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

Deflation is an unstoppable force driven by rapid technological advances, according to Jeff Booth. In this episode, HODLBarbarian helps you explore the concept of deflation and its impacts on the economy through Booth's lens. We discuss why technology is rendering efforts to create inflation irrelevant, and how central banks' inflationary models drive wealth inequality and societal discord. Discover why Booth believes Bitcoin is the ultimate tool for economic transparency and how it’s repricing the world, challenging traditional economic paradigms. Join us as we delve into the key ideas from Booth's influential book, 'The Price of Tomorrow,' and unpack the transformative potential of a Bitcoin-led deflationary future.

Chapters

• 00:00 Introduction to Deflation and Bitcoin
• 00:18 Event Recording and Sponsors
• 00:55 ATL BitLab Community and Membership
• 01:53 Introduction to Jeff Booth and His Book
• 03:10 Jeff Booth's Background and Bitcoin Advocacy
• 05:18 Jeff Booth's Views on Deflation and Technology
• 13:54 Discussion on Economic Growth and Inflation
• 22:47 Impact of Technology on Deflation
• 24:49 Inflation vs. Deflation: A Deep Dive
• 27:27 The Future of Deflation and Bitcoin
• 34:21 Bitcoin's Impact on Business Investments
• 37:12 Global Political Shifts and Economic Uncertainty
• 41:04 The Future of Bitcoin and National Reserves
• 48:06 Technological Advancements and Economic Disparities
• 55:38 Deflation vs. Inflation: The Central Bank Dilemma
• 8:40 The Case for Bitcoin as Sound Money
• 01:08:10 Conclusion and Final Thoughts

Links

• Elwood the HODL Barbarian
• The Price of Tomorrow by Jeff Booth
• Jeff Booth's Website
• Jeff Booth on Nostr
• Stephan Livera Podcast: Deflation: Natural State of Free-Market - Jeff Booth
• Ego Death Capital

Transcript

Elwood the HODLBarbarian: [00:00:00] Deflation is unstoppable because technology is unstoppable, right?

The cracks in the dam are appearing. It's coming, right? The dam is gonna break and we're gonna have a bunch of Bitcoin reserves, created by nation states.

Stephen DeLorme: This podcast episode is an event recording. If you're listening to the audio version, you might be missing some context from the speaker's visuals. You can find the video version at atlbitlab. com. That's A T L B I T L A B dot com. There might also be audience questions or other background chatter that's not audible.

Look, event recordings are never perfect, but we're sharing it here because we think you're going to find something valuable in it. Let's talk a little bit about our sponsors first, and then we'll get onto the show.

This episode is sponsored by ATL BitLab. ATL BitLab is Atlanta's freedom tech hacker space. We have co [00:01:00] working desks, conference rooms, event space, maker tools, and tons of coffee. There is a very active community here in the lab. Every Wednesday night is Bitcoin night here in Atlanta. We also have meetups for cybersecurity, artificial intelligence, decentralized identity, product design, and more.

We offer day passes and nomad passes for people who need to use the lab only occasionally, as well as memberships for people who plan to use the lab more regularly, such as myself. One of the best things about having a BitLab membership isn't the amenities, it's the people. Surrounding yourself with the community helps you learn faster and helps you build better.

Your creativity becomes amplified when you work in this space. That's what I think at least. If you're interested in becoming a member or supporting the space, please visit us at atlbitlab. com. That's A T L B I T L A B dot com. All right, on to our show.

Elwood the HODLBarbarian: All right. So I did my best. I asked Grok to make a picture of Jeff Booth. That's a caped Bitcoin [00:02:00] superhero flying through the world of tomorrow. So this is what Grok did for me. I don't think it looks that much like Jeff, but I guess he does have glowing blue eyes still on his Twitter, so that's where the glowing blue eyes came from.

But there you go. This book, in my hand here, The Price of Tomorrow, it's a fairly, reasonably small little book, quite readable. We're going to be covering this as basically a book club that's part of ATL BitLab, part of Atlanta BitPlebs. So each year we try to do at least one book in addition to other things we do.

And so this year we'll be doing The Price of Tomorrow. One of my personal favorite books, this is the one that I've been agitating for and lobbying for. So I'm a big fan. And that's why I'm going to have the fun of doing the sort of introduction to it tonight. Then we're going to be looking for volunteers to cover the chapters.

And Aida will be coming by and breaking your kneecaps if you don't volunteer. Make sure you're nice to her and offer up your time. We appreciate that because you don't want to hear me do all these, I promise. Or you don't want to make Aida do them all either. But anyway, we're going to hear a little bit more about Jeff Booth and why I think he's [00:03:00] great.

I personally think he's our best thinker in the Bitcoin space. So let's see if my little clicker here is working. Not so far. All right we'll figure that out. I'll do this way. All right, who is Jeff Booth? It's this guy. He's a goofy looking dude. Entrepreneur and technologist, co founder of BuildDirect.

This is a business that he built for a while, ultimately failed, but I think he ended up, earning a lot of his, wealth that he turned into Bitcoin that way. He's now really well known as a Bitcoin advocate. Ego Death Capital is one of the big names in the Bitcoin only venture capital space.

And so anybody who knows some people that have Bitcoin companies that are trying to launch, they probably know who Ego Death Capital is. They're probably either getting funded by them or hoping to get funded by them. And he sees Bitcoin as a tool for economic transparency and abundance. He's a thought leader, which is what we're really talking about tonight.

He discusses the technology's economic impacts through speaking and podcasting emphasizing adaptation to technological change for societal benefit. And of course, he's [00:04:00] an author of The Price of Tomorrow, which I just showed. The book was written in 2020, which is quite interesting because some of the things he talks about.

It was almost forward looking. If you look at the things he was saying and we'll get into some of them momentarily, they're even more true here five years later than they were in 2020. I think so. The book is not really about Bitcoin. It really only mentions Bitcoin in the very last chapter of the book.

It's really about Deflation and inflation and technology and we're gonna talk about why this is such an important thing to think through and understand. Personally, when I read this book, it like melted my brain. It was life changing. It was like, oh my God, things that I didn't think were connected, things that were, I didn't understand that things that always confused me suddenly all made sense.

Pieces that like I thought were just completely disparate things were like aligned and came together. So for me, it was really Like an eye opening kind of thing. I said, Oh my God, it all makes sense now. And it's actually been a big a big framework that I now use to think a lot about things that are happening, not just in [00:05:00] Bitcoin, but in, the world and technology in general.

So anyway, we'll talk about that. But before we do any of that stuff I thought maybe the most fun way to get this started would be, let's listen to a brief little. Spiel from Jeff. If I can pull up YouTube.

Jeff Booth: Yeah, I keep saying over and over again that the natural state of the free market is deflation. That's what I described in my book. Right? And then when you understand when people go, well, they think about it for a second, you can see them thinking about it. And then you add. You don't use things that give you less value.

If, uh, if Google charged 5 a click tomorrow, or if Riverside charged way more, uh, tomorrow, you would use a different, uh, uh, different video program, uh, and, and so it's a competition to provide more value, which entrepreneurs solve problems to provide more value. So that has to be deflationary. There is no, there is no, maybe it has to be [00:06:00] deflationary and then if you, if we invent more technology and technology is moving exponentially, um, because prices fall to the marginal cost of production, it has to be exponentially deflationary.

So, in that world, you would, even if you did nothing, if you didn't provide any value, you would get richer every year, probably. By about 5 percent a year today, and then getting faster and faster and faster into the future as all prices of everything fell. Remember, AI and robotics are going to merge and robotics will grow your food, food will fall and, uh, in price to almost zero energy will fall in price to almost, uh, uh, zero.

And so all of these things are going to continue. Um, a path. And when I say that relative to Bitcoin relative to something that can't be manipulated. So that's the world we should live in. And the, and, and the world that's stealing your time and stealing your energy, [00:07:00] therefore has to steal more and more of it all the time to stay solvent.

Stephan Livera: Yeah. And I'll tell you what, and I mean, obviously I'm with you in terms of deflation should naturally, you know, we should be living in a, growth deflationary environment. The cost of our, you know, living should be coming down over time, kind of on average, obviously assuming out, uh, you know, natural disaster and things like this, which will occasionally happen, but generally speaking, the cost should be coming down, but I'll tell you what, and I'm sure you understand this, but there are some, there are going to be some very big political and market At least crony capitalist market hurdles to that because a lot of people are conditioned to believe that housing should just go up, right?

And of course, you're Canadian. I'm sure you know, lots of Canadian property markets. Famously, the Vancouver property market is, you know, it's people have this mindset of, oh, it's only going up. What's going to happen when we move into a world where actually, yeah. Uh, maybe certain high level city properties or very, you know, great location properties will go up.

Generally, the cost of housing is going to come [00:08:00] down and there's going to be a lot of people who are going to feel like they're getting screwed over because they're quote unquote asset that they put their life savings into. Is now coming down in price.

Jeff Booth: Yeah, and, and because, because if you're buying housing for the last hundred years, you're really short the dollar, right?

You know that you have an inflation rate in the dollar, uh, and, and holding housing is shorts the dollar. I take on debt and I'm short the, uh, the dollar because it has to be inflated away and my housing retains some of that value. But now, so then housing instead of being, being, being a utility. Housing becomes a store of value and it increases a monetary premium and people think why the housing is my way to be able to save enough money because my, my currency is a terrible currency and you see this all over the world.

You see people doing that, but. That's why Bitcoin doesn't care. My, my house has fallen in the last four years from 300 Bitcoin to 22 [00:09:00] Bitcoin. And in four years, it's going to be two Bitcoin and it doesn't care if it, uh, if you want to take Bitcoin into your currency to price things, And from, from that economic calculation, you think bitcoins going up because you're taking it into pieces of paper, you're welcome to do that, but Bitcoin doesn't care about that.

It's repricing the world and by the way, you could do this for people on your podcast that are, I know, you know, this, but how I break through this for a lot of other people who don't know, just instead of saying currency, say pieces of paper that I price things in. Right? And it starts to be more real, right?

And so in in Canada, it takes 90, 000 pieces of paper today to buy a Bitcoin. But if if I go to Turkey, it takes 3 million pieces of paper to buy a Bitcoin. And if I go to Argentina, it takes 55 million pieces of [00:10:00] paper to buy a Bitcoin. And then you ask yourself, there's a whole bunch of people in Turkey that believe their pieces of paper are worth money, too.

So why wouldn't it look the same all over the world? So I agree with you. Most people are going to get caught in that and they're going to price Bitcoin from their currency thinking it's going up. Um, uh, and it's going up forever when it is actually not all prices are falling relative to it forever is a far better way to, uh, to, to look at what's happening in Bitcoin because you know this, but we have a 900 trillion dollar global ledger.

And, and that 900 trillion global ledger will not be 900 with 400 trillion of debt. And if the 400 trillion of debt was actually truly marked to market, the 900 trillion would be gone too, because that's just inflated asset prices because of the 400 trillion of debt. But, but there's just, there's a 900 trillion global ledger that in five years won't be 900 trillion.

It might be 2 [00:11:00] quadrillion. But Bitcoin doesn't care about that either. I know people do right because they're pricing from a globally manipulated ledger, but Bitcoin doesn't care. It's repricing everything and the other side of that argument or the other side of that thing that people miss on Bitcoin is the relative purchasing power of Bitcoin today.

So if you just took 900 divided by 21, 000, 000 or 20, 000, 000 or whatever lost coins you think would be, it equates to a terminal value today of about 42, 000, 000 per Bitcoin. And that if it stays decentralized and secure. Is for sure what it's worth today in relative to purchasing power kind of played out into the future.

Um, but it will be way higher than that because prices fall to the marginal cost of production. So it's not just higher because measured in a global ledger of 2, 2 quadrillion. That'll be 84 million per Bitcoin. And people think it's going up because they're not measuring the ledger, the other [00:12:00] ledger.

People should measure things in price of Bitcoin and they'll see it's just the free market and it's imposing a discipline. Um, and if you don't, if, if you really care about your piece of paper, if you care about government getting bigger. Government can't get bigger relative to that, so they can by creating more pieces of paper, but this is going to impose it on all governments as well, and eventually, and the governments that are understanding this will be in service of their, uh, service of their citizens rather than preying on them, and so it's going, it's bound to break a whole lot of beliefs along the way, and a whole bunch of, um, that's the pattern that's doing it.

It's repricing the world, not the other way around.

Elwood the HODLBarbarian: All right. 42 million per bitcoin. Luckily it's on sale today. You can get it for about 95. Get some before it goes up to 42 million.

What I've done here, because I thought it would be fun. We'll see how this format works. What I've done is I've pulled [00:13:00] quotes from the introduction.

And then a few other just quotes from Jeff Booth. Some things that he said in that video we just watched. Some things I've heard him say a number of times. And I've organized them in an order where I think, they start to build. His thesis like his main thesis of what he's saying I know that little video clip if some of you are hearing that for the first time first of all He's I think the best thinker we have in Bitcoin.

He is not the best speaker. We have in Bitcoin He stutters a little bit. He's there's a little bit of a monotone speaking style So he's not the most engaging speaker, but he's got really great ideas So we'll go into those ideas. So this I've got probably I don't know 16, 17 slides with quotes.

That's all we're gonna do tonight. We'll I'll throw a quote up there will open it up for people to react to talk about, disagree, agree. What do you want to do? And then we'll go to the next one. And we'll in the course of doing that, we'll probably go through a lot of the main ideas.

And then we'll as we go through the chapters, we'll end up covering all these things in more detail. Over several other sessions, we'll so anyway, this one, in all of our lives, we have lived in a world where hope for a better [00:14:00] future was a motivating force in economics. A world where growth reigns.

Our parents grew up in that same world, and so did their parents. It is what we know. So this is the world where, everyone thinks, oh You just need to get a job and then, you'll get raises and your pay will go up over the course of your career. And, you can buy a house and you buy it for cheap and it'll go up in value.

And everything, you'll buy stocks and stocks will go up in value. And this is just the world we live in. Everyone assumes that in the future, things are going to be worth more. Things are going to go up in value. You're going to make more money. This has just been the nature of the world that, we still live in.

Although. Jeff and Jeff is making the case that this world is really gone now or it and we just don't know it yet. Or it's changing very rapidly. So this is the backdrop of the world we've all grown up in and we'll talk about where Jeff says we're going. But anybody have a reaction to this they want or should I move on to the next one?

This is not too controversial. We'll go on to the next one. Okay. This one's a little more [00:15:00] controversial. The only thing driving growth in the world today is easy credit, which is being created at a pace that is hard to comprehend. The rise of that credit and corresponding debt is keeping us locked into a system where we are the proverbial frogs in a pot with the heat of the water slowly rising, and we do not notice.

So it's, how do you boil a frog? You just put it in the pot and turn the water, turn the heat up so gradually the frog doesn't even know he's boiling. So this is what he's saying is this world we've been in And, this is why we're in this world where, we suddenly have inflation that's, become ugly, let's say in the post COVID years.

And there's a lot of other trends that Jeff's, I guess one of the next quotes I'll pull up, we'll pull it together. These are the things that I was saying at the beginning are like trends that we all recognize and see, but didn't necessarily think they were connected. That I guess Jeff's going to make the case actually are.

So when we react to this, Stephen,

Stephen DeLorme: What does he mean when he says growth? [00:16:00] GDP, technology, energy?

Elwood the HODLBarbarian: I think things like technological growth are real and we're going to talk about that. What he's really talking about is the growth of the value of all the assets that we have, right? Why is your house worth more? It's not getting newer, it's not getting sturdier, it's crumbling, slowly.

So ultimately your house. Is a depreciating, decaying asset that requires maintenance, right? Why is it getting more valuable? Same thing with, the stocks of certain companies maybe that have been around a long time. Their business isn't necessarily changing, but nonetheless the stock goes up, every year.

The stock market goes up every year. This is where he, in the video he briefly talked about we've got 400 trillion of debt versus a global ledger of 900 trillion or whatever it is. So that 900 trillion is going to 2 quadrillion. This is what he's talking about. We're in this world [00:17:00] where. We keep borrowing more money, which is this easy credit.

The governments borrow more money, individuals borrow more money, companies borrow more money, and they go out and buy things, which inflates the value of those things, be it houses or stocks or cryptos or whatever, and then the overall balance sheet of the world is bigger. And he, what he's saying is the only thing really driving that is, and it's only maybe a bit of an exaggeration.

We do have You know, actual gains in productivity. We do have things like that, we have a declining population in a lot of the world, or at least it's starting to level off. I guess it's still growing, but it's starting to level off. And in the future, we'll probably meet, peak population.

So if there's not more people, why is the world growing in economic output? Yeah,

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

Elwood the HODLBarbarian: All the same line, yeah.

Audience 1: If you tilt the charts over increase in the money [00:18:00] supply, it's like the baseline. Nothing's, everything, nothing is going in value, it's all exactly the same.

Elwood the HODLBarbarian: That's right.

Audience 2: So is that the credit part?

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

Audience 3: Maybe it's not, but, when you're trying to have something, you're really buying the land under it, which is a selfish, which is a scarce asset, like Bitcoin and will continue to resist inflation.

Elwood the HODLBarbarian: Yeah, you make a good point. Depending on which property you're talking about, there's a some amount of the value is just the land. And if it's extremely primo land that's scarce and hard to get, then sure, that's going to be the thing that maintains the value. But it could be a piece of land that's maybe not that special with just a really nice house on it.

It's decaying, right? So that's another possibility.

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

Elwood the HODLBarbarian: Yeah, that's another good point. You own the land, but at the same time, if you ever can't pay the [00:19:00] property tax on the land, then the government can take it back from you, right?

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

Elwood the HODLBarbarian: Yeah.

Audience 2: Does he talk about the tax kind of relationship to all this? For example, we get tax benefit from investing in assets, so it drives our currencies toward assets.

(inaudible)

Elwood the HODLBarbarian: Yeah, I think we all know that is, certain assets, you get tax benefits on. I think that's, he doesn't necessarily go into that in this book or in this chapter, but you're right, obviously.

All right, let's maybe move on to the next one. Cause it gets more, more interesting. But what happens when we can't count on a system of growth and inflation anymore? What if a more powerful force renders most of our efforts to create inflation irrelevant? And what if, by desperately trying to cling to an outdated inflationary model, we drive more wealth inequality, more polarization, and more discord into our societies?

This idea [00:20:00] of, all of our efforts to create inflation, that may sound a little funny to anybody who's what do you mean? The whole government's been trying to fight inflation, we're trying to stop inflation. Jeff Booth, one of his main theses, one of his main premises is all the inflation that we're seeing is something that governments and central banks are deliberately trying to create.

And how do we know that? For one thing, the Fed and generally all the governments of the world and all the central banks do have an inflation target of 2%. So they actually all are trying to create. positive inflation at a manageable level of 2 percent per year. Now, sometimes they overshoot has happened during COVID.

But the reality is, the Federal Reserve targets inflation. They are trying to create inflation. They don't want it to get out of hand, but they do want it. Now, why is that? Because it creates this world that we talked about the beginning where things just tend to go up, right? Your pay tends to go up, your house tends to go up, your stocks and go up.

This is all a an artifact of the fact that, we have [00:21:00] effectively growth in the money supply, which should be on the order of around 2%. It's actually been a lot more than that in recent years with the various crises and pandemic and all that stuff. But the idea is we do have a government that's trying to create inflation.

Why are they doing that? That's what we're gonna get into a little more.

Audience 10: I was just going to say, I think one of the really, important concepts is the difference between real and nominal. With everything really coming back to the money supply growth, talking about potential inequality.

The real growth, there's already a significant inequality with the current system, right? I think understanding the differences between nominal and real is key, right?

Elwood the HODLBarbarian: Yeah, absolutely. And, this idea of what is inflation, that's another kind of Funny game that the government has to play right.

They say, Oh, we're trying to target 2 percent inflation. Then how do they want to measure it? They don't want to measure that in the growth of the money supply because that's something objective that we can track them on and it's Their fault, you know clearly because they're printing the money. So they said no, we want to track [00:22:00] CPI Dash you or whatever where it's a basket of regular grocery store goods that are not scarce that are not rare and by the way, if any of them do get scarce If want to buy a ribeye steak and that's suddenly gone up a ton in value, then the government will say, you know what, we've changed the basket because ribeye's got too expensive.

So now we're going to have the basket include a pork chop instead or a chicken wing or whatever. So that's what they've decided to do.

Audience 6: (inaudible)

Elwood the HODLBarbarian: Great question. I think we got another quote that gets in it more. So let's hold off on that one and let's do it.

I don't know if it's the next one, but it's coming up. All right. We are at a crossroads. What worked before will not work in the future. Technology is moving too fast and it will only move faster from here. Even if we wanted to, we can't put the genie back in the bottle. So what is this we're talking about here?

This is this idea of, AI, right? This is [00:23:00] 2020. This is before the ChatGPT moment, right? This is before Self driven cars seem like they might actually work, is nearly as well as they seem to be now. This is before there are multiple companies out there saying we're gonna have humanoid robots, taking over factory jobs with AI brains in them.

And that's all. That stuff is coming. If you do any look into that kind of stuff. technology stuff. The world is changing really rapidly. And the ChatGPT moment was just the first inkling of where we're headed with AI and with robotics and self driving cars and all these things, which all of which he talks about quite a bit in the book.

And as we go through the chapters, we'll hear, this was 2020. The point is it's even more true now than it was. So what the way to think about the technology growth is. It's exponential, right? And so how does an exponential look? It starts out slow and flat, and you're like it's almost indistinguishable from a line.

But then it starts to curve, and it starts to curve, and then suddenly we get into that part of the curve where it just starts going, crazy up. And you can think of, like, all the history of [00:24:00] civilization, right? As we've been in this long, slow, flat part of the curve, over a really long period of time.

The industrial revolution, railroads, all these things. And, we're now reaching the point where the curve is starting to bend way up. And when you get to A. I., that's where it goes crazy, right? When you get to robotics, that's where it goes crazy. And suddenly we're going to be in a world where, you don't, we don't need people doing all sorts of jobs.

Some manual labor type jobs that the robots can take. Some white collar knowledge worker jobs that, the A. I. agents are going to be able to take, right? So we're headed into a crazy place. And this is what he means with the technology is moving too fast and only move faster from here. So questions, comments on this one?

We're going to get to Alex's point, I think, maybe next. So let's go see if that's next. Not yet. So this is where we get into inflation and deflation, right? So we all know what inflation is because it's been a huge topic in the most past several years. It's been, [00:25:00] everybody understands what inflation is because we've all been experiencing.

But deflation is a term that unless you're a wonk that's really interested in, economics and finance, and central banks and stuff, you may not really think about it, but it's the opposite of inflation. So deflation, put simply, is when you get more for your money, just as inflation is when you get less for your money.

Audience 7: (inaudible)

(inaudible)

Elwood the HODLBarbarian: Yeah. And so one of the things we're going to get into here is central bankers one of their like axiomatic beliefs is that deflation is bad and has to be avoided at all costs. And actually I think it's one of the quotes we're going to do in a minute. So Jeff's point is so well, first of all, let's talk about what this inflation is, this deflation is.

So the best way to think about deflation is think about your iPhone or your Android phone, whatever it is. How many gadgets and [00:26:00] devices has it replaced? It's, it's a camera. It's a music player. It's a gps. It's a computer. It's a, it's a super computer in your pocket.

If you go back in time, 10 20 years. These are all separate things you had to own. And so now suddenly you get one device that has that much value. So that's deflation in a nutshell is like technology is creating this incredible value for your dollar, so you get more for your money by buying this one device, it does all these things.

Audience 8: (inaudible) (inaudible)

(inaudible)

(inaudible) (inaudible) [00:27:00] (inaudible)

Elwood the HODLBarbarian: So the economists talk about inflation is oh, we had a big recession or a depression and everyone lost their job. And so nobody had any money.

So the prices of things fell. And so if you happen to have money, that's great because if you're hoarding cash during a time of deflation, when prices are falling, then you can buy more, right? So that's the economic crash kind of deflation that the central bankers always want to over and scare us over.

But Jeff's point is deflation is unstoppable because technology is unstoppable, right? And we're headed into this world of AI and all these great technologies that are going to change things, whether we like it or not. And there's really nothing you can do to stop that because you're not going to go out and say, you know what, I really want to own a Garmin GPS and a Kodak camera and, 10 other things, and I'm going to pay, 500 for each of them rather than owning one, 800 iPhone.

You're just not going to do that, right? Maybe one crazy [00:28:00] person out there will do that, but by and large, people aren't going to. So this is his point is that this is a deflation as created by technology is a stronger force than inflation. And this world that we've grown up in where everything is expected to go up, everybody gets raises, everybody houses go up, assets go up.

Jeff's point is this world is ending and we're heading into a different world. And some people who, want to say something bad about Bitcoin say you can't have a deflationary currency. That's crazy talk. It'll destroy society. And Jeff's whole point is we're headed here anyway.

Technology has turned the corner in the sharp part of the curve where we go exponential AI and robotics are coming. We know people are going to get displaced from jobs. Deflation is coming like it or not. What we've been doing in Jeff's whole point is the government and the central banks have been fighting the deflationary forces by creating inflation in a equal and [00:29:00] opposite offsetting force to the technology deflation that we've already been experiencing.

And they've been doing this our whole lives. And, even before that, our parents lies in our grandparents lies. His whole point is in order for the government to keep creating enough inflation to offset this deflation, it's going to cause an outrageous explosion. And we were already seeing it, right?

The giant growth in debt, all the inflation things we're seeing. It's becoming untenably large, and we're headed into a crazy world. And this is where Alex's point a minute goes. Why is this going to create, bad things? And that's what we'll talk about.

Audience 1: Doug, how would deflation work on something like Stock Exchange, S&P 500 stocks and that sort of thing?

Would those prices then start coming down? If they do, who would invest in them?

Elwood the HODLBarbarian: Think about a stodgy old business. I don't know what some, Johnson and Johnson, Heinz ketchup, right? They're not innovating new ketchup things, right? They're [00:30:00] not innovating new soap things. It's just a regular business that's been around for years. They're trying to create, manufacture basic consumer products, put them in the grocery store so you can buy them and take them home.

Yet you look at the stocks and by and large, these stocks go up a little bit every year. They're not going up like crazy, but. S&P 500. The whole stock index is generally going up. That's because of the inflation, right? In a world with deflation, a business that's not really growing in any meaningful way might stay flat or go down, right?

Because it's actually falling in value. And when you think about what would What does the stock price of the S&P 500 look like when priced in Bitcoin? Anybody who's ever looked at that knows if you look at the S&P 500 on a graph of Bitcoin, the S&P 500 is flat and then Bitcoin's like this.

So if you price any stock, almost any stock, let's not count micro strategy in Bitcoin terms, then basically they're all going to zero compared to Bitcoin. And that's another one of Jeff's points. So we'll dive into that. Oh no, back here,

Audience 7: [00:31:00] (inaudible)

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

The answer I'm looking for is. Because there's always more monetary units chasing the same number of houses, right? That's what a, that's what a Bitcoiner would say. I'm looking for secret Bitcoiners when I'm interviewing people, by the way, but I always hear there's population growth and there's more demand and, I'm like, where's the demand coming from and where's the population growth coming from? We don't have that much, anyway, so that, that's the whole story there. All right. Deflation is not intrinsically good or bad. It just matters where you put your money. On each side of the equation, there are [00:32:00] winners and losers.

With inflation, the holders of assets win, since dollars in the future are worth less. This is again, if you, in the world we've been in You don't want to sit on a big bank account full of dollars, right? You want to go out and buy a house and borrow money, right? You want to have a huge debt and a big house and then debt, we'll get def we'll get inflated away and the big house will go up and then you'll get rich, right?

And you want to go out and buy a bunch of stocks. You don't want to have cash in the bank, right? So that's inflation world that we've been in. So holders of assets win since dollars in the future are worth less and it would therefore take more dollars to buy assets at a later date with deflation.

Holders of currency of the winners since their dollars can buy more goods and services in the future and they could today. So this is the idea of Bitcoin is a currency that is increasing in value versus goods and services and assets. So it's the idea where when you adopt Bitcoin as your money, [00:33:00] you're living in a world of deflation and you've transitioned that.

And what Jeff's point is we're all headed here anyway. Because of the technology. You could say Bitcoin's a crazy idea and this will never work and we can't adopt it because a world with deflationary money is a crazy world that won't work and it'll cause too much chaos and disruption.

And I guess Jeff's point is, we're headed there anyway because of the technology. And we're already seeing the chaos and disruption.

Audience 8: Yeah, I think one of the things I was getting at earlier, is we've had that economy in the past.

If you can even see that in like the cultural memory of some. The people who might be, save money in the bank and feed that kind of that kind of like folk act (inaudible).

Elwood the HODLBarbarian: That's right.

That's coming

like from the pre 1971 days of before we went off the gold standard, and there's this idea that saving was good. Housing has become a store of value, right?

So the dollar, when the Bitcoin price goes up, the other way to look at it is the [00:34:00] dollar price is going down versus Bitcoin just being one Bitcoin, right? The other way, house price, there's a famous chart like 600 Bitcoin to buy a house in 2016, 60 Bitcoin to buy a house in 2020, and then You know, whatever.

I forget. 60 Bitcoin in 2020, 660 and then six in 2024, something like that. So the average house has priced in Bitcoin. You can see is like showing that deflationary trend. Yeah, go ahead.

Audience 9: (inaudible)

Elwood the HODLBarbarian: When the world adopts Bitcoin as its money. Then what'll, there's some really interesting things that you can tease out of that. But at that point you would never want to own a business that underperforms cash, right? If you were thinking about putting your money in stocks and you're like, I've got cash in the bank or I could go buy a stock.

And if you know for almost for sure that the stock is going to basically. Fall in comparison to just holding the cash in the bank. [00:35:00] Plus, there's the risk of this company and having, a bad management or, a bad business turn. It's all these things like you would not rationally invest your cash into a stock that you would expect to underperform.

As Bitcoiners, when we look at almost every stock out there is underperforming Bitcoin regularly over any, four year period for sure, let's say. It's why would I own any stock when I could just hold my cash, which is Bitcoin? Then we think in the future world Companies are also going to adopt Bitcoin as their reserve asset and then you're gonna say I would only invest my cash in a company that's also on the Bitcoin standard so that earns Bitcoin and knows how to make more Bitcoin with their Bitcoin and This is the genius of Michael Saylor the last session I had where you know, they're looking to be maybe the first or maybe the biggest in this new world where the business is going to operate on top of Bitcoin rather than operating on top of the dollar and a lot of people who are confused about what's going on [00:36:00] with micro strategy and think it's a Ponzi on the other things, but they don't realize this.

No, this is the world that we're headed to, and you need to be in a world where The only reason to buy a business is because you expect it to outperform Bitcoin. You wouldn't buy a business that you don't expect to outperform Bitcoin.

Stocks can gain value in two ways, right? They can go, you can have an expected growth trajectory of the stock as the business is growing and they could also disperse some of their earnings in dividends back to shareholders, right? But unless you have a need to gradually be converting your stock to cash over time, you don't really care whether what you get out of the stock is coming in the form of growth.

Or coming in the form of dividend because you can always say I have a stock that's just a pure growth stock. It has no dividend, but I just sell a little bit of it. I'll sell a few shares and that's my dividend. And so if the stock's going to grow, you can create your own art dividend by selling some shares.

So the idea of a dividend stock versus a growth stock is more of interest for people who like, want to have hands off management. They just [00:37:00] want to own the stocks and not trade and just have the cash mule up in their account. But if you're willing to do a little bit of, actively managing your account a little more, you can create that dividend yourself.

All right, let's move on to this. Here we go. This is what I was trying to get to Alex, the seemingly random events of Brexit, Trump and a rise in populism and hate in our world are not haphazard or isolated at all. They are all connected to a loss in hope for a better future for larger portions of the population.

So this is where Jeff's coming from, is he's saying, this is to be expected. And the funny thing is, this was 2020 Trump hadn't been reelected. We didn't have, we weren't far through the pandemic. I think a lot of these trends that he's talking about here, Brexit had just happened, which was when the UK left, Europe.

So So this idea this trend has continued and it seems to be ramping up, right? So Trump has been elected a second time. There's a really angry reaction against some of the policies of the Democrats here in the U. S. Right now, a lot of countries are [00:38:00] leaning right. A few are still, left, but like Canada's PM just stepped down their nine year leftist leader basically got practically thrown out.

So this Trudeau, yeah, there's, the UK recently elected Keir Starmer, but that seems to be going rather poorly, there's, they're throwing people in jail for Facebook posts, there's some accusations that the leftist side over there were, turning a blind eye to rape gangs, horrible things like that, so I don't know how much to believe and how much not to believe, I don't want to tell you what to believe from your politics, but my point is, this, we can all feel this idea that over the course of the last, I don't know.

Of course, in my lifetime, let's say people in the United States used to have much more civilized dialogue, right? The, whether you're on the right or the left, people would basically, you could have a sit and have a civilized conversation. You'd have a debate, right? You'd say let me hear your point of view.

Let me hear mine. And, you'd get, you'd have a, you'd have people debate and that would be a regular thing. Nowadays, you go into social media, you go into network news and it's one flavor only. They're not going [00:39:00] to give the other side a chance to talk. And it just seems like civilized discourse is basically diminishing and this kind of, hate and lack of all this stuff, right?

Populism is, where we've got basically people that are just rising up in anger and electing a political candidate out of anger. That didn't really happen before Trump, right? Trump was the beginning of that, at least. And you can look deeper in the past, and so this is where there's a whole other book called The Fourth Turning, which I know a number of people here would know about, where there's this idea that there's a long cycle where we have, every so often things get, reach a point where people get fed up, and they want to, and this kind of whole thing happens again, and we've had, Similar things like this in the past, which, he makes the case that like the world war two was the last big one like this.

And the difference now is this technology exponential curve turn has occurred, We're experiencing an AI revolution. We're experiencing a robotics revolution. All these things are happening and it's not going to just be one where we can reset back to a new Fiat or, go [00:40:00] off the gold standard and go onto a Fiat standard.

These are the things that they've done in the past to get out of these situations. Now they're going to need a new way to get out of it. Cause we've got, I ran the numbers of the day. If you, if the U S government paid back the national debt, At the rate of 1, 000, 000 per hour, every hour they paid 1, 000, 000 toward the national debt.

Who knows how long it would take to pay off the national debt? 4, 000 years, yeah. It's roughly if the government is paying 1, 000, 000 every hour, in 4, 000 some odd years, we have a chance to pay off the debt. Now, the country isn't 4, 000 years old, right? Rome wasn't 4, 000 years old, right? We're in this crazy situation where something's, you can't just continue doing what we're doing we're never going to pay off the debt.

I think that's basically what everyone's figuring out is, so it's time for another fourth turning, it's time for another global reset, it's time for another Bretton Woods, whatever you want to call it, where they get the bankers together and [00:41:00] decide it's time to race the board and come up with a new system.

So what's that new system going to be? Jeff's whole point here is there's really only one good choice and it's going to end up being Bitcoin.

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

Elwood the HODLBarbarian: We can speculate, right? We know that Trump has been elected saying he's going to create a Bitcoin stockpile.

He's got bitcoiners all around him. Now, is he going to do it? I don't know. Maybe he'll, maybe he just did it to get elected, right? Maybe he'll throw us all out with the baby at the bathwater. But the whole idea behind Bitcoin game theory has always been the first country to print their own currency to buy as much Bitcoin as they can wins.

El Salvador can't, they don't have their own currency. They can't print it, but they've been buying a, [00:42:00] small, they're being like one Bitcoin a day. They're buying a little more now. Okay. And they got a loan from the IMF and went out and bought a bunch of Bitcoin, right? The first major country that has their own currency that prints the hell of it and buys Bitcoin with it is, and MicroStrategy has been doing this as a corp, right?

Audience 10: If that's the case, obviously they're going to know that, right? So they also realize That any country ever prints own currency by Bitcoin and ultimately all the country

Elwood the HODLBarbarian: kicks off game theory. That's right.

And that's why, Jeff's like this isn't maybe this is happening. We don't know exactly when, but this is going to happen.

How do you get a bun? It's a prisoner's dilemma, right? Everybody is incentivized to be first. You can't get everybody to collude. They've done it so far, but at some point, there'll be a crack like El Salvador has already said, we're out. We're doing our own thing.

We're not going to do with the I M F and the, all these bankers want us to do. Other countries are following suit. The cracks in the dam are appearing. It's coming, right? The dam is gonna break and we're [00:43:00] gonna have a bunch of Bitcoin reserves, created by nation states. States in the U. S. Are doing it. We've got multiple states in the U. S. Starting to create their own Bitcoin reserve.

This is happening in real time. And how fast it happens depends on how bullish you are. But, if you believe anything that Trump said, which, good luck if you want to believe politicians, Trump or anybody else.

But, he claims he's gonna do it next year. So we'll see. He might sign something day one

Audience 7: (inaudible)

Elwood the HODLBarbarian: The problem with that is every debt is owed to someone, right? So if, this is the problem with let's forgive all student loans, right? This is one of the political tropes. It's what do you do to the guys who, are owed the money from those loans, be it student loans, be it corporate loans, be it U. S. Treasuries? Somebody basically takes a [00:44:00] loss there. And in theory, that's called bankruptcy, right? That's called a default. And yeah, that's, that is what's going to happen in some form. There's, multiple ways you can do it. The most obvious way is to just print so many dollars that you can say, all the debts paid off because we just went out and printed, 80 trillion dollars and retired the debt, right?

That's, that's where the question is, do you think people would settle for that when they know about Bitcoin? I don't know.

Audience 2: (inaudible),

Elwood the HODLBarbarian: it's called

a default.

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

Elwood the HODLBarbarian: Yeah, it's a great [00:45:00] point. We know that Argentina has defaulted on their debt multiple times, and yet then, a few years later, someone starts loaning them money again, right? Russia's done it, could the U. S. say, we're going to just say all of our debt owed to China is gone. Is China going to go to war with us over it?

They might. I don't know. They're not going to be happy, that's for sure. If you look at where the balance goes, still the majority of our U. S. national treasury debt, anyway, is owned by the Chinese. It's a political thing, right? What is our currency really backed by?

It's backed by the U. S. military, right? And so that that's what you get into. Are you willing to have a war over it? Yeah, or the petrodollar. Alright, so let's move. Yeah, go ahead.

Audience 11: Does he speak about the idea of a supply shock? Because it seems like there's, we know there's a limited amount of Bitcoin.

But if everybody rushes to create reserves and in the micro strategy presentation, you listed like he borrowed 42 billion that there's not enough Bitcoin even satisfying the 42 billion.

Elwood the HODLBarbarian: Yeah so at least he's buying up all the Bitcoin that's being mined. Yes. Supply shock is clearly part of the Bitcoin [00:46:00] thesis, right?

We're seeing it already, and why is Bitcoin? going on from 102 a week ago down to 95 today. Does that mean it's going to crater? I think the long term trajectory is it's just gonna keep going up because it's a limited supply asset and it's being adopted not just by individuals like the people here, but by corporations and nation states.

Yeah, we're gonna have bits of volatility like we've had the last week, but that's really just, Basically big finance players playing finance games, right? They're trying to shake people out of their Bitcoin. They're trying to move the markets. They're trying to basically, get you to sell because you're going to create fear.

Oh, it's going to drop to 70. Sell now, and then they scoop it up and buy it for the ETF sort of right here. Yeah,

Audience 12: I've been like watching some videos on YouTube and just hearing the theory of the government seizing bitcoins at some point, like reaching to a level with all of us as individuals.

Yeah. Yeah.[00:47:00]

Elwood the HODLBarbarian: This has been a thesis and a concern and a key plank of, Bitcoiner thinking for a long time. This is why, everybody who's a Bitcoiner here that's been, part of this building here would tell you. Don't hold your Bitcoin in the ETFs, you never know the government going to come in and not tap Larry Fink on the shoulder and say, that strategic Bitcoin reserve we want, it's all the Bitcoin BlackRock has, it's now the U. S. strategic Bitcoin reserve, right? But if your Bitcoin is held in cold storage and you've got your own private keys and you've got your own hardware wallets, they're gonna have a hard time seizing your Bitcoin, right? They could put a gun to your head, they could kill you, they could lock you up, they still can't get your Bitcoin unless you, tell them how to access your keys. So well, they can, they could block the off ramps, right? They cannot, it's a permissible network. Like I can send you Bitcoin. There's nothing the government can do about that. But if you want to change it into dollars that's a different matter. But in some point in the world in the future, we may not have to do that anymore.

If Bitcoin becomes a currency [00:48:00] for real. All right, let's let's move on to the next one.

Instead of technology allowing for a 15 hour work week, as Keynes predicted when he penned his 1930s essay, Economic Possibilities for Our Grandchildren, vast numbers of people are working longer in jobs they rightly fear will soon be gone. This probably feels familiar to a lot of us here. So this idea of, hey, technology, Is deflationary.

It's going to create this immense prosperity. We all hold a more powerful computer in our hand than what NASA used to put, the moon lander on the moon, right? By an order of thousands. I don't even know how much more we all hold. It's more powerful like the first Cray supercomputer, right?

Every single cell phone we've got. We all have the lifestyle that we all have today. Even if we just, live in a simple house or apartment or, and we basically live, we eat better, [00:49:00] we live better than King and then the King of England did, X hundred years ago or whatever.

It's. By any reasonable measure, we are living in an incredible, life of luxury, but we don't get our time back, right? Nonetheless, we're all still out there, maybe not all of us, some of you guys are smarter than me, but I'm still out there working, 40 plus hours a week, whatever it is, and showing up for my job and telling my boss what he wants to hear and all that kind of stuff.

So why is that, right? And the problem also is, A lot of these jobs with the encroachment of A. I. And robotics are going to disappear. So here we are all like slaving away when the smartest economists, let's say you can love him or hate him of the 19 thirties predicted that we would all be able to reduce our work hours down to 15 hours a week.

So we've gained all that productivity. The world is that much more efficient. Why don't we enjoy the better lifestyle? And why don't we get that time back? And Jeff's point, which [00:50:00] I don't know if I have a quote that perfectly covers this year, but his point is because it's been stolen from you. What's happened is by the government creating all the inflation to counteract the productivity gains, they basically forced you to stay marching.

40 hours a week to try to have your pay slightly going up every year to try to have your assets go up, try to have your house go up. The government through the money printing and then the inflation creation has basically counteracted all of the productivity gains that have come since from the 1930s till now.

And there's these two counterbalancing things, right? We have that the technology created deflation being offset by the government created inflation. And if you think about what they're trying to do, they're trying to offset all the deflation of productivity gains and technology gains, plus about 2 percent more.

That's how they create 2 percent inflation, right? They have to offset all the deflation plus create a little bit more inflation. That's always the goal of the central [00:51:00] bank. And what the net effect of that is, they're stealing the economic gains from everyday people like us and putting them in the pockets of the bankers and the central bankers and the governments.

That's where all those productivity gains are going. They've been stolen by that class, that elite class of people, rather than being accrued to everybody in the form of more leisure time. That's his thesis. Yeah?

I think you could say like somebody who, maybe is, let's suppose you're doing, you're a compensated individual, right? So you could probably work less and get by, but instead you want to work more and get more stuff, right? You're ambitious. You want to have a nicer car.

You own a better house. That's true. But let's suppose we're looking at people who are [00:52:00] just like living paycheck to paycheck, worried about how they're going to make rent and how they're going to feed themselves and their family. And like 50 percent plus of America is those people don't necessarily want more stuff.

They're basically struggling to get by. So I agree. Those of us who live a fairly privileged life, why are we still working, 40 plus hours a week? We could, slack off and cut our hours and find a job that's not as demanding and still be fine. Probably because we like, buy more bitcoin, for example.

Or whatever else

One of the things that Jeff talks about in the book in the first, in that first introductory chapter is we now think of there being like technology stocks, right? There's the magnificent seven, right? There's Facebook, Google, Apple Microsoft, Netflix, et cetera, and then, other tech companies, right in the Nasdaq and the tech companies you would expect would be accruing all the gains from this, advancing technology and creating these devices that are, creating so much value that they're deflationary.

But then there's all the other sectors, right? There's like the packaged goods sector and there's the banking sector and there's the whatever. And those are not thought of as technology companies, right? The [00:53:00] point Jeff's trying to make is we've now turned a corner where every company has to be a technology company, right?

Every company is gonna have to adopt AI. Every manufacturing is gonna have to adopt robotics. If you don't, you'll perish, right? Because you won't be able to compete with your competitor who does. So effectively, the technology, which has been isolated to maybe the tech sector, is now going to basically infuse every single business, every single stock, everything, everywhere.

And this is why he says that there's no longer any way for the inflation to be kept under control, even by the powerful governments and central banks. It's just going to be too massive a force, and it's going to basically create, huge changes in our way of life. Call them positive, call them negative, whatever you want, but it's coming and there's no stopping it.

So this is, and there, Yeah,

Audience 12: there's some people that argue that like with technology advancing the way that it is, that it's [00:54:00] squeezing out at the end of the day, capitalism in and of itself is a poor part of the problem because once it fully capitalizes, always seeking efficiency. And so technology is going to always advance.

So on one end of the stick, we're getting pressed by technology now, canceling out humans in a way is our job. On the other side of the coin, you have the government printing, which is now devaluing our dollars, so we have to keep climbing. Now you have to make six figures to even live a decent life, and the average human is not going to get that.

So you're squeezing out. Truly, this diamond scenario of the middle class is an illusion and we're moving into the triangle experience. We have a few at the top and a massive lower class.

Elwood the HODLBarbarian: Yes.

Audience 12: I'm wondering, does he talk about that? Because I feel like that is what's also happening. Oh, yeah, he

absolutely talks about the growth in and how how completely polarized our world has become, how the top. 5 percent of the population own whatever it is. 95 percent of all the assets are 80. I don't know what the number is, but yeah, exactly right. He talks about that in the book, and this is one [00:55:00] of the things that he says has been created by this Inflationary world that we're in because the way that you get rich is you own a lot of assets.

And if you live paycheck to paycheck and don't own any assets and you rent your apartment and you pay, you take your paycheck and you go by your basic needs and you have nothing left over, then Inflation only harms you. Whereas if you own a big portfolio of stocks and a big house and all these other things, Bitcoin, then inflation ultimately helps you because it's driving up the value of your all your stuff.

And it's creating this massive disparity. And so we're more polarized than we've ever been. All right. I think we're good. We're going to go ahead and get down. I've got a few quotes left. So we talked about this one already, but governments and central banks will do almost anything to stop deflation.

If you read anything from the Fed, if you listen to Jerome Powell talk, Oh, deflation is the biggest fear. We have to fight deflation. That's the biggest worry. We have to prevent deflation. Deflation is, Inflation is a bit of a worry. Deflation is the real worry. That's the way the central bankers and governments [00:56:00] will always sell it to you.

But, and I think the other point is when you look at, Actually, I lost the point. It was in my head and then it was gone, so it'll come back to me real long. Yeah.

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

Deflation is bad, and then what?

Elwood the HODLBarbarian: The question was what is the stated reason? Why do the central bankers and governments say that deflation is bad? Why do they say it's bad? And the other question is, why do I think that the real reason is? The. The reason that they are afraid of deflation is, and this is kind of part of Jeff's thesis, the entire system that we live in is a system built on growth and inflation.

Everything about the world, we talked at the very beginning, the world you've grown up in, you always have this expectation that, you just got to get your first job and then you'll earn more money and more money. You've got to go buy your first house and then it'll go up and then you can flip it and get a bigger [00:57:00] house and you got to get, buy some stocks and the stocks will go up this whole world, this whole American dream.

It's not just the American dream. It's the whole world economy that we're living in. It's, inflation world, right? This is what all that's an artifact of, and they know that. That world cannot is not compatible with deflation. And so in the word that they have around deflation is if people get so pessimistic and become so worried about the fact that they want to hold on to their money because they think, Oh, I don't want to go buy something now because everything's just getting cheaper, right?

It's hard to think about. That's the way we are. Bitcoin is with our Bitcoin. I don't want to spend my Bitcoin. It's gonna be worth more in the future, right? What if you're there with cash? I don't want to go buy Bitcoin. A loaf of bread because by the end of the week, it'll be, 10 percent 20 percent less.

I'm going to wait to, and so everyone just starts hoarding cash and waiting and that slows down the economy and creates this world. This is the central bankers talking, this creates this world where demand goes down, the velocity of money goes [00:58:00] down and it becomes very hard to get out of that.

Whereas what they wanna do is stimulate the economy by printing a bunch of money, and then basically have people have the expectation, oh, you wanna buy things now because they're gonna go up in price and that'll move the money faster. And so this is why, the central bankers and the government want to think that economies need to be managed and people need to be spurred the the demand needs to be spurred and so forth.

Audience 7: inaudible)

Elwood the HODLBarbarian: I think there's better books that cover it, but I'm sure he covers it at least partially in one of the chapters. It's been a while since I read the whole book. I've only reread the introduction recently. So the inflationary opinion, I would say that, Jeff or most bitcoiners would have, or I would have is we don't really know what a world would look like where you have a deflationary currency.

But what we do know is what the world looked like when we were on the gold standard, right? And gold was really not a thing. It was not an inflationary currency, right? The world under gold [00:59:00] was if you're a king and you want to go to war with your neighbor, You need to have enough gold to pay your soldiers, and if you run out of gold, the war ends because you can't, your soldiers are going to keep fighting for free, and so it created a more peaceful world, right?

Because you couldn't just print up a bunch of gold and hire a bunch more soldiers, right? And likewise, all the other things where Bitcoiners say Bitcoin fixes this is what the deflationary world looks like, right? It's in a world where you can't artificially print and create more currency.

Lots and lots of distortions that we see in the world today that are created by money being something that you and I have to work for, but someone else can create for free that creates an unjust system, and it creates a lot of these problems, which go away in a system where we have sound money. Now, sound money could be truly deflationary, or it could just be, money like gold, which is out of the technically you can go mine for gold harder.

You can, go. You can send SpaceX up to grab a gold asteroid, hasn't happened yet, but that kind of thing. But the world that we lived in before of gold, where there wasn't a lot [01:00:00] of technology that would allow us to mine more gold. And there wasn't, any great way to inflate the gold supply.

Audience 7: And throughout history, whatever standard, (inaudible)

generally they've always switched to that standard. First was the king Proceus, the gold coin. It is from 500 BC. The Roman silver. And you had Isaac Newton and the British pound gold standard. Yeah.

So at the time there was a gold standard throughout history.

Elwood the HODLBarbarian: And we've had pretty good you can read The Bitcoin Standard by Saifedean, or you can read Broken Money by Lyn Alden.

They cover those topics better than this book does. Let's move that one for dinner. Let's get through the last few of these. Now I'm on to famous quotes by Jeff Booth. Some of these he covered in the video. A system problem cannot be solved from the system creating the problem.

So his point here is if you're living in the [01:01:00] Fiat world and you're thinking in Fiat currency, you're thinking in dollars and you're trying to figure out how to solve these problems. All the ones that we've been talking about, right? The problems of, why is, why are people hate each other more now?

Why are people blaming each other? Why do we have populism? Why do we have Trump? Why do we have Brexit? Why do we have political discourse? Why do the poor blame the rich? And why do the rich blame the poor? Why does the left blame the right, right blame the left? All that stuff. It's a problem we're all living and swimming in this system where the real problem is we've reached near the end of this debt cycle and we've got too much debt in the system, it can never be paid back and someone's going to get screwed and nobody wants it to be them.

So everyone's trying to say I ain't going to be me. It's going to be somebody else, right? It's all the rich guys fault. It's all the lefty politicians fault who, is doing this or that. And so this is the point is if you want to solve This problem with the system, you have to step outside the system.

We have to find something that's completely outside the system, and that's the only way to solve it. And that's his point of Bitcoin. It's the [01:02:00] solution, and you need to be thinking in Bitcoin. You need to be denominating your, you need to be on a Bitcoin standard personally. You need to and you need to, and we as a society need to move to that new standard.

All right, I think I got a couple more left. He said this in the video as well, and this is really, This is probably, if you want, one sentence that's Jeff Booth's main thesis, it's this one. The natural state of the free market is deflation, and most, our central bankers and governments, and a lot of people that are, have a fancy finance education will say no, that's not true.

But it's very obvious that it is true. And it's, again, the iPhone is your best example why. The world is going to continue to innovate. There's always going to be new technology. And new technology is always deflationary. And as we get the robots and the A. I. s and all that, it's going to become much, much more deflationary.

So this is an unstoppable force. Unless people are going to suddenly quit acting in their own best interests, unless people are going to want to say, I want to spend more money for something that gives me less value, [01:03:00] we're always going to have, or unless we get out of a free market, right?

If we have a government that's Controlling everything, and actually that was the other point I wanted to come back to you, the one I forgot, it came back to me finally. So free markets and capitalism. Jeff Booth's point, and you asked, is part of the problem that maybe capitalism's to blame. So I think what Jeff would say is, we haven't been living in a true capitalist world, in fact we've never have, because we've never had, a truly Sound money where, gold was closed, right?

But since we went off the gold standard, we haven't been living in a world where you have true capitalism. Instead, what we have, you could call it crony capitalism, right? We have a world where it's not a true free market because someone controls the money supply. Someone could create it for free, and the money supply is always being inflated away.

So any, the people who are out there criticizing capitalism and saying, look, capitalism isn't working, look how it's unjust. Look at all the. We've got all the super rich and the super poor. Capitalism has [01:04:00] failed. I think what Jeff would say, and I think I would agree with him, is what you're not looking at is real capitalism.

What you're looking at is the impact of crony capitalism with the government printing the money and the inflation. If we actually eliminated that component to it and went to a true capitalism, like the gold standard, you'd have a lot less of that, huge separation between the very rich and the very poor.

You would, all the, a lot of those artifacts that feel like a failure of capitalism are really a failure of the currency and the fact that we're creating inflation to try to offset the deflation.

Yeah, that's true. That's another hand of the government making winners and losers. The other half to his key thesis is prices fall to the marginal cost of production. Who can explain this one? I could do it, but anybody else want to try?

Audience 11: Yeah, upon competition, as people get more efficient, they can lower their prices and still make profits.

[01:05:00] So it always falls to the lowest.

Elwood the HODLBarbarian: That's right. Yeah, James has got it. It's in any competitive business, whatever you're selling, you're going to always be incentivized to undercut your competitors, right? You're going to say we want to We can make money, we can sell for less, and if we can sell for less, we'll sell more, right?

Or we can offer more value for a lower price, or whatever it is, be it cars, be it, hamburgers, whatever it is that you're creating, right? Prices always fall to the marginal cost of production. The idea is, when you're in a truly competitive environment and there's multiple fierce companies competing against each other, not big monopolies, but like you have real competition and a real free market, Inevitably, any large profit that any company could make on any good or service they're selling, somebody new will enter that market, compete with them, undercut their price, and this will constantly happen.

And then what will happen is the prices of anything you want to buy, any good or service, are always going to be driven down to very close to cost. And eventually the profit margin will get razor thin because there's a lot of [01:06:00] competition, right? This coupled with this, ooh. What happened there? This coupled with this, so the natural state of the free market is deflation, so we have this world where technology is growing and growing and growing, things are getting, you're, we're able to deliver more value for the same amount of money, or we're able to basically have our money buy more because of deflation, if again, absent the inflation that's being artificially created by our overlords, our government.

That on top of the price, the prices fall to the marginal cost of production means these two things together and you'll have to work it out for yourself and think through it and read the book and maybe listen to a few more Jeff Booth podcasts. But his point here is these two things together mean that the prices of every good and service are going to zero or very close to zero, like any, anything you want, if you want.

A house, if you want food, if you want a car, all those things are gonna be going down and down in [01:07:00] price when measured in any fair measuring stick. And he's using Bitcoin as the fair measuring stick, right? So as we know, a house went from 666 Bitcoin to 66 Bitcoin to six Bitcoin. Cars, you name it.

Everything is collapsing against the price of Bitcoin. And what he's saying is Bitcoin is the fair ledger. The one thing that can't be inflated or controlled. And all prices are collapsing to zero against Bitcoin, which I think is the next quote. Bitcoin is repricing the world. This is what we're saying.

This is, again, Jeff says this all the time. What's happening? Is Bitcoin number go up technology? Is it going to, is it going up because we're in a bull market? What Jeff's saying is, what's really happening, the long and broader trend is, Bitcoin is repricing the world. We are eventually going to reach a point where in the future, people, Bitcoin will be money.

And everything's, as priced in Bitcoin, will be a deflationary currency where you can say I could go buy this thing now, but maybe I'll put it off, maybe I can put it off a year, because it'll be cheaper in a [01:08:00] year, whatever it is you're talking about when Bitcoin's your currency.

And the price of everything is falling to zero against Bitcoin, which is what we just said. That was it. This is me. I'm Doug, also sometimes like to be known as Elwood, the HODLBarbarian. I'm a quant, I'm a Chartered Financial Analyst. I am a barbarian. I'm HODLBarbarian on Twitter, Telegram, and Discord.

And I used to say that I have nothing to sell you, and this is still basically true, but at some point I'm, I do manage money for my family, and at some point I may be looking to expand that into a family office plus some outside investors. Where I like to think about these trends in the technology, where we're headed into this hyper Bitcoinized world, what does that mean?

If are interested, we can talk about it over dinner. And thank you all for your attention.

Audience: (inaudible)(inaudible) Applause

Stephen DeLorme: Hey, thanks for listening. I hope you enjoyed this episode. If you want to learn more about anything that we discussed, you can look for links in the show notes that should be in your podcast player, or you can go to atlbitlab. [01:09:00] com slash podcast on a final note. If you found this information useful and you want to help support us, you can always send us a tip in Bitcoin.

Your support really helps us that we can keep bringing you content like this. All right. Catch you later.