The Pomp Podcast - Jeff Booth On How Inflation Is Theft #904

Episode Date: April 8, 2022

Jeff Booth is a well respected entrepreneur & investor and is the author of the book "The Price Of Tomorrow" In this conversation, we discuss central banking, financial censorship, inflation, the possible looming recession, Bitcoin, and El Salvador. ======================= Exodus is leading the world out of the traditional financial system by building beautiful and user-friendly blockchain products. With its focus on design and user experience, Exodus has become one of the most popular and loved cryptocurrency apps. It’s supported on both desktop and mobile, allowing you to sync your wallet across multiple devices so you can have access to your funds anywhere. You can instantly exchange around 100 different cryptocurrencies straight from your wallet. Interactive charts let you view an asset’s price history and your portfolio’s performance over time. And maybe the best part, Exodus is integrated with the Trezor hardware wallet - making advanced security easy for everyone.  Visit exodus.com/pomp for your free download or search Exodus on the App Store or Playstore. ======================= Today’s episode is sponsored by Abra. Based in California and backed by top VC firms, Abra is an all-in-one simple, secure app that allows you to trade over 110 cryptocurrencies, get 0% interest loans using your crypto as collateral and earn interest with up to 14% APY on stablecoins and 8.15% APY on Bitcoin.  Join nearly 2 million users by downloading Abra from the Google Play or Apple App store. If you download the app today, you will get $15 in free crypto once you fund your account.  You came, you invested — now conquer. ======================= DeFi Technologies represents what’s next in the digital economy -- providing simplified, trusted access to crypto, decentralized finance and Web 3.0 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols, through a single stock purchase on a regulated exchange. Currently listed on U.S. (OTC: DEFTF) and Canadian (NEO:DEFI) exchanges. For more information or to subscribe to receive company updates and financial information, visit our website at http://defi.tech  ======================= The Pod Pro Cover by Eight Sleep is the most advanced solution on the market for thermoregulation. It pairs dynamic cooling and heating with biometric tracking. Go to https://www.eightsleep.com/Pomp to check out the Pod Pro Cover and save $150 at checkout. Eight Sleep currently ships within the USA, Canada, and the UK. =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Jeff Booth is the author of The Price of Tomorrow and a well-respected entrepreneur and investor. In this conversation, we talk about central banking, talk about financial censorship, Bitcoin, El Salvador, and much, much more. I really enjoyed this conversation with Jeff, and I hope you enjoy it as well. Before we get into this episode, though, I want to quickly talk about our sponsors. Today's episode is brought to you by Exodus, the world's leading desktop, mobile, and hardware crypto wallet. They offer beautiful, user-friendly blockchain

products that sync across all of your devices, making it easier to send, receive, and exchange over 150 or more crypto assets in one place. And with world-class customer service available to you 24-7, Exodus always has your back. But the fun doesn't stop with staking and trading. They recently launched a new NFT marketplace where you can buy and sell your favorite NFTs on the Solana network. By partnering with the popular NFT platform, Magic Eden, they're offering the full Monty on verified collections with more added every single day.

Ready to check it out for yourself? Run, don't walk. Over to exodus.com slash pomp for your free download today. Again, if you want the world's leading desktop, mobile, and hardware crypto wallet, go to exodus.com slash pomp today. Today's episode is sponsored by Abra. They're based in California

and they're backed by top VC firms. Abra is an all-in-one, simple, secure app that allows you to trade over 110 cryptocurrencies, get 0% interest loans using your crypto as collateral, and earn interest with up to 13% APY on stablecoins and 7.15% APY on Bitcoin. You can join nearly 2 million users by downloading Abra from the Google Play or Apple App Store. If you download the app today, you will get $15 in free crypto once you fund your account. You came, you invested, now conquer. Abra, conquer crypto. Go check it out today. This episode is brought to you by DeFi Technologies. DeFi Technologies represents

what's next in the digital economy. They're providing simplified, trusted access to crypto, decentralized finance, and Web3 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols through a single stock purchase on a regulated exchange. DeFi Technologies is currently listed on the U.S. Exchange at DEFTF Stock Ticker and the Canadian NEO Exchange at DEFI. For more information or to subscribe to receive company updates and financial information, visit their website at defi.tech. I'm really excited about what these guys are doing. I've become an advisor to the business and I highly

suggest you go check them out. Go to their website at defi.tech today. All right, let's get in this episode. I hope you guys enjoyed this one. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right, guys, I've got Jeff here with me. Thank you so much for doing this. Awesome. Thanks.

I'm super excited to talk because I think last year about this time, when we had a conversation, we talked a lot about Bitcoin, the macro environment, kind of all the chaos, uncertainty. And I think we both hoped that the world would kind of calm down, things would become much clearer. Unfortunately, it seems like it only got exasperated, right? It got more chaotic, I think it got more uncertain, everything from some of the central banking issues to obviously the war in Europe and a number of other things. So maybe we can just start with this idea of central banking and some of the problems that it seems like we're starting to see. If we start here in the United States, it feels like the Fed is using their two or three tools the best that they can. But we have inflation at 8% officially, probably in the teens unofficially.

It looks like the March numbers are going to come in way higher and doesn't necessarily see like they have a plan as to how to kind of get this under control. So how do you see something like the Federal Reserve and kind of high inflation and the economic situation that they're facing? It's a function of the market. They have no choice. And I mean globally, all of central banks have no choice because they're trapped. and you know my premise or my thesis on technology being deflationary trying to drive prices down

if prices come down you have a credit collapse and the credit collapse keeps on winding all over the world and it just keeps on unwinding and when I wrote my book there was 185 trillion dollars of spending in the world of stimulus in the world to raise or to increase global GDP by 46 trillion. And I projected, because technology was moving faster and faster,

that what was to come was way higher rate, an exponential rate of debt creation to be able to try to stop deflation from happening. And so they're trapped and you can expect more and more and more because if they stop, you literally have a global credit collapse and in our economies, everything is built on top of that credit market. So how do they, if we get in the situation, right, usually they would just inflate their way out of it.

But if you already have high inflation, is the game kind of don't use our tools, allow for some sort of recessionary event to take place or go ahead and accelerate the inflation? Like is that the path? Is like recession or inflation, choose your poison? So even today, there's more stimulus coming. And so I think to simplify this, that inflation-to-inflation debate,

just to simplify it in first principles, ask yourself what would happen if government stopped easing? What would you see? What would you see if the market was a free market? And what we would see is cash would explode in value. But cash, for a while, U.S. cash, dollars would. But after that, after the banking failures over and over and over, cascading around the world because it would just keep on,

that counterparty risk would take down everything. The only cash that would explode in value is the stuff under your mattress. And prices would completely collapse. But into that vacuum, dictators would rise because you wouldn't have food on the streets, you wouldn't have food on the shelves, there would be no banking institutions, there would be no institutions left. Every institution is built on top of this global credit mess. And it's a staggering size of imaginary money.

And it has to keep on blowing up a bigger imaginary money to keep it solvent. Otherwise, you initiate that credit collapse. So they have no choice. So you'll raise interest rates. And even the threat of raising interest rates, both the bond markets start to collapse and the equity markets start to collapse. and as that starts to happen but they have to run fiscal policies and as this happens it doesn't just move into central banking

it moves into consumers demand more money to pay for higher prices and it overtakes the political establishment and politicians become the central bank so the central banks get corrupted by the state and there is no independence and again just go back and ask yourself what type of market would you see in a free market and you'd see no market because there the manipulation is part of the function globally

of money uh of money of of central banking yeah when we think about the macro situation uh or kind of the global environment uh it scares the hell out of me i think scares the hell out of a lot of people if that was the case but if we then go and we look at specific examples like the country level. So individual situations, we have Lebanon as a recent example, where the stats that I've seen are the local currency has collapsed 90%. The economy has collapsed 60% in about two and a half years. And the central bank recently declared bankruptcy. And obviously, it goes without saying, but the people, the citizens of Lebanon absolutely get crushed here. It's an incredible dire situation for them um but is that an example of how they get over their skis or kind

of uh it gets out of control they don't make the right monetary and fiscal policy decisions and quite literally they go bankrupt over it so remember and this is a global global worldwide structural problem where technology is advancing at a rate that is bringing down the prices and And globally, central banks have to try to, or they're trying to print into it. And eventually as they print into it, which will happen in the US too, and it'll be probably the last domino to fall.

But as they print into it, they're actually, so if they stop printing, you have what I told you before. You have a credit collapse, and the credit is our entire market that we live on top of. All houses fall precipitously. Everything falls. so you have no choice but to print into that and so you're printing into an inflation rate

that is staggering and we look at those other countries as banana republics and what happens to their citizens and we think oh there's high crime there and those people are ugly people it's a function of broken money that turns people into doing whatever they need to to feed their families and the same thing can be said for el salvador before el salvador went

to the bitcoin standard high crime rate high gangs if you look at peru and the food prices today and people rising up on the streets and they and all of these things all over the world are connected to the same monetary policy people don't turn against people the divide when when money is not broken they turn against when when they're fighting for survival and politicians can create us versus then their narratives because of the the the high wealth on one side because of equity because house prices went up stock prices went up and the massive poverty on the other side and in that scenario you can't build walls high enough to keep the the the middle class poor out that have been hurt by those policies.

So let's call increasing food prices and other types of issues that are driven by this central banking structural failure or complexity. How is that affected in relationship to something like an external shock where we have with the Russia-Ukraine conflict, where it's very obvious that they're a large wheat producer, natural gas, etc. And people are saying, look, if fertilizer prices spike, If wheat can't get out of the region, there is the potential for much higher prices in a good situation, in a bad situation, literally famine in some parts of the world. And so if the long kind of macro structure or trend is the central bank is going to cause these issues because they just can't get out of their way, and then you have an external shock that also is going to drive food prices higher.

Do those two things converge and just magnify the problem or are they two separate situations? No, they're exactly the same situation. In fact, there's monetary policy and this is probably deeper than we can explore on the show but monetary policy is the rise of the war in Ukraine as well because effectively what you have is the US being able to get free energy in oil

by pressing a button, and Russia's selling their oil or their value and their labor in stuff that it gets devalued. And so as you do that, and there's one country that has a monetary standard of the world and can keep on getting an advantage in trade, and energy prices is derivative of everything else, and you have an advantage in trade, other people have a disadvantage.

And so their economies suffer as a result of that advantage and disadvantage. So what China did in 2015 with the same thing they realized that the U.S. couldn't pay its bills anymore. So for a long time China was a beneficiary of this trade. They kept labor rates low. And if the economy didn't function really well in the United States In other words, if interest rates went up, the U.S. economy would have collapsed. And therefore, all of the buying from China would have collapsed too, and their economy would have collapsed.

So it was a beneficial relationship, but China pegged their dollar, their yuan, to the U.S. dollar. And you had low labor rates, high labor rates. And that balance all over the world has to equal zero. So when, and to keep interest rates low, China bought U.S. bonds. Correct. But when they stopped buying U.S. bonds in 2015 and realized U.S. can't pay back their debts, and they're not going to pay back their debts, so they took the money and they kept the peg. They took the money as they're hollowing out the U.S. economy and put it into safe haven assets.

rare earth minerals, real estate all over the world, kind of expanding their footprint all over the world with that same trade balance instead of putting it into U.S. dollars. So what did the U.S. dollar have to do to stop a depression at that time? They had to monetize their own debt. And they had to actually essentially take their citizens' money and make the rich richer and the poor poorer by monetizing their debt.

And that creates this geopolitical rival that is getting stronger and stronger and stronger because of that same imbalance. And so as everybody's pegging there, everybody's trying to find their way to what is valuable. And what Russia just did is said, you can print your money all you want my oil is more valuable than your printed dollars

and we're going to price it in something else we're going to start pricing it in something else a lot of people are worried they're going to price it in yuan I suspect if you just do the game theory on this China isn't going to be the reserve currency of the world who would trust that to happen in another country having a reserve currency in the world including China would they want that

because then they would have to run the structural imbalance that the U.S. is running. And you would port, U.S. labor rates would fall a lot, China labor rates would rise, and industry would move back. And so that balance all over the world has. And so what you need is a neutral reserve asset that as countries trade with one another

and labor moves up or they have a strong industry, labor moves up and it rebalances automatically. And so we don't have that today and all countries are trying to essentially look inwards and create policies that don't realize that we live in an interconnected world for their own good and it's driving massive chaos,

supply chains, chaos, that is bound to get a lot worse. We're a long way from done on this. So what you can expect in the macroeconomic landscape is if you look back 20 years and we live in a really safe world, everything's great, and it seems like these iterations are getting worse and worse

and it's hard to believe, and we're sucked into the news media over and over and over in these events. Every one of them is connected, and they're getting bigger and bigger oscillations. And I find myself, you want to react to the events, but if you look at the structure and what has to happen, they're going to get worse. I wish I didn't have to say that, but they're going to get a lot worse.

Yeah, it's funny because I read Ray Dalio's book, Changing World Order, and in it, much of what you're saying, this is not new right and his whole uh kind of focus for the last number of years has been go back in history look at the rise and fall of various economies uh geographic uh military powers and also uh empires and this idea that you're a small country with no power no wealth you eventually uh focus on investing in education technology etc you then rise in both military might and also in wealth. Eventually, your citizens become wealthy, feel wealthy, they take on tons of debt, your country takes on tons of debt, you then basically get overextended. And

at some point, somebody else rises and replaces you. And this is a cycle that continues over and over again. What's fascinating is it feels like there's a lot of countries that are all doing this at the exact same time. And to your point about China making very specific decisions, I don't know how clear it is to the U.S. that we are following history. And if we don't do something, we get the same results that people have gotten, you know, for thousands and thousands of years at the end of kind of these very long, you know, positive runs for our country. Yeah. And I think the one thing Ray Dalio misses is how different Bitcoin is in this transition. and he believes, now he's incented to believe this too

because a lot of his investments are in China, but he believes China is the rise and it will become that new superpower or global reserve or something like that. And I categorically dismiss that. That's not going to happen and it's not going to happen because of Bitcoin. And I can't imagine the world looking

at that type of model which is actually not a free market model which is if you look at the rise of debt in China there's never been faster growth of debt for a country if you look at their debt to GDP ratio it's off the charts the known, not the hidden dark pools of debt and that debt has created a fastest growth

forever as well but it has to be repaid too and and so who is going to trust um a country that look at cbdc like look if you look at the rights and freedoms of individual chinese people and if you look what that looks like do you trust the truth coming out of china and and and would you trust that type of policy around the globe um i suspect not i said so so and that's actually what's so different about bitcoin and a lot of people miss this. Actually, I'll tie it back through history. That's probably better.

Technology has always been deflationary. From the invention of the wheel to everything we do, it's our ideas put into things or technology that makes our lives better. And that reduces the labor component, or today, in a lot of cases, removes the labor component. But it used to happen, if you go back to Roman times, it used to happen over a slower period.

But because we always had hard money, but hard money couldn't gain velocity, so you couldn't have fast enough velocity to do global trade in gold. You had to have a credit market built on top and that credit market, once it built on top, incensed the system to expand credit and reduce the amount of gold in a system.

And at the end of that bubble, Ray Dalio talks about this, at the end of that bubble the debt can't be repaid back so governments always either seize the gold or they start driving more and more inflation. And a function of that whole model is, we believe it today, is 2% inflation is required for a productive economy. And it's a false construct. We believe it though so it's real for us.

and it is a construct if you have to build a debt bubble that has to keep growing and then eventually that debt bubble has to turn into 8% inflation 14, 50% inflation, it has to and so what that meant is in the Roman times you would have a currency failure every 500 or 600 years and then as you advance through history

as technology is moving more and more moving faster and faster you had debt bubbles, not the small ones, the massive debt bubbles that tends to take countries to war every 100 years. And today you have them, if you project what actually would happen, you would have them every 50 years.

Remember, the US defaulted on their debt in 1971. And so now the petrodollar is effectively defaulting now. And so you have them every 50 years. And all of those things are caused by technology moving faster and faster and faster. And we're projecting backwards. All of what we think looks backwards instead of looking forwards. If you look forward on the technology axis, it's moving at a rate we can't even comprehend. So that exponential rate of technology now moving forward means if you run a monetary policy that requires inflation,

It means you have to collapse. You'll have these debt bubbles at a faster and faster rate. And that's where Bitcoin is so different. You gain monetary velocity through the network. You can have unlimited monetary velocity without creating a massive debt bubble on top. And so people think, oh, it has to act like gold. It doesn't act like gold.

I can trade, we can trade Bitcoin over in India to El Salvador, to Canada, to here, all in instant transactions on Lightning. So you don't have to store gold in a vault, build a monetary and go back and forth on slow rails. That change changes the very nature of debt markets and it changes the very nature of how things move and allow technology to create abundance for all of us, actually.

Yeah. When you start to think about that central banking system, obviously the oscillations get larger, the uncertainty becomes deeper. There's more fear, I think, of kind of the unknown moving forward. But also, I think we're getting some of those fears pulled into the future, or I'm sorry, pulled into the present, where in Canada, seeing the trucker protests and having the Canadian government essentially treat them as terrorists and go ahead and seize, whether it was bank accounts or go after citizens who had donated, et cetera.

But at the same time, those financial sanctions or censorship also being applied to the Russian government, given their actions in Ukraine, freezing central bank assets. And I think most people would say, okay, those are, you know, whether you agree or not, situations where somebody is engaging in an activity that somebody else that's at the government level disagrees with, and so they're taking action. But then if we kind of extrapolate out even further, we have also seen, as part of the Russian sanctions, going after the oligarchs, where it's not just taking money out of a bank

account. It's literally confiscating physical assets, taking their yachts or their property, etc um and it just feels like whether it's the truckers whether it's uh uh the russian central bank uh which really ends up punishing the people not the leaders uh or it's going after uh these oligarchs um it's a guilty you know uh kind of uh sentence before there's any sort of due process um and maybe sometimes that's supposed you know maybe sometimes it's actually uh effective or necessary. And the moment of war is a little bit different, obviously, than when you're dealing with something like maybe the protest. But how do you think about the relationship between financial censorship and what seems to be an acceleration and a more normalization of

a lot of those sanctions, along with some of these central banking issues that we've been talking about? Yeah, it's not a complex topic, but it seems complex because there's so much emotion tied to it and depending on where your emotion will will drive you to a construct you will either okay in russia that's right we should censor those people uh or we should we should cut them off and then try and the truckers that's uh that's that's that's wrong and they're actually similar and I can say this because in the truckers I was one of the

Bitcoin key holders and sitting in Canada which I think is a free nation and having emergency powers act and realizing that my bank account could be seized is unbelievable to actually think that. Worse

outside of Canada people are looking this is not a democratic country anymore because the protests were peaceful and whether you agree with the truckers or not most of the protests were peaceful and in retroactively for something that was peaceful

Trudeau Emergency Powers Act and anybody who donated to them could have their bank accounts frozen worse than that 75% or so of Canadians thought that that was the right move. And that alone blew me away. It blew me away how many people thought, because I don't think people realize that once that happens,

what if you donate to the wrong party? And then the new party comes in and says, retroactively, I don't like the way you stand up for free speech. and retroactively seize your bank accounts. So these things are wildly interconnected. But we tend to polarize on one of the issues that we believe in and then we'll be on the exact opposite side of that issue on something somebody else believes in.

And probably this is the simplest way to look at it. Capitalism and communism, free markets and communism, are the exact same construct, underprinted money. Democracies fail underprinted money. And why? And why do they have to take more and more control? It's because we don't have a vote in a democracy on inflation. yet inflation is the number one impact

in all of our lives because it's actually a theft of our money and a transfer of our money to somebody else but we don't have a vote in a democratically held election on inflation so if you taxed 100% of the companies in 2019 100% of all of the wealth in the US

you couldn't pay for half of what the spending is right now so they have to hide the spending rate in inflation and because that impoverishes so many people the same people that it impoverishes have their hands out for more money

and so it empowers governments to come in and say we're going to help you but they're actually killing you by printing more money and transferring that wealth and how do they do that They look like heroes going after the rich.

They're making richer and creating divide in society. But that same extension is not just in your country. It's in every country. And it turns into my country against your country. And we believe in those false narratives while our individual rights and freedoms are being taken away to control the narratives. What's fascinating about it is if you take it in the United States,

There's a recent legislation that was put forward. It's basically the billionaire income tax, right? And there's a minimum 20% tax they want to levy. And based on the name of it, you would think that it was for billionaires. But except for it, actually, the threshold is $100 million. And again, $100 million is very, very wealthy. So maybe the $100 million income tax doesn't sound as good as the billionaire income tax. So some marketing there.

But I think what it signals is two things. One, to your point, going after the wealthy, regardless of how they got it and regardless of it being less of an evil versus good, more so an educated versus uneducated, right, is really how they get to that level of wealth. It makes them look like they're doing something. But the other piece of it is if you go after their income, you know, I think it's Steve Schwartzman as an example. He made a billion dollars, I think, last year. and he gets paid a couple hundred thousand dollars salary and it's $999 million or whatever that he gets all through dividends

and capital gains type revenue. And so when you think of that, the income tax almost feels like it's more of a marketing stunt than it is actually trying to raise capital for the state. Say this over and over and over again because it's so important. Most of government revenue comes from inflation.

A hidden repressive tax that is levied on the middle class and poor, that they have no realization that somebody is walking into their house, stealing their money and their wages and their time, and transferring it to other people. And until that is brought into light and politicians are advocating on truth, then all of this all of the other things that people are talking about on top of this

is just nonsense but people believe in those narratives and people believe I would venture to say 99% of people all over the world 98% of people all over the world believe inflation is required for a productive economy and they never asked why

Why is inflation required for a productive economy? Does that make sense? Does it make sense what rate of theft is required for a productive economy? Because that's what you're saying. When you think about this, I know you have this idea of capitalism and socialism end up being the same thing in this environment. Explain what you mean by that. Because on a structural issue that you have to have inflation

and you don't have a vote in a free market. Again, go back to what would happen in a free market. Prices would collapse to zero everywhere. Everything would collapse. And so we tell ourselves, we dismiss that because, well, we can't let that happen. But that's the first principle answer. That's what would happen in a free market

because this credit bubble that we live in would unwind. And so we dismiss, okay, well, it's kind of free. There's no kind of free. And then while you have manipulated money, every price signal has to be manipulated. In fact, as you have manipulated money, and money is just an abstract concept for our time, people actually don't want more money.

They think more money will give them. Correct. And so when you have misinformation and money, which is just the division of our labor, and all it is is trust all over the world, wouldn't it be obvious that if you are trying to remove trust, trying to give misinformation and money, you'd have misinformation everywhere in society? And that's what's happening. And so to be able to essentially, and I don't want to call it a crime, but be able to perpetuate that lie, you have to control. You have to remove individual rights and freedoms and drive more control to perpetuate that lie. And it comes from, and probably the most frightening thing is the people most hurt by that lie are the most susceptible to believing in it and will vote to keep it going.

Because the thing that's hurting them and transferring that wealth to the 0.1% at an increasing rate, and it's not the, by the way, it's not the billionaires that are creating it. It's a system that's creating it. The billionaires are just, what would you do if you had your choice of cash that was being devalued? Would you put that into a house? Would you put that into something else that couldn't be devalued? And if a country was trying to stop you from doing that,

you would move your assets to another country. So every human nature would say, I'm going to get this money out of here, just like China's done, to try to move their assets all around the world for the same reason. So that's a structural issue that's caused by this printing money.

But society votes for it. Because, and again, going back to that free market, just ask yourself a simple hypothetical question. If a politician today told you the truth and said, listen, here's what it looks like, I'm going to advocate for a free market and I'm going to let all prices collapse. And this is what it means for everything.

What I just said about no food on shelves, banking failures and everything else. Would you vote for them? No one would vote for them. They would be ostracized. So politicians are incented to lie and drive more and more inflation. And they're incented to say,

I'm going to help you, the person who's been most hurt from this because of those rich people, and they're going to print more money to transfer more wealth. But they have to now. And that's why you need a parallel system like Bitcoin. Because this is a system, global system problem that can't solve it from the system. It's impossible.

You have either complete credit collapse or you have inflation rate that keeps on going. And again, to measure this in months, when this is playing out and it's going to play out for a long time, people are going to be, if there's a tightening, things will start collapsing really fast and you can expect yield curve control, you can expect massive easing at some point. So if we're measuring at what point, I can't tell you. But essentially, all bets right now are bets on when government is going to stimulate more. Nothing else matters.

And so we don't live in a free market. We live in a bet on what's going to happen with people stimulating more. That's why a parallel system is required, because this system can't solve it. And that parallel system, which is Bitcoin, I think it's inevitable. is as people are starting to understand what you've been saying for a long time, what I've been saying, what a lot of people have been saying for a long time,

they're building that parallel system. And that parallel system on Bitcoin is getting stronger and stronger and stronger and it's moving at a velocity. And what's building on top of that is going to remake the world under a system that looks more like a free market. Yeah.

What's fascinating about this is there's a gentleman, Mark Spitznagel, who runs a fund, and the whole idea is he loses money every day by buying basically out-of-the-money options, betting on a market downturn. And so he loses money sometimes for years, and when there is a market downturn, he's the best-performing hedge fund,

and he basically catches up and then passes everybody. And so I think it was February and March of 2020, he returned like 4,400%. And he has a book, The Dow of Capital, And I always tell folks it's probably one of my favorite books to read. And in it, he has a lot of analogies and kind of frameworks in which he thinks about. But one of them is this idea of planting a special kind of tree. And the whole idea is over a long period of time, it grows and it's very strong.

And that's similar to what Bitcoin's doing. But the other piece of it is he explicitly calls out the market intervention. And he says if every single day you show up and you're constantly intervening in the markets, You distort all the price signals. You completely remove the free market. And what you actually do is, as a human, you probably make the problems worse. And that's exactly what we're talking about. You do make the problems worse.

Because people are short-term in nature, and they have mandates for four years, and they're short-term, and now I need to get elected. And the problem cascades way worse. And they miss all the second, third derivatives of those problems, which are, and a lot of monetary, monetary theories. Like, ask right now, what does modern monetary theory look like where you can just print money? Ask those people right now what just happened with Russia

saying we're not pricing in US dollars. And so if you're a nation state that controls the currency of the world, and somebody else wants to price their raw materials that you need in something else, it's checkmate. When you think of that, Bitcoin I think is probably the only way out for a lot of folks in this environment. How do you see Bitcoin playing out

and why do you see it as the only way out? When I wrote my book, and I only had a paragraph on Bitcoin in my book, because I wanted to talk about the structural issues and then a potential way out. But I have been looking, I've been talking about this for 10 plus years and trying to find a way out of this and really for my kids.

And probably the simplest way I could explain this is throughout history, same thing Ray Dalio talks about, You could just say, if a money could be corrupted for some people's gains over some people's expense, positive externalities, negative externalities, it will be. Not it might be. It will be for sure. And history proves it. Seizing of gold, changing of the rules of gold. History proves that that will happen always.

And it's because human nature is inside that state. We care about ourselves first rather than some far off land. And so we will do that, humans will do that if a money can be controlled. And Bitcoin is the only thing that I've seen that removes that temptation or power from us, our human nature, to compete against other people. And it's kind of a profound thing because it moves global competition to global cooperation. and a different shelling point um and and and and assuming that stays true bitcoin remains decentralized which i suspect it will um and and then it's out of the hands of people to be able to manipulate it now when i people say okay well why are prices going down manipulation

um on on bitcoin if more and more people are buying there are people creating leveraged products on bitcoin today and some of the exchanges some of the exchanges will fail on bitcoin and when this price goes make sure make sure you hold bitcoin on your own private wallet and your own own own own keys um because over time when this thing goes parabolic it's going to take out a whole bunch of uh exchanges that are levered and you're going to see you're going to see what happens because bitcoin doesn't care it doesn't have that counterparty risk unless you impose that counterparty risk by leveraging yourself onto somebody else's exchange.

But that decentralization and taking that money out of control of human nature means we're forced to cooperate. And in labor, we often miss that the buyer and seller are actually the same person. so all of our labor shows up as somebody buying our labor but because we miss that

we miss that we can use Zoom now for effectively free and that removed a whole bunch of other businesses because now that message can transfer touch millions of people all over the world essentially for free and yet we don't want prices to fall over we want our house prices to go up forever yet all the things we choose in our lives

we want more value in so we miss that it's the same thing right all of our labor is somebody else's buying and and so we but we but we want all of our things we choose to go down in price yet we want our assets to go up in price and and that's because of the system that wouldn't look like that system, prices of housing would fall to the utility value. They wouldn't be used as a store of value in a market that didn't require leverage and leverage and leverage.

And so all of these prices, as technology removed labor, would fall in lockstep. That's why I say it would be the broadest distribution of technology. Winners, we would still compete to create products, which is to create great technology. And the only way to win would be delivering value to somebody else in their terms.

That's the only way to get more Bitcoin in their terms. And what would happen out of that is prices would fall. Everybody would win. So that's the world we're moving to. It's going to be chaotic on the way there. If you're living in Bitcoin, if you're managing your world in Bitcoin right now, what you're seeing is prices against Bitcoin fall forever.

Every price falls forever. But if you're measuring your world in a fiat currency, you're thinking prices are going to rise forever. Yeah. You recently went to El Salvador, and I think that they're probably the closest thing so far to that world. Now, of course, everything's not priced in Bitcoin. Every single citizen is not even holding Bitcoin or interested in Bitcoin. But when you went, what were some of your takeaways

in terms of kind of what they're doing? And is that an example of kind of where the world is headed or is it maybe not so clear yet? There's a lot of powers to be that are trying to stop that or not trying to stop. So international powers to be international system that are trying to stop that experiment. Because once El Salvador is a currency,

than it's a currency everywhere. Other nations can just say it's a currency and it moves around the world. You're going to see some of that at this conference. But it is early. It is really early in El Salvador in this. But what I saw is, again, I've traveled extensively all over the world

and I've gone to some places that people think, oh, why would you go there? It's really unsafe. And I heard the same thing going to El Salvador, and I saw the exact opposite. I saw just beautiful people, and maybe for the first time in a long time, hope. And that's really powerful.

Because crime comes out of, I met a teacher at school and teaches in Bitcoin and what's happening here and his school enrollment went from 200 to 800 this year and we met a bunch of the kids and we talked to the kids in El Salvador

and he told us a story he said how many people did you lose to gangs over the last two months and the number out of 840 students they lost 41 to gangs in two months and I asked why and he said well when there isn't an economic system and the gangs provide an economic

system, he gave two young brothers, the mom had cancer and they didn't have any money for cancer and so they joined a gang to try to get it when the mom died they came back to school they dropped out of the gang and came back to school So it's an economic calculation that people get forced into this and then the gain gets stronger and stronger

and drives a bunch of force to be able to make that. Again, most of this comes down to an economic calculation. And when you break that and people see hope that they have another path, they take the other path. In that entrepreneurial adventure, I met a guy, he calls himself the Bitcoin taxi guy and you should meet him. he's just like full of energy and he was dirt poor i think he had a grade three education um and and no hope and and when bitcoin came in he wanted to learn it so he learned it now he has

three different drivers working for him everybody that goes there looks up the bitcoin taxi guy and is expanding and you should see that that hope is palpable like it's so so it's so it's so cool to meet people on the ground watch actual people not what you hear through the media and what it looks like for them it is still early though it is still it's not widely uh accepted there there's still how does it what does it what does it look like here but but it's but i would say really hopeful It looks good, yeah. Part of this, I think, is hope is a huge piece of it. It also feels like, I call it energy, right, in terms of we have a young leader, regardless of whether somebody thinks they're an expert on Salvadorian politics or not, and nobody can tell anyone's intentions in the future. But you see this in El Salvador, you see it here in Miami, you see it in a couple of other regions around the world where a young person who understands technology, understands innovation, has a pretty good handle on the internet and things like Twitter, et cetera. And they just are excited, right?

And they say, listen, I am enthusiastic about our future. And I always tell founders that enthusiasm is contagious. if you show up every day you have high energy guess what everyone else is going to show up and have high energy too totally and it feels like uh what you have to ask yourself is what is that spark what kicks off the enthusiasm what if you have the enthusiasm it leads to hope if you have the hope then you actually probably get results and uh in in this case uh both in miami and in el salvador bitcoin was a huge piece of that story and i think that we're going to see this kind of rollout across the world is people realize a lot of people believe in this and we're going to have

to be pro-Bitcoin in order to make this happen. Yeah, I actually have thought about that. Maybe this would be a call out to a whole bunch of people that are either in Bitcoin or just in Bitcoin, but just holding Bitcoin. We all create the world we want to live in. And through our idea exchanges competing for ideas um and and i want to live in a world that is filled with truth hope abundance and and so holding bitcoin now isn't enough for me and i and and as i see this this play out because it's not enough for me just to have more wealth in an economic system and it's probably not enough to drive bitcoin but it's bitcoin will happen but can i influence the rate of change in this by myself actively participating in it not just speaking on podcasts like this

but actively participating with my time and money and so i'm and because i'm there's so much hope in this and there's actually an asymmetric bet for value gain too i've just decided where I can, when I can, I'm going to pay it with lightning. I'm going to invest in these businesses and start spending way more of my time in this space because that time is more valuable than fighting a system that can't win. The system can't change itself.

And it's going to be, for everybody, it's going to be challenging as we move through this. This is going to be really chaotic because the world you're living in is going through a phase transition. And you're going to want to reach in to all the hate that is coming from this system.

And if you're spending all your time hating what's happening, which is just a function of a structure, you'll probably end up unhappy. I'm just going to spend more time in the, in the, in the new system, in the new system, doing everything I can with my time and energy to expand it. Yeah. It, um, it, it does focus you. I think that's one of the, uh, the big things is, uh, most investors, they look across industries or, uh, one day you may be

looking at a, you know, enterprise software product. The next day you may be looking at a ride sharing product. Um, and, uh, one of the things I think Bitcoin has, uh, has done for me and many other people is it drives focus and you start to think about this one single system and uh there's not very many um corollaries in history but uh when you try to say to yourself i want to be as best informed as possible about a single system and that single system could become the equivalent of an operating system for humanity globally it's probably the right place It is the internet in 95, it's 96. It's literally an open monetary network

that everything's porting to being built on top of it. By the way, if you talked about altcoins and everything else and you take out the perception of what's happening from the Bitcoin maxi space to the altcoins, actually if I said I understand why an entrepreneur built onto Ethereum to try to create value, when Bitcoin didn't offer the ability to do a bunch of smart contracts

or anything else on the second layer. Because a choice on simplicity and decentralization was made on Bitcoin that wasn't made over here so you could do more things on these other contracts. And a bunch of the entrepreneurs in those spaces have been labeled and everything else. But if you actually look at the entrepreneur, they're just trying to create a good business

and once they're on top of that structure they don't really have an exit valve and their structure they're building on is like building on quicksand and it keeps shifting but if you have a bunch of business

on that you're trying to protect your business and you have employees they have to go home to their families and you're trying to do everything to protect your business on quicksand and what Bitcoin offers

and so what's going to happen and I don't think a lot of people know this yet but the entrepreneurial talent is all going to move over on top of a base layer that's incorruptible, that's not built on quicksand and so what that form factor what's going to come on top of it layer two, three, is it's going to look a lot like the internet

and it's just wildly exciting citing what's about to happen in this space and that value that it'll drive to society. Yeah, I completely agree. Where can we send people to find you on the internet and anything that you want to share in terms of where you're posting a lot of these ideas outside of maybe Twitter?

Twitter's probably best. It connects to a bunch of the other things. I haven't updated my website in a long time and I don't try to gain value from these types of things anyways, But Twitter, at Jeff Booth on Twitter is probably best. All right. And then I got one fun question for you, which is we were talking before. We're recording this during the Bitcoin conference.

I think you and I are both probably running on six hours of sleep multiple nights. And you made the comment that it feels like we're in Vegas. Yeah. Which there's many reasons why it may feel that way. Yeah, it's amazing. When you're not here, what's your sleep schedule these days? It's actually pretty good. I probably get eight hours a night.

Yeah. Yeah. Not here. Yeah, definitely not here. Four hours here. One of our sponsors is Eight Sleep, and they have this whole idea of eight hours of sleep, you usually get about four hours of deep sleep, right?

And can they compress eight hours to six, but still get the same four hours of deep sleep? So you wake up and kind of have all the same benefits of the eight hours, but you only took six, you get two hours back. And when I was going to bed last night, I was thinking to myself, damn, I only got six hours, right? Uh, I really wish that they were already getting us at the six hours. They're on their way. Right. But like, Oh man, come on guys, speed it up. Where's that deflationary force that Jesse was talking about. Um, awesome. Well, thank you so much for taking

the time to do this. Uh, I really enjoyed it. And, uh, I think that you've just, you've been ahead of this for a while and, uh, you know, there's a, there's a, uh, a negative side, I think of the story in terms of, uh, uh, things could get pretty bad and chaotic and uncertain. Uh, but at the same time, Bitcoin, you know, is that way out. It is hope. And, uh, I think as more people get educated about it, they'll, uh, there'll be in a better position. Yeah, completely agree. Thanks. Of course. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or

crypto industry, we've got you covered. Head over to palmscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to palmscryptocourse.com to learn more and I'll meet you guys for the next episode.