We have never lived in a global free market. You have no reference frame for what I'm talking about. No one on the planet has a reference frame. And what's happening on Bitcoin is it's imposing a new set of rules and it's ruining people's reference frame.

All right. I'm not sure if I'm going to release this. It might be a podcast, but I'm here with Jeff Booth, author of Price of Tomorrow, your favorite entrepreneur. And I am writing my own book and I'm having trouble explaining this world of inflation and how it will change.

be met by the challenges of deflation and the opportunities as well. And so I'm just going to talk this out with Jeff and maybe it'll be helpful to someone if I do release this, because I think that this is one of the most important lessons that you could learn in Bitcoin as we live in this world that relies on ever expanding credit. But it's completely incompatible with deflation and how technology is inherently deflationary. So, Jeff, first of all, thank you for writing this book. And I'm sorry that I asked you probably the same question over

50 times. You're not the only one. It kind of, it's, and we just talked about this before we jumped on, but the problem is this creates a cognitive dissonance in our brains and we can't grasp the unknown of the new system because we've never lived in it. There's no books that ever reference it. And so everything we've ever learned is outside of a different, inside of a different system.

And this is imposing a new reality. And so, so, so let's go as deep as you want to on this topic, because I think it'd be helpful for others too.

So you've had people come to you and it's like they read the book, they love it, they find it to be fantastic, but they kind of need you to explain the lesson over and over again because it's so contrarian to this system that has inflation baked in the cake. Like why is it so hard for us to understand this? So there's actually virtually no one I know that hasn't gone through the same process. So think of somebody like Luke Grohman. Like he's brilliant. Brilliant. Brilliant.

And he came up to Vancouver and I introduced him to one of the top AI, general artificial intelligence, general intelligence companies, robotics companies. And, and he was talking at the time about the productivity growth miracle that AI was going to drive. And that how that would help solve the debt. And I, and I looked at him and I said, productivity growth is faster deflation. That is the, that's the key driver of the debt.

The exponential rise in credit is to stop and then the manipulation of that money is to stop the deflation because a credit-based system cannot allow deflation. And so even Luke at that time, now Lucas now totally understands this.

I don't know anybody, including myself, who's went through that process, who didn't grapple with some of these concepts because they're so different than anything we've ever worked with. And that first principle, um,

has to touch everything else. It has to touch everything else. So it's a confusing topic for everyone. It's not just if you're having trouble hanging on to this, it's because everybody has trouble hanging on to this. Well, that makes me feel better. Well, why don't we start with breaking down inflation? Because prior to Bitcoin, I didn't really even think about inflation when I was a reporter. If we did report on it, it was

Usually around the target, especially I'm trying to think like the 2010s decade, inflation, I think, was below their target for some of that. But then everyone started paying attention to it after the pandemic. Oh, my gosh. Peaked at 9.1% in 2022, I think June 1st.

But there are multiple kinds of inflation. There's monetary inflation, there's asset inflation, and then there's CPI, consumer price index. Can you kind of break down what inflation really is?

Yeah. And so I would actually rather start from the other way. Okay. Because then as a byproduct, you can see what inflation really is. Because these terms are all a construct from the existing system. So if you start from a first principle and you say, instead of technology being deflationary, if you just start with the natural state of the free market is deflationary.

And you know how you just nodded your head? And it's funny, everybody knows that to be true, even though they can't explain it very well. Yeah. And the nod of your head is actually, you know, you feel that that's true. And why would that be true? The natural state of the free market is deflation. So let's dig into that deeper, primarily because of this. Every single thing that an entrepreneur creates to create more value

is competing against something that was there before and people were using. And if they don't create more value, they fail. Right. And if they create more value, we use the thing that creates more value. And the output of that is some of the other's business is impaired and the new business grows. And the output of that is price is falling.

Okay. Right. And so, and that's, that's been the process throughout time as we essentially, and because what ends up happening in the free market is the scarce thing or the, or the thing that drives more margin creates more opportunities for entrepreneurs to attack that scarce thing and provide more value. So it's a natural phenomenon. And we trade with people all over the world.

to gain more value. Then every component of every components in this, component of computers, components in everything rely on that same principle to try to gain more value for ourselves. So we are part of the equation. We are a critical part of the equation that searches for more value. So you ask yourself if the natural state of that process of us searching for more value is that price is full,

And then we create ideas like artificial intelligence or chips and computers that were made from grains of sand, right? In silicon to be able to create new and better ways to solve scarcity. Then as we create these tools for human abundance, then deflation should be faster and faster.

Because the productivity growth moves faster and faster, and it should flow to all of us, every single person in humanity. Eight billion people in service of eight billion people. That's what the world should look like. And so what does that mean on the surface of what I just said? So first, you could, as a first principle, you should argue what I just said.

Try to poke holes in what I just said and find ways. And people will say, well, what about energy? Or what about some things that are scarce? Well, let's look at energy as something as an example. So in Bitcoin terms, energy price is falling.

And there's a free market now in energy that's using Bitcoin mining to chase abundant energy, to create more energy. So as a first principle to life, we need more energy, right? And we're on top of that work of energy. And if energy prices are falling in real terms in Bitcoin, then some of the other things that we need, let's look at mining or resources that people use as examples that don't fall in price.

Well, look at a mine today versus a mine 100 years ago. And how much labor is in the mine today versus the output versus 100 years ago? And the labor is way less. And if you go to a mine today, most of the vehicles are automated.

Most of the AI systems are moving into that. Pretty soon it'll be robotics into that. So measured in energy and output or abundance or growth, then those prices are falling as well. But we don't recognize those prices are falling, right? Because in real terms, they are falling and they will continue to fall forever. That's actually what Bitcoin is measuring. So in real terms,

And I can tell you why Bitcoin is measuring that. But first, we'll go into the other part of that argument. So first is a first principle. Try to poke a hole in what I just said. So there is no... I haven't seen an argument that can...

critically, critically fight what I just said, that the natural state of the free market is deflation. Coin Stories is proudly brought to you by Bitdear, a global leader in disruptive technology for Bitcoin mining and AI. As a publicly traded leader, Bitdear boasts a massive 2.5 gigawatts of electrical capacity and infrastructure under development across three continents,

Now they're leveraging years of expertise in data center and cloud management into high-performance computing through a partnership with NVIDIA. Learn more at bitdeer.com and explore how they are pioneering the future today. The thought or question that comes to mind, which maybe you'll want to answer now, maybe we circle back to, is, okay, I think of a technology like, let's say, a

Like you've talked about the calculator, right? Before we used to have to pay – I think I paid a fortune for one of those big calculators that I had to have at one point, the Texas Instruments one. And now it's free. Everyone has it on their phone. In order to devise new technologies though –

haven't companies and entrepreneurs benefited from a system that inflates the money supply so that basically you can get investments so that you can borrow and you can start your company. And I would argue that like, I mean, QE gave rise to some of these new big tech companies and the tech darlings that don't have to generate any real revenue. I mean, a lot of them don't make any money for many years. Amazon didn't make money for a very long time, but they were able to do it because someone, because of,

The cost of borrowing was free because they printed money. So I think that you just had a false equivalency because you can't measure the new system. And so you've conflated that the only reason that the free market works is because you print money. And that's not true at all. The free market works because there's always something that's stuck and scarce that creates margin opportunity for entrepreneurs to solve.

Always. But where do they get the money? Like they have to borrow it from someone's capital as opposed to, it has to be deferred consumption capital, right? The real idea of saving versus made out of thin air and you- Yeah, I've always been an entrepreneur and very rarely can an entrepreneur raise debt.

Very rarely when they have an idea. Why? Because it's too much risk for debt. The only money that an entrepreneur can raise for a new idea in something is somebody who believes in them, in equity, that their thing that they're going to build is going to create so much value for society that they're going to return more equity.

So it's not it doesn't require debt. It doesn't require it's a false again, it's a belief that it requires that. And you know what I'm saying is true because you see a lot of entrepreneurs get funding. In fact, Ego Death, what we do is we make investments. So primarily Ego Death is in the risk free rate of the world is 45% IRR. That's a Bitcoin return against the currency.

And so we're making investments in entrepreneurs to beat the risk-free rate of the world by creating value for the world. Right. And then those entrepreneurs are building their balance sheets in Bitcoin because of the value that they're adding. So the process that I'm describing, and we have a lot of money to do that. And why do we have a lot of money to do that? Because other investors believe in our ability to do that.

to be able to choose entrepreneurs and help those entrepreneurs succeed. So it doesn't require doubt. Right. Okay. So if technology is deflationary, then I mean, we do see prices dropping. We do see prices dropping in things like electronics, all the stuff that kind of distracts us. But then you can look at one of those charts. I think Charlie Bilello has put this out before. It's a really shocking one where the cost of everything really important, like a

affording a home, health care, college tuition, textbooks, everything's going up, skyrocketing. And then television, electronics, everything else is going down. So how do you bridge that? Yeah. So again, let's start in layers and start at the top. And again, go through each one of these things. So the natural state of the free market is deflation.

As we create technology and better tools or digital goods that replace physical goods, those goods, because the prices fall to the marginal cost of production faster because it's based on a line of code, fall faster, even faster. So physical goods would fall less fast faster.

because there's still more human labor in those goods. And so, but I'm trying to do this in an order to be able, because it's a compliment, but prices fall to the marginal cost of production. As we create more and more technology and abundance, then that means prices should fall faster and faster. Meaning there is no inflation rate. There's no zero inflation rate. The natural state of the market is not zero. It's not 2%. It's not 5%.

It is negative. It's a productivity rate of the world expanding. And so that today would probably be... Now, you cannot measure what I'm saying from the system you're measuring from. And the chart that you just described, I hate that chart because every single thing in that chart is also manipulated by the money supply. So TVs, computers would have fallen way faster. iPhones would have fallen way faster. The entire chart...

is being manipulated by money supply and everything in it is being measured. So you have to be outside of the system to see the real truth of how fast prices are falling. That's why Bitcoin is outside of the system. It's bounded by energy. It's outside of the system. So you can see the true rate of what I'm talking about. Has there ever been a time in history where

That has been true where prices just fell. So, yes, let's go into that. So first principle, the natural state of free market is deflation. As we create more value, entrepreneurs have always throughout all of time tried to create more value because, and what do they attack? The highest margin opportunities because they make more money, right? So they're trying constantly, the globe, everyone on the planet is trying to

to drive the best value for others. Where's the best value where things are stuck the most. As we do that faster and faster, and we live on top of everybody else who went before us, progress, we solve more problems faster and the natural rate would be complete abundance. You wouldn't need the job you think you need because the prices would fall so fast. And it would keep on doing it forever.

Sorry to stop you, but if prices are falling, how do the producers make money? Because they're competing until there's... How did the producer of the calculator app make money? They made money until... So they made money because you used to buy it for a dollar a month. And then somebody offered it for 50 cents and then offered more features for 50 cents. And then another one offered it for 25 cents, one cent, zero.

And they make money all the way to zero and then they go and then entrepreneurs go somewhere else. Okay. And, and, and, and constantly, constantly. So there's a forever competition in the free market to deliver more value to society. And if you don't, someone else will. Okay. Right. So it's the only thing we've ever found that's in service of us through that competition. It's a cooperative process that builds a better world.

through the process of that competition. So because you'll trade with somebody you don't like because it'll give you more value. You'll say, I don't like how Google's controlling everything, yet you'll use them every day. And if they charge you $5 a click, you wouldn't use them anymore. You'd use somebody else. So it's our own need to gain more value that drives this. And we will trade with anybody who gives us more value. And so when in time, I mean,

Because I feel like even the history of money, which so many of us explore, right, as Bitcoiners, beads and shells to early coins, which got coin clipped and they inflated and it was the fall of empires, which we never learned that perspective in school. And then the paper money, because obviously gold had its physical limitations, paper money built on top of it. It seems like the natural state of human society has been to inflate when you can. Yeah.

So again, this is why I needed to go in stages for this. And then you can push back if something's not true, because this is the thing that's so hard to grasp. So what does that mean? What I just described? What it means is we have never lived in a global free market.

You have no reference frame for what I'm talking about. No one on the planet has a reference frame for what I'm talking about. The way your brain will compare things is compare from what has existed before and then try to make an association with what the new thing is. And what's happening on Bitcoin is it's imposing a new set of rules and it's ruining people's reference frames.

It's imposing what I just described. You actually, if you're living in Bitcoin, you're living in the start of the first global free market the world has ever seen with within time, 8 billion people in service of 8 billion people. And the only thing that changes, the only thing that could change that, what I just said, is if somehow Bitcoin became centralized or insecure. But otherwise, it doesn't care that I'm saying this is it is imposing a free market force on the world.

And everybody else is negotiating against their belief system and that happening. Right. And let's use before we get into inflation and kind of the other side of the coin, let's say if you believe if you're not in Bitcoin and you believe in your piece of paper, then it is true all prices rise for you. Right.

And your life is likely getting worse and worse. And it is also true that the government is centralizing because it has to centralize and it has to misallocate more and more capital and it has to do all these things because it's a structural problem that can't be fixed from that system. It is likely true that from within that system, if you're measuring from that system, let's say you're one of 7 billion people on the planet without assets. You're getting stolen from at such a rate

that you think the solve is from within that system. And you're voting for people to, and why the world feels like it's dividing is that. Let's say you're one of the hundred people or a thousand people with most of the assets. Then you're wondering why those people, why you can't build walls high enough to keep those bad people out while you're stealing from those other people. Because our system is based on, based on theft or inflation, which is based on theft.

Those two viewpoints from inside the system, depending where you would look from, would be they would be true for you. They wouldn't be true for the new system. So now let's say if you're most of Bitcoiners, most of Bitcoiners are measuring Bitcoin from the US dollar. And so what would they be saying? They would be seeing, and it would be true for them, that

I have an asset that is rising at 45% per year with volatility. And my other assets are 8%, 5%, 2%. And there's still inflation. I still live in an inflationary world, but my Bitcoin is rising faster than inflation.

And that would be true for them. And so what they would be doing is they would still be contributing to a centralized world that was extractive and making that stronger from them and wondering why the world's still dividing. Well, because, and then if you were in Bitcoin only, if you really understood Bitcoin, that prices fall forever in it, then prices would fall forever in it. And that would also be true. And so when I say these different viewpoints,

depending on the observer of the system, would all be true for each observer, and they would think they were right.

And so it's and that's why I kind of we've talked about this lots. People find Bitcoin in their own time and when they're willing to because it's just an open protocol. It doesn't care what you and I are saying about it right now. It's decentralized, secure, bounded by energy, and it is repricing the world. And if it stays decentralized and secure, then nothing that I'm saying right now will change that. It will reprice every single thing. It's outside the system repricing it.

But let's go back to now inflation. So if the natural state of that is if the natural state of the free market is deflation and we sit on top of everybody else who's ever gone before us, all of their work and we fix more and more problems, then that means prices should fall faster and faster and faster and forever. But we've never lived in a global free market. You could argue that the rise of the US

and protected by the Constitution, individual rights and freedoms, was the first local, really local free market, where people went from Europe, from more of a control system, and they moved to the U.S., and free markets are more productive. And so the productivity rate of the U.S., the growth of the U.S., bounded by hard currency, was the dawn of the U.S. empire.

And in the late 1800s, they called it the Great Deflation, where those productivity gains had a rising middle class. They were getting richer and richer and richer, and that was the dawn of the US empire. Now, let's just play what would happen through money and what's always happened through money.

If you could control money, then you can control everybody else because you could have a little bit of an inflation rate and steal the productivity gains from everyone else. The more people on your system, the more you've stalled. And so we've always centralized money. Humans have never not centralized money. Gold's always been centralized and repriced through this. And so let's use the free banking era in the US and what that would look like.

So you had free markets, you had first coins before coins were clipped and everything else, but then you had a derivative instrument, a piece of paper on top of the gold. And then the bank centralized the gold. And one bank would say, I'm going to lend out your gold at 50%, right? Because no one ever comes and gets all the gold at the same time.

So they would only have half of the reserve. Half of the reserve. Not fully backed one-to-one. Exactly. But then what would happen with that? It's the same thing we saw with Celsius. It's the same thing we saw with FTX. Same thing we'll see a hundred times, a thousand, million times more on the way to Bitcoin monetizing everything, changing everything, is the next bank says, well, I'll only reserve 30% and I'll give you a higher interest rate. And the next bank says, I'll reserve 10% and I'll give you a higher interest rate.

And what creates is a bubble because everybody goes to the highest interest rate. We are part of the process and we centralize around that. And that bubble creates an economic boom because it's based on kind of faster growth money. And then as that collapses, as everybody chases the same thing, as that collapses, we go back to the government to say, how dare they did this to us?

And government comes in and says, we'll centralize that. And then the same thing happens at the government. And the dawn of the Federal Reserve was this topic by trying to solve banking crises. And by doing that and centralizing, because the demand from population says, you have to protect us from our own errors.

creates the regulation that then creates the uh the federal reserve that then money is co-opted um and the whole thing starts again and that co-option and that and and then then through that that that process and remember we are part of the process we've never been able

to not centralize currencies because we trust somebody else more than ourselves. And so throughout time, and then what happens through that centralized process is then gold is repriced or taken back or another country is invaded to take their gold. And because that can't solve the problem of inflationary monetary system, we first divide our countries.

It's their fault, their fault. And then we have to create a bigger enemy outside of our borders. It has to be their fault. We go to global conflict. We kill millions of people. We then devise institutions, the winner of the war institutions. Let's never forget institutions.

Let's protect this. We'll never do this again. And the winner of the war resets the currency to a new standard against the same thing. And the process starts over. So I've read a couple of-- I don't know if alternative is the right word. But in school, you learned that the free banking era was the wildcat banks. They were really bad. We needed something like the Federal Reserve. And we needed a lender of last resort. But if you do read this time in history,

the free market regulated itself more because if the bank took on too much risk, it imploded and you knew not to store your money there. And so, yes, there were crises, but they were more contained and they were smaller rather than when you concentrate all the power, you develop these institutions that are too big to fail. And obviously the banks wanted a lender of last resort. They wanted a backstop. So, you know, that side of the history is also fascinating because the big, powerful bankers were incentivized to have a federal reserve and then place all the banks

um, place all the burdens and the bill on the taxpayers. Um,

But I do want to talk about the idea of the crack-up boom before these busts because a lot of people are not familiar necessarily with the business cycles, but they've lived it. They can name the bubbles that popped from the 90s to the 2000s to the pandemic and the recessions that followed. Obviously, we haven't had one officially yet here. But the idea that you say in Price of Tomorrow of inflation does have this short-term effect

kind of like a drug addict that's getting high, right? Like it's good, like more stuff gets produced. The money does get allocated places and this system has led to people being able to afford a home or take out that loan for a car, all of that, right? When does it catch up and then crash? Because I would argue that now they don't allow it to crash. Yeah, so the home in real terms, two different systems, the home in real terms is

is falling. The home measured against a piece of paper that's debasing is rising. And so what that means is the system that's based on it, there is no natural rate of inflation. There is no inflation. So monetary inflation, when you talk asset inflation, it's all monetary inflation that drives asset allocation, asset inflation, and all of these misallocations through the market. Because it's a control system

that essentially stops the free market from working. And if you have a control system that stops the free market from working, then you have to constantly rely on more and more control and coercion because you're destroying the free market with your control system. And so it has to, it's just a time window. And one end of that time window has to end in total control

Think about where AI is going in both systems. One system has to be everything's controlled and prices rise against prices falling. And that price of rising is stealing from you to control you. And you're on a hamster wheel to try to get more and more assets within that, creating more control. And ultimately, it has to end in a superpower, some person controlling everything.

And very rarely does it end there. Before it gets there, you go to global conflict because it's just based on theft. It's based on broken systems. And look at some of the control systems in dictatorships that look like that. Because broken money and you're making that system stronger from broken money, trying to get enough

It's somebody has to lose for you to win. Yeah. In that system, it's based on exploitation and extraction. And so, so there is no inflation.

The natural state of the market is deflation and faster and faster deflation forever. That's the, yeah. - Just a quick question on human nature, 'cause I know that you're a believer like me, Jeff, that people are mostly good and they crave connectivity and like we're all seeking love. If you benefit from this type of system that steals,

Are people just not aware that they're crushing the rest of the people? Or is there, I mean, is it all just incentive systems you want to maintain and preserve your position? I think so few people are aware of this. And part of the journey down the rabbit hole and part of the cognitive dissonance for me too is like, it's easy to look at my knowledge now and then say, everyone else should do this.

But 10 years ago, I was equally like, I didn't know. I didn't realize that this, that Bitcoin could actually be, it was a discovery that for the first time in history, we could get off of this path, this exploitative path, and we could move to a competitive cooperative one that heals humanity. I didn't know that. And so some of the things I had to wrestle with in my own cognitive dissonance was,

to let go of lies that I constantly believe that I believed inflation might be the greatest lie ever told.

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The Bitcoin way specializes in personalized one-on-one training to help you become fully self-sovereign. Schedule a free consultation today. All right, back to the show. That somehow that's good for you. People are not ready to hear that. It is so contrarian. Yeah. The greatest lie ever told. And so if you believe that inflation is good for you, like just now attack that, go through that. So why do you believe that?

And people will say, well, well, like you, like you did the free market can't work, right? Because debt is needed. Well, that's not true. Right. So why do you, and you keep on going? Why, why, why? Because what you're really saying, if you believe that is I believe for humans to trade with each other, that there has to be theft and money that my money has to get worth be worth less over time.

And somebody has to be able to make decisions to make my money worth less over time for me to trade with other people on this planet.

So how did they convince? I mean, literally, this is what all the academic books about economics teach. It's like a little bit of inflation is healthy. They have a target rate of 2%. It allows for more flexibility. It allows for stability and growth. How did we get it so backwards? Because a credit-based system has to have inflation to grow. And the credit-based system is insolvent. So if the credit-based system allows, why nobody talks about this, is from a credit-based system,

they are right. And if your entire world structure is a credit based system, then it requires higher and higher rates of inflation to stay solvent or a wipe out and a collapse and deflationary spiral, a collapse and a restart. But if everything was wiped out by that, every single asset, every single

work trade supply chains grocery stores every single thing would collapse right and so the fear of that collapse has people in so scared of that collapse and so unwilling to look at a different type of solution that they're inside this system telling them I'm saving the world I need to do this otherwise those stupid people those poor people will starve to death

when they're actually creating the same problem. And you have seven and a half billion people on this planet literally living in modern day slavery.

unaware that they're living in modern day slavery from this uh from the same system and so take seven and a half billion people out of modern day slavery and add them to the free market where their minds and their uh and can can create value for us too and you'll have a faster rate of deflation you'll have a faster rate of abundance for everybody

Can you break down what you discuss when it comes to, for example, the price of homes, not reflecting their utility, but basically fluffed up by all of this money printing? Because one thing that people celebrate is their house went up in value, only to realize that if they were to sell it, capital gains tax, you're going to have to buy a house just as overpriced. Oh, your property taxes have gone up. And if you're on a fixed income, that's really hard. I mean, there are so many things that we celebrate that we probably shouldn't.

Yeah, so if you had money that lost value, before we talk about houses, let's talk about we have money that loses value. And some people believe that inflation is required for you to spend, right? For you to spend. Otherwise, you wouldn't spend. No one would spend. It incentivizes you. Yeah, it incentivizes spending.

Number one, it's just insanely wrong because you don't spend because of inflation. You spend because you want to buy the things you want to buy because you know a TV gets you get more valuable and you still buy a TV. You buy computers, you buy a whole bunch of things that you know in time will be you'll be able to buy them cheaper and they'll be more valuable. And so you spend when you buy food every day, you have a whole raft of things.

that you buy anyway. So just to say that you wouldn't isn't when we do is so insane. But let's argue the other side of this, what they're actually saying, because what they're saying is for people to buy, I need to steal their money.

I'm incenting them to buy because otherwise, if they don't buy, I'm going to steal more of their money. I'm stealing 2% at a time, but it adds up. But it's more than 2% because it shouldn't be the inflation rate. It should be measured from the actual productivity rate, the deflation rate in this system. So it's way more than 2%. And people know it's more than 2% because their food prices are going up more than that. Their other prices are going up. But think of what that's saying.

To live in a productive society, I have to steal your money so you can spend. And if you want to measure the world from that, and you think that that's a good thing for you, what do you think the world would look like? And if that rate had to increase, or 2% isn't enough to make people spend, I'm going to make it 10%. I'm going to make it 50%. And look at countries that do that. And as grocery store prices are changing daily, what does society look like?

And you can see just in arguing the other side of that coin, that if you believe that, it's so insane. But that's tied to housing. Because what ends up happening is I can't store my money in money. I have to store it in something else. Yes. So a house becomes a monetary premium. And 100 years ago, we lived in a house, neighborhood, everything else. It used to be a utility. Right.

where we'd raise our families. But as it attracts a monetary premium and everybody knows I can't store my money in money, I have to store it in something else. Then the house turns into money and it touches a monetary premium. And instead of having one house as an investor, you have to have 10 or 20 to protect your assets or protect your money from being stolen.

And if you have more and more of those assets, it looks like it's relative to everyone else. You're winning while they are losing at a crazy rate. Relative to the destruction of the world that that causes, you're losing too. Because you can't build walls high enough to keep everybody else out. Right.

if you're doing that. So all parties lose in that system, but it's because money is broken and these assets turn into a store of value against money being broken. Then those assets, if you actually measured those assets from the money supply rate, you see they haven't risen at all. They've risen the exact rate of monetary debasement.

Um, and, um, and, and so it's not the house going up, it's the money going down in value.

Right. I know. I had a viral clip with my last interview with Michael Saylor where he talked about land banking and how the wealthy, they buy up all these homes. They don't even live in them and they price the average family out. And now you see more and more people not able to afford the home, which was once so core to the American dream. It's something I've struggled with. But you write something in your book that I want to touch on because specifically when you're discussing homes, the rising price of assets,

If we leverage those assets like a home, we add debt. Our return is even greater because the asset increases in value while the dollars that we pay back in debt are priced in today's dollars. And with inflation and growth in our incomes due to inflation,

we pay back the debt tomorrow in dollars that are worth less. And so you say housing is a classic example of the leverage. You buy a house in the 1970s for $60,000, income rises, mortgage becomes easier to pay while inflation increases the value of the home to 1.5 million in 2018.

Overall, you wrote this process in the world has driven much of the world out of poverty. But what happens if we can't count on a system of growth and inflation anymore? So I want to touch on that. Like a lot of people would say that, well, without debt, without a mortgage, I wouldn't have a house. But you you disagree. Like if our system wasn't based on inflation, probably homes would be more affordable is what you're saying. Yeah. So so go back 100 years. Go back to go back to when when

early in this US cycle. So people bought houses out of their savings. And they didn't have to work for 50 years to pay off a mortgage. They bought it out of their savings. A Sears home, I think in 1920 something, but you could look up at the stat, a Sears home delivered to your lot

at that time. So you could get a packaged home, windows, doors, lumber package, roof, everything, plumbing, the entire thing delivered to your lot for $2,500. It's crazy. So every single thing inside that component package of the home, lumber, all of these things have also faced more and more automation, more and more value. And all of those materials would be way cheaper on a hard money standard.

So now if you add the inflation rate that's made all of those more expensive, unnaturally made them more expensive, you can see what's happened. So what would life look like in a world where all that $2,500 that was at that time got cheaper and cheaper and cheaper and cheaper? What would houses look like? They would be a utility value again.

But you do like you're saying that this current system has brought a lot of people out of poverty around the world. So so and just like you could say the rise of rise of China based on the same thing, you have this massive unsustainable debt that looked solvent and it brought people out. But that thing is going has to collapse.

has to be repaid one way or the other. So it was, so it looks, it looks good on in a short window, but they, but what it actually over a long window or a lot, a longer term window, it has to collapse.

So let me ask you something, because I know you're in Canada, but so much of American policies influence the world, right? And the U.S. dollars, the global reserve currency. For so long, we did have a strong middle class. And my parents wanted to come here from communist Poland in the 80s. And all they looked at in terms of America was the quality of life and the opportunity here. But in 1971 was when we went off the gold standard. Things were still kind of like

pretty good. When would you say was the inflection or turning point? Because when I started to, I think for me, it was when I went off to college and the great financial crisis hit, I saw a sudden change and I entered into the reporting world. And I was, I was interviewing average Americans who really were afraid about the future, lacking hope, feeling like they couldn't afford the cost of living. There seemed to be this divide that was, that was

created that you you talk about populism in the book right people getting frustrated because they no longer look at the top as a source of inspiration that they feel they could reach it's like they're working harder and harder and actually moving backwards and that breeds that can breed resentment I mean I hate to say this but right now what we're seeing with this

this Luigi Mangione, the killer of the CEO, there's like this whole section of the internet that praises him as a hero because they hate CEOs. They see these, they see them as parasites that are taking, you know, 300 times what the average worker is. And that, I used to never see that in society. If you saw someone wealthy and successful, you would aspire to it. You'd be, you know, like you'd admire it. You'd want to achieve that too. Is it,

like we've turned into people who completely resent anyone who has anything because they have so much and no one thinks it's possible anymore yeah and because it's not based on the free market it's not based on it they know it but they don't know it they don't know it and they don't know it and they think that there's a soul from within there and that's what I said you can't build walls high enough if the world it looks like if you're on if you're on the wealthy side

The world's coming for you, right? Inside that system. And so think about this. There's 2,750 billionaires in the world. There's 63 millionaires in the world and they all can't have a Bitcoin. And they think they're safe from what's happening as it's getting worse and worse and worse. And they can feel it too, right? I would say predominantly, these aren't bad people. These are people who believe that...

it was all made by that from them from themselves and they are they're they're smarter better but but they're sitting on top of a system that keeps making extracts so much from other people to retain their as their assets go up higher and higher they're and they think they're immune from that theft and and they're it's not their fault it's a it's a construct of the system

that is driving this. And if you just go back further to, so again, it's hard for our minds to grasp these things because we're grasping local maximums of different times and trying to compare our situation to a different situation and everything else. And this is such a state change.

that has never existed in humanity before. It's like a state change in physics, going from ice to water, right? Water to ice. Everything is different on the state change. And this state change in physics

in Bitcoin is everything is different. It's imposing the reality I'm describing and it doesn't care about your reality that you've lived in. It is imposing a new reality where we are first times living in a global free market. Now, everybody has to negotiate with their own, right? And it's hard because we've never lived in that. And what you're doing even now, this time when I moved here, gold in 71, when I moved here. So why did your parents move here?

And they moved here because the U.S. was more free than other nations. So it was more productive. But you didn't know, nor did I. And this is one of the hardest things that I had to kind of unwind in my thinking is by living in one of the nations, the Western nations that controlled currency, we were extracting from those others. And their plight was because of our gains.

Right. Right. It was exactly because of our game that they lived the way they did because it wasn't a global free market at that point. And so a lot of the plight of people in Africa and South America was because of the system.

that was created there. And why would they want to get on boats and come to the nations that we're extracting? Of course they would, because they're living in crazy poverty. And then what ends up happening in the US or here is we don't see it. We want to ignore it for so long. When we know, when we can see other nations, what it looks like on the opposite end of that spectrum, because in an exploitative system,

Somebody has to lose for somebody to win. And we were on the winning side of that equation. And we don't see our own thing until it starts to hurt us. And so that's what's happening in the U.S. right now. And there's a whole bunch of people in the U.S. that are now starting to realize that they're hurt too.

by the same process because it's getting to the end of days of the system before it just completely collapses. - And we saw it with the anger, the frustration on both sides with this election. I think it was a referendum on like how many people are just feeling left behind and they just want anyone who promises that they're gonna make their lives easier, right? - How do they? Like how do they?

from a system that must steal more of their energy. Right. Yeah, go ahead. I'll be honest. I mean, I'm so grateful that the universe led me to Bitcoin. And I obviously had a curiosity, something I had a pain point that resonated with the message. And I wanted to learn more. But I was one of those people, which is why I really relate. Because in the 2010s, after my parents lost everything in the great financial crisis, I thought that the

The solution is tax the wealthy. It's the greedy people at the top who are responsible for all this pain and struggling. They have enough of the pie. We need someone to go in there. And I was like a hardcore Bernie supporter. I was

I'm ashamed to admit now, you know, I thought someone needs to go in and like force them to pay their fair share. That's what it was about. And so when I hear that cry from people, I no longer I don't I don't look at them and I think, oh, God, you're so stupid. You don't understand. I just think, oh, my God.

oh, you haven't learned enough to understand what is happening and how and why. And you're placing the blame out of pain, out of struggle, out of pain. And you want someone to come in and fix it. But that's not at the core how it works. And to your earlier point about my parents wanting to come here, I share a small anecdote in the book that there was a time where everyone wanted to get their hands on dollars in Poland.

But it was illegal like that. There was a special police force that would go to homes and check if you were if you if someone tattled on you and said that you have dollars. And that was a that was a great crime. And because obviously they don't want you to have it was like capital controls. They don't want you to have an escape from the system.

Yeah. And that same thing is happening today and that same thing. So if you said right now where we are in this cycle, you have a couple of different that's why I don't price Bitcoin in pieces of paper. And I never do. I don't. So you shouldn't take Bitcoin to a piece of paper to then measure prices. That's ludicrous. It's as ludicrous as pricing in the piece of paper. Right.

Because a currency should price other things. And if you look at Bitcoin as pricing other things, you can see the economic reality of what I'm describing in the global free market. And right now you have this liquidity dry up trend.

and other nations are going through deflationary spirals. And US dollar is getting stronger versus those currencies. And their debts are denominated in the US. So they're getting wiped out. And it's creating a lack of liquidity in the market. And if it goes on for too long,

the market just capitulates like crazy and those houses and everything else people are having assets inside that system that needs way more liquidity to stay solvent starts to roll over so you so you have this interesting dilemma and and people are scared of bitcoin in this example when the next shoe to drop on this is there has to be way more manipulation of money right

no matter who's in office no matter what it's all right okay I want to come to that because I I really um I'm curious your thoughts on the current state of the world and where where we're headed but first I um one big important thing that I would love for you to expand on is when you say asset inflation is wage deflation can we zero in on that for a moment because I think for a lot of people like

for example some people argue well my i get a raise every year right my wages have gone up incomes have gone up but they have not gone up at the pace of assets like stocks and real estate so i i did a measurement i think it was from 2000 where the average annual rate of the expansion of the money supply measured in m2 is 6.5 percent

Homes went up about 4% and I know that's very regional. There were some areas that went crazy in the US, right? But it was 4% over that same time period. Wages went up 2.9%. Why aren't the, why isn't the growth happening also at the worker level? Yeah. And so what I don't say asset inflation is I say inflation is wage deflation. Okay. So it's just the other side of the coin. So what does inflation mean? It means I'm diluting your currency.

to to and by diluting your currency one thing in economics is wages are sticky meaning you don't recognize the dilution of your currency is the dilution of your purchasing power and you can easily be fooled that a two percent raise is a good thing but your purchasing power has been diluted way more than that and and because wages are sticky they don't go up as fast as inflation

And so if wages are sticky now, because these two systems are almost polar opposites, right? If wages are sticky and you have a neutral money and that neutral money in Bitcoin allows deflation, then wages are sticky on the way down too. And so your company has to come to you and ask you to take less money. And so they're just totally inverse. And that's the rise of the middle class.

But why are they last to move? Is it the Cantillon effect? Because as the money gets issued at both the central bank level and banks with the multiplier effect, and they don't have to have a lot in reserves, it goes to investors essentially first. It pools in assets before a company. Right.

Because I think a lot of people ask this, right? Like, well, people are good. Why wouldn't the company invest in the labor and pay if they're making more money and the CEO is able to make $10 million? Why isn't that shared with the workers? So the company is only in business to service other people. And their job is to be, and they're competing against other companies who are constantly trying to provide more value in the free market.

And so they're not incentive in the free market. So let's, let's, let's use, let's, let's say that let's use Google as an example. Tomorrow, Google says, I'm going to give everybody, I'm going to triple everybody's wages. I'm in Google pays a lot, but let's say somebody else, or yeah, let's say, let's say Costco. I'm going to triple everyone's wages. The impact of that is prices rise to you and you won't shop at Costco anymore. And somebody else will be Costco.

because you'll change your purchasing power to the person who gives you the most value. So we're almost hypocrites in this process and it's not, and we think it's everybody else, but we are like our purchasing power and our labor inside the company we're working with, it's the same thing, right? In other words, how could you want your house to go up

But everything else you're choosing to come down in value. You're choosing to rise in value, come down in purchasing price. So those two things are two different systems. And we can't understand that we're the same thing. We're the labor and the purchaser. Right. We're angry that when we go out to eat, it's more expensive, but we want our house to go up in value. But oh, wait, these workers want an increase in minimum wage. Well, they can't

It's so funny how backwards we get it all. And that whole thing, it comes from our own hypocrisy on a system that is miswired for us. Because it's stealing from us and we're confused. I sometimes...

Sometimes I go to places even just for lunch that maybe I went to when I was younger. And I don't know. It's just things have changed. Not only has the quality of the food, let's say, that I'm buying, that has definitely changed. The sizes of things have changed. But also I feel like, yes, a minimum wage job was never something you could

Thrive on but it was like a good entry point you can make enough to maybe supplement what you were doing Maybe it was education or maybe you had you were helping your family But it wasn't like now you can't you can't survive on that type of income You need multiple people living in the same home to afford what once was so easy for one and and I can understand why people would be They don't have a good attitude when they're serving you they don't they don't care because I

they're having such a hard time. How can they express joy and be more customer service minded when it's so hard today? Yeah, it's moving to nihilism and they just don't care about the world's getting worse and worse. They don't, they can't understand, but they don't understand they haven't looked deep enough or they're in so much pain.

They think that there's a solve somewhere else or somebody else's fault. And that keeps them from investigating Bitcoin at a deeper level. But it's their pain that's caused. And then they go and listen to experts telling them that they should live. That should be the way that they live, because a monetary system has to look like that. And because it sounds too confusing.

And people use all these big terms, QE, liquidity, this program, this program, but this program. And it's so confusing that they can't ask the question because they feel like they're not smart enough to know the question. That's actually why I start the other side.

Because if you're trying to explain the Rube Goldberg machine that is just a system with checks and balances to keep the system solvent, that has to have more and more manipulation.

It's almost impossible to chase that down to the sand because there's always another thing. There's always a hidden off balance sheet money that's stolen. There's always the extra programs that are funded. There's always growth of government outside of that system. And trying to chase it, and I know it because I've chased it all down, but trying to explain it from that system is ludicrous. And if you start with the natural state of the free market is deflation.

And if somebody understands that, then they can start to see the generation, the multi-generational, the greatest lie we've ever been told. Wow. Okay. This is really interesting because, yeah, I usually start the conversation with inflation. The last topic I really want to explore with you is where we're going today. And the reason I really want to hear your take is because I feel like right

Right now, Bitcoiners are even bifurcating into two teams, one that is really excited about the government potentially embracing Bitcoin and the strategic reserve and others who see that as a great threat to the freedom technology aspect of Bitcoin and Bitcoin being more of a medium of exchange than just a store of value.

And a lot of people, I think, are so excited about this election and the idea of cutting government spending and reforming some things. But to your earlier points about how this current system is so fundamentally opposed to a deflationary world, they're going to have to keep printing money back.

They're going to probably have to do things that concentrate power. What is your take on the current state of the world? Yeah. And you and I have talked about this before or briefly, and I simplify the whole thing. I try to simplify things. And I say, if Bitcoin fails as a medium of exchange, it will fail as a store of value.

Just as a simple, and here's the thing I know, Bitcoin will not fail as a medium of exchange. And so how I look at, and I can totally appreciate somebody wanting to attract more Bitcoin and measure in the US dollar and leverage against that. And I realize that most people pricing in Bitcoin or pricing in the US dollar are actually through that action because they're not holding their own Bitcoin.

They're not spending in Bitcoin. They're holding it as a store of value only. And they're pricing it in the US dollar. They're essentially a trader. Right. And one day they're going to sell their Bitcoin for something else measured in the US dollars.

And that's okay. It's going to happen anyways. But these two systems are incompatible, right? We've already determined the natural state of the free market is deflation. And the US-based system is inflationary. So the inflationary system has to centralize. Whether it attracts more Bitcoin on its balance sheet or in BlackRock's balance sheet or in MicroStrategy or anything else, it has to rely on inflation.

And over time, if it centralizes more and more and more and people, let's just use again, two opposite ends of the spectrum. And then we can, we don't have to yell at different people inside, but let's just go from first principles. If you have an inflationary system against productivity growth in the world, it has to eventually manipulate money. It has to centralize.

People won't see it. And if you're in the derivative instrument instead of Bitcoin, if you have your money on an exchange or somebody else's platform, it is not your Bitcoin. It is somebody else's Bitcoin. And it will likely be centralized and repriced on you at some point. Or that company will probably get liquidated at some point because the natural state of the free market is deflation.

And because you are inside that system and giving your energy to the system, you will probably underestimate that risk. Similar to the example I gave before, if you were in the bank that gave you a return by leveraging your gold.

you would underestimate that risk it has to centralize because it's based on a based on a structure that has to centralize but does the centralization mean like confiscation like if you leave if you trust your coins to an exchange or you purchase through an ETF issuer that the government eventually will be incentivized to just say oh

This is my domain. At some point, let's say at some point on that, because it has to continue to centralize. And if you continue to do that, and if every, let's just say everyone continued to do that, then Bitcoin layer one would be suppressed just like gold was suppressed by layer two, because we wouldn't care about Bitcoin layer one. We would care about the derivative instrument because that's what we would be spending in. And we would be...

we would forget the innovation that this was decentralized and secure, and we would trust the centralized currency on top. And then you would play games from that centralized currency, just like you play games in gold. You would write derivatives contracts and nobody would see the underlying cent because they wouldn't care. That could still have a massive rise in Bitcoin.

If you're measuring in the US dollars, it could still have a staggering rise in Bitcoin as the US goes and tries to gain more of it. And other countries can play game theory. But it ends in a place that is centralizing.

So I know that this was more of a silly offhand comment by President Trump. But when he said that, oh, we could pay off our debt using Bitcoin. Do you see that as possible? Like to just level, I mean, clear our balance sheet of the debt that we owe because this is the best appreciating asset. So that means selling the Bitcoin at some point. Yeah. Right. And then what would that do?

Right. So so so you could you could have your balance sheet that is more favorably impacted. But but likely that inflationary monetary system has to drive more and more inflation. The U.S. dollar is an inflationary debt based system. So why would you do that instead of just printing more money?

So do you think that we will get a strategic Bitcoin reserve and that the government has some sort of plan in place to create a Bitcoin backed dollar in the same way that we had the petrodollar, which countries are now moving away from? Absolutely. So do I think that that's going to happen? Absolutely. I think that's going to happen. Somebody has to do that. There's going to be a nation state that does that.

And I suspect that because remember, Bitcoin is imposing this discipline. So the countries that go first, just like if you went first in Bitcoin, your money hasn't been devalued. You have more purchasing power. It goes further. Same thing for any government buying. So they can provide more surfaces to their citizens over time.

If they go early. Same for any county. Same for any state. Same for any country. Same for El Salvador. Same for every person. You don't have to wait for your country to do this. It's an open monetary network. Secured by energy. And you just have to move your time. And you have the benefit. So of course. I suspect Trump is going to do this. Early in his presidency. Because if he doesn't.

then it's going to be a shit show for his presidency because you're going to have to print so much money or have a deflationary spiral. And this is a way to essentially print the money into something that drives prosperity for US citizens. And if he doesn't, some other countries will.

Is that because you're saying, I mean, right now things appear great on paper, the stock market's doing great, right? I mean, no recession, we soft landed, but actually there's something around the corner. Um, and those misallocated resources are going to come due and, uh,

And on the other side of it, we do need to strengthen our balance sheet with something like Bitcoin. So the lack of liquidity, when I say liquidity, lack of printing money or interest rates or interest rates that drive a massive funding, more debt, giant, massive debts. So when Powell just said he's not going to decrease interest rates as fast right now, people can. So you have a liquidity tightening in the market.

and people can feel that liquidity is tightening in the market, it will roll over and cause a capitulation everywhere. Stock prices will keep, it will, US dollar will go stronger, a lot stronger, or other countries, other assets will sell off like crazy until there's a change in what's going on.

we're going to we're going to create uh liquidity that liquidity for setting up for next year in bitcoin if you want to measure in us dollars two things are going to happen you're going to have um right now you're facing this liquidity uh crunch and at some point like larry leopard's new book the big print might be launched just in time so you can read it before the big print

Oh my gosh.

of the rise. Right. And so if they don't print into that, they don't gain the benefit of the rise. And so, so I suspect that is going to happen. I suspect that's going to happen early in Trump's term. Again, if I'm, I can't say for sure, but if I'm measuring probabilities, it seems like the natural thing that they have to, they have to do.

um and and if they don't this is just game theory at the nation state level now and uh and and somebody's going to do this wow so we are really early the ones of us who are in it early uh i just saw the other day i think it's a company that ego death invests in they tweeted that they now have 30 bitcoin which doesn't sound like a lot but 30 bitcoin especially if you fast forward out you know 10 20 years it's like

Companies are going to be announcing that they bought 0.002 Bitcoin. We have companies that are adding Bitcoin to the balance sheet every single month. They're growing so fast. They're so profitable that they're adding Bitcoin to the balance sheet every month. And it's staggering. I can't believe we get to do this and most people don't even see it.

Yeah. Yeah. I mean, to be able to have a whole Bitcoin, it's going to be, I think that's going to be extremely rare someday. Okay. I'm going to stop recording. Thank you, Jeff, if I do release this.

Thank you so much for checking out this episode of Coin Stories. Make sure you're subscribed to the show. Also check out our weekly free newsletter at thenewsblock.substack.com. This show is for entertainment and educational purposes only. Nothing should constitute as investment advice and you should always do your own research. I'm always open to feedback and guest suggestions. So please feel free to reach out at info at talkingbitcoin.com. I'll see you next time.