Jeff Booth On How Inflation Is Theft #904

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. =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  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

• 0:42Anthony Pompliano?

  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/pomp for your free download today. Again, if you want the world's leading desktop, mobile, and hardware crypto wallet, go to exodus.com/pomp today. Today's episode is sponsored by Abra. They're based in California, and they're backed by

• 1:25Anthony Pompliano?

  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 Web 3 investors.

• 2:10Anthony Pompliano?

  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 into this episode. I hope you guys enjoy this one.

• 2:52Speaker 01

  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.

• 3:15Anthony Pompliano?

  All right, guys, I've got Jeff here with me. Thanks so much for doing this.

• 3:18Speaker 02

  Awesome, thanks.

• 3:19Anthony Pompliano?

  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, 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.

• 3:53Anthony Pompliano?

  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, you know, 8% officially, probably in the teens unofficially. It looks like the March number is going to come in way higher and it doesn't necessarily seem 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?

• 4:21Speaker 02

  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 unwinding all over the world. And that and it just keeps on unwinding. So, so for and when I wrote my book, there was 185 trillion dollars of spending in the world, stimulus in the world to raise or to increase global GDP by 46 trillion.

• 5:04Speaker 02

  And I projected, because technology was moving faster and faster, that was what was to come was way higher rate, exponential rate of debt creation to be able to try to stop deflation from happening. And, 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.

• 5:33Anthony Pompliano?

  So how do they, if we get in a 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?

• 5:54Speaker 02

  So even today, there's, there's more stimulus coming. And so I think to simplify this, that inflation to inflation debate, like just to simplify it in first principles, ask yourself, what would happen if governments stopped easing? What would you see? What would you see if the market was a free market? And what we would see is, is cash would explode in value. But cash, for a while, US 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.

• 6:36Speaker 02

  The only cash that would explode in value is the stuff under your mattress. And and and prices would completely collapse. But into that vacuum, dictators would rise into because you wouldn't have food on the streets. You were you're on the shelves. You wouldn't you would there would be no banking institutions. There would be no institutions left. Every institution is built on top of this global credit mess. And 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.

• 7:21Speaker 02

  So they have no choice. So so they'll raise you get raise raise interest rates. And even the threat of raising interest rates, they the the credit market. So they both both the bond market start to collapse and the credit and they and the equity markets start to collapse. And as that starts to happen, but they have to run fiscal policies and they have to. 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 and it overtakes the political establishment. And politicians become the central bank.

• 8:01Speaker 02

  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 of of money be of of central banking.

• 8:22Anthony Pompliano?

  Yeah. When we think about the macro situation or kind of the global environment, 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 at 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.

• 9:08Anthony Pompliano?

  But is that an example of how they get over their skis or kind of it gets out of control, they don't make the right monetary and fiscal policy decisions and quite literally they go bankrupt over it?

• 9:19Speaker 02

  So remember, and this is a global, global, worldwide structural problem where technology is advancing at a rate that is bringing down prices and globally, central banks have to try to, or they're trying to print into it. And eventually, as they print into it, what will happen in the US too, and it'll be probably the last domino to fall. But, but, 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, banking fail.

• 10:02Speaker 02

  But if, and so you won't have no choice but to print into that. And so, 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 what, and we think, oh, there's high crime there and it's just, those people are ugly people. It's, it's a function of broken money that, 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 Bitcoin standard high crime rate, high gangs. If you look at Peru and the food prices today and people's rising up on the streets and

• 10:44Speaker 02

  they, and all of these things all over the world are connected to the same monetary policy. People don't turn against people the, when, when money is not broken. They turn against when, when they're fighting for survival and politicians can create us versus then narratives because of the, the, the high wealth on one side because of, 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 they've been hurt by those policies.

• 11:24Anthony Pompliano?

  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, et cetera. 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 trend is the central bank is going to cause

• 12:07Anthony Pompliano?

  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. Like, do those two things converge and just magnify the problem? Or are they two separate situations?

• 12:20Speaker 02

  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 but monetary policy is the rise of the war in in Ukraine as well. Because effectively, what you have is US being able to get free energy in oil by pressing a button. And Russia's selling their oil or their their value and their labor in stuff that it gets devalued. And so and so as you do that, and there's one country that has a monetary standard

• 13:03Speaker 02

  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 US 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, US economy would have collapsed.

• 13:46Speaker 02

  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 US dollar. And you had the 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 US bonds.

• 14:16Anthony Pompliano?

  Correct.

• 14:17Speaker 02

  But when they stopped buying US bonds in 2015 and realized US 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 pig. They took the money as they're hollowing out the US 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 US dollar. So what did US dollar have to do to stop a depression at that time? They had to monetize their own debt.

• 15:00Speaker 02

  And they had to actually take their, 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. In balance. And so as everybody's pegging their, 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 gonna, we're gonna price it in something else. We're gonna start pricing it in something else. Now, if they,

• 15:44Speaker 02

  a lot of people are worried, okay, they're gonna price it in yuan. Or they're, and I suspect if you just do the game theory on this, China isn't gonna be the reserve currency of the world. Like, 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 US is running. And you would port, US labor rates would fall a lot. China labor rates would rise, and industry would move back, back. And so that balance all over the world has, and, and so what you need is a neutral reserve

• 16:25Speaker 02

  asset. That as countries do, do, 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, 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 they're, and, and it's, it's driving massive chaos, supply chains, chaos, that is bound to get a lot worse. Like, we are, we're, we're a long way from done on this.

• 17:09Speaker 02

  So what you can expect in the macroeconomic landscape is If you look back 20 years, 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.

• 17:45Anthony Pompliano?

  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 nipped, right? And his whole kind of focus for the last number of years has been go back in history. Look at the rise and fall of various economies, geographic, military powers, and also empires. And this idea that you're a small country with no power and no wealth. You eventually focus on investing in education, technology, et cetera. 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.

• 18:29Anthony Pompliano?

  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 US that we are following history. And if we don't do something, we get the same results that people have gotten for thousands and thousands of years at the end of these very long, positive runs for our country.

• 19:03Speaker 02

  Yeah, and I think the one thing Ray Dalio misses is how different Bitcoin is in this transition. And he thinks, 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.

• 19:42Speaker 02

  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 so who is going to trust a country that CBDC, like if you look at the rights and freedoms of individual Chinese people, and if you look at what that looks like, do you trust the truth coming out of China?

• 20:24Speaker 02

  And would you trust that type of policy around the globe? I suspect not. So, and that's actually what's so different about Bitcoin. A lot of people miss this, that, and I'll tie it back through history, that's probably better. Technology's 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, right? And that reduces the labor component and removed, or today, in a lot of cases, removes the labor component.

• 21:07Speaker 02

  And so, but it used to happen, if you go back to Roman times, it used to happen over a slower period. And, 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 to build, and that credit market, once it built on top, incents the system to expand credit.

• 21:36Speaker 02

  And and reduce the amount of gold in a in a system. And at the end of that bubble, Gray 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 they start driving more and more inflation. And a function of that whole model is, we 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's it's a 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.

• 22:18Speaker 02

  And and so what that meant is, in the Roman times, you would have a currency failure every five 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 into those not that not the small ones, the massive debt bubbles that kind of 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 and so now the petrodollar is is effectively defaulting now. And so you have them every 50 years.

• 23:03Speaker 02

  And that all of those things are caused by technology moving faster and faster and faster. And it's moving and we're projecting backwards. All of our, all of what we think looks backwards instead of looking forwards. If you look forward on the technology access, access is 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.

• 23:48Speaker 02

  And so people think, oh, it has to act like gold. It doesn't act like gold. You can, I can trade, we can trade Bitcoin over in India to El Salvador, to Canada, to here, all in instant transactions on Lightning. And so you don't have to store gold in a vault, build a monetary and go back and forth on it 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.

• 24:29Anthony Pompliano?

  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

• 25:12Anthony Pompliano?

  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

• 25:48Anthony Pompliano?

  Their yachts or their property, etc. And it just feels like whether it's the truckers, whether it's the Russian central bank, which really ends up punishing the people, not the leaders, or it's going after these oligarchs. It's a guilty, you know, kind of sentence before there's any sort of due process. And maybe sometimes that's supposed, you know, maybe sometimes it's actually effective or necessary. And a 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

• 26:30Anthony Pompliano?

  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?

• 26:39Speaker 02

  Yeah, it's a, this is a, 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, or we should, we should cut them off. And in truck, in the truckers, that's, that's, that's, that's wrong. And they're actually in similar. So, and I, and I can say this because in, in the truckers, I was one of the Bitcoin key holders of some. And, and sitting in Canada, which I think is a free nation, and

• 27:22Speaker 02

  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. If, if, and because the protests were peaceful, and whether you agree with the truckers or not, the protest, most of the protests were peaceful. And, and, and then retroactively, for something that was peaceful, Trudeau Emergency Powers Act, and anybody who donated to them, could they have their, their, their bank accounts frozen? Worse than that, 75% or so of Canadians thought that that was the right move.

• 28:09Speaker 02

  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 will be on the exact opposite side of that issue

• 28:50Speaker 02

  on something somebody else believes in. And so, 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? Is 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.

• 29:33Speaker 02

  But we don't have a vote in a democratically held election on inflation. And 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.

• 30:17Speaker 02

  And how do they do that? They look like heroes going after the rich that they're making richer.

• 30:25Speaker 02

  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, and we believe in those false narratives while our individual rights and freedoms are being taken away to control the narratives.

• 30:43Anthony Pompliano?

  Yeah. 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 a hundred million dollars. And again, a hundred million dollars is very, very wealthy. So maybe the hundred million dollar income tax doesn't sound as good as the billionaire income tax. So some, 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, of evil versus good, more so an educated versus uneducated, right?

• 31:27Anthony Pompliano?

  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 like a couple hundred thousand dollar salary. And it's, you know, 999 million dollars or whatever that he gets all through dividends and kind of 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.

• 32:10Speaker 02

  Right. 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 delivered, 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, and politicians are advocating on, on truth.

• 32:42Speaker 02

  Then all of this, all of the other things that people are talking about on top of this is, is just nonsense. And, but, but, but people believe in those narratives. And people believe, I would, I would, 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. Like, why, why is inflation required for a productive economy? They, like, 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.

• 33:22Anthony Pompliano?

  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.

• 33:30Speaker 02

  Because on a structural issue that you have to have inflation and you don't have a vote in a free, free market, just ask, again, go back to what would happen in a free market? Prices would collapse to, to zero everywhere. Everything would collapse. And so, so, so we tell ourselves, we, 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, free market, because this credit bubble that, that we live in would unwind. And so we, we dismiss what, okay, well, it's kind of free. Right? There's no, no kind of free.

• 34:13Speaker 02

  And then, and then, while you have manipulated money, every price signal has to be manipulated. In fact, as you have manipulated money, if, if you have, and money is just an abstract concept for our time. People don't, actually don't want more money. They want, they think more money will give them.

• 34:31Anthony Pompliano?

  Correct.

• 34:32Speaker 02

  And so, so when you have misinformation in money, which is the, just the division of our labor, and it's, all it is, is trust, all over the world, wouldn't it be obvious that if you, if you are trying to remove trust, trying to give misinformation in, in money, you'd have misinformation everywhere in society? And that's what's, and that's what's happening. And, and so to be able to essentially, and I don't want to call it a crime, but, but be able to perpetuate, perpetuate that lie.

• 35:07Speaker 02

  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 this, 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, because the thing that's hurting them and transferring that wealth to, to, to the, the point one percent 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, they, what would you do if you had asset, if you had your

• 35:51Speaker 02

  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, human nature would say, I'm going to get this money out of here to save it, just like China's done, to try to move their assets all around the world for the same, for the same reason. So that's a structural issue that's, that's caused by this, this printing money. But society votes for it. Because, and again, going back to that free market, just ask yourself a simple hypothetical question.

• 36:33Speaker 02

  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, 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? It, it, no one would vote for them. They'd be, they would be ostracized. So, so politicians are incented to lie.

• 37:01Speaker 02

  And and drive more and more inflation, which and and they're instead to say, I'm going to help you, poor 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. And and but they they have to now. And that's why you need a parallel system like Bitcoin. Because this is 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 it keeps on going. And and again, to to to measure this in months, when when this is playing out, and it's going

• 37:42Speaker 02

  to it's going to play out for a long time, is going to people are going to be if they're 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, it's just but but essentially, what you're what all bets right now are bets on when government is going to stimulate more.

• 38:07Anthony Pompliano?

  Correct.

• 38:08Speaker 02

  Nothing, nothing else matters. Right? And so we don't live in a free market. We live in a a bet on what's 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 is as people are starting to understand what you've been saying for a long time, what I've been saying for 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 under a system that looks more like a free market.

• 38:53Anthony Pompliano?

  Yeah. What's fascinating about this is there's a gentleman, Mark Spitznagel, who runs a a fund. And the whole idea is he loses money every day by buying, you know, 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 person, right? And he has a book, The Tao 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

• 39:33Anthony Pompliano?

  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, right, 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.

• 40:07Speaker 02

  You do make the problems worse. And then all the, because, 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 you make the problem cascades way worse. And they, 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 monetary, modern monetary theory look like, where you can just print money? Ask those people right now, what, what just happened with Russia, saying, we're not pricing in US dollars. And so, you, if you're a nation

• 40:48Speaker 02

  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.

• 40:58Anthony Pompliano?

  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?

• 41:15Speaker 02

  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 through history, same thing that Ray Aliyah talks about. You could just say, if a money could be corrupted for some people's gain over some people's expense, positive externalities, negative externalities,

• 42:00Speaker 02

  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. 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

• 42:45Speaker 02

  to global cooperation, and a different shelling point. And assuming that stays true, Bitcoin remains decentralized, which I suspect it will, 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? 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

• 43:25Speaker 02

  own private wallet and your own, own, own, own keys. Because over time, when this thing goes parabolic, it's going to take out a whole bunch of exchanges that are levered, and you're going to see, you're, 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, by leveraging yourself onto somebody else's exchange. But, but that decentralization, and taking that money out of control of human nature, means we're forced to cooperate. Mm hmm.

• 44:02Speaker 02

  And, and in, in labor, we, we'll often miss that the buyer and seller are actually the same person. So all of our labor shows up as somebody buying our labor. Mm hmm. And, but, but because we miss that, so we, we miss that we can use Zoom now for effectively free. And that removed a whole bunch of other businesses, because, because now that, that message can transfer, touch millions of people all over the world essentially for, for free. And yet, we don't want prices to fall over, we want our house prices to

• 44:44Speaker 02

  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.

• 45:13Speaker 02

  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 most, the broadest distribution of tech. Winners would, we would still compete to create products, we would still create, create great, 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.

• 45:47Anthony Pompliano?

  Mm-hmm.

• 45:48Speaker 02

  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, on the way there. If you're, 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, in a fiat currency, you're thinking prices are going to rise forever.

• 46:16Anthony Pompliano?

  Yeah. When, 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?

• 46:42Speaker 02

  There's a lot of powers that, 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 for a currency, then other, then, then it's a currency everywhere. Other nations can just say it's a currency and, and it moves around the world. You're going to see some of that, you're going to see some of that at this conference. But.

• 47:16Speaker 02

  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, 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, I saw just beautiful people and maybe for the first time in a long time, hope.

• 47:46Speaker 02

  And that's really powerful. When, when, because, because essentially crime comes out of,

• 47:55Speaker 02

  I met a teacher at school and teaches in Bitcoin and, and what's happening here. And his school enrollment went from 200 to 800 this year. And we met all, a bunch of the kids and we talked to the, to the kids in El Salvador. What do you say? And he told us a story. I said, "How many did you, people did you lose to gangs over the last two months?" And, and the number out of 800, 840 students, they lost 41 to gangs in two months. And, and I asked why? And he said, "Well, here's, when there isn't an economic system and the gangs provide an economic system." Then he gave an, two young brothers, the mom had cancer

• 48:38Speaker 02

  and they didn't have any money for cancer medicine. And so they joined a gang to try to, try to get, when the mom died, they came back to school. They, they dropped out or the gang came back to school. So it's an economic calculation that people get forced into this and then the gang gets stronger and stronger and, and drives, drives a bunch of force to be able to make, to make that, again, most of this comes down in economic calculation. And when you break that and people see hope that they have another path, they take the other path. And 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.

• 49:19Speaker 02

  And he was dirt poor. I think he had a grade three education. 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 he's expanding. And you should see.

• 49:42Speaker 02

  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 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.

• 50:07Anthony Pompliano?

  Looks good, yeah. Part of this, I think, is, uh, hope is a huge piece of it. Uh, it also feels like, um, I call it energy, right? In terms of, uh, when you have a young leader, uh, regardless of, uh, whether somebody thinks they're an expert on Salvadorian politics or not, um, uh, and nobody can tell anyone's uh, intentions in the future. But you see this in El Salvador, uh, you see it here in Miami, you see it in a couple of other regions around the world where a young person, uh, who understands technology, understands innovation, uh, has a pretty good, uh, handle on the internet and, and things like Twitter, et cetera. Uh, and they just are excited, right? And, and they say, listen, I am enthusiastic about our future.

• 50:49Anthony Pompliano?

  And, uh, I always tell, uh, 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.

• 50:57Speaker 02

  Totally.

• 50:58Anthony Pompliano?

  And, 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 roll out across the world as people realize, a lot of people believe in this and, uh, and we're going to have to be pro Bitcoin in order to, uh, to make this happen.

• 51:27Speaker 02

  Yeah, I actually have thought about that, that maybe this would be a call out to a whole bunch of people that are either in Bitcoin or, uh, or just in Bitcoin, but just holding Bitcoin.

• 51:39Speaker 02

  We all create the world we want to live in. And through our idea exchanges, competing for ideas. And I want to live in a world that is filled with truth, hope, abundance. And so, holding Bitcoin now isn't enough for me. And as I see 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. 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,

• 52:23Speaker 02

  but actively participating with my time and money. And so, and because 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. Where 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 so, and it's going to be, as I say, for everybody, it's going to be challenging as we move through this.

• 53:08Speaker 02

  This is going to be really chaotic, because the world that 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 probably end up unhappy.

• 53:33Speaker 02

  I'm just gonna spend more time in the new system, doing everything I can with my time and energy to expand it.

• 53:41Anthony Pompliano?

  Yeah, it does focus you. I think that's one of the big things is, most investors, they look across industries, or one day you may be looking at a enterprise software product, the next day you may be looking at a ride-sharing product. And one of the things I think Bitcoin has done for me and many other people is, it drives focus. And you start to think about this one single system. And there's not very many corollaries in history, but 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

• 54:25Anthony Pompliano?

  humanity globally, it's probably the right place, right?

• 54:29Speaker 02

  It is the internet in 95. It's 96. It's literally an open monetary network that is, 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 and simplicity and decentralization was made on Bitcoin that wasn't made over here, so

• 55:13Speaker 02

  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 and to their families, and you're trying to do everything to protect your business on Quicksand.

• 55:56Speaker 02

  And what Bitcoin offers, and so what's going to happen, and it's really, I don't think a lot of people know this yet, but it's all, 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 the, what that form factor, what's going to come on top of it, layer two, three, three, is it's going to look a lot like the internet. And it's just wildly exciting what's, what's about to happen in this space and that value that it'll drive to society.

• 56:31Anthony Pompliano?

  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 like maybe Twitter?

• 56:41Speaker 02

  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, from these types of things anyways, but Twitter, at Jeff Booth on Twitter is probably best.

• 56:55Anthony Pompliano?

  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 like, it feels like we're in Vegas.

• 57:10Speaker 02

  Yeah.

• 57:12Anthony Pompliano?

  Which there's many reasons why I may feel that way.

• 57:14Speaker 02

  Yeah, it's amazing.

• 57:16Anthony Pompliano?

  When you're not here, what's your sleep schedule these days?

• 57:19Speaker 02

  It's actually pretty good. I probably get eight hours a night.

• 57:23Anthony Pompliano?

  Yeah.

• 57:24Speaker 02

  Yeah.

• 57:25Anthony Pompliano?

  One of our-

• 57:25Speaker 02

  Not here.

• 57:26Anthony Pompliano?

  Yeah, definitely not here.

• 57:28Speaker 02

  Four hours here.

• 57:29Anthony Pompliano?

  One of our sponsors is Eight Sleep, and they have this, this whole idea of eight hours of sleep, usually get about four hours of deep sleep.

• 57:37Speaker 02

  Yeah.

• 57:37Anthony Pompliano?

  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? 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 Jess always talking about? Awesome. Well, thank you so much for taking the time to do this. I really enjoyed it. And I think that you've just, you've been ahead of this for a while. And, you know, there's, there's a negative side, I think, of the story in terms of

• 58:20Anthony Pompliano?

  things could get pretty bad and chaotic and uncertain. But at the same time, Bitcoin, you know, is that way out. It is hope. And I think as more people get educated about it, they'll, they'll be in a better position.

• 58:30Speaker 02

  Yeah, completely agree. Thanks.

• 58:33Anthony Pompliano?

  Of course. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe 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 pompscryptocourse.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 pompscryptocourse.com to learn more and I'll meet you guys for the next episode.