HODLBarbarian: The Unstoppable Force of Technological Deflation - Atlanta BitPlebs - (EVNT003) - ATL BitLab Podcast

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Elwood the HODLBarbarian: Deflation is unstoppable because (00:00):
undefined

(00:02):
technology is unstoppable, right?
The cracks in the dam are appearing.
It's coming, right?
The dam is gonna break and we'regonna have a bunch of Bitcoin
reserves, created by nation states.

Stephen DeLorme (00:21):
This podcast episode is an event recording.
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Look, event recordings are neverperfect, but we're sharing it here

(00:44):
because we think you're going tofind something valuable in it.
Let's talk a little bit about our sponsorsfirst, and then we'll get onto the show.
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(01:04):
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That's A T L B I T L A B dot com.
All right, on to our show.

Elwood the HODLBarbarian (01:52):
All right.
So I did my best.
I asked Grok to make apicture of Jeff Booth.
That's a caped Bitcoin superheroflying through the world of tomorrow.
So this is what Grok did for me.
I don't think it looks that much likeJeff, but I guess he does have glowing
blue eyes still on his Twitter, so that'swhere the glowing blue eyes came from.
But there you go.
This book, in my hand here, The Priceof Tomorrow, it's a fairly, reasonably

(02:16):
small little book, quite readable.
We're going to be covering this asbasically a book club that's part of
ATL BitLab, part of Atlanta BitPlebs.
So each year we try to do at least onebook in addition to other things we do.
And so this year we'll bedoing The Price of Tomorrow.
One of my personal favorite books,this is the one that I've been
agitating for and lobbying for.
So I'm a big fan.
And that's why I'm going tohave the fun of doing the sort

(02:37):
of introduction to it tonight.
Then we're going to be looking forvolunteers to cover the chapters.
And Aida will be coming by and breakingyour kneecaps if you don't volunteer.
Make sure you're nice toher and offer up your time.
We appreciate that because you don'twant to hear me do all these, I promise.
Or you don't want to makeAida do them all either.
But anyway, we're going to heara little bit more about Jeff

(02:58):
Booth and why I think he's great.
I personally think he's our bestthinker in the Bitcoin space.
So let's see if my littleclicker here is working.
Not so far.
All right we'll figure that out.
I'll do this way.
All right, who is Jeff Booth?
It's this guy.
He's a goofy looking dude.
Entrepreneur and technologist,co founder of BuildDirect.
This is a business that he built for awhile, ultimately failed, but I think he

(03:21):
ended up, earning a lot of his, wealththat he turned into Bitcoin that way.
He's now really well knownas a Bitcoin advocate.
Ego Death Capital is one of the big namesin the Bitcoin only venture capital space.
And so anybody who knows some peoplethat have Bitcoin companies that
are trying to launch, they probablyknow who Ego Death Capital is.
They're probably either getting fundedby them or hoping to get funded by them.

(03:43):
And he sees Bitcoin as a tool foreconomic transparency and abundance.
He's a thought leader, which is whatwe're really talking about tonight.
He discusses the technology'seconomic impacts through speaking and
podcasting emphasizing adaptation totechnological change for societal benefit.
And of course, he's an author of ThePrice of Tomorrow, which I just showed.
The book was written in 2020,which is quite interesting because

(04:05):
some of the things he talks about.
It was almost forward looking.
If you look at the things he wassaying and we'll get into some of them
momentarily, they're even more true herefive years later than they were in 2020.
I think so.
The book is not really about Bitcoin.
It really only mentions Bitcoin inthe very last chapter of the book.
It's really about Deflation and inflationand technology and we're gonna talk

(04:27):
about why this is such an importantthing to think through and understand.
Personally, when I read thisbook, it like melted my brain.
It was life changing.
It was like, oh my God, thingsthat I didn't think were connected,
things that were, I didn't understandthat things that always confused
me suddenly all made sense.
Pieces that like I thought werejust completely disparate things
were like aligned and came together.

(04:48):
So for me, it was really Likean eye opening kind of thing.
I said, Oh my God, it all makes sense now.
And it's actually been a big a bigframework that I now use to think a
lot about things that are happening,not just in Bitcoin, but in, the
world and technology in general.
So anyway, we'll talk about that.
But before we do any of that stuffI thought maybe the most fun way
to get this started would be,let's listen to a brief little.

(05:14):
Spiel from Jeff.
If I can pull up YouTube.

Jeff Booth (05:18):
Yeah, I keep saying over and over again that the natural state
of the free market is deflation.
That's what I described in my book.
Right?
And then when you understandwhen people go, well, they think
about it for a second, you cansee them thinking about it.
And then you add.
You don't use thingsthat give you less value.
If, uh, if Google charged 5 a clicktomorrow, or if Riverside charged

(05:40):
way more, uh, tomorrow, you woulduse a different, uh, uh, different
video program, uh, and, and soit's a competition to provide more
value, which entrepreneurs solveproblems to provide more value.
So that has to be deflationary.
There is no, there is no, maybe it hasto be deflationary and then if you, if we

(06:02):
invent more technology and technology ismoving exponentially, um, because prices
fall to the marginal cost of production,it has to be exponentially deflationary.
So, in that world, you would,even if you did nothing, if you
didn't provide any value, you wouldget richer every year, probably.
By about 5 percent a year today,and then getting faster and faster

(06:24):
and faster into the future asall prices of everything fell.
Remember, AI and robotics are goingto merge and robotics will grow your
food, food will fall and, uh, inprice to almost zero energy will fall
in price to almost, uh, uh, zero.
And so all of these thingsare going to continue.

(06:44):
Um, a path.
And when I say that relative toBitcoin relative to something
that can't be manipulated.
So that's the world we should live in.
And the, and, and the world that'sstealing your time and stealing your
energy, therefore has to steal more andmore of it all the time to stay solvent.

Stephan Livera (07:03):
Yeah.
And I'll tell you what, and I mean,obviously I'm with you in terms
of deflation should naturally, youknow, we should be living in a,
growth deflationary environment.
The cost of our, you know, living shouldbe coming down over time, kind of on
average, obviously assuming out, uh, youknow, natural disaster and things like
this, which will occasionally happen, butgenerally speaking, the cost should be
coming down, but I'll tell you what, andI'm sure you understand this, but there

(07:26):
are some, there are going to be some verybig political and market At least crony
capitalist market hurdles to that becausea lot of people are conditioned to believe
that housing should just go up, right?
And of course, you're Canadian.
I'm sure you know, lots ofCanadian property markets.
Famously, the Vancouver property marketis, you know, it's people have this
mindset of, oh, it's only going up.

(07:47):
What's going to happen when we moveinto a world where actually, yeah.
Uh, maybe certain high level cityproperties or very, you know, great
location properties will go up.
Generally, the cost of housing isgoing to come down and there's going
to be a lot of people who are going tofeel like they're getting screwed over
because they're quote unquote assetthat they put their life savings into.

(08:08):
Is now coming down in price.

Jeff Booth (08:09):
Yeah, and, and because, because if you're buying housing
for the last hundred years, you'rereally short the dollar, right?
You know that you have an inflationrate in the dollar, uh, and, and
holding housing is shorts the dollar.
I take on debt and I'm short the, uh, thedollar because it has to be inflated away
and my housing retains some of that value.

(08:31):
But now, so then housing insteadof being, being, being a utility.
Housing becomes a store of value andit increases a monetary premium and
people think why the housing is my wayto be able to save enough money because
my, my currency is a terrible currencyand you see this all over the world.

(08:51):
You see people doing that, but.
That's why Bitcoin doesn't care.
My, my house has fallen in the last fouryears from 300 Bitcoin to 22 Bitcoin.
And in four years, it's going to be twoBitcoin and it doesn't care if it, uh,
if you want to take Bitcoin into yourcurrency to price things, And from, from

(09:12):
that economic calculation, you thinkbitcoins going up because you're taking it
into pieces of paper, you're welcome to dothat, but Bitcoin doesn't care about that.
It's repricing the world and by theway, you could do this for people on
your podcast that are, I know, you know,this, but how I break through this for

(09:33):
a lot of other people who don't know,just instead of saying currency, say
pieces of paper that I price things in.
Right?
And it starts to be more real, right?
And so in in Canada, it takes 90, 000pieces of paper today to buy a Bitcoin.
But if if I go to Turkey, it takes 3million pieces of paper to buy a Bitcoin.

(09:56):
And if I go to Argentina, it takes 55million pieces of paper to buy a Bitcoin.
And then you ask yourself,there's a whole bunch of people in
Turkey that believe their piecesof paper are worth money, too.
So why wouldn't it look thesame all over the world?
So I agree with you.
Most people are going to getcaught in that and they're going
to price Bitcoin from theircurrency thinking it's going up.

(10:19):
Um, uh, and it's going up forever whenit is actually not all prices are falling
relative to it forever is a far better wayto, uh, to, to look at what's happening
in Bitcoin because you know this, but wehave a 900 trillion dollar global ledger.
And, and that 900 trillion global ledgerwill not be 900 with 400 trillion of debt.

(10:43):
And if the 400 trillion of debt wasactually truly marked to market, the
900 trillion would be gone too, becausethat's just inflated asset prices
because of the 400 trillion of debt.
But, but there's just, there's a900 trillion global ledger that in
five years won't be 900 trillion.
It might be 2 quadrillion.
But Bitcoin doesn'tcare about that either.
I know people do right because they'repricing from a globally manipulated

(11:07):
ledger, but Bitcoin doesn't care.
It's repricing everything and theother side of that argument or the
other side of that thing that peoplemiss on Bitcoin is the relative
purchasing power of Bitcoin today.
So if you just took 900 divided by 21,000, 000 or 20, 000, 000 or whatever
lost coins you think would be, itequates to a terminal value today

(11:27):
of about 42, 000, 000 per Bitcoin.
And that if it staysdecentralized and secure.
Is for sure what it's worth todayin relative to purchasing power
kind of played out into the future.
Um, but it will be way higherthan that because prices fall to
the marginal cost of production.
So it's not just higher because measuredin a global ledger of 2, 2 quadrillion.

(11:51):
That'll be 84 million per Bitcoin.
And people think it's going upbecause they're not measuring
the ledger, the other ledger.
People should measure things in price ofBitcoin and they'll see it's just the free
market and it's imposing a discipline.
Um, and if you don't, if, if you reallycare about your piece of paper, if you

(12:13):
care about government getting bigger.
Government can't get bigger relativeto that, so they can by creating more
pieces of paper, but this is going toimpose it on all governments as well,
and eventually, and the governmentsthat are understanding this will be
in service of their, uh, service oftheir citizens rather than preying on
them, and so it's going, it's boundto break a whole lot of beliefs along

(12:37):
the way, and a whole bunch of, um,that's the pattern that's doing it.
It's repricing the world,not the other way around.

All right.
42 million per bitcoin.
Luckily it's on sale today.
You can get it for about 95.
Get some before it goes up to 42 million.
What I've done here, becauseI thought it would be fun.
We'll see how this format works.
What I've done is I've pulledquotes from the introduction.
And then a few other justquotes from Jeff Booth.
Some things that he said inthat video we just watched.

(13:04):
Some things I've heardhim say a number of times.
And I've organized them in an orderwhere I think, they start to build.
His thesis like his main thesis of whathe's saying I know that little video
clip if some of you are hearing that forthe first time first of all He's I think
the best thinker we have in Bitcoin.
He is not the best speaker.
We have in Bitcoin Hestutters a little bit.
He's there's a little bit of a monotonespeaking style So he's not the most

(13:26):
engaging speaker, but he's got reallygreat ideas So we'll go into those ideas.
So this I've got probably I don'tknow 16, 17 slides with quotes.
That's all we're gonna do tonight.
We'll I'll throw a quote up therewill open it up for people to react
to talk about, disagree, agree.
What do you want to do?
And then we'll go to the next one.
And we'll in the course ofdoing that, we'll probably go

(13:48):
through a lot of the main ideas.
And then we'll as we go throughthe chapters, we'll end up covering
all these things in more detail.
Over several other sessions, we'llso anyway, this one, in all of our
lives, we have lived in a worldwhere hope for a better future was
a motivating force in economics.
A world where growth reigns.
Our parents grew up in that sameworld, and so did their parents.
It is what we know.

(14:08):
So this is the world where, everyonethinks, oh You just need to get a job and
then, you'll get raises and your pay willgo up over the course of your career.
And, you can buy a house and you buyit for cheap and it'll go up in value.
And everything, you'll buy stocksand stocks will go up in value.
And this is just the world we live in.
Everyone assumes that in the future,things are going to be worth more.

(14:29):
Things are going to go up in value.
You're going to make more money.
This has just been the nature ofthe world that, we still live in.
Although.
Jeff and Jeff is making the casethat this world is really gone now
or it and we just don't know it yet.
Or it's changing very rapidly.
So this is the backdrop of the worldwe've all grown up in and we'll talk
about where Jeff says we're going.

(14:50):
But anybody have a reaction to this theywant or should I move on to the next one?
This is not too controversial.
We'll go on to the next one.
Okay.
This one's a little more controversial.
The only thing driving growth inthe world today is easy credit,
which is being created at apace that is hard to comprehend.
The rise of that credit and correspondingdebt is keeping us locked into a system

(15:12):
where we are the proverbial frogsin a pot with the heat of the water
slowly rising, and we do not notice.
So it's, how do you boil a frog?
You just put it in the pot and turn thewater, turn the heat up so gradually
the frog doesn't even know he's boiling.
So this is what he's saying is thisworld we've been in And, this is why
we're in this world where, we suddenlyhave inflation that's, become ugly,

(15:32):
let's say in the post COVID years.
And there's a lot of other trends thatJeff's, I guess one of the next quotes
I'll pull up, we'll pull it together.
These are the things that I was sayingat the beginning are like trends that
we all recognize and see, but didn'tnecessarily think they were connected.
That I guess Jeff's going tomake the case actually are.
So when we react to this, Stephen,

Stephen DeLorme (15:54):
What does he mean when he says growth?
GDP, technology,
energy?

I think
things like technological growth arereal and we're going to talk about that.
What he's really talking aboutis the growth of the value of all
the assets that we have, right?
Why is your house worth more?
It's not getting newer, it's not gettingsturdier, it's crumbling, slowly.
So ultimately your house.

(16:32):
Is a depreciating, decaying assetthat requires maintenance, right?
Why is it getting more valuable?
Same thing with, the stocks ofcertain companies maybe that
have been around a long time.
Their business isn't necessarilychanging, but nonetheless the
stock goes up, every year.
The stock market goes up every year.
This is where he, in the video hebriefly talked about we've got 400
trillion of debt versus a global ledgerof 900 trillion or whatever it is.

(16:54):
So that 900 trillion isgoing to 2 quadrillion.
This is what he's talking about.
We're in this world where.
We keep borrowing more money,which is this easy credit.
The governments borrow more money,individuals borrow more money, companies
borrow more money, and they go out andbuy things, which inflates the value of
those things, be it houses or stocks orcryptos or whatever, and then the overall

(17:17):
balance sheet of the world is bigger.
And he, what he's saying is the onlything really driving that is, and it's
only maybe a bit of an exaggeration.
We do have You know, actualgains in productivity.
We do have things like that, wehave a declining population in
a lot of the world, or at leastit's starting to level off.
I guess it's still growing,but it's starting to level off.
And in the future, we'llprobably meet, peak population.
So if there's not more people, why isthe world growing in economic output?

(17:42):
Yeah,

Audience 1 (17:42):
just on that note, I saw a chart recently where they had the
chart was showing the increased price onhousing and the increase in the S&P 500.
Okay.
And then overlaid with the increase inthe money supply, and it's all the same.

Elwood the HODLBarbarian: All the same line, yeah. (17:56):
undefined

Audience 1 (17:57):
If you tilt the charts over increase in the money
supply, it's like the baseline.
Nothing's, everything, nothing is goingin value, it's all exactly the same.

That's right.

Audience 2 (18:05):
So is that the credit part?

So that's the credit part, yeah.
Mel?

Audience 3 (18:10):
Maybe it's not, but, when you're trying to have something,
you're really buying the land underit, which is a selfish, which is
a scarce asset, like Bitcoin andwill continue to resist inflation.

Elwood the HODLBarbarian: Yeah, you make a good point. (18:19):
undefined
Depending on which property you'retalking about, there's a some
amount of the value is just the land.
And if it's extremely primo landthat's scarce and hard to get,
then sure, that's going to be thething that maintains the value.
But it could be a piece of landthat's maybe not that special with
just a really nice house on it.
It's decaying, right?
So that's another possibility.

Audience 4 (18:39):
If you buy
the house, (inaudible)do you own the land?

Yeah, that's another good point.
You own the land, but at the same time,if you ever can't pay the property
tax on the land, then the governmentcan take it back from you, right?

Audience 4 (19:02):
Exactly.
So you really don't own the land, right?

Yeah.

Audience 2 (19:07):
Does he talk about the tax kind of relationship to all this?
For example, we get tax benefitfrom investing in assets, so it
drives our currencies toward assets.
(inaudible)

Yeah, I think we all know that is, certain
assets, you get tax benefits on.
I think that's, he doesn't necessarilygo into that in this book or in this
chapter, but you're right, obviously.
All right, let's maybemove on to the next one.
Cause it gets more, more interesting.
But what happens when we can't count ona system of growth and inflation anymore?
What if a more powerful forcerenders most of our efforts to

(19:45):
create inflation irrelevant?
And what if, by desperately tryingto cling to an outdated inflationary
model, we drive more wealthinequality, more polarization, and
more discord into our societies?
This idea of, all of our efforts tocreate inflation, that may sound a little
funny to anybody who's what do you mean?
The whole government's beentrying to fight inflation,

(20:07):
we're trying to stop inflation.
Jeff Booth, one of his main theses,one of his main premises is all the
inflation that we're seeing is somethingthat governments and central banks
are deliberately trying to create.
And how do we know that?
For one thing, the Fed and generallyall the governments of the world
and all the central banks dohave an inflation target of 2%.

(20:29):
So they actually all are trying to create.
positive inflation at a manageablelevel of 2 percent per year.
Now, sometimes they overshoothas happened during COVID.
But the reality is, the FederalReserve targets inflation.
They are trying to create inflation.
They don't want it to get outof hand, but they do want it.
Now, why is that?
Because it creates this world thatwe talked about the beginning where

(20:51):
things just tend to go up, right?
Your pay tends to go up, your housetends to go up, your stocks and go up.
This is all a an artifact of thefact that, we have effectively
growth in the money supply, whichshould be on the order of around 2%.
It's actually been a lot more thanthat in recent years with the various
crises and pandemic and all that stuff.
But the idea is we do have a governmentthat's trying to create inflation.

(21:16):
Why are they doing that?
That's what we're gonnaget into a little more.

Audience 10 (21:19):
I was just going to say, I think one of the
really, important concepts is thedifference between real and nominal.
With everything really comingback to the money supply growth,
talking about potential inequality.
The real growth, there's alreadya significant inequality with
the current system, right?
I think understanding the differencesbetween nominal and real is key, right?

Elwood the HODLBarbarian: Yeah, absolutely. (21:41):
undefined
And, this idea of what is inflation,that's another kind of Funny game
that the government has to play right.
They say, Oh, we're trying totarget 2 percent inflation.
Then how do they want to measure it?
They don't want to measure that in thegrowth of the money supply because that's
something objective that we can track themon and it's Their fault, you know clearly
because they're printing the money.
So they said no, we want to trackCPI Dash you or whatever where it's a

(22:04):
basket of regular grocery store goodsthat are not scarce that are not rare
and by the way, if any of them do getscarce If want to buy a ribeye steak
and that's suddenly gone up a ton invalue, then the government will say,
you know what, we've changed the basketbecause ribeye's got too expensive.
So now we're going to have thebasket include a pork chop instead

(22:24):
or a chicken wing or whatever.
So that's what they've decided to do.

Audience 6 (22:26):
(inaudible)

Great
question.
I think we got anotherquote that gets in it more.
So let's hold off onthat one and let's do it.
I don't know if it's thenext one, but it's coming up.
All right.
We are at a crossroads.
What worked before willnot work in the future.
Technology is moving too fast andit will only move faster from here.
Even if we wanted to, we can'tput the genie back in the bottle.

(22:54):
So what is this we're talking about here?
This is this idea of, AI, right?
This is 2020.
This is before the ChatGPT moment, right?
This is before Self driven cars seemlike they might actually work, is
nearly as well as they seem to be now.
This is before there are multiplecompanies out there saying we're gonna
have humanoid robots, taking overfactory jobs with AI brains in them.

(23:15):
And that's all.
That stuff is coming.
If you do any look intothat kind of stuff.
technology stuff.
The world is changing really rapidly.
And the ChatGPT moment was just the firstinkling of where we're headed with AI
and with robotics and self driving carsand all these things, which all of which
he talks about quite a bit in the book.
And as we go through the chapters,we'll hear, this was 2020.
The point is it's evenmore true now than it was.

(23:37):
So what the way to think aboutthe technology growth is.
It's exponential, right?
And so how does an exponential look?
It starts out slow and flat,and you're like it's almost
indistinguishable from a line.
But then it starts to curve, and itstarts to curve, and then suddenly
we get into that part of the curvewhere it just starts going, crazy up.
And you can think of, like, allthe history of civilization, right?

(24:01):
As we've been in this long, slow,flat part of the curve, over
a really long period of time.
The industrial revolution,railroads, all these things.
And, we're now reaching the point wherethe curve is starting to bend way up.
And when you get to A. I., that'swhere it goes crazy, right?
When you get to robotics,that's where it goes crazy.
And suddenly we're going to be ina world where, you don't, we don't

(24:22):
need people doing all sorts of jobs.
Some manual labor type jobsthat the robots can take.
Some white collar knowledge workerjobs that, the A. I. agents are
going to be able to take, right?
So we're headed into a crazy place.
And this is what he means withthe technology is moving too fast
and only move faster from here.
So questions, comments on this one?

(24:43):
We're going to get to Alex'spoint, I think, maybe next.
So let's go see if that's next.
Not yet.
So this is where we get intoinflation and deflation, right?
So we all know what inflation isbecause it's been a huge topic
in the most past several years.
It's been, everybody understandswhat inflation is because
we've all been experiencing.
But deflation is a term that unlessyou're a wonk that's really interested in,

(25:07):
economics and finance, and central banksand stuff, you may not really think about
it, but it's the opposite of inflation.
So deflation, put simply, is when you getmore for your money, just as inflation
is when you get less for your money.

Audience 7 (25:21):
(inaudible)
(inaudible)

Yeah.
And so one of the things we'regoing to get into here is central
bankers one of their like axiomaticbeliefs is that deflation is bad
and has to be avoided at all costs.
And actually I think it's one of thequotes we're going to do in a minute.
So Jeff's point is so well, firstof all, let's talk about what this
inflation is, this deflation is.
So the best way to think aboutdeflation is think about your iPhone

(25:56):
or your Android phone, whatever it is.
How many gadgets anddevices has it replaced?
It's, it's a camera.
It's a music player.
It's a gps.
It's a computer.
It's a, it's a supercomputer in your pocket.
If you go back in time, 10 20 years.
These are all separatethings you had to own.
And so now suddenly you get onedevice that has that much value.

(26:18):
So that's deflation in a nutshellis like technology is creating this
incredible value for your dollar, so youget more for your money by buying this
one device, it does all these things.

Audience 8 (26:32):
(inaudible)
(inaudible)
(inaudible)
(inaudible)

(26:54):
(inaudible)
(inaudible)

So the economists talk about inflation
is oh, we had a big recession or adepression and everyone lost their job.
And so nobody had any money.
So the prices of things fell.
And so if you happen to have money, that'sgreat because if you're hoarding cash
during a time of deflation, when pricesare falling, then you can buy more, right?
So that's the economic crash kind ofdeflation that the central bankers

(27:25):
always want to over and scare us over.
But Jeff's point is deflation isunstoppable because technology
is unstoppable, right?
And we're headed into this world ofAI and all these great technologies
that are going to change things,whether we like it or not.
And there's really nothing you can doto stop that because you're not going

(27:46):
to go out and say, you know what, Ireally want to own a Garmin GPS and a
Kodak camera and, 10 other things, andI'm going to pay, 500 for each of them
rather than owning one, 800 iPhone.
You're just not going to do that, right?
Maybe one crazy person outthere will do that, but by and
large, people aren't going to.
So this is his point is that this isa deflation as created by technology

(28:10):
is a stronger force than inflation.
And this world that we've grownup in where everything is expected
to go up, everybody gets raises,everybody houses go up, assets go up.
Jeff's point is this world is ending andwe're heading into a different world.
And some people who, want to saysomething bad about Bitcoin say you
can't have a deflationary currency.

(28:30):
That's crazy talk.
It'll destroy society.
And Jeff's whole point iswe're headed here anyway.
Technology has turned the corner inthe sharp part of the curve where we go
exponential AI and robotics are coming.
We know people are goingto get displaced from jobs.
Deflation is coming like it or not.
What we've been doing in Jeff'swhole point is the government and the

(28:52):
central banks have been fighting thedeflationary forces by creating inflation
in a equal and opposite offsettingforce to the technology deflation
that we've already been experiencing.
And they've been doingthis our whole lives.
And, even before that, our parentslies in our grandparents lies.
His whole point is in order for thegovernment to keep creating enough

(29:14):
inflation to offset this deflation, it'sgoing to cause an outrageous explosion.
And we were already seeing it, right?
The giant growth in debt, all theinflation things we're seeing.
It's becoming untenably large, andwe're headed into a crazy world.
And this is where Alex'spoint a minute goes.
Why is this going to create, bad things?
And that's what we'll talk about.

Audience 1 (29:34):
Doug, how would deflation work on something like Stock Exchange,
S&P 500 stocks and that sort of thing?
Would those prices then start coming down?
If they do, who would invest in them?

Think about a stodgy old business.
I don't know what some, Johnsonand Johnson, Heinz ketchup, right?
They're not innovatingnew ketchup things, right?
They're not innovating new soap things.
It's just a regular businessthat's been around for years.
They're trying to create, manufacturebasic consumer products, put

(30:07):
them in the grocery store so youcan buy them and take them home.
Yet you look at the stocks andby and large, these stocks go
up a little bit every year.
They're not going up like crazy, but.
S&P 500.
The whole stock indexis generally going up.
That's because of the inflation, right?
In a world with deflation, abusiness that's not really growing
in any meaningful way mightstay flat or go down, right?

(30:29):
Because it's actually falling in value.
And when you think about what wouldWhat does the stock price of the S&P
500 look like when priced in Bitcoin?
Anybody who's ever looked at thatknows if you look at the S&P 500 on
a graph of Bitcoin, the S&P 500 isflat and then Bitcoin's like this.
So if you price any stock, almost anystock, let's not count micro strategy

(30:51):
in Bitcoin terms, then basically they'reall going to zero compared to Bitcoin.
And that's another one of Jeff's points.
So we'll dive into that.
Oh no, back here,

Audience 7 (30:59):
(inaudible)

That's right.
That's right.
So really all the growth, ifyou ask somebody, why is, why do
houses in Atlanta go up in value?
And I, this is some, I use thisas an interview question when I'm
looking to hire people at my company.
And I say Atlanta specifically,so the beltline sure.
But when I say, why do housesgo up in value, I almost never
get the answer I'm looking for.
The answer I'm looking for is.

(31:30):
Because there's always more monetary unitschasing the same number of houses, right?
That's what a, that's whata Bitcoiner would say.
I'm looking for secret Bitcoiners whenI'm interviewing people, by the way,
but I always hear there's populationgrowth and there's more demand and, I'm
like, where's the demand coming from andwhere's the population growth coming from?
We don't have that much, anyway, sothat, that's the whole story there.
All right.

(31:52):
Deflation is notintrinsically good or bad.
It just matters where you put your money.
On each side of the equation,there are winners and losers.
With inflation, the holdersof assets win, since dollars
in the future are worth less.
This is again, if you, in the world we'vebeen in You don't want to sit on a big
bank account full of dollars, right?

(32:13):
You want to go out and buy ahouse and borrow money, right?
You want to have a huge debt and a bighouse and then debt, we'll get def we'll
get inflated away and the big house willgo up and then you'll get rich, right?
And you want to go outand buy a bunch of stocks.
You don't want to havecash in the bank, right?
So that's inflationworld that we've been in.
So holders of assets win since dollarsin the future are worth less and it

(32:33):
would therefore take more dollars to buyassets at a later date with deflation.
Holders of currency of thewinners since their dollars can
buy more goods and services inthe future and they could today.
So this is the idea of Bitcoin is acurrency that is increasing in value
versus goods and services and assets.

(32:55):
So it's the idea where when youadopt Bitcoin as your money, you're
living in a world of deflationand you've transitioned that.
And what Jeff's point iswe're all headed here anyway.
Because of the technology.
You could say Bitcoin's a crazy idea andthis will never work and we can't adopt
it because a world with deflationarymoney is a crazy world that won't work and

(33:18):
it'll cause too much chaos and disruption.
And I guess Jeff's point is, we're headedthere anyway because of the technology.
And we're already seeingthe chaos and disruption.

Audience 8 (33:27):
Yeah, I think one of the things I was getting at earlier, is
we've had that economy in the past.
If you can even see that in likethe cultural memory of some.
The people who might be, save moneyin the bank and feed that kind of that
kind of like folk act (inaudible).

That's right.
That's coming
like from the pre 1971 days of beforewe went off the gold standard, and
there's this idea that saving was good.
Housing has become astore of value, right?
So the dollar, when the Bitcoin pricegoes up, the other way to look at it is
the dollar price is going down versusBitcoin just being one Bitcoin, right?

(34:03):
The other way, house price, there's afamous chart like 600 Bitcoin to buy a
house in 2016, 60 Bitcoin to buy a housein 2020, and then You know, whatever.
I forget.
60 Bitcoin in 2020, 660 and thensix in 2024, something like that.
So the average househas priced in Bitcoin.

(34:23):
You can see is like showingthat deflationary trend.
Yeah, go ahead.

Audience 9 (34:30):
(inaudible)

When the world adopts Bitcoin as its money.
Then what'll, there's somereally interesting things that
you can tease out of that.
But at that point you wouldnever want to own a business
that underperforms cash, right?
If you were thinking aboutputting your money in stocks and
you're like, I've got cash in thebank or I could go buy a stock.
And if you know for almost for surethat the stock is going to basically.

(34:56):
Fall in comparison to justholding the cash in the bank.
Plus, there's the risk ofthis company and having, a bad
management or, a bad business turn.
It's all these things like you would notrationally invest your cash into a stock
that you would expect to underperform.
As Bitcoiners, when we look at almostevery stock out there is underperforming

(35:16):
Bitcoin regularly over any, fouryear period for sure, let's say.
It's why would I own any stock when Icould just hold my cash, which is Bitcoin?
Then we think in the future worldCompanies are also going to adopt Bitcoin
as their reserve asset and then you'regonna say I would only invest my cash
in a company that's also on the Bitcoinstandard so that earns Bitcoin and knows

(35:40):
how to make more Bitcoin with theirBitcoin and This is the genius of Michael
Saylor the last session I had where youknow, they're looking to be maybe the
first or maybe the biggest in this newworld where the business is going to
operate on top of Bitcoin rather thanoperating on top of the dollar and a
lot of people who are confused aboutwhat's going on with micro strategy
and think it's a Ponzi on the otherthings, but they don't realize this.

(36:03):
No, this is the world that we'reheaded to, and you need to be
in a world where The only reasonto buy a business is because you
expect it to outperform Bitcoin.
You wouldn't buy a business that youdon't expect to outperform Bitcoin.
Stocks can gain value in two ways, right?
They can go, you can have an expectedgrowth trajectory of the stock as the
business is growing and they couldalso disperse some of their earnings in

(36:24):
dividends back to shareholders, right?
But unless you have a need togradually be converting your stock
to cash over time, you don't reallycare whether what you get out of the
stock is coming in the form of growth.
Or coming in the form of dividendbecause you can always say I have a
stock that's just a pure growth stock.
It has no dividend, but Ijust sell a little bit of it.

(36:45):
I'll sell a few sharesand that's my dividend.
And so if the stock's going togrow, you can create your own art
dividend by selling some shares.
So the idea of a dividend stockversus a growth stock is more
of interest for people who like,want to have hands off management.
They just want to own the stocksand not trade and just have the
cash mule up in their account.
But if you're willing to do alittle bit of, actively managing

(37:06):
your account a little more, youcan create that dividend yourself.
All right, let's move on to this.
Here we go.
This is what I was trying to get toAlex, the seemingly random events
of Brexit, Trump and a rise inpopulism and hate in our world are
not haphazard or isolated at all.
They are all connected to a lossin hope for a better future for

(37:28):
larger portions of the population.
So this is where Jeff's coming from,is he's saying, this is to be expected.
And the funny thing is, this was2020 Trump hadn't been reelected.
We didn't have, we weren'tfar through the pandemic.
I think a lot of these trendsthat he's talking about here,
Brexit had just happened, whichwas when the UK left, Europe.
So So this idea this trend has continuedand it seems to be ramping up, right?

(37:50):
So Trump has been elected a second time.
There's a really angry reactionagainst some of the policies of the
Democrats here in the U. S. Right now,a lot of countries are leaning right.
A few are still, left, but likeCanada's PM just stepped down
their nine year leftist leaderbasically got practically thrown out.
So this Trudeau, yeah, there's, the UKrecently elected Keir Starmer, but that

(38:13):
seems to be going rather poorly, there's,they're throwing people in jail for
Facebook posts, there's some accusationsthat the leftist side over there were,
turning a blind eye to rape gangs,horrible things like that, so I don't know
how much to believe and how much not tobelieve, I don't want to tell you what to
believe from your politics, but my pointis, this, we can all feel this idea that

(38:34):
over the course of the last, I don't know.
Of course, in my lifetime, let's saypeople in the United States used to have
much more civilized dialogue, right?
The, whether you're on theright or the left, people would
basically, you could have a sitand have a civilized conversation.
You'd have a debate, right?
You'd say let me hear your point of view.
Let me hear mine.
And, you'd get, you'd have a,you'd have people debate and
that would be a regular thing.

(38:54):
Nowadays, you go into socialmedia, you go into network
news and it's one flavor only.
They're not going to give theother side a chance to talk.
And it just seems like civilized discourseis basically diminishing and this kind of,
hate and lack of all this stuff, right?
Populism is, where we've gotbasically people that are just
rising up in anger and electing apolitical candidate out of anger.

(39:17):
That didn't really happenbefore Trump, right?
Trump was the beginning of that, at least.
And you can look deeper in the past,and so this is where there's a whole
other book called The Fourth Turning,which I know a number of people here
would know about, where there's thisidea that there's a long cycle where we
have, every so often things get, reach apoint where people get fed up, and they
want to, and this kind of whole thinghappens again, and we've had, Similar

(39:38):
things like this in the past, which,he makes the case that like the world
war two was the last big one like this.
And the difference now is this technologyexponential curve turn has occurred,
We're experiencing an AI revolution.
We're experiencing a robotics revolution.
All these things are happening and it'snot going to just be one where we can
reset back to a new Fiat or, go off thegold standard and go onto a Fiat standard.

(40:02):
These are the things that they've done inthe past to get out of these situations.
Now they're going to needa new way to get out of it.
Cause we've got, I ranthe numbers of the day.
If you, if the U S government paid backthe national debt, At the rate of 1,
000, 000 per hour, every hour they paid1, 000, 000 toward the national debt.

(40:25):
Who knows how long it would taketo pay off the national debt?
4, 000 years, yeah.
It's roughly if the governmentis paying 1, 000, 000 every hour,
in 4, 000 some odd years, we havea chance to pay off the debt.
Now, the country isn't4, 000 years old, right?
Rome wasn't 4, 000 years old, right?
We're in this crazy situationwhere something's, you can't just
continue doing what we're doing we'renever going to pay off the debt.

(40:48):
I think that's basically what everyone'sfiguring out is, so it's time for another
fourth turning, it's time for anotherglobal reset, it's time for another
Bretton Woods, whatever you want tocall it, where they get the bankers
together and decide it's time to racethe board and come up with a new system.
So what's that new system going to be?
Jeff's whole point here is there'sreally only one good choice and
it's going to end up being Bitcoin.

Audience 2 (41:09):
Does he speculate how, so inflation is used by a reserve currency to
control the economies of other countries.
Does he speculate what the, if Bitcoinis the good one, what's the U. S. going
to do or what's other countries going todo to, they're not just going to give up
and be like, okay, you're right, we suck.
They're going to say, allright, does he speculate?

Elwood the HODLBarbarian: We can speculate, right? (41:31):
undefined
We know that Trump has been elected sayinghe's going to create a Bitcoin stockpile.
He's got bitcoiners all around him.
Now, is he going to do it?
I don't know.
Maybe he'll, maybe he justdid it to get elected, right?
Maybe he'll throw us all outwith the baby at the bathwater.
But the whole idea behind Bitcoingame theory has always been the first
country to print their own currency tobuy as much Bitcoin as they can wins.

(41:56):
El Salvador can't, they don'thave their own currency.
They can't print it, but they'vebeen buying a, small, they're
being like one Bitcoin a day.
They're buying a little more now.
Okay.
And they got a loan from the IMF and wentout and bought a bunch of Bitcoin, right?
The first major country that has their owncurrency that prints the hell of it and
buys Bitcoin with it is, and MicroStrategyhas been doing this as a corp, right?

If that's the case, obviously they're going to know that, right?
So they also realize That any countryever prints own currency by Bitcoin
and ultimately all the country

Elwood the HODLBarbarian: kicks off game theory. (42:21):
undefined
That's right.
And that's why, Jeff's like thisisn't maybe this is happening.
We don't know exactly when,but this is going to happen.
How do you get a bun?
It's a prisoner's dilemma, right?
Everybody is incentivized to be first.

(42:41):
You can't get everybody to collude.
They've done it so far, but at somepoint, there'll be a crack like El
Salvador has already said, we're out.
We're doing our own thing.
We're not going to do with the I M F andthe, all these bankers want us to do.
Other countries are following suit.
The cracks in the dam are appearing.
It's coming, right?
The dam is gonna break and we'regonna have a bunch of Bitcoin
reserves, created by nation states.

(43:03):
States in the U. S. Are doing it.
We've got multiple states inthe U. S. Starting to create
their own Bitcoin reserve.
This is happening in real time.
And how fast it happensdepends on how bullish you are.
But, if you believe anythingthat Trump said, which, good
luck if you want to believepoliticians, Trump or anybody else.
But, he claims he's gonna do it next year.
So we'll see.
He might sign something day one

Audience 7 (43:23):
(inaudible)

The problem with that is every
debt is owed to someone, right?
So if, this is the problem with let'sforgive all student loans, right?
This is one of the political tropes.
It's what do you do to the guys who,are owed the money from those loans,
be it student loans, be it corporateloans, be it U. S. Treasuries?
Somebody basically takes a loss there.
And in theory, that'scalled bankruptcy, right?

(44:02):
That's called a default.
And yeah, that's, that is what'sgoing to happen in some form.
There's, multiple ways you can do it.
The most obvious way is to just printso many dollars that you can say, all
the debts paid off because we justwent out and printed, 80 trillion
dollars and retired the debt, right?
That's, that's where the question is,do you think people would settle for

(44:23):
that when they know about Bitcoin?
I don't know.

Audience 2 (44:27):
(inaudible),

it's called
a default.

Audience 2 (44:36):
Default is good for us.
If I owe you a bunch of money,and I say, you know what?
I don't really need any more money.
Because I control your economy,and if you call us, you're
gonna go that way, whatever.
I think, that was part of the strategywith taking over Canada, with Trump
saying that, is look, we have animbalance in trade, we have some
debt with you you're at stake now,so maybe I don't have debt with you.

Elwood the HODLBarbarian: Yeah, it's a great point. (44:58):
undefined
We know that Argentina has defaultedon their debt multiple times, and
yet then, a few years later, someonestarts loaning them money again, right?
Russia's done it, could the U. S.say, we're going to just say all
of our debt owed to China is gone.
Is China going to goto war with us over it?
They might.
I don't know.
They're not going to behappy, that's for sure.
If you look at where the balancegoes, still the majority of our

(45:20):
U. S. national treasury debt,anyway, is owned by the Chinese.
It's a political thing, right?
What is our currency really backed by?
It's backed by the U. S. military, right?
And so that that's what you get into.
Are you willing to have a war over it?
Yeah, or the petrodollar.
Alright, so let's move.
Yeah, go ahead.

Does he speak about the idea of a supply shock?
Because it seems like there's, we knowthere's a limited amount of Bitcoin.
But if everybody rushes to createreserves and in the micro strategy
presentation, you listed like he borrowed42 billion that there's not enough
Bitcoin even satisfying the 42 billion.

Yeah so at least he's buying up all
the Bitcoin that's being mined.
Yes.
Supply shock is clearly partof the Bitcoin thesis, right?
We're seeing it already,and why is Bitcoin?
going on from 102 a weekago down to 95 today.
Does that mean it's going to crater?
I think the long term trajectoryis it's just gonna keep going up
because it's a limited supply assetand it's being adopted not just by

(46:15):
individuals like the people here, butby corporations and nation states.
Yeah, we're gonna have bits of volatilitylike we've had the last week, but that's
really just, Basically big financeplayers playing finance games, right?
They're trying to shakepeople out of their Bitcoin.
They're trying to move the markets.
They're trying to basically, get you tosell because you're going to create fear.
Oh, it's going to drop to 70.
Sell now, and then they scoop it up andbuy it for the ETF sort of right here.

(46:38):
Yeah,

I've been like watching some videos on YouTube and just hearing
the theory of the government seizingbitcoins at some point, like reaching to
a level with all of us as individuals.
Yeah.
Yeah.

This has been a thesis and a concern and a key plank
of, Bitcoiner thinking for a long time.
This is why, everybody who's aBitcoiner here that's been, part of
this building here would tell you.
Don't hold your Bitcoin in the ETFs,you never know the government going
to come in and not tap Larry Fink onthe shoulder and say, that strategic

(47:25):
Bitcoin reserve we want, it's all theBitcoin BlackRock has, it's now the U.
S. strategic Bitcoin reserve, right?
But if your Bitcoin is held in coldstorage and you've got your own private
keys and you've got your own hardwarewallets, they're gonna have a hard
time seizing your Bitcoin, right?
They could put a gun to your head, theycould kill you, they could lock you up,
they still can't get your Bitcoin unlessyou, tell them how to access your keys.
So well, they can, they couldblock the off ramps, right?

(47:48):
They cannot, it's a permissible network.
Like I can send you Bitcoin.
There's nothing thegovernment can do about that.
But if you want to change it intodollars that's a different matter.
But in some point in theworld in the future, we may
not have to do that anymore.
If Bitcoin becomes a currency for real.
All right, let's let'smove on to the next one.
Instead of technology allowing for a15 hour work week, as Keynes predicted

(48:11):
when he penned his 1930s essay, EconomicPossibilities for Our Grandchildren, vast
numbers of people are working longer injobs they rightly fear will soon be gone.
This probably feels familiarto a lot of us here.
So this idea of, hey,technology, Is deflationary.
It's going to createthis immense prosperity.

(48:32):
We all hold a more powerful computerin our hand than what NASA used to put,
the moon lander on the moon, right?
By an order of thousands.
I don't even know howmuch more we all hold.
It's more powerful like thefirst Cray supercomputer, right?
Every single cell phone we've got.
We all have the lifestylethat we all have today.
Even if we just, live in a simplehouse or apartment or, and we basically

(48:58):
live, we eat better, we live betterthan King and then the King of England
did, X hundred years ago or whatever.
It's.
By any reasonable measure, we are livingin an incredible, life of luxury, but
we don't get our time back, right?
Nonetheless, we're all still out there,maybe not all of us, some of you guys
are smarter than me, but I'm still outthere working, 40 plus hours a week,

(49:19):
whatever it is, and showing up for myjob and telling my boss what he wants
to hear and all that kind of stuff.
So why is that, right?
And the problem also is, A lot of thesejobs with the encroachment of A. I.
And robotics are going to disappear.
So here we are all like slaving awaywhen the smartest economists, let's

(49:39):
say you can love him or hate himof the 19 thirties predicted that
we would all be able to reduce ourwork hours down to 15 hours a week.
So we've gained all that productivity.
The world is that much more efficient.
Why don't we enjoy the better lifestyle?
And why don't we get that time back?
And Jeff's point, which I don't knowif I have a quote that perfectly

(50:02):
covers this year, but his point isbecause it's been stolen from you.
What's happened is by the governmentcreating all the inflation to
counteract the productivity gains, theybasically forced you to stay marching.
40 hours a week to try to haveyour pay slightly going up every
year to try to have your assets goup, try to have your house go up.

(50:22):
The government through the moneyprinting and then the inflation
creation has basically counteractedall of the productivity gains that have
come since from the 1930s till now.
And there's these twocounterbalancing things, right?
We have that the technologycreated deflation being offset by

(50:42):
the government created inflation.
And if you think about what they'retrying to do, they're trying
to offset all the deflation ofproductivity gains and technology
gains, plus about 2 percent more.
That's how they create 2percent inflation, right?
They have to offset all the deflationplus create a little bit more inflation.
That's always the goalof the central bank.
And what the net effect of that is,they're stealing the economic gains from

(51:05):
everyday people like us and putting themin the pockets of the bankers and the
central bankers and the governments.
That's where all thoseproductivity gains are going.
They've been stolen by that class,that elite class of people, rather
than being accrued to everybodyin the form of more leisure time.
That's his thesis.
Yeah?

(51:37):
I think you could saylike somebody who, maybe
is, let's suppose you're doing, you'rea compensated individual, right?
So you could probably work lessand get by, but instead you want to
work more and get more stuff, right?
You're ambitious.
You want to have a nicer car.
You own a better house.

(51:57):
That's true.
But let's suppose we're looking atpeople who are just like living paycheck
to paycheck, worried about how they'regoing to make rent and how they're going
to feed themselves and their family.
And like 50 percent plus ofAmerica is those people don't
necessarily want more stuff.
They're basically struggling to get by.
So I agree.
Those of us who live a fairlyprivileged life, why are we still
working, 40 plus hours a week?
We could, slack off and cut ourhours and find a job that's not

(52:20):
as demanding and still be fine.
Probably because we like, buymore bitcoin, for example.
Or whatever else
One of the things that Jeff talks aboutin the book in the first, in that first
introductory chapter is we now think ofthere being like technology stocks, right?
There's the magnificent seven, right?
There's Facebook, Google, Apple Microsoft,Netflix, et cetera, and then, other
tech companies, right in the Nasdaqand the tech companies you would expect

(52:44):
would be accruing all the gains fromthis, advancing technology and creating
these devices that are, creating somuch value that they're deflationary.
But then there's all theother sectors, right?
There's like the packaged goodssector and there's the banking
sector and there's the whatever.
And those are not thought ofas technology companies, right?
The point Jeff's trying to make is we'venow turned a corner where every company
has to be a technology company, right?

(53:05):
Every company is gonna have to adopt AI.
Every manufacturing is gonnahave to adopt robotics.
If you don't, you'll perish, right?
Because you won't be able to competewith your competitor who does.
So effectively, the technology, whichhas been isolated to maybe the tech
sector, is now going to basicallyinfuse every single business, every
single stock, everything, everywhere.
And this is why he says that there'sno longer any way for the inflation

(53:29):
to be kept under control, even by thepowerful governments and central banks.
It's just going to be too massive aforce, and it's going to basically
create, huge changes in our way of life.
Call them positive, call themnegative, whatever you want, but it's
coming and there's no stopping it.
So this is, and there, Yeah,

there's
some people that argue that like withtechnology advancing the way that it is,
that it's squeezing out at the end of theday, capitalism in and of itself is a poor
part of the problem because once it fullycapitalizes, always seeking efficiency.
And so technology isgoing to always advance.

(54:11):
So on one end of the stick, we'regetting pressed by technology now,
canceling out humans in a way is our job.
On the other side of the coin,you have the government printing,
which is now devaluing our dollars,so we have to keep climbing.
Now you have to make six figuresto even live a decent life, and the
average human is not going to get that.
So you're squeezing out.
Truly, this diamond scenario of themiddle class is an illusion and we're

(54:34):
moving into the triangle experience.
We have a few at the topand a massive lower class.

Yes.

I'm wondering, does he talk about that?
Because I feel like thatis what's also happening.
Oh, yeah, he
absolutely talks about the growthin and how how completely polarized
our world has become, how the top.
5 percent of the populationown whatever it is.
95 percent of all the assets are 80.
I don't know what the numberis, but yeah, exactly right.
He talks about that in the book, andthis is one of the things that he says

(55:01):
has been created by this Inflationaryworld that we're in because the way that
you get rich is you own a lot of assets.
And if you live paycheck to paycheckand don't own any assets and you
rent your apartment and you pay, youtake your paycheck and you go by your
basic needs and you have nothing leftover, then Inflation only harms you.
Whereas if you own a big portfolio ofstocks and a big house and all these

(55:24):
other things, Bitcoin, then inflationultimately helps you because it's driving
up the value of your all your stuff.
And it's creating this massive disparity.
And so we're more polarizedthan we've ever been.
All right.
I think we're good.
We're going to go ahead and get down.
I've got a few quotes left.
So we talked about this one already,but governments and central banks will
do almost anything to stop deflation.
If you read anything from the Fed,if you listen to Jerome Powell talk,

(55:47):
Oh, deflation is the biggest fear.
We have to fight deflation.
That's the biggest worry.
We have to prevent deflation.
Deflation is, Inflationis a bit of a worry.
Deflation is the real worry.
That's the way the central bankers andgovernments will always sell it to you.
But, and I think the otherpoint is when you look at,

(56:08):
Actually, I lost the point.
It was in my head and then it was gone,so it'll come back to me real long.
Yeah.

(Jordan) (56:12):
What is the supposed reason that they think inflation is bad?
What are they saying?
Deflation, right?
Deflation, excuse me.
Deflation is bad, and then what?

The question was what is the stated reason?
Why do the central bankers andgovernments say that deflation is bad?
Why do they say it's bad?
And the other question is, why doI think that the real reason is?
The.
The reason that they are afraid ofdeflation is, and this is kind of
part of Jeff's thesis, the entiresystem that we live in is a system

(56:45):
built on growth and inflation.
Everything about the world, we talkedat the very beginning, the world
you've grown up in, you always havethis expectation that, you just got
to get your first job and then you'llearn more money and more money.
You've got to go buy your first houseand then it'll go up and then you
can flip it and get a bigger houseand you got to get, buy some stocks
and the stocks will go up this wholeworld, this whole American dream.
It's not just the American dream.

(57:06):
It's the whole world economythat we're living in.
It's, inflation world, right?
This is what all that's anartifact of, and they know that.
That world cannot is notcompatible with deflation.
And so in the word that they have arounddeflation is if people get so pessimistic
and become so worried about the factthat they want to hold on to their

(57:31):
money because they think, Oh, I don'twant to go buy something now because
everything's just getting cheaper, right?
It's hard to think about.
That's the way we are.
Bitcoin is with our Bitcoin.
I don't want to spend my Bitcoin.
It's gonna be worth morein the future, right?
What if you're there with cash?
I don't want to go buy Bitcoin.
A loaf of bread because bythe end of the week, it'll be,
10 percent 20 percent less.
I'm going to wait to, and soeveryone just starts hoarding cash
and waiting and that slows downthe economy and creates this world.

(57:55):
This is the central bankers talking,this creates this world where demand goes
down, the velocity of money goes down andit becomes very hard to get out of that.
Whereas what they wanna do is stimulatethe economy by printing a bunch of
money, and then basically have peoplehave the expectation, oh, you wanna buy
things now because they're gonna go up inprice and that'll move the money faster.

(58:15):
And so this is why, the central bankersand the government want to think that
economies need to be managed and peopleneed to be spurred the the demand
needs to be spurred and so forth.

Audience 7 (58:26):
inaudible)

I think there's better books that cover it,
but I'm sure he covers it at leastpartially in one of the chapters.
It's been a while sinceI read the whole book.
I've only reread theintroduction recently.
So the inflationary opinion, I wouldsay that, Jeff or most bitcoiners
would have, or I would have is we don'treally know what a world would look like

(58:48):
where you have a deflationary currency.
But what we do know is what theworld looked like when we were
on the gold standard, right?
And gold was really not a thing.
It was not an inflationarycurrency, right?
The world under gold was if you're aking and you want to go to war with
your neighbor, You need to have enoughgold to pay your soldiers, and if you
run out of gold, the war ends becauseyou can't, your soldiers are going

(59:11):
to keep fighting for free, and so itcreated a more peaceful world, right?
Because you couldn't just printup a bunch of gold and hire
a bunch more soldiers, right?
And likewise, all the other things whereBitcoiners say Bitcoin fixes this is what
the deflationary world looks like, right?
It's in a world where youcan't artificially print
and create more currency.
Lots and lots of distortions that wesee in the world today that are created

(59:32):
by money being something that you andI have to work for, but someone else
can create for free that creates anunjust system, and it creates a lot
of these problems, which go away ina system where we have sound money.
Now, sound money could be trulydeflationary, or it could just be, money
like gold, which is out of the technicallyyou can go mine for gold harder.
You can, go.

(59:53):
You can send SpaceX up to graba gold asteroid, hasn't happened
yet, but that kind of thing.
But the world that we livedin before of gold, where there
wasn't a lot of technology thatwould allow us to mine more gold.
And there wasn't, any greatway to inflate the gold supply.

Audience 7 (01:00:05):
And throughout history, whatever
standard, (inaudible)
generally they've always
switched to that standard.
First was the king Proceus, the gold coin.
It is from 500 BC. The Roman silver.

(01:00:27):
And you had Isaac Newton andthe British pound gold standard.
Yeah.
So at the time there was a goldstandard throughout history.

Elwood the HODLBarbarian (01:00:37):
And we've had pretty good you can read The
Bitcoin Standard by Saifedean, or youcan read Broken Money by Lyn Alden.
They cover those topicsbetter than this book does.
Let's move that one for dinner.
Let's get through the last few of these.
Now I'm on to famous quotes by Jeff Booth.
Some of these he covered in the video.
A system problem cannot be solvedfrom the system creating the problem.
So his point here is if you're livingin the Fiat world and you're thinking

(01:01:01):
in Fiat currency, you're thinking indollars and you're trying to figure
out how to solve these problems.
All the ones that we'vebeen talking about, right?
The problems of, why is, why arepeople hate each other more now?
Why are people blaming each other?
Why do we have populism?
Why do we have Trump?
Why do we have Brexit?
Why do we have political discourse?
Why do the poor blame the rich?
And why do the rich blame the poor?
Why does the left blame theright, right blame the left?

(01:01:22):
All that stuff.
It's a problem we're all living andswimming in this system where the real
problem is we've reached near the endof this debt cycle and we've got too
much debt in the system, it can neverbe paid back and someone's going to get
screwed and nobody wants it to be them.
So everyone's trying tosay I ain't going to be me.
It's going to be somebody else, right?
It's all the rich guys fault.

(01:01:43):
It's all the lefty politiciansfault who, is doing this or that.
And so this is the point is if you wantto solve This problem with the system,
you have to step outside the system.
We have to find something that'scompletely outside the system, and
that's the only way to solve it.
And that's his point of Bitcoin.
It's the solution, and youneed to be thinking in Bitcoin.
You need to be denominating your, you needto be on a Bitcoin standard personally.

(01:02:05):
You need to and you need to, and we as asociety need to move to that new standard.
All right, I think Igot a couple more left.
He said this in the video as well,and this is really, This is probably,
if you want, one sentence that's JeffBooth's main thesis, it's this one.
The natural state of the free marketis deflation, and most, our central
bankers and governments, and a lot ofpeople that are, have a fancy finance

(01:02:29):
education will say no, that's not true.
But it's very obvious that it is true.
And it's, again, the iPhoneis your best example why.
The world is going tocontinue to innovate.
There's always going to be new technology.
And new technology is always deflationary.
And as we get the robots and theA. I. s and all that, it's going to
become much, much more deflationary.
So this is an unstoppable force.

(01:02:51):
Unless people are going to suddenlyquit acting in their own best interests,
unless people are going to want tosay, I want to spend more money for
something that gives me less value,we're always going to have, or unless
we get out of a free market, right?
If we have a government that'sControlling everything, and actually
that was the other point I wantedto come back to you, the one I
forgot, it came back to me finally.

(01:03:12):
So free markets and capitalism.
Jeff Booth's point, and youasked, is part of the problem
that maybe capitalism's to blame.
So I think what Jeff would say is, wehaven't been living in a true capitalist
world, in fact we've never have,because we've never had, a truly Sound
money where, gold was closed, right?
But since we went off the goldstandard, we haven't been living in a

(01:03:34):
world where you have true capitalism.
Instead, what we have, you couldcall it crony capitalism, right?
We have a world where it's not atrue free market because someone
controls the money supply.
Someone could create it forfree, and the money supply is
always being inflated away.
So any, the people who are outthere criticizing capitalism and
saying, look, capitalism isn'tworking, look how it's unjust.

(01:03:55):
Look at all the.
We've got all the superrich and the super poor.
Capitalism has failed.
I think what Jeff would say, and I thinkI would agree with him, is what you're
not looking at is real capitalism.
What you're looking at is the impactof crony capitalism with the government
printing the money and the inflation.
If we actually eliminated that componentto it and went to a true capitalism,

(01:04:16):
like the gold standard, you'd havea lot less of that, huge separation
between the very rich and the very poor.
You would, all the, a lot of thoseartifacts that feel like a failure of
capitalism are really a failure of thecurrency and the fact that we're creating
inflation to try to offset the deflation.

(01:04:39):
Yeah, that's true.
That's another hand of thegovernment making winners and losers.
The other half to his key thesis is pricesfall to the marginal cost of production.
Who can explain this one?
I could do it, butanybody else want to try?

Audience 11 (01:04:52):
Yeah, upon competition, as people get more efficient, they can lower
their prices and still make profits.
So it always falls to the lowest.

Elwood the HODLBarbarian (01:05:02):
That's right.
Yeah, James has got it.
It's in any competitive business,whatever you're selling, you're
going to always be incentivized toundercut your competitors, right?
You're going to say we want to We can makemoney, we can sell for less, and if we
can sell for less, we'll sell more, right?
Or we can offer more value for alower price, or whatever it is, be
it cars, be it, hamburgers, whateverit is that you're creating, right?

(01:05:23):
Prices always fall to themarginal cost of production.
The idea is, when you're in a trulycompetitive environment and there's
multiple fierce companies competingagainst each other, not big monopolies,
but like you have real competition anda real free market, Inevitably, any
large profit that any company couldmake on any good or service they're
selling, somebody new will enter thatmarket, compete with them, undercut their

(01:05:47):
price, and this will constantly happen.
And then what will happen is the pricesof anything you want to buy, any good
or service, are always going to bedriven down to very close to cost.
And eventually the profit marginwill get razor thin because there's
a lot of competition, right?
This coupled with this, ooh.
What happened there?

(01:06:08):
This coupled with this, so the naturalstate of the free market is deflation,
so we have this world where technologyis growing and growing and growing,
things are getting, you're, we'reable to deliver more value for the
same amount of money, or we're ableto basically have our money buy more
because of deflation, if again, absentthe inflation that's being artificially

(01:06:29):
created by our overlords, our government.
That on top of the price, the prices fallto the marginal cost of production means
these two things together and you'll haveto work it out for yourself and think
through it and read the book and maybelisten to a few more Jeff Booth podcasts.
But his point here is these twothings together mean that the prices
of every good and service are goingto zero or very close to zero, like

(01:06:52):
any, anything you want, if you want.
A house, if you want food, if youwant a car, all those things are gonna
be going down and down in price whenmeasured in any fair measuring stick.
And he's using Bitcoin as thefair measuring stick, right?
So as we know, a house went from 666Bitcoin to 66 Bitcoin to six Bitcoin.

(01:07:12):
Cars, you name it.
Everything is collapsingagainst the price of Bitcoin.
And what he's saying isBitcoin is the fair ledger.
The one thing that can'tbe inflated or controlled.
And all prices are collapsingto zero against Bitcoin, which
I think is the next quote.
Bitcoin is repricing the world.
This is what we're saying.
This is, again, Jeffsays this all the time.

(01:07:33):
What's happening?
Is Bitcoin number go up technology?
Is it going to, is it going upbecause we're in a bull market?
What Jeff's saying is, what's reallyhappening, the long and broader trend
is, Bitcoin is repricing the world.
We are eventually going to reacha point where in the future,
people, Bitcoin will be money.
And everything's, as priced in Bitcoin,will be a deflationary currency where you

(01:07:55):
can say I could go buy this thing now,but maybe I'll put it off, maybe I can put
it off a year, because it'll be cheaperin a year, whatever it is you're talking
about when Bitcoin's your currency.
And the price of everything isfalling to zero against Bitcoin,
which is what we just said.
That was it.
This is me.
I'm Doug, also sometimes like to beknown as Elwood, the HODLBarbarian.
I'm a quant, I'm aChartered Financial Analyst.

(01:08:16):
I am a barbarian.
I'm HODLBarbarian on Twitter,Telegram, and Discord.
And I used to say that I have nothingto sell you, and this is still basically
true, but at some point I'm, I do managemoney for my family, and at some point
I may be looking to expand that into afamily office plus some outside investors.
Where I like to think about thesetrends in the technology, where we're
headed into this hyper Bitcoinizedworld, what does that mean?

(01:08:37):
If are interested, we cantalk about it over dinner.
And thank you all for your attention.

Audience (01:08:41):
(inaudible)(inaudible) Applause

Stephen DeLorme (01:08:48):
Hey, thanks for listening.
I hope you enjoyed this episode.
If you want to learn more aboutanything that we discussed, you can
look for links in the show notesthat should be in your podcast
player, or you can go to atlbitlab.
com slash podcast on a final note.
If you found this information usefuland you want to help support us, you
can always send us a tip in Bitcoin.

(01:09:09):
Your support really helps us that wecan keep bringing you content like this.
All right.
Catch you later.

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