TFTC: A Bitcoin Podcast - #159: Jeff Booth

Episode Date: May 12, 2020

Join Marty as he sits down with Jeff Booth, Author of The Price of Tomorrow: Why Deflation is Key to an Abundant Future, to discuss: - Tech deflation in recent decades - The future of cheap energy - Why an inflationary monetary policy doesn't make sense in a deflationary world - How Bitcoin fixes this - The future of AI - The future of work - much more Follow Jeff on Twitter Check out The Price of Tomorrow Shoutout to this week's sponsors. Cash App. Start #stackingsats today. Use the promo code: "stackingsats" to receive $10 and contribute $10 to OWLS Lacrosse when you download the app.

What's up freaks, it's your boy Marty here to introduce this episode of Tales from the Crypt. I sat down with Jeff Booth, entrepreneur, tech leader, and author of The Price of Tomorrow. Why deflation is key to an abundant future. Very fascinating conversation. We get into the deflationary forces that exist in our world today and have existed for some time. How the inflationary monetary policies that exist throughout the central banking world sort of conflict directly with the deflationary pressures that we've experienced uh in the economy and uh the effects of ai on jobs in the future of humanity will we merge with machine

and be basically are we just stepping stones for machines becoming a predominant species on earth machines and software and artificial intelligence specifically i'm not sure i'm 100 sold yet uh though jeff does make some really good uh points in his book and in this episode this one will definitely make you think about where we are like our people who myself included are a bit apprehensive to an ai-led future are we are we missing uh the exponentiality of everything that's happened within our lifetimes and are we going to be blindsided by this stuff jeff makes a compelling case that we just may be um we talk about bitcoin as well and how it is imperative moving forward especially in the face of all the deflationary

pressures we're seeing in the tech sector and across industries uh beyond tech this episode of tales from the crits brought to you by our good freaks at the cash app you freaks may already know all about them if you don't know all about them let me tell you a little bit about them uh jack ceo square company that owns cash app uh he tweeted out earlier today that he's he's maxing out his sat stacking on the cash app so if you freaks didn't know uh now you do you can stack sats on the cash app you don't have to buy a whole bitcoin just buy sats stack sats and now they're making it easier to stack sats on a set cadence if you want to buy daily weekly bi-weekly monthly you can now do that on the cash app by setting up a dca function dca what's that dollar

cost average you learned a little bit if you didn't know that on top of stacking stats you can stack slivers of stonks all right via cash app investing if you want to stack stonks i'm not saying you have to if you want to if there's a stonk out there that you're interested in and cash app offers it and you want to buy it you can stack a sliver of that stonk as little as one If it's too expensive, you can't afford the whole stonk, you can buy as little as $1. Because Cash App is directly connected to your bank account, or it may even be your bank account, because they're offering account numbers and routing numbers where you can just get your income directly deposited into the Cash App. There's no four to five day waiting periods because of this.

You can start investing today. Cash App Investing is a member SIPC and a subsidiary of Square. uh as always almost forgot the most important part as always use the code stacking sats it's s-t-a-c-k-i-n-g-s-a-t-s when you download the app if you have not downloaded it yet you're going to get ten dollars and ten dollars going to go to our good friends at owls lacrosse in chicago that's owls lacrosse they're doing incredible things charity very near and dear to our heart owls lacrosse enjoy this episode made me think a lot pick up the book the price is tomorrow it's a good one

easy read on audible or you don't read it not audible you'll listen to it enjoy You've had a dynamic where money's become freer than free. You talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be.

be probably should be what is up freaks welcome back to tales from the crypt that your boy marty been here on a monday monday afternoon getting started earlier this week very excited for this episode uh very pressing topics considering what's going on in the global economy right now and around the world as chaos seems to be reigning supreme at the moment i'd like to introduce you freaks to jeff booth author of the price of tomorrow why deflation is key to an abundant future jeff how are you great thanks for having me marty again thanks for coming on um i was telling you i literally just finished the audible version of your book a couple minutes before we hopped on the zoom call and there's a i mean i want to dive into a lot uh for any of you freaks

have not read the book yet i highly recommend you go pick it up or listen to it on audible uh the topics covered are very uh very prescient considering what's going on today uh the we talk a lot about inequality in the world and what drives that and this podcast and in the newsletter i'm a big proponent of central bank easy monetary policy has has done a lot to exacerbate inequality in the world uh over the last five decades um and it's sort of a weird thing to have happen at a period of time when you have massive deflation in the tech sector going on. So I think we should start with what's been going on in the tech sector, how prices have been coming down in that particular sector

over the course of the last five decades, and how you sort of played a role in that. You're not only an author, but an entrepreneur who's started and sold many tech companies. Yeah. So where would you like to start, Marty? So, the devaluation of prices in the tech sector, what has been driving that? How cheap are things really today? Okay. So, I think let's first start with deflation or inflation, right? Kind of what's valued on each of those. deflation is when the value of your currency gets higher, is higher because goods and services

are cheaper in relation to. Inflation is the opposite. We grew up in an inflationary monetary policy and we've grown up with inflation all our lives. So it's hard to see that those, what I just said before are just facts, right? Not good, not bad. But we've grown up believing and taught that deflation is bad and i would i would argue why are goods and services getting lower price back if you have money right different winners and losers yes but not bad or good good so we've also grown up with thoughts that if you have deflation people will wait and they won't buy so you create a deflationary spiral um and and and it gets worse and worse and i would say That's just not true. If you look at when a new iPhone comes out and there's a line up around

the block, you can see the evidence and technology deflation is a good thing. Your cell phone is only 13 years old. The first smartphone is only 13 years old. And look at your home screen and think about all the things that you get for free, right? Every year it gets more powerful. there's more things today it's my camera it's my like guitar tuner it's my maps it's my virtual assistant all of this stuff is free and there's another flaw in people and say well it's not free really because because there's a whole bunch of advertising induced and that's not true to write code for my say my flashlight on my phone there's one flashlight app that'll win and write that code it costs nothing, right? And pretty soon AI is going to be writing the code. And it digitally

goes to everyone. So you could have a penny for every one of them and make them mint if you're the winner of that home screen. And again, so what that means is we're on a road and technology is taking prices down lower and lower and lower and lower and lower because of that. And it's a good thing and i'm sure nobody wants to give up their their cell phone but we still measure that technology thinking that it just is in your cell phone and we can have deflation there and abundance there well in the broader economy we have to rely on inflation so if you looked at cpi and and and the things kind of that are deflationary in nature things that are inflationary in nature it's really just because of manipulation of currencies. So you have massive debt and everything else

chasing into asset prices. So if you look at housing, it's going up because you're manipulating currencies. But take that one sleep forward, that same technology in your cell phone and more is moving across society. Every single company, it is the backbone. It is the new superhighway. And that logically means that shouldn't you have the same abundance and cost decreases in the wider society? The only reason you don't is because monetary policy trying to drive an inflationary environment against that. So you have two opposing forces, massive forces. On one side, you have technology deflation, wanting to make prices cheaper more abundance to everybody in that world you wouldn't need to work as many hours right um you

just have prices declining and you'd get more for less all the time against an inflationary monetary policy and central banks trying to stop that at all costs so that's where we are in the world yeah and it's really perplexed and it really drives home like what are these central banks doing and that's what i really liked in your book too you brought up the nassim taleb example of why we why we let forest burn every once in a while to help cleanse the system and particularly since 2008 like that we haven't been allowing the forest to burn our solution has just been to print more money and dump it into failing industries that are that are driving up asset prices particularly in the stock market real estate and other high-end assets that most people don't have access to or

don't have enough money saved up to to get access to um and so that's what i've been saying on this podcast is is really that people want to think blue or red team republican democrat and sort of solve the country's problems you have politics but i'm saying you're just you're just slashing at branches there and the root of the problem is the money and that's why i champion bitcoin because i believe that if we have a deflationary currency a hard currency hard money uh it sort of pairs well with the deflationary uh the price deflation we've experienced in the tech sector particularly yeah you just said uh you just said something i think that is is really important and if you've been saying this for some time i think you're right and actually a lot of people in the bitcoin

community would agree with you i agree with you what's going to happen i just uh so but you said something that's important on both sides of the aisle on the political rhetoric that you hear they they're not dealing with first principles on both sides and you're driving it further and further away from each other and they're screaming at each other and driving their bases further and further away from each other when both sides can't see it's a sound money problem right so think about the this in what uh tie tying this together if you bail out if you have negative interest rates number one and a ceo of a company um will a ceo of a company a big corporation save cash because what you're saying is don't do that right it's i'm going to punish

you for saving cash so you're going to be you're going to you're not going to trade against your peers because I've created an artificial incentive for you for cash to be worthless right so don't save cash that's a bad thing and then when you have a have an issue and so you have this economy primed for just perfection all the time and you're constantly lowering interest rates and you're constantly artificially and then there's a problem any event pick a print pin in the balloon now it's now it's on that warning no wonder the CEOs then say wait I don't have any money. Bail me out. Now the government comes in and bails them out.

And let's just use an example in, let's say, commercial real estate. Zoom users, the one we're on right now, 10 million users to 300 million users or participants on the call in about a month and a half. That 300 million isn't going back to 10 million. if you carry that forward that means commercial real estate prices have to fall a lot if you carry that forward that means the debt on the commercial real estate prices has to be wiped out right and that's why the government the fed says okay well let's take these leverage loans off your balance sheet and we'll put them on ours and then prices don't fall they're artificially and then the same government has to go in and reach into a whole bunch of people

and then uh prices of rents don't fall right because and then there's a whole bunch of people left out of that that they punished because because they didn't allow capitalism to clear and work and now you have to go in a whole bunch of social safety programs to be able to save the people that you killed in the first place by artificially propping up uh prices the insanity of this discussion it's just it's mind-boggling but they can't but but but but governments can't see it because they're trapped in a in a spiral and it's always worked before yeah and it's do you think it's really the governments can't see it or you think they they're just incentivized i think i think they can't see it i think there's a lot of people that would say it's the rich taking

right and and and they they i there's some in that class um but i think they can't see it right i think everything that i argue in the book by the way is against my personal wealth i'm one of the winners i i own technology companies some boards of technology companies and I have tons of assets and I could use this scheme and just drive tons of wealth but if you actually play that forward what that does to society

the bigger impact is what you're talking about to your listeners the bigger impact is you're driving society to break and people that can't pay their rent, pay their food pay for their food and everything else

because of artificially high prices that you created and then jobs are leaving the system because of technology anyways we'll listen to any rhetoric to say it's not your fault it's their fault and so if you drive hands in the if you're driving uh wealth into the hands of a very few people and most of the people don't have it there's no way for society to function actually there's no way for capitalism to function in that uh in that uh if you just play that path forward it doesn't work so yeah they have knots come and take it back from the house okay that's when the guillotines come out yeah that is where the pitchforks pitchforks come out revolutions history is full of full of this when uh when when the revolutions start and how do you create that

you create an internal enemy of your in your country first and then you need a bigger external enemy so if you think about what the politicians are doing right now internal enemies are on both sides of the aisle no matter what your political stripes are um that's what's happening and then it's not your fault it's china's fault or russia's fault or something out and you see this happening if you think it's happening in u.s what do you think it would look like in china what do you think it would look like in something it's happening everywhere yeah i mean we're at a truly chaotic time in human history and it's especially chaotic because of the pace of change that's going on within the tech sector with technology and so that's one of the things you

dive into in the book is the emergence of ai and the inevitability of it replacing far more jobs than anybody can fathom at the moment and i was telling you this before we hit record i've been an ai skeptic for for quite some time but your explanation of exponential functions and humans pretty innate inability to uh not understand exponential movements has me questioning whether or not i i'm missing this exponential move behind the scenes in the tech sector it's not even behind the scenes it's in my hand the supercomputer the zoom talk right now um like how fast is this is this change happening right now yeah it's i'm at the front i'm at the front of this i'm at the front of this in a whole bunch of different sectors, and I can't keep up. I know some of

the top AI researchers, the pace of change, and not just AI researchers in deep learning. I know some of the top AI researchers in the next level of where AI is going. One of those pieces, probabilistic programming that can do the same thing with less data. And there's a whole bunch of this research that's moving forward as it's moving across industry and so it's moving at a pace one of the things i talk about in the book and i've said on a number of podcasts is exponential change fools us um i've asked this question to tens of thousands of people all over the world and the following question and no one gets the answer unless you've known the answer before and that's if you fold a piece of paper on itself 50 times how thick is the piece of paper and you can

only fold it seven times before you can't fold it anymore but if you could continue folding how thick is the paper on on fold 50 and the and the paper would reach to the sun and and and i don't say that to to say i i know something you don't i say that to to say we're all fooled by exponential patterns right all of us because if you didn't uh if if i asked that to 10 000 people and half of them got it okay then then no we're okay it's enough people get it everybody's fooled by it right and so when you have technology moving exponentially um and we're likely to be fooled by that change um and and some people would argue that okay moore's law uh is going to run out of steam right and they might be and that's probably a fair bet

i talk about it in the book but after that whether it's quantum or something else and move on on x it's going to feel exponential the pace of technology change for the foreseeable future um and and when you fold a piece of paper i'll just do it right now with you because it's if You fold a piece of paper once, right? So I'll use this example on, say, additive manufacturing, right? So when we think of 3D printers, I'm sure everybody on your podcast listening thinks of 3D printers as this, and it prints a trinket, right?

Because the same thing that drives this technology paradigm work, it creates a crescendo, collapses, and then keeps going, is the same thing that we just talked about the first fold of the paper when everybody has this hype or the second fold of this paper saying wow we're going to be able to print out anything in our homes and everything else and then it shows up and you can print some plastic toy i mean it takes a full day to do it we we all think what a joke right um and that's what that's what happens but then the folds keep happening right and the folds keep happening and the folds keep happening and it and and and it doubles and it doubles again and it doubles again and so if you carry

those forward um where we were with technology last year we're on full 33 right and more as well fold 34 doubles everything in the last 50 years if you carry that forward to 3d printers your additive manufacturing if you see what's happening with additive manufacturing today there is no reason in that you could call it 10 years 5 years 20 years but the pace of change what is valuable in the things you buy right it's the information right that is die-cut put into into a factory, produced at scale, shipping channels to get to you, and it's all the cost is in that, right? And a profit for the manufacturer and all the levels of distribution to get to the store to get to you. What happens when the value of that mic that you have is just information?

It looks like a Google search, right? And that information can be printed anywhere. and and and think about the benefit to society think about the how much cost comes comes out and what you could have you could have anything you wanted really right and it and cost keeps coming down on that and it just looks like information but think about the job destruction as well so so so if there's going to be that job destruction right then and it's going to happen anyways then shouldn't you allow society to reduce prices so that you could actually instead of driving health wealth into the hands of a very few allow the allow the benefit to to reach most of society that's that's what i argue in the book yeah

these additive so these additive technologies like producing a mic how how how about the physical side of that like the raw materials need to go into that how so so some of that but the same thing there the same same thing there so so what did what did the original toner to print stuff from your computer right what did that look like at first first you went to staples or something like that and they had these giant printers that you had to take a disc in to go to the store and then the printers can almost no cost to you and they just get lower and lower and lower and printing seems really easy at your home right same path in products that's what it's going to look like at some point and you could argue that path is still 10 years out but it doesn't matter like

in in in the macro trend all of this stuff is deflationary it's at it's adding more deflation if you add on what you're talking about before artificial intelligence how fast that's moving it's staggering right it's stat it's moving at a staggering rate and it makes all it just reinforces all of these other industries and makes them happen faster well that's what scared the crap out of me in your book is the uh the realization that if ai is to be successful probably replaces humans as the smartest beings on this planet that's a very uncomfortable thought So, so that's, that's the problem. And I agree with that with it. So people, people won't want to listen to the physics, or why, why that's, that's actually a probability, or high probability. I would say it will happen. So you can argue when, because they're so scared of that outcome. Right? But it doesn't change the outcome. and and so so people would just okay that can't happen because we're smarter right why are you

smarter and you saw this in the book right why are you smarter than the next person why are you more creative a lot of it comes down to pattern recognition and you practicing something more than somebody else and seeing a pattern or a mental model somebody else hasn't had seen and a lot of that comes from what you read or what you've seen from somebody else. So it's a collection of knowledge. It's a collection of information that has been error corrected, right? What you're doing right now to a lot of your audience is hopefully correcting some of their errors, right? And, and, and, and, or maybe we're making an error, right? And it'll be corrected. But, but as you aggregate information up and you're correcting those errors,

right with with us you're able to see patterns that other people can't see so if you just take that down to the base level and you say what is information doing and as you digitize that information that's what that's what deep learning algorithms that's what ai is doing they're being able to it's able to see patterns that we can't see in all sorts of different uh and also it's a different disciplines yeah so that's what you described in the book is right now ai is sort of like a narrow understanding and narrow disciplines like in go uh the watson on jeopardy uh and other and self-driving cars were the examples you honed in on and so how close are we to to them being multidisciplinary or so it's cross-discipline

okay i'm going to take you into a place that this uh the first time i've said i've talked about this but if you just think about so what makes you really good at anything you do right 10 000 hours tons of practice right then the more practice you uh you are anything the better you are at practice makes perfect so that's an elite athlete that's a that's a banker that's any practice practice practice and as you do that um you narrow essentially the neurons firing and you're able to do things at ease that that other people can't do at ease because you've had all all this practice it's just your brain's rewiring itself um to be able to do things better and which frees up more energy or time to be able to see a bigger path and make creativity off of that that's

how but even narrow ai applied to an industry today has profound implications on jobs right because even in any one of those things it becomes better than you in a in an industry and a lot of our um and a lot of what we make our most money at is become becoming the best at something right in a narrow industry that's why we go to school that's why we do practice practice practice and everything else because i want to be the top so if you if you extrapolate what happened with go right where where where ai kills everybody and go like does anybody actually now and people used to make a lot of money from go like stars and everything else and maybe not in north america but in asia it's a big deal right um kids let's do this like chess before and everything else

because because you'll go on the circuit um who's teaching her kids to do that now right and and and so if you if you play that forward in every industry it's going to look like the same thing in every every every industry your general artificial intelligence where it moves from within the industry outside of industry and kind of conceive multiple things across industry that's still a ways off but when i say a way some of the top researchers talk about it being five years off some some say 15 years off but in any some say 30 years off but here's here's a hypothesis for me right i think it's actually and and i might be wrong here um but i think it's about our ability it's energy right and our ability to our brains to be able to hold enough

thought on something you have to practice practice practice practice practice breath but that means not seeing other things right and forgetting things right to hold on to something else you don't remember information exactly you don't remember all of the things i'm saying right now with perfect clarity you remember the things through your own filter bubble and the fan going in the background you're not even hearing that right now and for uh for you there's a whole bunch of information that your brain can't store right so at some sort of path on computers you could get to massive storage ability right and do it through kind of superpower of computers energy and computers and the hard way that would be deep learning algorithms currently the way that

they're working and and if if if this if this rate of change in computers and power of computers and storage keeps going as then you could do a kind of brute force method but we're pretty efficient users of energy right so what we can do as humans is crazy we can generalize and everything else forget that and do something else that's where some of the new algorithms are coming in ai right can you do some of the things we do can maybe can a computer forget this to be able to do and take a pattern into something something else that's where that's where that's going i can't say with certainty what date what date that happens but uh but uh but it's coming are we creating skynet is this uh is this something we should be doing i mean you

it's inevitable it seems like people are going to do it no matter what i don't think i don't think it looks like that i i don't think uh and and and i and i hope ai at that level isn't owned by a corporation right the uh but i hope it you have broader uh broader societal gains um but uh so i don't i don't think it looks this is dystopian is that and if you take another trend that's happening right with uh uh, uh, uh, uh, brain interfaces, right? What, uh, NeuroLace with Elon Musk is doing. I know the person who's running that, uh, that, uh, that, uh,

I think it's highly likely that, that we augment ourselves and tie into that superpower kind of as it's happening, instead of it being binary, it's the AI against us. Right. I don't think, I don't think, I don't think it looks like that. what does a human look like after that though after that that link has been made well are we even human anymore i and and i think i i think we're changing i think that is like i think uh and some people fight that change these are hard hard like when when when people hear this you're going to get some of your audience that's going to react

super negative and go because of fear right and uh and um and if it's happening anyways what does it look like and i don't know these and like these are we're entering in a time that uh that change is inevitable right um and you can run from it and say i won't change right or you can be and there's going to be some people there's going to be early adopters of say brain interfaces and it won't work well and there's going to be some and then it'll work but if you say the interface today does anybody even leave without their smartphone right the only difference is it's connected to your hand all the time and so connected to and so if you had that if you had that power at will and you didn't know it was really that power well you don't have to hold it

your hand you might you might take yeah i'm just saying as somebody i mean that's what you said early on your book you wrote the book you want to get these ideas out there because thinking about the future for your children and somebody who's got a two-month-old baby right now just trying to think of what his future is going to be like so that's the that is the crazy thing and i would say from a from what i what i try to i try to talk to my kids i try to debate i try to debate debate things at a first principle level right so what could happen not not get emotional on the things i might not want that to happen but if it but but if that's the path of technology and everything else at least i want to know that it that it is the path of

technology and then make my my own choices yeah yeah uh it is scary i'm one of those humans is like i don't want that i'd rather go live on a farm like what about the people just want to live on a farm and you know and that and and that might happen and actually probably i would say a lot of that does happen right a lot of that will happen it's happened in previous revolutions or previous technology that people have said the ledites right yeah i'm not going to be in part part of this right part of that is inevitable so part of that will happen yeah do we go out space after this in your opinion or do we just perfect everything here and make our immediate life i think i think space is inevitable too and i think some of these things are for me i'm not going to be the first

one on mars right the uh why would i leave this to go there right uh with with what that that would uh look like but i think space is inevitable at some point too yeah uh there's a james o'byrne is a bitcoin developer has this uh theory or not theory it's like a principle fermi's principle maybe where we where we sort of create the systems that destroy us and he's been talking about coronavirus being one of them if it does turn out to be something that was engineered like our are we experiencing like the height of hubris of man or is this just a natural progression of what's going on i think it's a natural progression tools are going to get uh so so most of these things technology isn't good or bad it's it's us that warps these things right

um the even if so so crisper which can change right uh your dna and give it not good or bad but it gives us more power to influence and some of the people are going to take these technologies and create more pain right and and and i generally think uh and this is general rule that you see in the book too um even game theory human humans have an evolution evolutionary bias for cooperation right and if we didn't um we wouldn't have survived right so it's an evolutionary bias the problem is when everybody's cooperating it creates an incentive for somebody to cheat right and and so in the short term you can have cheaters prosper and it's uh and so you see humanity go through these waves right of cooperation you could say bretton woods and

they're going to gold standard and all the wealth generated from all the countries and everything else after world war ii was a world of cooperation largely of cooperation and going off that and everything else and what's happening today is the opposite right because because because if you cheat against that system you win for a short time right and so now we're moving into a non-cooperative environment. And my hope is a whole bunch of really great people come together and force the other way. Because actually the incentives accrue when everybody's not cooperating, the incentives accrue to cooperate again. And so the new, so I tend to look at this as you could look at it as yin and yang, you could look at it as karma, you could

look at it as um but great leaders who unite are more powerful long term than ones that divide right but short-term ones that divide win right because the uh so so uh if you if you put those things together and what this looks like and in fact in a lot of the different bitcoin podcasts that i've been doing i've said that that that inst uh because some of the bitcoin it was fringe and everything else and it was started out of 2008 what are we doing here right and and and it creates such a religion around it and i think it's still right but a lot of the people in the community go and bash other people right and and and and it would be better if they didn't if they would be better if they talk if because people don't want to listen to somebody that's yelling at them

right and it would be better to unite i agree there um i think there be a lot more civility in some parts of the bitcoin i mean it's just most bitcoiners you meet in person are very civil yeah no i know like there's a some fantastic people in this community yeah and that i mean and that's the beauty of bitcoin like you're saying like uh incentivizing cooperation i think the network design does that beautifully between the full nodes the miners the people transacting they're just literally incentivized to uh work number one and their their own self-interest and that also just happens to be the self-interest of the network overall uh because cooperating It makes it more distributed, more decentralized, and therefore stronger at the end of the day.

Yeah. But let's use it as gold, like as against gold. And I agree with it. So when I would say gold has a market cap of something like $8 trillion, Bitcoin $150 billion, $160 billion today. The reason why gold has that market cap is it used to be tied to money. It's no longer tied to money, right? But all of the people in gold probably think the same as Bitcoin. They want something that can't arbitrarily be changed in rules.

So those communities seem to... So do I like the bet on Bitcoin as a new future reserve currency? Love it. Because it works on a network effect. All of the things you're talking about, it makes tons of sense. and that means that the the market cap of bitcoin should go go higher and then the market cap of gold should come lower if it's not going to be the future of money that's what i believe i might be wrong um but that's what i believe but i do when i look at both sides of the community on both sides

community they both believe and fundamentally that currency currencies are unstable right now because of government easing so so talking like that unites more than divides no i agree i had royce abog on who's the founder of gold money uh last month and so we can't agree we all want sound money i can and i get i get shit from the bitcoiners that are that are hardcore about this that we shouldn't be butting out with gold bugs um because they'll sort of just try to drift on our coattails because bitcoin is actually has a better chance of being successful which i agree a gold a gold standard will never come back it's too centralized and volts controlled by central authorities and uh transacting in gold using it as a bearer asset when you compare it

to bitcoin is just uh abysmally less of a good experience it's it's a terrible experience when you compare sending a bitcoin transaction at a coffee shop to trying to shave down some gold shavings to pay for a coffee but i think like you're mentioning here the ideology behind why we each want one or the other is because we want sound money and sound money as we're getting to in this podcast is it's going to make the world a much better place especially in a high price deflation era in the tech sector right and remember it's not just the tech sector it's all sectors the tech sector if tech so so you used to be able to is when in if you needed um a government needed to stabilize uh things and get people back working they used to put infrastructure projects

right essentially build a wider road so people could travel faster to their work to their office And you get not just the initial job benefit, you get a longer-term GDP boost because the time travel less means more efficiency. So it used to be one of those things that would provide not just jobs in the short term, but GDP gain in the long term because of productivity gains. The new superhighways are all digital. And just look at what we're using right now on the phone or on Zoom. we wouldn't have met um we i didn't need to drive to you i didn't need to take a plane to you to do this this job it's all around us right and and the cost how many extra jobs there's some eric who runs zoom is a friend of mine the ceo uh uh the um how many extra jobs versus jobs that they

took right or it's it's across borders there's no extra technology that is this those are all of those areas are the super highways of our future but does does this not create a scenario which people like so all these jobs get taken but you don't see people realizing that's happening and getting creative and innovating somewhere else creating more jobs like after the luddites came after the factories so and i i love that you asked that uh because because i think that's okay i have a hypothesis and and backed with a whole bunch of data you read some in the book why that is very unlikely right are there new industries created a hundred percent yes some that we can't see today virtual reality where there's going to be some the the how much opportunity there is in some of

these technology companies to consolidate information and industries that haven't been consolidated yet like health care and everything else um and having ai run that so it has way better outcomes staggered my apple watch uh has more information than my doctor right knows more about me than my doctor um so as this starts to happen it's going to uh accelerate and create a bunch of new industries. But the net sum of jobs in the new industries, I don't think have a chance of replacing the jobs that are destroyed. I might be wrong. Maybe I can't see all of these new industries that are coming, and I might be wrong. But if you play some of the themes we're talking about, if you just said AI in the future is going to be more

intelligent than us as you argue the point is at some point but on the way there it's not like a light switch it's stealing jobs all the way and then one day right so so and it's stealing jobs that's deflationary in nature right and it's getting it's doing more for less and it's it's creating code it's doing all of these things and it's doing more for less and then one day it's even smarter than all of us if every single job is a function of our intelligence right then which it's pretty easy to see it's a function of our intelligence and creativity and everything else and ai becomes more intelligent or more creative and everything else and it's hard to see these massive new industries that are going to be created um on that path maybe but uh

But if you drive policy, if you drive policy response, so if you make an argument for, I'm going to inflate my currency away and drive on the hope of that, I think it's just an insane, it's insane. Yeah. No, I mean, it, I mean, and I guess we can transition to like, so if we do transition to a more sound currency, And this is the one big question I have. You're advocating for UBI as all these jobs go away.

How do you institute that? So I don't know if I was advocating for UBI. No. So I was saying, what would it look like if you allowed prices to... My central premise is this, that technology creates that automation, right? It drives so much abundance. and abundance drives prices down and if abundance keeps driving prices down then a lot of things become free or almost free that's the central premise right and then if you

tie that and you can see this economics is about scarcity not value so if you have things driving to free everywhere it's hard to price those things they become cheaper and cheaper and that's deflationary and that's not such a bad thing if you're not pretending to stop it by living in an inflationary world because the air you breathe is free right um and nobody can charge it for you for it unless you want to go unless you want to go diving underwater they can charge it for you because it's scarce there right so so if you have a tech if you have technologies a whole bunch of them that are driving that product those productivity gains to society and as a result driving more abundance and and you stop that force right then you're going to make it less abundant

you're going to artificially price it and you're going to drive wealth into the hands of some at expense of others it's not going to be broadly distributed to society so so i would say my argument is broadly distributed to society stop manipulating currencies and let it and let let because they're not going to be able to stop it anyways central government no matter what they're not going to be so and and if they try you're going to have this massive inflation as currencies collapse right and then it's going to go back but that trend no matter what you are not going to be able to stop the deflationary trend if you try you you divide society so bad but before we get there we go through a bunch of world wars right to uh so so let it happen

and then on the transition the transition is the hardest thing because if you let it happen and at the rate it wants to happen right now because we've kicked the can down the road so bad, debt has to, and prices go down, debt in real terms can't be paid back. And we already, and because we've manipulated prices so long, we've created so much debt in the world. That's a big problem, right?

So what's happening is governments are trying to outrun the debt problem by printing more debt or by creating more debt. right? And incentivizing debt and spending, just try to outrun and inflate away. Because if you let deflation happen, the debt gets a higher cost in real terms. You can't pay it back. That transition is going to be hard and it's going to be really hard for central banks to understand because this is a structural change that they haven't seen. None of their economic models could see what we're about to see. They're looking backwards in history

on a different time frames yeah the models the models the models they uh that's why so i actually worked at a fund as an analyst and met a tutor's fund specifically and we had to uh just as a product of that job i had to follow fed tea leaves central bank tea leaves from around the world and that's what really made me realize that they were way outside their depth is the models they would use to to project forward and the the data that would come in the future uh that would be nowhere close to those models somebody came to me that worked at the in those models as well you're saying the same thing but somebody came to me out of one of my podcasts and and he said he said i worked there and he and he said when you see what's happening it's nothing short of criminal

it's uh um it it it it it's nothing short of criminal yeah and so it's more of a political will to let this happen than not um it's either that or you're forced by the point at which you can't outprint the the debt um so you're taking so so the central government central banks right now are taking all the liabilities off of the private sector right and they're you don't have capitalism anymore you don't have any price clearing mechanism you have misallocation of pricing everywhere and interest rates are about to go negative and they're gonna go very and what does that do to pricing and risk and and what there is no free market right so it's so distorted how does an

entrepreneur decide to go and build a business in a in something that's that distort it you're actually you're making it worse yeah and so do you think it just collapses one day because of confidence like is there is there a number or is it a confidence game so so the the debt in the world so 185 trillion of uh of new debt creation in the last 20 years to stop what we've been talking about right and every year it's more to try to to get two percent inflation rate right every year it's logically more but that makes sense because because to stop the exponential deflationary force of technology you have to exponentially increase monetary easing to stay even right so so everybody is looking and this is one of the things in in projections that make a

lot of people um they're looking for that that date right that time that time we're so far past that time right there it's and and and so that would so the 250 trillion against an 80 trillion world economy was looking backwards what do you think debt is now if you if you are about to be if you try to stop what's happening with covid and the economy um this this year globally right does that number probably not double but does that number um way bigger 100 trillion maybe more right to stop stop what's happening and the economy is smaller right everything i just said is a fact and that fact it doesn't count the unfunded liabilities and pensions and everything else and they um globally doesn't count all the black pools of money in china that are pretending

to be paid back that it doesn't count those things it's just what's known it's way worse than that So when you ask a question, when does it break? And you say, it's already should have broken, right? A long time ago, because this can't be paid back. There's no way any of this is going to be paid back. It's just a Ponzi scheme. So when does this last person hit the bottom of the pyramid and decide to start running for the exits?

that's that's what's happening right now and and some of these things can go on for way longer than you think they can go on but at some point people realize by the way the debt itself is a massive drag on future growth and it's actually disinflationary in itself because they're assuming you have to increase taxes to pay the debt you have to slow demand in the future you're just pulling forward demand so so yeah we're so far past that point that it's it's ridiculous but can the governments all over the world paper over our current problem and pretend again maybe i don't know but if they can they won't be able to next time and and and all that

all they'll be successful in is dividing society because by doing so you you enrich a whole bunch of people with assets and stocks and everything else and you improvise others you pick the pocket of this you pick the pocket of societies and you transfer that wealth to to to others and so so that becomes a real problem that becomes that becomes what breaks things yeah no i mean i think that's becoming glaringly obvious to people especially those who are being forced to stay home and not work and they're living paycheck to paycheck and they've got that 1200 stimulus check that you're not going to hold them over i don't think it is glaringly obvious what we're talking about right now it's not glaringly obvious what you said what politicians do is what is a short

term is and so you could do this you can do this and pump this up and then pretend that you're saving somebody else by giving them a tiny smidgen so they can pay for their officially and they believe that you did the right thing i don't think it's glaringly obvious at all i don't think and and this is we are not biased to do to do the long-term best interests right we're uh what what's what's right now what's immediate into politicians are elected for four years right what can i do right now um in the face of that trump's tax cuts which makes the uh which makes the deficit that much bigger and before this actually boosts the economy and everybody thinks he's a a hero because he spent tomorrow's dollars today to artificially boost the the economy

and you have labor and then you have unemployment going down those jobs aren't great jobs right they're they're um but you have an unemployment going down which which drives the base and says wow this guy knows what he's doing but it's all artificial right and at some point that uh that us lose everywhere and that's what's happening yeah yeah the signs i've seen are when neil kashkari went on 60 minutes and said oh we can print print unlimited cash then people started questioning like why do we pay taxes if you can just print cash yeah if you can if you can print if you can print out any anything and then instead of giving me what twelve hundred dollars give me ten thousand yeah yeah it's like how many how many of those stimulus checks do people get where

where they're like, how is this working? It's fascinating. I mean, this is why I feel so compelled to educate people about Bitcoin. I hope that Bitcoin, as an alternative to that central banking system, this distributed monetary system that cannot be corrupted in the way that the central banks of today are, sort of provides a safety net. Hopefully, we're doing a good enough job to build out the protocol

so that people can adopt it at a sufficient pace. But I do like to envision Bitcoin as a sort of fallback option and a point of optimism in this current chaotic world. Yeah, so it is for the people who hold it. And I think you're going to see massive acceleration of gains there. So that I all agree with. But I'm going to say something potentially controversial to some of the Bitcoin community.

I suspect it's needed, I suspect it's where it's going and I absolutely hold it in my portfolio and I tell all my friends, make sure you own this. I hope it's not needed. Because if it's needed, it means the existing system collapsed so hard. hard and if you have only a certain number of people if the on-ramp comes too fast and you only have a certain amount of people that have wealth in bitcoin and everybody else is is on the street think about what that looks like yeah it's a it's a it's a it's dark for everybody and when we shouldn't be wanting that outcome right we should be we should be wanting an outcome where central banks and governments get a little get around and say this is insane let's build it let's

build a transition to bitcoin or something like that and it can be a new reserve currency that's what we should want no i agree i agree and i said this when somebody asked me last week on twitter and i was saying hyperinflation is possible in the future and that's what most people think bitcoiners want that but no you don't want that it'd be chaos in the street and like like you're getting to here like if this happens in that fashion like do we and do we just shoot ourselves on the foot as a society as humanity what we do what we do the unintended consequences and a lot of people can see one one order of magnitude they don't see the order of magnitude they're kind of the only unintended second order third order fourth order effects these are just

looking at the next step and so so really great investors really great entrepreneurs really great are doing okay if this happens then this then this the and they're building mental models on all this and then what if this happens it looks the opposite and they're asking all the next steps from first from first principles i think that's critical right now um and it's it's critical in your investment philosophy too right so from from an investment philosophy um if if governments get away with this again and cash becomes worthless then you need to store that value somewhere else but like bitcoin like assets like everything else today bonds if you bonds if you know interest rates are going to go down then bonds are a good bet longer term it's just inverted it's just the

right so if you're in there too long and it goes the other way you're wiped to zero right so So some of these things, it's really important to ask, if this happens, then what are the implications of that happening everywhere else? Yeah. So somebody who has thought through this pretty thoroughly, it seems, if you were given a magic wand and you were able to dictate some of the transition needed to sustain cooperation and civility in the world, what would you mandate? it um i'm fortunate to be in a position now that i'm starting to get into some of those

conversations the house of commons in canada had me in on friday to to talk about uh policy and recommendations and at least that a government is actually having these conversations that it invited me into the finance committee um that yeah that those conversations are starting to it's not just in canada i'm starting to get pulled into a whole bunch of these internationally um then then potentially you could build the on road on road to something that is more sound money um and and and transition the negative societal uh costs through time to be able to to get there um and and what would that look like it's hard to say exactly what that that looks like uh but but um i suspect that some central bank at some point or or a collection of them

will peg to bitcoin right um maybe before they do that they'll start buying in the background but uh um and but i but but this because this whole thing is global in nature um it's uh it needs to be handled globally in nature yeah do you think we could cooperate as a globe at this scale you say in the book you need a common a common goal a common mission like the moon race yeah can we create that with a money race so that's that's another theme i've been harping on to bitcoin is like the simple simplified things in the in the reproducible memes very memorable memorable means and i've been saying something fix the money fix the world it's that simple that's that's what happens that's exactly what happens people don't realize

how much of their life is in chasing around on this and storing about and on a on a system that's broken they have no idea that that they're caught up in this spinning right i i need to and my my family has uh two jobs working as many hours as i can so i can pay so i can save up enough a deposit so i can buy a house that's being artificially stimulated and everything else and most of my time my most valuable thing is not my money my most valuable thing is my time is going in to drive this cycle in perpetuity right and people don't even know it they don't they're just so so but i need more than the next i need to be able to feed my family and it just in perpetuity it go uh it goes on if you actually valued your time most of and and you could see

wait if we built this a different way i would get all of the benefit with way less time and my time would go into other stuff but it's hard to see that it's hard to see that when you're trapped into when you're trapped in the system you're you just fix fix the system fix the world you're exactly right um you have more time to go into into pursuits that are more valuable no i agree and actually another bitcoiner masir mamadov shut up masir he actually just wrote a book this book will save you time and it explains bitcoin and sound money and and how time is your most valuable asset and you're you're giving it away for a currency a monetary system that inflates away the value of that time right this money's supposed to store your work exerted over

time and it's just debasing that time spent right um so another book you got to read two books freaks after this podcast um jeff has been a fascinating conversation really thank you for all the work you're doing i mean and that's the thing we have to leverage these technologies and specifically the communication technologies that exist today to try to educate our fellow man about this because this is the biggest problem in the world uh keep doing this keep doing this do this have your have your audience do that like um take this forward right they just the more people that are talking about this in a constructive positive way and and building if people can't see an on-ramp to kind of a brighter future they'll stay in the past right and so if you can you can you can

tie these things together and ask why is it bad if you worked less and got the same amount as today right if you why is that a bad thing if you if people can actually see see that and and started to see then the technology gains would then if the population understands that in general or more people understand that in general it's it'll happen it's more likely that we'll have a soft landing or transition that's that's amenable i agree no i mean there's too much pessimism in the world right now it's it's i mean especially with this lockdown going on it's like hard uh for a lot of people to remain optimistic and maybe that's what we need to do is create this this um this sort of moon race for the future we need to fix the money then we'll fix the world

like let's race to do that and and all the other yeah all the other problems end up being actually a symptom of this problem yes um all right let's keep fighting a good fight where can we find out more about what you're doing how can we help you um comment on the book again i told you before this started i don't need to sell a book that's not the last thing i need is to sell books from this the the most the biggest thing is i think about my kids i think about the society in the future and this is the most important conversation we can have so if you can carry the forward the conversation. If any of your audience wants to carry it forward, please do.

My Twitter is at Jeff Booth. My website is just a placeholder website. Some of the different companies I'm involved with is jeffreybooth.com. The book is The Price of Tomorrow, Why Deflation is Key to an Abundant Future.

The book is on Audible. That's how I consumed it. If you put it on one and a half speed, you can actually blow through it. Five and a half hours, it seems daunting at first, but you can up the pace, which I'm sure you guys are doing for this podcast right now um again thank you jeff it's been a fascinating conversation i think it's really important work what you're doing and and thank you for somebody who doesn't need to has had much success in life and is is could rest on his laurels to get out there and and try to

champion uh a good message for for the rest of humanity is is extremely laudable thanks thanks very much all right that's all we got this week freaks peace and love