How Understanding Economics Is The Key To Understanding Almost Everything | Saifedean

those other subjects. And today I am joined by a good friend, someone I've been excited to talk to you and bring to you for a long time, author of one of the books that I think is very instrumental and everyone should read. UM. And we dig into economics. We talk about how it's that foundation for the rest

of everything, UM. What is at the root of that UM, the two different camps of economics, and how all they're at odds with each other, How one of those camps has really driven all the policy of the developed world and kind of politics where we're at today, the problems that it's created, UM, how to solve it, what's at the root of that problem, and how we can solve that problem? UM, and and so much more. UM. I am excited to have this interview with you today. UM,

I hope you enjoyed it as I did. So let's quead just jump in everyone today. I'm joined by Safety and he is a pH d in economics. He's an independent scholar, and he's a teacher on his own website, Safety and dot com. He's also the author of the Bitcoin Standard and the newcoming book, the FIATS Standard, which I think everyone is pretty excited to read. I know I am, I've read quite a bit of it released. But anyway, Safety and thanks so much for joining me today.

Thank you so much for having me Mark. It's a pleasure to be chatting to you. Yeah, that's great. I'm glad we're able to finally get this together. UM. I've been a big fan, uh ever since you kind of you kind of popped up on the scene several years ago. A big fan of your books. I've I've recommended them NonStop. But what I really like is is the take that you have almost not everything that seems to be counterculture today, but you always are able to tie it back to economics.

You use, you have such a good understanding of that. I have so much I want to dig in today, but just real quick, why don't you just kind of give us a background on on on who you are,

what you're doing right now. So I used to be the university professor at the Lebanese American University when I wrote the bitcoin standard, UM, and then UM that went well, and UM, my working bitcoin became quite popular, and I decided that I could make a lot more impact by being independent and producing my own research, publishing it on my website, publishing my books and selling them to my readers,

and teaching economics on my website. So I teach. I've got four economics courses that are available on my website that you can take, and you can join the website as a member and study the courses which are recorded, and then you can join the two live seminars that we have every week. And it's, um, it's it's my kind of twenty first century take on the university model.

And you know, I started this in and then the rest of the worlds university has joined me and now they're all teaching over zoom anyway, So UM, it's kind of uh, it's kind of inevitable because of the economics involved. I mean sure that the university model of going and hanging out with a bunch of twenty year olds is obviously a lot of fun, but the economics of it in terms of education, when you have the alternative of essentially learning for free or close to free online, it's

just too compelling. And it's not like if you learned online you can't socialize. You know, you can still go out, you don't have to stay stuck in your house. You're just gonna be learning much more efficiently. And then you can socialize and invest and network and do all of those things with all the time and money that you save, and you can do them a lot better. So, um,

this is where this is where I am. And I've also, uh, you know, since leaving my university job, I've written the FIAT Standard, which I'm finishing up next week sending off to the printers. You can pre order it from my website safe at dean dot com. And I'm also writing a textbook on economics Principles of Economics in the Austring School Tradition, which will be out early next year. Yeah, I love that. I love a lovely idea of disrupting

all legacy institutions and including the education system. And it's you know, over the last twenty years, technology has changed so much that it's like these all these institutions have

to be disrupted. UM. Education is a big one, do you think, UM back you know, changing that model, as you say, like are your classes they're like prerecorded, right, so then people can go through them whenever they want UM and then you have the discussion that you add on UM as opposed to the old model where like a professor has to be in the classroom giving the

same talk day after day, year after year after year. Right. Yeah, Well, I mean the first time that I recorded them, it was being offered live, so there were students who could join the zoom call and that we could have some

discussion with it. But from then on, yeah, you just recorded once and then I mean the things scales uh enormously that way, because it's the same lecture if you're going to be giving it to somebody else and it's UM you know, there's no need for me and the student to be live online at the same time in order for him to get it. So they can just get the recording and then they can join the discussion with me or with other members of the website. UM uhh.

And you know that that's the interesting part and there's an enormous amount of extra productivity that you can get by just keeping the conventional lecture part recorded. Hey guys, let me just interrupt this interview real quick, just to plug the show sponsor, and that is block Fi. Now. Block five is doing amazing things in the bitcoin finance space.

As a matter of fact, they've cracked some really big news by bringing on the x CFTC UM chair Chris gian Carlo UM and they are one of the most transparent, most heavily regulated UM companies inside the United States, which gives me a lot of trust into what their services are. Now, I've recently did a video talking about how to retire off bitcoin, and you can do that by leveraging debt and interest against bitcoin. And Block five is the number one company in the United States or maybe in the

world to go to and use UM. They are leading the charges. Are paying interest on your bitcoin if you park it with them, or you can borrow against it. Now, as I broke down in that video, you can borrow against your bitcoin, and when you take debt against it, it's not taxable. It's not taxable. Event you can use that debt for anything that you want, including to live off of to leverage up and buy more or roll

it into another asset. UM you can do something like I've done recently, like sell some real estate put that money into bitcoin. Now as that bitcoin price has risen, I'm able to borrow against it and go back and buy the same real estate or something similar, and I still own the bitcoin, and I also own the new asset as well. Lots of ways you can do this um and block five is the company that I recommend. Down in the description, I have a link that you

can click on. If you choose to use that link, you can earn up the two U fifty dollars in bitcoin just for using that link. So check out block fine out. Yeah, I love it. I love it. I I have a daughter who's starting to think about college at this point, and I'm not really a big fan of that. I secretly don't not not so secretly, I

don't really even want it to go at all. Um and now because I don't love education, I do, it's just, uh, you know, that model, especially with with the way universities are today, it's pretty scary to send a kid into that type of a system. UM take away their creativity and brainwash them. At the same time, you know, but being able to like learn a specific subject like you wanna, like you offer, UM lets people kind of come in specialize get the information they need without having to take

on all the extra stuff. So it's awesome. I love it. Yeah. So, UM, I want to talk about today. So you know your your PhD in economics teach economics. Um, you teach really, I guess you would Austrian economics, which is a big difference from what most people would learn in economics in colleges, which is typically more of the Kensian type of economics. Um. Do you want to just kind of talk about the difference of kind of traditional college economics versus what you

teach and how how that works. Um. I think the difference is that since the nineteen thirties, really, um, since essentially central banks came on the scene after World War One and then they started playing a massively more significant role in the management of their economies. After the nineteen thirties, the job of an economist went from being somebody who studies economic reality and tries to explain it into being somebody who advises policy makers on how to fix economics.

And so the approach is entirely different, Whereas, whereas Australian economists think about the world as it is, mainstream economists are much more in their mind practical in the sense that they're looking for solutions. They're trying to make unemployment go away, They're trying to um, you know, remove the economic problems that they see and poverty or so on, and so it's much more of an activist mindset. Where are we need to approach the economic problems from the

perspective of how can the government fix them? Essentially? Um that's I think the difference in the approach in terms of methodology. The primary difference is that the Austrian school thinks of economics as being human action, as being what individuals do you know, It's that there are human beings and they are constantly in a state of economizing because

we live in a world of scarcity. We live in a world in which the amount of things that we want is much larger than the amount of things that are available, because it's much easier to want things than to make things, and so it's easy for us to want a lot of things, um, but we can't have them all, and so we're constantly economizing. Primarily with our time.

We're thinking about how can we spend our time productively and what is the best use of our time and how we can make the most of it, and you know, thinking about all the different uses. So Australa economics starts from the lens of let's just look at individuals and how they act and try and understand the economic phenomena

that we see around us. And I find that to be an extremely powerful tool for understanding reality, as opposed to the kynes In perspective, which is an aggregate perspective, which looks at economics from the perspective of what should the policymaker do, and therefore it analyzes the economy in terms of a bunch of aggregates. It looks at people as essentially cattle on a flarm and you're managing them

in a way that maximizes their output. And it's um, you know, there's not much room for the individual freedom or the individual decision making. It's a lot about, you know, what the policymaker and the central planners think is the best thing to do. So I don't, and I think there are enormous differences, and I think in terms of

methodology UH. You know, the Austrian school starts from the premise that value is subjective, and since value is subjective, all economic action depends on human subjective valuations, and there or you can see how consequently whatever is best is

whatever the individual values best for themselves. Whereas from the mainstream perspective that you learn at university, value and economic valuation is something that is computed by equations and by economists, and therefore, if you can calculate value, and if you can aggregate it across people, then you can make economic

relationships that UM. Then then you can study the economic relationship between different factors in the economy, and then central planners can tweak these intervene in a way that allows um that brings about the desired outcomes that the central planners want. So it's an entirely different approach of UH.

For economics. It's almost like the difference between astrology and astronomy, and that you know, nominally to the two fields discussed the stars, but it's completely different discussion that's taking place. And of course, the mainstream perspective has been dominant in universities in the U S and all over the world over the last eighty years or so ninety years, because that's what governments want. You know, governments are in charge of education thanks to central banking, I think, thanks to

Fiat money and you know, spoiler alert. My next book, The Fiat Standard, can be summarized as everything I don't like is caused by Fiat and fixed by bitcoin, and I make more volit and education is one of those things.

I have a whole chapter on education, and I think, uh, you know, the the ability of government to print money has allowed government to um what sounds like a very noble goal, which is, let's just have the government give everybody the education that they want, to make education more affordable, use education and the scientific method in the service of

public policy. It all sounds very noble, and it's actually quite compelling until you get to grad school and then you start really asking hard questions about how this thing works. Then you read the Austrians and you realize, oh, yeah,

that's not how the world works. All the actually taking place here is that you're ending up with a bunch of people in charge of other people's lives and causing a lot of problems for them, and then society turns into a war of all against all because whoever controls the printing press can essentially dictate reality for everybody. You can dictate what gets taught at university, can dictate what foods get produced, what people can eat, what they should eat,

what is legal, what is illegal. A lot of power comes along with the printing press, and in education this has led to UM I believe that the corruption of education in the twentieth century where if you look at

universities today, you know they're free from market competition. They're free from the discipline that the market would give you, the market will force you to have in order to continue to operate, and so free from that discipline, they have expanded and grown as bureaucracies and they serve the interests of their funders. And that's, you know, just basic human incentives. You pay the piper. You know, whoever pays

the piper calls the tune. And the universities are not paid by their students, even though the students pay a lot of money. UM it's primarily through government agencies, both through facilitating loans for the students and approving loans for students, which is entually means that the real players the government as well as financing research and financing universities and financing professors,

which is an enormous amount of money. So ultimately, universities end up serving the cause of the bureaucrats that fund them rather than the students that go there. And over time, you see what has happened. You know, the teaching experience has degraded. The number of students getting to learn directly from a professor is declining, the number of students in the classrooms declining. The number of professors has stayed roughly

the same. But what has increased massively at universities is the number of administrators, the vice president for this and that, and the vice president for all kinds of different buzz words.

And it comes with political baggage, and it comes with ideological baggage, and of course, you know, the the main driving ideology behind all of this is more government spending, because it's government spending that's financing all those things, and government wants to hear that the government is the solution to everything, and that's the way to succeed in academia.

So um, I I'm you know, extremely critical of the state of where academia is, and I don't really recommend people go into universities because I think whatever it is that you want to learn, whatever field you want, you know, with the exception obviously of some technical fields, UM say medicine, UM and and specific types of engineering. But even with these, you know, a lot of them is a lot of the engineering stuff is beginning to become more of a learner on the job kind of situation. So for for

some fields, obviously this doesn't apply. But the vast for the vast majority of things that you could learn in the university, you could learn them equally well online. You can find online lectures, you can find the syllabi of courses, you can find all the readings online. You can get all of the education that you could get at the best university for um less than one percent of the price online. Yeah, you just don't get that. You just don't get that little piece of paper that that degree

which um following economic principles, I mean scarcity. So every single person has a degree. How valuable is that degree? Right? So I think it's taken some of that value away anyway, Yeah, absolutely, it's UM, it's and I think the entire value of credentialism is dropping because um, you know, credentials had a lot more value before the Internet, when it was very

hard to know who knows what. And being able to go to university and spent four years, say at a physics department or at an engineering department, and come out of that university with a paper that says that you know you've done a good job, carried a lot of signal for an employer. You were obviously much more employable than somebody they pick up from the street because you had a lot of skills and the discipline required to maintain yourself, to keep yourself on the program and pass.

But now with the Internet, you can see essentially everybody's background online through the work that they do, and so people can just do work and demonstrate that they can do the work online and it's very easy to determine who can do the work. And then you don't really need the credentials anymore. The credentials the proof of steak, and then we have proof of work, right like I staked my money, I did my time, I have proof of steak, but over here is my proof of the

work that I've done. Um. The interesting take on that, So you you kind of you set this foundation and then you layered a whole bunch of stuff on there. I peel all that back, and I go back down to the layer. It seems like what I'm hearing is the difference of the two systems really comes down to

maybe almost a difference in worldview. Where one group of people believe like the world happens it's this uh, you know, giant organic complex system versus maybe the Kinsians over here believe they can control everything, almost like this godlike complex, where, um, the economy is a machine that I could build and I can manage, versus organic organic organism made of billions of people that have constantly changing once needs and desires, and so rather than you're trying to learn and maneuver

navigate it, we want to play god and control it. Would that be a way to kind of sum that up absolutely? If you read kanes Um, one of the common things that you hear about Kings is that you know, Kines has been misinterpreted by his followers, and a lot of the followers did bad things, and his ideas were

better than this. It's absolute nonsense. I think the most damning indictment that you could say of Kines is that he was a true Keynsian and I think that's also the most damning indictment of Keynesians as well to say that Kings, because he was a truly despicable person if you look at him as an individually, you know, he um. His idea of entertainment was trafficking in child sex slaves.

He traveled Mediterranean to do this. So he had a very very sociopathic bent to him, and he was he despised normal people, and he believed they needed his control and his supervision in order for them to be able to live their lives. And you know, if you read his conceptions of economics, it very much flows from that

kind of mentality. And he Um. You know, he in nineteen thirty six, the German translation of his stupid book, The General Theory was published, And you know what kind of political system existed in Germany in nineteen thirty six was the Nazi editarian system. And in his um in the he wrote a ForWord for the German edition, and in the German edition he said, um, the the kind of economic ideas that I'm proposing here are better suited for an economy like the German economy. So it was

a big fan of the German centrally planned economy. He was a big fan of the Bolsheviks. He wanted to implement ideas like this in Britain, and to a very large degree he succeeded in um bringing about powerful uh central government and a powerful central bank. And he was involved very early on. In my exbooked the Fiat Standard, I look at the point at which the Bank of England went off the gold standard, and Canes was very much in the background at that time. He was in

the Treasury. He wasn't very public about his role, but there was a point I mentioned this in the Fiat Standard, which is not It's not a very well known story. It was only revealed a few years ago, three years ago. In nineteen fifteen or fourteen, the the Treasury issued a bunch of bonds in order to finance the war, and they were less than one third subscribe The British people didn't believe that fighting a war and the continent was worth buying bonds for that. They got around the third

of the money that they got. And then what the British Treasury and and the Central Bank did was that they got a couple of the employees of the Central Bank to buy the rest of the bond issue under their own name, so the central bank gave them the money, and then they bought two thirds of the war bonds

under their own names. And then the press publicized at the Financial Times, ever, the faithful mouthpiece of central banks publicized announced that, you know, the war loan, the war bond issue was highly successful and fully subscribing, We're going

to issue more and everything is going great. And Keynes was involved from the start with this, and so there was an there was definitely, you know, all through his life you see this element of I know, I understand, I'm smart, you are all idiots, and I'm going to do whatever I need to do in order to make

this work. And so from that moment, you know, that's when England went off the gold standard, and that's when the world went off the gold standard, because England what the world's central bank at that time, and it's you know, the British bound has collapsed. Since then, the British Empire has collapsed, and world leadership moved to the US, and the US also suffered from all of the problems from

this inflationary mess. And it's it's just been an entire an entire century of totalitarian governments all over the world being financed by this crazy um bastard animal money in central banks and it's been devastating. Thankfully it's going to fix.

Is this? It seems like when I've kind of gone through the history of this, which I have many times, Uh, you know, in Britain they left the gold standard temporarily for the war, and then it seems like when they went try to go back to the gold standard, which kind of caused the collapse. Keinges told Winston Churchill like, hey, you've doubled the money supply, you need to double the price of gold. Um. And he didn't, And Winston Churchill said, now let's just go back to the same price which

caused that deflation to happen. Um. Is that what happened? And did it? I mean to me, it seemed like maybe that was one little piece of rational thought that that that that Kings maybe had at that time, and it wasn't really about debasement. He was worried about the debatement that did cause the collapse. Well, I'm not entirely sure what he was m calling for at that point. I mean, obviously the correct course course of action was to not engage in the inflation in the first place.

Now I have the inflation had taken place. Yeah, you have to just recognize the reality and say, well, this is what has happened, and let's devalue the currency again. Let's devalue the currency formally, so that we moved to a new exchange rate with gold, and then everything gets sorted up. But they tried to square the circle effectively of keeping the interest, keeping the exchange rate high, and keeping prices low, and so the result was that there

was just massive economic problems. You know, people were unemployed and prices were rising, and you have shortages, and the economy was falling apart. But I doubt that Kan's wanted to go back on gold at a higher price, because what he wanted to do was to get rid of the gold standard. He didn't want any fixed exchange rate between the pounder and the gold stand and that's what

he got. In the nineteen thirties. The idea was, we just go off gold and then we can just print all the money that we want and then it's not an issue. Whenever we have a war, we print money. Whenever we have any economic problems, we print money. And then this is where the hocus focus of mainstream Kings

and economics comes in. Where um, and really, if you if you really study it closely and then you think about it, it's it's very obvious, particularly if you studied scientific subjects, and if you studied how scientific theories come about, it's very obvious. This is just a stupid after the fact story that somebody made up in order to come

up with the conclusion that they want. The conclusion they wanted was let's print more money that will fix things, because you know, they had the printers and they needed an excuse to print money. And so the whole thing is just in an elaborate post talk rationalization for why actually, you know, no, printing money is very good and it's gonna work well, and so there's all these stupid graphs

and equations and um nonsense. Essentially that uh um, you know, you you analyze the world in terms of aggregates, and then you decide that you you know, Kings just posits how those accregates relate with one another. And then he assumes that if you just get spending up, then everything in the everything else in the economy gets fixed. And

so how do you get spending up. You print money, and so you ignore all the consequences of printing money, and then you attribute all these magical um um results to it, and then you come up with the theory that says, oh, guess what, printing money fixes our problems. Right. It's so it's such a transparence, Cam. It's like, if you fall for it, I worry about you. Yeah, well

I think, Um, you know, they won't. They don't want to give the power of the money printer, and so they'll use all the power at their disposed to continue to convince us that they need to have the money printer, and so, um, you know everyone's been duped, you know, Henry for it's a hundred years ago. If the people knew how the banking system worked, would be a revolution before morning. So of course they don't. They don't tell

us that. It seems like Keynes was involved on both sides of that, Like as you just said, right, his book was written in Nazi Germany. He liked that he was consulting the Britain, British government also the United States from and he was instrumental in the Breton Woods Agreement.

And during that Breton Woods Agreement, you know, he kind of came up with like that Bankoor system, which was it seemed like his idea was maybe to your point, get rid of the gold standard and then have like that neutral reserve asset that like maybe never came to fruition um. And now we see today like the I m F calling for a Breton Woods to moment um, and we hear talk of this like I m F like an SDR basket, which maybe they have thoughts of like having a trying trying to do his original idea,

which is have that neutral reserve asset. What do you think about that? Yeah, I think it's it's it's a non start. It's a non starter as an idea. It's unworkable, and I think it's unworkable on many levels. The first is the political level, which is why it didn't work in the Breton Woods agreement, because we had this essentially, you know, this British aristocrat who had never worked the real job in their life was just all has been out there living in his world of fantasy and pontificating

about how the world should work. You had this delusional muppet turn up at the meeting of the world leaders and saying, hey, uh, we're gonna get rid of gold, We're gonna get rid of all of your money, and we're gonna issue this new paper token that me and my buddies at Cambridge have come up with. And essentially I am going to be on a committee of a bunch of my friends who are going to decide how much money everybody else in the world has had. You

can obviously see where the problems happened with that. Well, the first problem is that you run up against the United States, which has just won the war, has the majority of the world's gold, and has the world's most powerful military, and why would they give you the power to print all of that money. So obviously the U has said, no thanks, We're just gonna build this around our own money which we can print, which you know,

we control. And so the the program that the result of the Breton Words Agreement was the program of Harry Dexter White, who was an American um communist, self confessed communist. And you know, some people say he was a Soviet spy, and he was investigated for being a Soviet spin and he killed himself during the investigation. But I think it's more accurate not to say that he's a Soviet spine inasmuch as he is just a local, homegrown American communist.

And these people were quite influential at that time in the US, and it was their communist idea to just turn the US into the world's central bank, and that was the idea that UM succeeded. So I think it's extremely naive to imagine that we could have monetary policy handed to a group of experts. It's naive to pretend that you are a neutral expert that can just take over something like monetary policy and run it like you're running a machine when it's obviously something political. And it's

not just political. It's you know, you're allocating economic resources. If you'd side to print money in order to give this government money so that it can find a war, whereas you don't give the other government money so that it doesn't fight the war, then you know you're picking the winner of the war. So it's an enhance the political question, and it's not something that can be UM

just wished away. That's the first issue. And the second economic reason why this is unworkable in my mind is that you can't just come up with this thing called bank or and tell the world, Hey, you know, all of your money doesn't work anymore. All of the things that you value, all of your gold, your dollars, your wants, and your euros, all of that is zero. Now don't use it, turn it in and will give you bankers instead. Like it's, um, you cannot really do that. It's it's

it's never happened. You know, people use the term fiat money, and there is truth to the term fiat money, but there's never been a real fiat currency. This has never happened that somebody just went and said, hey, I've printed a billion um of my coin and um, you know, here you go accepted. This is the value and this this is the price of it. This has just never happened. Anybody who's ever issued a currency has had to back it by something in order for it to gain a

value on the market. So what you do is effectively you create a market in your currency with the other currency. So what most countries do they do is they do that with gold with the dollars. Before it used to be done with gold. So you gather a bunch of gold. If you have a bunch of gold, you can issue paper backed by that gold and make it redeemable in the gold, and then people will use your paper because they know they can get it redeemed in gold. Similarly,

today they do the same thing with dollars. You go to your central bank, you can exchange your local shit coin for dollars. But um so, the not the notion that we can just get the entire planet to agree to dump their currencies and to give value to something is nonsensical. I think what's more likely to happen. I think there will be some element of something like this happening is that we're going to who basically replaced national

currencies by a an international central bank digital currency. But more likely I think, well, I think you know this is already happening nationally. But I think more significantly is that, excuse me, the reserve asset backing those central bank digital currencies is going to be something like a central bankers digital currency which is used amongst the banks themselves, So something like the I m F S S the rs

right now. But what's going to happen is that, you know, I mean, the I m F SDRs are essentially backed by U S dollars because the I m F has a credit line from the Federal Reserve. So I think what would be likely to happen is essentially national governments turned in their currencies and it transformed their currencies into this international central bank currency, and then that currency is managed by UM. I mean, I guess this is really

the interesting question that we're going to be seeing play out. UM. You know, if we still lived in a world that was dominated by the US, then I could see this being just more modern way of running the dollar system, where in the US just says all right, instead of having paper dollars and running it on the Swift network and using the federal reserves payment settlement system, we're going to introduce those new cryptographic based settlement systems and everything

is going to be centralized, with the US in the middle. The US and CHARGE essentially formalizing and making the breton Wood system more efficient without gold backing. This is how I would imagine, you know, if this kind of technology was available UM twenty or thirty years ago, I think this is the direction that we would have gone in. But now things are much more interesting because China is UM.

Primarily because of China but also to a lesser extent, Europe, they're not going to be crazy excited about joining a new dollar system, and so more likely what the going to be pushing for is some kind of either a multilateral system in which UM and the base layer money is jointly run by the US and China and maybe Europe, maybe some few other smaller economies here and there, UM

getting like votes on a monetary policy board. But I think we're more likely to see monetary competition, with the Chinese essentially attempting to bring about their own national currency to make it into the global reserve currency, because it doesn't really make sense to have a global reserve currency run by two governments, particularly governments that are essentially rival

for the position of world leadership. Now, given the way that things have unfolded over the last couple of years in the world economy with UM, with the way that you know, international cooperation has taken place around the coronavirus crisis, and the way that basically everybody marched to the tune of the World World Health Organization in the World Economic Forum, you can see this kind of thing being implemented in

UM natural currencies as well. You could see perhaps UM we'll get something like this, and I think UM one hypothesis I have is that, you know, as inflation begins to pick up, the central bank dogs little currency narrative is going to be marketed as the solution for the inflation problem. And so, oh, you know, your dollars and euros and yends and yu wants are the valuing not because of your government spending and printing a lot of money, obviously,

because that's crazy conspiracy theory talk. You know, obviously supply has nothing to do with demand, right, No, that's not it. Your currency is tanking in price because it's physical and it's um ancient twentieth century technology, and Bitcoin is rising in price because it's digital and it's advanced twenty first century technology. So we're going to copy bitcoins technology and use cryptography in order to prevent the value of your

national currency from declining. So I can see this kind of pitch being given and people being given their new digital currencies, which are going to, you know, do the old Latin American trick where you just rename your currency and take off a bunch of zero. So I remember in Brazil they had the Cruizero, and then they had the Novo Cruisero, the new Crusado, and then they had the Cruisado and the Novo Cruisado. I think it was

the other way around. The Cruisadoes came first, but yeah, and then they went to the real and now the real is beginning to fall apart. And I'm sure soon as soon they'll introduce the novo reale UM so it'll be like the new dollar or the digital dollar or something like that. And uh, people will think, all right, well, now this will fix the inflation problem because this will copy the digital technology that will protect us from this

crazy inflation bug that we suffer from. Um. But I again, I don't see that as being a sustainable solution because I think you'll get you know, the US is no is not nothing. There's an enormous amount of trade that is based around the U S. So you're still gonna have the Chinese in the U S and the Europeans trying to make their currencies be the world currency. But they would all, um, you know, they would all like it if they were the ones who have produced the

global reserve currency. But they can all live with it if the global deserve currency was one that was not issued by either of the other two, and therefore they could all tolerate something like bitcoin. Hey, sorry to interrupt this video just one more time. I'm not running Google ads, so it's actually way less interruption than I normally would have on a video. UM, and that's because it's sponsored

by block five UM. They are opening up the world of bitcoin and financial products offering to pay you interest on your bitcoin. Um better than own in a rental property that you have to manage and control and have the risks. You can just earn interest on it, or you can leverage against it. Now, I plan to hold my bitcoin forever and literally never sell my bitcoin. So how do you do that? Well, if I need money,

I don't want to sell that bitcoin. I'm gonna pay tax on it, all right, I'm gonna end up with less and I don't have the bitcoin anymore. So a better way to do it is to borrow against the bitcoin. So I've put all my money into bitcoin. If I want to buy a car, or I want to buy a house, I can borrow against it at very very low competitive rates. Get my house, get my car, whatever that may be, and get to keep the bitcoin. I've done a whole video on this. You can find it.

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the interview. Yeah, that's where it seems like, um, you know, like you said, right, they used to hold gold in their reserve, so you know there'd be whatever percentage of their currency would be in gold reserves, and then they swapped out the gold four dollars um. But if they used an I m F SDR back to kind of

what you said, like all value beings subject. So if everybody agrees that an I m F SDR basket has value and it's a neutral asset um, then I guess they could agree it has value um temporarily and so swap out the dollars for the SDR as reserves, and then everybody's in that basket based off their GDP proportions, so they all kind of have a vote. It seems like they might be able to try to get get

that to work temporarily. Ultimately it fails because of the scarcity. Right, they can print unlimited amounts of SDRs, and I think that the day it's backed by it's not backed by any real capital, right, It's just it's just worthless paper. So I think maybe they get a little mileage out of it, but ultimately it ends up failing. Oh yeah, it ultimately ends up being an advertisement for a bitcoin. Yeah.

So um, you know all this kinds and stuff. It seems like it seems like we know the future because ultimately it fails, right, I mean, you can't just create value out of nothing, and you can't control uh. And the more value create out of nothing, the more you just continue to store markets. So print, you know, you mess up the signal, you get short ridges, and you get surpluses, and you get malinvestment, etcetera, and eventually it fails.

It seems to have I guess on one hand, you look at it and go, well, we're maybe fifty years into this experiment, you know, since nineteen seventy one, and look how bad and how fast things have gotten in fifty years. But on the other hand, it's like man how long can they keep this game going for? Yeah, And this is um, this is kind of the motivation of my book, which is, you know, this thing has been around for fifty years, and just because it doesn't

make sense, it doesn't mean it can't work. And it's been working, and it's been written off for fifty years. You know, people have been predicting a collapse of the dollar for fifty years and longer, and yet it's just along and people continue to use it. So um. You know, in my book, I try to explain why that is, and I think, you know, the reason is ultimately that what FIAT offers is the ability to send money quickly

across space, across nations, across national borders. So gold is better because it holds onto its value into the future, better because nobody can print gold, and it's always going to have a low inflation rate because of reasons I discuss in detail and Bitcoin standard. So gold has best salability across time. It's the best way of saving value into the future, or at least traditionally it was UM,

but FIAT has much better saalability across space. Sending gold across space involves a significant loss in the value of it, it's gonna it's gonna lose about point five percent or one percent of its value when you ship it halfway around the world when you think about the cost of shipping plus insurance. So that's really ultimately why I think FIAT succeeds and continues to operate, because it has terrible salability across time. You can't really hold on to it

across time. It continues to lose its value. But we live in a world where everybody is interconnected with the rest of the planet, and you need to trade with the rest of the planet. And even if you don't trade personally with people on the rest of the planet, everybody you buy your stuff from does trade with people from the rest of the planet. You know, there's a lot of people that think, you know, trading with other countries is a bad thing because it makes us dependent

on them. It doesn't. Trading with other countries makes you less dependent on any one country. The more countries you trade with, the less dependent you are on other countries, and less dependents you are on your own natural environment not screwing you over. So you're able to live a much better, more comfortable life because you can always trade with others, and so it provides you with um a lot of insurance. But of course the main benefit is

that it's the division of labor. And the larger the circles with which we trade, the more each producer can specialize, and the more people they can sellt So you specialize in making something smaller and smaller. You know, we have some really highly paid people who are specialized in building one tiny little part of your car or your laptop, and they spend their entire life working on, you know,

making the car wind shield work. Well, there are people in car factories that are just doing this every day. The specialized is something very tiny, and the only way that they can specialize in this and get so good at it and make such good cars is because they're able to sell their cars all over the world. And so this is what drives the specialization. And without it, we wouldn't be able to have any of the nice

things that we have today. We can't have computers if we try to live as a you know, and maybe the US might be able to pull off computers on its own, it's got three forty million people, but I think the vast majority of the world would not be able to produce anything advanced uh within its own borders.

And that's just the way that a market economy works, because at every step in the way of the production of your computer or your car, the only way that it gets produced is that someone is making the decision had every step along the way, and not just someone, you know, several people like the guy who's making the tires and the guy who's designing the windshield. They're making economic decisions along the way to always look for the

best supplier at the best price. So we are highly intertwined in this global system of trade, and we need it, and we need it very badly, and therefore, um we have to trade with the rest of the world, and so we need the money that can cross borders. And governments simply prevent you from using any other money other

than their's. They won't license banks that use currencies other than theirs, and that just means that you have to deal with their currencies, and that just means that people continue to take it um But you know, governments continues to inflate the money supplying people have no choice but to continue to use it. But I think bitcoin obviously changes this because you can trade bitcoin internationally without the permission of your government. Yeah. Yeah, what's interesting about that

whole thing obviously with the specialization is UM. You know, for progress, the more people we have that are looking at problems from different angles and coming up with different solutions and trying different things, the more progress we ultimately have. And so to your point, a small little country only has so many people, and so they're gonna be very limited in what they can do. And the more people

we can get into that global uh picture. And so you know, you and I were talking kind of before we started recording, and uh, you know, half the world is basically kind of excluded or left out of that entire UM system, right, I mean half the world doesn't have any money, half the world have don't even have internet, UM, and so they're kind of left out of that and

they haven't really had that way. And so UM by being able to give them a global money that's one can't be inflated away, but two can be used anywhere. UM speeds that up. We saw that, you know, going from the Dark Age to the Renaissance Age, when you had like a good standard coin that could be used kind of or recognized globally, how fast things developed and so I think we'll see the same thing again, right, having a new global money that can be recognized and saleable.

As you said, across space. I think there's as bad as things are, as scary as things are, I see massive hope on the other side. Yeah, I think, um, bitcoin really is responsible for maybe of that hope. I think if bitcoin didn't exist, i'd be extremely hop to us about the world at this point. I'd be in a very bad place because, um, it's it's the crack in the wall, it's the it's it's the place where

all of the prison that they're building just unravels. It's that they're locking up the entire planet essentially and forcing everybody to be dealing in this giant corporatest economic system where everything is under the control of the government and all of our lives are lived um to the benefit of the governments that are in charge of us. And bitcoin just allows you to have a free market, and it allows you to access a free market anywhere you

are in the world. Anybody can access it from anywhere. And I think it's a it's it's um Yeah, it is hope. As Michael Salers says, bitcoin is hope. Yeah, so, um, yeah, you know, we've we've often thrown around things like bitcoin fixes this, or fix the money, fixed the world or whatever,

you know, all those types of things. And I think, really, when when you know, you started out talking about how it's really comes down own to that money printer, and then the money printer allows them to then influence the food or the culture, or the the energy that we have or whatever it may be, and to kind of control those things. And so then, um, if you believe that individuals are better off creating their own destiny and making own decisions, then we want to remove that control.

And the way to do that in is ultimately take that money printer away, I guess at the base of it. Yeah, And I think a century of a century of Fiat money shows us that the political solution is just in fun impossible. It can't be done because it's it's just it's it's it's it's unhappable in the way that it is set up because the people in charge of running the government are the ones that are in charge of

the money printer. And so there's no conceivable scenario in which you can win the fight for the money printer if you're not using the money printer. So the money printer is always going to be controlled by people who want to use it because they can win control with it. You know, the person who wants to win an election by telling people, I'm not going to build all of the stupid things that you want. I'm not going to

fight all the unnecessary wars that you want. I'm not going to build all the children's hospitals that you think you want, what you don't really need. They're just boon doggles for people, all of these emotionally attractive things under a field system. Basically, it's a it's it's a it's

an impossible strategy. And in a sense like you can you can hate on politicians for this um but at some level you have to kind of come to terms with reality, which is in a sense, yeah, when you have a magic money printer that can print money out on the band, poverty is a choice. You know, if you are poor in the US today, you're poor because the government didn't print enough money for you. That's there's

no running around that fact. You know. The reason Lehman Brothers went out of businesses because the government didn't print money for them. That's in Goldman, Saxon, Morgan Stanley are still in business as because the government printed money. So poverty, Um, you know, Leaving Brothers is out of business. You or somebody you've seen on the street, they're poor because jr. Own power doesn't care about them. There's no arguing with that.

You know, your own power could make them rich. They could just tell them you get a million dollars a month. It won't even be noticed on the federal reserve. You know, a million dollars a month is nothing. And um, so obviously you know the politicians that are going to be in charge are gonna be the ones that are going to promised to take control of the printer and use it for all kinds of uh popular things. So I

can't see a political solution for it. And I think this is just and and a beautiful example that's going to be taught for centuries about in engineering schools about how engineers can um solve everything. And in this case, in my mind, it's almost like, you know, we're a we're a frontier town and we have a problem of theirs attacking the community and killing our children, eating our

food and eating our cows. And it's like an engineer has managed to figure out this magic technology that just repels bears and now we never have to suffer from that, and it's it's I think that metaphor is also very powerful because that's exactly what the government really is in that you can, up until bitcoin came about, people who believed in hard money and sound money and free markets, you had no choice but to try and think of the solution through the political perspective, Like we have these

politicians that are doing things this way. We got to elect the better politicians. We've gotta raise awareness, we've got to make people figure things out, and then we'll be able to get it. In my mind, that's as practical at this point as um thinking you're going to negotiate

with the bears so that they don't eat kids. Like we just sit down with the bears explained to them, Hey, you know, we're building this town and we like our kids, and we don't want our kids to be your dinner, So could you please stop ease now watching our children, and good luck convincing bears about that. So you know, the right engineer doesn't sit there and try and convince the bear because he realizes the bears are not something

you can reason with. The smart engineer figures out a technical solution that makes the cooperation of the bears irrelevant. You know, you build a fence, or you have a watch tower or something, whatever it is. You put technology that repels them, that issues sounds that makes a bear scared and makes them go away, But you find a solution, and it's a solution that doesn't require the bears to cooperate. And I think this is what bitcoin is. It's just

gonna be there. They can't stop it. It's going to continue to grow and they're either going to join it

or they're going to have fun staying poor. And it's you know, either they joined and they start doing the bad things that they're doing because they start understanding opportunity costs and they start understanding how expensive it is for them to be wasting their lives in doing stupid bullshit that they're doing, and how much better off they could be if they were just talking sounds or you just uh, you know, people move away from the money pent their

money and they use the harder money and then that makes the money pent the money powerless basically, so either way, the bears are not going to hit your children. Yeah, I love that. That's a good analogy. UM, if we uh, if we if we look into the future. UM, I'm not going to try to tie you down to a price on bitcoin, But what do you think about this transition process? Like fiat ends uh sound money wins? Um.

I think we both believe that. But I mean, do you think this is something that we really start to see escalate over the next several years, like by the

end of the decade. If we look at like like escort, like an escort, which we typically used to look at adoption of technology, maybe we look at like, you know, the first ten percent, and then that's the amount of time it takes to go from ten to we could argue were past ten percent now, I mean, what do you think about this transition as far as time frame future casting? You think but into the decade, in the next couple of years, we really start see this happening.

It's really hard to tell. I don't think it's um, I don't think it's gonna be uh as quick as the end of the decade. I think the limit on bitcoin scaling this is I think, um, some something I disagree with on most people. Most people think of bitcoin scaling as being a technical problem of getting this many

transactions to be operated. And for me, the technical aspect of bitcoin is, um, I'm not gonna say it's solved, but I think it's it's a tractable, easy problem, and it can be solved tomorrow if the economic scaling works, which is what I want to get to in a minute. In other words, you could you could have the entire world economy running on bitcoin tomorrow if the US just simply, if the US government tomorrow says the dollar is redeemable

for bitcoin. You know, we've got a million coins in our stash and you can buy a dollar at say, you can buy a bitcoin from US at a million dollars, and we're redeeming the bitcoin in dollars. Once you've done that, all of your transactions everything you know, your PayPal, your venmore, you're checking account, um, your credit cards, all of that stuff is now denominated in bitcoin effectively. So um, the issue of moving the technical aspect of payments I find

to be not the real challenge. That's not the real mountain to climb. The real economic scaling issue is the transition of people's cash balances from being fiat based into

being bitcoin based. And that's just something that's going to take a lot of time, just because it's an enormously complicated process, and it's a process that takes a lot of time for people to first learn what's going on, understand how bitcoin works, being able to take care of their own bitcoins and managing them, and then making the economic decision to switch over, but then waiting until they're able to make the complete switch, which can't be done

overnight for the vast majority of people. So and and and you know, it's not about being rich or poor, whatever it is. You have a job, or you have a business, you have your you live now in a world in which your receipts, all everything you pay, everything you receive is denominated in dollars. And so you have obligations to pay people in dollar and you have assets of other people that are supposed to be paying you in dollars. And that's going to continue to be the case.

So there's a small marginal of you being able to take your money out of the dollar and put it in it into bitcoin. You can't do it with all of your money. Um, you know, obviously, if you were rich and you just had a bunch of money in the bank and you didn't have much business, then yeah, you can say convert that money into bitcoin, and then you keep one percent for data expenses, and then you

sell some of that bitcoin. But for the vast majority of people, they have income and they have expanded chair, and they have a cash balance that's essentially constantly being added to uh, constantly having more payments attitude, and constantly there's payments going out from it. So you're limited how much you can transition into bitcoin from that. And I think we're seeing that transition happened gradually, and the thing that's obviously driving it is the fact that bitcoins prices

continuously going up. So what happens is people by one percent of their work net worth in portfolio or portfolio in bitcoin. Over time that becomes two percent, five percent, ten percent, keeps to increase, and they keep adding up more to it. But then you know, at some point in the future, without them um ever risking the solvency of their business, at some point in the future, they're able to wrap at a point where they have as big enough stash of bitcoin that it's bigger than the

majority of the of their dollars. So that's that that can't be done at once. We can just click a button and have the entire planet upgrade. Well well, I mean the US government could, but I wouldn't count on that because, as was saying earlier, you know, we're not going to count on the cooperation of the bears. So in order for it to happen as a spontaneous market

process is going to take time. It's going to take time for business to upgrade, and it's gonna take time for the bitcoin to grow as part of their balance sheets. And as bitcoin grows as a part of their balance sheets, then it becomes more likely for people to find trading opportunities in bitcoin. And so what's going to happen, you

know right now? It's you know, the vast majority of people don't get paid in bitcoining, They don't make payments in bitcoin, because somewhere around one percent of global cash balances are in bitcoin, maybe less than one percent, so

it's only one percent. So the odds of you coming across somebody who wants to buy something from you and is willing to give up some of their bitcoin is one percent, but likely even lower, And so it doesn't doesn't make sense to base your business around bitcoin entirely,

and so you continue to accept fiat. But over time, as the price of bitcoin goes up, and as people can fiction of bitcoin go up, and as the process of bitcoin education increases and the understanding of bitcoin increases, you're gonna see those one percent uh in everybody's portfolio begin to rise up more and more. You can see more and more trading opportunities emerge, and then you're going to see more and more of a bitcoin based economy image.

But I think it's gonna be a while, and I don't think it's um you know, I don't think I think, you know, people who criticize bitcoin on technical grounds missed the point. Like lightning is already there, it works, I use it, I accept lightning payments on my website. You can payment with lightning, and my customers use it, and I've never had a problem with it. It's there, and it works, and it is going to grow, and so it's but the limit on its growth is not the

technical aspect. It's not the fact that it can't handle enough transactions. Can already handle enough transactions with the whole planet. The limit is how much liquidity people have in bitcoint and it's just not that much compared to all the other currencies. But you know, let's give you the short answer your question. I'm gonna say fifteen years. Yeah. Well, I think it depends on what you consider that outcome

is in fifteen years. But to your point, um, you know, in modern times, in the last hundred years or a a hundred and twenty years, um, gold was a reserve asset, but it wasn't used on a day to day transaction, and so my savings went right, Okay, you're right, Yeah, yeah, I mean so you know in the late eighteen hundreds, early nineteen hundreds, I mean, gold was my reserve asset, but I was using fiat to spend at all paper

gold certificates or whatever they were at the time. I think in the eighteenth and nineteenth century, UM, gold was you know, you were using gold back nay, so it was just second layer of gold scaling solutions. You know, paper money was just receipts for gold, so it was

still gold. Yeah. Um. And I I put this thesis together that I've been talking about, and it's like three revolutionary cycles converging, and so obviously we can see the financial market every about eighty years is ready to be reset. They're calling for a reset of it. But then we have the technological revolution every fifty years the technological revolution, and then there's every two years is a political, social, cultural revolution. Um. And they're all could urging right now

in the next couple of years. UM. And so it seems like every two or fo years the world rejects globalism or centralization, it moves to decentralization. Two or fifty years ago was the American French Revolution, and years before that was the Protestant Reformation. UM. So I think while everybody's looking for a centralized answer, will it will the dollar remain and will it be the yuan? Will it

be an SDR? I think the futures decentralized. Where you and I use a bitcoin standard, some people still use the dollar, some people use gold, and it's more of a decentralized answer than that power power from on high gives this decree Okay, this is the new UH standard or whatever. But um, yeah, and I think what massive changes decades. So we'll see how that plays out. It's interesting. Yeah, I think I agree with you. UM. All right, last question I'd like to ask, since UH you're a you're

an educator. I've read your books. I highly recommend him, UM, and I value your opinion. I'm curious, Um, if you were to make your own amount rushmore like the United States we have amount rushmore for presidents, who would you put up on there? Um that may we were the most influential for you. Mm hmmm, Um, definitely I put moderin Rothbard, Ludvig one ms M. Hard to choose between those two, so not I'm gonna choose to have these two. And mm hmm I could add hands Harmon Hopper as well.

I think those three would be there that I need for before I'll add Ferdinand Lips. I've only read one book of his. He's only written one book. I think the book is called gold Wars, and it was highly influential on the bitcoin standard. The bitcoin standard was essentially to a very large extent. I think it was what

Ferdinand Lips would have written if he was fifty years younger. Um. He died in two thousand, I think or in the late nineties, and he was a Swiss banker who worked in Switzerland in banking and UM he wrote a book on gold has money in the history of gold, and he understood the significance of hard money for civilization. He understood it very well and wrote about it very eloquently in that book, and it was enormously influential for me. So I would probably say these four Yeah, Mises hop

rough part and Furtherland lips nice, alright, good. I know I caught you off guard with that one, but but it was but I was good to hear that. Um cool with that. We're gonna wrap it up. I know you have that book. If you had Standard coming out really quickly, you were running a kickstarter. Is that still running or is that over? Yes, it's still running. You can you can go to my website safetan dot com slash Kickstarter or safety dot com slash t f S and Fiat Standard and you can pre order the book

right now. It will be delivered in December, but you can get the draft of the book, the almost complete the draft still gonna be some editing done. But if you order now, you'll get the draft so you can read it now in digital format, and then in December you'll get the physical book, the digital book and the audiobook and you can get a signed copy of it. Yes, and you can get a signed copy, and essentially the signed copies my way of Um. You know, people like

donate to universities that they like. I'm sort of cutting out the middleman, and you know, if you want to support me working on these books, it takes a lot of time to write these books and I don't and I'm publishing. I'm self publishing them. UM. So instead of going to publishing house and taking an advance, I'm getting the advance essentially from my readers. So if you buy a signed copy, you get a signed copy and you get listed in the book as one of the supporters

of the book. So please do that. Yep, I got a signed copy of the Bitcoin Standard. I'm definitely getting a copy of the signed copy of the FED standard. So I'm in. I'm gonna put the link down below for everybody. I recommend that you go do that. Um and with that, we'll go ahead and sign it off. Thanks so much, Safety, thank you so much, Mark. Pleasure to take care all right,