Invest Like the Best with Patrick O'Shaughnessy - Saifedean Ammous – The Bitcoin Standard - [Invest Like the Best, EP.107]

Episode Date: October 9, 2018

My guest this week is Saifedean Ammous, author of the book the Bitcoin Standard. This was one of the more interesting conversations I’ve had in the world of cryptocurrency, primarily because we don���t talk about Bitcoin or Crypto until 25 minutes into the talk. Instead, we focus on history, economics, sound money, low time preference, and gold—all interesting topics. Saif’s thinking on cryptocurrencies other than bitcoin—which is that they are worthless—is unique and thought provoking. His reasoning around why gold shouldn’t be compared to the returns generated by assets like equities was also compelling. If you’ve followed my Hash Power episodes, this is a new a differentiated interpretation of Bitcoin as a technology for the store of value use case. Please enjoy our conversation. Hash Power is presented by Fidelity Investments   For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Show Notes 2:10 - (First Question) – Explain Sound Money 4:25 – Examples of hard vs easy money 7:36 – the even money trap 9:36 – The benefits of hard money vs today’s standards 14:05 – Why this interests him             14:16 – Gold Wars: The Battle Against Sound Money As Seen From A Swiss Perspective             14:56 – Democracy – The God That Failed: The Economics and Politics of Monarchy, Democracy and Natural Order 16:17 – Correlation between time preference and people’s ability to succeed in life 19:59 – How money markets worked in the late 18th century vs today 27:57 – How he came across Bitcoin and how he thinks of it as a digital gold 35:42 – How will the world transition to a sound money standard 42:15 – The impacts of hyperinflation on crypto currencies 45:04 – The idea of a orderly upgrade of the world currency 48:20 – His thinking on alternative coins 54:05 – What it takes to compete with bitcoin 1:01:43 – How he diversifies 1:04:35 – Stalling bitcoins demand 1:06:11 – Does he apply his thinking of lower time preference elsewhere in his life 1:07:09 – Kindest thing anyone has done for him   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

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I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfield guide.com. Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaunacy. Ashernesty Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of Oshonosy Asset Management may maintain positions and the securities discussed in this podcast.

My guest this week is Safedin Amos, author of the book The Bitcoin Standard. This was one of the most interesting conversations I've had in the world of cryptocurrency, primarily because we don't talk about Bitcoin or Crypto until about 25 minutes into the talk. Instead, we focus on history, economics, sound money, low time preference, and gold. All interesting, topics. Safe's thinking on cryptocurrencies other than Bitcoin, which is that they are worthless, is unique and thought-provoking. His reasoning around why gold shouldn't be compared to the returns generated by assets like equities was also compelling. If you followed my Hash Power episodes, this is a new and differentiated interpretation of Bitcoin as a technology for the store of value use case specifically. Like the Hash Power documentary, this episode and other Hash Power singles are brought to you by Fidelity Investments, a company that is constantly researching and experimenting with

emerging technologies like crypto assets and blockchain to improve the lives of their customers. Fidelity provides a comprehensive set of products and services to individual investors, employers, and financial advisory firms. For more information, please visit Fidelity.com. Please enjoy our conversation. Thank you so much for being here with me today. I think a great place to start would be for you to begin with a description of sound money. It's such an important central concept in the book.

This will probably be the least technical of the, the various cryptocurrency conversations I've had, which is refreshing for me. I'm certainly no economist, but your take on Bitcoin and its role in sort of the modern world is fascinating. So I think sound money is the perfect place to start because it's such a pervasive concept in your writing. Okay. Well, thank you. I agree. That is a great place to start. So I borrow the Austrian economist's definition of sound money as being money whose acceptance and value are one on the market, on the free market, by people.

willingly accepting it in exchange, as opposed to unsound money, which is imposed with the threat of violence, or whose acceptability or value is imposed with the threat of violence. This is, I think, is the separating criteria of what separates sound from unsound money. Now, it so happens to be that if you let the market decide if people have the choice in what to decide to use as money, there are some pretty good explanations for it. or what ends up getting chosen. So historically, the most common example of what has been always chosen as money was gold,

although that's not the only thing that has ever been chosen as money. When people have the freedom to choose the monetary instrument that they want, they will tend to choose the thing that is the hardest to make, or what is called as hard

money. So the hardest money ends up being chosen as sound money, and it ends up being chosen as the money of the market. and is therefore usually the soundest money. And the reason for that is quite simple, that if your money is easy to make, then it's very easy for others to make more of it,

increase the supply of it, and that will then punish or tax anybody who uses that money as a store of value. On the other hand, if the money is hard to make, it's hard for people to inflate its supply in response to increasing demand, and so the people who use it as a store of value You won't witness it, get devalued a lot.

Perhaps just not to take it for granted. If you could give a couple examples, maybe each of this concept of hard versus easy money, and touch on this concept of not being able to be a source of profit. So sort of creation of new money representing a small portion of the overall stock. Yeah, exactly. So if you look historically, why gold has been chosen as money, you know, it wasn't a coincidence and it wasn't because it's just yellow and shiny and nice. It's specifically about its economic properties, in particular about the fact that because gold does not ruin, its stock is accumulating over thousands and thousands of years.

There's no way to stop gold from being gold. It's the most chemically stable element, I think. So the supply of gold that we have produced thousands of years ago is still around today. And so we keep adding to that supply of gold. And that constitutes the gold market of all of the gold that's being held everywhere in the world today. So when people use gold as money, it's not easy for gold miners to increase the stock files of gold that exist on the market. Because the stock piles of gold that we have are the product of thousands of years of gold production. And so no matter how much we up the production of this year, it's always going to be a tiny little, well, not drop in the ocean, but a small percentage.

In fact, if you look over the last 80 years or so, 90 years, you see that gold production has pretty much, much always been at around the one or two percent of global supplies of gold. In other words, total stockpile of gold that exists on the planet, every year we add about one or two percent of it to it. But that would lead to the stockpile doubling around every 50 or 60 years or so. And that's basically what has been happening. And so if you look at the numbers for gold production, you know, they continue to increase, but they increase less than any other method. And that's really, key thing with all the other metals, with all the other materials that could have been used as money, if anybody ends up choosing it as money, it'll be quite easy and straightforward

for the people who make it, for the people who produce it, to make more of it, increase the supply of it, and then drop the price, call the price to drop. So in a sense, you know, people can either figure this out and understand it and then start putting their money in what's hardest, but I think the vast majority of people never even think about it. It's a naturally emergent outcome of markets to end up choosing money as gold because people who don't end up having no more wealth left in the long run. If you chose to put all of your wealth in copper, that just means that the price of copper goes up and when the price of copper goes up, copper miners can continue to produce more and

more copper. Now, unlike gold, copper ruins and russ and gets used up and gets destroyed all the time. And so the stockpiles of copper that exist in the world are tiny compared to the new mining production. In fact, well, not tiny, but they're around the same order of magnitude. So if copper production were to increase significantly because people are using it as money, the production of copper could rise significantly and the price would come down again. The only thing that resists this thing, which I call the easy money trap, is gold because it's the hardest thing to produce. and so this ends up people don't have to even believe in it.

It's harsh economic reality that imposes itself. If you choose any other form of money, you're going to witness your money lose value and your wealthless value over time, and that's going to impoverishing. And so the best example of countries that were stuck on the silver standard by the late 19th century, like China and India, suffered enormously from the fact that their currencies,

their currencies were effectively silver, and their value dropped significantly as the whole world was shifting more and more towards the use of gold as money. Another example I mentioned in my book, examples of the limestones that were used in the Yap Island, which you can see the photo of on the cover of my book, and also glass beads in Western Africa. These were very rare in Western Africa because they didn't have advanced glassmaking technology. but once Europeans started coming there,

they found that these glass beads were very valuable because Africans used them at a store of value, so they were valuable far beyond their market value in Europe or their cost of production in Europe. And so Europeans would bring large quantities of them from Europe to Africa and use it to buy things. And these beads, these glass beads later on came to be known as the slave beads because with these enormous quantities of beads

that the Europeans could get, they were able to buy so much of the property of Africans. And then they ended up eventually buying plays as well. And so it's a pretty sobering story about just the harsh economic reality of hard versus easy money. Choose easy money and your value is leaking out of your wealth, generation after generation or year after year. Whereas if you choose a harder money, you're able to accumulate wealth and it could save and accumulate value and improve year over year.

Yeah, so let's dive pretty deep into this idea of time preference. So having done such a nice job of defining both sound money and the importance of it being hard, let's talk now about the benefits of having that be the standard. So you know, you read a lot about what you call the Bella Polk in late 1800s and under the gold standard, kind of global gold standard. Let's get into the reasons why this might be attractive in contrast to the system that we're sort of all familiar with, which is, you know, government fiat money, its potential downs. sides, according to your theory. Well, I think at a very simple, basic level, before we even get into time preference, the best thing about this, the best thing about having a hard money is that if you live in a society with hard money, if you want to make money, the only way that you can actually have wealth and have access to goods and services from others is to go out and produce something valuable to others. So if you live in a society in which money is hard, in which you can't just print money,

you have no choice but to be useful to others. You know, you've got to go get a job, give people a haircut, cook for them, grow food for them, whatever, find something useful for others. So a society of hard money, the society in which everybody puts their head down and works and gets productive. On the other hand, the problem of a society with easy money is that it's possible for you to get rich without having to actually be productive towards others. And that's why, you know, historically, in many cultures, view digging for gold or gold mining is being looked down upon as a profession. There are negative connotations to it, which is that, you know, you're trying to get rich by digging for treasures or digging for gold, which doesn't really add value to anybody and doesn't really help anybody. It's kind of an antisocial way of getting rich because fundamentally, you know, the quantity of money that we use as a society doesn't quite matter. We could run the entire money supply of the entire world on any quantity or any money,

as long as we just keep dividing into smaller units. So the important thing is that, you know, everybody has to work. In the case of money that's easy to produce, then people just end up spending a lot of time on producing these forms of money and mining them. And this is effectively, you can understand that as being why gold emerges is money, because it's mining so hard, so uncertain, so unpleasant, and so toxic for people involved in it, and highly unlikely to offer positive returns because it's so rare and it's so uncertain, that it just ends up not taking up a lot of time.

People don't spend a lot of time in gold mining, and instead they go and get real jobs. In the modern fiat economy with government money, we have something equivalent to digging for gold finding treasures as a way of making money, but it's far more perverse, and that is using government's magic printer as a way to obtaining money. That just allows people to get rich by expropriating wealth of others without having to produce something themselves. So if you think about it, a lot of the world economy today survive purely because it has access to money printing from their local central bank. And you know, if you're connected to the central bank in one way or the other, if you're connected to the government, if your business is subsidized,

or if your business has a special credit, you know, if you're able to borrow at a lower rate than everybody else, that's effectively a license to print money. And so as a result, modern fiat societies have just more and more of people's time and activity goes towards rent-seeking, it goes towards trying to secure funding from the government, it goes towards figuring out how to make government's newly printed money come to me and not to you. It's a negative sum game in which people think that, you know, they're going to get rich by stealing from one another and everybody ends up stealing from everybody else

and thinking they're smarter than everybody else. But effectively, everybody is just stealing from themselves. And, you know, in the long run, even the winners from this game are kind of losers because it leads to an increasing number of people not being productive and instead being engaged in these rent-seeking bullshit jobs, whose survival is just purely dependent on government money printing. So that's the first part of it.

But more importantly, for me, and probably the reason that I'm so interested in this stuff and why I'm really fascinated by it is. And the roots of this, you know, go back to reading a book by an old Swiss banker called Ferdinand Lips, that's the name of the banker and his book is called

Gold Wars. I cite it in my book extensively. And in that book, he gives an incredible perspective on the role of gold as money and how civilizations thrived when they had hard money and how they collapsed when they did it. And there's, you know,

when you read that book you come up with an idea that there's something cultural as well about this sound money story about this hard money issue. And I think the way that I form also based on the work of another economist, an academic economist, the German economics, called Hans Hermann Hoppa. He wrote a book called Democracy, the God, that failed, and the first chapter of it discusses time preference. That was also very influential in my thinking, and I sort of

linked the two concepts together. So time preference refers to how much an individual values their future compared to the present, compared to the future. So somebody with a high time preference prefers the present a lot more than the future. Somebody with a low time preference prefers the present more than the future but not as much as the other person does. In other words, the person with a high time preference discounts the future heavily.

They think very little of the future. And so the lower your time preference, the more of a future-oriented person you are. And I think it's pretty unfortunate that we as economists don't spend more time on this concept because I think it's an interesting. enormous important concept. I make sure to teach it in every one of my classes, no matter what the topic of the class is, I always make sure to sneak it into one of the lectures where I talk to them

for about 30 minutes about time preference, delayed gratification, and the time frame of your decision is whether you're a short-term-oriented person or whether you're long-term and what this means and the consequences of it. There's quite a bit of research on it, but unfortunately not so much in economics. A lot of it in psychology and in other fields. But there's pretty impressive correlations that you can find between people's time preference and their ability to succeed in life. You don't need academic studies to tell you this. I mean, you just need to start becoming aware of time preference and start experimenting with your life yourself to see the impact of shifting towards a very high time preference, you know, and making decisions with no

regard for the future or doing the opposite in thinking of the future and having less regard for the present. I mean, anyone who's been alive has obviously experienced the impacts of future orientation versus present orientation can tell you. It's pretty significant. And the way that I see it, you know, in economics we talk about the trade to do with others, but the trade that you perform with yourself every day with your future self, the trades you perform in your future self are by far more significant to your well-being in the long

run than anything you do with anyone else. I mean, you'll trade with, say, 10, 20, 50 people a day. You were part of a big division of labor in, you know, in a company that has thousands of people. Well, yes, but, you know, for all of the trades that you conduct with all of these companies and individuals you deal with every day, the number of these trades and the influence of them is nowhere near as important as all of the trades you can. conduct every day with your future self. You know, when you wake up in the morning and decide it would be nice to stay in bed and, you know, just relax all day in my pajamas at home, but I have stuff to do if I care about my future, if I want to have a house, if I want to

provide for my family, if I want to have dinner on the table at the end of the month, I got to get out of bed and go and work. You know, that's a low time preference decision. You favor the future over the present. So every day, you're making thousands of these decisions. Should you buy the more expensive car right now and enjoy it or save more money for the future? And if you have a low time preference and you're always making future-oriented decisions, you're highly likely to end up succeeding in the long run. Whereas if you have a high time preference and you have and you continue to make decisions oriented towards the present, you're highly likely to screw things up in the long run.

I think the, you know, the archetype for this is like all these professional athletes who get really rich, really young and then they make enormous amount of money more than they could have ever imagined making and yet a few years after they retire they they're broke again they've spent more money that they could have even imagined how much they could be making from the sport and yet they've managed to not just earn it all but spend it all because if you're just always focused on the present if you're always focused on what satisfaction can I get right now there's no amount of money that could go into your pocket that you would save because there's a lot of money that could go into your pocket that you would save because there's always more fun to be had.

There's always a bigger boat, a bigger house, another car, another port car. You know, you can always keep finding thinking if you were short-term oriented, you won't be able to save a single dime from that amount of money. In the long run, you know, people, you can complain about what others have done to you and how others have short-changed you in life and how others have been mistaken, have done terrible mistakes towards you. But you know what? none of these other people are going to be able to affect you as much as you affect yourself.

And then you make that decision, you make these decisions with the future orientation. You are most likely have a much better future than if you make it with a short-term orientation, regardless of what anybody else does. And, you know, thinking of it this way, once you understand this aspect of what I think can be, I personally think is the most valuable lesson in economics ever caught me. It reminds me of that phrase, easy choices, hard life, hard choices, easy life. And it's a great point in the conversation to kind of tie this idea of time preference and the fact that maybe sound money imposes a lower time preference on, let's say, people,

individuals, but then more broadly on society, on how that then manifests. So maybe talk about the late 1800s as a period of, you know, on the gold standard explosion of technology relative to, as you explore in the book, sort of the preference for spending its consumption and debt that we've seen more recently declining savings rates. You know, the manifestation of these things, I think, is critical at a societal level. The value of money is very important towards the determination of individuals' time preference. And the reason is quite simple. If money is expected to hold on to its value into the future, people are more likely to

hold on to it and to save for the future. Whereas if money is expected to drop in value, people are more likely to spend it right now. So because time preference is positive, it's always positive, meaning that any individual will always prefer today over the future. If I offered you, you know, $100 today or $100 a year from now, assuming absolutely no change in purchasing power, you would prefer to take them today. Because, you know, time preference has to be positive because fundamentally what it really comes down to is that you are not immortal. and you could die in that year, but also you prefer to consume it earlier in your life rather than later, because if you get it now,

you can get to enjoy more of your life with that extra money than if you don't. So because our lives are limited, our time preference is positive. We always prefer the present. So the only way that I could get you to give up the $100 today for a payment next year is if I pay you a little bit extra. And that's where interest rates come from.

fundamentally, according to the Boston School, interest rates are a reflection of the fact that time preference is political. That's why we have interest rates. So if we live in a society with hard money, then interest rates are a natural market phenomenon. They're naturally emergent market price. And believe it or not, such places in this, saying this to people who live in modern economies with central banks

is like telling people who live in the Soviet Union that, you know, it is possible to have a free market in potatoes. You don't need the potato board to tell you how many potatoes to eat every week. You can just have a free market and then you can buy all the potatoes you want and grow all the potatoes you want and pay for them. And that's how the credit market works. That's how the money market works in a hard money economy. If somebody wants to borrow, they need to find somebody who has put up saving. And so the interest rate is the price that the borrower needs to pay to the saver so that the saver would forego consuming the money.

money today and put it into the investment, put it into the saving or into the loan. In other words, the interest rate is a naturally emergent price. And so the tendency of civilization in his book, he calls the lowering of time preference as being the process that initiates civilization. When we start lowering our time preference, we start thinking of the future and then we start saving more, and because we start saving more, that means more and more capital is available for people. More and more resources are available, and so people can invest more, and then with more investment, we get a higher level of productivity. In a hard money economy, you would get

a lowering of interest rates through people saving, through people deferring consumption, through people thinking about the future, through people basically giving up 10 apples today, so they would have 11 apples to borrow. And this leads to more and more capital, This leads to more productivity because, you know, when you work with a higher level of capital, you're more productive. So this is really the process of civilization. You know, we forego consumption, we delay gratification, that frees up resources to be invested. We invest those resources. That gives us capital goods.

The capital goods allow us a higher level of productivity. So we have a higher amount of output next year. And then we reinvest more and more of it. And then the quality of life continues to improve over time. So easy money or artificially manipulated money, like the one that we have today, comes and basically begins the reversal of this process slowly because it artificially manipulates the price of money downward. In other words, it artificially manipulates the interest rates downward by effectively inflating the supply. I mean, effectively, once the interest rate is lower, the money supply is going to increase. So, you know, we can explain this relationship either through the fact that the money supply is.

increasing and the value of the money is declining and so people want to hold less money and prefer to spend more, which means people are more likely to spend, which would explain the consumerism today. Or the other flip side of explaining it, which is just the other side of the same coin, the same explanation, is that it's the artificial manipulation of interest rates. When central banks set interest rates artificially low, that just makes it cheaper for people to borrow and it makes it less rewarding for people to say. And so the end result is that central banks encourage people to get into more and more debt.

Fewer people have savings. And so people tend towards this modern existence of consumerism. It's just for our generation, for our people my age in the 30s and 20s and 40s, you know, the majority of these people don't really have the conception of saving. Pretty much even as you start getting richer and start earning more money, people don't pay off their debt. People just get bigger debts. You move to a bigger home with a bigger mortgage.

And people think this is just... Business as usual. Yeah, business as usual. But, you know, it wasn't always like this. A hundred years ago, you couldn't just get into debt for anything. If you needed a house, you have to work your way into the house. You have to build it yourself or you have to save for it. I wonder if I could try to very briefly summarize your thoughts thus far.

And then we can... I'm impressed with how far we got in the conversation without using the word Bitcoin. But I do want to build a bridge from all of what we've talked about to Bitcoin today. So I think the way to summarize it would be that you've got these elemental concepts of hard and sound money, their impact on time preference, and the fact that the lowering of time preference itself is sort of like the civilizing process that I think I heard you say somewhere. It's what separates us from apes, right? That we're able to invest for the future and delay gratification.

And that the more of that that's happening pervasively at the societal level, the better outcomes will have longer term, the better improvement in quality of life, et cetera. So I remember reading a decade ago about the gold standard and gold as money and becoming really fascinated with it and ultimately sort of having to abandon it because quantitatively, if you look at gold's performance, its stability as a store of value, at least in the period that most people have been alive and thinking about this, let's say it's since the early 1970s, has been long-term volatile, by which I mean it has a couple decades in the 70s and 2000s where it has tremendous appreciation. And then from 1980 to 2000, it goes nowhere, it goes down a lot,

and it's gone down more recently. And so I feel like people's opinion of gold as a, let's say, an asset class, something that can be invested in or bought or held, pales compared to something simple like, say, global equities, which have been more consistent in the return that they've delivered to investors. So if I'm an investor today, which I am, and I've got savings because I've got a lower time preference, my view is I don't want to buy gold. I want to buy, you know, productive of companies, let's say, at reasonable prices. So that's something I'd love to get your opinion on is kind of squaring the performance, if you will, of gold. And maybe hear why Bitcoin is interesting to relative to gold, which has been around so long and proven to be valuable. So let's start

talking about those concepts now, maybe how you first came across Bitcoin and how you square this idea of gold's performance, if you think about Bitcoin as a digital gold with the performance of other asset classes. Moving on to Bitcoin, I think where Bitcoin is interesting, because in a nutshell, it's just a digital decentralized technology for doing gold's job. It's just the simpler, faster, cheaper way of doing what gold does. That's Bitcoin's importance for me.

And in fact, you know, there's nothing wrong with gold as money. The only thing that was wrong with it is that it's physical and bulky and then it requires centralization. And the centralization meant, you know, because gold clearance is expensive, carrying gold from A to B, moving it around, tends to be expensive, that gives an enormous amount of economies of scale

for people to use central clearance for payments. And so eventually we stopped using physical gold and we were using papers backed by gold. And all these paper became more and more centralized as trade started to expand and as communication started to expand, it was only natural that we would centralize gold in locations and then trade pieces of paper and credit instruments backed by it instead of it.

Now, that centralization is the problem, because the problem with gold then became. The governments took it over. They confiscated it in large quantities across the world, and the central banks of the world now own it. Now, the thing is gold is still money, because central banks still own it. And central banks, you know, every central bank in the world either has gold or has a currency that is backed by gold until today.

And central banks between them own about a sixth of the world's gold market. And so, you know, the way that gold's monetary role was, I wouldn't say it was completely destroyed. I'd say that it was subverted so that only central banks have it and that individuals are forced to use pieces of paper that are not fully backed by that gold. And as a result, you know, we've seen in the 20th century the value of all currencies is collapsed next to gold. In the long run, you know, today no currency has 3% of the value that it was redeemable for in gold in 1971. No currency has maintained more than 3% of its value.

So they've all lost more than 97% since 1971 or maybe 95% if there's a couple of outliers here or there. But they've practically all been devalued once. governments had the ability to devalue them by delinking them from gold. Now, in terms of the performance of gold, I mean, I think this is kind of besides the point. Gold is not the productive asset. So, you know, of course, engaging in productive activity is going to be more profitable in the long run.

The case for holding gold is the case for holding money, is the case for holding cash balances. And I think people miss the point when they say, well, you know, gold or who needs to hold money when you can just buy stocks and bonds and commodities? and all these amazing financial instruments that stock markets offer. And the point is that for me is a little bit like saying, you know, who needs a home when you can just buy a fast Ferrari or you can just buy a fast sports car? You know, the cars today are much faster than homes,

and so you don't really need a home. I think, you know, the value of money is that it is the thing that is the most liquid and the thing that has no counterparty risk, the thing that is saleable for its own sake, the term that Carl Manger uses is salability, the fact that you can always take money to the market and people will take the money. And so that in itself, you know, people need to have a certain amount of cash balance in money that they can be certain is going to hold its value in the future.

And then once that is secured, you can then invest in things that offer a return, but also incur a risk. the problem is that once you take away from people this idea of being able to have something that will hold value without risk and without return, then everything they have is risky, everything they have has risk. And so everybody is effectively less safe because you don't have that safety net of being able to have, say, six months expenditures in savings that you're not risking at all because, you know, case things go really bad, you still have enough food for six months or for two years or whatever. But I think the complete mischaracterization of the idea that people who believe in sound money believe in sound money over investment, it's a complete non-sequitur. The point is that you want to have a cash balance for uncertainty for the future so that you can

have something that is secure and then you invest. And I think if people had that safety, they would be able to take more risk in their investment. And I think more likely the kind of risk that people would take is that you would see more individual initiative. Once you've got a couple of years of expenditure saved and you know that these won't lose their value, then you can go into, say, setting up your own business. So having all of that money out there that's just trying to meet inflation is just fuel for bubbles. because if all of that money goes into housing and then people start investing a lot in housing, then housing makes great returns and then more and more and more of that money flows into housing,

which was, you know, that was the point then, if you remember during the housing bubble, the point was that housing is one way to be inflation. Housing is a store of value. You save your money in your house, make your house your saving account. And, you know, a house is a crappy saving account. A house is a great place to live in. But as a saving account, it's not ideal because it's not very liquid. You need to find somebody to buy it. And you can't sell off small chunks of it.

You can't sell chunks of your house off most of the time for most people. And so it's not liquid. It's not divisible. It's not where you want to have your safety net. It's not suitable as a safety net. But because everybody is speculating in it, so then everybody starts making good returns on it, more and more people start piling into that market, and then it keeps appreciating until,

of course, then more and more supply of houses gets made, and then the market crashes. And that's the story of... That's your original point. Yeah, that's effectively the Austrian business cycle theory. You know, once cheap money is available, people start using anything as speculative investment as a way to beat inflation, and that leads to bubbles in specific. sectors and then overproduction in these sectors will bring the price down and then we'll ruin everybody's investment. And so you would not have that if you just had this one little basic thing

for storing value into the future. And then, you know, if you need to buy a house because you know you want to live in a place and you like that place and you can afford it, you go and you buy a house, you save money and you buy a house. If you want to invest in a business, you go and you invest in a business. So I think that kind of world, investment and financial markets, would be far more sane and they would be far less of a gambling place where effectively you can just make money by anticipating the psychology of how people are going to switch from one place to the other. Yeah, it's a great answer to the original question of why consider gold if equities have done so much better. How might this transition happen? So if we were to somehow move the

world, let's say, or individual countries more towards a sound money standard, let's say it was based on Bitcoin, how do you think this will be precipitated? It seems to be a massive threat to powerful governments who are able to print their own currencies. I'm not trying to be political about it. It just seems obvious that that is a nice thing to be able to control and to do as a source of power. You know, I'm thinking about the ability to wage war or something. How might that change? It seems a long shot just from the cheap seats that this transition will be easy or fast. So how do you think about the move from where we are today back to a sound money policy and why might that happen?

Obviously, I don't have a crystal ball. I'm not going to pretend that I have one. So I don't like to make predictions about the future or how Bitcoin is going to unfold. Effectively, my book just starts from the starting point that this thing has been working for about nine years. It's almost 10 years now. And it does exactly what it says on the tin and it's been doing it reliably for 9, 10 years. Maybe we should start taking it seriously and thinking about the economic

implications of it. Now, whether it's going to take over the world or not, I think, is an open question. And also, I should clarify, you know, my book is not an invitation for people to go out and buy Bitcoin. Bitcoin is extremely, extremely risky. And I wouldn't advise anybody to have a lot of exposure to Bitcoin because, you know, it's extremely volatile. You don't want to have your entire, I mean, maybe you do. It's up to you to make that choice. But for most people, it's probably not healthy to be exposed to a large amount of Bitcoin in your portfolio. So I'm not trying to get people to use Bitcoin. If Bitcoin does win, it's not going to be because I'm telling people about it

or I'm evangelizing it or anything, it's going to be because of its own economic property. The economic reality that it will impose because of its scarcity, I think, would be, if it does win, that's going to be the reason that it wins, in my opinion. So in my view, what I think is I have two main ideas here that I don't think this is necessarily going to be ugly. That it's not going to, there's a temptation that this will lead to terrible hyperinflationary crises. And the whole world is going to look like Venezuela as Bitcoin takes over. There's that strand of thinking, which I think is probably inaccurate. And then there's the idea that governments are going to crack down on it and try and

destroy it and then it's going to be pretty ugly for Bitcoiners. And I think there are reasons to believe that that might not be the case on both counts. On the case of government clamping down on Bitcoin, I think the better metaphor to think about it here is that this is just an entirely new technology. And it just technology is not something that you can legislate away. You can't just ban it because technology creates its own economic reality. poses its own economic reality on the world. And so, I guess a good example would be, or an analogy, would be when gunpowder was invented,

governments didn't go and just say, let's ban gunpowder because that would render our swords ineffective. If you did that as a government, you didn't ban gunpowder. You just made your enemies pick up gunpowder and use it on you. So effectively, at the end of the day today, you know, nobody was able to clamp down on gunpowder and every inch of the world today is ruled by somebody who's got gunpowder somewhere, you know. So I think it's better to think of Bitcoin as this kind of new technology.

So governments have gold, governments have currencies, governments settle, famous between one another. And I think eventually they're likely recognized or they have to come to recognize the economic reality of what this thing is, which is that it's just a new form of gold. and if you use it, you're able to perform global settlement with money that is nobody's liability across the world in under one hour, which is not really possible with gold. And so in the very long run, I mean, I don't know how this is going to play out. I don't know what governments are going to do, and I don't particularly follow what governments do about Bitcoin because I don't think it ultimately matters. But I think in the long run, the people who utilize this are going to have an advantage over others. And so I don't really see governments clamping down on it.

Particularly another reason for that is that people within governments themselves are getting into Bitcoin. And so this is quite common that particularly, for instance, in third world countries, the government might be issuing warnings about Bitcoin. But the rich people and the people in government in that country are the ones who are buying Bitcoin in their country as well. And you also see this in the U.S. A lot of congressmen, a lot of politicians are already getting into it. And you already see the emergence of a small interest group behind Bitcoin in the U.S. There are probably more bitcoins in the U.S. than there are corn farmers. And corn farmers are just a small little motivated pressure group,

and they are obviously extremely influential in U.S. politics. Obviously, that's a bit of a stretch of an example. There are many other special interest groups that are not as effective as corn lobbies. And so doesn't mean the Bitcoin is going to be as effective as corn farmers very soon. But the point is that, you know, once you've gotten a small motivated minority that cares about something, it becomes an extremely ineffective mechanism for political success to try to oppose that thing. It's just that if you went and took on the corn farmers or if you took on the special interest group of any kind of small little minority, they'll lose all of the people who care about this,

and you will not gain any of the other people who don't really care about this. So, you know, the majority of people don't like that there are subsidies to corn, but they don't care about it enough to make it worthwhile for a politician to go up against the corn lobby. It's the intolerant minority idea,

and in politics, in democratic politics, particularly with the U.S. system, it's quite effective. So we have that aspect of it, that makes me think that it might just continue growing peacefully without government clamping down in a very ugly way. Secondly, there's this idea that, you know, also I think comes from a lot of the gold background of Bitcoin, which is that money is going to collapse.

And I think the problem here is that there's the analogy that we're going to end with hyperinflation and then people will switch to Bitcoin. And that may well be the case. And, you know, it's certainly unfolding in Venezuela and in Dubai. today, those countries have hyperinflation, and it can be horrible. And I think we're probably going to see more countries experience hyperinflation over the coming years. For as long as fiat money exists, there will be hyperinflation.

History shows that very clearly. But I think if Bitcoin continues to grow, if Bitcoin becomes the new gold of the new digital global economy, then the people moving onto it are not being deprived of a monetary standard. It's not like in Venezuela today or in Weimar, Germany, in the 1920s, wherein the collapse of the currency meant effectively the return to barter.

It meant effectively the collapse of the division of labor, the collapse of a market. People went back to a primitive society. And if you put people in modern civilization back into that state, you know, the human toll is going to be terrible. People are going to be dying in hospitals and people are going to be malnourished

and the effect on society is going to be absolutely terrible because we can't maintain modern society without the division of labor, without the ability to trade and coordinate, and we can't do that without money. So when the currency collapses, it's rightfully devastating,

but we're not going to collapse into Bitcoin or we might, but I don't know, my crystal ball doesn't work, but I think there is a possibility that we don't have a global, global economic collapse. Instead, we have a global economic upgrade effectively in that one by one people switch to the Bitcoin economy. And so the old economy is still there. It's still working

for the people who use it. But the people who switch to the Bitcoin economy experience the joys of hard money and the joys of inflation resistance and fast international settlement on the base layer and a global decentralized system of international clearance for payments You know, I think that's just going to be like the move from newspapers to reading websites on the internet. It's just when you're scrolling online, it allows you for such a richer experience than picking up pieces of paper and every morning and getting your hands dirty with ink. In the long run, that one is going to win, you know, it's just going to continue to grow, whereas the analog version is going to continue to with it away. And, you know, the interesting thing about this, and incidentally, I'm I've begun publishing an economic research newsletter or research bulletin.

I've already written the first one, and I'm finishing up the second one as we speak. And in this one, I talk specifically about this. I think an interesting way of thinking of it. I get into this in more detail. In the paper, we won't have much time to explain it here. But the global monetary system that we have built around the dollar is built on the idea that creating credit creates money. Money is credit.

In this kind of system, the money supply is made up of debt. In other words, when a bank engages in maturity transformation or in fractional reserve banking, they are creating new money. When a bank makes a loan, if the bank is fractionally reserved,

when they make that loan, they are issuing new money. So the money supply is increasing. The flip side to that is that when a loan is paid off, the money supply contract. And so there is a possibility of, I don't know if this is extremely crazy,

but this is the sort of stuff that I get into in the newsletter. There is this possibility out there that we just have an orderly upgrade where everybody pays off their debt and the global dollar monetary system just continues to shrink. You pay off your debt.

You move on to Bitcoin and you start being more productive and you start accumulating more wealth, and your Bitcoin's appreciate because Bitcoin is at a stage of monetary growth where the value is likely going to appreciate more. So over time, say, after 10, 20 years of slowly migrating to Bitcoin economy, eventually your Bitcoin holdings

become much bigger than your dollar holdings and your dollar debts. So you pay off your debt, and then your neighbors and cousins and friends all hear about this, and they all start getting into it. And then everybody just goes and starts paying off their debt. So now your local bank is just losing business because you're paying off your debt to them

and now you're functioning, the majority of your finances are working on the Bitcoin network with Bitcoin financial institutions and you're securing financing with Bitcoin and you're doing all of the activities that you used to do with your traditional bank. Now you've migrated over 5, 10 years or whatever, 20 years maybe. You've migrated towards using Bitcoin more and more.

So fewer people are using the traditional banks And that just leads to a decline in the growth of the money supply, possibly even a contraction of the money supply, and a contraction of the banking system and a contraction of the monetary system. And we could just see Bitcoin offers a way out of this mess of the global monetary system run by governments where governments print money, where people just from anywhere in the world can effectively get on this rocket ship that takes us to this new kind of. of economy on hard money decentralized all over the world with nobody being able to control the money supply. And I would imagine massive increases in productivity and prosperity and peace and cooperation amongst people as a result of that. We haven't talked at all about alternatives to Bitcoin, the elegance of Bitcoin as a system with this kind of interesting balance between math and cryptography and miners and owners

and this sort of preset supply schedule is all really what appealed to me about this world to begin with. It just seems very elegant. Of course, there have sprung up countless thousands of potential competitors, call them altcoins or whatever else you want. And my guess is that you're quite dismissive of their potential relative to Bitcoin's potential. But I would be curious just to hear a little bit more about your thinking there, maybe even specifically around close cousins of Bitcoin, things that are trying to solve the same problem, to the extent there are those alternative coins, I'm not well-versed enough to know. I'm thinking less here of something like Ethereum and more of something, I don't know, a Monaro or a Z-cash or something. I'm curious your take

there. Well, briefly, I find it hard to dig around the bush. I'm just going to put it out there. I'm part of a fundamentalist cult, if you want to call it, or many people do call it, fundamentalist cult of people who just think Bitcoin is all we get from this entire episode of what people think is this transformative blockchain technology. We are a group of people who have spent the last four years or so telling people, no, no, no, no, no, there's no blockchain technology here. There's no other coins. There's no other uses of this. Bitcoin is all you get.

Either Bitcoin works or it doesn't. And nothing of these other currencies and projects that build on its success or A-PIT or copy its software matter in any way. It really is Bitcoin is the one shot that we have at making this work. And none of the others are going to do it. And I know this sounds extreme and sounds crazy, and you wouldn't be the first to point us out. And of course, you know, before your commenters start hitting me, I assure you, I have heard every single one of the 1990s internet analogies that you can come up with about Bitcoin being the MySpace and Ethereum being the Facebook course, and Bitcoin being the AOL and all the other ones being.

That's fine. And arguing from analogy is not an argument. I think analogies can be useful as a ways of expressing a position, but it's not a way to refute an idea by just coming up with an analogy because anyone can analogize anything to anything. But the point is this. What Bitcoin has created is the idea to send value digitally and to send it directly from one party to the other.

And it only does that because it has managed to build an extremely intricate system of incentives and rewards that is extremely expensive. to operate. I mean, Bitcoin burns an enormous amount of energy and electricity every day in order to continue operating. And it's necessary for this giant Rube Goldberg machine, if you want, to produce the outcome of every 10 minutes, one megabyte of transactions. You know, we added on to this record. And once it's confirmed, we keep adding on to it. And then we follow one just long chain so that we have all of the transactions and everybody can keep track of everything. So engineers don't just put things together for fun.

You know, engineering, if you need to build anything, whether it's a car or a house or whatever it is, you know, you put things where they belong to perform a job with a specific purpose. And every single part of this Bitcoin architecture of the idea for making Bitcoin work was there for a reason. and it all fits together. And that reason is to create this idea of the ability to transfer value from one place to the other without having to rely on a central party.

You know, it's possible to transfer value digitally if you rely on a central party that holds the funds that I want to send to you. But Bitcoin allows me to send you funds effectively without us having to trust anybody in the entire world. It's exactly like a cash transaction. Now, the only way that it does that, as I was saying, is because of this complicated structure that it has. But functionally, without getting into the details of what that structure is, why it matters functionally is that that structure allows us to have a system that nobody can control, that nobody can sense it. Nobody can come in and say, oh, no, we don't want safe sending money to path. We're going to freeze both their accounts. We're going to take their coins.

Nobody can do that, and nobody can change the money supply. And that for me is the most important thing about it. The fact that nobody can change the supply of Bitcoin from 21 million is really the most astonishing thing about it. I get into explaining why it can't be changed or why it's hard for it to be changed in the book. But I can express it in a much simpler way, which is that nobody can force you to run the node software that you don't want to run. And so as long as you want to keep your 21 million Bitcoin supply limit, then you get to keep it. nobody can force you to run it. So if you and I want to keep running the Bitcoin with 21 million coins,

we can keep running it as long as our nodes want it. And it's a very strong shilling point for everybody on the network because they join for it. And defection from it is almost certainly going to fail. So obviously nothing is certain in life, but I think the possibility of Bitcoin maintaining its inflation schedule, its supply growth schedule, credibly as it has for the past nine and ten years, I think it's probably much higher than any kind of credibility we'd get from any other kind of money out there.

You know, who knows what the U.S. Central Bank or the European Central Bank are going to do with their currencies over the next 20 years. I think we have a much better chance of guessing with Bitcoin. So this is what makes Bitcoin value. Now, in order for somebody to be able to compete with Bitcoin, they need to compete with that. Okay? So all of the coins that are competing on things other than that are completely missing the point. When they talk about more transactions or faster, this better anonymity or all that stuff, that's beside the point. It doesn't matter.

What matters is, can it be not controlled by anybody? Can you actually credibly claim that nobody can control this? And that's really the problem that Alphcoins have. And the reason that I dismissed them all completely, and I genuinely mean it when I say that email, none of them matter. Any of the other currencies that circulate, I genuinely mean it when I say it, and it's not just because, you know, I'm a Bitcoin fan.

I've given these things thought, I didn't always think that, and I've heard about them and I've researched them for a very long time. But I've come to the conclusion that it's almost impossible for any of them to even matter, because quite simply, once Bitcoin was invented, you know, once that technology for digital transfer of value had been invented and was out there,

then anybody who wanted to use that technology could have already gone and used it. If you wanted something that wasn't controlled by anyone, then that thing is there. You could use it and it works fine. But why would you not use it and set up your own? If you set something up on your own, you're going to incur costs

and there's no market demand for a second less secure Bitcoin because the security of Bitcoin has always been a function of how many people are using it, how many nodes on the software, and how much hash power is going into the mining of it. And so Bitcoin has always been ahead of all of its competitors. And so all of the organic market demand would naturally go to Bitcoin. So the point is that, you know,

it's trivial to recreate the Bitcoin code. It's trivial to make a copy of it. But nobody has any reason to join that copy over Bitcoin because Bitcoin has already accumulated the much long, with track record and credibility and claim to neutrality. So the only way that anybody would join your other coin, of course, is if you market it, if you invest in it and market it and find a way to sell it to people. And that's effectively what all these other coins are.

If you've heard of any of them, if you've heard of any one of the thousands of Bitcoin knockoffs that are out there, then you've only heard of it because there's a group of people behind it that are actively marketing it. And so most of these have foundations, like an actual foundation. And the number of people who are behind these projects are always a small little number of people at the core and who can practically control this project.

And we've seen this with what is considered, you know, the biggest competitor to the Bitcoin, which is Ethereum. You know, we saw how trivial it was, effectively, for the people behind it to hard fork it or change the software for it. Because fundamentally, there's a small group of people that control it. And that's true of all of them,

because anybody who wanted to get into just the technology of a transfer of value over the internet, they went and worked on Bitcoin. So Bitcoin has continued to be the only true large-scale open source process that has continued to grow. And also, very importantly, because the guy who created it disappeared and it continues to grow. So it always had that wind in its sales.

It always had that momentum of being the place that is attracting all the people who want to work on this new technology, whereas all of the others have only grown in a very artificial top-down, astroturfed way, a small group of people trying to market it and flipping it out. And frankly, you know, it's been so many years that we've been hearing all of these coins come up with all of these stories about how they're going to revolutionize all sorts of things. And yet, until today, there is not a single one of these coins.

does anything that Bitcoin cannot do. I mean, functionally speaking, they all do the same thing. For you as a consumer, there's a shared ledger of transactions, and you get a private key and a public key, and the private key allows you to change the ownership of the coins on that ledger from one public address to the other. That's what they all do. And then none of them have been able to introduce one extra capability

that is commercially viable beyond this. And so after a while of looking into it, it seems pretty clear to me that the only thing these things can do is enrich the people who make them. But I can't really see any value for them because none of them will ever be able to step out of the shadow of the people that control it. And none of them will ever be able to credibly claim to be controlled by nobody. I think that's the key thing. The inability of the, I mean, it's like if you create that Frankenstein, you can't just say, I don't control it anymore. because how do we know it? Well, with Bitcoin, we've seen how hard it was for people who thought they controlled Bitcoin

to change anything about Bitcoin. And particularly, you know, there was a huge drama about Bitcoin last year when the majority of the miners, the manufacturers of the mining equipment, the people who own the mining equipment, and the majority of businesses that worked with Bitcoin and most of the big profile, high-profile, celebrities known in Bitcoin. They all got together and they decided they wanted to fix and change

and improve Bitcoin by increasing the size of the blocks in Bitcoin. And they failed miserably. They couldn't change it. Bitcoin is so incredibly hard to change that you have to really follow it for a few years

to get a real good sense of just how hard it is to change it. And no other currency can claim that. And if you can't claim that, then there's really no point behind any of the other things that you're doing because whatever it is that you're doing can be far more efficiently done with a centralized service,

which is what all these coins fundamentally are. I mean, they could be doing what they want so much cheaper with a centralized service. But, you know, they want to pretend to be decentralized, and that just makes it so much more inefficient. But in reality, you know, Ethereum's competition is not Bitcoin. Ethereum's competition is Amazon Web Services. And the cost of running an app on Ethereum compared to Amazon Web Services, services is about a million fold or 100,000 fold or something like that, because that's just

the nature of distributed computing. You're performing the app on thousands of different computers that need to keep continuing to sync with one another. It's completely hopeless, I think, with this notion. So I'm highly, highly skeptical about it. And, you know, I've been saying this for many years, and I've gotten an enormous amount of views from it from people on Twitter for it. And, you know, it's been years of people telling me, oh, no, but, you know, this point.

is different because it does this and this and that and or this blockchain project is going to be different. I still eagerly await today to see that anything comes out of this entire space that does anything the Bitcoin cannot do that is commercially viable. It's a fascinating take on what's become an enormous, certainly financial casino in terms of people, quote unquote, investing in or buying these coins, Bitcoin included. You know, everyone always wants to get rich without doing any real work. and this has been the sort of perfect, perfect probing ground for that type of behavior,

all your comments really center on this idea that it's very hard to tamper with. And, you know, you talked earlier about gold and we've talked a lot about sound money. And the beauty of gold is that no matter what human beings want to do, you know, we're not going to change the fundamental properties of gold and its availability and the difficulty or cost of extracting it from the ground. And that's what makes it sort of naturally. We gravitate towards it as a source of sound money. And you also talked about what the advantage of the advantage of the advantage of the

advantages of Bitcoin are over gold. So we kind of established those two ideas. Given all of this, I'm just curious personally if you own gold. There's this phrase that a prior podcast guest, David Salem made me aware of, which is that diversification is the only rational deployment of our ignorance. And gold's been around for 6,000 years, like you said, and Bitcoin for 10. So I'm just curious, given that your arguments really center around sound money and the inability of humans to tamper with in a centralized way that sound money, if you do own gold. Yes, I do. As you said, gold's been around for thousands of years, and I think it's still the prime money of humanity. I don't understand the Bitcoin technology well enough to trust it entirely, and I keep reminding people of this, and they should be reminding them more often that Bitcoin is software, and software has bugs, and we never know what might happen.

Just a couple of days ago, there was a new bug discovered that could have been exploited, may have been exploited, may have caused some headaches for Bitcoiners. It's not entirely out of the question that Bitcoin could be destroyed one way or the other through hostile attack or through just software failure. So it would not be the first pretender to the throne of gold that would have faced that fate. You know, gold has been around for thousands of years. And history is full of people who have come along and said, you know, we've figured out a way to make money that is better than gold or we figured out a way to, you know, let's use paper, it's much better than gold. And all of these experiments have failed in the end. and gold has survived. So it's not out of the question that that might still happen again.

Also, gold is far more distributed all over the world. It's far more liquid, far more and more people around the world own it than Bitcoin. And so it's got an advantage over Bitcoin in that sense. And it could well be, you know, in my book I discuss how, you know, people are always talking about how Bitcoin is going to die or what could kill Bitcoin or government could shut it down. And in my book, I think I present the idea that all of these, all of these kinds of threats that revolve around governments shutting it down are, I'm not saying impossible, but they're difficult because they run up against economic incentives.

They're as difficult as the Soviet Union trying to make planned economies work. You're flying against human incentives and humans will find a way around you. Even if you put guns to their heads, they'll find a way. And you know, drug prohibition is an example of this and command economies are an example of this. But what I think would be affected towards destroying Bitcoin or at least stalling its growth effectively is reducing its demand through reducing its value proposition by having sound money. I mean, if the governments of the world would shift to a gold standard today, I think that would be the most effective way to stop Bitcoin. Yeah, there would definitely be because, you know, the whole world has gold. The entire planet has gold everywhere, and it's far easier to move to using that as the medium of exchange that everybody uses all over the world,

then to wait until everybody buys Bitcoin and Bitcoin appreciates. And, you know, that's going to take a while for that to happen just even purely from a logistical perspective. You know, how do you get 7 billion people to buy something and hold it? And so it might just be the case if Bitcoin continues to go and start caring and start really caring governments and governments that buy inflation, if they continue to suffer, say, from hyperinflation and Bitcoin hastens the fall of a few currencies into hyperinflation, it could be that the remaining currencies realize the importance of what's going on and then get their act together and say decide, okay, maybe we move back to the gold standard.

that's still a possibility. So I would not write off gold's monetary role yet. I'm still a gold bugger heart. So this doesn't always sound very popular with the coiners when they hear it. Just a few closing questions to what's been a really enlightening conversation. The first would be, you know, if I had to sum this up in terms of what you believed in, and I'm positively surprised in how you kind of think about hedging your bets or diversifying your thinking. but one thing you seem sure of is that lower time preference is a good thing.

And I'm curious if you apply that in any other interesting ways, whether it's in your work or your personal life, if there are changes that you've made you view as positive that are the result of this philosophy around lower time preference. Yeah, I mean, I'm finding it hard to identify a pinpoint one specific example of where I applied this, but it's definitely changed the way that I make decisions in general. I mean, it makes you start thinking of life more in the long term in everything. And so I guess you could say I got married and I got a daughter. That's probably a very low-drawn reference. There's your one thing where you can pinpoint it, I guess.

Sure, sure. My closing question for everybody is to ask for what the kindest thing that anyone's ever done for you is. The kindest thing. I can't imagine anything would beat my mom and dad putting up with my childhood and feeding me and educating me and answering all the questions that I used to torture them with. Wonderful. Well, thank you so much for your time. It's been, as I said, enlightening.

I appreciate it. Thank you so much. Hey, everyone. Patrick here again. To find more episodes of Invest like the Best, go to investorfieldguide.com forward slash podcast. If you're a book lover, you can also sign up for my book club at investorfieldguide.com forward slash book club. After you sign up, we'll receive a full investor curriculum right away, and then three to four suggestions of new books every month. You can also follow me on Twitter

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