Music usually sets the mood.
That was Richmond North of Richmond by Oliver Anthony.
And the line in it that I think resonates very well is,
your dollar ain't shit and it's taxed no end.
And today we're going to talk about how nations are able to do that,
how they're able to confiscate your wealth,
make you poor while making you think you're rich,
and how they're able to control populations by controlling money.
So today we're here to talk about inflation.
We're going to have a quick review of what we talked about last time.
Before we do that, quick show of hands,
how many of you believe that Bitcoin is the most powerful innovation
that you have ever seen in your lifetime?
Okay, so we're doing pretty good.
We're doing pretty good.
There's a couple of people yet to go.
Everyone is either a current or future Bitcoin maximalist or believer.
The saying goes that you will come to understand Bitcoin when you feel enough pain.
And some of you just haven't felt enough pain yet.
So quick review of what money is.
That was that was last week.
So let's have a quick review.
So money.
Money is a social contract. It's a social contract much in the way that this handshake is a social contract, much in the way that IOU is a social contract.
But we weren't able to scale that. Because we cannot scale handshakes and we cannot scale verbal promises, we needed to have something that we agreed had value that we could pass in between us to represent that value.
money enabled specialization because we had a non-material good that we could pass between us
that meant that i could become an eye surgeon and i could still pay for a hamburger
because otherwise i'd have to trade you one ninety second of an eye surgery to get my hamburger
or if i was a horse trainer i would have to train you trade you three hours worth of horse training
to make my car payment. We're able to specialize because we have money. Understand that money is
the birth spring of civilization. Without it, we would still be operating on barter system,
handing each other bananas for coconuts. We would not have F1. We would not have Xbox.
We would not have air conditioning. Money is the solution to the non-coincidence of wants.
That's the thing where you have something I want, but I don't have something you want.
And therefore, we need to have that thing to pass between us.
We're looking at money through the framework of technology.
It is a technology that continues to evolve.
So we started with rocks, seashells, tobacco, cattle, salt, gold, silver,
Worthless pieces of paper.
And we keep moving into different domains.
So we need to view it as a technology.
And the rule that we have to keep in mind when thinking about technology
is that technology does not negotiate.
You adopt it or it kills you.
If you had the horse taxis back in the 1800s and the car came out
and you chose to keep operating your horse taxi, you went broke.
If you were a milk delivery man when the refrigerator came out and you chose to keep lugging around milk, you went broke.
We have to adopt new technologies or we will be destroyed, left behind.
China has the example of the hundred years of shame when they decided that they were going to stick with silver while the rest of the world went with gold.
money is an accounting system and it tracks the amount of work that you do that is valued by
society one second it means that we have a scorecard and that scorecard is representative
of the value that we give to the world that value can be passed down you can inherit it
You can find it.
But it is an accounting system.
And at its core, money is what you trade your energy and your time for.
Energy divided by time is power.
Money is power.
If you can control the money, you control the power.
If you control the power, you control the people.
Money has four purposes.
We use it to store that value, to store our power.
Think of a battery.
if I charge that battery with one day's worth of work,
I want to be able to, in two days, two years, two decades,
trade one day's worth of work for the same or more than I'm able to trade it for now.
So if my battery leaks power, then I'm going to lose that.
Inflation is a leakage of power.
money is the unit of account by which we measure everything that has value much like a meter is the
unit of account by which we measure height much like the kilogram is a unit of account by which
we measure weight it's the medium of exchange it's just the thing we agree is money and it's also
the means of payment it's how we exchange it is it a check is it a credit card is it cash
Is it something solid? Money has characteristics that make it worthwhile.
Those characteristics are being able to divide it and reconstitute it.
Durability means it lasts through time without decaying and breaking down.
It's immutable, which means you can't go back in time and change it.
It's incorruptible, which means that you can't just seize somebody's if you want it.
It needs to be scarce, because if it's not scarce, then it's useless as a unit of account, because that's the thing that needs to stay constant.
It needs to be uniform, which means that we all need to recognize when we see it that this is money.
It needs to be acceptable, which means that not only do we see that it's money, we will take it in exchange.
It needs to be verifiable so that we can tell that it's not fake.
It should be private because we don't want all of our transactions to be public.
And it needs to be portable because in case we need to flee, we want to be able to take our money with us.
So there's the background on the money.
That's kind of the base case that we're looking with.
We're starting out today.
Recognize that money is a technology.
Technology does not negotiate.
What I'm trying to do is make the case that Bitcoin is the innovation, the advancement in technology for money, that much like the refrigerator, much like fire, much like the Internet, is something that we either adopt or we get left behind.
So here we're going to talk about inflation.
because inflation is kind of the evil thing that has lied within every money that we've ever had.
What is inflation?
Most of us think of inflation as CPI, consumer price index.
Prices go up.
We think of it as a percentage.
We think of it as, oh, prices went up 4%.
So that means that I have to make 4% more in order to live.
But the first misunderstanding of CPI is that it's not static.
It's a vector, which means that it's a direction.
So if it's 4% here and it stays 4%, it goes up, it goes up, it goes up,
and eventually it becomes parabolic.
Because any time we have any sort of increase in monetary supply,
it's only a matter of time before we have so much money
that it becomes effectively useless and effectively valueless.
What a government would like you to believe money is,
is a basket of goods.
Here's your house.
Here's your car.
Here's your movie.
Here's your steak.
It's the things that we consume.
But this is a lie
because we cherry pick what goes in here.
Think about the basket of goods that we have today.
For your movie, it's a Netflix subscription.
For your house, it's a 150 square meter apartment.
For your clothes, it's buying cheap stuff off Amazon.
for your food it's a McDonald's
now let's compare that to what a basket would look like in the 1920s
so in the 20s all of your clothes were handmade
they were all made of natural fiber
all of your food was organic
when you went to go watch a movie, you went to go watch a movie and you had an experience.
We've priced the experience out of it. So we can't compare these things because they're not
the same. And they keep going down in value in terms of what the experience is.
my steak that I have had in 1920 was organic. It was natural. It was farm raised. It was grass fed.
It didn't have antibiotics. If you want to buy that same steak today, the one that's got all
the junk in it costs you about $12 a pound. The one that doesn't cost you about 80, right? And so
it's gone exponentially higher in order to have the same basket of goods. So that's not what
inflation is. Inflation, by definition, is an increase in the supply of money.
That's what inflation is. And inflation ripples throughout society because when we increase
the supply of money, remember, all the money always equals all the stuff. This is the unit
of account by which we compare everything and we offer it a price. Money is the most
complex unit of account because you can measure, you can't measure things individually. I can
measure how tall Jack is with a meter stick and it doesn't affect how tall Rami is. But if I want
to measure how much a hamburger costs, I have to take into account how much a Bugatti costs
and how much land in El Salvador costs and how much it costs to put a rocket ship into orbit
because everything is relative to what money is.
It has to measure everything at once, right?
So it's the most difficult unit of account to have
because in order for things to be relative here,
this cannot change.
If this changes, all of this changes.
Yeah?
The argument that the supply of stuff grows 30%.
Yeah, so we're going to talk about that right now, actually.
Yeah, so our thought process goes like this.
I buy a house for $100,000.
Ten years later, that same house costs $300,000.
I didn't make any money.
the thing that I used to value the house got three times less valuable, right?
It's the same house.
Arguably, it's in far worse condition because it's aged 10 years.
It's organic.
It's falling apart.
And we're losing our ability to measure.
So right now what we have is an ever-expanding money,
and we have ever-expanding stuff.
And shockingly, even though in the last century we have developed nuclear technology, we've
developed jet flight, we've developed the internet, we have uncoded the genome, all of these incredible
advancements in technology, shockingly, the supply of money has expanded more than technology
has been able to decrease prices.
Because technology allows you to do more with less.
And so what should happen?
What should happen is that money becomes a barometer which measures the impact of technology on society.
So if your money is consistent, if it does not change, and technology makes life 5% easier, then prices should go down 5%.
So you'll experience deflation.
And during times of strong money, like during the Roman Empire, when they had a fairly strong money for about a thousand years, it was only strong for maybe 700 and then it started to fall apart.
But during those times, they experienced this.
They experienced deflation.
So what we're going to move into in a Bitcoin world is we're going to move into a world where everything gets exponentially cheaper over time.
Because if 4% makes it get exponentially more expensive, this works both ways.
If technology makes things 5% cheaper every year, that's also a vector.
And it gets exponentially cheaper over time.
This is why the saying is that everything falls to zero against Bitcoin over time.
Because it's a vector.
It moves in that direction.
Has there been any examples of inflation in the last 100 years of currency?
Yeah.
Oh, of a currency?
Yeah.
You'll see like minor.
Like when Russia started stocking up on gold after the Ukraine war because the United States put sanctions and started seizing dollar assets, there was a period of time where Russia, the ruble gained a lot of strength relative to the dollar.
So relatively speaking, yes. But in terms of long term, and we'll get to this with the father of fiat currency, in terms of long term, understand that when you have money, these are gold bars.
I know they don't look like bars, but they're gold bars.
And what we do is we take these gold bars and we issue dollars on top of them.
And when we issue more dollars than we have gold bars, that's like us playing, what's the game where you have chairs and you pull one out each time, right?
Musical chairs, right?
So when the music stops, and when the music stops in terms of economy, that means when the interest rate gets high enough that people stop spending money and they start saving money when they hold it.
When people decide to hold it, that's like trying to sit down while playing musical chairs, and now there aren't enough chairs.
So understand that any time that you issue more money than you have gold or silver, whatever it is to back it, that money will die.
There's no going back from that.
The second that you issue more money than you can back, than you can give back, it's over.
4,000 fiat currencies have existed.
3,840 of them are dead.
Of the 160 that are left, everyone is down 99% from its original value.
This is a feature of the system.
It is not a bug.
This is how it was designed.
I have eight cookies, and I tell nine friends they can have a cookie.
Somebody goes hungry, right?
The current system is modeled on trust.
The trust is that not everyone will want to take their money out at the same time.
That trust always fails.
It's failed in the United States in the 30s.
They had what was called the bank holiday, where for a period of about two weeks, you were unable to withdraw any funds unless you happen to be a friend of somebody powerful.
It happened in 1971 when the United States closed the gold window after Germany asked for their gold back.
and they said this is a temporary closing of the gold window.
We're not going to redeem gold for dollars for a short period of time.
It's been 54 years.
Short period is relative when it comes to governments.
So we understand this, right?
Do we understand that money has to stay consistent because it's a unit of account.
It's a standard.
All of the money, it doesn't matter how much it is.
It can be one money.
It can be a billion monies.
It doesn't matter.
As long as it has these characteristics where you can do all these things with it, any amount of money will suffice to serve any size of economy until you start messing with the supply.
So one of the things that I want to hope, I hope that during the course of these talks that you have a change of perspective.
And a change of perspective is really hard because perspective is the thing that you don't know you have until it changes, right?
You look into the wormhole, you look into the rabbit hole, and you see something different, and now you'll never be able to unsee it.
So here's three numbers.
Zero, one, and infinity.
So can we say that the difference between 0 and 1 is bigger or smaller than the difference between 1 and infinity?
It's bigger.
The difference between 0 and 1?
Which one's bigger?
0 to 1.
0 to 1 is bigger than 1 to infinity.
But this includes more infinities, right?
This is infinity in between here.
and then there's infinities, infinities, infinities, infinities.
There's infinities, and then there's bigger infinities.
Zero to one's an infinity.
Zero to two is including of the zero to one infinity and another infinity, right?
So it's bigger.
So in actual terms, this is bigger.
But when it comes to money,
what I want you to understand is that the delta,
The difference between zero and one is greater than the delta between, you can even write it like this, 0.0 to the n1 to infinity.
In terms of inflation.
And the reason being is that here we go from nothing to something.
And here we just have something and a bigger something.
If we expand the supply of money by 1% per year, in 72 years, you lose half your value.
If you expand it by 0% per year, it'll last for infinity.
So the difference being is that if you have an inflation rate that is an integer, that is a real number, that is not zero, the difference between an inflation rate of 1, an inflation rate of 10, and an inflation rate of 10,000, it's just a matter of time.
It only becomes a matter of time before that money becomes so worthless that you cannot use it.
But if your inflation rate is zero, that money can last forever.
Does that make sense?
Yeah, it's just a category, right?
It's a category of inflation at all.
It's a matter of time.
No inflation.
It can last forever.
And no inflation means that it will act as a metric.
It will act as a barometer that gauges the technological increase, the technological progress of humanity.
And by the way, this is really, I don't know if I have the picture.
Well, this is very easy.
Take a house.
Take a house 10 years ago.
It cost you probably 300 Bitcoin.
Take a house today.
it costs you about three. Keep going.
Ten years, it'll probably cost you .3.
Twenty years, it'll probably cost you .03.
Something like that.
Why is that, though? Why is this?
So let's talk about what markets are.
Because all the stuff
So we've got all the stuff, goods and services, et cetera, et cetera, right?
And the stuff becomes available to us because we have a market for that stuff, right?
So we have a market.
And what does market determine?
I come to you.
You come to me.
You're selling something.
I'm buying something. We agree on a price that you'll let it go and I'll buy it, right?
Markets are a clearinghouse. They're a way that we determine value of a thing. And by the way,
the way that I determine the value of that thing is you're coming to clean my house.
You're going to charge me 60 bucks for it. I make 60 bucks an hour. You can clean my house in an
hour and I can give you 60 bucks or I can clean it and it's going to take me three hours. And so
in my head, I'm doing this mental math where I'm like, three hours is worth $180 of my time.
I could just work one hour and then I could trade it to somebody who is
more efficient at producing that good or that service, right?
So what are markets?
Markets determine price.
And what is price?
Price is a signal to producers and consumers.
the signal is if you're a producer of that good and that price is above what it costs you to
produce that good you'll continue producing more of it if that price is below what it costs you to
produce that good, you'll stop producing. Markets have to have a clear signal or else we have
too much of the things we don't need and not enough of the things that we do.
So what can cause an inaccurate price signal? An inaccurate price signal is caused by dumping
money into the system. Because we never equally dump money into the system, right? We bail
out the banking industry, and then that money trickles throughout the rest of society. We
bail out the automobile industry and that money trickles throughout society It not at all times equal across everything right So the price is the signal that determines the supply
So if you have an inaccurate price signal, then your supply will then become inaccurate.
When your money becomes worthless, people seek to store value in things that are not money.
Right?
I used to be an investment advisor.
And when you're an investment advisor, one of the things they teach you is cash is trash.
You do not hang on to cash because it will become more and more worthless over time.
You're not doing your job if you're not finding something that returns more than cash devalues.
so what do you do you buy a house
right because houses go up
or you buy stocks
because stocks go up you buy bonds you buy a racehorse you buy a collectible car
you buy a priceless piece of artwork that isn't priceless because it has a price.
But what happens when the value of houses goes up?
I'm a house builder, and when the cost of a house is $100,000,
I can't be in that market because it cost me $200,000.
But when it costs $300,000, now I can.
So you have new entrants to the market to increase supply.
And when you have more supply, eventually you end up with lots and lots of houses.
and when you have lots and lots of houses,
the fundamental law of supply and demand says that if you oversupply more than there is demand,
then the price will fall.
This is what happened in 2008.
The global financial crisis, ostensibly it was caused by rehypothecating mortgages and all this stuff,
But really, it was caused because people were investing in houses.
A house is not an investment.
A house is the thing that you live.
It has utility value.
So you have the value of the utility of consuming the good that is the home.
But we were also adding on a store of value, an investment value.
And that was what was taking over the industry.
That's why you had people that had 8, 12, 30, 150 houses.
And they didn't own any of them.
They were just taking the house that they bought for $100,000 that was now valued at $200,000 and using that to buy another house and then using that to buy another house and another house and another house.
And it keeps going and going and going until it pops.
That's the bubble popping.
I think that was that good.
I'm not going to say that I did something.
If the economy goes the way you're saying,
BTC is the only thing that's going on.
Do you like an empty economy?
Because we don't want to buy houses.
We don't want to spend our money.
We don't want to hang on to it.
Maybe the economy will just suck into a really small size.
No, no.
So what will happen is that prices will actually fall to the utility value.
You've got a house right now, and it has two values.
It has the utility value, and it has the investment value.
A house is a shitty investment.
Why is it a shitty investment?
It's because I can inflate the supply of houses at will.
Anytime I want more houses, I can build more houses.
Real estate's a shitty investment.
We're standing on a fake island.
If you want more land and the price is high enough, you can make more land.
And so the price sends a signal to increase supply.
So what you're going to see is you're going to see houses fall to their utility value.
You're going to see art fall to its utility value.
Collectible cars fall to their utility value.
Gold fall to its utility value.
The best estimate is that gold's value is 90% investment value and 10% utility.
So even the gold is going up in price.
When we realize that it's nowhere near as good as being money as Bitcoin, it's going to fall to its utility value, which is as an insulator or not as a conductor and as jewelry.
And the value of that is much, much, much, much, much lower.
So we see that we will have things fall to their utility.
Just like a soda has a utility value, right?
It's whatever utility, whatever.
In economics, we measure this in what's called utils.
It just means how much joy, how much utility do I get out of this thing?
And by the way, that creates this really interesting thing.
This is kind of a side part, but it creates what's called the paradox of choice.
the paradox of choice is that the more choices that you have the less utility the less enjoyment
you get from making that final choice if i offer you a candy bar and you like candy bars
and the alternative is that you don't get a candy bar you're really happy to get that candy bar
it's going to give you a hundred utils of enjoyment if i offer you your favorite candy bar
that gives you 100 utils of enjoyment and your second favorite candy bar that gives you 80 utils
of enjoyment, you're now making a decision where the final will be, you're still going to choose
this one, but you're only 20% more happy. This is why online dating is ruining relationships
because you have unlimited choice, right? And so if this one doesn't make me happy,
there's one right below it and right below it and right below it and right below it and right below
I can just keep making choices, and none of them are fulfilling because it's always just a little bit better than the last one.
Any questions?
Okay.
I want to push through here a little bit and see what we've got.
So I experienced this, by the way.
This is when I was banking. During the COVID crisis, we shut the economy down.
Shutting the economy down is very similar to shutting the music off when playing musical chairs.
Everybody just held on to their money, right? They couldn't go to the bar, couldn't go to the movies,
they couldn't go to a concert, they couldn't do anything. And so all that money started to just
gathered back. And they realized, oh, this is a problem. Because we stopped the music,
everybody's saving their money. What happens when everybody saves their money?
Is that the economy collapses because I erased it, but there's not enough chairs.
There's not enough chairs for everybody to have their money, right? In order to pay off the debt,
We need people to continue borrowing money because we need to sell them debt at a higher rate than we're paying.
The government's paying 4% for their debt.
You need to pay 7% for your house.
Governments never pay off debt, right?
They just refinance it.
And that's why if you look at a chart of what interest rates look like since 1971 when the U.S. went off the gold standards, interest rate, time, it looks like this.
because we have to keep making the money cheaper in order to incentivize you to use it.
We have to keep making it more trash.
We have to make it so trash that you won't hold on to it at all,
and you'll just live in debt.
We have to do that or else the music stops.
If we're on a hard money standard where it never changes,
what you're going to see is you're going to see an increase in the interest rate over time.
And that increase in the interest rate will be reflective of the progress that technology is adding to the world.
So basically, it's going to be like, at 12%, I might give you my money because I think that you might be able to do something
that is better than hanging on to what I've got.
But the hurdle rate, the hurdle rate is how much is the money increasing in value?
Right now, for Bitcoin, it's like 40%, 50%.
It'll settle out to probably 20% or 30% for a bit.
But then we're going to start getting all of these advantages.
Fusion, AI, robotics, longevity.
and it's going to go parabolic again.
Anyway, so here's how we control things, right,
is we make the money cheaper
and we force you to spend it because it's worth less.
And this is the federal chairman talking on July 30th, 2020.
If I can make it play.
There it is.
We're not even thinking about raising rates.
We're totally focused on providing the economy the support that it will need.
We think that the economy will need highly accommodative monetary policy and the use of our tools for an extension.
So, by the way, highly accommodative monetary policy means that we're going to make a lot of money and we're going to put it into the market.
We're going to create a lot of money out of nothing.
and we're absolutely committed to staying in this until we're very confident that that is no longer needed.
So I wouldn't look for us to be sending signals about cutting back on facilities or anything like that for a very long time.
We're in this until we're well through it.
We're not even thinking of it.
So, and by the way, if you read the stuff from the Fed at the time, what they were saying is that a minimum of two years before we even consider raising rates, because they dropped the rate to zero in order to make the cash trash, to make us spend it, to make us move it around.
and less than two years later, we experienced the most rapid rise in interest rates in history.
And the reason for that was that we dumped all this money into the market. It made everything
worthless. The money was worthless. Therefore, all the stuff costs more. We experienced inflation.
It was killing people. And so how do we cure that? Well, we raised the cost of money
in order to encourage you to save it.
If you save it, then you're less likely to spend it.
If you're less likely to spend it, then you have fewer people competing in the market.
That means less demand.
Less demand means lower prices.
This tweet, I think, very accurately summarizes the situation that we're living in.
So when you earn a dollar, your employer is taxed for paying you.
It's a payroll tax.
You get taxed, income tax.
You spend that dollar, you get sales tax.
If you invest that dollar, then you get capital gains tax.
Even when you hang on to that dollar, you're being taxed because we're increasing the money supply.
So inflation is what's called a hidden tax.
By the way, did any of us vote for any of this?
Like, we all agree that we should pay tax, right?
We only agree that because there's this shame that we've instituted around that.
If you don't pay tax, then you're not a good citizen.
But the way that taxes worked when your money wasn't controlled by the government,
you had your gold.
And they came around, and they came to your door, and they said,
hey, the French are talking shit.
We're going to go beat their ass.
We need some money.
Can we have it?
And you said, all right, damn French.
I'll give you some money.
I'll give you 15%.
And they come back, and they go, the Germans are talking shit.
We need some money.
We're going to go kick their ass.
And then you say, the French just kicked your ass.
Things got worse.
All right, I'll try again.
I'll give you my money.
And then they come back again.
And they say, we got our ass kicked by the Germans and the French.
And now we can't afford to build roads.
We need your money.
And finally, you said, no.
You can't have my money because you're not good at spending it.
And it turns out that maybe the Germans aren't that bad.
Maybe the French aren't that bad.
In fact, I hear stories that they have roads and they have plenty to eat.
Has anybody read The Sovereign Individual?
Okay.
The Sovereign Individual's thesis, very plainly stated, is parts of it.
If the government cannot control the money, if they can't take it without you giving it up, if they actually have to compete for it, what you're going to see is governments as a service competing for your citizenship.
Where are we standing?
Right?
It's from 1996, I believe.
It's insane.
it's incredible. But if they can't take that money, they have to ask for it.
And if they have to ask for it, you have to give it up. And if you have to give it up,
then you have to be giving up something that you feel like is worth more than what you're,
you have to be getting more than what you feel you're giving up.
When you guys pay taxes, do you feel like you're getting more than what you're giving up?
right
if you can no longer unilaterally tax people
not just through stuff that you didn't vote for but through
inflation remember last time we posed
this question if governments can
create more money at will out of nothing
why do they need to tax you
It's just control.
It's just a form of control.
You don't need those taxes.
You don't need my $50.
You can just make $50.
What is the government controlling?
What is the guideline towards?
so
we talked about this i think maybe one class ago but in the 50s and 60s we went through an era of
relative peace after world war ii and we entered the 60s and we entered this time of revolution
Right. Psychedelics expanding, people marching. We don't want to get a war.
There's no use for this. And during that time, I've read a couple of reports and a couple of listening podcasts on this.
There was there's a lot of talk in the government of how do you control the people that is not at war?
How do you keep them from uprising and overtaking?
100%
so fiat money
is backed by what?
what's the United States dollar backed by?
what?
it's backed by the power of the United States military
yeah
if you don't use our money
if you want to go against us
will kill you. Remember, we talked about this before. Your president, what's his name?
Javier Millet. He talked, he broke down after he was elected as president of a country that taxes
his people. And he explained very easily how tax is only enforced by violence. I come to your house
and I say, give me 10% of your money, and you say, and I leave, and I come back, and I say,
give me 10% of your money. Here's a piece of paper, and I signed it, and it says you have to give me
10% of money, and you say, and then I come back, and I say, give me 10% of your money. Here's a
piece of paper. I signed it. Here's a guy with a gun, and now you'll pay, right?
Fiat is enforced only through violence.
If I'm trying to control violence, violence is usually generated by scarcity.
What if the enforcers can make my citizens richer instead of poorer in order to make them happier so they don't grow?
Correct.
But scarcity ensues when you have money that mixes with the market in order to send bad price signals, which affects the supply, which creates scarcity of things that you need and abundance of things that you don't.
I've got a slide here at the end.
It said that the slide is when money is scarce, Bitcoin, when money is scarce, everything is abundant.
When money is abundant, everything is scarce.
Right.
Yeah.
I think one more reason
is that they charge income tax
from people and why there are different slots
for different income taxes
is because if they just, let's say
they didn't have income tax and we kept
bringing more money
to control their spending,
the poorer will have to
keep paying more for each product
as equal
to the people who are rich.
Yeah.
Yeah. Inflation is an unfair, unfair attack on the poor. Absolutely. 100 percent. Because
everybody has a baseline of what they need. They need food and shelter. Right. And when we inflate
the money, which, by the way, we do that way more than we tax people. Right. Way more. Most of our
money comes just from printing. It doesn't come like, again, remember, governments have no money.
It's people's money, and they're taking it, right?
So, yes, you could say that.
You could also say that when I decide to tax Jack, who makes a billion dollars a year, 80% of his wealth,
and I decide to tax you, who makes $50 a year, nothing,
what I'm doing is I am unfairly targeting the person whom society values,
who is providing value to society by doing something that society has deemed is worth value.
And so I'm handicapping him. It's like playing basketball and taking LeBron James and strapping
weights to his legs so that a midget can compete with him, right? That's what these accelerated
tax brackets do, is they hamper people who are productive. And this is why you're seeing the
fleeing of billionaires and millionaires from UK and from California, from all these oppressive
tax regimes to places that are of more fair, more fair tax regimes. Like, look,
fact of life is, if you're more powerful than somebody, then you can do more. And we shouldn't
We shouldn't handicap people for that, right?
We shouldn't make it harder for people who are better.
Because, by the way, it's harder to be better.
Like, it's just already harder to be better, right?
If I'm the best guitar player in the world and you feel bad because you're not the best guitar player in the world,
you're just like, okay, now I have to wear mittens while I play, right?
That's what these tax brackets are.
That's what they do.
One thing about European culture is also just that what you described as that people just provide more value.
For example, we were talking about billionaires.
In Europe, it's like mostly just, okay, let's do some shady thing,
and they're actually just bad people who got that kind of shit and did not buy more value.
Yeah, that's the woke narrative.
What the woke narrative would want you to believe is that they love the poor.
What they actually believe is that they hate the rich.
Right?
Hate never comes from above.
Always remember that.
When somebody's trying to bring you down, trying to hurt your feelings when they're talking trash on you, hate never comes from above.
It's not worth it.
Can we actually measure successful people, wealthy, billionaires who are actually wealthy because of their talent and hard work and not because of some trap that they've done in the system to shortcut that wealth?
I don't know. Maybe you had context.
Maybe you're talking to me and then you're stupid.
So it's 90% of all the billionaires in the world are self-made?
Okay.
If I, in 1950,
if I decide that there's a good way for me to put a basketball into a rim
and I decide that the way I can do that is just by getting very close to it
and jumping up and pushing it through, and I invent the slam dunk?
Have I taken advantage of the rules of the system?
I did.
There's no rules, then there's no advantage.
Don't hate the player, hate the game.
Right?
And what are we doing today?
We hate the players.
Hate the game.
Hate the loopholes.
Remember the, I don't know if you remember this,
maybe you've never seen it, but in 2016, Hillary Clinton and President Trump are debating.
And she says, he doesn't pay his taxes. He's a billionaire. He doesn't pay taxes. And he says,
that's because I'm smart. I'm following the system that you and your cronies created for
yourselves. And you're just mad that I'm using the rules the same way you intended to use them
for yourself.
Are you telling me that Nancy Pelosi is the best trainer in the world?
Her husband is.
It's her husband, remember.
It's not Nancy.
Yeah.
I can't think that was after a question.
The money comes from social services and stuff like that.
How should we manage that?
That's a good question.
How do we think we should manage that?
You know, societies are really, I would say, best measured by how they take
care of the least able to take care of themselves. I was in a youth organization when I was in
high school and college, a youth leadership organization, and we had a motto that we would
say. And the motto is, I believe in less need for charity and more of it when needed.
And so when you ask that question, I would say, I don't accept the premise of your question,
because the premise of your question is based upon believing that these people are incapable, right?
It's believing that these people are incapable.
And I don't think that in the majority of cases that's true.
I think we have a, like, would you agree that there are a lot of people that are perfectly capable of working who do not work and exist on social services, right?
So how do we change that?
This is the discussion that we had with James during one of the Charter City talks.
is that better rules don't make better people, better values do.
So if you have better values, if you instill as a child that you have to work hard,
that you have to overcome things, that you have to do all this stuff,
you have to gain hard skills, then you can end up with a society that supports itself.
So what I would say is that I would argue that it is a case of we need to accept more responsibility for ourselves and that when we do so, then we will have less need for charity.
And if we have, like, the charity that we have today, we saw this with Doge, when Doge came out and exploited all these organizations, you know, $300 billion for, I don't know, infants in Africa, and one million made it there, right?
Most of this stuff is not actually charity.
Most of it's just extortion.
but I think
the way that we provide for those people
is through advancing technology
to provide basic needs
what about normal things in a society
like school, hell
school is free
like the best education in the world is on the internet for free
right
fire department
yeah
so I come from a place
that has a rural fire department
I'm a member of a rural fire department.
I don't get paid.
My dad doesn't get paid.
We all agree that it's worthwhile to have the skill
to know how to fight fires And therefore we all individually contribute some of our time some of our money in order to train because when a fire comes up we want to be able to stop it So that back to self
Other people would like to donate to illnesses
that are behind their families. They could help with the charity.
Yeah, they would, you know...
The most needed charity.
Yeah. And like, understand
that the majority of your wealth has been stolen from you throughout your lifetime.
Right now, you probably have to earn between, based on where you're from, you probably have
to earn between two and ten times as much as you did when you were born just to have
the same level of standard of living.
And that's because you have a money that can be controlled by someone else.
So when we exist in a world that has money that can't be taken, again, I want to try
to change your perspective.
And so I want you to think about this, like think about nuclear power, think about jet planes, think about the Internet, think about all that.
And still a Coke costs three dollars.
And it used to cost five cents.
That's how much of your wealth is stolen from you.
so much so that things cost more despite the fact that we have had more advancement in technology,
more abundance in the last hundred years than we've had in the entirety of human civilization
combined. That's how fast your money is taken away. By the way, flip this chart upside down,
this United States national debt. Flip that chart upside down, and that looks like every
other shit coin that you've ever seen. Everyone. Milton Friedman, one of the most famous economists.
I believe he was a treasury secretary. I can't remember his title. Only government can take
perfectly good paper, cover it with perfectly good ink, and make the combination worthless.
Warren Buffett
the arithmetic makes it plain that inflation is a far more devastating tax
than anything that has been enacted by legislatures
Alan Greenspan, former Federal Reserve Chairman
back in 1966, back before he got the job of creating the fake money
back when he was someone who did legitimate academic work,
back before the United States got off the gold standard.
In 1966, five years before the U.S. left the gold standard,
he said in the absence of gold standard,
there is no way to protect savings from confiscation through inflation.
There is no safe store of value.
It does not exist.
Karl Marx.
owners of capital stimulate the working class to buy more and more. Why? Because you produce
when you have capital. You're able to have means. Unpaid debt will lead to the bankruptcy of banks.
2022, we start to see that just rife through the United States. We had the collapse of Silvergate
Bank. There was probably 40 or 50 mid-level banks that just no longer exist. Billions and
billions and billions of dollars. The unpaid debt will lead to the bankruptcy of banks,
which will have to be nationalized. When we bail out, think, I want you to listen.
When you hear the word bailout, I want you to understand that that means nationalization.
It's a payoff. When the government bailed out the banks in 2008 and all the CEOs got
$100 million bonuses and they left, they're no longer involved. That was their payment
to sell to the government. We now live in a nationalized bank system.
When the automobile industry took the loans from the government, got bailed out, that was the
nationalization of the automobile industry. When you hear bailout, think nationalization.
this eventually leads to communism communism is just we're nationalizing everything right
we'll nationalize the mining industry we'll nationalize the automobile the housing nationalize
food john maynard keens this is the father of the model that we live under this is the guy who
basically created the fiat system that we live under so read this and i want you to realize
you losing your money is a design.
It is not a bug.
By a continuing process of inflation,
governments can confiscate secretly and unobserved
an important part of the wealth of their citizens.
This is another problem that you have with inflation.
This is called shrinkflation.
This is what a Big Mac looked like in 1980.
This is what it looked like in 2024.
This is what a two-by-four looks like today.
This is what it looked like in 1918.
We have some of these back in the man cave.
They are so hard that you cannot drive a nail through them.
When you're buying a house, there's a term that you'll hear.
People say it has good bones.
good bones is slang for it was built with boards like this because this board this is a tree that's
about 15 years old this is a tree that's about 80 years old we allowed it to actually develop and
mature and grow and be strong but now we're selling the same board for 20 times the price
and in reality it's about one-tenth of the actual quality potato chips are like this
because bags of potato chips keep getting bigger and they keep getting less potato chips in them, right?
Shrinkflation, this is a moral hazard.
If you're a wine producer and you make a $20 bottle of wine and all of your costs go up
because now you have to pay more for your land, you have to pay more payroll tax,
you have to pay more and more and more, what are you going to do?
Are you going to keep selling your wine for $20?
Are you going to raise the price to $40 and price yourself out of that market?
or are you just going to add some water to it?
I used to live in a college town and there's like 30 bars.
And bars change hand.
The average bar stays open for about two years before it goes bankrupt
and somebody else buys it and they try again.
Every bar starts out the same way.
Strong Jeeps, strong drinks and they're cheap, right?
And then over time they start watering down their drinks.
and then they realize that they can't compete because there's another bar that has a reputation
for porn, strong drinks, they're cheap. And then they try to do that, and they realize that they
can't because it costs too much, and then they go back front over and over and over and over and
over. When I was front in a band, there was one bar that we played their grand opening and their
grand closing in the same year. All right. I've said this before. How much money is needed to run
the world? It doesn't matter. As long as it has these characteristics, as long as it has those
characteristics, you can run the entire world off of whatever amount of money that you need,
whatever you have. As long as you can divide it, it lasts. As long as you can't change it,
as long as you can't take advantage of it, as long as it doesn't change in supply,
as long as I can recognize what it is, and I will accept it as long as I know that it's true,
as long as it's private, and as long as I can take it with me.
But that's an arbitrary number. It could be 3 million. There's approximately 4 million that
are lost, so there's only 17 million left, and we're just fine with that. There's no problem with
yeah yeah yeah privacy schools like a little bit lower maybe a little bit lower than cash yeah
but it's very easy to make bitcoin private right it's very easy to use mixers and tornado cash and
stuff and you can't stop that like you can make it illegal but you can't stop that just like they
outlawed cars when they first started. Not only did they outlaw cars, they made laws that said
somebody had to walk in front of a car waving a flag. They also said that the car could go no
faster than a horse could walk, right? You have all these stupid laws that come into play,
and soon enough you realize that the technology is so strong that you can't enforce the law.
And Bitcoin's way stronger technology than a car, right?
Cannot stop it.
Remember, all the money always equals all the stuff.
The number that you care about is not the number in your bank account.
The number that you care about is what will that number buy me?
If I have a million dollars, am I rich?
Depends on where you live, right?
What if I have a million dollars in 1920?
Am I rich?
Yeah.
If I have $10,000, am I rich?
In 1920?
In 1700, maybe.
In 2020, I'm poor, right?
It depends where you live.
Yeah.
it's kind of interesting because you say it all depends and all depends and it all depends but
in bitcoin it's one bitcoin is one bitcoin it doesn't change but what changes is what you can
buy with it right what changes is what you can buy with it and it goes one way it goes that way
because it is a barometer for techno technological innovation and progress
when money is abundant goods are scarce
when money is scarce goods are abundant
this part yeah yeah here hold on we'll get there i want to show you
uh we'll skip these and we'll come back okay germany 1923
in 1915 you could exchange 4.2 Deutschmarks and get one dollar
eight years later it took 4.2 trillion dollars
to get one dollar money was everywhere money was abundant in ways that you could not imagine this
is a woman shoving millions of dollars into a furnace to burn it to stay warm
because it's worth less than firewood, right?
Money is abundant.
Goods and services are so scarce that you can't afford to heat your home.
During this time, drinks would go up in bars every hour.
So if you were wise, you would show up and you would pay for all your drinks at the beginning.
the little kid stacking
hundreds of thousands of dollars just playing with money the money's abundant
because they printed it they printed it because they got saddled with these
insane reparations for world war one they couldn't afford it and so they said well
we don't have enough money to pay the debt. We can just make money. And everyone lost everything.
Venezuela. If you made an average income, like a median income in Venezuela in 1980,
about $4,000 a year, based on how much money was created, how much more abundant money became,
in order to have the exact same standard of living in 2020, you would have to make 2.08
on the tillion. It's like as many molecules exist in the universe.
This is art created out of money that people made and they sold on the street. I lived in,
I lived in Colombia in 2022, I think, 2022 or 2023.
And I remember asking my host, I was like, this is kind of interesting.
I've never been to a place where every single street corner, you have somebody at the stoplight and they're like performing tricks.
Like there's mimes and there's guys that are juggling and whatever.
So they're all Venezuelans.
They walked here from Venezuela when their money became so worthless that they could not afford to live.
And the ditches are filled with cash.
The streets are just lined with cash because it's so abundant that it becomes.
And of course, this of course, this has to be true. Right.
Of course, this has to be true. If if the supply of something increases so much higher, you don't you don't value it anymore.
Right. Why? Why is why is the Mona Lisa valued?
There's one of them.
What if there's a billion Mona Lisas?
Everybody has one in their living room.
Is it worthless?
Yeah.
A racehorse, a collector's car, a baseball card,
their value is always tied to their scarcity.
Remember, value equals desirability multiplied by scarcity.
I want it and there's not much of it.
That's what gives something value.
More in Venezuela, making purses out of money.
Price of a dozen eggs.
In two years, the price of a dozen eggs went from $1,500 Venezuelan dollars to $1.4 million.
This will happen to every single fiat currency.
This will happen to the dollar.
It will happen to the Singaporean dollar.
It will happen to the Chinese yuan.
It will happen to the Japanese yen.
Japan's ahead of everybody.
They've experienced negative interest rates already.
They're ahead of everybody because they're kind of a vassal state of the United States.
The Japanese hold more U.S. treasuries.
They buy more U.S. debt than any other country.
And so they're saddled with losing, right? Because they're buying this debt that pays them 0%, 1%, 2%, 3%. And the money decreases in value by 13% per year. So they're losing every single year. And they have to force people to keep playing that game of musical chairs.
And remember, the only way that I can force you to move your cash and spend it and put it in the economy is I can make that cash so worthless that it hurts you to hold on to it.
And they're already to that point where not only am I not going to pay you interest, I'm going to charge you interest to keep your money in a bank.
They're ahead of the U.S. in that drop.
Zimbabwe
at the height of inflation
prices doubled every 24 hours
in Zimbabwe
they had a
100 trillion dollar
bank note that they created
and people wiped their ass with this
because it was cheaper than toilet paper
I want to go back
I want to go back to
this video
mainly because I love cartoons
but this is from the 60s
oh, hold on
Uncle Scrooge, why don't they just turn up a few billion or so?
A few billion?
Oh, dear Lord.
I've had one billion hours of dues.
If it weren't so frightening, I'd be a ghost.
Folks have no conception.
A fortune in the hat.
Gee, you officer.
I'm not too bad.
See, honey?
They were nowhere near.
I have to wait on a hundred thousand years.
It's about fifty seconds.
Didn't you buy it without a break?
In thirty-two years you have them all.
But who is back with me?
And now?
You're in a lot.
Aye, I'll print several billions and see what you've got.
But unless something's behind it, in the treasury.
Something in solid and secure.
Uh, like me.
We'd have inflation.
Inflation?
Oh, that's a mess.
Your money would be more, less, and less.
I'd like to take this hatch full, I dare say,
to buy what you'd be if I would buy the cheap.
A dollar wouldn't be worth the paper it's printed on.
I don't know.
Oh, good one.
Good one.
What you can find is what you've got in taxable accounts.
It's a question of economics.
I, it only means high school management.
It's a great world.
High school management, that's budgeting, dear Jen.
I, financial discipline.
It's not what you have. It's what you can buy with it. Right. Buying power.
A cartoon duck in the 1960s knew this. And somehow we all forgot it.
We all went off because we were told that prices going up are good because that encourages us to own assets.
It encourages us to spend into the economy. It encourages us to buy houses.
that encourages us to invest in the stock market
and to buy debt and to buy bonds and collectibles.
But we shouldn't be encouraged to buy things.
We should only buy them when it makes sense for us to do so.
A couple of charts that I wanted to go.
Oh, wait, no, this one's even better.
This is Jared Bernstein.
I believe he was part of the Biden administration
and the economic side.
The U.S. government can't go bankrupt
because we can print our own money.
It obviously begs the question,
why exactly are we borrowing an currency
that we print ourselves?
I'm waiting for someone to stand up and say,
why don't we borrow our own currency in the first place?
Like you said, they print the dollar,
so why does the government either borrow?
Well, again, some of the language and concepts are just confusing.
The government definitely prints money, and it definitely lends that money,
which is why the government definitely prints money,
and then it lends that money by selling bonds.
Is that what they do?
they sell bonds.
Yeah, they sell bonds.
Right?
So they sell bonds and people buy the bonds and lend them the money.
Yeah.
So a lot of times, at least to my year with MMT,
the language and the concepts can be kind of unnecessarily confusing,
but there is no question that the government prints money
and then it uses that money to...
So, yeah, I guess I'm just...
I can't really talk...
I don't get it.
I don't know what they're talking about.
Because it's like the government clearly prints money.
It does it all the time.
And it clearly borrows.
Otherwise, we wouldn't be having this debt and deficit conversation.
So I don't think there's anything confusing there.
What does Ray Dalio think about inflation?
He talks more about this in the long term, that cycle, and this may be added to the US.
What does he think specifically about inflation?
Ray Dalio came out a couple of years ago, very against Bitcoin.
About two years ago, he came out and said, it's an effective store of value.
You should probably have around 2% of your portfolio in it.
Last week, he upped that number to at least 15%.
He said, if you don't have at least 15% of your portfolio in Bitcoin, then you're falling behind.
And that makes sense because the inflation rate's around 13%.
By the way, so understand that this always, where's my eraser?
This always looks the exact same.
It always looks the exact same.
Every single time a fiat currency dies, it looks the exact same.
You start out and you have a supply of money, and it's usually backed by gold.
Like every fiat money starts out being backed by something, gold, silver, whatever.
Then they increase the supply a little bit.
And then inflation hits, and they raise interest rates, which decreases the supply a little bit.
And then they lower interest rates to stimulate the economy because at this point, it's already done.
that currency is already going to die. You already have not enough chairs for people.
And then it inflates a little bit more. And inflation gets out of control, so they
raise interest rates and it goes down. But they have all this debt and they have to pay the debt.
And the only way that you can pay the debt is to refinance it at a lower interest rate,
Because you can't afford to borrow at 4% and keep borrowing and not make more money and pay 6%.
You have to pay 3% or 2% or 1%, so you have to go down.
So then the money supply goes like this, and then this, and then this, and then this.
And it just becomes more and more chaotic and wild at the end.
And at the end, it always looks like this.
Every time.
They start printing insane amounts when it gets way too out of control.
This is the global supply of the dollar in 2020.
We're printing it, we're printing it, we're printing it, we're printing it, we're printing it.
Shit got really wild.
Then we tightened interest rates.
We dropped the supply by tightening interest rates that decreases the supply of money.
And now what are we doing?
We're going to drop interest rates again.
Right.
And it's going to go up and we're going to keep because we can't afford to pay that debt off.
I like this one.
This is Alan Greenspan again.
After he had become part of the government.
can pay any debt it has because we can always print money to do that.
So there is zero probability of default.
It's a short clip, but I play it just for the look of the other guy,
where he goes, oh, God.
And you should all do that, too.
Every one of you should listen to that and go, oh, God.
This is what my money is based off of?
somebody using circular logic?
We have debt, but that's okay.
We can make money.
How do we make money?
By issuing more debt.
And when you issue more debt, we need to make more money.
And when we have more debt, we need to round and round and go
until it goes to zero.
Every single time.
Guarantee it is a feature of the system.
And I think at this point,
just a couple more charts on like what happened so like so again remember that when your cash is
trash you seek to store value in other things you seek to maintain your buying power by hiding money
in other assets that do not inflate as fast and all you have to do is take a look at how much more
of that is issued right is the issuance of houses faster or slower than the issuance of dollars
It's way slower, right?
You can make a trillion dollars with a click of a keyboard.
It takes a while to issue.
By the way, this is why cows were so much better money than fiat, because they have a predictable issuance schedule.
It takes nine months and a boy and a girl cow to make another cow.
So when we know how much money is coming out and we can predict it, we can actually start to grapple with that a little bit.
and we can, the prices aren't affected as much.
But remember, we watched the clip of Jerome Powell.
We're not even thinking about, thinking about,
thinking about raising rates.
And then what's he do?
The fastest rate increase in human history.
And it sent things haywire, right?
So if you have predictability in your issuance schedule,
which Bitcoin does, right?
Like the brilliance of this, I love that it is so brilliant.
We don't have a predictable gold supply because we cannot predict who is going to hit the next mother load.
We cannot predict that if you dig here, you're going to find X amount of gold.
Or if you dig here, you're going to find X amount of gold.
We can't predict that an asteroid made out of gold, which is the only way that we get gold, it's just exploded stars, right?
It's the only way we have gold.
We can't predict when the next one's going to hit or how much gold's going to be in it.
It's hidden in the ground, and we can't determine it.
But Bitcoin is hidden in time.
Every 10 minutes, we know how much Bitcoin is coming out.
And then we also know the total supply.
So we have consistency in the unit of account.
And because we have consistency in the unit of account, we have a safe store of value.
Those are the two most important traits of money, most important purposes.
Why does the government borrow money if they can print money so
probably do about as good job as he does actually
like so let's talk about let's talk about cookies right let's talk about cookies
I have eight cookies.
I promised nine people they can have a cookie, right?
I made all the cookies that I could make.
I used all my flour.
I used all my eggs.
I used all my milk, right?
I used all my sugar.
But I know that you're going to be mad if you don't get your cookie, right?
So what I'm going to do is I'm going to borrow in order to get more milk,
eggs and sugar so that I can make you the ninth cookie, right? But of course, I'm going to borrow
more than what that cookie needs. It cost me $5 to make the cookie. I'm going to borrow 50 because
I got to pay an administrator and I got to pay a lobbyist and the lobbyist has lawyers and I got to,
right you see what i'm saying like governments are insanely inefficient right so there's this
multiplier right if a government needs a million dollars then what they actually need is a billion
dollars because everybody's got their hand out along the way the united states is like i think
it's like 22 of the united states depends upon the government for their means of income either by
directly working for the government, being on social services, or being a company that exists
solely on government contracts, that number was like 0.3% 100 years ago. So think about,
think about, think about what, what is a government? A government, let's see, I tried to do this when
I was on the beach, but we'll see. It's just going to look like a penis again. Hold on.
is it a shark close enough right it's a terrible shark but so yeah it's not good yeah there's a
reason i play music okay sharks whales what do they have they have these they have these little
these little fish that hang around and they exist off the scraps right and then they have these
little things that are in here and they eat the little pieces of food left over in their teeth
right? And we call that a symbiotic relationship. That's what governments are supposed to be,
right? They're supposed to be a symbiotic relationship. They're existing off the
resources of the people. The shark, whale, penis is the people. And the government is the little
things that are eating the little resources off of it, right? And they're providing a service,
right? They're cleaning the teeth. They're keeping it clean on the outside. They're keeping barnacles
off of it. But the only way that this works is if they're dependent upon the food from the whale,
from the shark. If this little fish can print its own food out of nothing, right,
then what does it become? It becomes, I'm terrible at drawing. It becomes a tick
where it's just sucking the life out of it. It's just taking a government that controls the money
is like being able to take as much as you want from the host organism, right? So if it can do
that, then it just sucks all the life out of the host organism until there's
nothing left. It becomes a tick. It's a glutton that has
learned that it can feed itself to no end.
Right? And there's no way to control it, right? Because it's a
good business to be in government. And so you're encouraged to go ahead
and get in that.
I mean, that's part of the reason
that the government borrows?
It's not money in the economy,
so strictly speaking,
so it doesn't contribute to inflation.
You're serious?
Sorry.
That was my reaction.
All the money always contributes to inflation
because no matter where it goes,
it ends up in the economy.
If I pay a government worker,
if I pay a zookeeper,
if I pay an astronaut,
they all put that money into the economy.
They all compete for housing,
for food, for goods and services.
There's no separate economy.
Right?
So inflation should be much higher than it is, like,
officially or whatever.
I mean, how does it use, like, how do they manage to,
what, officially?
Technology.
Technology allows us to do more with less.
And technology, as powerful as it is,
cannot overwhelm the amount of inflation.
I remember in 2015, there was the money supply.
Everyone's supply was like $2 trillion or something.
And then in 2015, it's almost $20 trillion.
That's the debt.
The actual base money is more like $8.
Yeah.
It doesn't add up if you look at the inflation rate.
per year.
Remember, inflation is a vector.
It's not a position.
It's a direction.
Yeah, so if it's 5% per year,
that's 10 years ago,
that means that it's almost a doubling.
All right, if you bought a house,
if you bought a house 10 years ago,
is it twice as valuable now? Yeah.
Okay, but the most part
inflates by the main things,
not the few years.
So I think they've managed to
have a 5% instead of 3%.
Understand that not every single
good inflates at the exact same rate,
right? Coffee is
not scarce, and so it's not going to go up
in price nearly as much as gold,
which is moderately scarce.
Houses are moderately scarce. They're going
to go up in supply much more
than candy bars because they're not scarce. And why? Because I don't store my wealth in Snicker
bars. I don't store my wealth in a Vente latte. I store my wealth in a house and I store my wealth
in a collectible car. And so there's more competition for those things because they're
scarce. Inflation, how much more is health insurance? 10 times as much, right? My clients,
when I was a banker, a 60-year-old and his wife, they paid $32,000 a year for health insurance.
Both in good shape, right?
Ten years before that, it was right around $2,000 per year, right?
So it hits different things differently.
So my point is that the official information figure is on the other day.
Yeah, that was literally the first thing that I said, is that CPI is complete bullshit.
Yes.
Yeah.
So how long do they, like, keep that up?
That's the question.
Stop believing in it.
Have you seen screenplay?
You should not come up.
I'm so sorry.
Yeah.
Yeah. If you want a good look at what inflation is, then you can always look at this site.
Or maybe not. Well, I guess we failed that. I encourage you all to look at this.
pricedinbitcoin.com
and it will give you an idea
of what happens when an innovative technology
starts to take over an entire asset sector.
The house that you guys are looking to buy, right?
The house that you guys are looking to buy 10 years ago
would have cost you 10,000 Bitcoin.
Today, it'll cost you 1.5, right?
Prices fall forever when your money stays scarce.
It's going to be super violent, super distressing, like most people are.
Yeah.
So one thing that's very common during any sort of decentralization era is that nation-state violence falls, but person-to-person violence rises.
And so you will see more individual.
This is why being a fighter is such a good skill to have today, because the returns to violence at the nation-state level have fallen drastically.
but their turns to violence on the individual level are much higher.
And so you're always going to see that.
So what is my recommendation?
My recommendation to you is that you stop fucking around with shit coins,
is that you stop trying to get rich quick,
because get rich quick schemes are sold by people who get rich quick,
and they're bought by people who get poor quick.
My recommendation is that you invest in learning hard skills.
You invest in the ability to speak with precision,
to use your language to its greatest efficiency and accuracy. I suggest that you become responsible
for your life in as many ways as possible. Clean your own room, manage your own bank accounts,
fix your own shit, build stuff if you can, learn how to do things for yourself.
I suggest that you spend a lot of time understanding philosophy.
and that's more of an AI thing
because AI is very rapidly going to be programmed
in natural language
and Andres Carpathie says this too, right?
He's like the coding language of the future is English, right?
So...
You just describe Athens.
What's that?
You just describe Athens.
Actors?
Athens.
Greece.
Athens, yeah.
They have a generation.
Yeah.
They have a philosophy.
Yeah.
They shape.
Yeah.
They care about how they talk and communicate what they need.
They need to help the bill.
Yep.
They had a – they remember like wrestling was a big part,
like being able to defend yourself was a huge part of that society.
Yep.
They also had a pretty stable money.
Yeah.
So, yeah, that's the thing.
And then just – yeah, the thing about Bitcoin that people talk about
is having a low time preference, is being patient,
like understanding that I don't need to get rich today.
or tomorrow or in five years that I have a life to live. And that if you spend your life
dedicated to becoming good at something or just a few things, then you can be very successful.
But you have to choose wisely what those things are, right? If it's 1975 and I decide to spend my
life becoming a typewriter repairman, I'm going to have to change my expertise. If it's 2008 and I
decide to spend my life becoming a watch repairman, that's not going to be a very valuable skill
moving on. So what are the valuable skills? It's being able to speak. It's being able to connect
with people. I do think music is actually one of the highest returns. I think, and this is delving
far away, and this is a personal thing, and so this has nothing to do with this, but my personal
thoughts is that we're moving into an era of insane abundance, where everyone will have everything
they need, and nothing will be scarce except experience. So the experience of being in pristine
nature will be scarce. The experience of being at a live music concert will be scarce. The experience
of having children and having loved ones close to you will be scarce. The experience of being
physically fit will be scarce. And so those are the things that I think are the most valuable.
Yeah. And that's a very long-term bet. Yeah. All right. What else we got? Yeah. Yeah.
Yeah, they got to make the ninth cookie because they promised nine and they only had eight.
Yep.
Right.
But when they print more money, they're promising more cookies.
if you print more money you're promising more cookies without having the milk eggs and sugar
to make them right so you have to so so here's how it works i'm a government i create a bond
i give that bond to you i i say i'll pay you interest for 30 years 20 years plus the amount
of the bond if you give me the money right now to buy the milk, eggs, and sugar.
So if I just print it, then I have nothing, right?
I have nothing.
I can't print it without having the debt.
You can't separate the two.
They have to be involved, right?
They have to be together.
Is it like the legal procedures around printing money?
Like, then they have to have, like, some special vote to print money, whereas to issue bonds, they can just go and do it in, like, a regular...
Like, that's why the machine would increase when they were like, yeah, we're going to print those money, and it went through, like, Congress.
I think it's the other way around, isn't it?
Because, like, Congress votes to raise the debt ceiling.
So when they vote to raise the debt ceiling, what they're doing is they're approving the sale of more bonds, which is the creation of more money.
Is there a restriction? I would say, I mean, so the levers that the Federal Reserve has to pull is they change interest rates, which changes the supply of money in the market.
And they can issue more money, which they call they call quantitative easing or quantitative tightening.
Right. Which in every if you look at that from any other country, you call that currency debasement.
That's that's what it's known as. But U.S. has a fancy term for it to make it sound not as bad.
I genuinely think that it's just the Board of Governors that approves it, but I'm not certain on that.
And by the way, I mean, I don't feel bad for not knowing that answer because the guy who determined that has no clue, right?
Yeah.
Every time there's like a quantitative easing session in the UK, it's like offline news and there's like a speech given.
Yeah, yeah.
Whereas like issuing treasury bills, it's like they happen every day.
Yeah, every day. Every day there's a market for treasury. I think it's every week or something like that. Yeah, and so you're just trading money. By the way, this is a fun fact. The largest market in the entire world, does anybody know what the largest daily market in the entire world is?
the most liquid market is forex right what is forex what well it's it's betting
on which fiat money is going to live and which one's going to die right seven trillion dollars
a day seven trillion dollars a day is exchanged in the forex market
betting on which currencies are going to live and die.
That seems like a...
What do you got?
I think the thing that helped me understand
is to think of money as oil in an engine
or as water in the ecosystem.
I think oil in an engine probably works better
because oil in an engine is...
You only need the amount of oil that the engine needs.
If you have too little, it causes problems.
If you have too much, it causes problems.
The too little thing doesn't work very well as an analogy because there's no such thing as too little money.
There's just, does it meet the characteristics of money?
It could be this much, this much, this much, this much, doesn't matter, right?
But yeah, it's half of the world.
Like understand that money is half of the world.
The other half is stuff.
Money is the non-material good that we pass between us.
For all of eternity, we've used material goods to pass between us that also had utility value.
Gold has utility value.
Cattle have utility value.
Salt has utility value.
But we now have a non-material good.
We have a good that we can pass value that only has value.
I can't use Bitcoin to tie my shoes with.
I can't make it into a car.
I can't do anything with it other than exchange value.
And that's perfect, right?
It's a purpose-made, purpose-engineered tool.
So, another, like, so a small high-level pattern is something to play with.
Think about the parking, because the parking is free, and the stuff I've said, customers
can't visit the shops, there's no parking nearby.
The parking's too expensive, people do not respect the doors, or nobody can afford the
So there's no good in the shops.
But if the parking price just rises, the average person can spend just not the right amount of time for the business or sacrifice just through the pricing of the parking.
I think for that analogy to work, then the amount of parking would have to expand and contract every time the amount of parking was needed or not needed.
Like nobody needs to park at a mall at 2 o'clock in the morning.
So you don't need any parking spaces there.
You need a lot at 11 a.m., right?
So in and out, in and out.
What do you think about assets like the MSCI world, the S&P, or emerging markets?
What do I think about what?
The assets.
The asset?
MSCI world, the emerging markets, S&P.
MSCI world?
Yeah, like ETF, the index fund.
That hold Bitcoin?
Or just in general?
Like index funds.
Of tracking emerging markets.
Yeah, yeah, yeah.
They're a specific barometer of technology investment in a place that has a lot of gains to be made, right?
So you take a third world country and you take them from dirt roads to hyperconnectivity.
There's a quick rapid ascent maybe to what modern economies look like.
But as far as like, what do I think about investing in that?
so that's a trade
it's not an investment
you will exit that trade
has there ever been a country
that has been strong
for 10,000 years
no
oh general index investing
yeah
I see
the quote that I would use there
or the framework that I would use
So what you're doing there is you are diversifying amongst a whole bunch of different things, right?
And you're hoping that there's more winners than losers.
That's it.
You're just hoping that there's more winners than losers.
I love how Michael Saylor talks about this.
He says that diversification is for people who can't make up their mind.
The reason that we diversified throughout all of investment history, I was taught to diversify when I was an investment advisor.
The reason is, if you start to look at it from this framework, is that you're just trying to catch the bubbles before they pop.
So in 2008, when I was a financial advisor, it was, well, the real estate bubble just popped.
It dropped down to nothing.
So real estate's a good investment.
The stock market just crashed.
So stock markets are a good investment right now, right?
But bonds are a terrible investment, right?
But you still had the 60-40 portfolio. So you're just, again, remember if the supply can be increased at all, not just of money, of anything. If the supply can be increased at all, it's only an amount of time before it becomes worthless effectively. It falls to the cost of production.
We're seeing this with OnlyFans right now, right?
First couple hundred thousand people that got into OnlyFans, they became multimillionaires.
Now, maybe a millionaire.
Now it's AI.
Make $5,000, $10,000, right?
And it's forcing all the other people out of the market because we're making it, we're increasing the supply so much that the value has fallen to effectively nothing, right?
So you can put this and be 500 on that drop, minus 90%.
No, no, it's back here, actually.
I've got the S&P on a slide.
S&P pricing, but when it's 4.9%, there you go.
Yeah, S&P barely keeps up with inflation.
And by the way, the S&P, so that's, what is it?
The 500, that's the 500 most profitable companies in the world.
Seven of them make all the profit.
The other 493 actually drag it down, right?
That's what we call the FAANG stocks, right?
Facebook, Apple, Amazon, Netflix, Google, now Tesla, and NVIDIA.
I think there's one more, but I forget it.
Amazon.
I said Amazon.
Maybe this is a topic for Netflix.
We'll just leave credit on this move because a lot of sports in the economy is now built on credit.
Yeah.
Which is basically there's all this excess money in the system, so then they just leave credit on the phone.
Yeah.
How would credit work in this new Bitcoin economy?
Yeah. So the entirety of our economy is built on credit, right? The only way that our economy
works is through debt, which is the issuance of credit. We need to have a good understanding
of what credit is. Credit means that I am pulling value from the future into the present,
right? I'm reaching out and I'm saying, I want $500,000 that I'll pay you back in 20 years,
but I want it now. And I'm making a bet that that $500,000 today is worth more than that $500,000
down the road. And that makes perfect sense when you have a money that goes down in value,
because it absolutely is, right? And so it's built on that. But when your money is built on
of money that goes the other way, when that five Bitcoin in the future is worth exponentially more
than the five Bitcoin today, what you're going to see is just a reevaluation of interest rates,
where they go to the natural interest rate. And that natural interest rate is going to be a
measure of the technological, like how much better does technology make society? We will still have
credit, we will have a lot less credit. We'll have a lot less credit.
My hypothesis is that credit will be spent in a lot better way.
Yes. Yeah.
We spend it a bit shorter, you're going to get more than 15 cents.
Yeah. I mean, like, why did we have the crash of the housing market? It's because strippers
had 14 houses, right? People were putting in mortgage applications with their dog's name
on it and buying houses in their dog's name, right? We overextended. We went too far, right?
And by the way, the reason that happened was because they were all on variable rate loans.
So those variable rate loans, when we started to experience inflation and we had to raise the
interest rate, those people could no longer afford that house. Because if you have a 2%
loan and then the rate goes to 6%, it's not a small increase in your mortgage payment.
That's like a tripling of your mortgage payment.
Not just a tripling of the, that's like a tripling of the whole payment, right?
So you just can't afford that.
So, yeah, you're just going to see sensibility in the market where if you can't afford to buy something, you shouldn't buy it.
Right?
That just makes more sense.
Hell yeah.
We need to borrow money.
Yeah.
Based on my understanding.
Obviously, we bring money, for government, we bring money, all of it's in there.
It's kind of like an exaggeration because it's back from that.
So government uses that to get some money.
And then, just like any person, if I borrow too much, then I need somebody to determine,
to judge how much I can pay back.
But the government just borrowed from itself
And then, oh yeah, that shouldn't be a
What do you say, the meaning?
That's what we have for the devastating meaning
But the issue is that it's just people breaking the meaning
So that's why I would say the borrowing and money creation is
Unstoppable because they keep breaking the devastating meaning
The creation
So supposedly the money creation is that
Yeah.
And the debt's backed by violence.
And so, nobody wants to pay back.
Yeah.
And the debt's backed by violence.
And so you have to keep expanding violence in order to keep expanding the debt.
All right.
I think we're at a good spot.
I appreciate you guys being here for this.
Next week, we will go a little more in depth on what Bitcoin is, how it works, and kind of, again, try to move a little closer to a full understanding of what an innovation in technology can do.
and the, I guess, the incredible advantage of being an early adopter of new innovation.
So thank you guys very much. I appreciate it.