STOP SAVING MONEY! How To Invest In Crypto & Avoid The DOLLAR CRISIS | Robert Breedlove

[Music] robert breedlove welcome to the show man glad to be here tom thank you for having me i am very excited to have you and i have recently gone way down the bitcoin and cryptocurrency rabbit hole uh you come up early and often when somebody does that exploration and i feel like i have a i felt like i had a very um intuitive understanding of what money is you know it's been a huge part of my life pursuing the accumulation of wealth and then you hear the phrase from you which stopped me in my tracks which is inflation is theft and it didn't make sense like it wasn't that i disagreed it was that i couldn't make the sentence make sense and i realized that i always thought of inflation and we're going to get to answering the question around what is money why bitcoin is useful all of that but to me to attack that head-on doesn't work as well as talking about why inflation is theft because i had mistaken it for a fundamental property of nature right i just never thought beyond that inflation exists and it's roughly two percent a year and that is what it is yeah and then i encountered michael saylor and him talking about hyper inflation i was like wait a second what because i literally told my money manager i want to be as close to my money buried in the backyard as humanly possible during covid right because i didn't i didn't know where that was going to leave us um why is inflation theft and maybe what is inflation yeah it's um i don't think you should feel bad not understanding it at the outset i actually have argued in some of my writing that it's a euphemism you know the idea of economic inflation sounds wonderful you want your house to become more valuable you want your portfolio to appreciate you want things in general to go up in dollar value how they actually do that though is very important you want them to be value producing assets uh inflation though and this is a word that really gets twisted because it's got a lot of different meanings do you mean price inflation do you mean inflation of the money supply and the way when i use the term inflation i like to refer specifically to arbitrary increases in the supply of fiat currency so what's happening in that instance is that the actual unit of perception we're using to value assets the dollar is being diminished so fiat currency for people that don't know is just money backed by the government fiat currency the word fiat means by decree so this pretty much means because i said so under the veiled threat of force um and yeah it is you know this gets a little bit deeper into the history of money but the dollar originally was issued to make gold which was money selected by the free market more convenient to make it more portable make it more transactable very difficult for us to settle in physical gold at every transaction right so if you abstract that gold into paper it makes it much more convenient all right really fast because i think these are important pieces to put together so um you said very quickly that gold was what the market had decided on yes why that's a deep rabbit hole we can go that's the money question yes yeah i think we have to at least define what it is that made the market select gold and for thousands of years let me answer the fiat piece and then i'll go back to the gold so we abstract gold into paper to make it more transactable more convenient uh faster and more portable frankly which is one of the properties of money we'll get into about gold the problem is you end up trusting the custodian so you put all your gold on deposit with a custodian that then issues the paper that's redeemable for the gold and over time this becomes the most alluring source of power for governments or anyone that can command force they want to control that source of economic power because it's a it's a call option on everything which is one of the definitions of money by the way so you go from a full reserve currency where each dollar is redeemable for one unit of gold to fractional reserve banking where there's an excess of paper uh beyond what the gold reserves can justify themselves to post 1971 is fiat currency where it is not redeemable for gold whatsoever so one answer for what is fiat currency it is an irredeemable government debt certificate undergoing slow motion default via inflation while its use is forced on all of us on free economic actors no one would ever voluntarily hold a fiat currency why would you ever choose to hold the money that someone can arbitrarily diminish i can answer that question and i think this becomes part of the debate around what this is going to look like in a post-fiat world but the answer is that you trust the government that you were born into a system where the government seems stable and trustable your parents did it and so it it's like a promise made by somebody that you trust implicitly and so for instance i'm relatively bright and educated and until about 18 months ago i i just thought you make as much us dollar as you can you put it under your mattress and you're fine and then i was introduced to the idea of inflation and how even two percent becomes problematic really fast seven percent becomes terrifying and 15 you're devastated in less than a decade i was like what so that put me on this mad scramble as somebody who never wanted to learn about investing i was like i'm good at making money i have no interest in learning about finance or investing and every time i would speak to my money manager i was like this is dumb i don't i don't want to learn about calls and puts and options it's so complicated so given how complicated it is i just want to trust the government so i would choose it out of laziness and terror yes so we're all prone to seek out cognitive expedience and i would say even the dollar itself you don't want dollars per say you don't want a definite amount of dollars you want purchasing power but i don't realize it you're right yes but i don't realize it that's right as a matter of cognitive experience you think in terms of dollars and so and this is where you get deeper into what is money money is also a psycho technology it's like literacy or numeracy it's a software implementation we put into our brain we use it to communicate negotiate plan i mean how many times a day do you think in dollars it's something that's deeply embedded in our cognitive machinery um and that gets into my argument later about why central banking is kind of a computer virus on the human brain but i think what would be an appropriate avenue here is to think okay you've been pursuing dollars your whole life what you're actually pursuing is what those dollars can get you that's what money is right money is the most exchangeable good you can think of it as a call option on anything the market can produce so any good any service any knowledge human time anything people can do any service anyone can render for you money is a call option on that and that's why it's the most valuable or apex good in a marketplace so what it ultimately means is that money is the most important form of property so what we're all really after all of our businesses our lifestyles our governments these are property strategies if you will these are ways to reach consensus on property to distribute property in an equitable way in a way that we all determine to be um fair right fair and equitable so it will probably help here to we're setting up a lot of rabbit holes we'll go into the property rabbit hole first we typically think property is the house the car the stock whatever that's not what property is property is a relationship it's an exclusively acknowledged relationship between the owner and the asset right the fact that you own this house and no one else can come into it if they did you have recourse to uh the government right the apparatus of compulsion and coercion you can call the police force and say hey this guy is violating my property please remove him that is the foundation of civilization when we can go and take our most personal form of property which is ourselves right and this is something we're talking offline self-ownership this is the foundational axiom on which all of this libertarian capitalistic philosophy is based um you own yourself only you can move your arm only you can move your leg right you can't even sell that property you can't trade away your consciousness or your willpower to anyone else you own it and it's inalienable cannot be traded away what you choose to do with that self-ownership you go out into the world and you voluntarily add value to something right you plant a garden you build a business or you trade the fruits of your labor with other cell phone people that's how we create wealth right that's what enables us to focus specialize and create wealth so the basis of civilization is that relationship between the owner and their asset which we call property money is just a reflection of the wealth in the world right the property that we have created through this capitalistic process when you give one organization right this is all based on free market dynamics but when you give one organization legal monopoly privileges which is what the central bank is to now monopolize money and control its issuance they have a mechanism to violate the property rights of all other economic actors that are using dollars that are denominating assets in dollars so this is something that's so fundamental that it it contradicts the premise of self-ownership when we give power away to a single institution that can arbitrarily at a political whim uh choose to violate the relationships of all economic actors using that money watermelon you doing right now if the answer isn't joining impact theory's discord community all i can say is that you are missing out you are missing out on incredible fellow impactivists missing out on exclusive content missing out on direct access to me missing out on what i was talking about in that first sentence and you will miss out on the biggest thing i will ever do you will miss out on impact theory founder's key this was originally code named the full meal deal and it will be your ultimate key to unlocking all the things we are working on impact theory will be leading the charge into this metaverse blockchain nft space and i want to make sure that you don't miss out this opportunity will be huge not only for impact theory but for you as you navigate the new digital world that is coming go to impacttheory.com discord and click start here to get in on the fun and i'm telling you this is really the best community on discord the choice is yours are you going to get in or are you going to miss out there's a link and more info in the description copy all right guys take care and be legendary peace so that's a bit of the what is property rabbit hole we could go into gold next well first let's go back to what you said that nobody would voluntarily choose a fiat currency and the reasoning behind that is okay you have a portion of the total whatever that portion is so the number of dollars you have represents a dollar of the uh a percentage of the total if they can change the total at any time they can dilute you and so your perception is that the value of your house is going up but the reality is the value the buying power of the dollar is going down that's correct and so it creates a the the mental equivalent of an optical illusion yes so you think oh my god i'm winning this is amazing yes uh but in reality you have opted into a system where human beings yeah like you said arbitrarily make a decision as to whether or not they're going to inflate that by just and this was i am embarrassed by how recently i thought this i actually asked somebody and this i think less than a year ago i said where do they take the bags of money that they're printing like whose doorstep are they dropping them off at and of course the the answer is it's a database and it's just a data entry but even that whose data entry are they changing you're right the this is an important point actually uh the us dollar is a one node database it's on an sql server at the federal reserve so it's the list of who owns what dollars and there's one group of individuals that update it for everyone else arbitrarily and to your your earlier point about inflation i think it's best to think about this as like a cap table right when you own a business and you have shares in a business that you're buying and selling you wouldn't arbitrarily give one group the ability to just issue new shares whenever they want and dilute everyone else that would clearly be asymmetric and unfair to to the shareholders yet that's exactly the model we have in money exactly right that you can think it's another way to think about money maybe is it it's a share in the capital stock of the world right my share of the us dollar supply gives me a fraction of whatever u.s dollars can buy it's if again if money is a reflection of the total capital pool or the total savings um that's what it effectively represents in its purchasing power but when one group can just twist the rules to favor themselves and disfavor everyone else you have a disequilibriated structure or an asymmetric monopolized structure um so hopefully that explains inflation and property a little bit it does um putting a real fine point on why it's theft though because it theft implies it implies ill intent i don't know if that's what you intend in fact let's start there do you intend that that ill intent is afoot uh i would say it's more the arbitrariness right i don't necessarily want to dig into the intent so much as mechanically what happens it's an arbitrary redistribution of wealth or property from one group to another so they're diluting the property rights of dollar holders anyone depending on the dollar to store its value is being victimized and those getting access to the freshly produced or printed money first are the victimizers they're the ones actually extracting wealth from that group and this is uh especially abhorrent because if you think who depends on the dollar to store its value the most the poor those living on fixed income pensioners retirees right people living paycheck to paycheck these are the people being stolen from so i'm not going to make a claim about intent there's a lot of arguments about oh no central banking they don't mean to be doing what they're doing they think they're doing what's in everyone's best interests fine i'll accept the argument but mechanically those depending on the dollar are being robbed by central banks and those that receive the newly printed money first and who receives the newly printed money and how is that decided and printed again is by changing numbers in the database yes so a lot of the beneficiaries are asset holders right um name some assets real estate stocks how so i own both of those how do i benefit because i'm terrified of inflation right so why am i not excited because when money the store value function of money is compromised which is what's happening when when we inflict inflation that the dollar's not holding its value over time people market actors are smart right they're gonna move into a reliably scarce asset the most predominant store value in the world today are stocks frankly so stocks real estate all these things that are reliably scarce in an inflationary environment become store value assets so people that hold those assets as a larger percentage of their total net worth will benefit at the expense of those relying on dollars to hold their value because what database entry is changed in that scenario it's not like they gave me more money for owning those right but your home will appreciate right and it's not based on supply and demand so much as it is based on central bank policy so they've if you think about more dollars chasing the same amount of stuff it's kind of the simple way to think about it this implies higher home prices and it's not a consequence of supply and demand in the marketplace per se it's just that diminished unit of economic perception part of the quote-unquote printing of money is the government buying like um corporate bonds and things like that yes it's because that's how they actually get it into the system right they go and buy a bunch of things whether it's making sure that the california government doesn't default on their uh bonds and things like that um and then they actually buy things off of companies right that's right and this is a very i like to say central banking and the fiat currency complex is as clear as mud and twice as dirty right so it's very uh confounding to say the least but um essentially the government is issuing new debt right which the federal reserve is buying so they're injecting dollars into the economy uh that way it's become more exotic recently where the fed's actually spinning up special purpose vehicles to buy corporate debt directly i think equities as well and so what's happening is there's this confiscation of wealth taking place and then the proceeds are being doled out arbitrarily so you could think of this the fed or government beneficiaries of fed policy as picking winners and losers so this is antithetical to capitalism right which capitalism is much more darwinian right survival of the fittest if the business is producing profits and satisfying wants for people then people will pay for it voluntarily and that business will grow if the business is unsatisfactory it's not delivering uh good goods or services to people people will abstain from doing business with that entity and it will shrink and fail and when that business fails its capital will be reassimilated into the marketplace and put to higher and best use that's what capitalism does but when you have this arbitrary avenue of confiscation and and wealth redistribution it it stymies that evolutionary impulse that capitalism gives us so you end up with zombie companies right and it's funny that they use that term zombie which is i had a good conversation with a guy about this how this has entered the modern mythology or lexicon uh interestingly right after 1971 which is when we went off the gold standard the term zombie became much more widely used but zombie companies are that they're lost producing enterprises they're not satisfying anyone's wants but they're kept on life support by central bank policy so we have central bankers printing money to harvest the productive surplus of the economy stealing from the productive economy and then doling it out to these certain entities that are producing losses and keeping them alive so it's um very polluting in that way if you will it's it's it's it's toxifying to the darwinian process and i think that's why it degrades uh everything that's downstream from economics like politics and culture et cetera all right i want to walk through one thread that all of this is me taking liberally from you so tell me where i go straight here um but this was a chain of events that i was like oh my god i now actually understand what's going on and this is terrifying so you've got um world war ii happens and you've got people invading countries and raiding their gold stores because why would you invade if you're not going to get something if you can't steal something these are your words so you invade a country you steal their gold so people like [ __ ] i don't want to get invaded so they started or if i do i don't want them to be able to steal my gold so they started sending gold to the us us ends up storing all this gold for people has a massive amount of gold and gold historically basically money as we think of it the the tangible dollars and bills you would store gold in a protected warehouse somewhere and they would give you a paper that represented the amount of gold so people being savvy started trading that because it's as good as gold because you could go and cash it in so now the us post world war ii has all this gold coming in and we then after world war ii have a the bretton woods uh convention i'm not sure what it was exactly but they say hey we've got all this gold now we're gonna make the dollar the um central reserve currency global reserve currency excuse me and but it's all backed by all this gold that we have so hey we're good but in 1971 for reasons that you will have to explain uh nixon decided to take us off of the gold standard so previously to that if you had a dollar you could actually go redeem it for gold yes now you couldn't and it was fiat it was by decree i say that this dollar has value and therefore it has value uh the problem is that's married to something that happened at some point in the early 1900s that you will have to explain the beast from jekyll island where we decided uh to create a central bank which isn't owned by the government right correct which i still can't believe it's true the federal reserve yeah is not the federal federal and it has no reserves [ __ ] crazy like this is where i'm like language matters well played that's a very good way to get me think that this is a government all right so we now break with the gold standard and so it's we can literally print money so as me the ignorant guy that spent his whole life trying to make money knows nothing about investing i make the money i think i am safe actually putting it under my bed only to realize that there's actually somebody that has the ability to go print a go burr right and they can press a button and it just makes more money and therefore with more money floating around you've got more people competing to buy that loaf of bread or whatever so the cost goes up as one would naturally expect and so now even though i theoretically have my assets are going up and yeah i have more money but i i either have the same buying power so it's just an illusion or i actually have less buying power and it's actually devastating and so now we get into this crazy making loop of it seems like i should be getting ahead but i'm not getting ahead i think of inflation as being a natural act but really in the background are people making these decisions and and we will grant them that they are being kind they're trying to do something nice they're trying to level out volatility if i had to guess is actually their motivation but they level out that volatility by um creating debt cycles and devaluing the currency which you are saying mechanistically it just isn't different than theft um but when people think of redistribution of wealth as a good thing is that just another crazy making thing or are people right to think that no this is good we should be redistributing the wealth well that's a good long question um i would start with this question yeah so let's do this wealth redistribution first of all no one ever thinks it's a good thing when they're the target no one ever no one ever wants to be redistributed from no one ever voluntarily gets redistributed from that would be giving up value or wealth or capital for nothing in exchange i don't think anyone i don't see no one ever but typically no one ever will enter that agreement let's say so maybe we'll track this arc we'll do what is gold how did we get gold why and how central banking was introduced and then we'll get into um really what's happened post 1971 so and i love this question by the way what is money right this is the name of the show and this is the i think the key to incepting these ideas into people or at least getting people to question their socioeconomic reality such that they can peel back the layers of this onion and see through some of these euphemisms we've been getting to or we've been given and one definition of money this is the austrian economic definition is that it's a universal medium of exchange so again capitalism is built on free exchange it's built on voluntary action right self-ownership you go out into the world create things of value you trade them with other cell phone people the result is we create more output per unit of input we become more efficient acting in concert than we do acting in isolation this is the division of labor this is the reason wealth and riches exist because we specialize and we trade with one another in that process something necessarily becomes most exchangeable or most treatable right by definition if we're all trading with one another there's going to be a single asset of that flurry of trading activity that is the most liquid asset the most tradable or exchangeable asset that is money that's how money emerges in the marketplace it is not a government creation has nothing to do with government other than the fact that they monopolize it and try to control it to control people and when you look at money from that first principle standpoint and this is from the austrian school there's a deep long literature on this you'll see that money needs to exhibit five key properties and this is an important point we typically think that we want the thing right we want the table we want the car whatever but we don't we want the services the thing renders to us so you could think almost in the world of economics there are no such thing as goods if you will i know there are goods i know there's tables i know there's cars but what we are after is what services those goods provide to us so when we look at money the five properties that market actors voluntarily favor you could also think of as the five services we seek from money are divisibility durability recognizability portability scarcity so i'll walk through each one of these money needs to be divisible pretty obvious you want to transact at different scales you want to buy coffee in the same day you go and buy a house right so you'd like to be able to give someone a coin or send someone a wire for 10 million bucks to buy a house pretty obvious money needs to be durable in that it's not going to corrode over time if you put a bunch of gold in a safe it's not going to decompose right the half-life on gold is way longer than uh matters to any of us if you put a bunch of oranges in the safe and you're using that as money that's going to rot pretty quickly so clearly durability matters money needs to be recognizable which means that each trading party can verify its authenticity so every transaction and i'm handing you dollars you can certify either with that little pin they mark on dollars to make sure it's a legitimate you know u.s federal reserve issued dollar or if it was gold back in the day they had different techniques for a saying uh the gold's authenticity making sure it wasn't lead plated with gold in fact the name sound money which you've probably heard in your explorations of the rabbit hole that referred to the sound a gold coin made when dropped a certain way so you could verify its authenticity by the sound it would create and this is another reason we introduced coinage and currency because to verify money at every transaction is a very significant transaction cost transaction costs are dissipative to trade right if we want to increase trade and increase wealth we want to reduce transaction costs so by abstracting into currency or putting it in a warehouse and trusting the warehouse custodian we can now trade much more quickly and more efficiently so that i mean that's that's one aspect of money that coinage and currency helped was recognizability money also needs to be portable pretty obvious you want to be able to move it across space right if i'm buying something in another city i need to get my gold or dollars to the other city to give it to the recipient finally and most importantly money has to be scarce and now we typically think scarce is purely a supply side function that's not what scarcity means scarcity occurs when demand outstrips supply so when there is more appetite for the thing then there is a supply of the thing okay so oxygen pretty important for human life there's no price on it why not scarce it's not scarce the supply way outstrips the demand right something like diamonds not that important to human existence yet has a huge price because the demand way outstrips the supply the unique thing about scarcity and money is that money is always scarce because it's a call option on everything all the capital all the savings humans can produce the heart of man is never satisfied we always want more therefore money is always scarce by definition so what market actors tend to favor is the money that has the most inelastic supply so this means the supply that is least subject to change uh by the willpower of others that is what market actors will zero in on and here there's another number of ways to think about this time energy [Music] second law of thermodynamics we cannot create nor destroy energy right we're sacrificing time and energy to earn money you would naturally want the thing you're sacrificing this absolutely scarce time and energy for to be similarly absolutely scarce that would be the ideal money right something that can't be created or destroyed um with money to gloss over a little bit of history monetary metals best satisfied divisibility durability recognizability portability those were just we've tried a lot of experiments we've had sea shells we've had glass beads we've had cattle we've we've used all kinds of things as money right natural market processes determined that monetary metals were the most satisfactory across the first four properties or services that money can render to us of the monetary metals gold was the most scarce meaning specifically its supply was the least vulnerable to change no matter how much effort time energy we poured into producing gold its supply increased the slowest and the most predictably so this gave us a medium into which we could store economic value and we would know with relative certainty that it would only change by about two percent year over year so this gave gold the store value function we traditionally associate with it um that's great right gold is great gold is good money it's been good money 5 000 years uh served a lot of purposes but the big hang up with gold is lack of portability right we talked about this a little bit earlier you want to be able to move it across space obviously but gold's heavy it's physical right it's very expensive to secure it actually in one way it's beneficial and that you can store a lot of economic value in a small area and sort of amortize the security costs around it but when you need to move it that's when there's a lot of risk involved and this was the impetus for introducing what you alluded to earlier were the warehousing businesses so a private enterprise a free market function came to be where a warehouse would take custody of the gold give you the warehouse receipt you can go and transact it it's as good as gold right you have a call option on gold effectively this wasn't introduced to augment the portability of gold well those warehouses became banks those banks became central banks and this is all again i'm not laying out a nefarious scheme here this is the economics the economies of scale associated with gold it is more efficient to centralize custody of this heavy bulky metal and issue abstractions in it it's more efficient to transact in that model than it is with physical gold so that's what drives this process the problem is you now have to trust the custodian you've introduced what we call counterparty risk there's a counterparty to that trade i can trade this paper with everyone and it's as good as gold until i go to redeem the gold from the warehouse and there's the gold's not there or they won't redeem it or a fraction of what this paper represents is available so that is kind of the history of gold into central banking and i guess the history of central banking is quite interesting um i would say that you know maybe this is an important point too that people we're all seeking something for nothing i think this is kind of unavoidable this is the entrepreneurial path right you've got a problem you've got a niche you want to scratch that itch or solve that problem with less effort right the the really successful entrepreneur is almost brilliantly lazy right he's identifying a problem and finding the quicker way a better way to solve it when he makes that discovery he can now sell that product or that service or that method whatever it is into the marketplace and because everyone wants something for nothing they will reward him right this is the entrepreneurial process so that's great we all want something for nothing and it's a valid noble pursuit the problem i think is when we cross that line of self-ownership or of morality and we start seeking something for nothing from others right someone else has planted the garden someone else has built the business someone else's mind the gold and instead of me performing the work to create that value or earn that value i figured that i can just go out and co-opt or coerce or take that property or that asset from that person that's a path for me to get something for nothing but it's the immoral path right so i see this as kind of like the driving force in most human action we're trying to get something for nothing but there's a line that can be crossed and we talked earlier about self-ownership i think that's the line when you violate the self-ownership of someone else that's a problem central banking sort of came about as this natural institution to augment the technological limitations of gold it wasn't portable right but when you put that much power you concentrate that much power into one institution it becomes noxious it becomes corrupting it becomes uh irresistible for some people of lower scruples anywhere in the world to seek that seed of power and this is what i think has really started to deteriorate the monetary system and if you look at the history of central banking it's a lot of leveraging one another right you know you talked about a lot of the gold ending up in the united states this is also pre-world war ii a lot of it has to do with the balance of payments among countries which are just inflows and outflows of capital but particularly when things got hot in europe a lot of gold started coming into the us and again with when we with that much power or money in one place we became the world superpower and so we stepped on to the the theater of war at the end of world war ii and we declared ourselves victorious rightfully or wrongfully so you can make your own judgments about that and then we rewrote the rules of global banking to favor the united states where the dollar is pegged to gold all of the currencies are pegged to the dollar so what this gave the united states is the infamous exorbitant privilege as has been called to be able to print money we could send these paper certificates out into the world and have them send us goods and services in exchange add infinitum right until the system breaks down countries had the option to call our bluff though they could accept these dollars but they could redeem them for gold if they thought were being irresponsible with a monetary policy for printing too much money well countries started calling our bluff after uh we had this huge economic boom and then again glossing over some history i think it was germany they tried to repatriate some gold so they tried to redeem dollars for gold and then we had the infamous 1971 nixon shock that said no more gold redemptions and from that point on and it was said to be a temporary measure as governments so often and infamously say who was it that said that there's nothing more permanent than a temporary government solution here we are exactly 50 years later in 2021 um deep into this global fiat currency experiment led by the united states um and things have really come off the hinges i've point people on this topic to this website wtf happened in 1971.com this is not just economic right this is it's socioeconomic there's you know obesity rates have spiked drug addiction suicide clearly indebtedness right when you think this is tied to coming off the gold standard as the austrians wrote a long time ago the monetary standard and the moral standard are inexorably linked that and this gets into back into property and time preference when money is losing its value over time we're all incentivized to be more short-term thinking this is a de-civilized force and i think it is at i don't want to say it's the sole cause for a lot of the cultural malaise we see in the world today but i think it's a significant contributor okay that gets really complicated so while very interesting i think we pushed that down there's a line that i've heard you say that i think is really important for people to understand because i'm i'm thinking of myself as i first started to grapple with this idea of inflation as theft and i just couldn't make the words even it seemed like such a non-sequitur to me um and that is that there's no difference between i had a realization when i first got introduced to the stock market i couldn't make it make sense until i was like wait this is like baseball cards right these unless it pays you a dividend if it pays you a dividend it's different because it's actually giving you cash but if it doesn't it is literally baseball cards it only has the value that people agree that it has and once they stop agreeing that it has that value then it stops having that value in any real way when i think about inflation the following sense that i heard you say makes all the sense in the world which is that there is no difference between counterfeiting and inflating the amount of dollars in the system absolutely it's just that one we say is fine because the federal reserve is doing it with the sort of implicit um okay of the us government and the other is a person in their basement you know that's right uh doing it on the down low but it's the same thing yeah and then i heard you talk about there was a time where um when um africa was being colonized that i forget what region but they use glass beads as a form of payment and the people coming in we're like word we've got glass manufacturing places you know back home we'll just make more of these beads yeah and when you think about the things that that money represents our time and our energy right you do something you specialize as you said your specialization creates something and then somebody who doesn't want to specialize in that that specializes in something else gives you money it's a call on that good or service and you give them that thing so if you can just go make these glass beads back home and bring you know ships full of them you can slowly milk the efforts of the people that you're counterfeiting their money and when i heard it said and again i also don't imply i don't think that i choose to look at this with no negative uh viewpoint that they're they're not doing anything negative on purpose this is all good intentions just potentially gone awry but when i heard it explained how you would do it if you were nefarious i was like oh my god because you suddenly understand that that there's this extractive nature of i'm either getting you to do this for free or because if nobody ever realizes that the glass beads are fake then you just have inflation right if you give me that thing in exchange for glass beads the next person goes but these are counterfeit then you really lost that's right but if i'm just slowly devaluing it because the prices are going up because wow there's just so many glass beads everywhere um which first would feel like an embarrassment of riches and then suddenly you'd realize wait everything is just re-normalized and either i can afford the same thing or again i can afford less then i was like oh my god now i understand how inflation is theft and then you really do get into i think it was andrew jackson punching a banker in the face you have to understand what happened on jekyll island so it's like before we get to the sort of morality side of this which is [ __ ] fascinating and i really hope that we don't run out of time before we get to it i want to understand jekyll island why would andrew jackson punch a central banker in the face like because i grew up in this system it seems natural yeah but there was a time where this was like governments even by government agencies or or government actors were like met with such suspicion and the founding fathers and how they were like yo you have to be so careful of governmental overreach it's like we don't have that same vibe today yes what happened on jekyll island yes okay great question um i'd like to first reinforce the point you just made that inflation is legalized counterfeiting counterfeiting is criminalized inflation this is not my opinion this is in fact mechanically how it works um and in the piece you're referring to masters and slaves of money i wrote about this debacle in 16th century western africa where they were using glass beads as money and i think this history gives you a good foundation for understanding what's happening today it was really technologically difficult to make glass beads at that time in western africa so they had reliable and predictable scarcity a la gold as we described earlier but only specific to that region european explorers arrive and they quickly notice hey these glass beads are being used as money to you know as a call option on all the wealth this area is producing we can produce these glass beads in bulk back in uh european glass making facilities very low cost uh to the point where they started packing ship holes full of glass beads and this occurred over uh it was over a 300 year period they were shipping in these glass beads so kind of doing it slowly and surreptitiously enough there was resistance actually africans could identify the counterfeit beads they would try to only use the authentic ones the europeans would introduce you know more indistinguishably counterfeit beads so there was back and forth but over time what happened was this multi-century usurpation of african wealth by european explorers through the counterfeiting of money and what i mean specifically here by counterfeiting is that delta in cost of production right the cost of production was high for glass beads in africa therefore they had reliable scarcity therefore they had reliable market value and utility as money the cost of production in europe was low so they could inflate the supply really quickly and use it to basically disrupt the hard money system if you will in africa when i say hard money i mean it's hard to produce but it was not hard to produce for europeans so therefore they could usurp the wealth and this this points to a key property of money is that the market value of the money is going to converge to its cost of production over time so if i can mine an ounce of gold for 1900 and it's selling on the market for 2 000 i'm gonna mine gold as hard as i can all the way up until my cost of production is 1999.99 right so long as there's a profit margin baked in there uh and this also points towards why fiat currency always goes to zero the cost of fiat currency production is effectively zero again it's an entry on the federal reserve's database right control enter another 10 trillion dollars added to the money supply so it's almost intuitive through that lens why the market value of fiat currency historically has always converged to zero which we call hyperinflation so that's all i think a good way to look at it and that's and that's happened many times historically so it's not just it's not purely that these europeans are set out with nefarious purposes per se but there's a dynamic in money or you it needs to be costly to produce to support its market value and therefore support a sustainable trading economy if it's cheap to produce then it will be the market will be flooded with the money and a hyperinflate essentially and so that process again is why people settled on gold it was the most difficult thing to produce so the other thing that happens here is that when you're increasing the money supply like it's very common today in the us we think oh there's not much inflation you know food hasn't gone up a lot whatever whatever but what you're not seeing is that markets if they're functioning properly we should actually have price deflation over time as we get smarter and better and more efficient at making things or providing services prices should be coming down so the fact that we're targeting price increases of two percent is shadowing over what may be we don't know right we don't know what um the increase in market efficiency would actually due to prices absent the central bank intervention so i think this is a very important point too that you know people try to argue that the degree of it is such that it can be ignored or not worried about the two percent's not that big of a deal you know let them take what they need but it's overshadowing the opportunity cost if you will that's being lost like we would have five percent price deflation or more in certain sectors and so to get to the why did andrew jackson punch a central banker in the face which he is as someone that grew up in tennessee he's my favorite tennessean for this very reason i think he also called them a den of vipers and he said he would route them out he resisted um or at least he was instrumental in the resistance of the first two attempted implementations of central bank in the united states the federal reserve being the successful third is because this country was founded on the principles of which we inherited from the magna carta life liberty property as we've touched on earlier the central bank is antithetical specifically to the third one property right it's arbitrarily violating the property rights of some to enhance the property rights of others there's another way to look at it so what is that what is life liberty and property our life is our future right these are the to take to lose your life is to lose your future let's say right liberty is your present it's your present freedom right to lose your liberty is to become a slave right and the the spectrum to slavery is very important to you zero percent tax or theft is a free man right completely owns himself 100 taxation or theft is a slave all the fruits of your labor go to someone else and then so you've got your life as your future liberty is your present property is your past actually it's how you've spent your past infusing nature with your life and liberty right your self-ownership you've accumulated fruits of labor that becomes your property and so the central that those are the kind of the three tenets not only of natural law but also basic morality i don't think anyone would sit here and argue with you face-to-face and say no i have a claim on you more than you do i don't like it it's a non-reasonable argument and again this is this is a priori right this is only you can move your left arm there's no argument that i can formulate that says no i have some claim over your left arm and the actions that it takes yet we have that implemented in this system that can violate property rights if i can violate your property rights i'm effectively saying your self-ownership is limited and that i have a higher claim on your life than you do this is like the rotten core at the heart of modern uh statism we call it capitalism but it's not it's state marginalized capitalism with a communistic institution at its core called the central bank so andrew jackson was a man that understood these principles he understood the importance of adhering to life liberty and property for a not only is it pragmatically the most wealth generative model of human organization but it's also the most humanitarian and ethical right it offers the greatest equality of opportunity to actually have property rights in yourself in your time in your labor so and it's you know thank goodness it's that way thank goodness the ethical humanitarian choice is also the most wealth producing choice otherwise we'd have a really ugly dilemma on our hands uh i think andrew jackson and our founding fathers understood these three pillars of life liberty and property as the most important components of human organization that if we adhere to them we can actually create modes of being that increase our wealth which is to say increase our satisfactions right the heart of man is never satisfied but this is the way to optimize the satisfactions of human beings and create a mode of being that's focused on trade cooperation interdependence as opposed to warfare or fighting so it's to boil it all the way down it's like we can either cooperate and trade let's see cooperate and compete it's very important part of entrepreneurship right it's competition and trade voluntarily with inviolable property and we generate wealth that's a positive sum game the pie is growing or we can violate the property of one another and fight over it and this gets to that old bastion saying that when goods and services don't cross borders soldiers will right we need we're all seeking something for nothing if we don't channel that human action into these uh productive channels of trade and entrepreneurship then we end up over here in violence coercion and compulsion okay so you've got andrew jackson trying to root out the vipers i'm assuming he thought of them as vipers because they can redistribute wealth which is a violation of your property that's right why then do we end up creating the central bank and why did they meet in secret like what give us a little bit of background on that meeting on jekyll island i know they were pretending that they were going on a hunting trip there's yeah it's such a weird confluence of things that are happening right now you have this sense of like distrust of people are working behind the scenes against you but you also have the sense of redistribution of wealth is good like it's it's a very confusing time right now and this is a still confusing to this day people will argue with you um that this you know the fed was set up with very good intentions and that this whole which by the way this book the creature from jekyll island by g edward griffin this was formative to my understanding of central banking and this was pre-bitcoin that i got into this so i would really just encourage the audience to go check out that book it's a it's a big book though you can also read an abridged version called dishonest money i think was one that i gave to my family and friends and it sort of encapsulates the gist of it but to your question i think based on my study of that book that it was done in secret and it was done over a holiday weekend because this was a time when people still understood the ideological importance of life liberty and property we'd learned a lot of lessons from central banking and its failure and its tyranny in england and even before that so it was still fresh enough on the human mind that we we were resistant to its implementation but as far as why it got pushed again it's just something for nothing principle right there if you could found an institution or a business and by the way all organizations are businesses right governments or businesses institutions or businesses they're all property strategies as i call them if you could establish an institution that could generate perpetual profits and be able to paper over its own losses or you can never sustain a loss would you not have a pretty large incentive to establish that organization i mean the equivalent question is if you could magically wish for a money printing machine right here on your table like wouldn't you want that wouldn't you once you had it wouldn't you run that machine until it was absolutely blowing smoke and sparks out the side of it i mean that's central banking in a nutshell is it human beings in this pursuit of something for nothing or in this pursuit of pursuit of wealth frankly right the most powerful incentive in the world we have tried to rationalize and formulate different ways of creating uh socio-economic structures that favored the few that could understand it and create that privilege for themselves at the expense of others all right i think this is where bitcoin needs to enter uh stage left here so i have a quote from you um actually i'm gonna start with a paraphrase from alan greenspan this is you paraphrasing alan greenspan um that sets us up then for your quote so alan greenspan again this is a paraphrase a sound store of value must be made illegal otherwise fiat currency would not be competitive so you've got this idea of so a sound store of money you talked about you dropped that coin but basically that it's the amount of it is fixed inflexible supply okay so that's sound now this is your quote which uh i love and i think sets this up for understanding why the bitcoin guy who has bitcoin tattooed on the inside of his arm like the most painful place to get a tattoo uh says this this entire system we've built is a complex of unintended consequences and bitcoin is an immune response from the collective economy so if we buy into the idea that they didn't have bad intentions to create the central bank they don't have bad intentions to make the printer go burr they just like they're trying to they're trying to policy their way to something that's far more stable which i actually get and when i put like my they don't have bad intentions hat on i'm like word like i get what they're trying to do and i'm grateful that i've grown up in a super stable environment where i was able to go from you know sort of lower middle class to generating real wealth in my life so for me it worked right i was able to jump class like all the things that i was promised with the american dream i was actually able to do and so i'm like yo that stability is amazing um i didn't ever have to um use weapons to build my company which is a whole side thing that i've talked about before where i had former drug dealers working for me long story there's a whole reason why i think it's amazing to give people second chance so anyway they were telling me stories of like people trying to confiscate their product right which for me would have been protein bars so it was like whoa the thought of somebody showing up with shotguns to take my protein was like that's crazy that's a hard way to do business yeah right so it's like okay this is all work for me i like the stability so when i have that hat on i'm like i get what they're at least trying to do but when you try to engineer a system whoa like the number of things that go wrong where you can change whether it's ecological and you're trying to do something and it has you know 10 different knock-on effects or whether it's with money and it has different knock-on effects um why though is bitcoin the immune response yes um it's funny you read that line i don't barely remember you said while you i heard you say it whether you've read it or written it or not i can't say but in a podcast you said um so these principles that the united states was founded upon again that have been refined from the past from like the magna carta one of the most important if not the most important is that principle of inviolable property meaning again property is the relationship between yourself and the value you create or the fruits of your labor which is the foundation of the scaffolding that lets you climb the socioeconomic hierarchy right from as you said lower middle class to where you are today was because you knew that you could hold the value of the value you created and use it to scaffold yourself upward if that foundation were not stable right at least to some extent there would be no way if you'd have upper mobility so again it's we're back to property rights being the basis of civilization itself they're pretty good here they're pretty good in the us you can open a bank account you can put dollars in it your property rights will be violated by inflation when the federal reserve is printing money you're going to now need to outpace inflation with some other investment otherwise your property will be diluted you don't have full property in that money because if you try and wire it to you know i don't know what countries are on the ofac list today iran or something they'll block you and say no you can't do it so you don't have full rights in that property you are being surveyed you don't have full privacy but you have pretty good property rights right relative to the rest of the world bitcoin is the first permanent implementation of this principle we've been refining throughout human history of inviolable property it actually cannot be violated in any way no one can produce more than 21 million bitcoin so it's and i've argued this in some of my writing that although it's an invention we've actually discovered something with bitcoin we've discovered absolute scarcity for money so if we're back to those five properties of money in terms of scarcity bitcoin is absolute it's not relative right it doesn't change we know with you know nothing's um people argue with me about this it's not absolute everything's probabilistic true uh bitcoin has proven itself over 13 years of flawless operation that it does two things essentially perfectly which are turn out a block on one block of transactions on average every 10 minutes and adhere to a supply cap of 21 million so it's the first fixed supply money there has ever been and i don't think you can recreate that because by definition money is a centripetal network effect so it we tend towards one so for the same reasons we had one analog gold we're likely only to have one digital gold this so your property rights cannot be violated by inflation because no one can change the supply cap if you hold a thousand bitcoin you hold 1 000 of a possible 21 million forever right you have a guaranteed fraction of the total money supply you cannot get that level of assurance with any other asset in the world full stop doesn't exist even with gold you can hold all the physical gold you want you're still not immune to some technological breakthrough we figured out figured out how to produce gold in the lab very cheaply we mine an asteroid we mine the ocean floor we find a new south american bonanza whatever you're not immune to any of that but with bitcoin and again it's a bit of a bet because it's only 13 years in but it's done these things perfectly so far if it continues to do what it's been doing for 13 years you have a guaranteed fraction of total money supply so you have an inviolable property right further this is again property is the relationship right we've historically always needed an enforcer so you need the police force you need the military to make sure no one comes into your house and violates your relationship with your house we needed if maybe not necessarily a monopoly on violence but you needed a protection producing enterprise which historically is the role of government to enshrine your property rights the problem of course is that they willed the power to violate your property rights as well which historically has been very tempting for governments and bureaucrats they typically give into it and governments get overthrown over time that's been the cycle we're locked into bitcoin's the first property right independent of the monopoly on violence or independent of uh physical protection production it's an informational property right it's just an alphanumeric string you can store it in any information bearing medium put in your mind put on your computer put it in a song do whatever you want with it and there's no the enforcement is done by the mining network so the algorithm and the free market competition that's going into bitcoin mining is effectively displacing the protection that government was historically necessary to provide in bitcoin itself so it's this radical new you know some people call it a metaphysical property right and that it's just an information bearer asset so gold was really good as a bearer asset and that you know assets equal liabilities plus equity the accounting equation gold was pure equity if i hold gold it's no one else's liability that's really important right i have no counterparty risk if i hold physical gold if i hold dollars that's not true right i have this liability to the federal reserve to the bank whoever whatever counterparties are involved bitcoins the same as physical gold but it's non-physical right it's informational so it opens up this entire new sphere of possibilities and how you custody it you can custody bitcoin in these multi-signature schemas that are all but immune to theft you can chop the key into a bunch of pieces and distribute it geographically you have these military-grade protocols wrapped around it and it gives you an absolute it it is the highest implementation of human self-ownership we've ever had right in the past it's been scribbles on the american constitution or the magna carta and like we'll always adhere to this document no matter what but then you know a few hundred years go by i'm like well you know let's tweak this or change that or add this bitcoin's taken those principles we've used with foundational documents historically and it's permanently emblazoned them in computer code in unbreakable code basically is another way to think about it so it's the invention of inviolable property right it's no longer a principle we've grabbed this principle out of the space of ideas and we've anchored it into reality via the thermodynamic competition of bitcoin mining and it is so radically new and hard to get your head around that it's shattering world views worldwide hey thank you so much for watching this episode i have some important news to announce actually this is the biggest news in the history of impact theory we are launching a very special nft what we're calling the impact theory founders key if you don't know what that means that's okay you can learn all about it by joining our discord community there you will get access to an amazing community and all kinds of valuable information like the beginner's guide to crypto and nfps my friends the internet changed the world in just a decade social media changed the world in a few short years and nfts are going to change the world possibly even faster [Music] if you enjoy watching impact theory you're going to love our discord community and all the things that i've put together for you and i really do not want you to miss out on the revolution it doesn't have to be with us but make sure that you get involved if you want to get involved with us click the link or go to impacttheory.com discord and get started today yeah it really is uh difficult to wrap your head around the part that starts to be a little unnerving for me is all right if if the government has coming to existence um to solidify the will of the people to protect you to protect property but then over time it begins to involve itself in that property and you're in a fiat position now where part of how they get the control is through money and now you have the first true sound money and it has the inelastic properties that make it you know the soundest money of all time the question that i had for michael saylor that he answers very differently than you is aren't the governments going to get really upset about this that their only real option would be to either mimic it in which case now i have that counterparty risk because it's a government that created it versus this sort of mythical creator that pouf has disappeared and other than whatever units he or she or they have is not trying to engage in the system in any way shape or form couldn't change it even if they wanted to [Music] how do we avoid the government coming down with an iron fist and saying yeah this is this is illegal now yeah i do view this a little differently than in sailor who's absolutely brilliant um i think his position in general is that they'll exist side by side fiat currencies in bitcoin i tend to agree in the medium term and i think that's happening today bitcoin's almost trillion dollar asset it exists side by side with countless or hundreds of fiat currencies let's say however in the long run i think bitcoin and again we're back to that the difficulty in understanding it is because it is so far outside our worldview right the idea of gold being disrupted gold is almost the only game that humans have ever played in a way it's foundational to all of our institutions it's a 5 000 year old technology that's so old we forgot what made it valuable everyone knows it's valuable how many people can tell you the five properties of money and what gold was selected the idea that that's being disrupted by this 13 year old digital upstart is pretty pretty wild but i think that bitcoin is an innovation as significant as the gutenberg printing press actually and i think the implications of its emergence will be similarly disruptive to institutions in the world um you know this is late in the 15th century i believe when the printing press was invented the 500 years prior to that there had been roughly 10 million books printed all of a sudden this super cheap and efficient way of reproducing books is invented the gutenberg printing press which was a composite of other inventions by the way it wasn't really a breakthrough in itself it was one guy or guys put together four or five different other inventions and made this thing work similar to bitcoin actually that's what satoshi did he pulled together things that already existed but just put them in it together in a radically new package that we call bitcoin 10 years after the invention of the printing press 10 million books were produced so the amount of books produced in 10 years equals the amount produced in the 500 years prior what did this do this led to the rapid proliferation and dissemination of literacy numeracy again psychotechnologies right these these modes of systemizing our cognition that actually increase our ability to cooperate absent or independent of institutions of the day which the dominant institution of the day was the church they owned a monopoly on knowledge effectively via the scriptoria which is where uh scriptorium i may be saying that you can make it out i have no [ __ ] idea i've never heard that word before they used to have monks copying books by hand right so to produce one book took a lot of labor books were a luxury item but all of a sudden due to this innovation called the printing press the cost of book production plummeted books become much more widely dispersed and it the church at first didn't realize this existential threat once it did it actually tried to clamp down on the printing press uh which created an interesting dynamic that it we we actually started producing books on how to produce the printing press so it saw that this is a good allegory i think that when uh the institution tries to gra tries to clamp down on the disruptive technology the subversive technology let's say it actually drives it to its highest and most useful form of subversion actually so the result of that was a lot more thinkers a lot higher quality of thinking variety of thinking and in general it created a market for heresy right this led to martin luther pending that like why do we need you and that we individuals can now have this independent relationship with the word of god because they've developed literacy and whatnot they don't need to go through this middle man of the church and the printing press effectively led to the dissolution of the church as the dominant institution in the world so we had separation of church and state and all the the benefits that created in the aftermath i think encryption technology and this is deriving a lot of this from the book the sovereign individual which i've recommended highly is similar that it actually disrupts functions of the government that we needed the government previously for we can now provide with code bitcoin being an obvious one right we needed the physical enforcer for property historically now for money the most important property you don't need that enforcer anymore so i think that bitcoin its emergence will actually lead to the dissolution of the nation-state as the dominant organizational model for human beings every time i hear you say that and i may regret saying this out loud but every time i hear you say that i'm like shh like i and look i know that that also would be its own form of social engineering to like hey don't tip off the government like let this happen like give it more breathing room and so there would be unintended consequences there but it's like man so i'm going to give you my layperson's view on bitcoin and why i become so and admittedly i'm not a maximalist so for me this is looking more broadly at like cryptocurrency and the digitization of value which is how i see this so my thesis is technology is a one-way street we will find anything that can be turned into code will be turned into code for reasons such as that you can create absolute scarcity you can now have a blockchain that will track ownership so everybody knows exactly what's going on there's a transparency to the ledger that um that we don't have to be slaves to as many laws of physics you're still going to be tied to energy production but once we are spending once you can tap into the um the basically your nervous system and you can get me to feel like i'm flying where it is indistinguishable for me actually flying then all bets are off and i think given the human desire to pull the levels of our neurochemistry we will just end up going down that route so it just makes sense to me that things will be digitized that money will be digitized that um anything again like i said we can for sure it's more efficient it's more exciting it's more interesting it's it just seems like an inevitable sort of one-way street and so i'm like oh when i heard about this and finally went down the rabbit hole of learning what it actually is and why it works i was like okay i totally get this and for me the the priming mechanism was nfts because i knew that would make sense for my business all of that sort of irrelevant but it took me down the path of of learning what this is and so now i'm like whoa whoa whoa for the first not the first time we're all living through a moment right now where for the first time we as just normal individuals are front running the institutions and so i became obsessed with just getting people to look at it because i can't see the future nor can you nor can anybody so i don't know it's going to work out this could end up being a disaster so i don't want people to just do what i say i want them to go learn what this is because i think it's it is incredibly important for all human beings to be able to think from first principles meaning you know how things work don't just think about things think about the nature of things that's right and when you understand the nature of things you can solve novel problems a problem nobody's seen before nobody can give you a book there is no way um for me to sort of pre-masticate the idea for you but now you have the information like with literacy where you can go on this discovery mechanism and if you should lead to the same conclusion that i have come to which is that oh my god this moment of panic i had where so understand dude that this to me is funny and i really believe that the the purpose and meaning that i'm finding in life is i've had to learn everything the hard way i'm not particularly bright and i can't think fast but i can think really [ __ ] deeply about something and so because i have to learn things the hard way with sort of normal hardware right i don't have particularly i don't have a genius like that but then i can sort of explain after i've really spent some time with it i can explain it is i had this moment of panic where as this guy who managed to create tremendous wealth in his life by spending two decades getting good at business right took me for [ __ ] ever i did not have natural instincts and entrepreneurship but i figured it out and so then have created wealth in my life but now i'm still ignorant to investing so i've created like [ __ ] crazy money money where people be like what and but i don't know how to invest it and so i get involved in the world of investing and i'm telling my money manager just don't [ __ ] take risks all right like keep this [ __ ] as just keep me at the amount of money that i have the buying power that's all i'm looking for i'm not trying to warren buffett this [ __ ] i don't need to die as the richest person on earth none of that matters to me but they keep like haranguing me tom you can't just do that like you and i'm like why and no one could explain it to me and the confused mind says no so they would try to explain mechanisms calls puts options um that you know every seven years i could double my money all that and i'm like i don't give a [ __ ] about that i just i've already made the money i just want to protect my money now and then i discover nfts and then i discover [ __ ] michael saylor and he goes into inflation and like what it means and how it breaks down your buying power and i thought oh my god i have to then keep making money and i don't want to have to keep making money so then i'm like god damn it and so i'm looking at inflation and i'm saying here's one thing i find really [ __ ] distressing no one can agree on what's happening so i'm like then it's not super obvious you've got michael sailor who's like tom you're going to be broke in 62 days and then you've got you know uh other people that are like come on like it's you know we're we're only around two percent like this is all madness and then you've got people that are in between and then i find you and you actually explain what inflation is and now i'm at first principles now i understand it now i know what's happening now i'm really freaked out so now my moral obligation goes to a hundred but i'm like breedlove will you shut the [ __ ] up you're gonna like get the government like they're gonna freak the [ __ ] out and they're gonna clamp down on this [ __ ] and now i'm legitimately like whoa what do we do because my hope is that you're right about the thing and you're wrong about either the speed or the amplitude meaning you're probably right that on a long enough timeline government takes on a new shape but it happens over five or six generations it doesn't happen in 20 years which that would be literally bloody and terrifying but if it happens over a hundred years then i can see it where it just changes the dynamic between us as sovereign individuals and the government because quite frankly i don't think most people want sovereignty not not 100 sovereignty yeah and i'll explain it through bitcoin i know i'm supposed to put it on my cold storage device and put my cold storage device somewhere very safe but i kind of prefer it on an exchange because i want them to deal with like the security and all of that because i'm sure as hell not storing it in my house because i don't want to incentivize somebody to break in so now i've got a i've got counterparty risk of like i'm storing at a bank like where am i putting this [ __ ] thing so i realized whoa like i'm uh i trust myself a lot relatively bright very hard working like hey if anybody can figure it out i can figure it out and i still want somebody else to deal with it yeah it's and that's analogous to wanting a government to be the one to come in and protect my home i don't i don't want to need a gun you know what i mean [ __ ] like that i want a government to deal with some of these things yeah and again uh as a means either a cognitive expedient or outsourcing security like that's natural we want that i should make the important point it's not black or white it's not like banks or bitcoin you actually have bitcoin banks they already exist um you know nidaeg and all these other guys they're just taking custody of bitcoin now giving you traditional banking services but on a bitcoin standard uh the other aspect is it's not you don't have one pot of bitcoin you know you can put a little this bank that bank this bank you can spread out your counterparty risk keep some income self-custody i mentioned multi-signature earlier that might be a little bit beyond the scope of this conversation but you can actually get redundancy plus self-sovereignty so you could trust yourself but not make your house a target by using a multi-signature setup which i think is the most uh useful schema for custodying your bitcoin because you get again redundancy you don't have single point of failure but you also don't have counterparty risk or you have yeah that's going out to like my friends or my family and saying hey you five or six people you also have to sign for this to be moved and one of you hopefully goes did tom really want this right that's what multisig is correct yeah you're you're selecting your circle of trust basically uh and structuring it in a way that a majority would not collude against you right yeah and that they don't probably even know who each other are exactly and there's a whole lot of game theoretic considerations to that but it can be done is the point um and bitcoin enables us you can't do that with any other any other asset so that's radically new um and to your point about breedlove shut the [ __ ] up you're not the only one to say that actually um people have a bit of reticence about maybe discussing the geopolitical implications of bitcoin but the way that i look at it is that these conversations are going to be had it's just a matter of are they being had behind closed doors you know favoring those in the room or are these conversations we're going to have out in the open such that it does not produce such an asymmetric outcome so maybe i'm wrong you know i could be persuaded one way or the other and i've had a lot of smart people give me really good criticism about it but it seems to me that in the digital age you know the ethos of openness and transparency that we discuss what we've done here what world have we created for ourselves how does this radical new asset or form of property change the game and what are the geopolitical implications what does this do in the the broader span of human history to the institutions we've come to depend on um i think it's a fruitful conversation to to be had out in the sunlight um i do think though that it could be you know we're very maybe indoctrinated to some extent that transitions have to be bloody they have to be violent and you know what have you but again a lot of this is rooted in the viability of property again the book the sovereign individual goes into the logic of violence and how this has changed human behavior and human institutions over time one simple example here would be the knight on horseback used to be the dominant force in the land because this guy can afford a war horse afford a suit of armor and a lance the stirrup actually was very very pivotal innovation because before the stirrup the armored knight was too heavy to get on horseback so he didn't have mobility to be the force on the land so the stirrup the seemingly simple invention changed the logic of violence that allowed the knight to that [ __ ] is so fascinating things like that yeah how like what a big knock-on effect they have yes utterly fast so then that was this you know had implications on the feudal age and the night you know uh the the moral code of chivalry all these things emerged from this kind of simple innovation that made the knight the dominant force but then what happened we invented gunpowder so the you know one night they could take on 50 peasants in armed combat all of a sudden one peasant at 200 yards can take out a knight so it all changes again right chivalry collapses all these things so when we change the logic of violence which means you know the economic returns of violence or coercion or the cost of defense the way we organize ourselves changes and so you can think of bitcoin as this new technology that so radically increases the cost to benefit ratio violence and that if someone's properly custody that again in a multi-signature format or whatever there's not any carrot at the end of robbing them you're not gonna get anything right you can go and in bitcoin circles they call this the five dollar wrench attack because you buy the wrench for five dollars and you beat the guy over the head with a wrench until he gives up his bitcoin but if he's custodied it properly there's no incentive even to conduct a five dollar wrench attack so in this gigantic geopolitical upheaval that i anticipate occurring due to the monetization of bitcoin i think it could be very uncertain at first you know governments are going to use their power in certain ways that could be unfavorable let's say but over time as bitcoin continues to monetize and more and more people are holding their wealth in this inviolable property that would i would tend to believe that the incentives towards peaceful cooperation would begin to outweigh the incentives to coercion so although it could be a bit rocky in the beginning i think the long-term outcome is way more fruitful for for humans you know we're and something you said earlier too that maybe people don't want sovereignty full full sovereignty i think people i think incentives are the fertile soil from which our humanity springs actually all right so we think is maybe a bit egotistical that we think that however we are this is the way humans are and the way they've always been but again that's totally not true right pre-printing press most of us were illiterate we didn't have our cognitive software was completely unrecognizable to what we are today no one could sit here and have a conversation like this much less with all these amazing tools we've created in the marketplace since then so i think that by changing the fundamental soil which are the incentives again like the logic violence all these other things that we actually change our character traits and behaviors um i've said that and to try and draw a commonality here i said organizations and institutions are all property strategies you know i think that even dna itself is kind of a survival strategy or property strategy over time right we're all all organisms geared towards reproduction reproduction necessitates territory we need to take territory humans express territory in property right that's how we share and build uh declare property and create more wealth actually by trading through property rights so i think that we our strategies ultimately conform to the invariance on the game board if you will and sailor talks about one of these is gravity right like gravity is the one invariant that all of these strategies whether you're a human being whether you're a building whether you're a government like you're you're adapting your strategy to gravity it's an invariant right you can't if you change gravity it would destroy all the humans and buildings and all the things you can kind of consider bitcoin maybe i'm out on a limb here but i think 21 million this fixed supply asset as the emergence of a new seemingly perfected invariant in the market for money so it forces all of us to change our strategies to adopt this invariant in the in the the space so this is at the individual level the institutional level and at the nation-state level um sounds a bit radical but i think that if you come to see you know dna as a survival strategy propagating through blood flesh and bone and that all the other creations we make are just you know in biology they call this the extended phenotype we have the genotype which is the genetic code the strategy itself we implement it in the phenotype the body the teeth eyes we have the extended phenotype which are our tools and technologies or even our institutions that it's all a strategy and that those strategies will adopt themselves to the invariants that we create for ourselves i think bitcoin is just the perfect invariant money very interesting okay now when i think about the properties of this invariant money one of them is that there's only ever going to be 21 million and now it makes money feel like a zero-sum game to me which may be out of ignorance i always felt like my um getting wealthy did not take from anybody i created something they wanted i gave it to them at a fair price and that worked out to my advantage in that um they got what they wanted in that momentary exchange but i was able to build value in something that somebody else wanted for me and so i could sell that to them uh and now where money is let's say in a world where bitcoin becomes essentially gold it becomes the place where people store their value [Music] there's only 21 million and so now if i'm jeff bezos and i have some just insane portion of that and don't have even really a mechanism to intelligently spend it all uh and this is where we probably have to get to people think that jeff bezos has all that money sitting in a bank and of course he does not even have to sell portions for his company um to get that so does that notion of equities like go away like what does that look like yeah so stock markets will continue to exist but i think where maybe your confusion here is again purchasing power versus the supply of money so the purchasing power of money will continue to increase the more wealth we create through free exchange so although there's only 21 million bitcoin it sounds like you know this absolutely scarce number the amount of purchasing power it can contain is unlimited right you can have an unlimited it's not unlimited right there is a cap like uh there can only be whatever we well you can actually soft fork bitcoin and divide it further so to your point each bitcoin and a lot of people don't know this this is probably important you don't have to buy a whole bitcoin each bitcoin is divisible into 100 million subunits called satoshi's if ever that divisibility were inadequate we're back to that property of money divisibility if that were inadequate liquidity to support economic activity right if bitcoin were global money and one satoshi were worth i don't know a car or something you can soft fork the code which is to say uh it's a simple software update let's put it that way to increase the divisibility of bitcoin so that's built into the code that's built into the code so it's bitcoin is essentially that's one of the reasons better than gold infinitely divisible right it's for only 21 million units but you can infinitely divide it now does that have the effect of printing more money no and this is another common uh commonly misunderstood thing people think that if you can increase the divisibility of it then all of a sudden you're back into inflation right but in the problem with inflation is the distributive effects of inflation it's that this group is producing new money for themselves and you're not when you just increase the divisibility of the money it's it's a it's like a stock treated equally stock split right you had one share of stock now everyone has ten no one was diluted everyone was just increase the divisibility of their stock that's essentially what the soft fork would be to bitcoin to visibility now this this point this is very important because people get this confused the more productive we become as a global economy the more purchasing power bitcoin can contain and that is unlimited that is limited only by the amount of capital we can produce money as a what you're gonna have to define that then because if capital isn't money what is it because money is a form of capital but let me distinguish this non-money capital let's say all the other things right the buildings the stuff the cars the factories the equipment all of the productive factors in an economy non-monetary productive factors which i'm seeing loosely as capital here say non-money capital money is a call option on all that right it's denominating the value of all these assets that are trading back and forth but there's also this people are this reservation demand for money people are just holding money as a call option on all that stuff so another definition of money it's an insurance policy on uncertainty the only reason people are holding money is for its option value we don't know what's going to happen in the future therefore what's the answer to uncertainty optionality if i have no idea what's going to happen i want the maximum number of options to deal with all possible contingencies that's what money is it's another thing money is so if you think of money i'm sorry i'm talking my answer fixed supply bitcoin over here not changing right 21 million but this capital stock non-money non-monetary capital growing as we trade and produce more and more this would imply the purchasing power per bitcoin is growing right it's a call option on more and more stuff this amount of stuff is limited by us how much can we innovate how much can we create but there's no limitation on bitcoin itself and to the point of a bezos or any individual actor holding an outsized portion of the money supply that's capitalism what we have removed though is the ability for bezos because he has such a large position in the money supply to change the rules of the monetary network right and that's what the fed has effectively done it's like we hold all the gold we're going to make the rules bretton woods 1944. we're going to award ourselves this perpetual free lunch on the productive economy for the right of monopolizing money which sounds asinine because it is um that's not possible on a bitcoin standard so the fixity of rules the the unchangeableness or immutability of rules is the bedrock of peaceful and productive cooperation and you know this if you sit down at a table to play poker and if the hand rankings changed every few hands and one guy was deciding i mean he would clean everyone out and that would be that and he would never want to play the game again right you would want to go and find another game to play poker works as a game because the rules don't change we can formulate strategies and compete with one another one another in a productive way but when you if you want to drive people insane and really create a lot of conflict just try changing the rules of the game every few hands and this applies to any game especially money that's what inflation's doing right nobody knows the rules of the us dollar how many are in circulation how many will be in circulation who's profiting we don't even know exactly who the shareholders of the fed are what's their dividend what are their criteria for deciding how much how many dollars to produce who's getting it first who's going to be the fed chair next year like al there's all of this uncertainty injected into managing the asset that's intended to be an insurance policy against uncertainty that it's just oxymoronic in a way and so bitcoin is another way to look at it is the most certain form of money we've ever had and if money is an insurance policy for dealing with uncertainty you would want maximal credibility in the properties of money to deal with that uncertainty and that is bitcoin and that's why people it's like people think you can ignore it or avoid it or i don't want to hear about it but it's like if you like if you prefer wealth to poverty and if you depend on the marketplace for wealth which is the only generator of wealth then you have to pay attention to bitcoin because it's monetizing okay now to go along i hope that answers the difference between purchasing power yeah yeah in fact let me restate it because as you were saying you were [ __ ] melting my brain so it's one of those that's so self-evident that once you hear it you're like oh my god i can't believe i couldn't come to that on my own but so basically it's everything that we create has some value the way that we denominate value of all kinds is with money so whether that's energy water air if you're on mars which was a joke i wasn't able to make when you said it the first time because i didn't want to interrupt you uh give them a call all of that stuff is denominated in whatever the monetary system is so in this case dollars or bitcoin uh so it's an umbrella that by its nature encompasses all things so as you produce more things then it grows to encompass that you could buy all of those things that everything has value that can be traded for that yeah the more rigid the money supply the more people will choose to store their time energy wealth there and then if the capital stock non-money capital stock is growing then that would be reflected in an appreciation of the purchasing power of money and this is like what gold gold has been roughly uh one ounce of gold is equal to a fine man's suit for like 100 years right but if you look at the price in dollars it's gone from i don't know 30 to 1200 dollars that's interesting i didn't know that yeah um i had an insight on that but now it is gone hopefully to come back at some point um so going to the sort of next layer deeper so the book the sovereign individual which i have not read but i've heard you talk about so many times um it predicts a lot of things that we're seeing it predicted cyber cache uh crypto obviously um but it predicted social media like so what what is the key insight to that book that allows it to predict all these things and does it give us any insight moving forward yeah um it called social media narrow casting as opposed to broadcasting which i thought was interesting uh it also predicted that as the digital age started to really progress that governments would uh likely resort to pandemic like um situations to try and reinforce the validity of their borders yikes which is interesting what year was this written this was written in 1997. wow yeah and the key insight is again the the logic of violence and the main point that they make is that cryptography allows us to insulate things or defend assets in a way that is many orders of magnitude cheaper than anything ever before so that the cost of defense has plummeted which you could say has a commensurate uh increase to the cost benefit ratio of coercion right all of a sudden you can't why break into the guy's house if you can't steal his bitcoin why invade the country if you can't take their bitcoin that type of thing that it would have a decentralizing effect on government because government is as large as it is because it extracts monopoly profits through senior age through inflation through taxation right none of these are mutually negotiated free market phenomenon these are all imposed and they're all able to be imposed because people had no alternative there was no alternative monetary system so you have to have a bank account right before bitcoin what else did you do hold barry gold in your yard right right i mean it's pretty hard to transact gold globally um so that's the key insight and the book i'll warn you it's a bit of a dry read but i would highly recommend getting through it i think there's a lot of good insights here yeah that's um it the whole idea of decentralization and all of the things that it's going to change and again my entry point was nfts to because for everybody i think there's going to be something that's relevant to your life that forces you to get to first principles thinking and once you're there and you can predict then it becomes really fascinating and as a person in media what i realized so i got showed something like six years ago he called it v adams and of course it's become uh nfts but he didn't call it that and he showed it to me and i was like yo that's going to change my business like entirely and because when i think about so we're trying to build the next disney and when i think about that you start thinking about we make things in plastic plush toys you know all that stuff and it's very expensive to make the first one and so it gets very difficult to like reinforce your brand and there was this moment back in the 80s where you could do what they called selling from the shelf where you would promote the he-man cartoon with toys on the shelf and so they knew that moms like mine would take you to kmart and you didn't want to go with her to the bra section so you go to the toy section and you would see he-man sitting there and it would tell you that there was a cartoon and so you wanted the toy and you watched the cartoon and the cartoon advertised the toy and so it got into this loop where they could actually make enough money to make the cartoons so anyway i'm thinking about all this stuff and i'm like [ __ ] it's really expensive they've changed the laws and advertising and all that stuff so how am i going to crack that nut i see these v items and i'm like whoa that's going to allow me to create virtual products that because i'm again technology's one-way street i had a really hard thesis that people will value digital things in the same way that they value physical things and but the technology wasn't there wasn't ready for prime time flash forward obviously nft's hit and i'm like whoa okay i recognize this is that v adams thing like i'm all the way in and but that to be able to understand what i could truly do with it i had to learn the technology which forced me to understand blockchain smart contracts all that stuff and then you're like oh my god now you can predict where all this is going to go and that technology the decentralization of things the trustless nature of it all man it's it's hard for me to wrap my mind around the business implications like when you start thinking about dowse because i'm i'm a traditional business guy and so i'm thinking whoa daos are really going to come in it's going to be a fascinating challenge to the traditional way of doing business which is highly centralized and so then i'm like all right is steve jobs right and that by creating this walled garden you can create something better or is wikipedia right or android maybe a better um analogous example where it's this open system and it's more decentralized and you let anybody use your operating system that wants to and man it's the change that's coming and the rapidity with which it's going to hit us is thrilling if you're looking at it through the right lens certainly from a business perspective i've never been this excited in my life ever like this is it's a moment of disruption and so in fact i'm gonna put a slight um i think your enthusiasm for bitcoin captures my enthusiasm for just the moment of disruption that we're living through right now where when you have and because in business it's not scary the way that it's scary thinking about nation states uh until nfts i was looking at trying how do i beat disney at their own game and so i told my team when we founded the company i said our job is to stay in business long enough to figure this out because i don't right now see the path trying to beat disney at their own game is is a losing endeavor they're 90 years ahead of us they have untold billions of dollars in revenue this is all pre-pandemic and they have billions of dollars in ip and i was like like that's a really tall order so the only thing we could do is tell better stories and we were certainly headed down that path of like i think i see something culturally that's happening that they seem blind to and so that was what we were going to capitalize on and then nfts happen i'm like oh my god like the disruption now that's going to happen they will be way slower than will be to adopt the technology certainly to push it to its extremes and so as things disrupt for people that are able to get the first principles faster and think and be able to solve novel problems in a novel way you've got like a real shot at something here yeah now that the way that people are going to think of that moment of disruption the way that they're going to capitalize on this technology i think brings us to this idea of morality and the i don't want to put words in your mouth so i will simply say the note that i took after listening to you speak on the topic was i think bitcoin as god is what i wrote and you said i'm not going to call bitcoin god but uh and it was the fact that those could even be put in the same i'm trying to find the exact note that i took anyway it was close to that so how do these come together how does jordan peterson begin to influence the way that you think about all of this religion morality and what's happening with bitcoin well that's a lot done back there i would first the nft piece i don't know a tremendous amount about nfts but what i would say and this is in regards to centralization versus decentralization it's so many people get lost looking at other alternative crypto assets or nfts or other projects thinking that they have the same trust minimized properties as bitcoin to say that they are truly decentralized no one has a political attack vector on the network or the good or whatever it may be it is my strong opinion that bitcoin is the only asset that is truly uh credibly exhibited the qualities of decentralization right it's undergone a fork war people have tried to increase the block size change the supply all these things and bitcoin is kind of tried and true it's battle tested so with nfts i would just say and crypto more generally nfts and crypto i don't think decentralization has been achieved anywhere else so i'll just leave it at that just so people that is the key difference is that bitcoin is the one asset in the world that no one can control um one thing i want to say about the disney battle this may work in your favor actually is that should we move should bitcoin monetize and succeed as i have laid out this will move us to a much more free market lasse fair capitalistic market environment where something like ip goes away ip won't exist because ip right now is premise on litigation right someone violates your ip you go and sue them in a bitcoinized world it's going to be much more cost prohibitive to enforce ip why so that might work in your favor i don't understand that um largely because property won't be viable right if bitcoin were the sole money in the world it would be really hard to sue someone for their bitcoin be very very hard to enforce that now had you staked some of that bitcoin or the local governance model that assumes though that governments have essentially vanished from how we think of them now right they will have transformed significantly yes um the point being that it's much less economic to enforce ip i could just leave it it is it is a long game thing and it would be a dramatic change but might work in your favor trying to take out disney yeah that's interesting we could definitely get lost in that rabbit hole but i don't want to deprive people of hearing this whole thing about morality yes yes yes so very interesting uh we've published a book that i authored with jimmy song as a fellow bitcoiner and a group of others called titled thank god for bitcoin um this has received some you know some criticism because people always go back to this um quote in the bible the love of money is the root of all evil we're by no means advocating the love of money or the love of bitcoin or that bitcoin is god by the way or simply we wrote a moral treatise on the history of money i don't think we mentioned the word bitcoin until two-thirds or three-quarters of the way through the book and we looked at it through a judeo-christian lens and what the bible references money many many times and i think it it's written to be very accessible almost like cs lewis style very short punctuated sentences you can read the whole book in maybe two hours um but the people that do read it report it being very transformational to their understanding of money right you go in with this question just like what is money what is bitcoin and you leave with a good foundational understanding of answers to those two questions um this and this is part of my own personal journey i guess i was raised in tennessee i grew up christian i was in church on wednesdays and sundays um i was always a very scientifically minded young man i became very fascinated with astrophysics when i started reading by myself around the age of 11 i went straight to the deep end of the pool as i like to joke i was reading stephen hawking and brian greene jesus i was just enamored looking up at the night sky like what is all this and so i thought okay now that i know how to read i'm gonna go try and figure it out i was reading these books i could barely comprehend but i think it just sparked this deep curiosity in me but at the time it also inspired a bit of an atheism in a way i was just very scientific you know like i thought christianity was almost a fairy tale at this point and this this persisted through most of my teenage life and then later on uh i'll gloss over some of this but i discovered yoga yoga was very transformational for me uh reintroduced me i guess to the spiritual aspects of life i got into meditation meditation changed my life i always had trouble sleeping i was an overthinker with meditation once i learned lights out in 30 seconds every night now which is a big deal if you can't sleep you know uh reliably and so i was less scientific more spiritual but i had not revisited christianity until through bitcoin actually i was introduced to jordan peterson and his work and uh he's in my opinion one of the greatest living lecturers i would call him a philosopher you know he really gets at the fundamental nature of things and he looks at it looks at the world through many different lenses and in that way that method of kind of conciliance right looking what he calls multivariate analysis looking at different topics through different lenses uh one of the main ones is the excuse me judeo-christian lens he lended a lot of credence to religion to me all of a sudden it was not this fairy tale that i dismissed in my younger years and i started to really look into it um more closely i'm still looking if it wasn't that fairy tale then what what does it hint at so my current view and i love peterson's answer to this that people often ask him does he believe in god and he says i don't believe in god but i act as if he exists so in my mind that is peterson putting the emphasis on human action that's what matters and if you look at the austrian school you'll learn that all human action is an expression of value to walk across the room implies that you value being on the other side of the room more than you value sitting where you currently are so we are constantly and unavoidably expressing our values through action and looking at christianity it is this the bible specifically it's not just a moral text right it's kind if you read it from the old testament to the new testament it goes through this moral development of humanity there's a lot more kind of barbarism early on and it shows how we learned and developed and changed over time so i think it points to the emergence of morality morality sort of emerges from the rules of the game if you will like we can set our sights on something and work towards it but the ultimate implementation of the morality really depends on the actual implementation of systems and technologies in a way so peterson has this definition of god god's such a loaded term i hate even talking about it sometimes because people either oh guy in the sky yeah right or god is everything you know you can't even talk about it uh peterson has a number of definitions one he says in that hierarchy of values right we're always we all have this rank ordered set of values in our mind whatever we're doing in the moment is an expression of our current value if i take a sip of water it means i value a sip of water more than talking in that moment peterson says that god is the highest value in the hierarchy of values so it's almost like we're expressing god through action in a way god is kind of like this animating force or principle in life um i think it was gk chesterton said that a dead thing only a living thing can swim upstream a dead thing can go with it maybe i inverted that but it's no no that's right there's this principle to life that you know the entire universe tends towards greater entropy more disorder but life is antithetical to that we actually are an organizing force right we we negate entropy we construct order um and that is the ancient idea i got from peterson's work that's in genesis in the bible it's that god is that force that courageously confronts the chaos of nature converts it into good and useful order and i think that force and that principle is embodied in the entrepreneur actually that's what the entrepreneur is doing right you're going out into uncertainty you're putting your skin in the game you're staking your life your capital your ideas your reputation everything trying to pull something out of that unknown or that chaos that's useful and good for others so i think and the entrepreneur is the elementary unit of the free market right so i think the free market itself this idea of freedom being a creative principle is very closely connected to god another maybe another way to look at god is this you know it's clearly he's eternal he i'm not anthropomorphizing i'm just using what's there this principle is eternal which means it's outside of space and time what other elements of experience do we have that are outside of space and time truth love freedom right these things that are timeless right and they're they're very important to to all these things we've talked about right these foundational documents markets uh revolutions they've been fought over these timeless ideals and i think somehow god is kind of a composite of those in a way and i don't think it's a coincidence that they're all creative principles right truth as i've argued in a lot of my writing markets discover truth they discover prices and tools love is clearly a creative principle that's how we all got here uh and then freedom you know freedom is how we maximize wealth in the marketplace free trade as we've talked about today so this is i'm way out there on the the philosophical side of things but to try and bring it home um if god is the highest value in a hierarchy of values another definition peterson has given of god is the truthful speech which rectifies pathological hierarchies and i would define a pathological hierarchy as one that is premised on anything that negates truth or freedom or love and that is precisely what our current socio-economic hierarchy is built on central banking destroys price signals we didn't talk about this a lot today but and there's a saying in markets that price is truth this is the extant supply of capital in the world overlaid with the human demands for that capital is the price right it's dynamically updating in real time it is the truth of what is right now right whatever something is selling for clearing on the market that is truth um another thing markets generate is innovation so the truth of digging a hole is a shovel right it is the best most truthful real way we figured out to satisfy that want at that price and then the third thing markets are very heavily involved with is the development or promulgation of virtue so we learn that honesty is more energy efficient in the marketplace than deception right if you tell a lie and everyone's experiences to some extent you tell one white lie then you have to tell another second lie maybe to cover it up and it's just it always blows up right it's not good you're creating this little fork of reality to try and um maybe overcome some short-term pain but you end up exacerbating long-term pain right so this is this is a virtue that's discovered through free exchange and free interaction central banking destroys all that it destroys price signals it subdues innovation right your entrepreneurs are setting out surprises are supply and demand but when the central banks involved you can't trust the price you don't know if it's supply and demand or policy when you can't trust the price you can't organize your affairs effectively towards satisfying the wants of others i don't know if this price increase is because more people want the table or because this table is really scarce and the central bank's printing a lot of money all right so me as an entrepreneur i may be thinking oh people like tables i want to produce a lot more i don't know i can't disentangle the two so distorting prices misleads entrepreneurs which unwinds that that process of confronting the chaos of nature converting it into order and then it induces moral wickedness and that all of a sudden your strategy again is to get as close to the fiat currency spigot as possible because that's the lowest effort means of obtaining wealth if i can just become a shareholder to a central bank i now have a share in a company a central bank that bears perpetual profits to me i don't have to work my incentives to work and satisfy the wants of market actors is diminished so that i argue is diminishing to virtue and so i think it's evil you know i do think central banking is evil and i don't i'm not even saying that the institution was set out without intent i'm just saying that mechanically it in it becomes the invariant to human action that causes strategies to be adapted to getting as close to the fiat currency spigot as possible versus being an entrepreneur it's anti-entrepreneurial let's put it that way entrepreneurs are the hero of the marketplace they go on to the heroes journey they go out they get their clock cleaned learn the hard way like i have as you said you have and we take those lessons we embody them we adapt our strategy and we come back and hopefully we either create something of value to others and we succeed or even when we don't succeed as entrepreneurs our failure benefits the marketplace because other entrepreneurs can say that guy tried to open an italian restaurant on that block and it failed i'm gonna not do that i'm gonna go do something else right so it's information feedback into the hierarchy of human organization and central banking distorts and obscures all that so that was a lot to unpack and there's a lot of rabbit holes into my riding there but i hope that generally answered it no man it did and dude i was blown away by researching you by spending time with you like this is it's crazy you really have a an amazing ability to think through this stuff and then articulate it for people where can people follow you join you on this journey i just want to thank you for having me by the way dude round one i assure you the next time you're in la let me know because [ __ ] there's so much more that we could go into that is for sure this is great man um i really admire what you've done and you know hope to emulate some of that myself um i just got into the media game actually um i was my background's in accounting finance i was running a hedge fund but this quote with i think it was h.g wells civilization as a race between education and catastrophe that's a great question that quote just really hit me hard um you know sailor has this big focus on education i heard that quote around that time too and as an entrepreneur i'm just trying to listen to the market people have appreciated my writing and my talking so i want to focus on that i want to help enshrine the importance of inviolable property and what it means for humanity so that's the direction i've gone the show i launched is called the what is money show so i'm trying to incept that idea into people's mind i'm on youtube what is moneypodcast.com and then you can find me on twitter at breedlove22 which is my last name b-r-e-d-l-o-v-e-22 word awesome man thank you again so much for coming on the show boys and girls be sure to follow him trust me it will blow your mind and speaking of things it will blow your mind if you haven't already be sure to subscribe and until next time my friends be legendary take care peace you

Channel: Tom Bilyeu

Views: 1,954,740

Keywords: Robert Breedlove, What is Money?, Tom Bilyeu, Impact Theory, Conversations with Tom, interview, inflation, fiat currency, fiat, money, wealth, redistribution of wealth, assets, central bank, buying power, supply and demand, scarcity, counterfeit money, hyperinflation, Jekyll Island, Federal Reserve, liberty, bitcoin, digital gold, purchasing power, Jordan Peterson, decentralization

Id: d_34YjXAU5Y

Length: 128min 22sec (7702 seconds)

Published: Tue Oct 12 2021