>> from bloomberg headquarters in new york, i am caroline hyde. >> another record day for the s&p 500, the longest winning street -- longest winning streak for stocks going back to august, but the big question, what did you miss? caroline: yemen's commitment to

going big or going home, -- yellen's commitment to going big or going home, and tesla. we are zeroing in on the greenback. what is the impact of relief spending on the currency, and should companies be spreading their bets and shifting millions of dollars on the balance sheet? crypto is not just a substitute for cash. the market right now is banking on enormous -- banking on enormous federal spending package. >> the 10-year break even, one measure of the outlook for inflation, up to 2.2%. it continues to grind higher, well above some levels, and the traders bet on an inflationary/reflationary situation. we are joined by our bloomberg

colleague. thank you for joining us. we keep hearing about the size of the check, the size of the overall package. what do you think we are looking at in terms of timeline? a few weeks? the next month? when will we get a resolution on all of this? >> i .2 it happened before. march 2020 -- i point to what happened before. march 20 20. then, june 2020, -- march 2020, then june 2020, so when there is no massive crisis forcing the hand of the administration and lawmakers to find a way to work together, they take their time. they say it needs to be big, but it could take quite a few months. romaine: janet yellen, the

treasury secretary, has been making a pretty compelling argument about why it needs to be big and why it needs to be now, looking at the market, looking at the top line data. it kind of obscures the pain going on out there. the argument she is making, what does that mean about the strategy of the biden administration? >> it suggests that they do not want to let exploding deficits to hold them back. even though the deficit will rise, it is still better for the economy and the longer term because the amount of growth, the amount of tax revenue that will be added to the fiscal shortfall. also, they are saying they are not afraid of employment and some of the risks that can come from employment, like inflation, because it is only when the broader unemployment rate --

rate drops down very, very low that minority groups start to see their own isolated unemployment rates start to improve. caroline: what is holding back, from a time perspective, from a scale perspective the actual deal being done? is it within the democratic party? they have a very, very slim majority, but they have it. is it the democrats or republicans? >> it is also president joe biden has come in, pitching unity. that was a very central message on january 20, when everyone was looking to him for what the future was going to look like after four years of the trump era, and there are certain non-starters that a reporter like me, i am not going to say i am a republican or democrat, but

i will say it will be very hard for republicans to support increasing minimum wage. that is not part of what their ecosystem -- their ethos is. it is not bipartisan to begin with. if biden really does want to work with republicans, something is going to have to change. romaine: of course, she will be all over that, and we will have her back to talk about it soon. all right, coming up on the show, the reflation trade and all of the expectations about inflation, the dollar down. stephen engle and standard chartered next. this is bloomberg. ♪

romaine: all right, welcome back to "what'd you miss?" today. big bets bma on the economy. -- big bets being made on the economy. a rally in risk assets. joe, what is your dollar position? joe: well, i am long dollar, obviously. are there any veterans looking to engineer a short squeeze, check out positioning in the dollar. very overwhelming, the short position. we have had a bit of a dollar rally. a very short dollar. so the opportunity there, get on it. standard chartered, the dollar has had a decent start to 2021. you do not think this is going to last?

>> we do not. there have been a couple of things. the vaccines. the prospects of more fiscal. i think in the short term, the market has been resisting the temptation for high nominal yields. but when you see that underlying this, it is almost all inflation expectation, and the prospect that the external financing needs are going to get much wider. this is a weak dollar prospect. and to be clear, what we have seen is the asian currency index is flat against the dollar. it is mainly european currencies that have been soft here. but i think what it is telling us is the structure of the evolution of u.s. demand and

global demand favors emerging markets, and it will probably drag sentiment with it. caroline: rather staying small for that euro so that is going to be inevitably affected by the dollar -- where in the moment are the short positions, and how tense has that been? there was a flurry last week, saying this is short covering. what is your perspective? steven: basically ever since the u.s. payroll number came out, even the euro has been trading a little better. we put out a piece skeptical on the dollar actually friday morning, quite early. there is a bit of reconsideration. i think the market overall is still short dollars but not nearly as short as they were coming into the year. romaine: so, steven, for those

folks trying to call the end year for the dollar, the idea here that may be the dependence on it now can be shifted to other assets, that maybe there could be a bit more balance here, is that a pipedream? at the end of the day, fiat currency is still fiat currency. steven: we are all long dollars in our personal lives. we earn dollars. we spend dollars. the upper currency, taking risk relative to the uses we are going to make of it. we make this based on the community and other factors, but i do not think the conventional currencies are anywhere near being walked away from in favor

of the cryptos yet. joe: steven, long-term, what is going to drive the dollar? you talked about people being attracted to the yields, on the long end, not that much, but you also mention growth differential between the u.s. and europe in particular. what is the main driver? is it the relative growth differential? steven: i would say it is how much you need to finance or what your surplus is versus how attractive your assets are. if you follow -- if you believe janet yellen, take her at her word, rights will be low for a long time, because that is what the treasury will need to finance the spending that is planned.

-- rates will be low for a long time, because that is what the treasury will need to finance the spending that is planned. if you want a strong currency, you need to look at the factors that strengthen it, various assets on the one side or high saving rates -- savings rates and becoming an exporter yourself. caroline: of course, it has been something that the ecb has been worrying about, the relative strength of the euro versus the dollar if we are going to see this pan out. how much will we see the central bank five be sound? christine lagarde has been on this front, as well. is it the dollar that wins out with the $1.9 trillion spending? steven: the europeans, they do not have much room to ease or

cut rates to ease further into negative. their problem will be solved by fiscal. what is paradoxical is when the europeans spend money, because they have such a big surplus, it is actually positive for the currency, and when expectations go up, it is also positive, and the opposite is true for the u.s. my expectation is there will be higher expectations and a wider deficit in the u.s., and there will probably be higher expectations for the euro. caroline: in 10 years' time, is the dollar still the reserve currency? steven: i think so, because it is the deepest and most sophisticated currency that can be used. you can name challengers to it. the euro.

another is not there yet, and certainly the cryptos are not anywhere close. actual trade will be declining over time. romaine: all right, we have to leave it there. always great to catch up with you, stephen englander -- steven englander over at standard chartered beget bitcoin at an all-time high after elon musk's -- at standard chartered. bitcoin at an all-time high after elon musk's investment. a guest next. this is bloomberg. ♪

caroline: so, today, we are focusing on big bets in the market. the dollar, continuing dollar

weakness. tesla becoming the biggest company to back bitcoin. it is all about expanding your diversification when it comes to managing. joe: and exactly right. it is all about something, diversification, whatever it is. last year, michael sailor -- saylor became one of the first to invest in bitcoin, and he told elon musk to buy some, and he did. of course, we found out today that such large transactions are possible because elon musk did exactly that, so let's bring in michael saylor, the person perhaps inspired this.

your company recently hosted a seminar for other corporations on adding bitcoin to their balance sheet. it is the number one pitch that you made to them for why they should? michael: i think in the current monetary environment, cash has diluted. if you cannot get 15% on your assets, you are not going to keep up with the rate of monetary expansion, so the pitch on assets is to convert a nonperforming asset into the best-performing asset. bitcoin has been appreciating at 220% just about every year on average for the past 10 years, so -- romaine: the move you pay -- made here, is this a general assessment and to the folks who

work for you that the dollar and its position in the world right now is going to continue down this trajectory? we are confident this will be the case? michael: the outlook is for expansion in the range of 15% for the next 3, 4, five years, i think before march -- five years. i think before march 2020, we did not think that. in an expansionary monetary environment, you want scarce assets, and the scarcest asset in the world is bitcoin. it is digital gold that was designed and engineered to be the scarcest asset in the world. caroline: michael, you had that conversation with elon musk. are we talking of a scale -- apple will do it? are you seeing big companies wanting to? michael: we had a conference

last week, and i expected a few thousand, and we had 8000 firms area it went viral to over 10,000 people over youtube, and my phone has been ringing off the hook. it is pretty amazing, the degree of interest across the board. companies and institutions and the like. joe: owing back to that question, when elon -- going back to that question, when elon musk even asked if this was possible, putting a lot of money into bitcoin, how do you execute the trade, and then how do you store it in a way that makes sense? you hold your keys or a third-party? how should companies think about that? michael: there are institutional grade providers, and you either go the route of buying bitcoin, and you can do it with firms like coinbase, or you go in with grayscale or a firm that does

both, and generally, these are institutional grade providers that will do the trade. they will acquire the asset and process it for you. between their offering and the fact that we published a corporate playbook for bitcoin acquisition, i think it is becoming similar for the typical corporation and speedier. romaine: they call it elon musk a genius for listening to you. while we were speaking, a mayor is looking to add bitcoin to that city's balance sheet. what you think of that? michael: i think it is brilliant. state and municipal governments,

they have got a challenge. they have got balance sheets. they can raise capital. they can raise capital, and if they can do it with something like bitcoin, that takes pressure off their taxpayers. it is good for everybody involved, and he is probably the most progressive mayor in the country right now, frean -- free -- francis suarez. i cannot see why anyone would not one to invest 10% of the balance sheet in an asset that is going up over 200% over the course of a decade on average creed that is pretty much a

no-brainer. i think the more aggressive move is to convert most of your balance sheet into bitcoin. this is part of a general trend towards digital transformation. instead of digitally transforming your p&l, we are talking about digitally transform your balance sheet and going from an analog asset, like cash, to a digital asset, like bitcoin. i think it will continue because it is a normatively accretive. joe: how much it would be allocating to dogecoin? michael: dogecoin is fun, but i would steer people towards bitcoin, the institutional grade asset of the 21st century. romaine: do you worry about sort of a dogecoin of the world

affecting the credibility of bitcoin or some of the other legitimate currencies out there? michael: no, i think it is primarily for entertainment value. hundreds and hundreds of institutions and corporations are looking at an inflation hedge and a digital asset. they are looking at bitcoin, and nobody is seriously looking at dogecoin. caroline: michael, fungicide, it is interesting also that elon has the capability of buying gold, when he put it into going more diversified, -- is there a reason why you did not go gold? michael: we went through the same exercise and studied it. gold p in august at the same time we bought -- gold peaked in

august at the same time we bought bitcoin, and if we had bought gold, we would be down, and it would have been a disaster. here is the reason we do not buy gold. bitcoin is digital gold, and bitcoin is a better gold than gold, so once people start thinking about what they want, urges a nonsovereign safe haven store of value, they are going to realize that bitcoin does the job of gold better, and you are seeing all of the institutional flows move out of gold into bitcoin. bitcoin is going to be a $10 trillion asset. it is going to do monetize gold -- going to demonitize gold, so gold is going to be the loser as investors look to do the same thing better. caroline: michael, chairman and

ceo. there you have it. $1 trillion. joe: "bloomberg technology" is up next in the u.s. romaine: and if not, another show. this is bloomberg. ♪

emily: i am emily chang in san francisco, and this is "bloomberg technology." coming up in the next hour, tesla seeking elon musk invest in bitcoin, and they will begin to accept the cryptocurrency as payment. all the details and reaction. plus, investment