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We went into this world where governments are always able to finance themselves because

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they just have this fiat system where everybody has to use the government's money, everybody

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has to use the government's banks, and then the government prints more money and then you're

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stuck. And so you're constantly witnessing your wealth devalued. So people have no ability to

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save and governments have no restraints on their spending. And that's the 20th century. And that's,

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In my opinion, the destruction of civilization.

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They need your money and they need you to be a slave and they need your kids to be slaves.

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It's not the financial stability of gold that they're worried about.

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It's the financial stability of their Ponzi scheme that would collapse if people had the alternative of using proper money.

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So if Bitcoin goes up 100x from where it is right now, if we're at $9 million or $5 million or something like that, Bitcoin is the biggest monetary asset in the world.

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The cash balances in Bitcoin exceed everything else.

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Bitcoin is the world's money.

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That's it. It's game over.

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Let's go.

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It has been a long time since you've been on What Bitcoin Did.

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I have indeed. How are you?

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I am good. Welcome back.

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I think you've probably written three books since the last time you were on.

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I'm pretty sure it was only the Bitcoin Standard.

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Probably, yes. Yeah.

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And since then you did, was Fiat Standard before Principles of Economics?

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Yes, Fiat Standard was first, second, I should say.

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And then Principles of Economics was the third and the Gold Standard now number four.

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So what's the idea in the Gold Standard?

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The gold standard is an alternative history of the 20th century where fiat money dies in 1915.

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It's the century we could have had.

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It's what fiat took away from us.

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Okay.

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It's imagining what the world would have looked like in the year 2000, had we not been on government money for 85 years, had government money died in 1915.

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And then we went on a gold standard.

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But it's not just the gold standard as it was in the 19th century.

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It's a modern gold standard.

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imagining how a gold standard would have functioned with modern 20th century technology.

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So clearance happens frequently via a decentralized system of airplanes that move gold around.

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It's similar to BTC, essentially.

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It's applying Bitcoin technology, applying the essence of Bitcoin with 1915 technology.

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Okay, so can we start by going through what actually happened in 1915?

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So when did we properly break with the gold standard?

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Because I know it was different for different countries.

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When do you see the end of the gold standard?

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Yeah, I put it as 1914. And most people think of 1971, which is the point at which the last link was severed with the gold standard. So you could make a case for it being 1971, because up until 1971, the US dollar was, to some extent, redeemable in gold. Central banks could redeem their dollars for gold, but normal people could not.

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but that process really started in 1914 with World War I.

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And I discussed this in detail in the Fiat Standard

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and then I discussed it again in detail

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on the Gold Standard.

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I think it's an enormously important story

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that very few people know about

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because it was only revealed in 2017,

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which is really incredible.

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The war started in 1914

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and the way that Britain got into the war

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had always been shrouded in mystery.

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And there was always debate in Britain

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about why we got into the war

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and should we have gotten into the war?

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But the people that had argued,

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we shouldn't have gotten into the war,

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their position I would say has just continues

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to get stronger and stronger over time

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because over time it just became clear

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that there was no reason for Britain to get into the war.

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And then in 2017, the Financial Times,

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well, actually it was a bunch of people

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at the Bank of England who dug in the basement

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and found this old report.

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And then they read the report

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and then they published it in 2017, 103 years.

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after the events happened in 1914.

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And in that report, it was revealed

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that the reason that Britain got into the war

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was the treasury sold a bond auction.

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They made a bond auction to fund going into the war.

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And they offered a good interest rate.

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Interest rates at that time were around 2.5%,

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but this was, I think, around 4%.

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And they thought they would sell it.

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Britain was the richest country in the world,

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and people liked their country.

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and countries at war.

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So they're clearly going to be selling the bonds.

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Well, they didn't.

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They sold less than a third of the bonds.

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People didn't buy them.

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I think this is to the eternal credit of the British people

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that they didn't buy that.

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It's really a point of pride.

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Were these literally called war bonds at the time?

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Yeah.

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Yeah, so they were specifically to go and fund the First World War.

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And so I remember seeing this Financial Times piece

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probably a few years after it actually came out.

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But the fact that they had actually gone out and told the public

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that was massively oversubscribed,

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but in fact, they hadn't filled it.

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And so then, was that the first case

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of printing money to fill that gap?

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Well, I mean, I'm sure it has happened before in the past,

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but I think this was really the birth of the fiat standard

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because it institutionalized and standardized

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the way that this operated,

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wherein the central bank lends to the government

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and the government enforces the bank's monopoly on money,

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which makes sure that the banks don't get rugged

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and the government doesn't get drugged.

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So what they did was they got two-thirds of the bonds

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to be purchased by two guys,

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two guys who worked at the Bank of England

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who got a credit line from the Bank of England,

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and they just went and bought two-thirds

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of the bond auction for the war, which is incredible.

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There was just two guys who funded Britain's entry

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into World War I,

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which is what destroyed human civilization, arguably.

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And it was, there's no way of understating

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just how important that was

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because the entry of Britain into World War I

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was what made World War I possible.

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Because you'd look into the detail,

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and that's what I get into in detail in this book.

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If you look about what was going on,

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essentially, Britain, France, and Russia

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had a secret alliance going into World War I.

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And you look at the details

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after these details are revealed

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hundreds of years later,

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Another very important bit of detail which was revealed was that the king at that time, King George V, had told his foreign secretary, Edward Gray, that he must find a way to go to war with Germany.

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And this is just flying in the face of all of the conventional history about Britain being dragged into war or diplomatic miscalculations or sleepwalking into war, which was the sort of narrative that I used to find more convincing.

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that diplomacy went wrong, bluffs were called in the wrong way,

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and then everybody found themselves inadvertently

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in a five-year mass carnage in the middle of Europe.

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It seems pretty clear when you look at the evidence.

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After 100 years, you know, you can lie, but you can't lie forever.

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Truth comes out.

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And so the grandnephew of Edward Gray,

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who was the foreign secretary at that time,

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he revealed his uncle's diaries or a bunch of letters from his uncles where he was saying,

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I met with the king and the king was very firm. You need to find a way to get us to war with

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Germany. So it was the fact that Britain wanted to go into war with Germany that made Russia and

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France confident about taking on Germany. And that, I think this is where, you know, I don't

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really have solid evidence for this, but it seems pretty convincing that the assassination of the

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Archduke of Austria.

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Franz Ferdinand.

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Franz Ferdinand.

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Which was what we learned at school as being the like pinnacle point of the start of World

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War I.

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Yeah, and it was, but it's usually portrayed as just this random assassination that happened

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and then tensions escalated and people sleepwalked into war.

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But, you know, the Serbian government was pretty well connected to the terrorist organizations

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that carried out that assassination.

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It wasn't just some random dude with a gun.

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If his gun had jammed, there would have been other ambushes.

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There were apparently 10 ambushes in Sarajevo at that time to try and get him.

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And it seems pretty clear that the Russians knew what was going on.

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This was their attempt to provoke the Austrians and, by extension, the Germans into the war.

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And they were playing that game because they knew they had Britain on their side.

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And the really pernicious thing here is that they didn't have a formal alliance.

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They didn't have, you know, Britain didn't sign a formal alliance with France and Britain.

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with France and Russia because of it, they did.

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The British people would have rejected it.

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They would have voted them out.

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We don't want to be in an alliance with France and Russia.

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We don't want to go into a world war.

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And if they had a formal alliance,

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even if they managed to have a formal alliance

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and the British people had kept the cabinet

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and agreed to it,

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then Germany would have been a lot more careful

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about going into war with Austria against Russia and France,

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knowing that it would involve Britain.

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So they would have let it slide.

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So they had to set things up in this way so that the alliance was real and that the British would fight.

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But the Germans wouldn't think that the British would fight so that they would go into a war.

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And the British people didn't know that the alliance was real so that they can just be dragged into war inadvertently, accidentally, and not be told about it.

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And that's why the British people didn't fund the war because they saw no reason for it.

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There was nothing threatening Britain,

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and there was nothing even threatening Britain's interests.

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It was, you know, all of Britain's empire

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was pretty much isolated from the war.

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There was nothing that was going to threaten

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British control over India because of Germany

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or Russia fighting with each other.

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So it was very difficult to convince British people to do that,

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and that's why they refused to finance the war.

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But fiat fixes this.

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That's what fiat does.

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So the Central Bank, the Bank of England,

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issues a bunch of money to a couple of people in the bank.

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They buy the bonds, that finance is going into war

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and then the war starts.

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And then, and I've discussed this in the fiat standard,

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the Bank of England keeps collecting all of the gold

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from the hands of British people and uses it to,

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and ships it off to the US in order to get credit for the war.

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And that's essentially what destroyed the British empire.

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That's why Britain was bankrupted.

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It was an incredibly stupid thing to do.

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On top of it being immoral,

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on top of it causing carnage for tens of millions of people

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and the destruction of European civilization.

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On top of this catastrophe,

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it was just a very stupid thing for Britain to do

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because it stood to gain nothing.

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And it was just, the king was angry at Germany

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and they were afraid that Germany was going to take over.

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And it was completely nonsensical.

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Germany had, Germany's stuck behind Britain.

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So any attempt at growing the German empire

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is under British mercy

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because the German boats need to go out from British waters

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if they are to go into the rest of the world.

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So it's not a threat, and it shouldn't have been treated as a threat.

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And trying to defuse this abstract threat ended up costing Britain everything.

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And now you see Britain is a failed state.

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250
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when you use the code WBD. That's B-I-T-K-E-Y.world and use the code WBD. And when you say this was

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the death of civilization, do you mean because of the ramifications after World War I, which was

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obviously a terrible war. It then led to like economic despair in Germany, which led to the

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rise of Hitler, which led to World War II. Is that the way you're thinking about it? Like the second,

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third or fourth order consequences of this? Yeah, that's part of it. But I think it's,

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I mean, this is one aspect of it, but I think it's just, for me, I believe the real problem was in

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1914, because once we went off money, you know, everything for me is all about money and money's

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supply's growth rate. And just because I'm obsessed with it doesn't mean I'm wrong.

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But once the money stopped being gold, and then the different thing about 1914, you know, before

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that individual countries would go off the gold standard. But this was when all of the major

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economies went off the gold standard at the same time. And they all restricted the movement of

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money. They all restricted their banks. So you had no alternative. If you were in those countries,

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you had to use your local national currency, which was constantly getting devalued through inflation.

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So we had inflation. We destroyed the ability of people to save. We destroyed the value of money.

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And then you look at the economic problems of the 1920s and 30s.

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They were all a consequence of the inflation of World War I.

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It's not taught that way because we live in a world where everything is inflation propaganda.

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propaganda, but it was all the ramifications of the inflation of the World War I. That's what led

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to the problems of the 1920s in the US and Europe. And that's what led to more inflation to try to

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fix those problems, which eventually led to the Great Depression, which led to World War II,

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which then, you know, and World War II, of course, is a huge part of this. But even just beyond World

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War II, we went into this world where governments are always able to finance themselves because

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they just have this fiat system where everybody has to use the government's money. Everybody has

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to use the government's banks. And then the government prints more money and then you're

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stuck. And so you're constantly witnessing your wealth devalued. So people have no ability to save

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and governments have no restraints on their spending. And that's the 20th century. And that's,

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in my opinion, the destruction of civilization, because civilization is a process that happens

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because people are able to think about the future.

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We plan for the future.

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We sacrifice the present in order to get a better future.

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That's what makes civilization possible.

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In fact, we could say the entire process of civilization

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is the process of us lowering our time preference.

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So we save more, we think about the future more,

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and then that's reflected in all manner of our behavior.

295
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We become more cooperative, more peaceful,

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more understanding because we recognize

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that if we cooperate peacefully with each other,

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the benefits in the longterm far outweigh any benefits

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that we would get from being aggressive against each other.

300
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And I argue in the fiat standard

301
00:16:31,900 --> 00:16:33,840
and in principles of economics and the Bitcoin standard

302
00:16:33,840 --> 00:16:35,440
and the gold standard in all my books,

303
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I argue that one of my key points

304
00:16:38,660 --> 00:16:52,056
that I keep bringing up in all my work is that you could think of the hardness of money as being like a control knob for time preference When money is very hard when money is difficult to produce then it holds onto its value in the long

305
00:16:52,056 --> 00:16:54,015
So it allows people to think about the long-term,

306
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it allows people to provide for their long-term future,

307
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and that makes people more future-oriented

308
00:16:59,135 --> 00:17:01,176
and more likely to think of the long-term.

309
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Whereas on the other hand, when money's easy to make,

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it gets produced at increasing quantities,

311
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it holds its value badly.

312
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And so it's a terrible way of providing for your future.

313
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So without an easy way of providing for your future,

314
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your future becomes more uncertain

315
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and you start discounting the future more,

316
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you become more present oriented.

317
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And as a result, you essentially reverse

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the process of civilization.

319
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So I think, and you know, in my work,

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00:17:25,095 --> 00:17:26,576
I discussed this in a lot of detail,

321
00:17:26,576 --> 00:17:29,156
but I really think 1914 was the turning point.

322
00:17:29,156 --> 00:17:30,936
And it's not just me who brings this up.

323
00:17:30,936 --> 00:17:34,876
You know, there's a great book by a philosopher

324
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called Jack Barzun.

325
00:17:36,855 --> 00:17:40,576
And he wrote a great book called From Dawn to Decadence,

326
00:17:41,295 --> 00:17:43,015
500 Years of Western Civilization

327
00:17:43,015 --> 00:17:44,855
or The Rise and Fall of Western Civilization

328
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or something like that.

329
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I forget the exact title.

330
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But he also says basically

331
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the fall of Western civilization started in 1914.

332
00:17:51,575 --> 00:17:53,035
He doesn't really link it to money.

333
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He doesn't have a monetary explanation for it.

334
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But I think he looks at it

335
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from a cultural and political perspective.

336
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And I agree entirely.

337
00:18:01,916 --> 00:18:04,636
And I just think the money,

338
00:18:04,636 --> 00:18:10,476
fixing and ruining the money is a massive control knob for this process.

339
00:18:11,255 --> 00:18:15,555
So one of the things that Bitcoiners like to talk about is the fact that Bitcoin can prevent wars

340
00:18:15,555 --> 00:18:19,095
because of things like you need to raise money through war bonds that the people need to go out

341
00:18:19,095 --> 00:18:24,396
and buy. But the gold standard did a similar thing. But the gold standard obviously failed at that.

342
00:18:24,656 --> 00:18:27,355
Why would Bitcoin succeed where the gold standard failed?

343
00:18:27,775 --> 00:18:32,795
Yeah, that's a great question. And that's ultimately a central question in all my books,

344
00:18:32,795 --> 00:18:35,775
trying to draw the distinction between gold and Bitcoin.

345
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And the answer in this book is that, you know,

346
00:18:38,136 --> 00:18:41,795
the way that gold avoids failing in 1915

347
00:18:41,795 --> 00:18:44,355
is that it is made to look like Bitcoin.

348
00:18:44,936 --> 00:18:46,535
So, you know, the premise of the book initially was

349
00:18:46,535 --> 00:18:48,616
I was trying to introduce some kind of Bitcoin

350
00:18:48,616 --> 00:18:50,855
into the story of the 20th century

351
00:18:50,855 --> 00:18:52,456
and then see how it plays out.

352
00:18:52,916 --> 00:18:55,196
And at some point, you know, I did consider

353
00:18:55,196 --> 00:18:59,775
maybe they could use telegraphs and telegrams

354
00:18:59,775 --> 00:19:04,775
and newspapers or something to make a quasi Bitcoin,

355
00:19:05,835 --> 00:19:07,656
proto Bitcoin thing.

356
00:19:07,656 --> 00:19:12,656
But it seemed a little too far-fetched.

357
00:19:13,896 --> 00:19:15,116
We didn't have the technology.

358
00:19:15,116 --> 00:19:16,355
We needed to wait another century

359
00:19:16,355 --> 00:19:18,136
before Bitcoin could be possible,

360
00:19:18,136 --> 00:19:20,335
or at least another 80 years or so.

361
00:19:20,335 --> 00:19:22,136
But I thought about the next thing,

362
00:19:22,136 --> 00:19:25,116
which is how to make gold more like Bitcoin.

363
00:19:25,116 --> 00:19:28,355
And ultimately what it comes down to is the availability

364
00:19:28,355 --> 00:19:31,656
to the central banking system for clearance.

365
00:19:31,656 --> 00:19:33,696
And that's what something that Bitcoin has,

366
00:19:33,696 --> 00:19:35,436
but gold does not have.

367
00:19:35,436 --> 00:19:39,355
So today even, and back then,

368
00:19:39,355 --> 00:19:41,095
you can't just trade gold.

369
00:19:41,095 --> 00:19:41,995
You can't say, all right,

370
00:19:41,995 --> 00:19:44,555
I don't wanna use my bank and my central bank.

371
00:19:44,555 --> 00:19:46,396
I'm going to set up a gold bank account

372
00:19:46,396 --> 00:19:47,795
and I'm gonna trade with my suppliers

373
00:19:47,795 --> 00:19:50,436
in China and Brazil with gold.

374
00:19:50,436 --> 00:19:51,976
I'm just gonna send them ounces of gold

375
00:19:51,976 --> 00:19:54,855
and they're gonna send me back goods.

376
00:19:54,855 --> 00:19:55,896
That's not going to work.

377
00:19:55,896 --> 00:19:56,855
You can't do that.

378
00:19:56,855 --> 00:19:58,495
There are no gold banks.

379
00:19:58,495 --> 00:20:00,956
You can't get a license for a bank anywhere in the world

380
00:20:00,956 --> 00:20:03,176
if you run it on gold.

381
00:20:03,176 --> 00:20:06,355
And your central bank, you can't be a member of the IMF

382
00:20:06,355 --> 00:20:07,476
if you're on a gold standard.

383
00:20:07,476 --> 00:20:09,676
It's one of the conditions of joining the IMF.

384
00:20:09,676 --> 00:20:12,176
So if you wanna join the modern global monetary system,

385
00:20:12,176 --> 00:20:15,956
if you as a country want to trade with the rest of the world,

386
00:20:15,956 --> 00:20:19,015
you more or less have to join the fiat dollar system.

387
00:20:19,015 --> 00:20:20,555
There's no alternative to it.

388
00:20:20,555 --> 00:20:24,696
And there's no easy way of physically moving gold around.

389
00:20:24,696 --> 00:20:26,476
It's very expensive to move around.

390
00:20:26,476 --> 00:20:27,956
And it's very expensive to verify it.

391
00:20:28,055 --> 00:20:29,775
The only way that you can tell for sure

392
00:20:29,775 --> 00:20:31,255
that a gold bar is real

393
00:20:31,255 --> 00:20:33,876
is you have to actually melt down the whole thing

394
00:20:33,876 --> 00:20:35,495
and recast it, which is pretty expensive.

395
00:20:35,916 --> 00:20:38,136
So moving gold from one country to the other

396
00:20:38,136 --> 00:20:39,656
on an airplane is expensive.

397
00:20:39,656 --> 00:20:41,956
And then melting it and recasting it

398
00:20:41,956 --> 00:20:44,616
in order to verify its purity is also very expensive.

399
00:20:44,995 --> 00:20:46,376
So that practically means

400
00:20:46,376 --> 00:20:48,196
that if your central bank tells you

401
00:20:48,196 --> 00:20:50,176
you have to deal with this currency

402
00:20:50,176 --> 00:20:52,275
and you can't redeem it in gold,

403
00:20:53,075 --> 00:20:53,676
you're stuck.

404
00:20:53,876 --> 00:20:54,916
You have no alternative.

405
00:20:54,916 --> 00:21:03,176
In this book, I introduced an alternative. Before the war, a bunch of aviation enthusiasts set up a gold clearance business with airplanes.

406
00:21:03,335 --> 00:21:09,376
They want to scare airplanes. They're looking for a commercial application for airplanes in order to finance their investment in airplanes.

407
00:21:09,595 --> 00:21:11,295
That's how they use the Spitfires instead of the war.

408
00:21:12,295 --> 00:21:17,876
Exactly. So they decide that, you know, airplanes are too expensive at this point to move people around.

409
00:21:18,335 --> 00:21:21,116
You can't build a commercial business out of moving people around.

410
00:21:21,116 --> 00:21:24,416
and it's too expensive to move most goods around.

411
00:21:24,495 --> 00:21:25,736
If you're going to be moving something around,

412
00:21:25,775 --> 00:21:26,515
it's going to have to be something

413
00:21:26,515 --> 00:21:28,676
that's extremely valuable per unit of weight.

414
00:21:28,876 --> 00:21:30,936
So they realize, all right, there's only one thing

415
00:21:30,936 --> 00:21:31,795
and that's gold.

416
00:21:32,196 --> 00:21:33,795
So we can use significant amount,

417
00:21:33,916 --> 00:21:36,876
we can move significant amounts of gold in an airplane

418
00:21:36,876 --> 00:21:40,176
and that would be economical because it's very valuable.

419
00:21:40,176 --> 00:21:41,835
We're saving people from having to rely

420
00:21:41,835 --> 00:21:44,716
on 19th century banking technology

421
00:21:44,716 --> 00:21:48,116
and waiting for their bank to clear with their central bank

422
00:21:48,116 --> 00:21:49,995
and the central bank to clear with the other country's bank

423
00:21:49,995 --> 00:21:55,476
and then the local bank takes time for payments to clear across borders in the old gold standard

424
00:21:55,476 --> 00:22:00,436
system. But now with an airplane, you can just move the gold across borders, permissionless,

425
00:22:00,795 --> 00:22:06,416
decentralized, yes, and censorship resistance. At that time, they didn't have anti-aircraft guns

426
00:22:06,416 --> 00:22:12,495
and airplanes could take off from any field and land anywhere. So by the time border patrol would

427
00:22:12,495 --> 00:22:15,956
see them, they would be very high in the sky and you can't stop them. So it was in a sense

428
00:22:15,956 --> 00:22:18,535
permissionless and the censorship resistance.

429
00:22:18,535 --> 00:22:21,636
So you build this essentially Bitcoin network.

430
00:22:21,636 --> 00:22:23,476
And then that allows people to take their money

431
00:22:23,476 --> 00:22:24,696
out of this banking system.

432
00:22:24,696 --> 00:22:26,636
It allows people to not hand their gold

433
00:22:26,636 --> 00:22:28,495
over to the banking system.

434
00:22:28,495 --> 00:22:30,876
And, you know, there was a quote from Keynes

435
00:22:30,876 --> 00:22:33,075
because Keynes was in on this scam.

436
00:22:33,075 --> 00:22:35,396
And that's why I bring him in in this book

437
00:22:35,396 --> 00:22:38,535
and he's also a protagonist and spoiler alert,

438
00:22:38,535 --> 00:22:39,676
I get him executed.

439
00:22:42,236 --> 00:22:44,736
But, you know, he was in on this

440
00:22:44,736 --> 00:22:48,376
And he said, you know, he wrote a letter that was also uncovered in 2017.

441
00:22:48,716 --> 00:22:51,636
And in that letter, he said he called it the masterly manipulation.

442
00:22:51,755 --> 00:22:52,876
He was so happy about that.

443
00:22:52,916 --> 00:22:55,456
The fact that they lied about the bond sale.

444
00:22:55,755 --> 00:23:02,616
And he said, you know, this is high risk because we have a lot of credit outstanding,

445
00:23:02,716 --> 00:23:03,995
but only a limited amount of gold.

446
00:23:04,376 --> 00:23:09,476
And the success of this move depends entirely on how willing people are to keep their gold

447
00:23:09,476 --> 00:23:11,755
at the bank during these times of crises.

448
00:23:11,755 --> 00:23:17,575
And so in my book, people become a lot less willing to keep the money at the bank.

449
00:23:17,636 --> 00:23:18,156
So what happens?

450
00:23:18,436 --> 00:23:20,575
So the Ponzi's fall apart.

451
00:23:20,775 --> 00:23:22,855
And then you get a banking panic across the world.

452
00:23:23,236 --> 00:23:26,255
All of the countries that are at war, people withdraw their gold.

453
00:23:26,436 --> 00:23:30,176
People take their gold out and the banks can't give them the gold.

454
00:23:30,315 --> 00:23:31,535
So everything falls apart.

455
00:23:32,275 --> 00:23:37,116
Currencies collapse, the war ends, and then they have to negotiate a peace based on the

456
00:23:37,116 --> 00:23:38,236
fact that they are broke.

457
00:23:38,716 --> 00:23:40,495
And who has all the gold at that point?

458
00:23:40,495 --> 00:23:43,916
All the gold is in Switzerland, Holland, and the US, the neutral countries.

459
00:23:44,335 --> 00:23:46,855
And the neutral countries don't want to be at war.

460
00:23:46,936 --> 00:23:47,876
They don't want the war to expand.

461
00:23:48,295 --> 00:24:02,515
So they set up a new global monetary and political order built on free trade, movement of capital, and self-determination so that we don't get all of these stupid fiat empires fighting over borders for the rest of the century.

462
00:24:02,616 --> 00:24:07,156
Everybody can just vote their way into whatever political arrangement they want.

463
00:24:07,156 --> 00:24:09,976
So government becomes a very competitive service provider.

464
00:24:10,495 --> 00:24:13,075
And the century is very different.

465
00:24:13,275 --> 00:24:14,116
Everything is very different.

466
00:24:14,116 --> 00:24:18,736
So you said before that the IMF won't let you join if you're running the gold standard.

467
00:24:18,976 --> 00:24:22,335
And obviously El Salvador's had problems with the IMF because of their Bitcoin stuff.

468
00:24:22,595 --> 00:24:23,916
Why is that the case?

469
00:24:25,315 --> 00:24:34,015
I mean, I'm sure they have some kind of general explanations they might give for that, which you can ask them.

470
00:24:34,515 --> 00:24:38,355
But I'm going to give you my interpretation of why I think that is the case.

471
00:24:38,355 --> 00:24:45,055
And I just think it's because if you have a gold-based alternative to the fiat system, the fiat system collapses.

472
00:24:45,575 --> 00:24:49,275
In other words, they'll usually tell you something about, well, we're doing it for financial stability.

473
00:24:49,636 --> 00:24:51,636
And you think, oh, wow, how kind of them.

474
00:24:51,956 --> 00:24:56,156
Very nice of them to prevent things that are undermining of financial stability.

475
00:24:57,035 --> 00:25:00,216
But it's not the financial stability of gold that they're worried about.

476
00:25:00,275 --> 00:25:06,876
It's the financial stability of their Ponzi scheme that would collapse if people had the alternative of using proper money, which is gold.

477
00:25:06,876 --> 00:25:29,976
So if people could just use a banking system that held their money in a non-inflationary money and charged you a small little fee for taking that money or offered you a very tiny interest rate, then an enormous amount of all of the money that is in the world's capital markets and bond markets in particular would go to that.

478
00:25:30,736 --> 00:25:34,855
So much of the money, if you look at the last year, bonds have been getting destroyed.

479
00:25:34,855 --> 00:25:52,555
So people who have their money in bonds, if you tell them now, put that money in a bank account and that bank account will offer you 1% real appreciation per year, that's going to eat a significant chunk of their bond holdings because their bonds are down 50% or so over the last five years.

480
00:25:52,775 --> 00:26:01,855
So if you were to put some of that money instead in a bank account that gives you 1% real appreciation per year, that's a lot better than putting it in bonds.

481
00:26:02,116 --> 00:26:04,315
So that's going to just collapse the bond market.

482
00:26:04,315 --> 00:26:11,236
This is why recently, you know, in the Federal Reserve, they rejected the application of a bank called the Narrow Bank.

483
00:26:11,595 --> 00:26:12,795
What does the Narrow Bank do?

484
00:26:13,355 --> 00:26:15,035
They have a very simple business model.

485
00:26:15,136 --> 00:26:19,176
They're going to take deposits from customers and they're going to put the deposits at the Federal Reserve.

486
00:26:19,815 --> 00:26:21,515
And they're going to get interest from the Federal Reserve.

487
00:26:21,515 --> 00:26:25,436
And they're going to pass on that interest to their customers and take a small cut.

488
00:26:26,055 --> 00:26:27,876
And they're not going to do anything else with it.

489
00:26:27,896 --> 00:26:29,815
They're just going to put all of their money at the Federal Reserve.

490
00:26:29,815 --> 00:26:36,976
They're going to offer the safest bank account, the safest money really, because it's backed by the Federal Reserve, and sell it to their customers, essentially.

491
00:26:37,376 --> 00:26:42,775
Selling them an allocation at the bank account of the Federal Reserve and taking a small cut.

492
00:26:43,376 --> 00:26:45,255
And it was not approved.

493
00:26:45,595 --> 00:26:47,855
This is what Caitlin Long was trying to do with Custodian.

494
00:26:47,855 --> 00:26:50,755
It's what Caitlin Long as well was trying to do, and that was not approved.

495
00:26:51,275 --> 00:26:51,595
Why?

496
00:26:52,255 --> 00:26:53,275
Is it because it's unsafe?

497
00:26:53,416 --> 00:26:54,595
I mean, how can it be unsafe?

498
00:26:54,716 --> 00:26:56,495
They're just putting the money straight to the Federal Reserve.

499
00:26:56,515 --> 00:26:56,855
It's certainly more safe.

500
00:26:56,855 --> 00:26:59,476
Yeah, it can't be safer than that in the fiat system.

501
00:26:59,476 --> 00:27:02,936
The only way this collapses is if the entire Federal Reserve collapses.

502
00:27:03,476 --> 00:27:06,015
They are not withholding to any business model.

503
00:27:06,495 --> 00:27:10,196
They don't have to sell any kind of things in order for their business to operate.

504
00:27:10,315 --> 00:27:11,716
They just put the money in the Federal Reserve.

505
00:27:11,995 --> 00:27:14,436
But the problem is that it's too stable.

506
00:27:14,555 --> 00:27:19,495
It's so stable that everybody would move their money there, and then all the rest of the financial markets would come crashing down.

507
00:27:20,075 --> 00:27:21,575
So I think it's something similar with gold.

508
00:27:21,855 --> 00:27:28,295
If you were to have countries that use gold as money, their currencies would be strong, and everybody would want to move their capital there.

509
00:27:28,295 --> 00:27:35,636
So that's what the situation was like with Switzerland from the 1970s, really, when inflation took off.

510
00:27:36,436 --> 00:27:40,736
Switzerland really remained the least inflationary country, and everybody was moving their money to Switzerland.

511
00:27:40,855 --> 00:27:42,255
Everybody wanted a Swiss bank account.

512
00:27:42,616 --> 00:27:46,515
That's why in the 1990s, Switzerland had to be essentially taken down financially.

513
00:27:47,035 --> 00:27:48,436
They made them sell half their gold.

514
00:27:48,835 --> 00:27:53,095
They made them get into all kinds of inflationary nonsense and money spending.

515
00:27:53,095 --> 00:27:58,176
They introduced all kinds of restrictions onto the banks and they extorted the banks

516
00:27:58,176 --> 00:27:59,156
to pay a lot of money.

517
00:27:59,755 --> 00:28:04,315
And then they imposed sanctions on the, well, not imposed, they threatened sanctions on

518
00:28:04,315 --> 00:28:07,416
the banks and they got rid of banking secrecy.

519
00:28:07,755 --> 00:28:13,295
So they shitcoinified the rest of Switzerland and the Swiss economy, basically.

520
00:28:14,035 --> 00:28:19,015
So, and it's not because Switzerland was dangerous for the depositors in Switzerland, it's because

521
00:28:19,015 --> 00:28:20,275
it was dangerous for everybody else.

522
00:28:20,275 --> 00:28:30,775
I mean, it's insane that the idea of just wanting your money to retain value, not even increase in value, just retain your purchasing power, that that's an extreme position to take is wild.

523
00:28:31,095 --> 00:28:31,355
Yes.

524
00:28:31,876 --> 00:28:32,575
I know.

525
00:28:32,795 --> 00:28:35,595
It's like, how dare you want to keep your own money?

526
00:28:35,716 --> 00:28:36,835
It's so selfish of you.

527
00:28:37,216 --> 00:28:38,575
It's antisocial.

528
00:28:38,855 --> 00:28:40,255
It's sociopathic.

529
00:28:40,736 --> 00:28:42,335
Your money belongs to us.

530
00:28:42,335 --> 00:28:42,736
It's probably racist somehow.

531
00:28:42,956 --> 00:28:44,136
It's probably racist, definitely.

532
00:28:44,136 --> 00:28:45,616
Definitely sexist and misogynist.

533
00:28:45,736 --> 00:28:49,835
I mean, you can see how it's just built on the idea that your money is not yours.

534
00:28:49,835 --> 00:28:57,116
your money belongs to society and the government decides how it allocates it to society. And we,

535
00:28:57,275 --> 00:29:01,896
in our infinite wisdom, have decided that it is more safe. It is safer for you to keep your money

536
00:29:01,896 --> 00:29:07,136
in the fiat Ponzi scheme so that a lot of people are moving it around back and forth and we get a

537
00:29:07,136 --> 00:29:12,595
lot more GDP, which is just basically cover for we're going to devalue your wealth and take it.

538
00:29:12,595 --> 00:29:18,656
Yeah. And from the very early days, so 1914, like you said, Keynes was at the heart of this.

539
00:29:19,216 --> 00:29:20,936
Do you think any part of them was like,

540
00:29:21,095 --> 00:29:22,616
we can just print a bit of money now,

541
00:29:22,795 --> 00:29:23,736
get through this war,

542
00:29:23,835 --> 00:29:25,755
and then we'll be fiscally responsible,

543
00:29:25,896 --> 00:29:26,795
we'll pay back that debt,

544
00:29:26,835 --> 00:29:27,736
and it'll all be okay,

545
00:29:27,876 --> 00:29:29,236
and then we won't do that again?

546
00:29:29,456 --> 00:29:31,196
Do you think that's the way they were thinking about it,

547
00:29:31,335 --> 00:29:33,755
rather than it escalating to what we've got today?

548
00:29:33,916 --> 00:29:34,835
I would imagine so.

549
00:29:35,055 --> 00:29:35,995
I think that's how it is.

550
00:29:35,995 --> 00:29:39,156
I have no hard evidence on this,

551
00:29:39,295 --> 00:29:42,176
because we don't have recordings

552
00:29:42,176 --> 00:29:44,575
of the exact discussions they were having with them.

553
00:29:44,656 --> 00:29:47,795
We only have a few letters here and there that survived.

554
00:29:47,795 --> 00:29:50,916
but I think, you know, just knowing how inflation goes,

555
00:29:50,916 --> 00:29:53,495
it's the kind of, it's the kind of mentality

556
00:29:53,495 --> 00:29:56,015
where it's always just take one hit, you know,

557
00:29:56,015 --> 00:29:58,236
one more hit and then I'm gonna go clean.

558
00:29:58,236 --> 00:30:00,335
Just one more night of getting drunk

559
00:30:00,335 --> 00:30:02,095
and then I'm going to stop drinking.

560
00:30:02,095 --> 00:30:04,575
It's the addict logic.

561
00:30:04,575 --> 00:30:06,956
And I think, yeah, it was world war.

562
00:30:06,956 --> 00:30:07,696
It was huge.

563
00:30:07,696 --> 00:30:08,775
We had to defeat the Germans.

564
00:30:08,775 --> 00:30:09,896
We can't let the Germans win.

565
00:30:09,896 --> 00:30:12,295
If Germany wins, then they have all of Europe

566
00:30:12,295 --> 00:30:12,995
and that's terrible.

567
00:30:12,995 --> 00:30:14,795
So we must do everything we can.

568
00:30:14,795 --> 00:30:20,575
but these things just snowball out of all proportion.

569
00:30:20,876 --> 00:30:22,795
You know, it's just been going on.

570
00:30:22,976 --> 00:30:25,456
Here we are 111 years later,

571
00:30:25,916 --> 00:30:28,236
and the pound is still being devalued.

572
00:30:29,095 --> 00:30:30,236
And in that addict analogy,

573
00:30:30,476 --> 00:30:33,355
at some point when you press the button one more time,

574
00:30:33,575 --> 00:30:34,196
game is over.

575
00:30:34,896 --> 00:30:37,035
You'll either overdose or whatever it is.

576
00:30:37,216 --> 00:30:39,696
Yeah, you run out of money and you can't get more drugs,

577
00:30:39,696 --> 00:30:40,976
or you overdose and you die.

578
00:30:40,976 --> 00:30:42,976
So basically hyperinflation or...

579
00:30:42,976 --> 00:30:45,216
And how close do you think we are to that?

580
00:30:46,495 --> 00:30:47,355
I don't know.

581
00:30:47,535 --> 00:30:49,176
It's a very difficult question.

582
00:30:49,176 --> 00:30:55,335
I mean, a lot of people would have thought it should have already happened in the 1970s,

583
00:30:55,355 --> 00:30:57,995
and it looked like it was very likely to happen in the 1970s.

584
00:30:58,075 --> 00:31:02,315
You know, the level of inflation that we had back then was outstanding, like nothing we've

585
00:31:02,315 --> 00:31:03,236
seen since then.

586
00:31:03,355 --> 00:31:04,616
But it's stuck through.

587
00:31:04,815 --> 00:31:07,116
So maybe it can survive longer.

588
00:31:07,116 --> 00:31:19,355
And in the fiat standard, you know, I look at this question in depth and I make the case for why, you know, the steel man case for why fiat can continue to survive and what that means.

589
00:31:19,815 --> 00:31:30,995
And I think the same things that we've had for the last 50 years or for even the 111 years of kicking the can down the road, it can continue.

590
00:31:30,995 --> 00:31:37,035
But I think what is interesting about Bitcoin is that it can continue to grow even if that is the case.

591
00:31:37,116 --> 00:31:53,456
And I think this is, this was perhaps a little bit of an original contribution in the fiat standard in that most people think Bitcoin rises and takes over when fiat dies and Bitcoin has to kill fiat and that fiat has to die if Bitcoin is going to rise.

592
00:31:53,916 --> 00:32:03,736
But it's entirely plausible in my mind that we just continue with the same trend that we've had over the last 50 years with fiat and over the last 15 years with gold, sorry, with Bitcoin.

593
00:32:04,376 --> 00:32:05,656
And that Bitcoin continues to depreciate,

594
00:32:05,916 --> 00:32:07,116
fiat continues to depreciate.

595
00:32:07,575 --> 00:32:10,535
The fiat economy becomes smaller over time

596
00:32:10,535 --> 00:32:12,555
because inflation is destroying value

597
00:32:12,555 --> 00:32:14,916
and because people move from fiat to Bitcoin

598
00:32:14,916 --> 00:32:17,396
and the Bitcoin economy gets larger over time.

599
00:32:17,835 --> 00:32:20,775
Extrapolate that over another 10, 20 years, 30 years.

600
00:32:21,176 --> 00:32:22,835
Eventually the Bitcoin economy becomes bigger

601
00:32:22,835 --> 00:32:26,295
and we have a Bitcoin economy that dominates the world

602
00:32:26,295 --> 00:32:28,355
and fiat continues to become

603
00:32:28,355 --> 00:32:30,716
a less and less significant part of the world economy.

604
00:32:31,176 --> 00:32:32,656
In a sense, this is what's been going on

605
00:32:32,656 --> 00:32:33,535
over the last 10 years.

606
00:32:33,736 --> 00:32:39,075
You know, we're repricing everything in sats and we're re-denominating the entire world

607
00:32:39,075 --> 00:32:41,196
in Satoshis.

608
00:32:41,196 --> 00:32:48,775
So you know, they just need to, everything else needs to drop another 90% and in Satoshi

609
00:32:48,775 --> 00:32:54,416
terms and the Bitcoin economy grows another 100 X or so.

610
00:32:54,416 --> 00:32:57,716
And then the world is effectively on a Bitcoin standard.

611
00:32:57,716 --> 00:33:03,495
So I've stopped waiting for fiat to die and I'm just enjoying Bitcoin growth.

612
00:33:03,495 --> 00:33:04,795
You're enjoying Bitcoin winning.

613
00:33:05,216 --> 00:33:09,515
So this reminds me, we were doing a panel yesterday at the conference, and you said

614
00:33:09,515 --> 00:33:11,835
the Bitcoin price is the only thing that matters.

615
00:33:11,995 --> 00:33:12,976
And I guess this is why.

616
00:33:13,055 --> 00:33:13,476
Is that right?

617
00:33:13,696 --> 00:33:14,295
Yeah, absolutely.

618
00:33:14,755 --> 00:33:15,736
It's the scoreboard.

619
00:33:15,976 --> 00:33:22,156
I mean, it's a lot of people have this kind of, it's the anti-capitalist mentality, as

620
00:33:22,156 --> 00:33:35,351
Mises calls it where people think that wanting to be financially secure is morally dubious that you a bad person if you care about securing your kids If you don want your kids to be debt slaves

621
00:33:35,351 --> 00:33:38,631
then you're a selfish, evil, sociopathic person.

622
00:33:38,631 --> 00:33:39,951
You know, just like people who want

623
00:33:39,951 --> 00:33:41,411
to keep the value of their money.

624
00:33:41,411 --> 00:33:44,211
These things are pathologized in modern fiat society

625
00:33:44,211 --> 00:33:46,911
because that's government propaganda.

626
00:33:46,911 --> 00:33:50,071
They need your money and they need you to be a slave

627
00:33:50,071 --> 00:33:51,851
and they need your kids to be slaves,

628
00:33:51,851 --> 00:33:53,931
to pay taxes and to suffer from inflation.

629
00:33:53,931 --> 00:33:56,351
So if you try and find a way around this,

630
00:33:56,351 --> 00:33:59,351
you get a lot of social disapproval.

631
00:33:59,351 --> 00:34:01,451
You get a lot of hate.

632
00:34:01,451 --> 00:34:06,451
So I think ultimately it's just,

633
00:34:08,271 --> 00:34:10,731
I think the propaganda is what continues that,

634
00:34:10,731 --> 00:34:11,571
but I think in the real world,

635
00:34:11,571 --> 00:34:12,851
people are just going to continue to behave

636
00:34:12,851 --> 00:34:15,191
in a way that benefits them.

637
00:34:15,191 --> 00:34:20,191
And the real measure of how Bitcoin succeeds or fails

638
00:34:20,191 --> 00:34:23,911
is just how big the market capitalization of Bitcoin is.

639
00:34:23,911 --> 00:34:28,571
It's, you know, if you're thinking about the market for shoes,

640
00:34:28,571 --> 00:34:33,391
there's a total addressable market, 16 billion feet on earth

641
00:34:33,391 --> 00:34:35,371
that you have to cover with shoes roughly.

642
00:34:35,371 --> 00:34:38,471
And if you have a chunk of that market, somebody else doesn't.

643
00:34:38,471 --> 00:34:43,471
And it's how much of that shoes can you take in that market.

644
00:34:43,671 --> 00:34:46,591
And then Bitcoin is in the market for money.

645
00:34:46,591 --> 00:34:48,071
And money is the biggest market of all.

646
00:34:48,071 --> 00:34:49,491
People don't think of it that way,

647
00:34:49,491 --> 00:34:52,311
in the same way that fish don't understand what water is.

648
00:34:52,311 --> 00:34:56,431
but money is a market itself.

649
00:34:56,431 --> 00:34:59,171
We don't think of it that way because government

650
00:34:59,171 --> 00:35:00,951
generally wants us to think of money

651
00:35:00,951 --> 00:35:03,751
as just being the neutral layer of a market.

652
00:35:03,751 --> 00:35:05,631
A market is something that is happening.

653
00:35:05,631 --> 00:35:06,471
It's built on top of money.

654
00:35:06,471 --> 00:35:08,871
It's built on top of money, but money itself is a market.

655
00:35:08,871 --> 00:35:11,071
And that's the powerful Austrian idea.

656
00:35:11,071 --> 00:35:12,831
And once you think of money as a market,

657
00:35:12,831 --> 00:35:14,651
you realize it has a total addressable market,

658
00:35:14,651 --> 00:35:16,291
which is all of the world's cash balances.

659
00:35:16,291 --> 00:35:19,031
All of the money that people hold for the sake of money,

660
00:35:19,031 --> 00:35:24,031
not as investment and not as, you know,

661
00:35:24,391 --> 00:35:26,271
the wealth that people hold not as consumer goods

662
00:35:26,271 --> 00:35:28,491
and not as investments and as capital goods,

663
00:35:28,491 --> 00:35:29,731
as money, as liquid wealth,

664
00:35:29,731 --> 00:35:32,751
things that they hold so that they can spend later.

665
00:35:32,751 --> 00:35:34,571
And that's about $300 trillion.

666
00:35:34,571 --> 00:35:37,011
If you count physical money, checking accounts,

667
00:35:37,011 --> 00:35:39,691
savings accounts, and government bonds,

668
00:35:39,691 --> 00:35:41,891
which I would count as well, and gold,

669
00:35:41,891 --> 00:35:43,231
that's about $300 trillion.

670
00:35:43,231 --> 00:35:45,611
So Bitcoin is already at 2 trillion.

671
00:35:45,611 --> 00:35:48,751
So it's less than 1% of the total addressable market.

672
00:35:48,751 --> 00:35:53,751
But if it's at 50%, if it's at 60, 70%, then it's one.

673
00:35:53,931 --> 00:35:56,151
And then, you know, it doesn't matter what people think.

674
00:35:56,151 --> 00:35:58,511
So if Bitcoin goes up a hundred X

675
00:35:58,511 --> 00:35:59,891
from where it is right now,

676
00:36:00,951 --> 00:36:04,591
if we're at $9 million or $5 million

677
00:36:04,591 --> 00:36:05,751
or something like that,

678
00:36:05,751 --> 00:36:08,111
Bitcoin is the biggest monetary asset in the world.

679
00:36:08,111 --> 00:36:10,451
The cash balances in Bitcoin exceed everything else.

680
00:36:10,451 --> 00:36:11,611
Bitcoin is the world's money.

681
00:36:11,611 --> 00:36:12,991
That's it, it's game over.

682
00:36:12,991 --> 00:36:14,531
And that's just about the price.

683
00:36:14,531 --> 00:36:16,311
So the harder we pump the price,

684
00:36:16,311 --> 00:36:17,691
the more Bitcoin is winning.

685
00:36:17,691 --> 00:36:28,731
And you know, it offends people that somebody could write a book and be so intellectual about Bitcoin and then just sound like a total moon boy cheering on the price.

686
00:36:28,831 --> 00:36:30,171
But that's ultimately what it is.

687
00:36:30,611 --> 00:36:32,011
Bitcoin is a price technology.

688
00:36:32,191 --> 00:36:34,011
It's really all about that number.

689
00:36:34,011 --> 00:36:40,411
Because the higher that number goes, the larger the size of cash balance is in Bitcoin, the more successful Bitcoin is as money.

690
00:36:41,071 --> 00:36:45,091
And the more you are able to use it as money, the more wealth is stored in it.

691
00:36:45,091 --> 00:36:47,491
and the less wealth is being devalued

692
00:36:47,491 --> 00:36:48,591
through government inflation.

693
00:36:48,891 --> 00:36:51,191
So we need to move all the world's wealth into Bitcoin

694
00:36:51,191 --> 00:36:52,391
in order to really kill fiat.

695
00:36:52,891 --> 00:36:55,711
That's the long, painful way of doing this.

696
00:36:56,051 --> 00:36:57,391
Initially, when I first got into Bitcoin,

697
00:36:57,451 --> 00:36:58,071
and I think a lot of people,

698
00:36:58,171 --> 00:36:59,071
when they first get into Bitcoin,

699
00:36:59,551 --> 00:37:03,091
they imagine that, because figuring out Bitcoin

700
00:37:03,091 --> 00:37:06,231
and understanding the process is so mind-blowing

701
00:37:06,231 --> 00:37:07,251
that you imagine, all right,

702
00:37:07,271 --> 00:37:08,411
now everybody's gonna get this

703
00:37:08,411 --> 00:37:09,811
and everybody's gonna dump their fiat

704
00:37:09,811 --> 00:37:11,611
and everybody's gonna go into Bitcoin

705
00:37:11,611 --> 00:37:12,991
and Bitcoin is gonna moon overnight,

706
00:37:12,991 --> 00:37:16,491
you know, million dollars of Bitcoin tomorrow.

707
00:37:16,491 --> 00:37:18,751
But then over time, you realize people are a lot stupider

708
00:37:18,751 --> 00:37:20,951
than you give them credit for.

709
00:37:20,951 --> 00:37:22,931
So it's gonna take a lot longer.

710
00:37:22,931 --> 00:37:24,891
And they're gonna need to get poorer

711
00:37:24,891 --> 00:37:26,851
before they figure it out and understand it.

712
00:37:26,851 --> 00:37:31,091
And we're gonna take the long, scenic, ugly road

713
00:37:31,091 --> 00:37:34,591
toward a world where Bitcoin dominates cash balances.

714
00:37:34,591 --> 00:37:36,711
So it's gonna be a while, unfortunately,

715
00:37:36,711 --> 00:37:39,731
which is sad because the world needs to get rid of fiat.

716
00:37:39,731 --> 00:37:42,911
But, you know, Rome was not built in a day.

717
00:37:43,751 --> 00:37:45,851
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726
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727
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738
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746
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747
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749
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750
00:40:04,091 --> 00:40:09,431
So when we look at getting to 50% of all cash balances, how does Bitcoin do that?

751
00:40:09,471 --> 00:40:11,771
Is it as a store of value for most of the way?

752
00:40:11,951 --> 00:40:15,751
Or when do you think Bitcoin becomes an actual medium of exchange that people use very regularly?

753
00:40:15,911 --> 00:40:17,531
I try and use Bitcoin as much as I can.

754
00:40:17,631 --> 00:40:19,091
I just bought this book off you with Bitcoin.

755
00:40:19,091 --> 00:40:22,911
But how does that transition happen?

756
00:40:22,911 --> 00:40:51,891
Yeah, it happens through, again, increasing cash balances. Currently, as I said, you know, about less than 1% of the world's cash balances are in Bitcoin. So when you're buying something, whatever thing you're buying on the other side of that purchase, or when you're selling something on the other side, the expected size of that other person's cash balance globally is about 1%. So the average person you deal with has 1% Bitcoin. And 1% Bitcoin is essentially not a cash balance. It's almost a rounding error.

757
00:40:51,891 --> 00:40:53,171
It's almost like an investment position.

758
00:40:53,351 --> 00:40:55,511
So if you are holding 1% Bitcoin,

759
00:40:55,911 --> 00:40:58,491
you're not going to be conducting daily transactions in Bitcoin.

760
00:40:58,631 --> 00:41:00,111
You're going to be conducting daily transactions

761
00:41:00,111 --> 00:41:03,851
in the thing that you are holding of in significant quantities.

762
00:41:04,071 --> 00:41:06,751
If you want the 1% portfolio allocation to Bitcoin,

763
00:41:07,151 --> 00:41:09,431
then if you're buying and selling things with Bitcoin,

764
00:41:09,791 --> 00:41:13,251
you're going to go up or down very quickly.

765
00:41:13,271 --> 00:41:16,311
You're going to go to zero or you might go to 5% if you're doing that.

766
00:41:16,411 --> 00:41:19,911
So if your intention is to have a small position in Bitcoin,

767
00:41:19,911 --> 00:41:22,311
then you can't really trade with it.

768
00:41:22,311 --> 00:41:24,331
You trade with the thing that you have in abundance,

769
00:41:24,331 --> 00:41:25,711
the cash that you hold in abundance.

770
00:41:25,711 --> 00:41:27,971
That's the one that you buy and sell extensively.

771
00:41:27,971 --> 00:41:30,231
And that's the one that is going to,

772
00:41:32,231 --> 00:41:33,451
that's the one that's going to be the money

773
00:41:33,451 --> 00:41:34,291
that you're going to be using.

774
00:41:34,291 --> 00:41:36,031
So currently around the world,

775
00:41:36,031 --> 00:41:39,391
about the majority of the world's cash balances

776
00:41:39,391 --> 00:41:42,051
are in dollars or in dollar denominated currencies,

777
00:41:42,051 --> 00:41:44,711
currencies that are backed by dollars, the vast majority.

778
00:41:44,711 --> 00:41:47,591
So when you're going to be conducting trade with somebody,

779
00:41:47,591 --> 00:41:49,231
you're going to be conducting it in a dollar

780
00:41:49,231 --> 00:41:50,291
because that's the case.

781
00:41:50,291 --> 00:41:53,071
Now in the Bitcoin world,

782
00:41:53,071 --> 00:41:55,491
so for instance, my website is a good example.

783
00:41:55,491 --> 00:41:59,991
I have a lot more than 1% of my portfolio in Bitcoin.

784
00:41:59,991 --> 00:42:01,931
So Bitcoin really is my cash balance.

785
00:42:01,931 --> 00:42:04,931
I'm very happy to be buying and selling with Bitcoin.

786
00:42:04,931 --> 00:42:08,111
And if I could buy everything with Bitcoin,

787
00:42:08,111 --> 00:42:10,231
it wouldn't be a problem for me

788
00:42:10,231 --> 00:42:11,831
because my cash balance is in Bitcoin.

789
00:42:11,831 --> 00:42:13,711
So I'm spending effectively from Bitcoin,

790
00:42:13,711 --> 00:42:15,611
whether I'm spending Bitcoin or fiat,

791
00:42:15,611 --> 00:42:18,231
because everything is essentially ultimately

792
00:42:18,231 --> 00:42:20,111
denominated in Bitcoin in my mind,

793
00:42:20,111 --> 00:42:22,951
the cash balance is in Bitcoin.

794
00:42:22,951 --> 00:42:24,711
So I'm like that.

795
00:42:24,711 --> 00:42:26,091
And then a lot of my readers

796
00:42:26,091 --> 00:42:27,611
and the people who buy my courses

797
00:42:27,611 --> 00:42:29,071
and my books on my website,

798
00:42:29,071 --> 00:42:30,071
a lot of them are Bitcoiners.

799
00:42:30,071 --> 00:42:33,151
So they also have significant cash balances in Bitcoin.

800
00:42:33,151 --> 00:42:37,031
So they're also likely to be spending their Bitcoin.

801
00:42:37,031 --> 00:42:39,171
That's why my website does about one third,

802
00:42:39,171 --> 00:42:43,631
maybe close to one half of the volume these days in Bitcoin.

803
00:42:43,631 --> 00:42:45,091
And I also offer a discount on Bitcoin

804
00:42:45,091 --> 00:42:46,231
because I prefer Bitcoin.

805
00:42:46,231 --> 00:42:53,571
So in this situation, when you are, you're seeing people who have significant cash balances in Bitcoin, it's highly likely that we'll trade in Bitcoin.

806
00:42:53,711 --> 00:42:55,371
That's why a lot of people buy my books with Bitcoin.

807
00:42:56,171 --> 00:42:59,071
So that's what the rest of the world needs to do.

808
00:42:59,071 --> 00:43:10,371
You know, when the rest of the world has more cash balances in Bitcoin, when the rest of the world's cash balances in Bitcoin are similar to the cash balances of me and my readers currently in Bitcoin, then you're going to see a lot more trade in Bitcoin.

809
00:43:10,371 --> 00:43:17,131
And price kind of fixes that because for anyone who has a 1% allocation to Bitcoin, that's soon going to become 5%, 10%, 15% allocation.

810
00:43:17,611 --> 00:43:18,591
And that changes the dynamic.

811
00:43:18,711 --> 00:43:19,031
Exactly.

812
00:43:19,211 --> 00:43:26,811
So the no coiners can do this the easy way where they just dump their shit coins and get into Bitcoin and make a lot of Bitcoin and live happily ever after.

813
00:43:26,871 --> 00:43:30,491
Or they can do it the hard way where they keep their shit coins, their shit coins go to zero.

814
00:43:30,671 --> 00:43:36,451
And then eventually they get into Bitcoin with very few Bitcoins and have fun staying poor.

815
00:43:36,451 --> 00:44:04,751
Yeah. I want to just go back a little bit to something you said earlier, which was the 70s being like a really tough period, really high inflation. It seems like central banks and countries around the world are waking up to some of the instability in fiat currency. Like we see China stacking loads more gold. I'm sure Russia is. And maybe, in fact, when the US sanctioned Russia, which seemed like a very emotional decision, not a very rational decision, like that was kind of the shot that everyone heard.

816
00:44:04,751 --> 00:44:14,831
Do you think that these other central banks, like the polarization of the world, the rise of BRICS currencies, this is the start of people realizing maybe we shouldn't have everything in the US dollar?

817
00:44:15,391 --> 00:44:21,751
I think so. I think it's, I mean, people have been saying this for a very long time, since the 1990s even.

818
00:44:22,611 --> 00:44:27,951
In the 1990s, it was very fringe, few voices saying, you know, the dollar and the problem of the dollar.

819
00:44:28,071 --> 00:44:32,731
And then in the 2000s, after the financial crisis, that grew more and more.

820
00:44:32,731 --> 00:44:37,591
and the Chinese awareness of the problem of the dollar

821
00:44:37,591 --> 00:44:38,671
and the inflation of the dollar

822
00:44:38,671 --> 00:44:41,451
and all of the dollar printing increased.

823
00:44:41,951 --> 00:44:44,771
And clearly, the Chinese, in 2008,

824
00:44:44,851 --> 00:44:46,371
they had about a trillion dollars in treasuries.

825
00:44:46,511 --> 00:44:49,391
Now they have about, I think, 700 billion or 800 billion.

826
00:44:49,391 --> 00:44:54,551
So 18 years later, they've got a little bit less.

827
00:44:54,751 --> 00:44:56,831
But when you factor in the real devaluation,

828
00:44:57,091 --> 00:44:58,211
it's significantly less.

829
00:44:58,551 --> 00:44:59,951
Yeah, especially with the increased trade

830
00:44:59,951 --> 00:45:02,451
that's happened with China and the US over the last decade.

831
00:45:02,731 --> 00:45:06,351
So China's a lot richer and the dollar's worth less.

832
00:45:06,651 --> 00:45:08,351
And so when you factor those two things in,

833
00:45:08,711 --> 00:45:12,531
China's effectively decoupled a lot from treasuries.

834
00:45:13,431 --> 00:45:16,791
But they moved over the past 15 years,

835
00:45:17,151 --> 00:45:18,951
primarily instead of holding treasuries,

836
00:45:19,051 --> 00:45:21,611
they were moving toward holding investment assets.

837
00:45:21,771 --> 00:45:23,731
And they were particularly investing in the third world,

838
00:45:24,131 --> 00:45:25,431
in Africa and Latin America,

839
00:45:25,931 --> 00:45:28,331
building seaports and infrastructure and so on.

840
00:45:28,651 --> 00:45:31,771
And that was a way for them to channel all these extra savings

841
00:45:31,771 --> 00:45:34,311
because it's difficult to find a place to put savings

842
00:45:34,311 --> 00:45:36,771
because everything that you buy with your savings,

843
00:45:36,891 --> 00:45:39,171
you pump the price up to stop it from being attractive.

844
00:45:39,671 --> 00:45:43,871
But now I think they are stepping up their gold purchases.

845
00:45:44,511 --> 00:45:45,651
And I think really, as you said,

846
00:45:45,751 --> 00:45:47,391
the confiscation of the Russian reserves

847
00:45:47,391 --> 00:45:48,631
was a huge wake-up call

848
00:45:48,631 --> 00:45:50,851
because it just made it very clear to anybody

849
00:45:50,851 --> 00:45:54,451
that you never know when the Americans

850
00:45:54,451 --> 00:45:55,511
are going to kick you out.

851
00:45:55,611 --> 00:45:57,951
And it's quite interesting that even before that,

852
00:45:57,951 --> 00:46:03,051
that the Russians had not sought to exit the dollar system.

853
00:46:03,171 --> 00:46:03,911
I mean, it just shows.

854
00:46:04,271 --> 00:46:05,411
They must never have seen that coming.

855
00:46:06,531 --> 00:46:10,951
Maybe, or maybe it was just, I mean, unthinkable for them.

856
00:46:11,431 --> 00:46:13,431
How do we manage without this?

857
00:46:13,531 --> 00:46:13,911
I don't know.

858
00:46:14,431 --> 00:46:22,591
But I think it's very telling that for all the talk about people wanting to break out of the U.S. orbit,

859
00:46:22,591 --> 00:46:26,151
that the Russians had not even taken their reserves out

860
00:46:26,151 --> 00:46:28,871
even when they invaded Ukraine.

861
00:46:29,931 --> 00:46:31,431
So I think more and more countries,

862
00:46:31,431 --> 00:46:33,531
and then, you know, remember with this entire shit show

863
00:46:33,531 --> 00:46:35,391
around the tariffs over the last year,

864
00:46:35,391 --> 00:46:39,191
it was just so hilarious and so misguided

865
00:46:39,191 --> 00:46:41,111
and so idiotic in the way that it was conducted.

866
00:46:41,111 --> 00:46:42,991
And so completely and utterly clueless,

867
00:46:42,991 --> 00:46:46,331
clearly done over chat GPT over 15 minutes,

868
00:46:47,291 --> 00:46:52,291
that there's a capriciousness to the current US government.

869
00:46:52,291 --> 00:47:00,671
And you can tell, you know, it's just a very busy Donald Trump who just thinks that he doesn't need to get into the details of things.

870
00:47:00,671 --> 00:47:06,631
So, you know, he thinks it's all a negotiation and you're just bluffing and you're calling the first terms.

871
00:47:06,831 --> 00:47:11,771
And that's just not, it's turned out to be an extremely stupid stunt.

872
00:47:11,931 --> 00:47:17,971
You know, they went and signed with the Chinese basically to take things back as they were before Trump's stupid stunt.

873
00:47:18,131 --> 00:47:19,271
And that's all that it's achieved.

874
00:47:19,911 --> 00:47:23,271
I think he vastly overestimated his leverage on China.

875
00:47:23,511 --> 00:47:26,951
He vastly overestimated how much he could get them to compromise.

876
00:47:27,651 --> 00:47:31,171
And they are in a much better and much stronger position than him.

877
00:47:31,491 --> 00:47:33,711
But in any case, all of that just shows that really,

878
00:47:34,971 --> 00:47:37,971
whether through incompetence, erraticness, capriciousness,

879
00:47:37,971 --> 00:47:42,611
or just downright plain evil, the U.S. is not something you want to count on.

880
00:47:42,731 --> 00:47:45,151
I think a lot of the world is coming to that realization now.

881
00:47:45,151 --> 00:48:04,471
And, you know, also the wars are really the gusto with which America funds its wars and the way in which the insane lunatics at the U.S. government clap for Netanyahu, for instance, when he shows up and they all jump like prostitutes to do the tricks that they're paid to do.

882
00:48:04,471 --> 00:48:15,431
It's really disgusting for the vast majority of the planet because the vast majority of the planet don't take pleasure in mass murder and in robbing the rest of the planet in order to finance mass murder.

883
00:48:16,171 --> 00:48:19,291
So, yeah, I think a lot of the world is waking up to that.

884
00:48:19,391 --> 00:48:24,691
And I think, you know, we could see more pumping in gold.

885
00:48:25,051 --> 00:48:26,871
The gold's had an incredible run so far.

886
00:48:28,211 --> 00:48:29,851
We could see more.

887
00:48:29,851 --> 00:48:34,411
We could see more purchases on an individual level, on a governmental level.

888
00:48:34,551 --> 00:48:36,291
I think we could see it continuing.

889
00:48:36,871 --> 00:48:42,651
I do have my skepticism about the success of gold because it will be centralized.

890
00:48:42,951 --> 00:48:43,931
Governments can't control it.

891
00:48:43,971 --> 00:48:44,811
They can't stop it.

892
00:48:45,751 --> 00:48:53,531
But, I mean, the question is, can the Chinese and the Russians in particular, can these governments

893
00:48:53,531 --> 00:48:57,831
figure out that the advantages of moving on to a gold standard

894
00:48:57,831 --> 00:49:04,551
outweigh the drawbacks of losing their inflationary prerogative?

895
00:49:05,111 --> 00:49:06,391
That is the question.

896
00:49:06,571 --> 00:49:09,291
And it's a difficult one because I think the people who run the Chinese

897
00:49:09,291 --> 00:49:15,311
and the Russian government, they've had a money printer which they use.

898
00:49:16,191 --> 00:49:20,731
To be fair, they're not as dependent on their money printer as the U.S. is

899
00:49:20,731 --> 00:49:22,731
because they can't export their inflation.

900
00:49:22,731 --> 00:49:24,951
But still, they like their money printers.

901
00:49:25,331 --> 00:49:41,811
So the question is, do they like the money printer enough that they would forego the opportunity to essentially hurt the US or not necessarily hurt the US, just get out of the US orbit because they want to keep their money printer?

902
00:49:41,971 --> 00:49:43,311
Or will they decide, you know what?

903
00:49:43,371 --> 00:49:44,331
No, we don't need the money printer.

904
00:49:44,391 --> 00:49:45,851
We need to get out of the US orbit first.

905
00:49:45,851 --> 00:49:53,071
Because China runs such a trade surplus and they're a very wealthy nation, do they need inflation in the same way that the US does?

906
00:49:53,571 --> 00:50:05,151
No, they don't. And in fact, I think it's actually quite remarkable that if you look at the exchange rate, the Chinese yuan is practically flat against the dollar long term.

907
00:50:06,331 --> 00:50:21,367
It not pegged but they done a pretty good job of maintaining the value of the yuan and not devaluing it too much So therefore I don think they benefit enormously from inflation I don think the Chinese government

908
00:50:21,367 --> 00:50:25,987
is relying on inflation as much as the US government does because the Chinese government

909
00:50:25,987 --> 00:50:31,767
can't export its inflation. So if it engages in inflation, it just devalues its currency,

910
00:50:31,767 --> 00:50:34,706
which is not an international currency. Its currency drops against the dollar.

911
00:50:34,706 --> 00:50:41,747
but they you know they hold dollar assets that are devaluing as the dollar is devaluing their

912
00:50:41,747 --> 00:50:48,686
treasuries are devaluing and so therefore in a sense they are exporting they are importing

913
00:50:48,686 --> 00:50:55,947
inflation they are financing the u.s by holding on to the u.s's bond bags but they're not benefiting

914
00:50:55,947 --> 00:51:00,567
from inflation and another very interesting fact is the chinese central government actually has

915
00:51:00,567 --> 00:51:01,807
very low levels of debt.

916
00:51:02,847 --> 00:51:05,186
And the Chinese government, the central government,

917
00:51:05,307 --> 00:51:08,367
doesn't spend as much money as the U.S. central government.

918
00:51:08,867 --> 00:51:10,927
China is actually a lot more politically decentralized

919
00:51:10,927 --> 00:51:12,447
than the U.S.

920
00:51:12,787 --> 00:51:14,167
In other words, most government spending

921
00:51:14,167 --> 00:51:15,287
happens at the local level.

922
00:51:15,647 --> 00:51:17,747
So the local governments don't have a money printer.

923
00:51:18,186 --> 00:51:20,427
They're a lot more fiscally responsible

924
00:51:20,427 --> 00:51:22,186
because they can't just print.

925
00:51:22,747 --> 00:51:24,307
And they have a lot less debt.

926
00:51:25,147 --> 00:51:27,686
Sorry, the federal government has a lot less debt.

927
00:51:28,087 --> 00:51:30,447
But if you add the federal and state debt,

928
00:51:30,447 --> 00:51:38,807
in the US versus the national and provincial debt in China, the US is a lot more indebted.

929
00:51:39,567 --> 00:51:45,206
So I think in terms of fundamentals, China is just in a much stronger position and they

930
00:51:45,206 --> 00:51:47,327
don't need the US as a trade partner.

931
00:51:47,327 --> 00:51:50,787
Even the US is about 2.8% of.

932
00:51:50,907 --> 00:51:51,527
How is that all?

933
00:51:51,967 --> 00:51:53,087
I didn't realize it was that low.

934
00:51:53,407 --> 00:51:53,947
Yeah, exactly.

935
00:51:54,107 --> 00:51:59,147
The Chinese economy is just, most people are still stuck in the West.

936
00:51:59,147 --> 00:52:01,327
people are still stuck up thinking of China

937
00:52:01,327 --> 00:52:04,907
as if it's still the cheap workshop of the world in the 1990s.

938
00:52:05,027 --> 00:52:05,867
And it's not.

939
00:52:05,967 --> 00:52:06,947
It's the world's superpower.

940
00:52:07,127 --> 00:52:09,267
It's the world's industrial and economic superpower.

941
00:52:09,867 --> 00:52:12,387
And it's in a league of its own.

942
00:52:12,587 --> 00:52:15,686
It's really, there's China as the first world now.

943
00:52:15,947 --> 00:52:17,647
It's the industrial epicenter of the world.

944
00:52:17,987 --> 00:52:21,467
They produce pretty much around 50% of pretty much everything.

945
00:52:21,666 --> 00:52:24,967
You know, steel, cars, electronics, whatever it is.

946
00:52:24,967 --> 00:52:29,307
China is somewhere in the range of 50% of all the world's production.

947
00:52:29,607 --> 00:52:32,907
And the rest of the world combined is in the range of 50%.

948
00:52:32,907 --> 00:52:36,547
So they are far, far ahead of everybody else.

949
00:52:36,547 --> 00:52:37,747
And they don't need anybody else.

950
00:52:38,327 --> 00:52:41,227
The US market is a nice to have for them, but it's not an essential.

951
00:52:41,407 --> 00:52:42,787
It's only 2.8%.

952
00:52:42,787 --> 00:52:44,907
I mean, it's all of their exports, I think.

953
00:52:48,327 --> 00:52:50,267
The exports to the rest of the world are increasing.

954
00:52:50,267 --> 00:52:55,587
At this point, I think Southeast Asia is the biggest trading partner for China.

955
00:52:55,827 --> 00:52:56,547
It's bigger than the US.

956
00:52:57,627 --> 00:52:58,647
There's a lot more people.

957
00:52:59,227 --> 00:53:03,186
A lot more people, not quite as rich as the US, but they're very close to China, so it's

958
00:53:03,186 --> 00:53:04,407
cheaper to ship there.

959
00:53:05,227 --> 00:53:10,367
And the US is just, it's only 300 million people.

960
00:53:10,627 --> 00:53:12,547
There are 8 billion people on earth.

961
00:53:12,547 --> 00:53:24,807
And it's entirely becoming clear that the Chinese are thinking more and more about not relying on the U.S. because it's not a stable country.

962
00:53:25,127 --> 00:53:34,127
Yeah, it's interesting because I would be very shocked if China and Russia, the BRICS nations, like most of the world, I think, is thinking about Bitcoin in some degree.

963
00:53:34,567 --> 00:53:39,247
But the U.S. obviously stepped in under Donald Trump and started talking about Bitcoin far more seriously.

964
00:53:39,247 --> 00:53:41,967
Do you think that's because they see this risk of China?

965
00:53:42,547 --> 00:53:44,607
No, I don't think so.

966
00:53:44,927 --> 00:53:49,706
My honest opinion is that I think it's just Trump figured out that he could make money from this thing.

967
00:53:50,007 --> 00:53:56,107
And he's retrofitting explanations to try and justify that it's good for the dollar.

968
00:53:56,227 --> 00:53:57,347
It's taking pressure from the dollar.

969
00:53:57,627 --> 00:53:58,567
It's going to help.

970
00:53:58,967 --> 00:54:00,327
He's just making money from it.

971
00:54:00,367 --> 00:54:02,147
And he's coming up with rationalizations for it.

972
00:54:02,206 --> 00:54:03,947
I don't think that that is the case.

973
00:54:04,287 --> 00:54:08,407
Because I don't think, you know, he's not looking to move away from the dollar.

974
00:54:08,407 --> 00:54:17,027
And there are a lot of people that try and, with Trump, whatever stupid thing he does, there are always people that want to tell you that this is complicated, sophisticated 5D chess.

975
00:54:17,287 --> 00:54:18,467
And we saw that with the tariffs.

976
00:54:18,666 --> 00:54:25,487
You know, every day, all of his fans were convinced that he was being a genius, whatever he does, when he does something and then when he does the opposite.

977
00:54:25,666 --> 00:54:27,107
So he puts the tariffs on China.

978
00:54:27,267 --> 00:54:28,527
Wow, what a genius move.

979
00:54:28,847 --> 00:54:29,927
Then he removes the tariff.

980
00:54:30,027 --> 00:54:31,407
Oh, wow, what a genius move.

981
00:54:31,447 --> 00:54:33,247
He scared them, but now he moved the tariff.

982
00:54:33,527 --> 00:54:34,847
Then he puts them back on again.

983
00:54:34,947 --> 00:54:35,927
Oh, wow, genius.

984
00:54:36,387 --> 00:54:37,307
Now he's putting the pressure.

985
00:54:37,307 --> 00:54:39,607
And just these rationalizations.

986
00:54:39,727 --> 00:54:42,047
If we put the tariffs, then we're going to re-industrialize.

987
00:54:42,206 --> 00:54:47,847
If we remove the tariffs, then we're going to open access to the markets, and we're going to get free trade.

988
00:54:48,327 --> 00:54:58,487
So free trade or industrialization, exact opposite goals, but he's doing both, and whichever one he chooses is going to be right about it.

989
00:54:59,307 --> 00:55:03,706
This is just basic politics fanboyism.

990
00:55:04,467 --> 00:55:09,967
I think he's just made billions of dollars from his shitcoin and Bitcoin ventures.

991
00:55:10,347 --> 00:55:12,927
And he likes making billions of dollars.

992
00:55:13,007 --> 00:55:13,507
He's a businessman.

993
00:55:13,827 --> 00:55:15,747
I don't think it's more sophisticated than that.

994
00:55:15,867 --> 00:55:19,407
So you think by the end of his term, nothing interesting will happen out of the US with Bitcoin?

995
00:55:22,147 --> 00:55:23,047
Yeah, probably.

996
00:55:23,047 --> 00:55:28,547
I think the momentum behind getting something serious done, I think, is gone.

997
00:55:28,867 --> 00:55:33,507
And I think at this point, it's probably becoming politically expensive.

998
00:55:33,706 --> 00:55:53,347
I think the combination of tech bros and crypto bros making a lot of money, Trump making a lot of money, and the economic problems in the country combined together, I think is going to make for a toxic mix when the election comes along in the midterms.

999
00:55:53,467 --> 00:55:57,666
And I think crypto is going to be something that the Democrats are going to focus on.

1000
00:55:57,967 --> 00:55:59,147
Yeah, I'm sure that's true.

1001
00:55:59,227 --> 00:56:03,047
Especially like the Trump and Melania coin, all that stuff is just like so toxic.

1002
00:56:03,047 --> 00:56:12,927
The interesting thing is like before the US made this announcement, I think the general consensus amongst Bitcoiners was this movement was going to happen at the fringes, like the El Salvador's of the world, the Bhutans of the world.

1003
00:56:13,166 --> 00:56:17,067
So do you think that's actually still true? And the US was kind of a red herring in this?

1004
00:56:18,147 --> 00:56:32,747
Yeah, I guess so. I mean, if I were to look at how I thought about Bitcoin over the past 10 years or so, I'd say I was surprised that over the last few years, we witnessed a lot more corporate and government adoption.

1005
00:56:33,047 --> 00:56:38,047
El Salvador, Bhutan, MicroStrategy, BlackRock, ETFs,

1006
00:56:38,047 --> 00:56:38,967
all of those things.

1007
00:56:38,967 --> 00:56:42,547
I, in my mind, if you asked me in 2018,

1008
00:56:42,547 --> 00:56:44,787
when I wrote the Bitcoin standard, how it would play out,

1009
00:56:44,787 --> 00:56:46,747
I would imagine that by 2025,

1010
00:56:46,747 --> 00:56:51,747
we'd have more random, normal average Joes with wallets

1011
00:56:54,107 --> 00:56:56,887
and we'd still not have ETFs

1012
00:56:56,887 --> 00:56:58,547
and we'd not have MicroStrategy

1013
00:56:58,547 --> 00:57:00,447
and we wouldn't have El Salvador.

1014
00:57:00,447 --> 00:57:02,447
And I think that would come later

1015
00:57:02,447 --> 00:57:04,107
after more people did it.

1016
00:57:04,107 --> 00:57:08,787
But, you know, the last few years we saw that trend,

1017
00:57:08,787 --> 00:57:12,267
but I think, yeah, the government,

1018
00:57:12,267 --> 00:57:14,007
the US government getting in,

1019
00:57:14,007 --> 00:57:15,827
I don't think is going to stick.

1020
00:57:17,867 --> 00:57:19,967
I think in fact, if the Democrats get in,

1021
00:57:19,967 --> 00:57:23,327
they may make it a point to sell the coins that they have

1022
00:57:23,327 --> 00:57:25,767
because I can see it becoming a popular point

1023
00:57:25,767 --> 00:57:27,367
for them in the election.

1024
00:57:27,367 --> 00:57:30,587
And I can see it, it's just such great marketing.

1025
00:57:30,587 --> 00:57:34,107
You know, you can't afford your home, you can't afford this,

1026
00:57:34,107 --> 00:57:37,267
but Trump and his tech pros have done great

1027
00:57:37,267 --> 00:57:41,067
from their shitcoin investments, bought them out.

1028
00:57:41,067 --> 00:57:43,367
It's just unbeatable marketing, I think.

1029
00:57:43,367 --> 00:57:45,467
So I don't think that's going to stick.

1030
00:57:45,467 --> 00:57:47,507
I don't think the US policy on this is going to stick.

1031
00:57:47,507 --> 00:57:51,807
And I think, you know,

1032
00:57:51,807 --> 00:57:55,387
I was talking to the Africa Bitcoin Corporation

1033
00:57:55,387 --> 00:57:57,647
and I've just become an advisor for them.

1034
00:57:57,647 --> 00:58:00,587
And they keep telling me about how in South Africa,

1035
00:58:00,587 --> 00:58:03,647
They're really witnessing grassroots adoption.

1036
00:58:03,647 --> 00:58:05,206
A lot of people have just skipped

1037
00:58:05,206 --> 00:58:10,206
on the entire fiat payments technology

1038
00:58:10,587 --> 00:58:11,767
and just accept Bitcoin.

1039
00:58:11,767 --> 00:58:13,787
They have a phone, they download a Bitcoin wallet

1040
00:58:13,787 --> 00:58:17,427
and they use these wallets for day-to-day transactions.

1041
00:58:17,427 --> 00:58:20,147
It's pretty popular apparently in South Africa.

1042
00:58:20,147 --> 00:58:22,907
So this kind of reinvigorated my hope

1043
00:58:22,907 --> 00:58:26,087
that we'll maybe see more and more grassroots adoption.

1044
00:58:26,087 --> 00:58:29,647
And hopefully the US government

1045
00:58:29,647 --> 00:58:33,727
continues to do its shitcoin things and leaves the Bitcoin for the rest of the world.

1046
00:58:33,967 --> 00:58:37,427
Yeah, well, if they sell their Bitcoin, it's just more Bitcoin in the hands of actual Bitcoiners.

1047
00:58:37,727 --> 00:58:43,247
But I was just in Kenya before I came here. And I think it might be the best country in the world

1048
00:58:43,247 --> 00:58:47,666
to be a Bitcoiner. Oh, really? So I went to Kibera, which is the largest slum in Kenya.

1049
00:58:48,107 --> 00:58:53,706
There's like estimate seven to 900,000 people live there. It's huge. And there's Afrobit or a

1050
00:58:53,706 --> 00:58:58,767
company that are going around just trying to onboard merchants to accept Bitcoin. And I think

1051
00:58:58,767 --> 00:59:04,166
they have over 65 merchants all in like quite a concentrated zone in Kibera. And the cool thing

1052
00:59:04,166 --> 00:59:08,727
was it's not just Bitcoiners using it. Like I'm always a bit skeptical of Bitcoin circular economies

1053
00:59:08,727 --> 00:59:12,867
because it's just like Bitcoiners paying Bitcoiners. But what they'd done that was really

1054
00:59:12,867 --> 00:59:17,607
interesting is they'd started paying. One of the guys has a trash collection business. He employs

1055
00:59:17,607 --> 00:59:22,107
25 people. He's getting his payments in Bitcoin and then paying all his employees in Bitcoin.

1056
00:59:22,327 --> 00:59:27,367
And now there's 65 merchants in the local area where they can go and pay. And so like real normal

1057
00:59:27,367 --> 00:59:30,587
people who just live there who aren't, who don't really care about Bitcoin are actually

1058
00:59:30,587 --> 00:59:35,367
using Bitcoin there. And then on top of that, there's an app called Tando, which is like

1059
00:59:35,367 --> 00:59:39,947
this really basic looking app, but you can, because they use Mpacer there, which is like

1060
00:59:39,947 --> 00:59:44,727
mobile money, you can pay any bill, any merchant, you can pay your rent, you can pay whatever

1061
00:59:44,727 --> 00:59:52,047
it is in, um, in Kenya using Bitcoin. So you just like scan a QR code and you'll pay Bitcoin

1062
00:59:52,047 --> 00:59:56,467
and it's then just converted to Mpacer and pays, pays the other person. Um, so like you

1063
00:59:56,467 --> 01:00:00,887
could live 100% on Bitcoin in Kenya today and you would have zero problems. It was really cool.

1064
01:00:00,947 --> 01:00:07,146
Like seeing stuff like that, that's real Bitcoin. So yeah, I'm bullish on that. We're running out

1065
01:00:07,146 --> 01:00:11,347
of time. I know you've got a busy day. I think you're going to have a tired hand from signing

1066
01:00:11,347 --> 01:00:17,247
a lot of books. But can we close out back on the gold standard? Yes. When you look ahead at the

1067
01:00:17,247 --> 01:00:22,447
100 years following the start of the First World War, what does it look like? Is it utopia?

1068
01:00:22,447 --> 01:00:23,287
Yeah.

1069
01:00:23,287 --> 01:00:24,107
Pretty much. Yes.

1070
01:00:25,987 --> 01:00:29,987
Yeah. I mean, you know, it's, it's,

1071
01:00:29,987 --> 01:00:36,987
it's a thought experiment and I try and extrapolate the trends that I believe

1072
01:00:37,447 --> 01:00:41,527
would be positive and then try and think about what the world would have looked

1073
01:00:41,527 --> 01:00:42,447
like. And I think it's a,

1074
01:00:43,267 --> 01:00:48,767
it's a powerful thought experiment because it illustrates these things in a way

1075
01:00:48,767 --> 01:00:52,267
that we're not really used thinking of them. So for instance,

1076
01:00:52,447 --> 01:00:54,527
I guess this is a great example.

1077
01:00:54,527 --> 01:00:58,367
When we talk about the impact of inflation,

1078
01:00:58,367 --> 01:01:02,186
the usual idea that is taught at universities

1079
01:01:02,186 --> 01:01:03,627
is that you need inflation

1080
01:01:03,627 --> 01:01:06,507
because that incentivizes people to spend and to invest.

1081
01:01:06,507 --> 01:01:07,487
If you don't have inflation,

1082
01:01:07,487 --> 01:01:08,887
people will just sit on the money

1083
01:01:08,887 --> 01:01:10,967
and then there wouldn't be economic activity.

1084
01:01:10,967 --> 01:01:11,807
Which is nonsense.

1085
01:01:11,807 --> 01:01:12,867
Which is nonsense, of course,

1086
01:01:12,867 --> 01:01:15,547
because people consume not because their money

1087
01:01:15,547 --> 01:01:16,267
is losing value,

1088
01:01:16,267 --> 01:01:18,107
they consume because they need to consume to survive.

1089
01:01:18,107 --> 01:01:19,947
And if their money wasn't losing value,

1090
01:01:19,947 --> 01:01:21,907
they would consume less stupid nonsense

1091
01:01:21,907 --> 01:01:22,887
and save more.

1092
01:01:22,967 --> 01:01:24,367
And that means we have more capital

1093
01:01:24,367 --> 01:01:26,567
because more saving means more capital.

1094
01:01:26,567 --> 01:01:28,467
That means we could deploy more capital in production.

1095
01:01:28,987 --> 01:01:31,227
So if you take the opposite of that,

1096
01:01:32,287 --> 01:01:33,666
if you believe the propaganda,

1097
01:01:33,847 --> 01:01:36,027
then growth happens because of inflation.

1098
01:01:36,027 --> 01:01:37,227
And the more inflation we get,

1099
01:01:37,307 --> 01:01:38,447
then we get more growth

1100
01:01:38,447 --> 01:01:40,007
because that incentivizes more spending

1101
01:01:40,007 --> 01:01:40,747
and more investment.

1102
01:01:41,387 --> 01:01:43,607
So clearly Venezuela is the richest country

1103
01:01:43,607 --> 01:01:44,447
in the world today, right?

1104
01:01:44,487 --> 01:01:45,666
Because they have a lot of inflation.

1105
01:01:46,027 --> 01:01:46,887
Well, no, it doesn't.

1106
01:01:46,947 --> 01:01:47,607
It's not true.

1107
01:01:47,907 --> 01:01:50,347
And in fact, the countries that have less inflation

1108
01:01:50,347 --> 01:01:51,146
have more growth.

1109
01:01:51,146 --> 01:01:59,287
And historically, if you had less and less and less inflation, you'd have even more capital accumulation, more savings, more investment, more productivity growth.

1110
01:01:59,686 --> 01:02:07,166
So then let's step back and not believe that and then actually think about what the implication would be.

1111
01:02:07,427 --> 01:02:12,767
If we had a century in which we had no inflation, then you're accumulating more and more capital.

1112
01:02:12,947 --> 01:02:17,987
So the stock of capital that you have is growing and the value of the capital is increasing.

1113
01:02:18,507 --> 01:02:24,206
So people become wealthy, people become financially secure, people have significant savings that are constantly appreciating.

1114
01:02:24,206 --> 01:02:32,206
I mean, just think every family in the world today, the last four or five generations have had wealth stolen from them through inflation.

1115
01:02:32,367 --> 01:02:43,047
Imagine if every family in the world over the last five generations had had their wealth accumulate and grow in value at around one to two percent per year every year over the last 100 years.

1116
01:02:43,387 --> 01:02:45,067
The world would be very, very different.

1117
01:02:45,487 --> 01:02:46,727
People would be financially secure.

1118
01:02:46,727 --> 01:02:53,166
they'd have several years expenditures of savings saved up and then they take a lot of risk with

1119
01:02:53,166 --> 01:02:59,047
the money that they have beyond that so you start saving when you're born you get gifts in terms of

1120
01:02:59,047 --> 01:03:03,567
money and then they appreciate over time and then you work jobs as a kid and then you start working

1121
01:03:03,567 --> 01:03:08,487
as an adult and you keep appreciate you keep holding savings and they keep appreciating and

1122
01:03:08,487 --> 01:03:13,287
then by the time that you're 25 you can buy your own house with cash and house prices aren't as high

1123
01:03:13,287 --> 01:03:14,787
because there's not a monetary premium on them.

1124
01:03:15,007 --> 01:03:15,407
Exactly.

1125
01:03:15,567 --> 01:03:16,807
Houses are not bank accounts.

1126
01:03:16,907 --> 01:03:18,186
So houses are just consumer goods.

1127
01:03:18,666 --> 01:03:20,186
So one of the key points,

1128
01:03:20,367 --> 01:03:22,587
and I spent a lot of time thinking about the economics of this

1129
01:03:22,587 --> 01:03:23,407
and the numbers of it,

1130
01:03:23,727 --> 01:03:25,747
and I conclude the book with this almost,

1131
01:03:26,447 --> 01:03:29,247
is to imagine what would have happened to the prices of houses.

1132
01:03:29,247 --> 01:03:32,047
So around the early 20th century,

1133
01:03:32,447 --> 01:03:34,607
we see that there was a centuries-long trend

1134
01:03:34,607 --> 01:03:37,467
of houses becoming more and more affordable in terms of income.

1135
01:03:37,887 --> 01:03:39,166
So the median house in Britain,

1136
01:03:39,567 --> 01:03:41,267
as a function of the median wage,

1137
01:03:41,387 --> 01:03:42,547
is constantly declining

1138
01:03:42,547 --> 01:03:44,627
because we have more machines, more productivity.

1139
01:03:44,867 --> 01:03:46,807
We're making houses at a cheaper way

1140
01:03:46,807 --> 01:03:49,127
and work is becoming more productive.

1141
01:03:49,247 --> 01:03:52,047
The average British worker went from an average destitute farmer

1142
01:03:52,047 --> 01:03:54,727
in a few hundred years to becoming an industrial worker

1143
01:03:54,727 --> 01:03:55,767
with a lot higher productivity.

1144
01:03:56,067 --> 01:03:59,447
So he should be able to afford more house with his salary, right?

1145
01:03:59,847 --> 01:04:01,247
So that was the case.

1146
01:04:01,267 --> 01:04:03,646
And it was continuously becoming more and more affordable.

1147
01:04:03,646 --> 01:04:08,927
And then after 1914, that trend reverses in the real world

1148
01:04:08,927 --> 01:04:11,706
and houses become more and more expensive

1149
01:04:11,706 --> 01:04:13,747
in terms of fiat, in terms of money,

1150
01:04:14,107 --> 01:04:15,427
and in terms of wages as well.

1151
01:04:15,887 --> 01:04:18,407
So by the end of the 20th century or today,

1152
01:04:18,867 --> 01:04:21,527
you need something like, I think, 12 years income

1153
01:04:21,527 --> 01:04:22,867
to buy a house or something like that.

1154
01:04:22,907 --> 01:04:23,706
I forget the exact number.

1155
01:04:24,587 --> 01:04:28,447
So instead, what I do is we continue to extrapolate

1156
01:04:28,447 --> 01:04:30,327
the trend that existed before World War I

1157
01:04:30,327 --> 01:04:31,307
under the gold standard.

1158
01:04:31,407 --> 01:04:32,287
If we'd continued that,

1159
01:04:32,367 --> 01:04:33,787
then the house would have become more affordable.

1160
01:04:34,507 --> 01:04:36,467
And by the end of the century,

1161
01:04:37,067 --> 01:04:40,487
the average middle-class worker in a place like London,

1162
01:04:40,646 --> 01:04:41,867
I use London as the example,

1163
01:04:42,227 --> 01:04:43,907
would be able to afford a house

1164
01:04:43,907 --> 01:04:46,447
with roughly one and a half years' salary.

1165
01:04:46,967 --> 01:04:48,787
So you work for a year and a half,

1166
01:04:49,186 --> 01:04:51,787
the salary of a year and a half can buy you the house.

1167
01:04:52,127 --> 01:04:54,727
So basically you can save it over four or five years of work.

1168
01:04:54,987 --> 01:04:58,027
And now in London, you get a shoebox for 2 million pounds.

1169
01:04:58,467 --> 01:05:01,807
Yeah, and it's basically intergenerational debt

1170
01:05:01,807 --> 01:05:04,206
that you pass on to your children to have that shoebox.

1171
01:05:04,206 --> 01:05:08,047
because you're competing with all of the world's billionaires

1172
01:05:08,047 --> 01:05:11,247
and oligarchs who are looking for London

1173
01:05:11,247 --> 01:05:12,507
as a place to save their money.

1174
01:05:12,666 --> 01:05:15,787
London houses are decent bank account replacements.

1175
01:05:16,227 --> 01:05:18,067
So you need a place to live.

1176
01:05:18,166 --> 01:05:19,507
They need a place to park their money.

1177
01:05:20,067 --> 01:05:20,947
They're gonna outbid you.

1178
01:05:20,947 --> 01:05:22,447
So you're gonna be left with a shoebox.

1179
01:05:23,007 --> 01:05:24,607
So you reverse that trend.

1180
01:05:25,467 --> 01:05:26,327
Houses are affordable.

1181
01:05:26,547 --> 01:05:27,627
People have a lot of savings

1182
01:05:27,627 --> 01:05:30,107
and people are able to invest a lot more.

1183
01:05:30,227 --> 01:05:31,227
So there's a lot more investment,

1184
01:05:31,327 --> 01:05:32,087
a lot more entrepreneurship,

1185
01:05:32,287 --> 01:05:33,706
a lot more technological progress,

1186
01:05:33,706 --> 01:05:35,127
more energy consumption.

1187
01:05:36,027 --> 01:05:40,947
And, you know, rather than take the defensive way

1188
01:05:40,947 --> 01:05:43,547
of always trying to argue with the Keynesian saying,

1189
01:05:43,706 --> 01:05:46,666
no, this isn't right, inflation is not good.

1190
01:05:47,367 --> 01:05:51,807
This is really seizing the frame

1191
01:05:51,807 --> 01:05:56,487
and presenting the alternative as it is

1192
01:05:56,487 --> 01:05:58,467
rather than arguing with them on their terms.

1193
01:05:58,666 --> 01:06:00,307
It's not that we're telling them that they're wrong,

1194
01:06:00,547 --> 01:06:01,787
we're showing how it's wrong.

1195
01:06:01,787 --> 01:06:07,727
We're showing what would have happened if we'd had all of this capital accumulation over the century, how the world would have looked like.

1196
01:06:08,067 --> 01:06:14,387
And how much more peaceful the world would have been because governments wouldn't have been able to finance all of their carnage with the inflation that they're taking from you.

1197
01:06:14,646 --> 01:06:16,927
So think of all the money that's stolen over the century.

1198
01:06:17,387 --> 01:06:18,467
Give it back to its owners.

1199
01:06:19,166 --> 01:06:21,267
And imagine how much better the world would be.

1200
01:06:21,686 --> 01:06:24,047
We'd have bases on the moon, bases on Mars.

1201
01:06:25,027 --> 01:06:27,407
Well, the good thing is that we've got another shot with Bitcoin.

1202
01:06:28,287 --> 01:06:30,447
Yes, that's the moral of the story.

1203
01:06:30,447 --> 01:06:31,807
It is a Bitcoin book.

1204
01:06:32,107 --> 01:06:34,087
It's about gold, but it is a Bitcoin book.

1205
01:06:34,427 --> 01:06:35,487
Well, Saif, this has been amazing.

1206
01:06:35,686 --> 01:06:36,047
Thank you.

1207
01:06:36,206 --> 01:06:38,487
I could talk to you all day, but I know we've got stuff to do.

1208
01:06:38,827 --> 01:06:39,847
We'll have to do it again sometime.

1209
01:06:40,087 --> 01:06:40,767
Yes, absolutely.

1210
01:06:40,927 --> 01:06:41,686
Thanks for having me, Danny.

1211
01:06:41,787 --> 01:06:42,146
Thank you.

1212
01:06:42,287 --> 01:06:42,507
Cheers.