0:00

money is broken. And so your whole life

0:02

up to this point has been built on

0:04

a lie. Everything is a lie. Everything is

0:06

a lie because the food pyramid is a

0:08

lie. No, but you structure money is at

0:10

the heart of everything. Money is

0:12

at the root of every decision directly or

0:14

indirectly. The way that you

0:16

think about having a family, think about

0:18

setting up your life, think about having a

0:20

house, a career, it's all linked to

0:22

the money. And so if your money is

0:25

corrupted, every decision is corrupted. I think

0:27

a large sway of the society feels like

0:29

They work ever harder and their quality of

0:31

life doesn't go up or declines. This

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1:16

That is iron.com. good, we're

1:18

on. Joe, good to see you. Great

1:20

to be here Peter. Thanks for having me.

1:22

Bringing in a bit closer because you're

1:25

a soft speaker. I am very soft speaker.

1:27

Thank you for doing the conference. Did

1:29

you enjoy it? It was amazing. Last

1:32

year I was there in the

1:34

crowd and to think 12

1:36

months later I'd be doing

1:38

the opening talk with Dream come

1:40

true and just surreal to

1:43

be honest. But it was so

1:45

nice just to be back with so many bitcoins in

1:47

real life. You know,

1:49

exhausting, exhausting three days. Well,

1:52

look, it's good to see you.

1:54

I don't cover Bitcoin much on the show

1:56

anymore, although some people listen below. You're always talking

1:58

about it, but you know, the background, it was a

2:00

Bitcoin show and now it's not. But you're one

2:02

of the people I really didn't want to talk

2:04

to. I thought the film was great and it was

2:06

interesting. We were driving down today and I listened

2:08

to Radio Vive most of the time. And

2:10

they're often talking about big issues in society.

2:14

And every morning these days,

2:16

it is... with the schools, problems

2:20

with the NHS, cost

2:22

of living crisis, wealth gap.

2:24

It's just problem, problem, problem,

2:27

problem, problem. And it was this morning when

2:29

I was driving down because I know I was going to talk

2:31

to you. I was like, this

2:33

is what Joe's talking about. Yeah. It

2:35

all has the same root

2:37

cause and no one's talking about

2:39

it. It's, you

2:42

know, when you're listening to radio

2:44

shows or you're watching the TV, Even

2:47

on some of the shows

2:50

which are probably the most

2:52

highbrow, it's

2:55

as Larry LaParde

2:57

says, it's like they're discussing the

2:59

color of the curtains while the house is on fire. It's

3:02

like, it really doesn't matter. You're

3:05

talking about downstream issues, which

3:07

you could only fix temporarily even

3:09

if you could fix them. If

3:13

you didn't fix them, they're gonna break. They're

3:16

all from the central cause

3:18

that everybody just ignores

3:20

because of a mixture

3:22

of complexity and

3:24

a combination of

3:26

familiarity and

3:28

a disinterest.

3:33

I'm not sure on the disinterest. I

3:36

think there's definitely an

3:38

interest in money. I just think it's more

3:40

on the complexity. Of the

3:42

issue that people struggle with to

3:44

fully understand. It's like when they

3:46

have this. Gary economics

3:48

of the moment discussing money and he talks

3:51

about. And I think he's right on

3:53

the problem. I think I think we all agree on

3:55

the problem. I think he's right. But his

3:57

solution is always more government. More

3:59

taxation. Yeah. And I

4:01

don't think people really truly understand.

4:04

Money and the nature of money and

4:07

the nature of where government gets its money

4:09

from. and how the government

4:11

distributes its money, how that causes

4:13

such insidious problems in society. Yeah,

4:16

it's a combination

4:18

of cause and effect here. And

4:20

the list of problems that people

4:22

experience in their own lives, whether it's

4:24

the wealth inequality, obesity,

4:26

addiction, cost

4:29

of living crisis, all of these

4:31

things are viewed as independent

4:33

issues that require solving. And

4:35

people evaluate them as problems,

4:37

absolutely. do things to try

4:39

and solve them, especially if they

4:42

impact your life directly. But

4:44

they're caused by something else. And

4:46

so when you have Gary's

4:48

economics, when

4:51

you have Gary's economics coming

4:53

out and talking about the

4:55

wealth inequality and the solution

4:57

being more taxes, I

5:00

can sympathize with the evaluation of

5:02

an issue because 100 % that's an

5:04

issue. But

5:07

he hasn't zoomed out enough. It's

5:09

like, why is that issue there? It's not because

5:11

people are not getting taxed enough. It's

5:14

because the system's fundamentally broken. The

5:17

money is corrupted, which causes

5:19

the wealth inequality. You

5:22

don't solve that by taxing people

5:24

more. You just degrade society

5:26

and you drive a race to the

5:28

bottom. There's no solution there. It's

5:31

great for selling books. Great

5:33

for selling books. Great for selling books. There's

5:35

no solution there. This is

5:37

not... a us

5:39

versus them problem. It's

5:42

an everybody versus the

5:44

central bank problem. It's

5:46

kind of, I don't know if you

5:48

remember my slides in the conference, but what

5:50

I spoke about is if you're an

5:52

asset holder, this is great. And

5:55

okay, sorry, apologies.

5:57

It's great financially. It's

6:00

not great because society around you is crumbling. I

6:03

would even argue it's not great financially

6:05

because it's the frame of reference in

6:07

which you're measuring something. Okay.

6:09

There's a distinction to draw here between, you

6:13

know, Gary would very

6:15

helpfully split society into the rich and

6:17

the poor, which is too

6:19

black and white for this.

6:21

Society is a spectrum. And

6:24

even, you know, within the poor, you

6:26

have the destitute. You have to.

6:28

you know, the less well off

6:31

you have the poor, you

6:33

have different categories and it's the same for

6:35

the middle class and same for the wealthy, et cetera,

6:37

et cetera. It is a spectrum not aligned on

6:39

the middle here. And so everybody

6:41

can always point at somebody further

6:43

along the spectrum and say, you

6:45

know, I'm disadvantaged versus you. You

6:47

need to share more with me. You

6:50

can always do that. It's just however finely

6:52

you cut it. But

6:54

at one end

6:56

of the spectrum, you have

6:58

those connected to the money printer, which

7:02

is the difference. And

7:04

the wealthy are not necessarily

7:07

directly connected to the money printer. You

7:09

can own assets, see those assets

7:11

go up when measured in fiat currency,

7:13

but not become

7:15

wealthier. So

7:18

you own assets, more

7:21

money is printed, those assets go up in

7:23

value when measured in the thing that is

7:25

now more plentiful. So your number goes up

7:27

on a piece of paper, but your share

7:29

of the pie goes down. You

7:32

are also being stolen from. You

7:36

just don't realise it. And

7:38

it's those people who are

7:41

closer to the money printer, who

7:43

are able to effectively accumulate that

7:45

wealth balance in excess of the

7:47

rate of the money printing, which

7:51

are the politically connected. I

7:54

think there's a slight difference. I

7:56

think broadly across society people recognize

7:59

there is a problem right now. I

8:01

think people recognize that. I think

8:03

the rise of reform is a

8:05

reflection on that going from

8:07

essentially a new party to

8:09

leading certain polls is people

8:11

want something different. I

8:14

don't think they know exactly why they want something

8:16

different. I think they think they do. But

8:19

at the same time it's not necessarily going to

8:21

bring the change we need. I think

8:23

what would be really useful today is that there

8:25

are going to be people who know there's

8:28

a problem. We just put out the show with

8:30

Katharine McBride, talking about terminal decline. It

8:33

would be to really drill

8:35

into what the problem is with the money.

8:37

Try and explain it to the people

8:40

listening now who may be open minded

8:42

to this, who are, okay, explain to me

8:44

what is going on. Why is everything

8:46

falling apart? Okay, this

8:48

may be a long answer. Well good, because

8:50

you can hear my throat. It's still not

8:52

great. So

8:54

I think

8:57

the core issue with the

8:59

money is that it can be changed. So

9:02

to use the abstraction in the

9:04

video, which we'll hopefully post a link to

9:06

and people if they're interested can come

9:09

watch it and then share it with others,

9:11

is that there is a big red

9:13

button that exists, which

9:16

allows the government to

9:18

change aspects of the money as

9:20

and when they choose to. And I'll

9:22

try and use

9:25

non -technical terminology for any of these things. And

9:27

when I say government, I sort of

9:29

interchangeably mean government and central banks.

9:31

The central bank is this mandate

9:33

from the government. They're

9:35

independent, but they're not really. Yeah, exactly.

9:40

Now, many

9:43

people haven't really questioned what what

9:46

money is. And

9:49

it's

9:51

sort of the defining question of our time because we

9:53

just, we think we know what money is. We

9:55

have it in our pocket, we have it in our bank

9:57

account, we spend it, et cetera. But

10:01

when you really think

10:04

about what money represents,

10:06

we can go right back to the start. If

10:09

you know, we're in a

10:11

barter economy before any form

10:13

of medium of exchange exists

10:15

and You've got a

10:17

chicken that you've raised and I've got

10:19

some carrots that I've sown and

10:21

then grown. Both

10:23

of those products

10:25

represent our economic

10:27

energy. In

10:29

all the contributions we've made to our

10:31

skills, our time, in various combinations,

10:34

but they represent economic energy. Now,

10:36

you may want some carrots and I might want

10:38

some chicken and we can swap those. And

10:40

we might say... A lot of carrots are one

10:42

for that chicken. Well, yeah, they're great carrots. But

10:45

we agree to swap them. And that

10:47

is an exchange of economic energy. What

10:50

do you mean by that?

10:52

Because you, in order to

10:54

produce that chicken as a

10:56

good, you've had

10:58

to expend time, energy, innovation,

11:00

thought, effort into that.

11:02

It's my output. It's your

11:04

output. It's your representation

11:06

of your time and energy,

11:09

right? In just in different forms. But everybody

11:11

has their own things that they produce. Now

11:14

in a barter economy, you'd be looking to

11:16

swap those things in different quantities with each

11:18

other, but super inefficient, because

11:20

you probably don't want the carrots, right?

11:23

You might want something else. So over time, you

11:25

end up introducing something that everybody

11:27

can agree on as a medium

11:29

of exchange, so that

11:31

I can buy the chicken from

11:33

you, but not for carrots,

11:35

but for some rare seashells, for

11:37

example, because we're on an

11:39

island and these things are super

11:41

rare. And the smaller the portable, we

11:44

can use them as a medium of exchange,

11:46

people can carry them around. And

11:48

then you start, you've then got

11:50

something which is a representation of

11:52

economic energy. But it's

11:54

a representation of economic energy because it

11:56

took some time, could people value

11:58

them? Because they're rare, because they're hard

12:00

to find, hard to create more

12:03

of. They become that store of economic

12:05

energy. I always actually say to

12:07

people, cigarettes in

12:09

prison are a great currency. Yes.

12:13

But in any given currency, you

12:15

have factors which make it

12:17

a better or a worse currency.

12:20

So cigarettes in prison are great

12:22

because they're available. They're

12:25

not particularly durable. They'll

12:27

gradually decay, but they have

12:29

other uses and they smoke and

12:31

things. So you tend to

12:33

use a currency which makes sense

12:35

in your environment. Or

12:37

a money. I'm using money and currency

12:39

interchangeably for now, but I will draw a

12:42

distinction. slightly later. Use

12:44

what's in your environment. Now,

12:46

over time, I

12:49

mean, this is like the history of money,

12:51

but hopefully, I will get back to the

12:53

original question. Over time, as these

12:55

communities interact with each other, one community

12:57

might use shells, another community uses, you know,

12:59

ornate beads or something like this. Over

13:02

time, as they interact with each

13:04

other, the harder money wins. Because

13:07

let's say, And

13:10

one island communities visit by another island community

13:12

and they've got lots of these shells and

13:14

They arrive and they start giving all the

13:17

shells out buying all the chickens and disappearing

13:19

with them Islanders are just left with all

13:21

these shells and they realize actually Those shells

13:23

are super easy to produce. They were just

13:25

hard to produce for us And so they

13:27

that money is no longer a good form

13:29

of money and they move to something else

13:31

Right and it might be now the ornate

13:34

beads and then the ornate beads are actually

13:36

easy to produce for a more advanced civilization

13:38

So they replace it with Silver.

13:41

And then silver is replaced

13:43

with gold. And so over time,

13:46

you move to harder and harder money, something

13:48

which represents a higher quality of economic

13:50

energy. I think this is hard for some

13:52

people to get their head around because

13:54

they didn't live in the time where they

13:56

lived on an island where a shell

13:59

was a currency. And even

14:01

gold, I think gold is probably the

14:03

easiest to understand, but even that's difficult

14:05

because most people haven't used gold as

14:07

currency. I know. And

14:09

this is what has

14:11

disassociated money that represents

14:13

economic energy to what

14:16

we have today. That

14:18

link has been broken and I'll explain

14:20

why that's happened and how that's happened

14:22

and how that's become normalized and why

14:24

that's the problem. That's the start of

14:26

the problem. And

14:29

so harder money wins and

14:31

so eventually as society starts to

14:33

interact with each other. you

14:35

tend to agree on the hardest

14:37

form of money for the general use

14:40

of commerce and storage of economic

14:42

energy, and that has been gold. So

14:44

in the middle ages, everyone's got gold

14:46

coins and things. 5 ,000 years? Yeah,

14:49

yeah, for an extended period of time.

14:51

It's varied in different parts of the

14:53

world, because island communities were cut off

14:55

for very long periods of time, for

14:57

example. But then you

14:59

end up with gold, and then

15:01

the problem with gold is, how

15:03

do you know if it's real? If I have

15:05

a lump of gold and I pay you

15:07

with a lump of gold, how do you

15:09

know that's actually gold? There's no way of

15:12

quickly verifying it. It could be, as

15:14

we've seen in the central bank vaults, it

15:16

could just be an alloy with the same

15:18

density painted with gold that looks like

15:20

gold bars. It's very, very hard to

15:22

actually validate these things. But

15:24

then when people are carrying money around, they're

15:26

carrying little gold coins, which then get

15:28

chipped away as people scrape them off and

15:30

melt them down and create more gold

15:32

coins. So it's fallible. it's

15:34

fairly portable but it's not very

15:37

secure like it's a bearer asset

15:39

it's a bearer asset but gold

15:41

is still energy money economic energy

15:43

money because all the gold that's

15:45

ever been mined is still in

15:48

existence and to mine more requires

15:50

energy so you have to expend

15:52

real energy to go and get

15:54

gold out of the ground to

15:56

increase the supply so even in

15:58

a world where everyone is using

16:01

gold as a as a money

16:03

and a currency and paying in

16:05

gold. There's nothing else. The

16:07

supply is still increasing, but

16:10

the supply is increasing at a

16:12

rate limited by energy in

16:14

the economic equation. Does it make

16:16

sense to spend a certain

16:18

amount of gold on the energy

16:20

required to mine more gold? Often

16:24

it doesn't, but the amount

16:26

of gold on the planet is effectively

16:28

infinite. We just haven't accessed it yet. The

16:31

gold in the universe is absolutely infinite. We

16:33

just haven't accessed it yet. All

16:35

the gold we've ever mined is

16:37

in use today. But

16:39

what happens is the gold price

16:41

goes up and now it's more efficient

16:44

for people to excavate more gold.

16:46

But we'll come to that in a

16:48

second. But gold still

16:50

is that energy representation. I

16:53

don't think people think there's... energy representation though.

16:55

I know, but this is why I'm trying

16:57

to build it up from those first principles,

16:59

because that's what money is. It's

17:01

economic energy going from that very

17:03

first barter interaction. It's that

17:06

connecting it back to what it

17:08

should be, should be, because when

17:10

you see what it is, you realize it's not

17:12

right. And

17:14

so, you know, in that situation

17:16

where we've got gold coins, because

17:18

people don't want to carry gold

17:21

around, It's insecure.

17:23

You need somebody to secure these things

17:25

for you. And so what tends

17:27

to happen is people, gold gets centralized

17:29

and for convenience, people give you

17:31

bits of paper that represent the gold

17:33

because it's just much easier. Because

17:36

of the transport, the portability constraints with

17:39

gold and the verification issues with gold,

17:41

it gets replaced with a representation of

17:43

gold. And to start with, people think,

17:45

oh, that's fine. because I can just

17:47

take my bit of paper back to

17:49

the vault, back to the bank and

17:51

say, here you go, you can have

17:54

the piece of paper back, give me

17:56

my gold. And you have that convertibility.

17:58

And so this makes total sense because

18:00

it unlocks commerce, it unlocks the ability

18:02

for people to borrow, et cetera, et

18:04

cetera. But then

18:06

over time, you

18:08

have fractional reserve banking, which

18:10

comes in and I'll leave

18:12

that for now. But maybe

18:14

we can come back to this

18:17

because this is a... is

18:19

like steroids under the problem.

18:24

But over time, the gold in

18:26

the banks gets centralized. And

18:28

then the bank realizes that it

18:30

can just issue actually more paper.

18:33

And we'll dig it up. I'm sort of talking

18:35

about fractional reserve banking without explaining it, and

18:37

I'll come back to it later just to draw

18:39

the distinction. And

18:42

they start to issue more paper. And

18:45

then... People forget there was ever a

18:47

link to the gold because no one

18:49

ever asks for the gold and then

18:51

Where we've got to now is actually

18:53

you know what I'm gonna explain fractional

18:55

reserve banking because making this I've tried

18:57

to avoid it. I tried to avoid

18:59

it, but I think that was one

19:01

of the most interesting transitions in Money

19:03

in society when you because like I

19:05

said, I think it's hard for people

19:07

to understand the ideas There was a

19:09

time where people on islands were buying

19:11

things were shells. That was the money.

19:13

I think it's hard to conceptualize

19:16

that. I think it's half of people

19:18

to even understand that, you know, in the

19:20

wild west, people were buying, trading things

19:22

with gold, but they understand money. But that

19:24

period of time where we had the

19:26

creation of banks and the banks would hold

19:28

the gold and give you paper notes

19:30

to use as money, that's

19:32

still half of people to conceptualize because how

19:34

many people have been to a bank said,

19:36

here's my gold, can I have some paper

19:38

money? But we've all lived through

19:40

that paper bit afterwards. Yes,

19:43

exactly. I will

19:45

tackle fractional reserve bank. I've tried to avoid

19:47

it, but I don't think there's a

19:49

way to explain this properly. So I take

19:51

my gold coins to the bank, but

19:53

they're convertible for the paper I get in

19:55

return. Now the bank

19:57

can just hold those gold coins or

20:00

it can make, or it can

20:02

lend those gold coins out because everyone's

20:04

put the gold coins in the bank. They

20:06

realized that people very rarely come in

20:08

and ask for their gold again, because it's

20:10

a pain. They just keep the paper.

20:12

And so we've got all this gold in

20:14

the vaults and we can issue as

20:16

much paper as we want. Why don't we

20:18

start issuing more paper against the gold? And

20:21

so more and more paper comes into

20:23

existence relative to the gold in the vaults.

20:26

And that's fine. That's fine.

20:29

Credit expands. The economy

20:31

seems to be growing. But then

20:33

something will happen. The

20:35

stock market will fall or something

20:37

like this and you will then

20:39

get people panicking. and they'll

20:41

start wanting their gold back. And

20:44

they take their piece of paper

20:46

to the bank, and the bank realises

20:48

there isn't enough gold in the

20:50

vaults to give everyone the gold back.

20:53

And so they're effectively insolvent. And

20:56

then you've seen this happen time and

20:58

time again. And

21:01

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22:08

that happened. I mean, we had Nick

22:10

from Carter wrote a really good article

22:13

once about the free market for money

22:15

with free market and yet different banks

22:17

issue in different notes. And,

22:19

you know, if it was like now, there

22:21

would be the Lloyd's Pound and the NatWest

22:23

Pound. And they were

22:25

all independent of each other. And that was

22:27

good because with this free market of money, the

22:29

bank had a good trust. Otherwise,

22:32

they would go bust. But

22:34

then what happens is

22:36

you get overleveraged. Eventually,

22:39

somebody gets overleveraged. There's always a greedy

22:41

person. There's always a greedy person. But

22:43

this is what happens with the horror

22:46

show that is fractional reserve banking. And

22:48

then they appeal to the government.

22:51

to create a central bank that

22:53

can sit behind everyone else

22:55

and print a central currency. So

22:58

there's no individual paper notes from

23:00

any of the individuals, no Nat West

23:02

pound, there's no HSBC pound, there

23:04

is just the British pound. And

23:06

all the gold is then moved from

23:08

the individual banks to the central bank.

23:11

So your bank doesn't hold gold anymore,

23:13

but everyone now uses a central currency

23:15

that isn't exchangeable for gold. If

23:18

you are a certain person or if

23:20

you're a foreign company, country, you

23:22

can do this, the restrictions then get

23:24

put in place for the individuals. But

23:27

then over time, the gold just

23:29

sits in the vaults and people

23:31

forget the gold is even there.

23:33

Everything is just numbers, it's just

23:35

notes. The

23:38

thing you get the credit cycle happening

23:40

again, but on a national level, more

23:42

money is brought into existence

23:44

relative to the amount of underlying

23:47

economic energy that is there. until

23:50

something breaks again. And

23:52

you saw this, and I'll

23:54

give you another, this is more

23:57

UK focus, but we'll talk

23:59

about the US because the US

24:01

sets the direction for the

24:03

world. But post -1944,

24:05

in 1944 with the Bretton Woods

24:07

Agreement, at the end of the

24:09

Second World War, it put the

24:11

US at the center of the

24:13

global financial system. And

24:16

so the US was pegged

24:18

to gold. and all the other

24:20

currencies are pegged to the

24:22

dollar. And then they enforce

24:24

this, ensuring that everyone

24:26

else used US dollars as their reserve

24:28

asset and the US held a lot

24:30

of gold, because it also accumulated it

24:32

during the Second World War to keep it away

24:34

from what's happening in various parts of the world.

24:38

But the linking of the

24:40

dollar to gold was meant

24:42

to be a formal exchange

24:44

for other central banks. So

24:47

the French could call up or the British could call

24:49

up and say, look, you can have your dollars back,

24:51

send us the gold. But

24:54

no one really did. It's a bit

24:56

like the citizens going to their bank

24:58

and saying, can I have the gold

25:00

back? It really happened. And

25:03

what happened in the US is that they started

25:05

just printing more and more money because they realized no

25:07

one ever asked for the gold. We can

25:09

just print more and more. And then the French

25:11

started to ask questions. They said, well, how are

25:13

you financing these various wars? Can we a go back?

25:16

Can we have a go back, please? And

25:19

then so the gold, the amount of dollars

25:21

in the system was constantly going up. The

25:23

amount of gold the US held was then

25:25

constantly going down as people were drawing it.

25:27

And then 1971, Nixon said, right,

25:30

gold convertibility is gone. Okay.

25:33

And that is the

25:35

break then, the formal break.

25:38

You know Ben's website,

25:40

right? You've never

25:42

seen what the fuck happened. Oh, yeah, I didn't

25:44

know there's been it been created brilliant website, you

25:46

know, we should bring that up just so people

25:48

see this and anyone listening should go on to

25:50

this website because one the things I was going

25:52

to say to you is. When

25:55

the issues I'm having is people like

25:57

problem, problem, problem. Everything's broken. Nothing's working.

25:59

And I'm like, well, the

26:01

problem is the money. I don't want to talk about

26:03

that. I'm like, it is literally the central. This

26:06

is the problem. You need to go down this

26:08

rabbit hole and learn. Why money is the problem? And by

26:10

the way, we have this solution. No, no, I don't want

26:12

to hear about that. I don't to hear about the problem.

26:14

I don't want to hear about the solution. I just want

26:16

to talk about, I just want to talk about what's happening

26:18

to me. But that's what I meant by disinterest. Well,

26:20

I don't think people, the problem is

26:23

with money is that, you know, as a

26:25

kid, we first discovered money when our

26:27

parents take us to the shop and it's

26:29

like, you want a kinder egg, and

26:31

it's probably a 20p when I went, here's

26:33

20p, you get a kinder egg. And you go, I've got this thing.

26:36

This bit of metal gets me that. That's

26:39

all I've known for 40 years. And

26:42

suddenly you're going to come along and

26:44

say, there's this other thing. This is entirely

26:46

new form of money that was designed

26:48

by somebody we don't know who exists that

26:50

exists on a blockchain that has eight

26:52

decimal places. I just cannot get my head

26:54

around it. It's too much. Go

26:57

away. Fuck off. But I want people

26:59

to see this and I want people to

27:01

go onto this website just so they understand

27:03

what happened in 1971 when Nixon essentially When

27:05

you took the world of the gold standard, sorry, the US

27:07

of the gold standard, you took the world of the standard.

27:09

You took the world of the gold standard. And

27:12

so just first couple of charts here.

27:14

If you're listening, I'm just explaining the

27:16

chart. 1971, we've got a chart here

27:18

for growth in productivity and hourly compensation

27:20

since 1948. So there's

27:22

a red and a yellow line

27:24

and they track productivity and compensation

27:26

in terms of pay. They're

27:29

licked, they're matched. They're growing at

27:31

the same rate. 1971, we come with the gold

27:33

standard. By 2017 productivity

27:35

has increased 246 % and compensation

27:37

by 115%. There's a clear break

27:40

when we come to the

27:42

gold standard. But as you scroll

27:44

down, Connor, it's like everything.

27:46

Everything changes. Income gains, widely shared.

27:51

What else is there? I mean, there's

27:53

dozens and dozens of charts. You can spend

27:55

hours on that website. And they all started in

27:57

1971. They all stand there.

27:59

So people should go on

28:01

this website and just... Just if

28:03

you think there's a problem

28:05

just go and look at this

28:08

website. It will show you

28:10

what happens without the cold standard.

28:12

Yeah, but but even so

28:14

that was that was the formal

28:16

break between Economic energy being

28:18

represented as money and Something else

28:20

right something else that you

28:22

could create for free that wasn't

28:24

tied to the economic energy

28:26

and even prior to 1971 Even

28:29

when you're on the gold standard, you're

28:31

still weakening that link unless

28:33

you have one -to -one exchange

28:36

between your currency and the

28:38

gold you have in the

28:40

vaults. You're still undermining the

28:42

quality of that energy, that

28:44

economic energy. So 71

28:46

is just when they broke the link. It

28:49

was already deteriorating up to that

28:51

point. And this cycle repeats throughout history.

28:53

But since 1971, we've been on

28:55

the fiat standard. where the US is

28:57

able to print as much money

28:59

as it wants. And

29:01

here's where I'll draw the

29:04

distinction. Print as much currency

29:06

as it wants. Not

29:08

money. There

29:10

is no money there.

29:12

There's no economic energy. It's

29:15

printing currency not linked to

29:17

something. They don't

29:19

have to do work to bring currency

29:21

into existence. And

29:23

so, we're in

29:25

this whole new world. but it's

29:27

not new for everybody because

29:29

it's 50, 54 years old. Right.

29:32

But the thing is, I've been

29:34

out to places with high inflation. I've

29:36

been out to Argentina, Venezuela. I've seen

29:38

it. It's shit, right? Inflation

29:41

here historically has been so minimal

29:44

and so insidious. You just kind

29:46

of accept it. This kind of

29:48

like 2 % inflation, you suffer

29:50

it. Only recently when we had

29:52

like 10%, 15 % inflation, people like,

29:54

oh shit, something's going on here.

29:57

But they can get away with a small amount. They

29:59

can. They

30:02

have been. For a certain period

30:04

of time. They have been. It's changing.

30:06

It's changing. If

30:08

you make this

30:10

mental connection between

30:12

economic energy and

30:14

money, you start

30:16

to see why

30:18

the current system

30:20

is fundamentally flawed. Because

30:23

somebody can print for free. what

30:26

you have to work for. Now,

30:28

it's fundamentally wrong. Everybody

30:31

on an individual level knows that is wrong.

30:33

I have to go and do a day's work

30:35

to get paid in something that you can

30:37

print for free with the press of a button.

30:39

That is wrong. Well, that makes me think

30:41

of a meme I saw on Twitter yesterday. I

30:43

try to remember exactly, but it was like

30:45

a picture of a guy and he says, you

30:48

start work at 20, you

30:50

work for 45 years until you're 65

30:52

and you save. And in that

30:54

period, the government has stolen half of

30:57

your time. And I don't

30:59

think people have made that connection

31:01

because you call inflation theft. They

31:03

haven't realized that they are being

31:05

stolen from daily by government. Yes,

31:07

this isn't. I mean, some will say

31:09

taxation is there, but I think most people

31:12

accept like to run a society in

31:14

some taxation and some government. And I know

31:16

there are some people who disagree and

31:18

be losing their shit right now, but. Inflation

31:22

itself is direct theft. Yeah,

31:25

but inflation is only inflation is

31:27

a monetary phenomenon. Only

31:31

ever a monetary phenomenon is because you

31:33

print more money. Like we know this from

31:35

our history books. If you say that

31:37

to someone, they're like, yeah. Not

31:39

everyone even understands that. Not everyone understands

31:41

inflation. There'll be people who

31:43

will go to the shops and

31:45

their groceries are 10, 20 % more

31:47

and they don't understand the real reason

31:49

why that's happened. Agreed. So the

31:51

point I was going to make is,

31:54

in school, we all learn about what happened

31:56

in hyperinflation in Germany. They

31:59

just printed my money and

32:01

it caused hyperinflation. What we don't

32:03

connect is to today's world

32:05

where we're doing exactly the same

32:07

thing. It's just not wheelbarrows

32:09

full of cash in the street. Because

32:11

a very visible thing, they printed it

32:13

at such a rate that it destroyed

32:15

the currency very, very quickly. We're

32:18

doing that just in slow motion. But

32:20

we're doing it behind the curtain. And

32:23

over a 40 year working career.

32:25

Exactly. And like you say, if

32:27

somebody is stealing 2 % a

32:29

year from you, you

32:32

sort of can go unnoticed.

32:34

Yeah. And we've reached the point

32:36

now since 1971, the fact

32:38

that it's been 54 years, most

32:40

people are alive today have never known anything

32:43

else. Certainly the people working today have never

32:45

known anything else. This is just the way

32:47

it is. But unless you

32:49

have that anchor to understand

32:51

what money should represent, then

32:53

you don't have a clear

32:56

understanding of how it should

32:58

be or what the correct

33:00

version is today. And

33:02

really the issue is they have this

33:04

big red button and they can just print

33:06

as much money as they want. They

33:09

can print for free what

33:11

you have to work for and

33:13

it is theft and it

33:15

is the biggest issue that we

33:17

have. globally and it's upstream

33:19

of absolutely everything else. Try to

33:21

remember who said it to

33:23

me. Somebody

33:25

said to me it

33:27

is the biggest crime

33:29

that's been enacted on

33:31

civilisation and we've not

33:33

seen it happening. Yeah,

33:36

try to remember who said it to me.

33:39

I'm not sure who said that. It might

33:41

have been Dominic Frisbee. It could

33:44

well be. But it's worse

33:46

than you think as well, Peter, because

33:48

the central bank will tell us

33:50

inflation is 2 % or 3%. They

33:52

get to measure it. They get to

33:54

decide on the rules of measuring

33:56

it. And if prices of certain items

33:58

go up, they remove them. Yeah,

34:00

of course. And so when you put

34:02

somebody in charge of measuring, of

34:04

marking their own homework, they're going to

34:06

mark it favorably. No, they're in

34:08

charge of how much theft can we

34:10

get away with. Exactly,

34:13

well, 100%, 100%, but the theft

34:15

is bigger than you think. And

34:18

it's bigger than you think because one, they're

34:20

telling you the number is X when the

34:23

number is really Y. We

34:25

know when we go to the shops,

34:27

it's not 2%. The rate of money

34:29

printing is 8, 10 % a year

34:31

compounded. And we see that in the

34:33

goods, in the shops, services. We experience

34:35

this every day in our lives. But

34:38

that's assuming prices. shouldn't

34:41

change. Prices

34:44

should be going down. And

34:47

people are going to think, why should prices be

34:49

going down? The natural state

34:51

of the world is that prices

34:53

should go down. This

34:55

is 180 degrees from what people

34:57

currently assume to be the

34:59

natural state of the world because

35:02

we've lived for 50 years

35:04

in this VR era. People are

35:06

now accustomed to Yeah, inflation

35:08

is this natural phenomenon that just exists and

35:10

prices go up a little bit every year

35:12

and who knows where it comes from. Absolutely

35:16

wrong. It's entirely a monetary phenomenon

35:18

because they're printing money. But

35:20

if they weren't able to print

35:22

the money and we had, we

35:24

had perfect money. Let's just say

35:26

abstract. Before you get to that,

35:28

let's properly explain inflation for people

35:30

so they understand. Let's make

35:32

the connection between a growing

35:34

money supply or a growing base

35:36

money, whichever you want to use and

35:38

why that leads to things going

35:40

up in price. Okay,

35:42

so in the

35:44

video, I'll link it

35:46

back to the Yeah, we'll put it in the show notes. I'll

35:48

link it back to the video. I'll use some of the terminology

35:50

there. So we're

35:52

dealing with an island that splits in two

35:54

and one side of the island uses

35:57

perfect money with no big red button and

35:59

the other side, the island uses perfect

36:01

money but has a big red button. They

36:03

can press and change any aspect. Now,

36:06

Fiatello, who's the guy who runs that

36:08

side of the island, promises never to press

36:10

the button, but eventually he does. Why

36:13

did you cross it? Because

36:15

it suits him politically. Because

36:17

he's up for a reelection and

36:19

he's in a deficit. And

36:22

so the amount of taxes he's collecting

36:24

is below the amount that he's spending. And

36:28

so he either has to raise taxes or

36:30

cut spending. to try and balance the budget,

36:32

or he could press the big red button

36:34

over in the corner that he promised never

36:36

to press and print a bit of extra

36:38

money for the government. And

36:40

because he wants to get elected, he

36:42

knows it's going to cost him votes if he raises taxes

36:44

or cut spending. It's just easier to press

36:46

the big red button because no one will know. I

36:49

press the big red button, I print

36:51

some extra money, population don't know, he gets

36:53

reelected. Politicians wouldn't do this with him.

36:55

I mean, it's a far -fetched story, I

36:57

know. But he presses... press

36:59

the button and prints more on

37:01

the currents the user's fear tellers. So

37:04

he prints more fear tellers and

37:06

all fear currencies are just fear tellers

37:08

hence the name. And

37:10

so more fear tellers come into existence

37:12

overnight into the economy but into the office

37:14

of the government. No

37:16

one else just into the account of the

37:18

government. Now as

37:20

the government spends that money, it goes into

37:22

the spends those fear tellers, it goes into

37:24

the economy. Now.

37:28

Because the amount of fear tellers is

37:30

increased from one day to the

37:33

next But the amount of goods and

37:35

services in the economy hasn't changed

37:37

from one day to the next The

37:39

correct price in fear tellers for

37:41

all the goods and services in the

37:43

economy has gone up Why why

37:45

because imagine you've got a certain stock

37:48

of let's say housing And then

37:50

there's a certain amount of fear tellers

37:52

if you double the amount of

37:54

fear tellers in the system, why would

37:56

anybody sell you their

37:58

house for the same amount of fear tellers

38:00

they would have sold the house for yesterday.

38:02

Isn't it slightly different from that? Isn't it

38:04

more like the money gets distributed unevenly and

38:06

somebody somehow, because of the government, but more

38:08

money of the economy, they've got a bit

38:10

more money. It's like, wow, I'm going to

38:12

buy another house and then demand goes up.

38:14

It's a combination of the two. Right. It's

38:18

a combination of the two because

38:20

even if the money is not

38:23

reaching the economy, the fact

38:25

that you know the money exists, dilutes

38:28

the game. And

38:31

so, you know, imagine a game of a

38:33

game of monopoly where we're all playing one

38:35

player can take as much money out the

38:37

box and put it on the table next

38:39

to their stack as you want, but all

38:41

the houses are owned. Everyone can see the

38:43

money, but the money is not active in

38:46

the game. No one's any richer, but they

38:48

can see it. They know it exists and

38:50

therefore it affects the prices even before the

38:52

money comes into the game. So

38:54

there's a combination of the two.

38:56

There's knowledge. I'm not sure I agree. I

38:59

don't think most people see the amount

39:01

of money in the system. I think

39:03

it's purely a reflection of supply and

39:05

demand. I think the money goes into

39:07

the system that increases the demand, which

39:09

causes the prices to go up. I

39:11

may be wrong. I think it's a

39:13

combination of the two. And I'm certainly

39:15

not saying everybody takes that information and

39:18

factors it into their pricing. But

39:20

some people will because you can see You

39:22

can make the connection, the money's on the

39:24

table, eventually the money's going to be in

39:26

the game, the prices will go up. And

39:28

so it's a combination of the anticipation and

39:30

the actual action. But it's a

39:32

combination. The end is

39:34

the same. end point is the

39:36

same. The end point is the

39:38

same. You've diluted the value of

39:40

all the assets when measured in

39:42

the thing that's just been created.

39:44

You've doubled the amount of fiatelos,

39:47

so everything just becomes more expensive

39:49

when measured in fiatelos. The economic

39:51

energy of the things doesn't

39:53

change, but it's how you

39:55

measure them that's changed. That's all it is. That's

39:57

all it is. And this is what we see today. So

39:59

as the central banks create more

40:01

money and drive inflation, they actively

40:04

target and they tell you, our

40:06

job is to steal 2 %

40:08

a year from you. But

40:10

they frame it as a positive

40:12

thing and the whole economics. economic

40:15

framework with which we think about

40:17

economics these days, values that 2

40:19

% as being necessary to the

40:21

system, which is so unbelievably crazy.

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head over to ledger.com and secure your Bitcoin

41:10

today. That is ledger.com,

41:12

which is LED. g -e -r.com

41:14

that is ledger.com Well, I think

41:16

it's this Again, a bit like with

41:18

money Yeah, when we were a

41:20

kid all we knew there is government

41:22

and all we knew is every

41:24

four five years you have a vote

41:26

and there's a red pie or

41:28

a blue party We need government. Yeah,

41:30

I think it's by going through

41:32

this you start to Detest government you

41:34

start to think hold on this

41:36

isn't what I thought government is this

41:38

is a this is a mafia

41:40

and this is racketeering This is theft

41:42

and it's crime. That's pretty

41:44

much how I see government now. It's

41:47

essentially a crime family. It

41:50

is, but I would draw the

41:52

distinction between either the participants and

41:54

government don't necessarily have not necessarily

41:56

connected the dots themselves. And

41:58

so there's a distinction between government,

42:00

the entity and that naturally... Occurs

42:03

because of the fact that but

42:05

really big red button exists. If

42:07

they've not made the connection. That's

42:09

too stupid to be in government

42:11

I've had multiple politicians there and

42:13

I've asked do they know? Do

42:16

they understand what they're doing and the

42:18

answer is some of them do yeah

42:20

Which means they're evil and some of

42:23

them don't which means they're stupid, but

42:25

if you if you're in government and

42:27

you're not talking up against this Like

42:29

I say you're either evil or stupid

42:32

There's no there's no just because your

42:34

job is to understand this if you're

42:36

Rachel Reeves your job is to understand

42:38

100 % you're the you're the chancellor if

42:40

you borrow more And you drive inflation

42:42

that you you are stealing from people

42:44

you're if you don't know this then

42:46

you're too stupid for the job And

42:48

if you know it you're too evil

42:50

That's one of the things sorry I'm

42:52

to keep coming in but I admire

42:54

about the Trump administration They're actually coming

42:56

out saying with 36 trillion in debt.

42:58

We've got to get rid of this

43:00

We're coming after student loans. We're doing

43:02

new trade deals with 36 trillion in

43:04

debt. Well,

43:06

I agree with those sentiments, specifically

43:09

when it comes

43:11

to the Chancellor. Anybody

43:14

who's specifically focused on that aspect,

43:16

but I think it's probably too

43:18

much of a reach to ask

43:20

every politician to thoroughly understand the

43:22

financial system if they're coming from

43:24

different various backgrounds as well. I

43:26

do so agree. It's something they

43:28

should aspire to. But it also

43:30

is complex, Peter. I

43:33

mean, we're having to, this

43:35

video is basically running it the other

43:37

way around, helping people understand why today

43:39

is the way today is from first

43:41

principles. Because running it the other way

43:43

around is incredibly tough. I think you're

43:46

being too kind. Perhaps

43:48

I am. And I agree the whole

43:50

thing is that there is a

43:52

complexity to it. But

43:54

there's also a simplicity to it. You

43:56

as it was at Hayek who

43:58

said inflation is purely a monetary phenomenon,

44:00

or is it freedman? I think

44:02

it's freedman freedman That's not a complex

44:04

thing to understand is that if

44:06

you increase the money supply you're going

44:09

to drive inflation inflation always affects

44:11

the poorest in society the worst So

44:13

that's a very simple concept to

44:15

understand Once you understand that if you're

44:17

not your goal is not to

44:19

reduce that then you are happy making

44:21

the poorer poorer You're happy with

44:23

the transfer of wealth from the poorest,

44:25

the people who need it most,

44:27

to the richest, the people who need

44:29

it the least. If you've

44:31

understood that and you're not working against

44:33

that, you're fundamentally evil to me. pretty

44:38

brutal about this. I think we're

44:40

coming from the same place. I

44:44

would say it's... I'm slightly

44:46

more forgiving of the people on

44:48

the edges, because it takes

44:50

time to... people can agree with

44:52

the statement, it takes time for that

44:55

to sink in for them to

44:57

really understand the cause and effect. What

44:59

class are big on the year?

45:01

What year? 2020. Yeah, come

45:03

on, 2013. No, give

45:06

it seven years, you'll be like, fuck all these fucking

45:08

people. There's

45:10

certainly a part of me

45:12

which is like that, but at

45:14

the same time, trying to

45:16

explain it and represent the issue

45:19

and educate people in a

45:21

way which is probably

45:23

slightly more neutral. So

45:25

as, you know, try and

45:27

bring as many people along

45:29

as possible is maybe the

45:32

needle I'm trying to thread

45:34

with the way I'm framing

45:36

these things. Have you seen

45:38

the Matthew McConaughey meme? How

45:40

many years you've been in Bitcoin? Yeah. See

45:42

if you can find that one. God, I love that. That's very

45:44

good. Because there was a time was like, I had the long

45:46

hair, didn't have the Hawaiian shirt, but I

45:48

was close. I'm not sure

45:50

my wife would let me go down that

45:52

route. I think that would be a step

45:54

too far. But

45:57

perhaps to come back a little

45:59

bit because we were talking about why

46:01

the world should be naturally deflationary. But

46:04

we see it as being understanding

46:06

it to be naturally inflationary because the

46:08

action is central banks. And

46:11

we can do this just very simply

46:13

and we do it in the video because

46:15

the video is not just explaining where

46:17

today's issues come from. But it's a, a

46:21

primer for free market, free

46:23

market capitalism, which

46:25

is just the greatest force

46:27

for good globally. It's now

46:29

being vilified in various ways because it gets

46:31

corrupted and then gets blamed for not working.

46:33

There we go. So where are you? Oh,

46:35

there you go. Joe, you're

46:38

kind of still one or two. No. Yeah,

46:41

you are. Go for a

46:43

beer. I'm not one. I'm not one or

46:45

two. You are. Look, you're still smart. I've

46:48

done three. I've

46:50

done four. I've done five. I've even done

46:52

six. I've been out shooting. I've

46:55

seen the pictures. We got into trouble, didn't

46:57

we? Although I've cut my hair off, I don't know, Con.

46:59

Do you think I'm at about seven or eight? I

47:03

was looking at a shirt like that in all scenes with

47:05

Susie the other day. She wouldn't me get it. It's

47:10

probably a good choice. See,

47:12

we're going to do this show in four years' time.

47:14

You're going to come in with a shotgun, long hair.

47:17

And the Hawaiian show that you're going to fuck these

47:19

people. Let's, let's see. Oh, sorry, I keep interrupting. No,

47:21

no, no, no, it's, um, it's

47:24

good. Bitcoin is, Bitcoin is a journey, but

47:26

we need to try and bring as many people,

47:28

helps make people get to the starting line

47:30

as possible because it is the solution and we

47:32

can get onto why that is the case. But,

47:36

but to, to satisfy yourself that deflation

47:38

is the natural state of the world

47:40

and price is going down as a

47:42

natural state of the world is something we

47:45

solve in the video in two minutes.

47:47

Jeff Booth has written a wonderful book

47:49

called The Price of Tomorrow and I would

47:51

encourage anybody who's interested to order that

47:53

book and read it. The

47:55

two minutes in the video

47:57

is a super short version of

47:59

that and it does Jeff

48:01

book no justice whatsoever but it

48:03

helps people connect the dots

48:05

because these people who are on

48:07

an island, they initially

48:09

have nothing. And they're

48:11

just trying to survive. So they're doing the

48:13

fishing, they're cutting down their own trees for

48:16

firewood and they're building their own shelters. That's

48:18

super inefficient. And they've

48:20

got perfect money, but no one really trades

48:22

because they're just sort of scraping survival. But

48:25

they realize very quickly that, you know,

48:27

I'm better at fishing, you're better at

48:29

cutting down trees and making firewood. So

48:31

we'll just specialize. And we've produced

48:33

twice the amount in half the time. And

48:35

now we have excess. And

48:37

now because I'm... you're cutting down wood, you

48:39

have to trade with other people to

48:41

get the other things that you need. And

48:44

so perfect money comes into existence, but

48:46

the more productive you become, the more you

48:48

specialize, the more you focus, the

48:50

more you can produce in less time and it's

48:52

of a higher quality. And

48:54

so over time, prices

48:56

are falling because quantities

48:59

going up, qualities

49:01

going up and Then

49:03

you create excess goods and excess capital

49:05

so you can then invest more in

49:07

your processes, drive further productivity. You can

49:09

lend me some wood to buy, to

49:11

build a boat so I can catch

49:14

more fish, better quality fish, etc. for

49:16

everybody. And so technological

49:18

innovation and human action. Human

49:21

action is naturally deflationary.

49:24

Prices go down and quality goes

49:26

up. Can

49:28

I give you the real world example of this?

49:31

Yeah. Cuz I

49:33

think it's I I'm I've lived

49:35

it and it means I'm

49:37

gonna have to talk about Bitcoin

49:39

but Class of 2013 fuck

49:41

that up proper class of 2017

49:43

and since then I've been

49:45

pretty good at stacking Bitcoin because

49:47

I've been stacking Bitcoin, which

49:49

is hardest money and it's It's

49:51

benefited me and that it's

49:53

appreciated in value. What have I

49:55

done? I've invested I've built

49:58

businesses And I'm constantly looking for

50:00

new and new business to build because

50:02

I have this excess capital because I

50:04

have money, which doesn't inflate away. It's

50:06

very simple. It is. But

50:09

you've got two things driving that. You've

50:12

got one, it

50:14

being a 100 % efficient

50:16

economic store of your

50:18

energy, your economic energy,

50:20

but you've also you're benefiting from

50:23

monetization of the asset. And

50:25

so you have You

50:27

have gained you've got an

50:29

expanding economic battery there is not

50:31

just a retaining economic battery So

50:34

you're you're benefiting from two from

50:36

two directions and maybe we can

50:38

talk about monetization Slightly later as

50:40

well because that links back into

50:42

what we could think about the

50:45

future of Bitcoin is relative to

50:47

everything else but a hundred percent

50:49

you've You've got something that isn't

50:51

decaying and so this free market

50:53

free market capitalism basic example shows

50:56

you that when you have money

50:59

that does not decay, prices go

51:01

down, quality goes up, and it

51:03

lifts the quality of life for

51:05

everybody. Even the

51:07

children, the old people, the infirm, people

51:09

who cannot be productive, they

51:11

see their quality of life go up, not down. Because

51:14

the savings they have buy more tomorrow than

51:16

they do today. They don't need

51:18

to earn any interest. They don't need

51:20

to speculate, to protect their purchasing power.

51:22

The purchasing power increases naturally because the

51:24

prices are falling. And

51:27

this is, you know,

51:29

within 60 seconds, we've demonstrated

51:31

the world should be

51:33

deflationary. And that's natural. Jeff

51:35

has a really good chart. I don't

51:37

know if you can find it,

51:39

Connor. There's a chart that shows inflation

51:41

and deflationary items. You

51:44

can probably, if you search for

51:46

inflation chart, TVs and healthcare,

51:48

you might find it. And

51:50

he shows, there are things that are deflationary.

51:52

Yeah, deflationary in society. Massive. And TVs

51:54

is always a great example. When

51:56

you compare that to healthcare, healthcare costs

51:58

are going up massively. But

52:01

actually the TV you get now, it's about the

52:03

same price as the TV you bought five years ago,

52:05

but it's infinitely better. It's ultra

52:07

high definition, it's super

52:09

thin. And we've

52:12

managed to maintain deflation in

52:14

certain categories of items. Yeah,

52:16

when the rate of technical

52:18

innovation can still outstrip the

52:20

rate of the money printing.

52:23

And for that chart, there are two main drives of

52:25

that. One is the money printer and the other

52:27

is regulation. Because

52:30

in order, the

52:32

example that I didn't, the element I

52:34

didn't include in that island example is

52:36

that you're not the only woodcutter and

52:38

I'm not the only fisherman. There's

52:40

lots of people and we're all competing

52:42

to supply the market, which further pushes

52:44

down the prices. Because if you're

52:47

more expensive and offering lower quality, I'm not going to

52:49

buy from you. I'm to buy from that guy over

52:51

there. So it's the

52:53

combination of perfect

52:55

money and free market

52:57

capitalism of competition, which

53:00

drives that natural

53:02

deflation. And when

53:04

you look at that chart, you

53:06

see all the healthcare schools, all of

53:08

these things go up because they're structured.

53:10

That's the one. Yeah, there you go.

53:14

We get it full screen anyway. Okay,

53:17

so what's got that

53:19

hospital services is... the highest

53:21

inflation, college tuition

53:23

fees, college textbooks, medical care

53:26

services, childcare, nursery, average

53:28

hourly rages, food and beverage, housing.

53:31

Cars just stayed about the same, household

53:33

furnishing about the same, clothing about the

53:35

same, cell phone services, computers, toys and

53:37

TVs, of all, much

53:39

more affordable. Yeah, it's an incredible

53:41

chart. And it exemplifies

53:43

what we're talking about here. Well, the

53:45

ones that are inflated the most

53:47

tend to be human -led services. Yeah,

53:50

in areas where there's

53:53

limited supply, limited competition,

53:55

high regulations, and

53:57

driven by debt.

53:59

I love the fact that Jeff has notes to it. Yeah,

54:01

that's perfect, it? One, Jeff. And

54:04

a lot of those

54:06

things are in increasing demand

54:08

because the money is

54:10

broken. You know,

54:12

we have a greater level

54:14

of health crisis. We have a

54:16

greater level of debt being

54:18

pushed on everybody. More people

54:21

are being encouraged to go to university, take

54:23

out debts because it's a good way to

54:25

make money, not because it's a rational economic

54:27

decision. And so these things

54:29

are a combination of the money

54:31

printer with technological deflation with

54:33

regulatory overviews and the secondary consequences

54:35

downstream of the money printer.

54:37

One on one chart. Why are

54:39

we spending more money to

54:41

have worse health outcomes? Why

54:44

are we struggling? Why are schools struggling

54:46

to afford to even teach the kids? You

54:49

know, all these things come back to the same central

54:51

point. Yeah. And you're

54:53

measuring it in something that they're

54:56

just constantly printing. And

54:58

so to come back to

55:00

that, you know, central bank is

55:02

not stealing 2%. They're stealing

55:04

2 % on top of all

55:06

the productivity gains we should see

55:08

naturally. through technological

55:11

innovation. Prices should be

55:13

declining, let's say, two, three,

55:15

five percent a year through technological

55:17

innovation, and that should be

55:19

accelerating over time as we become

55:22

more technologically proficient. But with

55:24

that, we also get this massive

55:26

misallocation of capital. And

55:28

something I came to understand,

55:30

the misallocation of capital isn't

55:33

just financial misallocation. time misallocation,

55:36

human misallocation. I saw this. So when I was

55:38

in Argentina, me and Kurt were out there

55:40

making this documentary, we had this

55:42

fascinating dinner where the guys

55:44

said, everyone in Argentina is a

55:46

financial director. I was like,

55:48

what? They said, everyone spends 30

55:50

% of their time thinking about

55:52

how they can move their

55:54

money around to avoid the impact

55:56

of inflation. Can I get

55:58

dollars? Can I get US equities? They're

56:00

spending all their time thinking about Well,

56:02

30 % of their time thinking about

56:04

how do I protect my wealth? And

56:07

that's a fascinating thing to think about because

56:09

if you were the guy who cuts wood, you

56:12

really want to spend that 30 % of your

56:14

time cutting wood and not worrying about this

56:16

issue. So here is a high inflation

56:18

you think about and we haven't, that's happening here now.

56:20

And who keeps money in the bank? have to

56:22

be a fucking moron to leave money in the bank

56:24

at the moment. It's like, can I get another

56:26

house? What can I buy that's going to protect my

56:28

wealth? And

56:32

you've hit on two

56:34

points here. One is people

56:36

were fighting to get

56:38

into dollars. Dollars

56:41

are still going to

56:43

zero, just slower than

56:45

the PASA. So

56:48

the dollar is viewed just as a better store

56:50

of value. It's still a terrible store of value.

56:52

It's just not as bad as what using. This

56:55

is the first thing. And the second thing

56:57

is, you've

56:59

just said you wouldn't keep the money in the bank. You

57:02

would think that would be a controversial

57:04

statement, but everyone would agree with

57:06

you. Everyone knows you

57:08

don't keep money in the bank. They

57:10

probably don't think about

57:13

precisely why, but

57:15

they know they can't retain their purchasing power

57:17

through time by keeping money in the

57:19

bank. That change has happened over a single

57:21

generation. My dad did. Well,

57:23

they would have a building society

57:25

account and they would get interest rates

57:27

of five, six, maybe

57:29

seven percent. They knew to

57:31

keep them they could keep money

57:33

in the bank but even then even

57:35

then you'll be receiving five six

57:38

percent But the inflation rate will be

57:40

a lot higher. Sure. And so

57:42

there is no way There's no way

57:44

with the advent of central banking

57:46

To be able to store To go

57:48

out and do a day's work

57:50

get paid and that being to get

57:52

paid in pounds Paper pounds and

57:54

that being a representation of your economic

57:56

energy and then retain that over

57:58

time It decays. You put it in

58:01

the bank, even if you get

58:03

paid a small amount of interest, that

58:05

interest is below the rate of inflation, and

58:07

it's also before tax. There's

58:10

no way to retain that

58:12

purchasing power. Your economic battery is

58:14

being drained by design, by

58:16

design because of the creation of

58:18

the central bank, because

58:20

of the big red button, because

58:22

the central bank is targeting positive

58:24

inflation rates. And

58:27

so what happens is everyone knows they can't keep

58:29

money in the bank. So what do you do

58:31

with it? You've got to invest it. You've got

58:33

to do something. got to speculate with it. You

58:35

need 10%. The hurdle rate is 10%. 10 %

58:37

year, right? And so what does

58:39

that do? It changes your decision making.

58:41

You can't plan for the future anymore. So

58:45

what do you do? You put it in assets. You

58:47

buy a second house. You buy the stock market.

58:49

You buy some meme coins. I don't know. Because

58:52

even with that, Joe, even

58:54

with that, but then you pay

58:56

a higher stamp duty. then

58:58

you have capital gains tax on anything,

59:00

any appreciation you have. Every single thing you

59:02

try and do, they still want to

59:04

steal a bit more. Yes. Absolutely.

59:06

Yeah. Because

59:09

the system itself is insolvent because it's a

59:11

debt based system. If

59:13

you have, because the

59:15

central bank has a big red

59:17

button, it can print as much

59:19

money as it wants. And

59:22

what happens over time

59:24

is because this effectively enables

59:26

fractional reserve banking. And

59:28

so the banking system gets leveraged as we

59:30

talked about before, you put a deposit in, you

59:33

put your gold coins in, and

59:35

this is slightly different now because,

59:38

you know, we're not using money,

59:40

using currency now. But

59:42

you put your gold coins in, they

59:44

keep, let's say, 10 % of the gold

59:46

coins in the bank, they lend the

59:48

next person who walks in 90%, nine

59:50

of the 10 coins. That person

59:53

then takes nine of the 10 coins to the next

59:55

bank, puts it in. They

59:57

then take... bank keeps one of those

59:59

and lends out the next eight.

1:00:01

So the next person. Sounds like 2008.

1:00:03

Yeah, but this is fractional reserve

1:00:05

banking. And so you end up stacking

1:00:07

loans upon loans upon loans, but

1:00:09

the actual amount of gold coins at

1:00:11

the bottom of the stack is

1:00:13

still only 10. But your exposure

1:00:15

is now massive. And so if you're

1:00:17

keeping a 10 % reserve ratio and 10 %

1:00:19

is a lot higher than the banking

1:00:21

sector has, I think it's zero in the

1:00:23

US now. Right. You

1:00:26

can make

1:00:28

90 gold

1:00:30

coin loans

1:00:32

on 10,

1:00:35

right? Sorry,

1:00:39

that's incorrect. You'd lend,

1:00:43

well, you can have a 10 times

1:00:45

multiplier effectively on your lending. But

1:00:47

you can have multipliers on the multipliers.

1:00:49

But they stack over time. And

1:00:52

when do you get to zero reserve

1:00:54

ratio? you can basically do that ad

1:00:56

infinitum. And so you end

1:00:58

up with this massive leverage through the banking

1:01:00

system. And then what happens whenever something,

1:01:02

there's a downturn, the

1:01:04

banks have realized that

1:01:07

they are technically

1:01:09

insolvent. And so they

1:01:11

call the central bank or the government

1:01:13

and say, look, you need to

1:01:15

bail us out. Because if you don't,

1:01:17

all the depositors are gonna get wiped

1:01:19

out. Everything will collapse. And everything will

1:01:21

collapse. And so what? What the central

1:01:23

bank and the politicians do? Well, that

1:01:26

would mean I'd lose the next election. And

1:01:28

so we will bail you

1:01:31

out. We will print extra money

1:01:33

either explicitly or via QE

1:01:35

or even as we've seen via

1:01:37

the creation of bad banks. So

1:01:40

a bad bank will be created,

1:01:42

which sits on the government's balance sheet

1:01:44

and will exchange all the bad

1:01:47

assets, all the bad loans that you've

1:01:49

made to through

1:01:51

your loan book, we'll swap

1:01:53

them for currency at 100 %

1:01:55

and we'll sweep them all the

1:01:57

bad loans into the bad

1:01:59

bank, which over 10 years will

1:02:02

be shown to lose a

1:02:04

big chunk of value. But that

1:02:06

now sits on the government

1:02:08

and it's papered over by printing

1:02:10

money. So you've socialized

1:02:12

the losses there amongst the entire

1:02:14

population because you've just printed

1:02:17

more fiatellos. Whereas

1:02:19

the banks are now left with a

1:02:21

clean balance sheet again to do

1:02:23

the same thing because they know when

1:02:25

the times get tough, they call

1:02:27

up the and say, we're going to

1:02:29

go bust. The policy is going

1:02:32

to lose their money and the same

1:02:34

thing happens again. But the added

1:02:36

thing is each time the weakest die,

1:02:39

the weakest banks die, but

1:02:41

they don't die. They get rolled into

1:02:44

the bigger banks. And so each time

1:02:46

this happens, you get a smaller number

1:02:48

of banks remaining who become even more

1:02:50

centrally important to the economy. More powerful

1:02:52

then. More powerful. More powerful.

1:02:54

And so you end up with

1:02:56

more centralization, more money printing, more

1:02:58

leverage, and ultimately just debasement because

1:03:01

you're printing more Fiatellos, which then

1:03:03

causes inflation to go up even

1:03:05

further. And this is an ever

1:03:07

-ending cycle because it's a debt -based

1:03:09

system. It's a debt -based system. which

1:03:12

is underpinned by political ambition. It's

1:03:14

political ambition which forces people to

1:03:16

essentially lie and buy votes because

1:03:18

they don't believe the public will

1:03:20

accept the truth and so political

1:03:22

ambition drives the destruction. This show

1:03:24

is sponsored by Gemini. We live

1:03:26

in a really strange time with

1:03:28

governments driving inflation with their reckless

1:03:30

spending and endless money printing. There

1:03:32

is a way out of this.

1:03:34

There is a way to protect

1:03:36

your money and that is by

1:03:38

stack in Bitcoin. I've made loads

1:03:41

of shows about Bitcoin. You can

1:03:43

go and research this, you can

1:03:45

go and read the books, but

1:03:47

the truth is, it is the

1:03:49

hardest money ever created. If

1:03:51

you are interested in protecting your financial

1:03:53

future, it's time for you to get on

1:03:55

the Bitcoin train. I have. I've been

1:03:57

stacking Bitcoin personally and through my businesses since

1:03:59

2017. It's protected me, it's secured my

1:04:01

family's future, and it also strengthens all of

1:04:03

my businesses. So if you want to

1:04:06

start stacking Bitcoin, where do you do it?

1:04:08

Well, for me, is with Gemini. They're

1:04:10

a fully licensed, full reserve exchange and custodian,

1:04:12

so they give you a secure way

1:04:14

for you to buy and own your Bitcoin.

1:04:16

There's no risks and no funny business.

1:04:18

So if you're serious about stacking Bitcoin the

1:04:20

right way, head over to gemini.com, which

1:04:22

is G E M I N I dot

1:04:25

com. Yes, but they can only act

1:04:27

on that ambition because they have a big

1:04:29

red button. If you

1:04:31

don't have a big red button, you

1:04:33

don't have the third option. The

1:04:36

only two options you have is raise taxes

1:04:38

or cut spending. That's it. Imagine you had a

1:04:40

big red button in your home. Yeah. Do

1:04:42

you remember? How old are you, ish? I'm 40.

1:04:44

42. Yeah. Okay. Similar age. Do you remember

1:04:46

that program around the twist when we were kids?

1:04:49

The Australian one. Yes. Yeah. Yeah. So every,

1:04:51

every episode, something weird would happen, right? Yeah.

1:04:53

So I remember the episode, the guy had

1:04:56

this box in his room and he could

1:04:58

put something in it and it would duplicate

1:05:00

it. It's like, this is cool. So obviously

1:05:02

he did money. But the problem is everything

1:05:04

when it was duplicated in there would come

1:05:06

out. Reversed. So if I put this

1:05:08

text in, this piece of paper, it would come out and the

1:05:10

text would all be backwards. So he put the

1:05:12

money in and he was like, oh, it's come out backwards.

1:05:14

So he put the backwards money and it came out like normal.

1:05:16

And what did he do? He made

1:05:18

a shit load of money. And what

1:05:20

happened? The money ended up melting. But

1:05:23

I always think back to that when I think of

1:05:25

these conversations, I think back to that. We're

1:05:28

all kind of greedy. You give us

1:05:30

a big red button in our bedroom. Nobody knows,

1:05:32

Joe. You can print some money. You're probably going

1:05:34

to print some money. And you're doing it knowing

1:05:37

you're increasing the money supply. You know, you know,

1:05:39

you're gonna socialize the losses. But,

1:05:41

you know, it's a little red button in your bedroom.

1:05:43

And so, of course government are gonna use this. Of

1:05:45

course they're gonna fucking use this. Yeah,

1:05:47

because even if they're not, even

1:05:50

if they think they never will, there will

1:05:52

be something that happens that precipitates the use

1:05:54

of it. Look, don't get me wrong. Earthquake,

1:05:59

natural disaster, I empathize with the red

1:06:01

button, even though... people tell me even

1:06:03

in those scenarios, it shouldn't be used.

1:06:05

I empathize with that. It's not being

1:06:07

used for that now. But

1:06:09

even in those scenarios, the

1:06:11

only reason they would need to

1:06:13

press the big red button is if

1:06:16

they can't allow asset prices to

1:06:18

fall. Because

1:06:20

if you take away

1:06:22

that big red button,

1:06:25

you're back to the free

1:06:28

market system. government

1:06:30

regulation and interference in a box and

1:06:32

just ignore that for now because obviously

1:06:34

corrupts it further. But

1:06:36

in a free market, prices should be allowed

1:06:38

to move to reflect demand and supply. When

1:06:41

something happens, prices should

1:06:43

fall. The

1:06:46

fall far enough that people unlock

1:06:48

their savings and then start to invest

1:06:50

again. That's just a free market. They

1:06:53

cannot be allowed to fall

1:06:55

because of fractional reserve banking.

1:06:57

because of this stacking of

1:06:59

debt, typically against

1:07:02

assets and your

1:07:04

leverage. So

1:07:06

it only takes a small amount of

1:07:08

decline in assets value to start

1:07:10

eroding this and as soon as it

1:07:12

starts eroding it just collapses. So

1:07:15

as soon as this is

1:07:17

why when we see, you know,

1:07:19

when the economy has a,

1:07:21

you know, a mini heart attack

1:07:23

for some reason, Asset prices start

1:07:25

falling, stock market starts falling, people start calling

1:07:27

for the big red button, typically from the

1:07:29

banks, right? Because the

1:07:31

capital base is so narrow at the

1:07:33

bottom, it gets eroded very quickly

1:07:35

and then you're in spiral territory and

1:07:37

the bank then is forced, the

1:07:40

government is forced to press the big red button

1:07:42

to bail everyone out. And this

1:07:44

is why we're not in a free market. This

1:07:47

is the entire thing, but it's because the

1:07:49

big red button exists. If you take the

1:07:51

big red button away, free

1:07:53

market forces kill those people who

1:07:55

take too much risk too soon.

1:07:57

Alan Farrington said you can't have

1:08:00

capitalism without money. This is not

1:08:02

capitalism. It's not capitalism at all.

1:08:04

But it's held out to be capitalism

1:08:06

and therefore people who are anti -capitalist

1:08:08

point at the system and say

1:08:11

capitalism doesn't work. We're not in a

1:08:13

capitalist system, we're in a socialist

1:08:15

system. And I'm kind of empathetic to

1:08:17

them. I'm kind

1:08:19

of empathetic to the

1:08:21

socialists. who have

1:08:23

their own personal issues with

1:08:25

capitalism because it isn't a

1:08:27

capitalist system. It

1:08:29

isn't a capitalist system, but they would tell you

1:08:31

it is. So it's that

1:08:33

misunderstanding and the obfuscation of what's

1:08:36

actually happening here. We have socialism as

1:08:38

the heart of the system and

1:08:40

theft is the heart of the system

1:08:42

which corrupts everything. So you can't

1:08:44

build capitalism on top of that. It's

1:08:46

funny because even the people with

1:08:48

the capitalism, the thing when the capitalism

1:08:50

and the comedies, who think

1:08:52

we're in a capitalist system. Actually,

1:08:54

a lot of them identify the same

1:08:56

problems, even though, ideologically, they're

1:08:59

very different. Yeah, but this is why

1:09:01

the abstraction of the big red button

1:09:03

is nice, because it's like, it

1:09:05

just shouldn't exist. It shouldn't

1:09:07

exist. And if it didn't exist, we would

1:09:09

be in a free market capitalist system

1:09:11

where people would see the benefits of being

1:09:13

in a free market capitalist system, because

1:09:15

the quality of life would increase. And

1:09:18

this is where we should

1:09:20

link it back to the

1:09:22

concept of energy

1:09:24

money. Right,

1:09:26

because... Well, firstly, no government is ever

1:09:29

going to give up access to a big

1:09:31

red button, because why would you? you

1:09:33

have one in your bedroom, you wouldn't hand

1:09:35

it over voluntarily. But

1:09:37

for the very first time, we

1:09:40

are now in a position where there is

1:09:42

an alternative. And by

1:09:44

the way, every single

1:09:46

person I know who has

1:09:48

moved over to the alternative has

1:09:51

benefited. No one's left. No one

1:09:53

says to me, yeah, you know, I was in

1:09:55

Bitcoin. Yeah, I've lost interest and I sold it

1:09:57

when I'm not here anymore. That doesn't happen because

1:09:59

they're all benefiting from a sound money standard. And

1:10:01

this is, this is the point with the interview

1:10:03

where like some people listening and I don't want

1:10:05

to hear about this Bitcoin thing. And that happens. I

1:10:08

mean, for a range of issues, I was chatting to

1:10:10

a guy the other day said, oh, I'm too late.

1:10:12

They said, well, I'm not selling. You

1:10:14

know, people think they're too late or they don't

1:10:16

understand it or they just don't to go near it.

1:10:18

Like, because Bitcoin doesn't have a great brand. amongst

1:10:20

a lot of people. It

1:10:23

doesn't. But

1:10:25

it's the literal solution. It

1:10:28

is literally, and it doesn't necessarily have

1:10:30

a great brand because it is the

1:10:32

solution. Because it doesn't have a marketing

1:10:34

department. It doesn't have a CEO. It

1:10:36

doesn't have any organization behind

1:10:38

it whatsoever. And

1:10:41

therefore, when you are, when

1:10:43

you have something that

1:10:45

comes into existence, which poses

1:10:47

a, a very

1:10:49

explicit threat to the big

1:10:51

red button. What

1:10:54

the population tends to get told by those

1:10:56

connected to the big red button is this

1:10:58

thing is used by criminals. This

1:11:01

thing's destroying the planet. This thing

1:11:03

is XYZ. Because

1:11:05

they don't want to succeed. But

1:11:08

the reality is, it's

1:11:11

an opt -in network

1:11:13

for everybody. Nothing stops

1:11:15

this train? Well, nothing

1:11:17

stops this train on many different

1:11:19

fronts. But I

1:11:21

would encourage people to

1:11:24

make that connection with,

1:11:27

and I hope I'll help you make this

1:11:29

leap as well, with the thing about

1:11:31

what money really is. Money

1:11:33

really is just your economic energy. And

1:11:36

to think about all the downstream

1:11:38

issues that we see today, the obesity

1:11:40

and homelessness and all of these

1:11:42

things. these do come as a direct

1:11:44

result. All these issues that

1:11:46

Gary's economics and these people are

1:11:48

talking about on the radio shows, they

1:11:50

are all downstream of the corruption

1:11:53

of the money. And so watch the

1:11:55

video and it will, because we

1:11:57

haven't covered all of those today, but

1:11:59

you'll see where they come from

1:12:01

and they are consistent. All

1:12:04

right, so what is the solution?

1:12:06

The solution is you've got to take

1:12:08

away the bigger button and you

1:12:10

end up with a perfect money. when

1:12:12

nobody can print any more of

1:12:14

it without doing work. So

1:12:16

you restore that link to

1:12:19

energy. So gold was

1:12:21

just really inefficient energy

1:12:23

money. You have to

1:12:25

expend a lot of energy to get

1:12:27

out of the ground, but then it's,

1:12:29

you know, super wasteful in terms of

1:12:31

the way you do it, the time,

1:12:33

the effort, the consistency, all the issues

1:12:36

that we have with gold as commerce

1:12:38

as a... as

1:12:40

an economic battery for commerce, still

1:12:43

remain. That's where I was replaced with paper

1:12:45

because it was just easier. But

1:12:47

the next evolution of hard

1:12:49

money and the final stop

1:12:51

for hard money is just

1:12:53

pure energy. Pure

1:12:56

energy. And then people

1:12:58

would say, and we can come back to this

1:13:00

a little bit, but isn't that destroying the planet? And

1:13:02

the answer is absolutely not. Come back to it

1:13:04

in minute. But

1:13:06

Bitcoin, is just the

1:13:08

purest form of energy money. There

1:13:10

is a fixed supply that is

1:13:12

coming into existence over time for

1:13:14

the next 100 years, and the

1:13:16

only way to mine Bitcoin in

1:13:18

the same way that you would

1:13:20

mine gold is by expending energy,

1:13:22

but you expend it in the

1:13:24

purest possible form. It's

1:13:26

the only thing you're doing. You're

1:13:28

not destroying the planet while doing

1:13:30

it. You're actually solving the energy

1:13:32

crisis while you do it. The

1:13:36

solution to the energy crisis is not

1:13:38

the problem. We'll do a second show when

1:13:40

we get into the technical and the

1:13:42

weeds. Because I just think it's too big

1:13:44

a leap. I've done it with people,

1:13:46

it's too big a leap. Trying to get

1:13:48

into mining is too big a leap.

1:13:50

I think I want to focus more on

1:13:52

this. The basic principles

1:13:55

of why, if I

1:13:57

have pound coins here, Bitcoin

1:13:59

here, if

1:14:01

I am somebody who is only in the

1:14:03

pound coins, Why should I consider Bitcoin?

1:14:05

Because look, the great thing about Bitcoin is

1:14:07

there's nobody who doesn't know it exists.

1:14:09

You get in a taxi and somebody says,

1:14:11

what do you do? I'm a Bitcoin

1:14:13

investor or they'll ask questions because they've heard

1:14:15

of it. They know of it. But

1:14:17

so many people haven't made that leap. They're

1:14:20

getting their pounds at the end of

1:14:22

the month. They know that inflation is

1:14:24

an issue. They understand there's

1:14:26

problems in society. There's people

1:14:28

like you and I go, well, the solution is Bitcoin. Should we put

1:14:30

money in Bitcoin again? And

1:14:32

they're saying, I'm too late, they

1:14:34

don't understand it. What

1:14:37

have you had success with, again, being able

1:14:39

to just take that leap? Suddenly go, because I

1:14:41

took a leap, you took a leap, Pony's

1:14:43

taking a leap, Kurt's taking a leap. But what

1:14:45

have you had success with, again, being able

1:14:47

to take that leap and go, I'm

1:14:49

going to just spend a bit of time learning

1:14:51

about this. Well, watching

1:14:53

the video is a great

1:14:55

start. But

1:14:58

I would go back to what you said before,

1:15:00

you don't keep money in the bank. Why don't

1:15:02

you keep money in the bank? Because the purchasing

1:15:04

power is going to zero. Pounds

1:15:07

are going to zero. The

1:15:09

euro is going to zero. The dollar is going to

1:15:11

zero. You won't already

1:15:13

know this. This is why I

1:15:15

don't keep money in the bank. So that's a

1:15:17

good starting point. If they understand this as

1:15:19

a good starting point. But people intuitively understand this.

1:15:22

So if I'm using a currency

1:15:24

that I know is going

1:15:26

to zero over time, it forces

1:15:29

me to find a better

1:15:31

home. for my economic energy. As

1:15:33

you buy a second house or you

1:15:35

invest in the stock market, these things, but

1:15:37

they're just really inefficient ways of doing

1:15:39

it and you don't own them. You

1:15:43

buy a second house with leverage

1:15:45

and then you've got council tax, you've

1:15:47

got all these extra things, stamp

1:15:49

duty, you know, it's attached to

1:15:51

the ground, you say something the government doesn't like,

1:15:53

you lose the home. The asset

1:15:55

can be confiscated at the whim of the government. You

1:15:58

buy a stock market, it's a promise, it's a

1:16:00

piece of paper. It's stacked on

1:16:02

promises doesn't really even know which

1:16:05

institution is it? You don't

1:16:07

own the thing, but you're using as a

1:16:09

proxy store of value for your economic energy.

1:16:11

You go, well, okay, if I'm trying to

1:16:13

get the cleanest store of my economic energy,

1:16:15

maybe I'll just buy gold again, because that

1:16:17

will hold its value through time, but gold's

1:16:19

still being mined at 2%. When the price

1:16:21

of gold goes up, the gold

1:16:23

miners raise more equity to dig more, to

1:16:25

be able to access those deposits that

1:16:27

we know are already in the ground, they

1:16:29

just were previously uneconomical to extract. So

1:16:32

the supply then goes up and the

1:16:34

price comes down. And you also

1:16:36

don't own it because you can buy a

1:16:38

small amount of gold. As soon as it

1:16:40

becomes big enough, you don't want

1:16:42

to keep it in the house anymore. You're worried about

1:16:44

security. So you go and put it in a vault to

1:16:46

give you a piece of paper. You've got a promise

1:16:48

again. And so the government with the stroke

1:16:50

of a pen can confiscate that in the same way they

1:16:52

did in the US. And so you're

1:16:54

sort of solving for two different things. It's

1:16:56

like, how do I save my economic

1:16:59

energy in an efficient way? And how do

1:17:01

I actually own it? The

1:17:03

only two, the final

1:17:05

stop on both paths of

1:17:07

logic there is Bitcoin. It's

1:17:10

the only thing you can own. Only

1:17:13

thing in the world you can own. It's

1:17:15

the only absolutely scarce asset in

1:17:17

the entire universe. Gold is going

1:17:19

to go up 2 % a year forever. Until

1:17:22

we find that asteroid and then God

1:17:24

knows how much the supply goes up,

1:17:26

right? Because the supply is infinite. Bitcoin

1:17:28

supply is fixed forever. You

1:17:30

produce more of it through expending

1:17:32

energy and you hold it yourself.

1:17:34

You can carry it in your

1:17:37

head. Nobody can take it

1:17:39

off you. Nobody can stop you

1:17:41

sending it or receiving it. It's

1:17:43

perfect money. It is the end

1:17:45

state of the natural evolution of

1:17:47

money from the shells we started

1:17:50

with that represented our economic energy

1:17:52

all the way through to gold

1:17:54

and Bitcoin. Bitcoin is the final

1:17:56

stop here. And everybody is going

1:17:58

to wake up one day to

1:18:00

that realization. We're just on different

1:18:02

points of the journey. Now, everyone's

1:18:04

already started because they know they

1:18:06

can't keep the money in the

1:18:08

bank. And the process ends naturally

1:18:11

with Bitcoin. Now, you've got a

1:18:13

second. So that's one aspect.

1:18:15

And that would be good

1:18:17

enough by itself. If

1:18:19

Bitcoin was fully monetized, because

1:18:22

we talked earlier about you, your benefit

1:18:24

of owning Bitcoin has been on two

1:18:26

things. One, protect your

1:18:28

purchasing power because it's hard money,

1:18:30

it's not printing anymore, but you're

1:18:32

benefiting from the monetization. And

1:18:34

by monetization here, I mean, what

1:18:38

percentage of the

1:18:40

world's value does

1:18:42

Bitcoin represent? In

1:18:46

a scenario where you had

1:18:48

perfect money and you didn't need

1:18:50

to store value, you didn't

1:18:52

need to use anything, any other

1:18:54

asset as a proxy store

1:18:56

for your economic energy because you

1:18:58

had something that was 100 %

1:19:00

efficient. You wouldn't be

1:19:02

storing things in, storing your wealth

1:19:05

and your purchasing power and your economic

1:19:07

energy in other things, you just

1:19:09

use that. You wouldn't be

1:19:11

using anything else as a proxy. At

1:19:13

that point, it's fully monetized. It

1:19:15

represents the wealth of the world and

1:19:17

people use it as their both

1:19:19

money and currency because it's one and

1:19:21

the same thing again to transact

1:19:23

with each other. for goods and services.

1:19:26

That's fully monetized. Bitcoin

1:19:28

is much less than 1 % of

1:19:30

all the value in the world. But

1:19:32

it's the natural end state for

1:19:35

everything. And so investment thesis.

1:19:37

But this is exactly what it is. Exactly

1:19:40

what it is. To think that we

1:19:42

are late to Bitcoin is to not see

1:19:44

the big picture. Not

1:19:47

see the big picture. We are

1:19:49

2 trillion on an asset base

1:19:51

of 900 trillion. Gold

1:19:53

is 10 times bigger and and

1:19:55

Bitcoin outperforms gold on every single

1:19:57

measure you could care to evaluate

1:20:00

it. The thing is what you're

1:20:02

saying here is there are plenty

1:20:04

of people out there who understand

1:20:06

the problem because they're not keeping

1:20:08

money in the bank and they're

1:20:10

buying second houses or equities and

1:20:12

they're understanding there's a problem and

1:20:14

their solution is a bunch of

1:20:16

different investments yet they're missing this

1:20:18

one. Still. They're going through that

1:20:20

chain of logic. But

1:20:22

I think what your audience, in particular, they're

1:20:25

going to over -index some critical

1:20:27

thinking. Hence why they're watching you

1:20:29

and not watching something else. And

1:20:32

they're already questioning their

1:20:34

ability to be sovereign

1:20:36

or self -sovereign from

1:20:38

rules and regulations, government

1:20:40

interference perspective. There's a

1:20:42

lot of commonality there,

1:20:44

I would assume. Bitcoin

1:20:47

is the end state for that

1:20:49

in asset form. In

1:20:51

money form. You become, it's

1:20:53

the only thing in the world that can make you

1:20:56

self -sovereign. There is

1:20:58

nothing else. And so, it's

1:21:00

just about how far you are down that chain of

1:21:02

thinking, but we know where everyone ends up. And

1:21:04

once you end up there, you never go back. Because

1:21:06

you understand why you arrived there in

1:21:08

the first place, and nothing has changed. Well,

1:21:10

I think, I think so. For example,

1:21:12

I think when people buy houses, intuitively understand,

1:21:15

houses go up in fear value forever. You're

1:21:17

kind of intuitively understand. But they

1:21:19

don't understand why. Yeah, but they understand.

1:21:21

It's like, they know, like

1:21:24

I know my dad's first house he bought was like three

1:21:26

grand. That same house today would be

1:21:28

300 grand. And so we know

1:21:30

it's not necessarily increased the wealth, but

1:21:32

we understand that it goes up. It's just,

1:21:34

it goes up. And they think, oh,

1:21:36

this goes up and I can sell it

1:21:38

one day. And if I've got it

1:21:40

for two decades, it's a nice retirement thing.

1:21:43

I think one of them don't, a lot of people don't

1:21:45

understand this. Bitcoin goes up forever as well. that's

1:21:50

frame of reference is super

1:21:52

important because you when you

1:21:55

say it goes up the

1:21:57

house goes up when measured

1:21:59

in fiatellos yes right when

1:22:01

measured in bitcoin it's going

1:22:03

down and so if you

1:22:05

think if your default is

1:22:07

i'm measuring my wealth in

1:22:09

fiatellos you are becoming wealthier

1:22:11

on paper you're probably losing

1:22:13

as a percentage of all

1:22:15

the fiatellos Yeah, but measuring

1:22:17

in terms of Bitcoin, that's

1:22:20

post -orange pillage.

1:22:23

But this is the point

1:22:25

I'm making. So you're keeping

1:22:27

scoring something in something which

1:22:29

is being inflated. So you've

1:22:31

got Morpheus Teller, but there were just Morpheus Tellers

1:22:33

in total. You're not, your percentage of the pie

1:22:35

is declining. Right? But

1:22:38

the number goes up. So it's

1:22:40

like this mental clash. Whereas

1:22:43

if you switched

1:22:45

your... world view and

1:22:47

your default of

1:22:49

I'm measuring my wealth

1:22:51

in Bitcoin. Suddenly,

1:22:54

all those asset classes that

1:22:56

are not Bitcoin now look

1:22:58

like terrible investments because every

1:23:00

year, every few years, Bitcoin

1:23:02

is volatile, the volatility is

1:23:04

good and a skewed asset

1:23:06

when you come back to

1:23:09

that. You

1:23:11

see house prices decline over time when

1:23:13

measured in Bitcoin and then suddenly

1:23:15

When people have been using those assets

1:23:17

as a proxy store of value

1:23:19

If they start going down in Bitcoin,

1:23:21

you realize they're not a store

1:23:23

of value at all. They're costing me

1:23:25

money. I Don't want

1:23:27

to own a house. I don't

1:23:29

want to own the stock market.

1:23:31

I don't want to own gold

1:23:33

Because they're losing money They're becoming

1:23:35

worth less Bitcoin in time. And

1:23:38

so what happens is you sell

1:23:40

them and you buy a

1:23:42

Bitcoin. So your shares. But

1:23:44

it's this frame of reference

1:23:46

that you sort of go, you

1:23:49

make a, by going

1:23:51

down the rabbit hole, you make that

1:23:53

leap because it is such a

1:23:55

mental 180 from what we experience around

1:23:57

ourselves today, but it's what is

1:23:59

happening. And so when I talk about

1:24:01

that monetization growth from 2 trillion to 900

1:24:03

trillion, it's 900

1:24:06

trillion and the allocation, there's 900

1:24:08

trillion between you know, 20

1:24:10

trillion in gold or 100 trillion

1:24:12

in real estate, 100 trillion

1:24:14

in stock market and 300 trillion

1:24:16

bonds. I'll get the numbers

1:24:18

slightly wrong, but broadly speaking, or

1:24:20

collectibles. These things

1:24:22

are worth those amounts because they've

1:24:24

been monetized, because you can't keep

1:24:26

the money in the bank. So

1:24:28

you buy a collectible, you

1:24:31

buy the stock market, you buy a house

1:24:33

which inflates them when measured in theaters. But

1:24:35

then when you start to realize, Actually,

1:24:38

I'm losing money when I measured in Bitcoin.

1:24:40

You start selling them. So those asset classes

1:24:42

become demonetized in favor of Bitcoin and Bitcoin

1:24:44

accelerates to become the default money of the

1:24:47

world. That is a massive leap. No, no,

1:24:49

never take a brilliant connoisseur. I'm so proud

1:24:51

of him. So we're driving along the other

1:24:53

day. And I've been talking about just getting

1:24:55

a second house. Like talking about thinking about

1:24:57

retirement and got a little bit of

1:24:59

loose cash. I thought, well, I could pay

1:25:01

me by a couple of houses. Yeah,

1:25:03

by the time I retire, they'll be paid off. And

1:25:06

they'll be a rental income because I probably won't be doing

1:25:08

this. And you know, it's just

1:25:10

like, yeah, but dad, should you just buy Bitcoin?

1:25:13

And he was so right. And I kept convincing

1:25:15

myself I should be buying houses. He's like, yeah,

1:25:17

but shouldn't you buy Bitcoin? But

1:25:19

what I realized, there's

1:25:21

still this only small part,

1:25:24

the small part that worries about

1:25:26

the existential risk to Bitcoin, whether

1:25:28

it's government or, I don't know,

1:25:30

quantum computing. Because if that happens,

1:25:32

like i'm done i'm broke because

1:25:34

everything's in bitcoin um but what i

1:25:36

think most people is that small

1:25:38

slither of doubt i have there's as

1:25:41

much bigger there's is like maybe

1:25:43

half a cake or a slice of

1:25:45

cake where they're like yeah but

1:25:47

because they don't understand it they think

1:25:49

oh yeah it's just a bubble

1:25:51

it's gonna go away or it's gonna

1:25:53

go to zero i'm too late

1:25:55

and i think that that that slice

1:25:57

of cake gets smaller and smaller

1:25:59

and smaller the longer you're in it

1:26:01

because you'd learn more. We're trying

1:26:03

to get people when they're, it's like

1:26:05

half a cake for them, whole

1:26:08

cake for them. Does

1:26:10

that analogy work? Yeah, I think it

1:26:12

works. a

1:26:14

journey for everyone.

1:26:18

And I'm still on that journey

1:26:20

as well. I haven't reached

1:26:22

Jeff Booth's level of Bitcoin Zen

1:26:24

yet. I hope that's in my

1:26:26

future. But it's a journey for

1:26:28

everyone, but it's a set of critical

1:26:30

thinking. Everyone knows this already. They've just got

1:26:32

to think about, well, if this, then

1:26:34

that, then that, then that, and go down

1:26:36

that, connect the dots, and take

1:26:38

it to its natural conclusion. There

1:26:41

is existential risks in everything.

1:26:45

That's certainly true in the fiat system. Bitcoin

1:26:49

is the only... There's one existential

1:26:51

risk right now, within the fiat

1:26:53

system. The level of

1:26:55

the dead is an existential risk.

1:26:57

Yeah, we know it's going to

1:26:59

zero. Yeah, we can become Argentina

1:27:01

here. We are becoming

1:27:03

Argentina in slow motion. And

1:27:05

to go back to your

1:27:07

example of being in Argentina, because

1:27:11

people struggle with, well,

1:27:14

if I buy Bitcoin and Bitcoin goes

1:27:16

up, I will be able to

1:27:18

sell it and get Morpheus again. It's

1:27:22

hard to get them to the

1:27:25

point of understanding when you buy it,

1:27:27

you'll never actually want to sell

1:27:29

it. Once you understand why you hold

1:27:31

it, you will never sell it. And

1:27:33

the example I use is actually

1:27:35

from Lebanon, but it applies equally to

1:27:37

Argentina. If you went

1:27:39

to the person you met in

1:27:41

Argentina who spends 30 % of their

1:27:43

time getting rid of the peso for

1:27:45

the dollar, and

1:27:47

you said to him, you know this? The

1:27:50

pesos have gone up a lot when measured in

1:27:52

dollars. When you going to take some profits on

1:27:54

those dollars and move them back into pesos? He's going to look

1:27:56

at you like you're a crazy person. That's

1:27:59

such a nonsensical question. But you're making the

1:28:01

same point here about pounds. Exactly.

1:28:03

Yeah. No, you're totally right. Exactly.

1:28:05

It's just slow motion. It's just slow

1:28:07

motion. And I was

1:28:09

fortunate enough to get invited

1:28:11

after the video went out and

1:28:13

Michael Sele kindly shared it

1:28:16

with millions of people. world. The

1:28:18

world. I was invited to

1:28:20

go and speak to the strategy staff. The

1:28:23

strategy is the biggest

1:28:25

corporate holder of Bitcoin

1:28:27

globally. And they

1:28:30

wanted to try and encourage more

1:28:32

of their staff to learn about Bitcoin

1:28:34

because they were a software company

1:28:36

first before becoming a Bitcoin company. And

1:28:39

they said, can you just come and

1:28:41

talk to people and try and encourage them

1:28:43

to learn about Bitcoin? And

1:28:45

so I went and I talked to them. about

1:28:50

how I think about their

1:28:52

company. And

1:28:54

I gave them a historical reference,

1:28:56

and it links strongly back

1:28:58

to this, and it's about speed

1:29:00

of things that are happening. And

1:29:03

the example I gave

1:29:05

them was between 1919 and

1:29:07

1923, there was a

1:29:09

guy in Germany called Hugo

1:29:11

Steins, who became the

1:29:13

richest man in Germany. over

1:29:15

a four -year period. He ended up owning around

1:29:17

a third of the German economy. Right?

1:29:20

Four and a half thousand companies. Is that

1:29:23

the Michael's area at that time? Well,

1:29:25

this is the historical context. Now,

1:29:28

what he realised is after the

1:29:30

end of the First World War, in

1:29:33

1918, one mark was worth

1:29:35

one gold mark. But they

1:29:37

had access to a big

1:29:39

red button. And

1:29:42

they had debts to pay. Big

1:29:44

debts. Big debts. And so they not just

1:29:46

hit the bigger button, they absolutely smashed

1:29:48

it. And over four years, it went from

1:29:50

one to one to one to a trillion. And

1:29:53

he could see what was happening, but he

1:29:55

has access to financial markets because he was

1:29:57

already an established businessman. And

1:29:59

so he borrowed as much

1:30:01

money as he could in

1:30:03

the marks and bought hard

1:30:05

assets. He bought

1:30:07

industrial companies, he bought commodities, he

1:30:09

thought of these things. And what

1:30:12

happened is the government kept smashing the big red

1:30:14

button, printing more of the things that he had

1:30:16

borrowed. The purchasing power of the things he borrowed

1:30:18

went to zero. He effectively wiped out

1:30:20

all his debts, because he owned the hard assets. And

1:30:23

he just did the same thing over

1:30:25

and over again for four years and owns

1:30:27

a third of the economy. Well, that's

1:30:29

what Mauricio from Ledin did in Venezuela. He

1:30:32

got the biggest loans he could get. There

1:30:34

you go. But this is that

1:30:36

happened over a four -year period. It's

1:30:40

taking us 50 years. The outcome

1:30:42

is the same. The

1:30:44

outcome is the same because they have

1:30:46

the big red button and they're pressing it.

1:30:48

They're just pressing it at eight to

1:30:51

10 % a year, not 100 % a year.

1:30:53

That's the only difference. And

1:30:55

so the countries that are being inflated, having

1:30:57

their currencies inflated away 20, 50, 100 %

1:30:59

a year, see eight to 10 % a

1:31:01

year. I think that's great. I'll just

1:31:03

get some dollars. I'm losing still

1:31:05

losing, but I'm not losing

1:31:07

the rate I was losing. For

1:31:09

the people who already own dollars or

1:31:11

pounds or euros, I think 10 %

1:31:13

a year, that's horrendous. Right.

1:31:16

I need to get into the next quality

1:31:18

asset. XRP.

1:31:22

Got a fucking message about it

1:31:24

yesterday. I

1:31:26

didn't expect XRP to come off in

1:31:28

this conversation. If anyone

1:31:30

in doubt, absolutely not XRP. Absolutely.

1:31:32

Absolutely not. But the

1:31:34

conclusion is a hard

1:31:37

asset. And then when you

1:31:39

go down that route, the outcome is Bitcoin.

1:31:42

And so the reason I bring that up

1:31:44

is it's about that speed. So

1:31:46

this is just Germany after the

1:31:48

First World War, but just taking

1:31:50

50 years, but it's starting to

1:31:52

accelerate and there's no way out.

1:31:55

There's no way out. And so,

1:31:57

you know, when you have

1:31:59

the doge efforts, for example, in

1:32:02

the US, that's great. but

1:32:04

it's only ever temporary sticking plaster

1:32:06

and you can see the outrage

1:32:08

from people around all the misallocation

1:32:10

of resources and the extra, you

1:32:12

know, the 14 extra bunny printers

1:32:14

they found in the US. They

1:32:16

don't actually know how much money

1:32:18

they've printed. You see the outrage

1:32:20

around, hold on, what's that? I

1:32:23

mean, there was a video

1:32:25

probably a month ago with Elon

1:32:27

Musk talking with one of

1:32:29

the US politicians and they found

1:32:31

14 different computers that were

1:32:33

able to to create extra money

1:32:36

on demand, right? For

1:32:38

various governmental services, but they

1:32:40

didn't quite know how much

1:32:42

money had been printed. But

1:32:45

the fact that you haven't seen

1:32:47

this hasn't been outrageous is shocking. But

1:32:49

the Doge movement itself has

1:32:52

begun to wake people up

1:32:54

to the misuse of funds.

1:32:57

Misuse of funds, but this is like a tiny aspect.

1:32:59

But if you zoom out, the whole

1:33:02

thing is misuse of funds. The whole

1:33:04

thing is misuse. Well, there

1:33:06

is a big kind of philosophical conversation to

1:33:08

be had and we probably can't do

1:33:10

it justice today, but if you're right, which

1:33:12

I think you are, what

1:33:15

we're heading towards is separation of money

1:33:17

and state, which is a huge concept

1:33:19

to get our heads around because there's

1:33:22

probably nobody, there's nobody alive who hasn't

1:33:24

really, everyone has always lived under government

1:33:26

control and money. And

1:33:28

if we're right, they can't control

1:33:31

Bitcoin. And so we

1:33:33

move to a society where government

1:33:35

doesn't have the red button

1:33:37

anymore because everyone uses Bitcoin. And

1:33:40

that is the dominant financial system. We

1:33:42

might still have gold and commodities and

1:33:44

some people might try and do fiat.

1:33:46

But eventually we get into a separation

1:33:48

of money estate and there's a big