TFTC: A Bitcoin Podcast - #406: Debt-Based Colonialism and Structural Adjustment with Alex Gladstein

Episode Date: March 20, 2023

Join Marty as he sits down with Alex Gladstein to discuss how the IMF and World Bank harness debt to funnel resources from poor nations to rich ones. Alex's article on Bitcoin Magazine: https://bitcoinmagazine.com/culture/imf-world-bank-repress-poor-countries Alex's Essays: https://alexgladstein.com/ Alex Gladstein at HRF: https://hrf.org/team/alex-gladstein/ 5:26 - In town for SXSW talking about CFA franc 10:06 - Colonial exploitation 17:21 - Transfer of control of energy 19:51 - Outsourcing the cost 28:24 - The unrecorded losses 36:38 - Structural Adjustment 42:36 - What it could look like without the current system 49:32 - Double standard 52:51 - Bitcoin fixes this 1:01:13 - No political solution 1:04:16 - Odious debt 1:10:10 - Biological effect of wage deflation 1:12:30 - Bitcoin fixes this - again 1:20:00 - Wrapping up Shoutout to our sponsors: ⁠⁠Unchained Capital⁠⁠ ⁠⁠River⁠⁠ ⁠⁠CrowdHealth⁠⁠ ⁠⁠Bitcoin Talent Co⁠⁠ TFTC Merch is Available: ⁠⁠Shop Now⁠⁠ Join the TFTC Movement: Main ⁠⁠YT Channel⁠⁠ Clips ⁠⁠YT Channel⁠⁠ ⁠⁠Website⁠⁠ ⁠⁠Twitter⁠⁠ ⁠⁠Instagram⁠⁠ Follow Marty Bent: ⁠⁠Twitter⁠⁠ ⁠⁠Newsletter⁠⁠ ⁠⁠Podcast

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If 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. Alex, it's been a while. Happy to be here.

I'm happy you're here. There's a lot going on in the world right now. Yeah, right now my mind is focused on how comfy your chairs are. Thank you. These are pre-Nixon ripping us off the gold standard chairs. This is beautiful. This is the quality we can have if we bring back a sound money stand. These are not fiat chairs.

These are not fiat chairs. It's okay to buy non-fiat chairs with your Bitcoin. You should sell your chairs for Bitcoin, actually. It's the other way around. Okay. These ones are worth it, I would say. How's it feel to be back in Austin? it's been great it was surprisingly cold yeah i i've been coming to south by every year for

seven or eight years and uh it's always hot here like uncomfortably hot and this is the first year it's been like temperate and mild which is probably nice for you guys right yeah i'm liking it i got to wear a sweatshirt at the beefsteak last night yep i wish i had brought a sweatshirt to the beefsteak last night i was cold you should have let me know it would have brought you one i know well it it was soon not a concern after the waves of delicious food and and uh and beverage hit me so we were fine well the beefsteak was incredible we also had an incredible pre-game to the beefsteak which was the hrf event right outside this wall here yeah we've been doing events with bitcoin commons for the last few years now um typically what happens is the south by organizers even the

the largest creative festival you know on the planet arguably or at least one of the bigger ones they totally ignore bitcoin usually they have like a slew of altcoin programming pay for play you know last year they had like the chain link guy give a keynote and stuff like that good time but usually it's like bitcoin's not on the radar which i find it unfortunate because you know most of these people are pre-coiners you know they'd be they'd be interested a lot of them not all them are no coiners so i was happy to submit a a proposal this year and they accepted it which was cool and it was about fighting back against monetary colonialism so we had frida naburema and maget wade here uh at south by we had a huge line of people waiting to get in uh it was very full

we probably had a couple hundred people there it was great we talked a lot about bitcoin and empowerment and on ending colonialism and exploitation and then we came over here for a little little party after yeah and the uh are we allowed to talk about what was previewed here yeah yeah so we have the uh nine minute video diving deep into uh the cfa the the way the french have sort of financially colonized parts of africa totally with their currency that they control in paris and are able to debase people in senegal and other countries yeah there's an animation team that i've been working with over the last year and a half and three months ago we started work on a video to explain the sifa system sifa is the way people on the street call the the cfa the colonial

french franc currency that's used in 15 african countries today ever since world war ii 180 million people still use this thing they call it the sifa and we wanted to do an animated video um Because you can do a lot of kind of like historical explanation through animation that I find it's a little tougher to do in sort of a doc, a live doc. Yeah, you don't want to do a dramatization. It's so cheesy. We used my initial essay from two years ago

as kind of one of the grounding plot lines. And then we added a bunch of other stuff and parts of my Check Your Financial Privilege book as well. And then also just extensive interviews with Farida, who's kind of the main character of that story. And we ended up, they storyboarded it, they put it together, and we went through a bunch of edits and got a 10-minute video done and released on Twitter and social media, YouTube, yesterday.

And I'm very proud of it. I think it hits hard. We're going to be playing it tomorrow at the Takeover when I interview Farida about this topic. And if you want to check it out, it's pinned to the top of my Twitter, profile at gladstein right now um but every detail was carefully considered we'll put it that way it's it's hard to explain something like the sifa because it's it's that's dynamics are so hidden and there's so much there there's so much going on that we want to like shed light on all of it

it's hard to do in two minutes or three minutes so we really wanted that full 10 minutes you know but um now we can we can go deeper and deeper into those dynamics uh in a longer format here for sure yeah i mean sifa is just one example of this financial colonization that exists and this is an example of one country doing it but if like we have the article you wrote for bitcoin magazine that dives into other entities out there that aren't just one country but represent a coalition of countries like the imf and the world bank yeah i mean look i i think that bitcoiners know that the imf and world bank are up to no good i think that most people know the imfs up to no good like most people especially people in the global south they're like screw this they

protest against the mf all the time i think that a lot of people in the west think neutrally about the world bank or you know maybe it's this thing that has downsides but we really need it you know who else is going to fund these projects so there's just so much misinformation about these institutions out there and you know to be honest with you I didn't I didn't have a like a detailed understanding of why they exist or why they work beyond kind of just like a surface level understanding of it before last summer I was really intrigued when I learned about how the system worked and how the IMF was so integral in maintaining it like when for example in 1994 Before, the SIFA was devalued by 50%, wiping out half the savings of all the people who used the thing, making everything way more expensive for them.

That was something the IMF was involved in. So that was like the SIFA dictators. Basically, the 15 countries that use the SIFA, almost all of them are dictators. And they'll basically negotiate with the French and they'll enact policy that's good for them but terrible for everybody else, essentially, living under them. And the IMF was was issuing this like dictat essentially that that we recommend you devalue by half so that your exports become more competitive. Right. And I was like, hmm, there's probably more to that. And what you would what you would I think I want to I'm trying to paint through my essay called Structural Adjustment, which is coming out as a book in May before the Bitcoin conference. The book will be called Hidden Repression, How the IMF and World Bank Sell Exploitation as Development.

and i'll be giving a keynote at the bitcoin conference in miami about it um but basically what i've what i'm trying to argue in the book is that you had this process of of timeless process of stronger countries taking advantage of weaker countries or nations or empires or what have you and and a lot of this was monetary going way way back and something you notice is that to sustain our way of life in what we would call whether you want to call us the core countries the economic powers whatever you want to describe them as but in modern times we're talking about the u.s germany japan you want to go back we're talking about the british empire whoever was like the most dominant economic power or collection of dominant economic powers they constitute what

we call the core and then there's the periphery right so what you what you realize and observe is that the core wants to reduce inflation at home and subsidize the way of life of people there. And that's pretty hard to do. So one thing that they do to overcome that is they get cheap inputs of labor and goods from what's called the periphery. Or you could say global north and global south,

or developed world and developing world. You know, there's all kinds of different language we've used over the years. First world and third world. The audience kind of gets what I mean. But the point is that our way of life is inextricably linked, not just to the values that our country and our countries have been built on. Like, trust me, I'm a huge supporter of individual freedom and, you know, constitutions, liberal democracies, checks and balances, property rights, free speech. Like, I really love America for these things.

And I love Western civilization for these things. Like, I don't want to come off as some sort of communist or something. like that's what i believe in most fundamentally the thing is we have to understand that we are successful not just because of these things not just because we have free speech not just because we have property rights not just because we have open capital markets not just because we allow commerce to flower a lot more than than in a closed society not just because we have dissent and civil society and the ability to have things like bitcoin commons that is a massive part of why we're successful but another really large factor in why we're successful is that we steal

things from poor countries we steal time and we steal resources from poor countries or we exploit it at a you know at a big big big discount and i think we should just be humble about that and then we can try and think about how to make a better world and um we don't have a counterfactual like we don't have a world where that didn't happen unfortunately you talk about again germany france britain united states japan we got to where we are today in no in no you know small way because of colonialism and resource colonialism it's just part of the story is that does that resonate with you at all yeah it totally doesn't particularly because i know we were talking about this last night um the exploitation of the congolese for their coal um and rare earth

minerals and it's one thing that frustrates me because i completely agree there's a lot of exploitation going around and being an american citizen and watching the trend of people pontificating about the green energy revolution and the need to stop climate change and what we've really done i think that's a bunch of larping and virtue signaling because people want to feel good about believing that they're helping the world but all of that progress that's been made on those green energy fronts and the cell phone revolution the smartphone revolution has been made on the backs of congolese slaves we don't look at the human cost to our policies and you know what like putting aside the climate change stuff for the moment like well because

it's it's completely hidden in another country most people probably don't even recognize what's going on like it's they do not see the consequences of that cost anywhere in their life well i have a chapter on this in my book but like uh like the west stole enormous amounts of fossil fuels from the developing world to help it develop and in fact what's really interesting is when we lost control of the major sources of of oil and petroleum this was in the late 60s 70s so this is when colonialism proper ended and opec became a thing like the countries that sat on top of the majority of the world's fossil fuels became independent now i'm not endorsing their governments most of them are terrible dictatorships but the geopolitics politics of it was that the west no

longer controlled the production of of oil in that sense anymore like we no longer had swing production okay saudi arabia did as head of opec and guess what when we lost that ability to have control over like cheaper than otherwise would be energy for our societies guess what we had in the 70s massive inflation so not many people look closely at the link between colonialism and then decolonization and inflation and i think this is really important um one reason we had the great depression is linked to this as well and this is something i've uncovered in some some really interesting um history books that that are not in the mainstream but i think most of their theses are pretty strong there's a book called capital and imperialism that does a good job of arguing

this even though i like i don't agree with the authors on a lot of their conclusions i think this this observation is true we often talk about the debate of why did we have the great depression um at the end of the 1920s early 1930s you know a lot of people think it's because we left the gold standard a lot of people think that it's because we didn't leave it soon enough whatever There's a whole debate among Keynesians and Austrians about this, right? And other people argue all different things. What's super clear to me, after thinking more deeply about, you know, the world as a global system, is that decolonization, like, made it so that the West, like our societies, we were getting cheap, like, less and less and less cheap labor and goods. Because colonialism was, like, in decline, let's say.

so between the 1920s and 1960s like it it it went extinct essentially more or less there's a couple exceptions like like zimbabwe was you know rhodesia or whatever until 1980 but in general what was happening is like our control over the resources of the world remember like the the the global south or whatever you want to call it the third world has the majority of the world's people and the majority of the world's resources raw materials we in the whatever you want to call it the core the global north we don't we have a minority of the world's people and a minority of the world's resources so when control over that was taken from us quote unquote what i really mean is like united states europe japan whatever guess what our economy went down the drain and and i think

that's a big part of it that we overlook it's not just that there were issues in the monetary system in the technology the monetary system it's also that this like conveyor belt of cheap labor and resources like started to grind to a halt and this is at the heart of the thesis of my my upcoming book is that what i've noticed and what i'm trying to argue is that the imf and world bank took the role of what traditional imperialism used to do like traditional like old school british imperialism was like going around the world yeah with an army with boats with guns with slaves and just like taking resources and cheap labor enslaving taking using violence and and getting cheap resources and goods to subsidize the way of life back home that was like old school imperialism you want to go

back to the spanish and silver in bolivia all of it like the whole thing was just like going somewhere else and taking that became like politically untenable and like basically unacceptable in the early to mid part of the of the of last century and as that slowed down we saw enormous economic disturbances so um that in my opinion has to be taken into account we talk about the great depression and then the next big economic crisis came in the 70s and that to me is really obviously linked to the fact that we no longer controlled energy like somebody else did and that meant we had massive inflation now every time this happens we choose to enact policies that benefit us and sacrifice the rest if you want to look at the dollar world today and again for all

its benefits just you know we want to be even-handed here and humble but what we often don't think about is that the dollar world today is sustained by and at the expense of other people and other other parts of the world so like let's just look at volcker so volcker comes in to save us from inflation in the 70s by raising interest rates to whatever close to 20 you know that wasn't particularly uh pleasant for lower middle class americans in the 80s we had a huge recession right but like you know it wasn't a total disaster but what most americans didn't realize is that that caused what was what's known as the third world debt crisis which was enormous amounts of starvation and death across the whole global south in the 80s um these countries had been fattened up with

all this debt that we loaned them and that was all dollar denominated and then all of a sudden the dollar the price the cost of capital went way up and they all basically starved and they could only be rescued quote unquote by more and more debt so this is partly what explains why debt has gone exponential in the third world since since 71 since since the beginning of the fiat system but we we are seeing this repeat history rhymes right so now we had this long era of zerp right and coming out of it powell is going to do his volcker thing and we got rates going from 0.3 percent fed funds to what is probably going to be five percent like there's probably going to be another 25 point basis point hike on the table here probably so we're going we're going

from 0.3 to 5 which which is breaking stuff like very short amount of time yeah yeah and like americans are correct to be upset about that breaking things like breaking svb breaking all these breaking banks like people having a hard time um what we are not seeing is the devastation it's had on the rest of the world i mean in the last 18 months we've seen all kinds of regimes get toppled revolutions hyperinflations mass starvations i mean like and it goes back to this timeless thing unfortunately which relates to the money system we protect our economy by sacrificing others it's a very simple but brutal concept so we want to fight inflation at home we don't like price inflation it's annoying it's problematic in a democracy the voters don't like

it etc etc great so we're going to raise interest rates we don't think about that externality it's like a tragedy of commons type thing like it's it's a global system so we raise the cost of capital here everybody else goes down and this is how it's always worked in order to save us we've always had to sacrifice them and there's you know a a a specific tactic here and that's essentially to prevent inflation here we need wage deflation over there like it's again it's a global system so wage deflation was was actually one of the main goals of imperialism it was one of the main goals of colonialism and is one of the main goals of the imf world bank like neoliberal model of the world today like what we need for our societies for all the things that

we love to do we need cheap shit and we need cheap labor and you have to think about where does that cheap labor come from and that cheap labor comes often from a deflation of wages and in massive human rights violations in fact at south by we had a booth here the human rights foundation it's pretty awesome i'll show you some photos of it later but it was like a clean white booth with two racks of t-shirts one was on sale for 45.99 one was on sale for 4.99 45.99 one was made in california the 4.99 one was made in china and basically what what you saw was in the middle of the exhibit a machine spitting out receipts and the receipts on the receipt was printed the true cost who was paying and it was all these like political prisoners from xinjiang and and all of

the forced labor in china so like when you're paying 4.99 yeah you're only paying 4.99 they're paying the other 40 with their life you know with their blood sweat tears whatever so someone's paying the true cost you just don't see it and and that's something we need to think about like of course things get cheaper over time because of technological innovation but when you see really big price disparities like that you know that there's some sort of some sort of oppression happening and our entire system is based on this our entire system is based on policies that protect us over here while screwing them over over there and we'll get into it here but like a lot of this has to do with agricultural policy a lot of this has to do with tariffs and subsidies on agricultural

goods a lot of this has to do with the u.s foreign policy objective which which from a realist perspective makes total sense that we wanted to be energy and food sovereign and we wanted everybody else to be dependent on us for that so this is totally baked into the petrodollar system you want oil you got to buy it in dollars you want fertilizer you got to buy it in dollars and you got to get your food from us so africa which is just for example incredibly fertile continent in an adam smith style comparative advantage free market utopia should probably be feeding the world africa imports 85 of its food which is a giant scandal you're telling me this and um that's because of west of world bank imf type policies that like coax leaders of these

countries always usually undemocratic leaders typically coaxes them to follow certain policies and incentivize certain industries that move the energy of that nation away from feeding itself and developing itself to making shit for us. So what you saw under the World Bank and IMF policies in a generalized way over the last 50, 60 years was a moving away from industry and consumption agriculture, cattle, rice, things actually people eat that they need, and a move towards exports for international markets.

So the global south has been engineered to make stuff like coffee, cocoa, cotton, rubber, palm oil, and then, of course, any sort of extractive mineral that can be taken out of the ground and moved out without benefiting the locals. So these economies have been specialized to be focused on digging stuff out of their ground and growing stuff, shrimp farming, and aquaculture. and then and then and then giving it to somebody else and the government takes a small part but the international markets take most of it like gold mining in ghana i was shocked to learn when i was there with miles and and and um mike brock and jack and a few other people earlier

a few months ago in ghana we learned about this like the gold trade there like recently not not like in history like over the last 20 30 years something like 95 98 of the profits of the gold that's dug out of the ground in ghana goes to someone else not in ghana it's like it's insane so so these countries have all been like directed or engineered or shaped to produce stuff for us and then that way they need to be dependent on us for food and and energy but mainly food so it's it's just this really unfortunate tragic uh outcome of of the realist policy we have to be to be the world power and um i think that we just don't think about these things enough i certainly didn't you know you you go out in a beautiful large city in america or europe japan one of

these imperial powers and you look around and again like yes our values are so much of what makes us prosperous but a lot of it is also the fact that we've just exploited and i think the more humble and open we can be towards that i think the better we're going to be positioned to make a better world where we can actually co-create and cooperate um forced cooperation instead of exploitation and i think that the bitcoin standard is going to be a big big factor in this yeah once you have a monetary system that doesn't have different classes things are going to be very different um a lot of this nonsense is like not going to be quite possible like if you think about the subsidies that american farmers get which make it uncompetitive for africans to

make food for for for export and for them to eat um a lot of this has to do with money printing and and you know that sort of thing yeah which is only possible because it's offset by deflation elsewhere like like the subsidies we we create and the money we print for things like foreign wars foreign resource wars our own social safety nets here in america and europe and and subsidies for agriculture that's that would normally bankrupt us and throw us into like a crazy inflationary spiral with with the caveat that we get this like flow of cheap labor and resources from abroad i mean as listeners will understand like i'm basically talking about globalization here um and globalization in a textbook sounds like a great idea let's all be free markets let's

trade with each other but because trade is not free market it's it's all centrally planned um that's not how it's worked out for people so i know we have this like idea in in a lot of the bitcoin communities of like localism and local communities and things like that i think that's going to be a good thing i think i think globalization unfortunately it just has been negative for so many of the world's people and and we don't see that here we're like oh it's great like chinese people make this and people in africa do this and and we don't we don't kind of see the cost but on the other side of that it's been it's been a really really difficult 50 years it's been pretty terrible yeah and and it's it's getting we're going back to like the peak of how bad it

was in the 80s for some of these folks and the the true cost is is never discussed but and no one's ever counted it and you know we count we count victims of dictators and communism and that's why communism is bad is because it kills a lot of people but guess what resource resource colonialism is also pretty bad so for example mexico there's a study in mexico that for every two percent decline in gdp the mortality rate goes up one percent this is a typical country that um had a long experience with the imf etc like sort of a proxy for the global south we'll say i mean and it's a richer global south country so you could imagine for poor countries it's even worse but these are countries that um in the 70s 80s 90s i mean they

lost 10 20 30 percent of their gdp at times over like long stretches so we're talking tens of millions of people dying you know mexico let's say there was 100 million people there there's more in that now but um you know for every two percent decline in gdp you're talking a million people dying prematurely right so if you start to zoom out and start to grasp this you start to realize that like these structural adjustment policies which which we can detail a little bit uh that the imf and world bank have deployed um have probably led to tens of millions of deaths and we just don't ever see that that's invisible no one will ever go to jail for that and that's a pretty depressing thing to think about and there's not a whole lot we can do retrospectively

like one of the things that i try to say in my book and i actually have i dedicate my book to the victims of development and i say they may never get the justice they deserve but they may get a way out that's like the dedication page on my book of course i'm referring to bitcoin but like the i don't know if they get any justice i don't think they get any justice it's terrible but it's something that i again we should be humble about i'm not trying to attack the american way of life here or to be anti-american i think people get too hung up on that and they end up supporting dictators like a lot of people even in the bitcoin community are so anti-american that they end up supporting putin and other dictators this is very important to be morally clear about this the enemy

is tyranny the way we advance is to improve america not to like overthrow our system of government and bring in a king i think the better way would be to continue to decentralize and improve and continue to underline individual rights and to continue to improve in that area and to end the exploitation piece that's how i think we get better so i i don't want to um make it sound like i'm gonna you know go off and and and and support all these kind of like you know anti-american socialist leaders you know over the decades who were like screw the imf like we want to be they're full of it too like that was never the answer like before bitcoin there wasn't really what was there wasn't a great answer to be honest like like they got together all these

conferences over the decades global south leaders and they would say you know down with the imf like but at the end of the day they were most of them were all dictators yeah and and it was um hypocritical because most of them ended up taking the imf money to be honest anyway i wanted to preface the conversation with that because i just feel like it's important for us to just ponder that here a little bit completely agree and i've had a few conversations over the years that really tie into this and again it's really under the context of the virtue signaling around environmentalism that leads to exploitation elsewhere.

Two main examples are Kern County, California, where California has the potential and the ability to produce all the oil, most of the oil that it needs to run its economy. They drove out oil production within the state, yet the demand per barrel of oil per year remains the same if not continues to rise and so what happens they don't provide oil for themselves they export that to ecuador where they're cutting down the amazon rainforest and then putting it on diesel ships and riding it up the coast to the

harbor of california where the increased potential for oil spills in the ocean exists and then another example going back to congo and the cobalt it's been discovered in the last decade that up in maine we actually have large i believe it's cobalt and lithium and in quebec yeah yeah and in quebec that we could tap into yet we don't want zoning laws or something yeah we don't want to destroy the environment up there we're gonna we're gonna continue doing in the congo so we're not gonna i think the same overreaction is gonna happen well obviously we saw with nuclear obviously massive step back to human progress was this whole anti-nuclear stuff over the last 40 years but also i think we're going to get this with the ocean mining stuff now again i want to like see

the data i also don't want to destroy the oceans but generally speaking given that there's all these precious metals sitting on the ocean floor and these are like biological deserts down there i'd like to explore mining that instead of instead of like having people be enslaved in the congo like you know it is important to think about the human cost of our actions so that's that's kind of what what we're getting at um but anyway so the the dynamic uh that i'm diving into in the in the essay and in the book is something called structural adjustment and the the tldr is that basically the way the world has worked since since really the end of the 60s i mean in in in in when we call when we talk about development has been at the beginning when the bretton woods institutions

were created they really were created to fix europe and japan like that's why the world bank was created was to fund infrastructure projects in like war-torn europe and japan and the imf was created just in case one of these economies that were important to the core nations like failed like it would get a bailout basically but once those nations like got up on their feet and they started to recover late 50s 60s then that coincided with that with again the end of colonialism like 1960s known as the end of colonialism it's not it's not perfect but generally speaking that's kind of when it ended and that's when you see the behavior of of these institutions change and they start to become neo-colonial and the way that works is they've replaced the weapon of the sword

with the weapon of debt so um instead of going in and just like taking and stealing and thieving which is what they used to do in imperialism um you know again the spanish conquest of the americas etc um that's been replaced with debt so what happens is i'll give you an example um So France or Britain or U.S. as a creditor of the World Bank, France, the U.K., the U.S., Germany, Japan are the five major creditors historically of the IMF, the World Bank. They'll either alone or together make a loan to a global south country. So let's say Britain and Ghana. So let's say Britain gives $10 million to Ghana. What happens when you look at it from a balance sheet point of view is that the $10 million exits Britain, goes to Ghana, and then Ghana spends it immediately on British companies to do all the work.

So the $10 million flows right back to Britain. So Britain's been paid back. The British system has been paid back. The capital went back to Britain. And now the Ghanaian taxpayers are still on the hook for P&I on the loan. And these loans, historically, were very high interest, by the way. I mean, some of them back in, I mean, you were talking 3%, 4%, 5%, 6%, 7%, 8%, 9% higher. It depended on the time.

Of course, there's been different interest rate regimes. But generally speaking, you've got to remember these aren't gifts. Like, this is not a philanthropic charitable thing. Like, these are corporations that earn income, that make money. The IMF comes and says, hey, we're going to help you, but this is a risky endeavor for us, so we have to raise the cost of capital. Sure. Well, they use the Cantillon effect. They get access to cheap dollars at lower interest rates at the core,

and they sell it to poor countries at higher rates. That's like one of the ways they do business. But in the end, what ends up happening is you've got a country like Ghana. It's already paid, so it's like paid back, like Britain's been paid back, okay? So Ghana's given $10 million, okay? Now it gives another $15 million over the course of the loan for P&I. so in this relationship the west on the balance sheet has has is now 15 million dollars richer so this is what we call drain so the colonial drain which again used to be enforced by swords

guns whatever has been replaced by this like debt machine so over time what happened was uh again like at the beginning the world bank and imf you know basically did what they set out to do which was the international lender last resort and a development bank that's going to pay for projects the private capital didn't have the appetite for. They did that. But what ends up happening in the 60s and 70s is that the drain starts to shift the other way. At first, you have all this resources

going from the global north to the south. And then because of what happened in the 70s, in many ways, because of the increase in debt to the global south due to the petrodollar system and many other things, and then due to the interest rates rising, in 1982, the flow of funds shifts permanently. so ever since 1982 the total flow of funds has been from the global south to the global north

so since 1982 the people in the global south have been subsidizing our way of life and this is this is this was the magic of the neo-colonial trick that was played this is this is exploitation sold to us as development so ever since 82 this flow which started as a trickle it was in the hundreds of millions and then a billion two billion it was it started in the low billions today this flow is a torrent it's in the trillions of dollars per year so every year if you look at the total flow of funds going into the global south we'll say remittances investment uh gifts development support um illegal legal all of it like the whole flow for an average year in the last decade was something like a trillion dollars goes in from the north coming back two to three

trillion okay so and again you know that's a mark that might be marginal for the global like the u.s has like a gdp of what like north of 20 trillion or something like that so maybe you want to say that's marginal but it's very significant like material for those yeah like if you don't have that marginal flow our society deteriorates quite a bit now there's one number i wanted to show you would you mind just uh hitting this for a second this is uh the details of perfect we're doing control F looking for a particular word now yeah so

there have been many studies that look at this flow and they try to break it down in different ways it's of course very hard to come to an agreement on all the definitions but there was one study done in 2015 where it said that um the flow coming from the south to the north was 10.1 billion tons of raw materials and 182 million person years of labor so that's 50 of all the goods and 28 of all the labor used by high-income countries so that's the the drain right so think about what our societies would be like with 50 less goods and 28 labor just start to start to think about that in your mind

we would be way less prosperous we'd have way less stuff okay and we would also have uh like a much more difficult labor market you know we wouldn't have all this cheap labor to to save us you know it would not work out like that we'd have crazy inflation just start to think about all the implications of this so that's globalization and it's very very hidden and the problem and and safety has mentioned this many times is that usually the critics of this system who have good criticisms tend to be on the far left or even marxist actually i mean marx himself was an astute critic of this actually like and and it was a it was a reasonable criticism very much so and all of his students ever since have been have noticed this they've really noticed this the problem is

their answer is is not helpful like you know what what what they were saying in the 70s and 80s 90s was we should um end the imf and all this stuff great uh give power to local leaders they were all corrupt dictators like that was never going to work either so um there was never really like a coherent like way to move forward here um you have a lot of folks saying let me fix it you know uh you know like we need more government intervention here or there or whatever there was never like a coherent plan to fix this um i think what happens with bitcoin is it's not it's a gradual process but i think what ends up happening is the following there's an incentive mechanism inside this dynamic where what's really happening is like western

banks and are are making these loans through the through the bank and the fund and often just by themselves in the private market and i understand that over the last few decades bond issuance from these governments has has accounted for a larger and larger percentage of global south debt That's true. But borrowing from the from from the north has has remained like a very, very significant part of their debt. And again, their debt has gone exponential since 71. If you look at a chart of this thing, it's insane. A country like Bangladesh had about 100 million dollars in external debt in the early 70s. Today, it has 100 billion dollars. I mean, these are impossible to pay back. That will never be paid back. It's the largest bubble in the world.

Sovereign debt bubble. It's bigger than any of these other bubbles we've ever talked about. And it will have to unwind eventually. So what ends up happening, though, is that the dynamic is such that these banks are making these loans. And remember, that loan is an asset on their balance sheet, right? So when the dictator comes around and says, I can't pay back the loan, the answer is not, okay, and, like, write it off. No, no, no, the answer is, fine, we'll give you more money so that we can create more assets over here on the side of the balance sheet. They've never had, like, an economic incentive to write things down and let countries go bankrupt. And I know that sounds awful, and it's true.

There's no, like, good choices here. But it's almost like a drug addict. It's necessary. Yeah, like the drug addict wants more drugs. The drug dealer's happy to sell it. There's no one here saying go to therapy or whatever, try something else. And in this case, obviously, debt is the drug. And, you know, short term, in the immediate term, it feels good to take the drug.

It feels really good to take the opioid or whatever. But eventually it's going to kill you, right? So what ended up happening is it did kill you, meaning there was massive death and destruction in the global south, right? So this system has no incentive to stop. That's why it's going exponential. All the people making the loans out, they don't want to see less loans. They just want to see more.

Robert McNamara, who was probably the most important person at the bank or the fund ever, he was head of the bank for all the 1970s into the 80s. And by the way, before then, he was Secretary of Defense. He sent hundreds of thousands of Americans out to Vietnam. And then afterwards, he joined the Board of World Dutch Shell. So the guy's like totally in the military industrial corporate complex. You see a lot of this. Paul Wolfowitz was also head of the World Bank, one of the architects of the Iraq War.

So there's a lot of weird stuff going on in that area. But the point being that there is no incentive to stop the loans. They're going to keep coming unless the monetary system changes. so you know right now if a country wants to borrow and the u.s government european government like we're we're like friendly with that government we will we will issue that less paperwork we'll just issue that fiat paperwork loan 30 billion dollars whatever done if we're on a bitcoin standard though it'd be a lot more prudent about this we can't just like print the reserve currency like we can't today like it's going to be like there's it's limited so i think that it's possible

we would have um in a bitcoin standard i think it's quite possible we would have like collectively nations would agree to create potentially uh like a supranational like development bank to help poor countries that's possible i also think it's possible that there's like a lender of last resort type institution created where people throw in like like kind of like private banks do today with insurance like it may make market sense from a global perspective for all the nations to throw in a little bit every year just in case some terrible happens to somebody drought famine whatever totally reasonable but i think what will happen is it's going to be much more like um conservative prudent like the instead of the world bank like literally just like trying to

spend as much as it can in these poor countries to get them to borrow as much as they can i think like there's going to be a lot more like is this actually going to be working is this sustainable like is it a worthy investment of our capital like like the imf will do the same thing Like Mobutu in Zaire in the 70s and 80s, I mean, he borrowed billions and billions, and he was never interested in paying it back, and he was a horrible dictator. And we were able to, due to the currency structure of the time, we continued to bail him out. But in a post-fiat world, like, I think that those bailouts become much, much harder to do. And we might end up just saying, no, Mobutu, like, we're not going to give you another bailout. um another side of this too which is so so to conclude that part of it is which is again one

of the reasons i'm so interested is many many of these dictators over the decades were sustained by new credit flow from from the west right and and the credit flow that never cared about human rights violations um this credit was often dependent on local governments reducing expenditures in healthcare, education, subsidies on food and energy. That's what was cut. They never asked, we never asked them to cut police, weapons, guns. That was never asked to cut.

Corruption, none of those things were ever asked to be cut. That's never been a stipulation of the World Bank or IMF. That would be intruding in local politics. But we always force them, force them to get rid of any subsidy, again, on like basics, foods, energy. uh we raise tax we force them to raise taxes to value their currency look some of these things may make sense in in theory like like in theory like food shouldn't be subsidized but because we have the double standard like our food and energy is totally subsidized like the uk currently

has a price cap on energy like like we have socialized medicine in france and whatever but because like so we we're allowed to do that over here but you're not over there so you have things like the british empire brit the british which give all kinds of free stuff to their citizens they go tell little sri lanka way back then many decades ago you can no longer give free rights to your people which again in theory out of a textbook may make sense but because of the double standard and because of the brutality in which it was done and millions there's just all these people starve and the same thing with like medicine and and all this other stuff so it's it's difficult because this is repeating itself with sri lanka totally specifically in the last

few years the um they really got psyoped into going along with the esg and say hey don't use fertilizers like you got to be for you got to increase your your carbon credit score so you can't use these for i mean and then boom crops i mean a lot of yield anything a lot of it's just so frustrating because like we did x y and z and we're not permitting them to do x y and z yeah and they should be the master of their own destiny like they should tell us what to do um they really should they should be able to do that especially given that um again they hold most of the resources like look some of us have some of us meaning large countries that are advanced like are plenty fine like the united states is going to be rock solid for the next

for the foreseeable future we are very food and energy sovereign i see no reason that we need to like bully up on africa makes no sense in fact this was a crazy stat i uncovered in in writing this um if we just dropped our subsidies and tariffs on agriculture we wouldn't have to do well we wouldn't have to do there'd be no reason for us to do any foreign aid to africa full stop africa would just be able to feed itself if we if we just ended our tariffs and subsidies because they'd be able to sell their product make a profit exactly exactly it would make sense for them but because we like juice our peanut farmers with tons of fucking subsidies they can't compete so it's the artificial nature of fiat currency manipulating the markets that that's really i think at the root

of a lot of this so that's why i think this eventual shift that's going to happen in the next few decades of away from this like fiat dominated world to a world that's hopefully bitcoin at its core dominated like you know again fiat instruments are still going to exist like no one nothing's stopping me from lending you a tenth of a bitcoin in 30 years and you promising to pay me back and that becomes a financial instrument and then maybe you sell it to him like that that's going to happen like we're still going to have fiat credit that will still be there but i think that if the bedrock of the world is is a bitcoin standard so many of these shenanigans become difficult there's no balance and and the really inspiring idea that that came from jeff

booth is that it's almost like what he calls forced cooperation like because there's no real way to like um prevent like like the like wages are way lower elsewhere but because of all these like controls in the monetary system those countries can't really take full advantage of that and they can't like there's no arb like they don't come back up to to meet our wage you know there's there's no sort of natural balancing effect but if you like get rid of this carcass of this exploitative rent seeking fiat like payments and banking infrastructure move that aside and we have like bitcoin rails um all of a sudden like it makes a lot more sense for americans to work with nigerians to work with argentines like to actually hire them work with

them be more global like this this is what's called forced cooperation and it comes from like having open censorship resistant payment networks that that have no borders So I think that that's a really compelling idea. And again, like we're still going to need to make emergency loans and there's still going to be charity and philanthropy and all these things. But I think the exploitative nature of what we've been able to do with debt as a weapon, it's a devastating weapon. I think it gets significantly reduced to the point where it's just sort of impractical. yeah um and you know it's not going to fix everything but i do think it really like and especially in a world that's so marginal where like small things make such a big difference

i really think it ends this just like impossibility of these countries ever paying their debt back and then basically forced servitude into whatever we we want them to do yeah and it's not only the nature of re-architecting debt on a global scale and how these loans are given and the due diligence that goes into them like bring it back to like the smallest micro level like empowering the individual like people living in countries with despotic dictators or terrible regimes that mismanage their currencies like since bitcoin's open permissionless and accessible to anybody like you don't even have to wait for like a change at that level you can just start working in the digital economy or maybe even the local physical

economy and accumulating bitcoin opting out of that yeah and i think that um you know a lot of people may ask well why are you so focused on this like aren't isn't your day job supposed to be like helping people under dictatorship and the sad reality is that the imf and world bank prefer to work with dictators like they are one of the reasons why these dictators have been so so and they're they're vaunted as these pristine and we're not just talking we're We're talking about the most comically brutal dictators, like Mingistu in Ethiopia, Mobutu, the frickin' CCP after Tiananmen. Like, you name it. Like, they will go after the most comically corrupt, brutal, murderous dictators and give them tons of credit.

And there's a sad rationale to this, and that is that it is easier to work with undemocratic clients. Marcos in the Philippines is a great example. he started off like getting elected and there was like somewhat of a democracy there over time he eliminated that ended up becoming this like horrible dictator for the world banker imf especially the imf it's way easier to work with a dictator client because you don't have to worry about street protests and independent judiciary all that stuff the dictator will handle that for you you're just going to be able to go in and do what you need to do so that they vastly prefer working with undemocratic clients is what their track record shows um which is just insane it

allows them to go in and engineer these societies to grow or export what we need yeah and there's there's no more perfect kind of metaphor for what they do than a hydroelectric dam in the mountains in the global south somewhere the world bank makes a loan to build it it powers a resource extraction operation bauxite coming out they also make a loan for a train track that connects the the mining operation to a port. They make a loan for the port. All of it gets built with Western companies. A lot of the loan that was originally made flows right back to the West.

The loan itself still gets paid back P&I by the local taxpayers. And then all of the crap that gets dug out of the ground, nearly 100% of those profits go to outside international markets. This is colonialism, but dressed up as development. and that's that's what i'm really seeking to uncover here and it's not because i'm anti-american it's because i'm pro-american it's because i want us to be better agreed and if you're paying attention to what's going on particularly g fans gfa nz forget what the acronym stands for but it's like the next iteration and a new tentacle in this imf world bank like structure this amorphous

structure they want to go do like underwriting for like land resources and have like particular like land bonds that they go into these countries and say hey we're going to underwrite this particular national park or this particular portion of the ocean yeah with that and if you can't pay it back we take ownership oh yeah i mean again there's like it's it's um I mean the the extent of what happened was just so devastating I mean they would do it's not just that they would come in and devalue the currency raise tax this is what you're seeing now in Egypt and Ghana and all these countries we're seeing this right now the currency devalues this hurts the average person like the price of bread in Egypt has skyrocketed because Egypt is

trying to like change its economy to meet the IMF demands the the banking account gets restricted I mean it's called austerity for a reason i mean it's like basically shrinking the economy they look it's like a private equity firm that's trying to take over a company they want to maximize profits and reduce expenditures that's what the imf does it looks like when it looks at a country that wants to borrow from it how can we maximize profits and reduce expenditures and it's a brutal way of thinking about it because this is a body politic full of people it's not just some amorphous like thing no this is like a group of human beings and they're like reducing expenditures you know means like shrinking the state but they don't shrink the like security apparatus they

don't shrink the corruption they only shrink whatever's actually helping people even if it be inefficient so i'm not necessarily saying that that there should be subsidies for basic food and energy but when you when you when you have decades of just cutting that stuff and not cutting the security apparatus or the corruption this just makes life so miserable for people i mean you had entire countries in africa where there was there was there was universal health care or whatever in the 70s it wasn't great certainly but like you'd go like overnight due to the structural adjustment to like medicine just being like too expensive for the average person to to have and that's one of the factors in why you had like shrinking of the economy like uh like a

reduction in gdp like all these people dying prematurely like the crazy amounts of child mortality like the stuff in the 80s is is just so unspeakable and and it really hasn't seen the light of day and we're about i think we're about sadly i think we're about to sort of enter that decade again like that's happening again right now we're watching this right now yeah i mean you come rattle sri lanka lebanon turkey egypt argentina all these countries are having hyperinflationary and you know like war isn't you know war is inflationary yeah and we're gonna have wars they pop up and that doesn't help either so it exacerbates what's happening but the more we get

inflation again going back to the beginning the more we're gonna fight it by trying to sacrifice others yeah this is just the way the system works in the dollar system so we're again we're watching people like jaw dropped watching powell even after this you know this banking crisis i mean two of the three largest bank failures modern era just happened and powell's gonna keep hiking because he just want his main goal is to reduce inflation and that activity again folks is not just gonna break stuff here it will break stuff here and that's gonna suck but it sucks way more for people who don't live in the dollar system and he's just gonna break and break and break and break because there's no kind of democratic accountability when you look at how these

global structures work we get a veto the united states has a veto now what's really interesting is that the vote share the imf and world bank are not based on population they're based on world war ii kind of power dynamics so even though the u.s has i mean it's insane like and i detail this in in the book i mean there are like countries like china or india that have less votes than countries like britain and italy and i know that it's supposed to be tied roughly to their size of the economy and not to the size of the population but even still it makes no sense i mean china's economy is much larger than the uk now i mean you have little tiny countries like uh relatively speaking like like like belgium or whatever that have more

voting share than like indonesia and a whole bunch of other countries combined ethiopia like it is so so so the global south will never have the voice that they need to implement change at that level so i'm very jaded about a political solution i think it has to be a grassroots bottom-up thing agreed and like i think one thing we haven't even mentioned yet is because it made me think about as matt and i were discussing the bailout of the banks here in the united states this week where the fed said all right we'll take your bonds at par and lend you back the cash and we'll settle up later yeah but and what he said is like and then they're like oh we're only gonna do it for one year but it's like no there's no such thing as a temporary

government program like it's going to keep going the imf same thing like imf why does it exist it exists again post-world war ii needed to rebuild europe bail out bail out you know allies that failed along the way yes and but then it's it's rationale it it shifted and i don't think there was like one meeting where they sat around a table and said oh we're gonna like loot from the global south yeah that did not happen but it's like i don't know whether it's path dependent or whatever but it happened and and and by the 70s and 80s the decision makers at these at these institutions knew that the only way they could sustain this was with more debt yeah and it's like because it was long with a particular mandate and like once you like succeed in reaching that

mandate you're like oh we should keep doing this keep going keep going like ideally the imf spun up existed for a decade helped rebuild europe and then shut down well here's here's something you know we talk about the bubble unwinding eventually um and and and the credit being credit being destroyed is what me what i mean by a bubble unwinding so there's this concept of odious debt which is um an american concept actually it was created by american justices and law and and policymakers uh about a hundred some odd years ago when um the uh spanish were defeated in cuba by by america and we said to the cuban people you don't have to pay the debt that the spanish borrowed on your behalf because they were subjugating you this was called odious debt so

there's an american legal precedent for this and there's imf papers written by imf staff talking about this concept but it's never been a precedent that they've acted on so even though mobutu had no like in zaire for example had no democratic credibility whatsoever uh the the people of that country were forced to pay back what he borrowed this is the case for argentina for all of these countries there's never been like a oh like you were ruled by a brutal dicta philippines like after the people of the philippines protested enough and they used people power to oust marcos 40 of their gdp the next year was to pay back debt that he had borrowed okay so it's taking again it's taking the the energy and resources from the population to pay

back debt that somebody else borrowed this is the case in nigeria right now as we speak some absurd percentage of of of nigerian you know the revenue as a country is going to pay back debt so it's it's taking away from the potential of the country and the people didn't agree to borrow these loans is the point so maybe we you know like in an ideal world what would happen is that and ironically there was one exception i think america allowed the once we invaded iraq and got rid of saddam we allowed the new government to like wipe out some debt you know because it because it advantaged us or whatever hey sorry for blowing up your country we'll um yeah but i mean it's like you know if you if you if odious debt became a thing i mean such a massive amount

of global credit would disappear now of course that would mean an enormous financial crisis but like that would be just odious that shouldn't have to be paid back i don't know whether you want to call me socialist for that or whatever but like that's just something i believe in i don't believe that credit borrowed by dictators should have to be paid back by the people who didn't vote the dictator into office and what's the worst case scenario the imf and the world bank go under it's like well the western banks have a crisis in fact you know you want to be really clear about what happened in in the 80s um when the when when volcker was raising rates and these countries in latin america were like collapsing uh the the the western banks in new

York and elsewhere, London, had such an enormous amount of those assets on their balance sheet that they were going to fail. It was going to be a 1930s-style financial crisis. So that's why the IMF intervened. It was not to help people in Latin America. It was to help the banks in America and in Europe. That's why we bailed them out. So whenever a bailout happens, it's not to help the local people.

No. They're just going to get hurt. And it's not necessarily to help the dictator either. Sometimes it is. Sometimes it's a national security thing. But no, it's usually to benefit the creditors, the people who had extended the pre-existing loans. So for example, when Argentina took out,

they are the record holders. So Argentina, and if you notice, the countries that take out the most debt are the larger, more productive, more competitive global South countries that have been screwed over the worst. Argentina, Brazil, Indonesia, Egypt, Pakistan, like the bigger, meatier countries

are the ones that have suffered the most in this. But like Argentina takes out $57 billion from the IMF in 2018. So it's like this is the world record holder at the moment. And what did that do? It wiped out all previous debt, which of course some of that was racked up by military dictators in the 70s and 80s and just kept being rolled over.

But now they owe 30 billion plus in new debt. So they got this enormous bailout only to land themselves in an even deeper debt hole. And that's, again, what's happened. Like, if you look at this chart of global south or developing country debt, it is unbelievable how it just looks like a parabola. It just looks like an exponential curve. And that's an outcome of the post-71 political economy. One outcome is that the periphery gets deeper and deeper into debt.

and the other outcome is that whenever we need to protect ourselves from inflation at home we impose deflation abroad i mean those are the two mechanics that people should remember yeah i have to look up the stat about argentina particularly because it is they've gone to the trough of the imf or been forced to go i think more than 20 times i think 21 times yes it's and that's and each time they have to agree to structural adjustment they have to agree to wage deflation essentially which is accomplished by currency devaluation raising taxes raising interest rates etc yeah so this is as of may of last year argentina has an average annual inflation rate of 192 percent since 1944 they joined the imf in 1956 and have participated in

21 standby agreements since 1958 yeah the standby agreement is just when the imf makes a decision to loan a country money uh it's like a line of credit and they release the funds as you like complete these milestones and and the biological impact of this is is really something interesting so if you move currency to one side what ends up happening in these countries over time is that the amount of hours you need to work to earn a thousand grams of rice or chicken or whatever increases so from like the early 70s to the late 80s in places like sub-saharan africa and latin america certain parts of southeast asia south asia central asia the number of hours someone had to work to get a thousand grams of rice or chicken or beef or whatever would sometimes double i mean

we're talking about decades of quote-unquote chronological progress and people were getting poorer and poorer and poorer that's what i mean by wage deflation like your time and energy gets you less yes and that is a part of the system and that is a part of the system that needs to end yeah and like going back to the argentina like going to the trough 21 times an annual inflation rate of 192 percent obviously going to the trough is not helping the problem like but it's like it's like a it's like a an addict i mean what are they gonna i mean the thing is again there's no incentive here for anybody to stop the debt party the dictators and corrupt regimes are more than happy to borrow because they're not personally going to have to pay back anything the people

don't have a voice they're usually undemocratic countries the um or they're like disenfranchised in some way and the creditors at these banks are making a killing again these are like usually pretty high interest rate loans and get good fees on originating oh every there's a fee along every step of the way yeah so by like opting out of this nightmare of a system into some into like bitcoin systems i think that's kind of where the change begins like you know looking what's happening in africa so looking at what's happening with remittances cross-border payments like you're starting to see this new system being built and it's super early but the foundation's being laid for global commerce and interactions to be in a in a non-fiat system in a system that's

like not about rent seeking like in fact competition in a bitcoin system brings it's almost like deflationary like it it brings fees and costs down over time uh for users when you see innovation in the bitcoin system so totally different than than the fiat system yeah we got do it i think it's our duty as humans right now is to make sure that bitcoin succeeds yeah well i mean i i'm curious to see how this unfolds look we we know that bitcoin helps individuals and that it's a way for them to opt out like if you're stuck in structural adjustment peru in the 1980s you had no way out as a lower class person i mean you couldn't get anything but the local currency which was which was plummeting and not and less and less available um i think people have this

really interesting like misconception in the West that like interest rates and inflation have this sort of relationship where if you, you know, raise interest rates, um, you can like have inflation go down or whatever, but in the, in the global South, like the, the, the normal, the norm is very high interest rates and very high inflation. Like there comes a point where like, uh, you know, the, the, the interest rates fail to help you bring down the inflation. Yeah. I talked about this with lynn last week or like if you raise the cost of capital to a certain point it becomes uneconomical to build up the necessary infrastructure to drive prices down yeah but it's like it's not clear that like raising interest rates will bring down inflation no like that that's not that's

actually just like proven false by like tons of facts from around the world but anyway like in the 80s like people had no escape from this today they do you know you just need a phone with internet i mean even a feature phone with some of this new stuff coming out and you can get access to something that that can't be debased or confiscated and is part of this parallel system so we know that like bitcoin can help individuals we don't know what we're projecting what we're discussing what's the subject of conjecture is is what does it do to the nation-state system and that's that's interesting i mean we don't know but but it's hard to imagine the world bank imf model lasting very much longer as we start to start to really transition towards the bitcoin

world like it just seems like it'll be an artifact of the fiat system like so many things are going to be artifacts of the fiat system mercifully agreed we're going to bring back these high quality chairs all these all this plastic craft will be a relic of the fiat system and then yeah with bitcoin when i think about it from the american context particularly around energy we're importing a lot of energy when we don't need to and people want to extract the energy here as cleanly as possible and bitcoin mining helps you do that you can be as efficient as possible with the extraction and then as efficient as possible with each uh joule of electricity that's produced well that's wasteful i mean i was in in ghana talking with nigerians who are

bitcoin miners they learned how to mine on youtube it's like totally amazing these young kids and they're talking about going down to the delta and apparently that's like the place that has the most vented uh you know emissions anywhere in the world yep um it's just you look out at night everything's on fire like it's just i think you introduced me um to one of these gentlemen last year in miami very potentially but the point is that like there's so much waste that could be captured by bitcoin mining there so it's you know part of part of the equation is certainly the mining piece of it like you know part of the equation is certainly that um you'll live in a world where our whether it's our kids grandkids whatever they'll live in a world where every

nation has the ability to to mint the global reserve currency through uh energy now it doesn't mean they have the equal ability you know russia if it still exists will have a much higher ability to mint the reserve currency than belarus for example or whatever but but the fact that it's That like every country will be able to take advantage of its energy resources and turn that into the reserve currency is very different from a world where like only one country can mint the reserve currency and they don't have to do any work to do it. They just can conjure it. It's paperwork. And that's one of the biggest problems of our country is that we have this like, yeah, we have this system where we can just print money for energy. And then this culture where we just refuse to acknowledge the trade-offs that exist with the decisions we're making from a monetary perspective, energy perspective, food perspective.

Well, there's no apparatus where we'd face any accountability. So Powell, again, he doesn't have to answer to the people of Ghana. He doesn't have to go to a tribunal. Like in a fair world, he'd have to go answer to them or go speak to them. Are we bringing tribunals back? Well, not a tribunal, but how about this? Powell has every time he raises rates

he's got to go and at least talk to like some people who live in Ghana and Argentina and Lebanon that's not going to happen but you know

that would be more fair he'd at least have to listen to them and he'd have to weigh that you know there'd be like it would be weighed right now

the vast majority of people and resources in the world are not weighed in the minds of the people who make up the monetary decisions which is why the system

needs to end we need to have a system that's equal for everybody It's tremendously empowering. That's why we have it right out here, fix the money, fix the world. Yeah, and it's not just the SIFA. I mean, the SIFA is something that's worth focusing on because it's so outrageous and people get so frustrated by it.

And maybe we can create enough dialogue and debate around that that it can end. But that's just like kind of a tip of the iceberg in terms of the way the whole world works. And I don't want to let China off the hook either. I mean, China's trying to copy the World Bank IMF system. And if China becomes the power, it will do even worse. it'll be much more much more exploitative than we are same thing with france same thing with britain like or whatever any any rising power is going to do this to its geopolitical rivals there's always going to be resource wars right you know i was opposed to the illegal invasion

of iraq because that was a resource war i'm opposed to putin's invasion of ukraine i think it's a resource war i would be opposed to i mean i think the chinese occupation of tibet and xinjiang is quite obviously a resource colonialist these are these are ethnic minorities that are not han you know so every every power has a resource war going on and um i just think we need to be consistent and just say no like don't do that like that's that's that's that's that's that's not nice let's not do that i think as you mentioned bitcoin will be somewhat of a forcing function it's not going to be a panacea for the uh corruption that exists yeah and like without something like bitcoin we can't stop it but there's something that gg said that i love and he

says i don't know whether he wrote this somewhere or whether he just said it in my presence recently but um he said uh every 10 minutes the bitcoin network says thou shall not steal thou shall not steal thou shall not steal and it just says it every 10 minutes and that's such a powerful idea on like many levels and and that's what we're getting at here like it will tell you thou shall not steal and it will make it harder for you to steal over time and i think it's not just it makes it harder for like the individual to steal from you or the government to steal from its citizens. I think it might make it harder for like powerful countries to steal from

weaker countries. So that's maybe something we end on. But I thought that that was like really, really, really deep. It gets back to when you were mentioning earlier when Jeff Booth's express is just like a massive realignment of incentives. Forced cooperation.

Yeah. When people are forced to co-opt, not even forced, It's just economically incentivized to cooperate because both sides are going to benefit. Totally. Well, it's always a pleasure, sir. Yeah, this was great, man. Love coming down here.

Hope to spend more time in Austin in the future. Can we preorder the book yet? It's not quite out yet, but I will be sharing it with you. I think it'll be out for preorder in the next few weeks, and it should be on sale early May. And again, if you're in Miami, come say hi. Ahrefs will have a booth in the expo down at Bitcoin Miami, and I'll be giving a keynote. It's called Bitcoin versus the IMF.

So that'll be a lot of fun. Well, keep crushing it, sir. We're going to win. We're going to destroy the IMF, the World Bank. We're going to create this. Belt and road, all of it. Oh, God, the Belt and Road. We didn't even touch on that.

Exactly. But I don't want to let them off the hook is what I was saying. It's just that this was dedicated to the IMF and World Bank. yes it does what i'm trying to say is that we're opposed to any large power dominating weaker weaker powers yeah this is the whole point we're against tyranny just we're for freedom freedom do some hard work be productive don't steal from people it's pretty simple hell yeah peace a lot freaks