr app. I am active on Nostr, which is a bitcoin adjacent social media platform. It’s censorship-resistant social media.

MR: Wait, do you have any hobbies?

CL: Hiking and skiing. Just getting outside and enjoying Wyoming. And when I have time, yoga. But I haven't had much time to do that. I used to do hot yoga on the east coast. I used to do it three times a week and it was great.

But it's interesting, moving back to Wyoming, I didn't fully understand how hard it is to create high humidity in the dry air to make you sweat. You go back to the East Coast and do a hot yoga class and you're just dripping sweat. But I can’t replicate that here. I've tried to create high humidity — during COVID I bought something called a Hot Yoga Dome…it's like a bouncy house that creates an enclosed space for high heat and humidity. But I haven't been able to get the humidity up to 40%. So it's really tough to do Bikram Yoga in the desert.

MR: Someone who's never been to Wyoming before and wants to check it out — where would you recommend their first hike?

CL: Well, the Tetons and Yellowstone are just spectacular and there's nothing like them, really. The only other part of the world I've seen that is remotely like Yellowstone is Iceland because of the geothermal activity there. But the more interesting hikes are just in the local mountains that are not destinations really for pretty much anybody other than the locals.

I grew up in Laramie. There's a tremendous bouldering hiking area nearby, and I just did the hike to the top. You can do it without having trained, but you certainly need to make sure that you've got good hiking boots because you could slip as you're climbing up.

MR: What hiking boots do you have?

CL: I don't even know, they're so old. I just always wear them when I go out on hikes. Those hiking boots have been around the world with me in multiple iterations.

MR: Are you a feinschmecker…an aficionado of anything?

CL: That’s a good question. I did go on a big health kick when I had a health scare 10 years ago and tried to cut processed food and seed oils. So I do pay a lot of attention to just what goes into my body. I'll go through periods of being more strict and less strict. Nothing like a health scare to focus the mind on that.

There's no Whole Foods in Cheyenne. It's not big enough for that yet, but we have Natural Grocers, and they just tripled the size of their store here. So that tells you something about what's going on in this part of Wyoming. A lot of Coloradans and Californians are moving in.

Make America States Again

MR: Does everyone ask you when you do interviews about your political ambitions?

CL: No.

MR: Why not?

CL: Actually, I've done some political stuff privately here in Wyoming. And I was asked by some of the folks who helped pass the blockchain laws to get involved politically, and I did it for a while but really didn't like it that much. I don't think that I would run for office, but an appointed position someday, maybe.

MR: Why not?

CL: But I wouldn't want to do it in any sort of economics or financial regulatory field. People on Twitter will keep saying “you should become a Fed governor.” No way. That is one thing I'll rule out.

MR: But why not? You're so natural at this. Why wouldn't you run for elected office?

CL: Well, I’d avoid an appointed position in economics or financial regulation because I think the financial system is unstable and I wouldn't want the collapse of it to happen on my watch. Why burn the reputation of somebody who's spent years espousing solvency and financial stability by going and becoming part of a system that’s highly indebted and you know is fundamentally unstable? So I'd much rather work on creating financial stability from outside.

MR: Why not vote “no” on everything like Ron Paul? Why couldn't you do something like that?

CL: It's so interesting talking to some of my friends who have been just recently working for Wyoming's congressional delegation. Washington, D.C. is so screwed up, and they're just much happier working at the state level. Balaji [Srinivasan] has coined the phrase "make America states again" and I truly believe that that's going to happen — as in devolving power away from Washington, D.C. but not necessarily secession.

Although, the funny thing is I think if anyone's going to secede, it's going to be the left-leaning states — maybe even if Trump gets elected again. The perception is that it's the opposite — that if secession ever happens it’ll come from the right-leaning states, but I think that's not the case. Left-leaning coastal states are more likely to do it. But the point is that the power is being devolved back to the states where it belongs.

MR: You should just be governor of Wyoming.

CL: But that requires running for office. I don't think I'm interested in that. I'm actually much more interested in the policy side of things.

Oenophile

MR: On the health scare, does that cause you to rethink things? Are you religious at all?

CL: Yes.

MR: Are you denominationally religious?

CL: I grew up Catholic.

MR: And do you have a religious practice? Do you pray? Do you go to church?

CL: I do pray. I don't go to church every Sunday.

MR: Did it change after your health scare?

CL: Yes, definitely.

MR: How did it change?

CL: I pray more. When my sister's husband was really sick, he actually got H1N1 bird flu and was on a ventilator for 28 days…so very, very serious. And I was literally praying a rosary every day.

MR: How do you decompress from all the information that you have to deal with? Do you meditate or anything like that?

CL: I know I should, but I don't. No, I am a foodie and an oenophile, so that's how I decompress. I also hit the gym for strength training three times a week. 80 pounds on bench press these days — lifting heavy helps de-stress.

MR: What's the first bottle of wine that comes to your mind right now?

CL: Well, I'm actually a subscriber to a distributor that tests all their wines for basically bad chemicals — glyphosate and the like. And the wines are all lower sugar content, lower alcohol content, and lower nitrates and sulfites and the like. Candidly, I don't favor a particular wine. Pinot noir is my favorite grape, but I don't have a particular wine. I just get a mish mash delivered to us every month.

MR: What's the name of it?

CL: It's called Dry Farm Wines.

A doctor once suggested it. It's funny, a doctor who essentially prescribed having a glass of wine to unwind. And it works, but you don't want to overdo it of course. But if you're going to have a glass of wine, you may as well have one that's not putting a lot of chemicals in your body and a lot of sugar and a lot of alcohol either.

MR: Do you cook?

CL: Yes.

MR: Let’s say a senator is coming over and you have to cook, what's your go-to impress someone?

CL: I'm a grill person, so I would grill steaks and grill vegetables. Fresh ingredients, prepared simply.

MR: What kind of meat?

CL: Usually a rib eye or a filet.

I love the taste of beef with just salt and pepper. If you get good quality beef — again, I get it from a local rancher, so it tastes different than it tastes from the store. You don't have to doctor it up.

MR: What kind of grill do you have?

CL: Oh my gosh, you're going to laugh. I have a crappy grill that just won't die. I think it cost a hundred dollars. And we had friends over and they were saying, "Hey, you have a nice house. How is it that you have such a crappy grill?" It just won't quit. And I love it because it just won't quit. I don't even know what the brand is.

Lessons from the Forgotten Man

MR: But it's interesting. You don't throw away your boots, you don't throw away your grill. What do you think that's about?

CL: That's a good question, Max. I'm frugal. The first thing that popped into my head when you asked that question: my grandfather, my father's father. Both of my parents grew up on farms, so both of their parents were farmers. I never met my father's father, but he taught me one of the things that is actually very much with me in life that my dad passed down to me, even though my grandfather died before I was born.

And it is basically the impact of living through the Great Depression of 1929. My dad was born in November 1929, less than two weeks after the Black Monday crash, and his parents were farmers in Iowa. And some of the farm neighbors had mortgaged their farms to gamble in the stock market and then lost them. And my grandparents did not do that. My dad said that his father used to scoff at paper wealth. And frankly because my grandfather was frugal and he didn't chase the latest, greatest thing, my dad was able to afford college and a PhD, and as a result of that my parents were able to pay for my college. My grandfather’s decision not to bet the farm on leveraged stock bets in the roaring ‘20s turned out to be very meaningful for my family’s next generations. And so yeah, paper wealth can be fleeting, that does stick with me.

MR: When you were living in Connecticut, was that weird for you?

CL: Yeah, it's so funny. I've always been somebody who has one foot in multiple worlds. I lived in a really high-end neighborhood in Greenwich, Connecticut called Belle Haven, and two billionaires lived in our neighborhood. And I could mix with the billionaires but then come back home and talk to somebody in Wyoming who is working a manual labor job and communicate equally well with both people in both worlds.

MR: Where do you think you feel more comfortable?

CL: This is an interesting question because I'm cut from both cloths, right? I don't quite fit exclusively in one group. One of the other things my mom taught me — it's so interesting you're asking these probing questions — is to march to your own drummer. That's another thing that has always stayed with me. Don't necessarily conform, and basically do your own thing and walk on your own path.

And when I was on Wall Street, I did five different jobs in 22 years…that's very rare. Most people get into one seat on Wall Street because it's so lucrative and stay there their whole career and fight like hell to keep that seat. I just kept getting bored and moving to new things. And I think, like you, I have a lot of curiosities and have a pretty diverse educational background as well.

MR: What do you mean by that? What do you mean by that diverse background?

CL: Well, as in I'm educated in both political science and economics — then in finance, accounting, law and public policy. So, like you, doing lots of different things. I didn't just focus on one thing. But the funny thing is, I do tend to go very deep on something and then I'll move to the next thing once I'm done. But I'm like a dog with a bone. Once I'm onto something, I'm going to see it through. And I think this is what federal bank regulators underestimated about us.

“Gave Away Most of My Bonus”

MR: Since you’re quirky — is living in Greenwich, Connecticut a healthy place? The kinds of places that value conformity?

CL: Absolutely they do. I really appreciated the people who were there. And I'm not going to criticize the individuals — but there were a lot of people who made a lot of money off borrowing other people's money at taxpayer-subsidized borrowing cost. I won't criticize the individuals because that's the system that has been set up. But I will criticize the system. It’s not ethical.

I used to work directly for John Mack, and during the 2008 financial crisis he was a controversial figure, but I would never criticize him because he had to do for his shareholders what he did, which is go get a bailout from Washington, D.C. That’s the system Congress set up – the people’s elected representatives created that system. Yes it’s rotten, but you’d be surprised how few people working within that system think critically about it and realize it’s privatizing profits and socializing losses.

Now during the 2008 financial crisis, I was at Morgan Stanley and I gave away most of my bonus that year because I didn't think it was ethical for me to receive it. And in fact, I gave away a big chunk of it to the Mises Institute that year because they had opened my eyes to the alternative explanation for what really caused the 2008 financial crisis.

And so did I ever quite fit in with the billionaire set? No, I didn't. But did I try to fit in with them? No, because I was always marching to my own drummer and appreciating them for who they were. One of my friends is a good friend of Warren Buffett and he offered me the opportunity to meet Warren Buffett at one point and I turned him down. And a lot of people would say, "What the hell? Of course you should have taken him up." But I declined. I don't have as much respect for Buffett as most people do. Few realize just how much his success came from his access to cheap funding cost. Long-only investors who built great fee-only asset management businesses are far more legitimate and ethical in my eyes than leveraged investors who get paid on a spread subsidized by taxpayers.

After the 2008 financial crisis, I stopped doing business that was funded by Morgan Stanley’s balance sheet and flipped to doing business exclusively fee-based. So the revenues that I generated for Morgan Stanley, these were fee-based revenues because it was consistent with my personal ethics at that point – I didn’t want to be part of a business where the profits are privatized and the losses are socialized because I didn’t consider that ethical. I wasn't interested in doing spread-based business where I would've violated my own principle of not making money off somebody else's artificially cheap money.

MR: You know his father, right?

CL: Well, I know of his father and the work that he did on sound money, and Warren was the rebel and went 180 degrees opposite of his father. There's probably a psychological analysis that could be done of that.

MR: Is there a businessman or woman that you really admire?

CL: Yeah, the first name that comes to mind is Jack Byrne. A lot of people don't know who Jack Byrne is, but he was a giant in the insurance world. He turned GEICO around and he was actually the chairman of one of the companies whose stocks I followed very early in my career. I never met him, but two of his proteges were CEOs of companies whose stocks I followed, and I learned from them because they had learned so much from him. And he's part of the reason why I have this strong view.

MR: Okay, last question: What is the hill you're willing to die on?

CL: A central bank digital currency. This isn't the first time I've said that. Yeah, that is a hill I'm willing to die on.

Interview with Caitlin Long