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If I could hope for but one thing for you, so you'd be curious in all that you do.

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Cause love like a flower just wants to grow.

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Oh, and knowledge like your heart just wants to be known.

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If you like, please subscribe. This is Bitcoin Study Sessions.

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Today we are studying broken money, why our financial system is failing us and how we can make it better.

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We are on the sixth, seventh study session here.

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Today we are taking on part four, the entropy of fiat ledgers, which is chapters 14 through 19.

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this section should anger you it should leave your blood running cold but with intent and purpose

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ready to double down on bitcoin the genesis block of bitcoin was inscribed by satoshi with the

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headline from that day's paper which was chancellor on the brink of second bailout for banks and that's

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what part four is about so in this part really twist the knife on that essential point so first

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though before we get to that i'm going to do a quick summary of the book up to that point and

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then a summary of chapter four. And then Lucas and I are going to twist the knife even further

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on what the entropy of fiat ledgers signifies. So part one of this book was, what is money? And at

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that point, Alden kind of came up with the idea that money is at its most essential, a ledger,

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a way of recording transactions and ownership. Part two was then the birth of banking. So

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banking then, once you have money, banking arises as a way to specifically allow a gold-based

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monetary system to operate more smoothly without having to constantly transport and authenticate

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actual gold. That's the birth of banking. Part three, the rise and fall of global monetary orders,

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tells the story more specifically of how fiat money, after the rise of banking, so fiat money,

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money not backed by gold or anything else, becomes the basis of the global monetary order

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in its current iteration, the U.S. dollar as the world reserve currency.

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And then that part kind of also went into how this harms the U.S.

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by tending to hollow out its industrial base and also hurts other countries

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and developing countries specifically because inflation and volatility

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as much as possible are exported to those countries.

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And the institutions nominally that are supposed to help them deal with it,

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the IMF and the World Bank, actually have a track record of kind of exacerbating

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those problems through predatory forms of lending. So today we move on to part four,

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the entropy of the fiat ledger, the way that kind of broadly speaking, the fiat ledger as a flexible

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ledger, remember money is a ledger, the fiat system as a ledger, as a flexible ledger in its

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operation naturally leads to abuse and wealth concentration. That's its kind of entropy.

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And again, what I think should be in the back of your mind is the anger generated by the phrase

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Chancellor on the Brink of Second Bank bailout and why that is an inevitable part of the fiat

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system. So chapter 14, the modern financial system, we get first an introduction to the

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actual operation of the fiat ledger. So the modern financial system operates, you could say,

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in five general ways that contribute to the entropy, the degeneration of the fiat ledger.

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First, money supply continually inflates. Second, purchasing power is gradually siphoned away from savers and towards those who are closer to the source of money creation. The system rewards large and well-connected, kind of politically well-connected entities at the expense of small and poorly connected entities.

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Four, liabilities gradually shift from the private to the public sphere. Debt is prevented from ever clearing out completely. And five, volatility is suppressed for a while until it all comes tumbling down. So those are five general points that this section is really going to go into depth on.

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So first, we get a primer on the Federal Reserve. It controls, most generally speaking, we won't go into all the specific details, but it controls the base ledger for the United States and is somewhat of a mix of public and private in that it does include, in its public aspect, representation from the public sector on its Federal Open Markets Committee, which sets monetary policy for the nation, which is essentially what the U.S. Federal Reserve does as our central bank.

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and the one that manages the ledger in its most basic state, the base ledger.

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How does the Federal Reserve system actually work then in conjunction with private banks?

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Again, without going into kind of too much technical detail,

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Alden describes it as a layered stack of IOUs, which is also circular in nature.

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At the very bottom, the base of the system, even before the Federal Reserve system,

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is the taxing authority of the federal government that kind of underlies and is supposed to provide

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the assets for the system. The taxing authority provides assets to the federal government

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and then backs the treasuries that are then the assets of the Federal Reserve.

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It's circular because when you look at the whole financial system, at the end of the day,

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what's happening is the federal government is taxing in dollars, which, of course, are liabilities

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that it has to itself. And just to back up a step, it wasn't circular when we were on a gold

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standard, because if you taxed in gold, gold is not a liability of anybody else. It's a bearer

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asset. So the Federal Reserve System, a layered stack of IOUs that's circular in nature. To

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summarize it in Alden's words, everything is a claim of a claim of a claim reliant on perpetual

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motion and continual growth not to collapse. At a more granular level, how is the Federal Reserve

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Ledger updated? Alden talks kind of gives basic descriptions of Fedwire, FedNow,

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and what the acronym CHIPS, which stands for Clearing House Interbank Payment System,

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ways that are, these are all ways that the Federal Reserve system ultimately clears transaction,

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updates its ledger. To quote Alden, virtually all the transactions that we do as individuals

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and businesses on higher ledgers of the system get settled through those systems at or near the

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base layer of the system, that base layer being the ledger that is maintained by the Federal Reserve.

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So we can then ask that internationally, you know, how is that updated? The Federal Reserve

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is effectively the ledger for the world as the world reserve currency.

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Given that the world reserve currency is the dollar issued and maintained by the United

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States, the Federal Reserve then serves as the ledger for the world.

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Foreign central banks tie into the Federal Reserve because they hold U.S. debt in the

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form of U.S. treasuries as an asset.

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And Alden also kind of briefly talks about how sending money internationally is this slow,

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opaque, high-fee process with various conversions. So that's kind of how just a quick run-through of

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how the modern financial system operates. As a key part of that, Chapter 15 then discusses how

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fiat currency is created and destroyed, which is, of course, key in the modern sense to how

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that modern financial system is actually operated. Alden explains this most essentially through the

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distinction between two types of money in our system, base money and broad money. Base money

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is a direct liability of the Federal Reserve, a direct entry on their ledger. This can consist of

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physical banknotes or cash reserves that commercial banks hold with the Federal Reserve.

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So the cash, the commercial banks are holding with the Federal Reserve on the Federal Reserve's

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base ledger. So that's base money, which again, a direct liability of the Federal Reserve.

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Broad money is all the money that the public holds in a broad sense, which includes the base money, but also includes money that is created when a commercial bank holds a fraction of a deposit, promises that that person can withdraw the whole deposit and so has a claim created in that sense, but then only retains a fraction and then loans out the rest, which create further claims.

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these are all forms of broad money. So broad money is now a claim on a commercial bank and not against

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the base ledger directly. Those types of claims can be destroyed, for example, if a commercial bank

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defaults. To quote Alden, we often think that a dollar is interchangeable with another dollar,

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but really when we go from interacting with physical dollars to bank account IOUs,

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we switch from owning a direct liability of the Fed Reserve to a fractional claim for a direct

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liability of the Federal Reserve. Again, two types of money, base money, that direct claim,

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and then those later fractional claims that are broad money. In summary, central bank manages

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base money. Commercial banking system operates with a larger amount of broad money that is an

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indirect and fractionally reserved claim on the base money. The Federal Reserve directly determines

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the base money, but it also indirectly influences the creation and destruction of broad money.

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It encourages commercial lending through low interest rates, which will increase that broad money circulating through the system. And then it engages in quantitative easing and quantitative tightening. These are incredibly, when you get kind of into the nuts and bolts, complex things, broadly speaking, quantitative easing increases the money supply.

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The Federal Reserve buys something from a commercial bank, such as a treasury or mortgage-backed security.

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It's buying something, taking something in from the commercial bank, but giving them money.

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And so there's more money going in the system, increases money supply.

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Quantitative tightening decreases the money supply.

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The Federal Reserve sells an asset, and so it pulls in money out of circulation, so less money in circulation.

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Again, Alden then, after this, goes into incredible detail regarding the creation of money.

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but she very generously gives us permission and says we can skip this if the details are not that

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important and if you're not a banker or don't have you know some deep desire to go into the

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nitty-gritty um you can skip it in fact going over at orally is not a good idea there's charts there

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that are very detailed too um so we accept that invitation we skip over the details the importance

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in understanding the entropy of fiat ledger i think is just as that distinction between base money

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actual liability of the central base ledger, and broad money, which is all circulating money,

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including the IOUs generated by the fractional reserve and lending practices.

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Maybe a little quiz to help us understand the distinction again. We can ask ourselves,

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can individuals influence broad money supply? Theoretically, yes, an individual could withdraw

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money from a bank and hold physical cash, which is base money, and so they've influenced the broad

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money supply because it can't be relent out. Practically speaking, though, we know there are

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limitations on the amount daily you can withdraw, perhaps with certain banks, and also the amount

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of physical cash in existence is just limited such that everybody couldn't withdraw all their money.

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So now we get to chapter 16, pricing as a mechanism for organization. And here,

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this is really a debate or tension between stable prices and prices as coordinating signals. So

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a central banker type, they like price stability, which they define actually as gradually inflating

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price. And they think that type of stable price is good. The person who is maybe of the more

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Austrian economic bent sees prices changing as good. Stability is not an inherent

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good because changes in price send a signal about what is needed. A price includes all the

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information from millions of individuals doing millions of transactions daily about what they're

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willing to spend in order to obtain a product. They utilize real-time local knowledge that is

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specific to them. All of that knowledge is then aggregated in the form of the price.

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To look at an example of this tension between price stability and prices as coordinating signals, we can look at gas shortage.

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Alden gives the example of in Europe after the Russian invasion of the Ukraine, Russia no longer wants to sell to Europe.

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Prices in Europe of gas go up very quickly.

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The central banker type might be inclined to say, let's put a cap on prices to make it fair so everybody can keep on getting the gas and everybody has equal opportunity to get the gas, not just the wealthy.

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The more Austrian economic type is going to say, but that's going to suppress important information signals that are being sent by that high price.

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If the price is high, then people will tend to use less of it, conserve more, forego unnecessary usage.

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Those who value gas very highly, if it's very important to what they do, maybe a trucker,

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they need it, they're going to pay more for it.

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So the most important aspect of that, if the price is high, a signal will also be sent

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out to the rest of the world.

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Hey, you guys, come sell us gas.

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You can make a lot of money.

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We need it badly.

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In the Ukraine example, that's what happened.

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Liquid natural gas ended up being rerouted from other places and sold to Europe in response

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to the price as a coordinating mechanism, sending out information to the world.

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Why is this relevant to the entropy of fiat ledgers, which is what we're concerned with here?

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So money, too, has a price.

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And in a centralized fiat system, we could say that its price is set by central bankers in the form of interest.

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So the interest rate on loan is one way to look at the price of money.

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In a decentralized system, maybe each private bank makes their own lending decisions, sets their rates as is best for their region and what's going on and their customer base. Based on prevailing market conditions, they make these decisions.

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In a central banking system, you have 12 people on the federal open market committee set an interest rate. So they don't get this, you know, they are in this position of not receiving all of this information from price as a coordinating mechanism, but instead top down imposing a price on money based on what they want to do with the direction of price, the price of money.

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it's like trying to set the correct price for natural gas and a gas shortage

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what a centralized committee is doing when they set the price of something like money

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this does

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well the ability of a centralized entity like the federal open market committee of the federal

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reserve to set the price of money in a sense through interest rates raises another question

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In the past, we've talked about how strong is a currency, how weak is a currency.

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But there's actually another really important question.

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How flexible and fluctuating is the ledger?

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How often does the money as a unit of account implicitly change?

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How often does, if money is a ruler, how often does it go up to 14 inches and then contract to four inches?

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And how often does it stay relatively stable over time, in a sense?

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people who are, when money rapidly changes its value, people saving money are hurt because

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the dollar has rapidly lost value. They can buy less. People who are borrowing money then are

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hurt when the dollar rapidly gains value, it becomes more difficult to pay back their money.

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This makes it hard to plan for the future if the value of the dollar is changing without respect to

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the system as a whole making the decision, but instead being imposed from top down in a way

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that's an opaque process. If you are the producer, you need to negotiate contract prices for all the

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inputs of your product. And that's difficult to do if you don't know if a central banker is going

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to radically change interest rates. If you're an employee, you need to be able to negotiate your

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wage with your employer. So you also need to know how much is the currency going to inflate in the

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future through decisions of a central planning entity manipulating or changing interest rates.

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So to go back then for a second, I mentioned that central bankers are in favor of stable prices

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and that stable for them is gradually increasing, which usually is defined as like a 2% inflation

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target is what they define as stable. All the notes that that 2% inflation target in actuality

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is actually higher rate of inflation because the way that that inflation is measured as a basket

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of consumer goods is flawed. Naturally, also, Alden says, prices should deflate over time.

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The 2% inflation target is odd because left to its own devices, one would expect that the prices

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of things would deflate over time, get less because better technology enables more productivity,

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which enables more goods to be sold and prices to be lower if they're determined by a free market,

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which is good for consumers because goods are now cheaper and also for savers

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because they can buy something in the future for less than they're buying it now.

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So saving is then a good idea.

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But it's bad for central bankers.

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To quote Alden, in their policy framework, prices must constantly go up.

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Excess saving needs to be constantly discouraged and people need to be kept on a constant treadmill of consumption and borrowing to support continual and smooth economic growth. That's the central banker's idea.

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Inflation is good for central planners and not incidentally, it also financially benefits those who are politically connected to the central planners.

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It allows productivity gains to be siphoned away from those having the gains in productivity and then amassed by the central planner and allocated to political allies.

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It allows, in the same way, the value of people's savings to be drained through inflation.

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And so non-transparent taxes to be imposed and it discourages saving for the future in that way.

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Again, encourages present consumption.

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This brings us to chapter 17, the financialization of everything.

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If money is not stable in value over time or deflating, people have a strong incentive to hold other things with greater scarcity like gold, equities or real estate.

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That this is the financialization of everything.

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Everything becomes financialized, monetized.

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scarce things end up being worth more than their actual underlying utility, whatever you would use

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them for, because people then begin to amass those things to protect themselves from inflation.

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You can print money, but you can't print more beachfront property. So you buy that beachfront

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property because it will retain its value, whereas money will not. This has a lot of negative effects.

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For equities, for stocks of large companies, their value is inflated way beyond the fundamentals of that company.

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It gives these large companies then this inflated value, which gives them better access to capital and an unfair advantage against smaller companies that don't have that.

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Which this tends toward to encourage malinvestment, bad investment.

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It redirects capital to these larger but oftentimes more inefficient companies, which allows them to underprice their goods and continue to operate even when if they didn't have access to people piling that money into them to preserve it from a way to protect it from inflation.

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They didn't have that.

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Their product would be unprofitable and they would just fold as a company.

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So you encourage capital misallocation.

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in the form one of the negative effects and i think we're all savvy to this we see it on the

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day to many of us see it on the day-to-day level in real estate housing prices increase way beyond

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the value of a house as a place to live if people are piling money into the real estate market to

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preserve and protect it from inflation a millionaire now owns multiple houses they don't live in

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in order to protect their wealth a working class person struggles to buy one to actually live in

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And the overall effect of this is people, what people are doing is they're encouraged to short the dollar, to take out loans, use credit, to buy these harder assets like gold, equities, and real estate.

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Because the cost of the loan is going to depreciate over time, but the value of the asset is going to stay the same.

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but also

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inflation is going to be piled on top of that

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but the value of the asset is not going to become

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diluted. In a system

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where real assets are financialized

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in this way to protect people from

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inflation to quote Alden in general the modern inflationary financial system rewards people who have access to low interest rate debt and then can use quite a bit of it judiciously

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So in the system, savers regularly get diluted, over leveraged entities regularly default, and the sweet spot has been to permanently leverage, to be permanently leveraged without being over leveraged.

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Again, this system encourages people to short the dollar by taking out credit to buy harder assets with that credit.

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The use of debt and credit to capture value then brings us to the next chapter, chapter 18, Beneficiaries of the Cantillon Effect.

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So we left the last chapter with this idea to quote Alden, the ability to effectively short fiat currency with long-term debt at low interest rates has historically been a key mechanism of wealth creation in this inflationary system.

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And the inability to do so, to take out that debt, to short the dollar, represents being shut out of a key mechanism of wealth creation.

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Some people benefit then, and some people suffer under this system of capturing value through debt.

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Poor individuals have less access to credit.

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We all know the story.

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High-interest payday loans and credit card debt, not a good way to amass scarcer assets.

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You can't short the dollar.

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The interest rate's too high.

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The wealthy, though, tend to have access to lower-interest credit.

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And the risk to them of shorting fiat, of using debt to capture value, which is defaulting, not being able to pay those loans, is actually mitigated for the wealthiest people because historically the government has performed selective bailouts for them if the system begins to fall apart.

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We've all seen this in the 2008 subprime mortgage crisis, the government swooping in to backstop those failing financial entities.

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In the 2020 COVID lockdown, that aid money, Walden cites a study which showed that three quarters of it went to the top 20th percent of wealthiest households.

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And very little of it went to what its purported purpose was, which is to keep workers actually in their jobs.

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so the result of this prudent savers those people who don't use risky leverage have their savings

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diluted to pay for the bailouts of those who get wealthy shorting the dollar the bailouts further

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benefit the highly connected political class because they're also the first recipients of

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newly created money and this brings us to the title of the chapter the cantillon effect

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they can use the money before the prices rise due to the inflation caused by the creation of that new money.

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So this is the Cannellon effect.

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Essentially, if new money is printed, the first person to use it, the one who introduces it in the system,

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still benefits from the low prices that the system has.

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The system has not yet priced in an increase in the money supply.

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After that initial injection of money, the prices begin to rise.

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And so subsequent users of the money benefit less. The effect is that those who get bailouts can use that new money to buy the houses and hard assets of those who did not get bailouts. And when those people then turn around to use that money, all the asset prices have now gone up.

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So, Chancellor on the brink of second bailout for banks. That's the true horror of that phrase. History also repeats itself. These cycles of booms and busts are all programmed into the system. The fiat system is working as intended, in a sense, which brings us to the final chapter, the long-term debt cycle.

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Historically, wealth has always compounded upward and poverty compounded downward, so to speak.

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If you have a surplus, if you're wealthy and generate a surplus amount of value, you can invest that and grow over time.

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And that growth is then exponential.

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If you don't have that surplus, you tend to get caught in a debt spiral and you continue spiraling downward at an exponential rate.

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Throughout history, power has dealt with this poverty consolidation and the resulting social agitation of the lower classes through partial resets of debt.

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Alden cites Hammurabi's Code, giving a specified term limit for debt slavery of three years.

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Deuteronomy, the book of Deuteronomy, the Bible, canceling debts at the end of seven years.

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She mentions Solon's reforms in Greece, which have a lot of redistributive taxation, the canceling of debts, a way to try to ease this tendency to consolidate poverty downward and consolidate and compound wealth upward.

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Now we have in the fiat system, in the entropy of the fiat ledger, a system that has locked us into wealth compounding upward and poverty consolidating downward.

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To describe this, Alden talks about short-term business cycles then leading to a long-term debt cycle that are kind of nested in the structure of that debt cycle.

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The long-term debt cycle is determined by a series of short-term business cycles.

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What is a short-term business cycle?

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The cycle is something like this.

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The central bank cuts interest rates to encourage lending.

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Individuals and businesses then begin to engage in risky loans and speculative investment because they're trying to short the dollar.

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Central banks then try to restrain this.

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They raise the interest rates.

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The economy, in response to the raised interest rates, then contracts, retracts, and people begin to default on loans, lose their houses and savings.

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Policymakers then step in.

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They selectively bail out the well-connected entities, those that are perhaps determined, quote-unquote, too big to fail.

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This selective bailout then provides, it's usually new money infusion creation, printing, something like that, is the injection that then fuels the beginning of the next cycle.

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And the business of the next cycle starts with the cut in interest rates, encouraging lending.

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But in the next business cycle, it's those selectively bailed out entities that are in the best place to benefit from the next business cycle.

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She gives some historic examples.

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One is the 2000.com bubble burst.

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There is a bailout selectively, which then fuels real estate speculation that leads to the 2008 subprime mortgage crisis, which then leads to another selective bailout.

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The short-term cycles seem like boom and bust because of the bailouts, but there's never actually a bust because the debt is not actually completely cleared from the system.

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Instead, what happens at the end of a business cycle when it selectively bails out certain entities?

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The debt is just taken on from private to public, taken on by the government.

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So in this way, short-term business cycles build up to a longer-term debt cycle.

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Each business cycle began with a lowering of interest rates to stimulate the next round of speculative investment. In subsequent business cycles, you though eventually get to the point where interest rates, in order to jumpstart again, are zero or negative. You get to the point where you can't go lower.

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At this point, at the end of kind of cumulative business cycles, the choice becomes either a massive default or massive money creation, and the government always chooses money creation.

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Alden describes this as a one-two punch.

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When each private debt bubble pops at the end of a business cycle, the public debt bubble simply grows.

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so to quote alden in other words as the long-term debt cycle unfolds the excess debt starts to shift

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from the private sector to the government and the true climax of the event does not incur until the

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government itself runs into an acute inflationary debt spiral again the public debt bubble is pop

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but the but the private debt bubble is popping at the end of the business cycle the public debt

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bubble is just growing and growing as a result of multiple cycles. When do we hit this final spiral,

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this acute inflationary debt spiral that Alden mentions? Well, so this is going to be the point

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where higher interest rates can no longer be used to prevent private individuals from making these

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risky investments and speculation to acquire scarce assets because the government has too

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much debt. And so it can't pay that much interest without massive money creation, which would cause

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even more inflation. So there's a dilemma in the spiral. High interest rates lead to a fiscal

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spiral toward higher deficit-driven inflation. Lower interest rates encourage excessive borrowing

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and subsequent money creation by the private sector in order for people in the private sector

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to buy hard assets to protect themselves from the inflation they are creating. To quote a meme that

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Alden likes to use on Twitter, nothing stops this train. Historically, a final fiscal spiral in this

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sense ends chillingly through financial repression. Essentially, the government, at the end of the day,

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it can't raise interest rates enough to keep people from fleeing the dollar. So what the

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government does is it makes people hold money and then inflates its own debt away. Those that try to

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run for the exit into hard assets are simply prohibited by law. We saw this in the past with

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the government outlawing the possession of gold and confiscating it. We've also saw in the past

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with lending restrictions and capital controls. So basically what happens is as the public ledger

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is debased at the end of this acute fiscal spiral, people are prevented from fleeing to

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a different ledger through financially repressive measures. In concluding this section,

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And all the notes that kind of not only does nothing stop this train, but that nothing could have stopped this train, that it's this whole entropy of the fiat ledger is the necessary result of the technological innovation of telecommunications, which we've talked about in depth in past conversations, which introduces a speed constraint into finance.

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Gold no longer works once you have telecommunications, which makes the way for abstractions on top of gold, paper claims on gold, and the eventual dropping away of gold from the system, which is the world of fiat.

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Which includes a natural set of incentives, an internal set of incentives that lead to these short-term business cycles, long-term debt cycles.

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So I'll end with a quote that's kind of long, but Alden just puts it all together, and I think it's worth ending at this point and with this quote.

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Could this have turned out differently?

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Around the margins, it could have.

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But for the destination, I don't think it could have.

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In addition to the historical human tendency to think linearly, even as debt compounds exponentially, this time the generational debt accumulation was empowered by the fact that the invention of telecommunication systems allowed commerce to occur at the speed of light, while any sort of hard money could still only settle at the speed of matter.

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Gold, despite being of sounder supply than the fiat dollar, takes considerable time and expense to transport and authenticate, and thus could never really present an alternative in a digital era.

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Once the fiat dollar came into being, those who managed it were able to discard gold as a supply constraint without much pushback and use the flexibility of their ledger to opaquely finance war, entitlements, and all sorts of things in ways that don't add up in the long run.

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It was the first time the success of the fiat monetary system where a weaker money globally won out over a harder money, and it occurred because a new variable was added to the monetary competition.

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Speed. The speed gap between commerce and settlements empowered banks and central banks and created an irresistible arbitrage that the whole world turned to, which led to a greater level of centralization for the public ledger than ever before.

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That is the entropy of the fiat ledger, a natural, inevitable occurrence once you begin to adopt fiat unconstrained by any sort of scarce resource as your money.

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So that's the summary.

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That's the summary of part four, the entropy of the fiat ledger.

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Again, I hope it boils your blood.

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It did mine when I was reading it.

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It reminded me again of the anger that necessarily makes one want to smash buy some Bitcoin right away.

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I also had to let a lot of details, though, and excellent anecdotes drop out of that telling of part four.

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I mean, what do you think, Lucas?

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Was there anything that as I went through kind of what I determined to be the essential narrative, was there anything that I let drop out that you thought was incredibly interesting or maybe essential?

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As usual, you did a great job of covering everything.

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I'll throw in a little context on a couple of things just because this helps me visualize things.

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And so in one in in chapter 14, I believe, Alden talks about the growth of the base money.

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Sorry, that's chapter 15. So talks about the growth of growth of the base money.

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And in like 1913, the growth, it was like two point something billion.

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And now it's like five point something trillion or whatever.

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So as you very accurately just noted that our brains think linearly, they don't think exponentially, so they can't really comprehend what that means because trillions are just magic numbers to us.

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I kind of did a little poking around, a little math.

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So that means that our base money supply has increased by 193,400 percent.

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It also means that the buying power of the dollar has decreased by 99.94%.

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And even that's a little misleading because it's exponential to go from decreasing by 99% to 99.9%.

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Like that's a 10x loss in buying power.

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And we look around and we don't see that things necessarily cost that much more. In fact, what we see oftentimes is that a lot of things are relatively close to what they were in the 30s or in the 20s, a bushel of wheat or a gallon of milk.

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You know, it's higher and it's certainly significantly higher, but it's not a mass amount higher. And what that reveals to us is those are the cost savings of technology that are keeping us barely hanging on.

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And as I was thinking through this chapter, there's a couple of things that to me just scream at the speed at which this is going to come crashing down.

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One of those would be that never before in an inflation event has there been the ability for a central bank to offer digital money.

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So like you think about all of these hyperinflation events from the 20s and the 30s and even up through the 90s in a lot of cases, the ability to just put it onto a digital ledger was not available.

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So, I mean, first, that alone takes it to the moon.

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Think about how much faster German hyperinflation would have occurred if instead of having to actually print money, all they had to do was change in entry in a digital ledger.

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So that's one.

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And how much faster it collapses if instead of going to the bank, waiting outside the door for it to open, you can go onto your online bank account and hit withdraw.

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Yeah.

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Yeah. And so that's the other thing. That's the other side of it is that never before have you had a voluntary off ramp that was available to everyone who, as you say, you can you can do it whenever you want.

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Like assuming if you can get your money out before the capital controls go into place and before they hold the head of the citizenry underwater until they drown in fiat.

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If you can do that, the rate is just phenomenal.

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A couple more things about this is this system is designed to slowly nationalize every industry.

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And it does so by the bailouts. Once you bail out an industry, it's never the same. It's always at that point. It has an established price floor. It has an established price ceiling. It is nationalized. You can say that it's not. But if you want to look at the mechanism of it, it's nationalized.

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So you are slowly moving more and more towards a centrally planned and centrally run economy.

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None of those has ever worked.

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China is doing a – China was doing a bang-up job for a little bit, we thought, and then turns out that, oh, no, some things just still aren't working very well.

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But in order to do that, they had to put capitalist tendencies into it as well.

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They had to open up the free side.

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They're never nationalized in the sense, though, in the good sense where like if you have great oil wealth, sometimes a country will nationalize the oil wealth and like give distributions of that to each citizen.

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Like we didn't nationalize Goldman Sachs and give everybody a chunk of it.

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Instead, they just gave big bailouts to the executives there.

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It's like nationalizing the flaws of the system, but privatizing the gain from the system or, you know, letting the gain still fall to people who are just, you know, purportedly private or something like that.

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Yeah. Yeah. So it just moves fast.

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I am. And the other thing is that it's very encouraging to me because you you did note that there's the concentration of wealth at the top and poverty at the bottom.

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And it gets more dense. The rich get richer, the poor get poor in this instance.

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So the poor are the first to feel the effects of inflation.

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They are the ones who need to get out of the system the most.

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And now they have the opportunity solely by having an Internet connection to be able to learn, to be able to escape.

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As Michael Saylor talks about it being Bitcoin is on a need to know basis.

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And when you need to know, that's when you come around to it.

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And so it's very encouraging in that sense, because there is no doubt that we will see the greatest wealth transfer in history.

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There is no doubt that it will be on balance far more equitable than any sort of wealth distribution that we've ever.

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I mean, even now, when you look at how Bitcoin is a relatively unknown asset, I mean, it's known, but it's it's not it's certainly not fleshed out its market potential.

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But even now, it is still more equitable. The distribution is still more fair than global wealth, which is kind of shocking because you can audit the Bitcoin network and see exactly how many coins are in every single wallet.

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And there are some wallets that have a million, there's, you know, Satoshi's wallet has a million coins.

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And there's a whole lot of people that have 0.00001.

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And that is still more fair than what we currently have.

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And so it's encouraging.

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I like it.

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I look forward to the coming of the change and the tide moving.

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Yeah.

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And so I don't know.

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I want to, it incites a lot of rage and you did a really good job, I think, of framing that with some colorful language in the beginning.

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But to look at the way that I thought about this when I was writing notes, I took notes on what the fiat design principles are.

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And the first principle is that it's a constant devaluation of your money by increasing the supply while manipulating the demand.

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And to me, that sounds like dilution and fuckery. They sell it to us as inflation and stable prices. But it's more accurately described as currency debasement and theft. Because you're you're stealing, you're stealing wealth without asking for it, right?

374
00:43:00,097 --> 00:43:10,017
If I take something from you and I didn't ask for it, then I have stolen that from you, regardless of who I am or what badge I have.

375
00:43:11,917 --> 00:43:16,477
And so that's the big part is that you siphon wealth from citizens.

376
00:43:17,077 --> 00:43:19,177
It flows to the government, to two entities.

377
00:43:19,337 --> 00:43:23,757
It flows to the government and it flows to the holders of assets that are scarce and desirable.

378
00:43:23,757 --> 00:43:33,237
So the nationalization part occurs because the nation eats the debt of the citizens whenever

379
00:43:33,237 --> 00:43:46,013
buss occur as a way to sort of assuage them and basically placate and sedate them from uprising against the system that is continuously robbing them

380
00:43:47,013 --> 00:43:56,314
And the real danger of all of this is, yeah, it's all unfair and it is theft and it is awful and people die.

381
00:43:56,533 --> 00:44:01,553
The real danger is that you remove volatility from the system and you make it less and less and less resilient.

382
00:44:01,553 --> 00:44:08,854
And it's as though you go from, I'm rubber, you're glue, you know, I'm resilient.

383
00:44:09,073 --> 00:44:14,294
You can throw anything at me and it'll bounce off to now I'm made of paper thin glass.

384
00:44:15,113 --> 00:44:22,933
And every time, every time that you plug a hole in this dike by sticking your finger in it,

385
00:44:22,933 --> 00:44:45,053
Every time that you patch a girder in this railroad bridge by replacing steel with dry spaghetti, it gets us closer and closer to a really majestic failure, like a truly majestic, huge loss.

386
00:44:45,294 --> 00:44:48,213
And so, yeah, it is by design.

387
00:44:48,213 --> 00:44:54,834
And there's just so much, there's so many, there's so many half truths that are sold.

388
00:44:55,153 --> 00:44:56,893
Stable prices are not stable prices.

389
00:44:57,433 --> 00:44:57,573
Yeah.

390
00:44:57,713 --> 00:45:04,233
It's ever increasing prices, outpacing all of the gains, all of the gains of technology.

391
00:45:04,233 --> 00:45:19,633
You know, I looked out the window and I see a tractor that that can do probably you could probably plant 300 acres of corn in a day with it, maybe more, actually.

392
00:45:20,314 --> 00:45:28,053
And I think about when people first arrived here, they had a horse and that horse could or an oxen.

393
00:45:28,173 --> 00:45:31,053
And they were probably lucky to get an acre in a day.

394
00:45:31,053 --> 00:45:34,933
You know, so let's take a 500 X efficiency gain.

395
00:45:35,153 --> 00:45:36,773
And it's even more than that too,

396
00:45:36,773 --> 00:45:38,973
because you're more efficient on the fuel and everything else,

397
00:45:38,973 --> 00:45:43,374
but let's take a 500 X efficiency gain and still be paying more for things

398
00:45:43,374 --> 00:45:49,173
everywhere. You know, like I think that should enrage people.

399
00:45:49,173 --> 00:45:54,953
I think that it should, I think that it should cause people to protest.

400
00:45:55,273 --> 00:45:58,354
I think that it should cause people to be upset.

401
00:45:58,354 --> 00:46:11,513
And ultimately, I think it should just give people all of the courage that they need to exit that system because it just sucks everything into it and kills everything that stays within its reach.

402
00:46:11,513 --> 00:46:30,173
Yeah. And I mean, I like the way that rhetorically Alden frames this whole part four is the entropy of fiat ledgers. Entropy is a naturally occurring condition of any system. It's that chaos that always creeps in the frictions that are always there in the way the systems always degenerate and decline.

403
00:46:30,173 --> 00:46:52,013
And so by framing it and then going further to describe it as a naturally occurring consequence of the incentives of the systems, the technological advance of the need for speed, she, I mean, rhetorically, I think, cuts off any sort of argument that, no, we can just reform the fiat ledger, right?

404
00:46:52,013 --> 00:47:10,413
There's some said we can elect new politicians. Our side, if we if right or left, you know, if our politicians in power, we can do it better. Whereas, I mean, the way Alden describes it, like both sides, like politicians are incentive and incentivized to always run a deficit to never run a surplus. That's an incentive of the condition.

405
00:47:10,413 --> 00:47:16,053
There's always going to be the well-connected politically that are going to be incentivized to seek bailouts and to obtain them.

406
00:47:16,693 --> 00:47:26,773
And it's just a naturally occurring aspect of a fiat ledger, of a flexible ledger in this nature that that flexibleness – is that the word? Flexibleness?

407
00:47:27,033 --> 00:47:27,393
Flexibility.

408
00:47:27,393 --> 00:47:27,834
Flexibility.

409
00:47:28,073 --> 00:47:36,713
There we go. Flexibility of the system is going to be – yeah, is going to be manipulated and used by human agents because that's what human agents do.

410
00:47:36,713 --> 00:47:51,753
And so again, like entropy of the fiat ledger, that's a really good way to conceptualize it for yourself to both be angered that we've been in this system for so long, but sober-mindedly say that it's naturally the way this system had to play out.

411
00:47:52,193 --> 00:48:01,973
And so sober-mindedly, we need to exit it and not listen to any sort of placating person on the left or right who says, here's how we're going to reform it.

412
00:48:01,973 --> 00:48:08,334
yeah and entropy is something that you can't stop you can slow it and that's it that's all you can

413
00:48:08,334 --> 00:48:14,953
do is just um do maintenance and try to slow it down you can see that the rust spot is starting

414
00:48:14,953 --> 00:48:23,633
on the piece of metal and you can clean it off and uh repaint it and seal it so that it doesn't

415
00:48:23,633 --> 00:48:31,913
rust anymore or you can let it go and it will eat the whole thing yeah um and so that's when i think

416
00:48:31,913 --> 00:48:40,213
about really the beauty of being able to exit this system it's that you are able to escape that i

417
00:48:40,213 --> 00:48:48,053
so if if our economy i i like to visualize it like this now if our economy was a tire and it

418
00:48:48,053 --> 00:48:53,854
was filled with 40 pounds of per inch of air pressure which is what your average car is

419
00:48:53,854 --> 00:49:01,593
if it had 40 pounds of pressure in 1913 when the federal bank was created it would now have

420
00:49:01,593 --> 00:49:11,854
0.02 pounds of pressure. So you've lost everything beyond that. Um, it's, it's not just flat.

421
00:49:12,093 --> 00:49:20,193
Our atmospheric pressure is 14.7 pounds per inch. So that's, that's your natural state. Like,

422
00:49:20,193 --> 00:49:25,314
so there is a natural state we're below the natural state to the point that, um, if you want

423
00:49:25,314 --> 00:49:30,653
to carry that analogy through, it's creating a vacuum and it's a black hole and it's sucking in

424
00:49:30,653 --> 00:49:36,834
everything that is within its reach. And the only way that you can escape that reach is to exit the

425
00:49:36,834 --> 00:49:43,834
system, is to put your dollars into Bitcoin, sell your dollars, take the profit, because why would

426
00:49:43,834 --> 00:49:50,953
you ever hold something that can be created out of nothing, paid with more nothing, stolen from you

427
00:49:50,953 --> 00:49:56,633
at will, and seized whenever someone disagrees with you? Why would you ever choose to participate

428
00:49:56,633 --> 00:50:02,953
in that system unless you were able to set the rules and you were able to benefit from it.

429
00:50:02,953 --> 00:50:12,834
And it's clear that 99.99% of the people in the world are not able to benefit from that system.

430
00:50:13,153 --> 00:50:20,473
So there is a clear and direct route and cause and motivation for nearly every single person

431
00:50:20,473 --> 00:50:24,073
in the world to go move into Bitcoin immediately.

432
00:50:24,073 --> 00:50:27,753
there's also a cause for everybody else to do it eventually.

433
00:50:28,693 --> 00:50:30,834
But yeah, I mean, you know, it's, it's, it's a,

434
00:50:31,093 --> 00:50:35,153
people are going to fight and they're going to hang on, but there is no out.

435
00:50:35,153 --> 00:50:38,753
I, this takes me back by the way, to two discussions ago where I said,

436
00:50:39,253 --> 00:50:43,334
when you have a pie that has six slices and you tell seven friends that they

437
00:50:43,334 --> 00:50:45,834
can each have a piece of pie at that point, you've lost.

438
00:50:46,193 --> 00:50:51,193
It doesn't matter if then you carry it on to 7 trillion pieces of pie.

439
00:50:51,193 --> 00:50:57,733
and along the way you issue bailouts and you do this and you do that. The second that you did that,

440
00:50:57,733 --> 00:51:03,453
the second that you initialized fractional reserve lending, the second that you initialized

441
00:51:03,453 --> 00:51:09,453
creating something out of nothing. Um, and, and, and, you know, that, that seventh friend showed

442
00:51:09,453 --> 00:51:14,193
up and you handed them a piece, a picture of a piece of pie and you said, here you go. And they

443
00:51:14,193 --> 00:51:20,993
accept it. When you accept that, then you're done. It's over. It's only a matter of time

444
00:51:20,993 --> 00:51:25,933
at that point. It's all over but the crying. Yeah. I still disagree with that. I still think

445
00:51:25,933 --> 00:51:29,814
fractional reserve banking will be possible on top of a Bitcoin system. I still think that if

446
00:51:29,814 --> 00:51:35,874
people go into it eyes wide open, that their deposits are not entirely theirs. And if the

447
00:51:35,874 --> 00:51:40,354
debt is also allowed to clear, if entities are allowed to default and not backstop with the

448
00:51:40,354 --> 00:51:45,233
government i think it's a valid way things can play out but i don't we've talked about that last

449
00:51:45,233 --> 00:51:50,473
time kind of ad nauseum a couple times ago well i guess it's actually since we bring it up we still

450
00:51:50,473 --> 00:51:54,093
have we still have disagreement on it i think it's probably worth noting that i think you and i just

451
00:51:54,093 --> 00:51:58,653
think about what's different in terms of whether or not it works i say it doesn't work because

452
00:51:58,653 --> 00:52:03,033
there will be defaults and people will have their money lost you say it works because there will be

453
00:52:03,033 --> 00:52:08,913
defaults that people have previously agreed to yeah that's it yeah i mean really people can still

454
00:52:08,913 --> 00:52:12,913
in a Bitcoin basis that people can still take on risk and will take on risk.

455
00:52:12,993 --> 00:52:13,814
And not for me, buddy.

456
00:52:13,874 --> 00:52:16,334
That's not something that I, I, I'm pretty risk averse.

457
00:52:16,593 --> 00:52:17,233
You know,

458
00:52:17,334 --> 00:52:20,713
that's one of the things that like angers me a lot about rereading all this

459
00:52:20,713 --> 00:52:23,173
is like, you know, I like most of my life,

460
00:52:23,253 --> 00:52:26,913
live my life as a sort of financially and economically naive person.

461
00:52:27,053 --> 00:52:30,913
And I always had this natural prejudice towards saving and away from

462
00:52:30,913 --> 00:52:31,354
investment.

463
00:52:31,673 --> 00:52:35,693
And then you get to know more about how the financial system works and it

464
00:52:35,693 --> 00:52:41,973
completely is biased against anybody who wants to save and like people who are taking on and using

465
00:52:41,973 --> 00:52:45,913
credit like that's actually the smart thing to do that's incentivized by the system it's the

466
00:52:45,913 --> 00:52:50,834
natural state of the system like i was foolish to think that saving was that you don't save you can

467
00:52:50,834 --> 00:52:55,314
never stand still you are melting it's a melting ice cube you know you have to keep on running

468
00:52:55,314 --> 00:53:00,933
faster and faster in order to outrun inflation which is two percent and faster two percent faster

469
00:53:00,933 --> 00:53:07,993
every year. And like, you know, 2% inflation a year, all the notes over 35 years is prices

470
00:53:07,993 --> 00:53:12,633
doubling. And it's always worth the 2% as well. But like, even that in itself is for to me,

471
00:53:12,713 --> 00:53:19,413
incredible. So yeah, the power of math, you know, if people were taught, just simply taught a little

472
00:53:19,413 --> 00:53:26,013
bit of math comprehension as a, as a focal point, it would be a lot, it would be a lot harder to

473
00:53:26,013 --> 00:53:33,794
pull the wool over people's eyes when it comes to this. But this system requires that you focus

474
00:53:33,794 --> 00:53:41,433
on the short term and not on the long term. It requires that you do whatever you can today

475
00:53:41,433 --> 00:53:50,233
in order to get to tomorrow without worrying about 50, 100 years from now. And so it incentivizes

476
00:53:50,233 --> 00:53:58,613
short-term thinking, which incentivizes terrible decision-making for the overall citizenry long

477
00:53:58,613 --> 00:54:05,874
term. And it's just, yeah, very unfortunate the way that it's, but now one of the things that

478
00:54:05,874 --> 00:54:10,433
Alden notes in there is like, you know, Hey, is this gonna, is this gonna last? Can it last?

479
00:54:10,513 --> 00:54:15,633
Like, well, you know, it's lasted for a long time. The dollar has been around as this, as this

480
00:54:15,633 --> 00:54:21,593
reserve currency for a long time. I challenge that. It's not that long. I looked it up. There

481
00:54:21,593 --> 00:54:27,993
is a Japanese woman that was alive before the Federal Reserve was created. She's outlived the

482
00:54:27,993 --> 00:54:34,153
Federal Reserve so far. It's very unlike, I mean, it'll probably outlive her, but I don't think by

483
00:54:34,153 --> 00:54:40,294
much. And so if you want to zoom out and think about in terms of the length of something, if you

484
00:54:40,294 --> 00:54:44,633
were to say something is long lived to say that there's a human that's lived that long, I don't

485
00:54:44,633 --> 00:54:49,513
think that's right. You know, it kind of puts it in perspective. I do think we're going to look back

486
00:54:49,513 --> 00:54:53,653
just like I think we're going to look back at this time in history where we walked around

487
00:54:53,653 --> 00:55:00,294
with a piece of glass and metal in our hand, a little rectangle that we stared at and we poked

488
00:55:00,294 --> 00:55:05,314
at as though we were scratching in the dirt. I think that that time is about to pass. I do also

489
00:55:05,314 --> 00:55:12,213
believe that the time of the fiat system is going to be looked at back in history as a real blip,

490
00:55:12,213 --> 00:55:22,913
Um, just kind of like this, we had this deviation, we had natural money, natural commodity money that really got faster and faster all the time.

491
00:55:22,913 --> 00:55:28,073
You can say all the bad things that you want about the speed at which you can transact with gold.

492
00:55:28,193 --> 00:55:31,213
However, it was way faster than transacting in cows.

493
00:55:31,673 --> 00:55:39,433
It was way faster than transacting in, um, beads that were not, um, equivalent in shape and desirability.

494
00:55:39,433 --> 00:55:50,874
So we had always been moving along that, moving along, accelerating that characteristic trait of speed that we had been trying to optimize for it.

495
00:55:51,653 --> 00:56:05,973
And, you know, you said that as, you know, when the technological innovation of the telegraph came around and the speed at which business can be done outpaced the gold and therefore you couldn't settle as fast.

496
00:56:05,973 --> 00:56:33,153
And that created the need for the abstraction. It did. It didn't create the need for the abstraction. It created the need for a faster money. And the solution proffered was an abstraction. There were other solutions that were proffered. We talked about this in Lowry's book in Softwar, which was Henry Ford's idea that we could have an electric currency.

497
00:56:33,153 --> 00:56:41,794
so there were faster ideas yet they just weren't technologically possible right and so yeah yeah so

498
00:56:41,794 --> 00:56:48,233
this is just I don't know this like think of it as like this is like the stage where your entire

499
00:56:48,233 --> 00:56:53,794
face breaks out and you're 13 years old and everything is wrong and your your voice squeaks

500
00:56:53,794 --> 00:56:58,913
every time you talk and you trip because you're growing into your body and you don't understand it

501
00:56:58,913 --> 00:57:03,513
And just everything about you is terrifying.

502
00:57:03,874 --> 00:57:07,033
Like that's kind of the, like, this is like the puberty of,

503
00:57:07,453 --> 00:57:09,814
fiat is the puberty of the monetary system.

504
00:57:10,294 --> 00:57:13,233
It's just the awkward stage that you got to get through to get to adulthood

505
00:57:13,233 --> 00:57:14,033
and be mature.

506
00:57:14,573 --> 00:57:17,073
Yeah, no, but there's been a lot of pimples that have burst

507
00:57:17,073 --> 00:57:19,733
and then not been adequately tended thereafter.

508
00:57:20,093 --> 00:57:24,513
They've been bailed out through, like, Accutane or Retin-A

509
00:57:24,513 --> 00:57:26,773
or whatever the stuff is, the bad remedies.

510
00:57:26,773 --> 00:57:27,973
So, yeah.

511
00:57:28,913 --> 00:57:34,973
i i just want to no go ahead actually i want to hear two points i was what i was just going to

512
00:57:34,973 --> 00:57:40,413
say like that the fact that a japanese person is still alive who was alive back then japanese

513
00:57:40,413 --> 00:57:45,193
longevity is a flexible ledger i don't think they actually ever died like the some like combination

514
00:57:45,193 --> 00:57:50,153
of anime and sushi for whatever reason like it's just it works well it's an incredible tonic for

515
00:57:50,153 --> 00:57:57,874
for like longevity the second thing is so tomiko ituka is that who it is tomiko ituka

516
00:57:57,874 --> 00:58:02,294
Right on. Yeah. See what she eats. See what movies she watches. That's what you want to do.

517
00:58:02,294 --> 00:58:17,033
So but the other thing, I mean, so this the idea of the electric money obviously kind of gestures towards a future that we now settled upon where Bitcoin is the next possible iteration of what a ledger might be.

518
00:58:17,613 --> 00:58:23,713
And in fact, the next part of the book is Internet Native Money Part 5. So that's absolutely where it goes.

519
00:58:23,713 --> 00:58:43,533
In this chapter, though, another very chilling aspect of it is that the end of the long-term debt cycle, when the public debt has accumulated to such a stage that it's going to burst, that's been solved historically, all the notes, through financial repression.

520
00:58:44,834 --> 00:58:51,354
And so in the past, again, executive orders at 6102 where they outlaw individual private gold possession.

521
00:58:51,354 --> 00:58:58,413
so it's not just that like if for me again it's another it's another reminder that

522
00:58:58,413 --> 00:59:05,093
not your keys not your coin and financial repression in the future could take the form

523
00:59:05,093 --> 00:59:12,513
if bitcoin is really a alternative to the fiat system in the past what's happened is

524
00:59:12,513 --> 00:59:17,374
when the government's debasing the public ledger to deflate the debt they've locked all the exits

525
00:59:17,374 --> 00:59:37,553
And so to prevent people from going to a different ledger, gold was a different ledger. So, you know, it's not if history is any sort of lesson, then the exit towards Bitcoin could be blocked in the future, which means, of course, like exchanges where there's a point of control and you don't hold the Bitcoin yourself.

526
00:59:37,553 --> 00:59:53,394
This is definitely a good reminder that if a long-term debt cycle ends in a bout of financial repression, you should take the time now to learn what can I do to protect myself from potential repressive measures, what form are those repressive measures likely to take.

527
00:59:53,394 --> 01:00:09,854
And I think, again, learning about Bitcoin self-custody is something you can do here today. This year, 2025, can be the year of learning how to protect yourself from potential future financial oppression by taking that step and learning about self-custody.

528
01:00:09,854 --> 01:00:15,613
yeah i've kind of moved past the being upset about this and being enraged i know that

529
01:00:15,613 --> 01:00:21,553
i think i remember i remember when i was going through learning about bitcoin i had written down

530
01:00:21,553 --> 01:00:27,233
that there are three stages of growth that a person has with regard to a subject and it's

531
01:00:27,233 --> 01:00:33,713
ignorance is the first stage enlightenment is the third stage and in between is indignation

532
01:00:33,713 --> 01:00:39,153
and it's like you you don't know anything about something and then you start to learn about it and

533
01:00:39,153 --> 01:00:45,993
you're so upset at how awful it seems. And then you finally go to accept it because you've gotten

534
01:00:45,993 --> 01:00:51,914
past being upset and you've found your solution. And Bitcoin is our solution. So I'm not angry

535
01:00:51,914 --> 01:00:59,973
about it anymore. But I do think that we should really have a good laugh about the joke that has

536
01:00:59,973 --> 01:01:08,493
been played on people like kudos for over a hundred years the united states government

537
01:01:08,493 --> 01:01:16,513
has given people ious that they paid with ious they gave out favors that they paid with favors

538
01:01:16,513 --> 01:01:24,434
none of which have ever been able to be um turned in you know if i if you if you gave me a ride to

539
01:01:24,434 --> 01:01:29,613
the airport and I told you, Hey, I owe you. Um, and then you came up to me and you said, Hey,

540
01:01:29,613 --> 01:01:33,894
remember I gave you that ride to the airport. And I said, Oh yeah, that's right. And you're like,

541
01:01:34,133 --> 01:01:38,993
well, will you help me clean up my apartment? I'm moving. And I said, yeah, cool. I owe you.

542
01:01:39,453 --> 01:01:44,953
And you're like, wait a second. You're not picking up books. You're not packing up dishes. You're

543
01:01:44,953 --> 01:01:49,854
like, no, no, no. I owe you. And you're like, but, but that doesn't help me. You're like, yeah,

544
01:01:49,854 --> 01:01:51,493
I know, but I owe you.

545
01:01:51,953 --> 01:01:58,493
So it's so laughable that this actually worked for as long as it did.

546
01:01:58,493 --> 01:02:03,013
I mean, it is really shocking, I think.

547
01:02:03,153 --> 01:02:09,053
And it does point to, speak to, and I think shed light upon the idea.

548
01:02:10,354 --> 01:02:17,613
Everybody wants to traipse so carefully through this minefield of eggshells that could be that there's a conspiracy.

549
01:02:17,613 --> 01:02:24,093
that maybe some bankers got together on an island and they wrote the laws in order to benefit

550
01:02:24,093 --> 01:02:29,973
themselves and in order to feed their own ideas. And maybe it was kept secret from the public and

551
01:02:29,973 --> 01:02:38,394
maybe it was intentionally used to defraud the public. Maybe, maybe, maybe, maybe. I don't like,

552
01:02:38,394 --> 01:02:42,753
there's not really a whole lot of maybe surrounding that anymore. Like in order to

553
01:02:42,753 --> 01:02:47,953
pull the wool over this many people's eyes for this long, I cannot believe that it's not

554
01:02:47,953 --> 01:02:53,253
intentional. It's really, really hard to believe that it's not intentional, no matter how

555
01:02:53,253 --> 01:02:58,434
antiseptically you want to approach it. Alden does a fantastic job. We've both noted this because we

556
01:02:58,434 --> 01:03:04,193
talked a little bit about kind of the difference between Alden's book and Saifedean's book,

557
01:03:04,693 --> 01:03:10,513
The Bitcoin Standard. And one of the things is that he's a much more firebrand of a writer and

558
01:03:10,513 --> 01:03:24,093
And very direct in terms of assigning what he feels to be the accurate, accurate adjectives to describe how this how this was perpetrated.

559
01:03:24,093 --> 01:03:41,133
So, yeah, I just I don't know. I think it's OK. I think it's OK to it's OK to think that it's all a ruse, that it's all a ploy and a plot, that it was successfully pulled over for a while.

560
01:03:41,133 --> 01:03:52,814
It's not going to work forever. We're going to be out of it. We're going to be laughing on the way out because the people that are going to try to keep us into that system, I would assume are still going to be holding dollars.

561
01:03:52,814 --> 01:04:00,033
and that to me is hilarious like right the the ridiculous reflected on the ridiculousness of the

562
01:04:00,033 --> 01:04:05,093
system doug stanhope kind of has a risque joke that since you've said fuckery i will share his

563
01:04:05,093 --> 01:04:11,253
joke so basically the premise is like um this is about the ridiculousness of kind of derivative

564
01:04:11,253 --> 01:04:16,573
claims of an actual asset or whatever but um so he's on a date with his girlfriend they go to a

565
01:04:16,573 --> 01:04:20,993
baseball game and he says hey if this team the team's down like 10 points if this team wins you

566
01:04:20,993 --> 01:04:26,073
have to have physical relations with me and she says fine whatever you know and the team like

567
01:04:26,073 --> 01:04:30,314
rallies and they win the game and then she's all down in the dumps and he's like hey just be happy

568
01:04:30,314 --> 01:04:35,834
i'm not going to trade my claim to my friend he does it better and it's a long joke and that's

569
01:04:35,834 --> 01:04:40,814
just one of the parts of the joke but just yeah just when you say like a favor is not completely

570
01:04:40,814 --> 01:04:47,414
fungible and an iou on a material aspect like an asset or whatever it's an interesting sort of

571
01:04:47,414 --> 01:04:51,493
ontology has an interesting ontology where it's like it's not the thing itself but we think that

572
01:04:51,493 --> 01:04:56,053
you can just create this iou and trade it around for the thing and then cancel it out eventually as

573
01:04:56,053 --> 01:05:02,253
debt um but uh it's an interesting thing like you said that we built a whole economic system on

574
01:05:02,253 --> 01:05:07,794
trading around these ious even just an alden's account between base and broad money like we do

575
01:05:07,794 --> 01:05:12,633
if you told people you know there are two types of dollars in circulation right now one of them

576
01:05:12,633 --> 01:05:17,394
you know is like real in a sense and one is not like what i have no what do you mean like that

577
01:05:17,394 --> 01:05:21,973
doesn't make sense at all. And then like base money, a direct liability of the central bank,

578
01:05:21,973 --> 01:05:43,510
and then broad money this creation of the new claims to the fractional reserve system just like that in itself is kind of a um a pill moment of some sort where you see the truth of the how things are operating Yeah It like the uh the the broad money is sort of the uh it sort of the LaCroix of

579
01:05:43,510 --> 01:05:49,130
uh, of tasty waters, you know, the hint, the hint of the hint of the hint of a IOU

580
01:05:49,130 --> 01:05:56,810
that could possibly be claimed upon. Um, and the, yeah, it's just, it's a joke. Um,

581
01:05:56,810 --> 01:06:01,330
one of the things that I want to bring up again real quick was the,

582
01:06:01,330 --> 01:06:02,590
uh,

583
01:06:02,590 --> 01:06:04,330
desire or the,

584
01:06:04,510 --> 01:06:10,290
so extrapolate the thinking forward to Bitcoin and to thinking about the

585
01:06:10,290 --> 01:06:11,530
world on a Bitcoin standard.

586
01:06:12,130 --> 01:06:14,250
And we can continue to challenge you on this,

587
01:06:14,290 --> 01:06:14,550
I think,

588
01:06:14,550 --> 01:06:14,890
because,

589
01:06:14,890 --> 01:06:15,730
um,

590
01:06:15,830 --> 01:06:16,430
there's,

591
01:06:16,530 --> 01:06:16,950
I,

592
01:06:16,990 --> 01:06:18,790
I did have the thing in my notes of like,

593
01:06:19,250 --> 01:06:19,590
um,

594
01:06:19,590 --> 01:06:21,970
I was thinking about stable coins because I was thinking about,

595
01:06:22,510 --> 01:06:22,770
um,

596
01:06:22,770 --> 01:06:26,830
So what is it that we do that ruins the system?

597
01:06:26,990 --> 01:06:29,330
It's that we try to take volatility out of it.

598
01:06:30,330 --> 01:06:33,610
When we take volatility out of it, when we try to smooth it over,

599
01:06:33,730 --> 01:06:38,130
when we try to have consistent prices or consistently rising prices,

600
01:06:38,310 --> 01:06:41,610
to be more accurate, but smooth that line.

601
01:06:41,610 --> 01:06:43,230
We take volatility out.

602
01:06:43,470 --> 01:06:45,570
We take resilience out of the system.

603
01:06:45,810 --> 01:06:51,250
And it's a lot like taking pieces individually off of an engine

604
01:06:51,250 --> 01:06:52,850
until it simply explodes.

605
01:06:54,050 --> 01:06:56,710
Like you can't just, you can't do those things.

606
01:06:58,370 --> 01:07:02,990
It's, and so anyways, it made me think about stable coins

607
01:07:02,990 --> 01:07:07,210
because I'm viewing stable coins differently

608
01:07:07,210 --> 01:07:08,830
after having read this chapter

609
01:07:08,830 --> 01:07:13,530
because I'm viewing stable coins as simply a very short-term means

610
01:07:13,530 --> 01:07:15,170
to try and stabilize prices

611
01:07:15,170 --> 01:07:18,370
because that's, I mean, that's really all they are

612
01:07:18,370 --> 01:07:25,310
is that people want to trade USDT or Circle or Tether or whatever they are.

613
01:07:25,810 --> 01:07:30,270
They want to trade these instead of trading their Bitcoin

614
01:07:30,270 --> 01:07:32,190
because Bitcoin is volatile.

615
01:07:32,930 --> 01:07:36,990
And on some days it might work out for them and on some days it don't.

616
01:07:37,750 --> 01:07:42,050
First off, I would argue that this is the case.

617
01:07:42,050 --> 01:07:46,630
If you operate on a Bitcoin standard and if you bring in more money,

618
01:07:46,630 --> 01:07:52,970
then you let go, then it will always be in your best interest to operate fully upon a Bitcoin

619
01:07:52,970 --> 01:07:58,830
standard. If you are keeping more than you are spending and Bitcoin is going up forever as it

620
01:07:58,830 --> 01:08:05,030
eats the value of the world, then you are on an upward trend and you will actually not benefit

621
01:08:05,030 --> 01:08:10,970
from using stable coins in order to do your business. It will eventually come back to bite

622
01:08:10,970 --> 01:08:17,650
you. First, it'll come back to bite you because it will blow up. There are holes in that fence.

623
01:08:17,850 --> 01:08:23,190
There is problems with that system. The big problem with that system right now is that all

624
01:08:23,190 --> 01:08:27,470
those stable coins, even if they're one-to-one backed, what are they backed by? They're one-to-one

625
01:08:27,470 --> 01:08:35,870
backed by US treasuries, which is digital fake money. It is not real. And I'm going to say that

626
01:08:35,870 --> 01:08:41,510
it's absolutely fake in the way that I heard Breedlove talk about this one time. He said that

627
01:08:41,510 --> 01:08:48,910
counterfeit money is effectively and mechanistically zero difference from money printed by the

628
01:08:48,910 --> 01:08:55,270
government. It is just like if counterfeiting was the thing that we were trying to stop,

629
01:08:55,810 --> 01:09:01,110
then it would be understandable. It's not counterfeiting. They want more money to go

630
01:09:01,110 --> 01:09:06,750
into the money supply. That's the whole point. They want to dilute the money supply, but it's

631
01:09:06,750 --> 01:09:11,490
not that, that they're going after people for counting or counterfeiting for it's the ability

632
01:09:11,490 --> 01:09:15,550
to hang onto the Cantillon effect. It's the ability to be the first spender of that money

633
01:09:15,550 --> 01:09:20,870
before that it dilutes in value. And so that, that's, sorry, that was a quick aside, but

634
01:09:20,870 --> 01:09:25,990
anyways, yeah, cause I wrote down, I was thinking about stable coins and I wrote USDT and I was

635
01:09:25,990 --> 01:09:32,150
It's like, dude, if they told Donald Trump that it was United States Donald Trump, then he would be all for it.

636
01:09:32,770 --> 01:09:41,610
Yesterday, I had a conversation with somebody who was talking about how now we have an administration that is pro-crypto.

637
01:09:41,610 --> 01:09:46,070
I would argue that we might have some people in the administration that are pro-crypto.

638
01:09:46,230 --> 01:09:52,350
I think the president is just not actively attacking it like we were before.

639
01:09:52,350 --> 01:10:00,890
And that is a little dangerous because I think you can then open yourself up to the idea that using things like stable coins are of benefit.

640
01:10:01,470 --> 01:10:04,450
They're a benefit because there's a huge industry.

641
01:10:04,970 --> 01:10:08,570
There's a huge industry that you can take and profit from.

642
01:10:08,910 --> 01:10:13,950
Like, I think it was like Tether's done like six billion dollars in a year or something like that.

643
01:10:14,010 --> 01:10:16,050
It's massively, massively profitable.

644
01:10:16,610 --> 01:10:17,670
What is that profit?

645
01:10:17,890 --> 01:10:19,530
And this is how I look at all profit now.

646
01:10:19,830 --> 01:10:20,790
What is that profit?

647
01:10:20,790 --> 01:10:32,770
That profit is extracted value from the individuals using that product who are merely losing that value due to Tether acting as a middleman.

648
01:10:33,410 --> 01:10:45,370
And if you want to have your prices not change over the course of a week, if you want to make sure that the Pepsi that you buy today is the same cost as the Pepsi that you buy tomorrow, cool.

649
01:10:45,830 --> 01:10:48,450
If that's all you want, fine, then you kind of deserve to lose.

650
01:10:48,450 --> 01:10:56,090
But if you want to have the maximum benefit over the course of time, put your money into Bitcoin, live on a Bitcoin standard.

651
01:10:56,670 --> 01:11:06,250
And as it eats the value of the world and it takes over everything and it will take over everything because the dollar reached 90 percent market saturation.

652
01:11:06,250 --> 01:11:19,030
The dollar, which was enforced at the point of a gun, which was a terrible system for about 99% of the people who use it, it reached 90% market saturation.

653
01:11:19,470 --> 01:11:26,030
And you've got a superior technological asset that is going to get, you would think it would reach more than 90%.

654
01:11:26,030 --> 01:11:31,010
Like you would think that it would get closer to 99.9% of market saturation.

655
01:11:31,270 --> 01:11:32,650
So that's where we're going.

656
01:11:32,650 --> 01:11:48,410
I think it happens faster than anyone can believe for the reasons that we elucidated earlier, that there are technological off ramps that weren't available, that there are technological dilution mechanisms that weren't available for central banks before.

657
01:11:48,410 --> 01:12:04,390
All of these things, I think, coalesce in a just a wonderful, fiery explosion of the fiat system breaking down in a very fast way and being very rapidly replaced by Bitcoin.

658
01:12:04,710 --> 01:12:06,650
So that was that felt good, man.

659
01:12:06,730 --> 01:12:12,250
I know, but I hope for a future where the where there is a smooth transition and it doesn't collapse.

660
01:12:12,250 --> 01:12:13,870
And I think it's worth dedicating thought.

661
01:12:13,870 --> 01:12:30,090
But there's all these aspects, the entropic nature of the fiat system and these short-term business cycles and the long-term debt cycle that Alden has described do indicate a ultimate fiscal spiral that's not pretty.

662
01:12:30,350 --> 01:12:40,650
And we can imagine the end of one monetary order and the transition to the next also potentially augurs a period of discord and chaos.

663
01:12:40,650 --> 01:12:55,130
But I think that smart people, good people can think about ways to navigate the transition and that it can be done even in the most – it can be done in a better way as opposed to a worse way.

664
01:12:55,350 --> 01:13:07,850
Even if it can't be done in the best way, even if the transition will necessarily be messy and bad and painful, we can navigate that in a lesser painful way than – in a more painful way.

665
01:13:07,850 --> 01:13:22,310
Again, mealy mouth moderation there. But I guess I also see room for stable coins in maybe people in developing countries right now. There's a big market for stable coins. And I don't think it's necessarily-

666
01:13:22,310 --> 01:13:25,470
There is a big market and we're extracting the value of those people.

667
01:13:25,470 --> 01:13:34,250
I don't think, though, that their desire to use of stablecoins right now is an ignorance of what Bitcoin is.

668
01:13:34,450 --> 01:13:40,010
It's just like for their short-term goals and for their needs right now, stablecoins are helping fulfill something.

669
01:13:40,270 --> 01:13:47,190
And maybe even saving in Bitcoin and medium of exchange is something like a stablecoin.

670
01:13:47,290 --> 01:13:48,950
I can see a hybrid system like that.

671
01:13:49,030 --> 01:13:52,610
You have network congestion on the Bitcoin base layer.

672
01:13:52,610 --> 01:14:10,430
Of course, there's ways people are trying to resolve that, but one way to resolve that is stablecoins, and I don't see that as necessarily bad. Again, if people see it as a savings technology, that's 99% of how far we need to go to make the world an immensely better place.

673
01:14:11,190 --> 01:14:21,250
Even if you call Bitcoin cyber real estate, we don't break apart pieces of real estate and use them as money. Real estate is a savings device, and people don't see Bitcoin as basic.

674
01:14:21,250 --> 01:14:22,150
We would if we could.

675
01:14:22,610 --> 01:14:39,850
Maybe or maybe not because we might or we might see the role for something again, just given other technical aspects, the Bitcoin protocol, the speed of the fact that as Lowry says, it's reverse optimized.

676
01:14:39,850 --> 01:14:49,450
There may be specific uses for you where you want something that is absolutely optimized for speed and cheapness or something like that, that is a compliment to Bitcoin.

677
01:14:49,450 --> 01:14:53,490
And I don't say that that's impossible, I guess.

678
01:14:54,570 --> 01:15:00,650
You're bringing out your tender loving side and trying to paint me as this horrible person.

679
01:15:00,830 --> 01:15:02,550
Oh, the second thing I was doing.

680
01:15:02,650 --> 01:15:07,550
You said smart people and good people are going to hope for a peaceful transition.

681
01:15:07,750 --> 01:15:08,530
I'm going to tell you why.

682
01:15:08,530 --> 01:15:08,850
Not to say that.

683
01:15:09,050 --> 01:15:12,310
I just want to say that doesn't mean that smart and bad people are against it.

684
01:15:12,450 --> 01:15:13,390
I'm dumb and bad.

685
01:15:13,790 --> 01:15:16,890
I just say that you're not dumb and bad if you advocate for that.

686
01:15:16,950 --> 01:15:18,270
There's going to be smart people on both sides.

687
01:15:18,270 --> 01:15:25,230
So I think you're smart and good if you advocate for it to come crashing down in a fiery ball of terror.

688
01:15:25,490 --> 01:15:26,530
And here's why.

689
01:15:26,850 --> 01:15:33,350
If you look at people and you look at the nature of people and what causes people to change, it's always a it's an event.

690
01:15:33,650 --> 01:15:36,370
So you can have two people.

691
01:15:36,750 --> 01:15:41,810
One of them gains two pounds a year for the entirety of their adult life.

692
01:15:41,870 --> 01:15:45,530
And then they have a heart attack and they die.

693
01:15:45,530 --> 01:15:52,230
or you can have somebody that gets really overweight in their 20s and they have an

694
01:15:52,230 --> 01:15:58,690
experience where they're they can't walk up they can't walk upstairs and they realize no this is

695
01:15:58,690 --> 01:16:04,070
where it ends this stops here I change now and they then change their entire life

696
01:16:04,070 --> 01:16:09,810
one of those happens fast one of those happens quick maybe they have a heart attack you know

697
01:16:09,810 --> 01:16:15,510
but Tony Robbins talks about this is that you don't change anything in your life until the

698
01:16:15,510 --> 01:16:20,950
pain of staying the same is greater than the pain of changing. And there is pain to changing. There's

699
01:16:20,950 --> 01:16:26,230
pain to changing monetary systems and learning new nomenclature and pulling the wool back over

700
01:16:26,230 --> 01:16:33,630
your eyes. We've talked about how it is a very deep, you become unmoored from your reality a

701
01:16:33,630 --> 01:16:40,730
little bit when you start to dig into this orange pill, red pill world and see it in a different

702
01:16:40,730 --> 01:16:48,110
And so I look at it as benevolent and I look at it as a kind thing.

703
01:16:48,770 --> 01:16:58,170
I think that if you slowly wean people off the system, then all you're going to do is sedate people and slowly ruin more people's lives.

704
01:16:58,370 --> 01:17:03,750
I think if you do it quickly, if the Band-Aid rips, of course, there are going to be catastrophic failures.

705
01:17:03,750 --> 01:17:07,530
But then again, as you said, you're like, hey, man, fractional reserve.

706
01:17:07,690 --> 01:17:08,650
It's perfectly fine.

707
01:17:08,770 --> 01:17:10,610
People, they signed up for it.

708
01:17:10,730 --> 01:17:27,350
And if they signed up for it, then they can lose all their money. That's fine. If you're smoothly transitioning people over to Bitcoin and you're saying, oh, we're going to do a 2% allocation and then we're going to go do a 4%, you can see where the race ends.

709
01:17:27,350 --> 01:17:32,290
Like you can, you can see where it ends up to just go there and wait for everybody else to catch up.

710
01:17:32,690 --> 01:17:40,350
Because if you, if you do it along the way, I, and you know, this is not financial advice.

711
01:17:40,550 --> 01:17:41,370
Everybody has to do that.

712
01:17:41,510 --> 01:17:42,470
This is life advice.

713
01:17:42,710 --> 01:17:50,610
If you can end the race immediately and you can go to the point where everybody else is going and you can be waiting for them to arrive.

714
01:17:50,610 --> 01:18:08,310
And in the meantime, you can start doing other stuff in order to secure your family's legacy for generations, to build your own skills, to build your own network without having to struggle through this constantly devaluing world of living in fiat.

715
01:18:08,770 --> 01:18:09,850
Why wouldn't you do that?

716
01:18:10,290 --> 01:18:10,410
Yeah.

717
01:18:10,590 --> 01:18:11,810
Why wouldn't you do that?

718
01:18:11,810 --> 01:18:19,690
I think that you're painting an overly bright picture of what a fiery crash usually is.

719
01:18:19,690 --> 01:18:25,690
could entail. You give the analogy of a person who, on the individual level, it's better to

720
01:18:25,690 --> 01:18:29,850
increase your health immediately than do it slowly over long term. But when I think about a fiery

721
01:18:29,850 --> 01:18:37,670
crash, we look at past times in US history where there has been a crash of the financial system,

722
01:18:37,670 --> 01:18:44,730
and that has ended in alcoholism, suicide, drug use, people, literal death, bodies on the ground.

723
01:18:44,930 --> 01:18:49,650
And so when I mean a smooth transition, I'm not advocating for any one person. I'm all in on

724
01:18:49,650 --> 01:18:53,910
Bitcoin. And I advocate that, you know, again, not financial advice. For me, I determined looking,

725
01:18:54,090 --> 01:18:58,090
reading books like this and talk, thinking, talk to others, the best plan. But I do think that

726
01:18:58,090 --> 01:19:04,410
we do have a government with a lot of debt, and we need to figure out a way to get out of that in

727
01:19:04,410 --> 01:19:10,910
a way that's going to lead to the least amount of desperation, you know, French Revolution type,

728
01:19:11,290 --> 01:19:15,830
eat the rich people going after Bitcoiners to put them in the guillotine. You never, you don't,

729
01:19:15,830 --> 01:19:37,450
I mean, we don't know what a fiery crash would look like, but we know from human history that it can be an incredibly not just painful thing, but like just murderous and can lead to things like the rise of communism and bloody wars and long periods of people, you know, out of desperation, ending their own life.

730
01:19:37,450 --> 01:19:52,490
And that's what I mean, like a smooth transition where we do it in the way causing the least pain in that sense and trying to bring enough, bring people over as smoothly as possible so we don't have a buildup of resentment against a wealth transfer that occurs.

731
01:19:52,690 --> 01:19:58,710
And so we don't have people that suddenly lose everything just because they didn't read the tea leaves correctly and then they commit suicide.

732
01:19:58,710 --> 01:20:06,270
You know, that's the that's what I mean by smoother transition is mitigating those social consequences of whatever happens after the fiscal spiral ends.

733
01:20:07,450 --> 01:20:13,430
I think if I've learned one thing about life, it's that in order to avoid pain, you have to do the painful thing.

734
01:20:14,330 --> 01:20:22,170
And you have to have the hard conversation, which takes 15 minutes, but you struggle for two years to have it.

735
01:20:22,690 --> 01:20:32,450
And you have to push through the four minutes in the ice bath that benefits you for the next week.

736
01:20:32,790 --> 01:20:35,590
And you have to take the pain.

737
01:20:35,990 --> 01:20:37,390
You have to take the pain.

738
01:20:37,450 --> 01:20:42,930
because avoiding the pain in any way compounds it longer and longer and longer.

739
01:20:43,590 --> 01:20:45,370
And we have been avoiding the pain.

740
01:20:45,870 --> 01:20:47,250
We have been pushing it off.

741
01:20:47,430 --> 01:20:48,590
And what do we have?

742
01:20:48,670 --> 01:20:58,170
We have the most drug addicted, most unhealthy, most displeased, unfulfilled, aimless, lost,

743
01:20:58,630 --> 01:21:04,030
confused, demoralized society that has ever existed.

744
01:21:04,030 --> 01:21:08,350
and that's because we are trying to move slowly in one direction.

745
01:21:08,970 --> 01:21:11,810
And it just turns out that we're moving slowly in the wrong direction.

746
01:21:12,030 --> 01:21:13,830
Right. So I think we should move slowly in the right direction.

747
01:21:14,170 --> 01:21:17,630
And I think that even – I think a lot of those bad social things you mentioned

748
01:21:17,630 --> 01:21:20,050
will be compounded by too drastic a change.

749
01:21:20,170 --> 01:21:22,370
But you could be right, I could be wrong.

750
01:21:22,470 --> 01:21:23,150
We could both be right.

751
01:21:23,150 --> 01:21:24,350
What does moving slowly –

752
01:21:24,350 --> 01:21:25,610
Wait, no, no, no.

753
01:21:26,270 --> 01:21:28,850
What does moving slowly in the right direction look like then?

754
01:21:28,850 --> 01:21:30,850
There are conversations –

755
01:21:30,850 --> 01:21:35,390
And I'm not endorsing this specific thing because moving slowly can mean different things.

756
01:21:35,510 --> 01:21:48,910
But one is the conversation around would too aggressive an acquisition plan for a strategic Bitcoin reserve have the negative consequence of signaling a lack of confidence in the dollar and then –

757
01:21:48,910 --> 01:21:55,630
But you should have a lack of confidence in the dollar because the dollar has nothing to be confident about.

758
01:21:55,630 --> 01:22:04,170
We should, I think, pull back like a smooth transition away from the dollar should be managed as much as possible.

759
01:22:04,750 --> 01:22:17,210
And I don't know if that's possible, but I think it's worth trying to do and having the conversation about what does it look like to try to manage a transition to a Bitcoin standard in the most orderly way possible.

760
01:22:17,210 --> 01:22:25,270
yeah so if i'm injecting heroin into my veins constantly and somebody gives me the opportunity

761
01:22:25,270 --> 01:22:32,150
to stop doing that and eat an apple instead it would be my benefit now i see what you're saying

762
01:22:32,150 --> 01:22:36,210
so there's going to be withdrawal effects right yeah you would literally die if you cold turkey

763
01:22:36,210 --> 01:22:41,350
off a lot of drugs just to extend that analogy so yeah that's uh that took me that took me to a place

764
01:22:41,350 --> 01:22:47,370
careful with those analogies ruined it because a lot of but still i mean you know i i think that's

765
01:22:47,370 --> 01:22:51,230
how you have to view it is you have to view it as like look you're you're killing yourself now

766
01:22:51,230 --> 01:22:55,770
it's not going to kill you as an individual it's going to kill the system and that's the difference

767
01:22:55,770 --> 01:23:00,010
some individuals could die i mean that's the thing i don't know of anybody that's dying by

768
01:23:00,010 --> 01:23:04,270
selling dollars for bitcoin no no not on that but i mean if the system drastically changes we have

769
01:23:04,270 --> 01:23:08,170
a french revolution of people going after bitcoiners i mean i'm thinking like the worst

770
01:23:08,170 --> 01:23:14,350
possible points in history where we have drastic inequality resolving itself towards more equality.

771
01:23:14,550 --> 01:23:19,950
We have like now. And so it's bad. Right. And I just think it can get worse. It could get worse.

772
01:23:20,170 --> 01:23:26,210
And we need to make sure it gets better in a smooth way. So I don't know what that looks like.

773
01:23:26,250 --> 01:23:31,270
I think this is I hope that there is a future book we read that talks about what does it mean

774
01:23:31,270 --> 01:23:37,550
to actually manage the social transition to the Bitcoin standard and stuff like that. That would

775
01:23:37,550 --> 01:23:41,510
be an interesting read because i get where you're coming from i think that there's a valid point

776
01:23:41,510 --> 01:23:46,730
and i don't know what the correct answer is well it takes us back to an earlier conversation we had

777
01:23:46,730 --> 01:23:51,390
where we talked about there's never been a problem that government has tried to solve that it didn't

778
01:23:51,390 --> 01:23:56,950
make worse i disagree with that i don't i think you can't categorically say never someone will

779
01:23:56,950 --> 01:24:01,850
find certainly find one so but i get your point generally that's probably the case yeah yeah i

780
01:24:01,850 --> 01:24:06,250
mean they got a pretty good hit rate of fucking stuff up yeah they do like every once in a while

781
01:24:06,250 --> 01:24:10,750
they stumble onto something. But it's just, it's so hard to think about what the second and third

782
01:24:10,750 --> 01:24:14,730
order effects of things are. Yeah. Of slowing things down, of smoothing things. I mean,

783
01:24:14,790 --> 01:24:19,630
what is going to happen? You know, Hey, we're going to allow you to convert 15% of your net

784
01:24:19,630 --> 01:24:25,030
worth into Bitcoin. And then you've got all the people that have shell companies and different

785
01:24:25,030 --> 01:24:32,970
entities and they're able to do 15% of their net worth as an individual and companies can do a

786
01:24:32,970 --> 01:24:38,970
hundred percent or whatever. A selective bailout situation. Yeah. Yeah. Selective bail into Bitcoin

787
01:24:38,970 --> 01:24:43,650
for sure. That's the, yeah. There are going to be attempts, I believe there are going to be

788
01:24:43,650 --> 01:24:49,750
attempts to maintain the monetary hierarchy. Yeah, for sure. In order to like slow, to slow the

789
01:24:49,750 --> 01:24:57,650
individual at the bottom from being able to get to Bitcoin while they hold the door open for all

790
01:24:57,650 --> 01:25:03,670
the buddies from the old system to try and cross over. And that, that will get ugly. I believe that

791
01:25:03,670 --> 01:25:08,890
will get, that will get, no, I, I, I'm not saying like, I'm not cheering. I'm not cheering for the

792
01:25:08,890 --> 01:25:15,770
ugliness. I'm not cheering for, um, the fiery implosion of the global monetary order, but I am

793
01:25:15,770 --> 01:25:22,130
because I know that the thing that comes next is better. Like, it's like, okay, here you go.

794
01:25:22,210 --> 01:25:26,110
Here's a better analogy. If you're dating somebody that's not working out and it's a toxic

795
01:25:26,110 --> 01:25:31,610
relationship. Are you wiser to continue dating them for another two years and slowly try and

796
01:25:31,610 --> 01:25:35,630
distance yourself from them? You've got a lot of analogies while dating somebody else.

797
01:25:35,770 --> 01:25:40,410
Yeah. You know, all your analogies and like depend upon making this on the individual plane

798
01:25:40,410 --> 01:25:44,690
of one person. And those analogies fail. When you look at the social level of a bunch of people

799
01:25:44,690 --> 01:25:49,310
operating, I think also, I'm going to go back and take the audio and I'm going to

800
01:25:49,310 --> 01:25:53,470
extract the point where it says, I'm not looking forward to the firing plosion, but I am.

801
01:25:56,110 --> 01:25:58,310
No more.

802
01:26:03,310 --> 01:26:11,130
Yeah, you're correct to challenge me in saying that I am thinking about from the terms of the individual without trying to protect the institution.

803
01:26:11,630 --> 01:26:15,450
And I'm coming back to you and I'm saying I don't believe the institution needs to be protected.

804
01:26:15,450 --> 01:26:34,310
I mean more so that like analogies that try to analogize the body social to the human body are imperfect asymmetrical analogies and that some information is lost in transmitting, like doing the analogy between those things because they literally are different things.

805
01:26:34,310 --> 01:26:37,870
One is a human body filled with blood and et cetera.

806
01:26:38,070 --> 01:26:38,870
And the other is not.

807
01:26:39,150 --> 01:26:40,330
So, but I mean, it's also,

808
01:26:40,450 --> 01:26:43,290
you're very good at providing these helpful analogies

809
01:26:43,290 --> 01:26:46,090
because it is good a lot of times to simplify things

810
01:26:46,090 --> 01:26:47,330
and get rid of extraneous elements

811
01:26:47,330 --> 01:26:48,270
to help us understand them.

812
01:26:48,350 --> 01:26:50,070
So it's also a good way to think about it,

813
01:26:50,090 --> 01:26:51,670
but just also caution too.

814
01:26:52,750 --> 01:26:53,110
Yeah.

815
01:26:53,790 --> 01:26:54,330
All right.

816
01:26:54,410 --> 01:26:54,750
I don't know.

817
01:26:54,830 --> 01:26:55,770
Pour gas on the fire.

818
01:26:56,050 --> 01:26:56,350
Throw it in.

819
01:26:58,490 --> 01:26:59,730
Which we can end right there.

820
01:26:59,910 --> 01:27:00,630
Like put the other bell.

821
01:27:01,590 --> 01:27:02,430
All right, guys.

822
01:27:02,530 --> 01:27:02,850
Thanks.

823
01:27:02,850 --> 01:27:03,850
We appreciate it.

824
01:27:03,850 --> 01:27:04,590
You guys have a good one.

825
01:27:04,650 --> 01:27:05,150
We'll talk to you later.

826
01:27:05,630 --> 01:27:05,870
All right.

827
01:27:05,890 --> 01:27:06,190
Thanks.

828
01:27:07,110 --> 01:27:08,030
Thank you for listening.

829
01:27:08,330 --> 01:27:09,710
If you like, please subscribe.

830
01:27:10,030 --> 01:27:14,110
Every little bit gets me one tiny step closer to my ultimate goal of living in a cave.

831
01:27:14,870 --> 01:27:18,490
You never have to buy windows or shingles and there's no longer no.

832
01:27:19,130 --> 01:27:19,610
Look it up.

833
01:27:20,150 --> 01:27:20,730
Dream big, kids.