#662 Deflation Is The Key To An Abundant Future w/ Jeff Booth

Jeff Booth is the author of the new book titled The Price of Tomorrow: Why Deflation Is the Key to an Abundant Future. In this conversation, we discuss inflation, deflation, bitcoin, asset allocation, central banks, quantitative easing, technology trends, and how to protect yourself. ======================= Circle is a global financial technology firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for payments, commerce and financial applications worldwide. Circle is also a principal developer of USD Coin (USDC), the fastest growing, fully reserved and regulated dollar stablecoin in the world. The free Circle Account and suite of platform API services bridge the gap between traditional payments and crypto for trading, DeFi, and NFT marketplaces. Create seamless, user-friendly, mainstream customer experiences with crypto-native infrastructure under the hood with Circle. Learn more at circle.com ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp =======================

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 new book titled The Price of Tomorrow: Why Deflation is the Key to an Abundant Future. In this conversation, we discuss inflation, deflation, Bitcoin, asset allocation, central banks, quantitative easing, technology trends, and how to protect yourself. I really enjoyed this conversation with Jeff, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Circle. Circle is a global financial technology firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for

• 0:45Anthony Pompliano?

  payments, commerce, and financial applications worldwide. Circle is also a principal developer of USD Coin, or USDC, which is the fastest-growing, regulated, fully-reserved-dollar stablecoin in the world, now standing at more than $25 billion market cap and adding nearly $300 million of net new digital dollars in circulation every single week. The free Circle account and suite of platform API services bridge the gap between traditional payments and crypto for trading DeFi and NFT marketplaces. I've had Jeremy A. Layer, the CEO of Circle, on the podcast numerous times, and I am a big, big fan of what they are working on. Go check out USD Coin, or USDC, again, the fastest-growing, regulated, fully-reserved-dollar stablecoin in the world, and you can learn more at circle.com. Again, circle.com. Go check it out.

• 1:30Anthony Pompliano?

  Next up is LMAX Digital. That's right, the number one institutional crypto exchange. Maybe you've never heard of LMAX Digital. Why? Because they only serve institutions. They do not serve individuals. So, if you know about LMAX, you must be an institution. They offer clients the deepest pool of crypto liquidity on the planet, underscored by 100% uptime track record through all the volatility. Leveraging LMAX Group's liquidity relationships and ultra-low latency technology, LMAX Digital is the market-leading solution for institutional crypto trading and custodial services. They feature a central limit order book, streaming spot Bitcoin, Ether, Litecoin, and Bitcoin Cash, all paired with US Dollar, Euro, and

• 2:11Anthony Pompliano?

  Yen. LMAX Digital, they're secure, they're liquid, and they are trusted. You can learn more at lmaxdigital.com/pomp. Again, lmaxdigital.com/pomp. Go check them out and let me know what you think. Alright, let's get into this episode with Jeff. I hope you guys enjoy this one.

• 2:28Speaker 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.

• 2:51Anthony Pompliano?

  Jeff, how are you?

• 2:53Speaker 03

  Great. Good to see you, Pomp.

• 2:54Anthony Pompliano?

  Absolutely. Great to see you as well. Before we get started, maybe let's just remind folks, you have a great framework of looking at legacy inflation, deflation, kind of intersecting with technology forces. So maybe just remind everyone kind of how you view the macro structure, the market structure of inflation and deflation.

• 3:13Speaker 03

  Sure. We're going through a phase transition in markets and things won't look the same on the other side of that. And it's driven by technology. Technology is exponentially trying to reduce costs and it's moving faster and faster into everything around us. We vote our time with things that get cheaper and more effective. So we vote for things that give us more value. Yet the market is designed the exact opposite way. Market is designed to make prices rise forever. And so that credit-based system that we live in, that we measure everything by, housing, everything else, is up against a new reality that central bankers don't

• 3:55Speaker 03

  understand. And so, or if they understand it, there's nothing they can do about it. Because technology wants to essentially give us more for less. And that's the opposite way of our, the way that our financial systems are designed.

• 4:09Anthony Pompliano?

  When you think about a great example of technology trying to give us more for less, is there one or two examples that you're like, okay, this is a great way for people to wrap their head around that idea?

• 4:18Speaker 03

  Well, look at your phone. And look at everything on your phone, right? The, look at your camera on your phone. Look at, we don't pay for photographs anymore. We get abundance, billions of photos, trillions of photos that are free. We used to pay for a distribution network, photography. Take a couple of photos and say and develop a month later and say, oh, those were wrong. Today, we get that abundance for free. I mean, it's not just phones, it's music, it's not just photos, it's music, it's every, everything on your phone. So look at every app on your phone and it's a perfect example. But there's many others. Why do you think, why do you use Google? Why do you use Amazon? Why do you use all of these?

• 5:03Speaker 03

  Why do you use all these services? Because they give you more for less on a compounding or exponential scale.

• 5:10Anthony Pompliano?

  When you think about kind of the central bank actions, I think it was very clear to folks, hey, whenever there is some sort of market downturn or some sort of economic crisis, they basically have two tools, right? They've got the ability to manipulate interest rates. They've got the ability to leverage quantitative easing or the creation of money. And then there's obviously fiscal tools that could be used as well. Now that we are, call it 18 months or so from the official end of the COVID recession. So not talking about the health crisis, but the economic crisis itself. What's your general take on the actions that were taken and then kind of where we find ourselves today?

• 5:51Speaker 03

  General take is, and this might surprise a bunch of people on your show, but my general take is that the Fed and rest of central banks around the world are trapped. They cannot stop. So if you, if you allowed deflation to take place today on a credit based system, you would have an unwind of epic proportions. Every bank would fail, every institution would fail. And you would have, you would have societal collapse on the other side. And so when you see, and so now that doesn't change the fact that technology is making, is trying to drive more for less.

• 6:33Speaker 03

  It just changes the fact that we're too late to save the existing system. And so, so the facts are, technology wants to give a, make our time more valuable. Why do you use technology? Why do you think every business uses technology? And the facts are also that the existing system can't allow that to happen. So they're trying to stop that by, but, and, and because they, they're worried about the depression and what that would look like. So they're trapped in, in trying to essentially reduce the real burden of the debt and create, and, and all sorts of policy tools to try to, to drive inflation against that.

• 7:14Speaker 03

  But what they're up against is more likely, or what could happen is a credit collapse. And, and yes, uh, and, um, and, and because if they don't, if they, if they actually stopped easing, you would have a credit collapse. And, um, and if they, if they don't stop easing, you're going to have revolution on the street. That's, uh, the, unfortunately, when you have corruption in the base layer of money, is a, and money is just a trade of our time. And you must have corruption everywhere in society as a result of that corruption in the base layer of money. But, but, and this is where it's important, um, they're trapped.

• 7:58Speaker 03

  And, and there's nothing they can do about it because technology is a stronger force. In fact, what would any business do, do if tech, if labor is getting more and more expensive in their business and consumers demand lower prices? They'll automate.

• 8:14Anthony Pompliano?

  What's so fascinating is this trade off of what I'll call short term decisions versus long term decisions, right? So the short term decision of if we stop the, um, kind of, uh, trend and the momentum of the central bank activity, uh, and basically stop easing the market, uh, what you're saying is there would be this credit collapse, which would be, um, you know, pretty significant, pretty swift, uh, in kind of the history terms, um, and be very, very painful for, uh, a lot of people. The trade off is you avoid that short term problem by basically. Continuing the game and you continue to ease, you continue to ease and you deal with the problems later. But the problems later aren't credit collapse. It's basically this like revolution in the street that you talked about.

• 8:58Anthony Pompliano?

  And so is that a fair kind of way to look at it? It's not just credit versus revolution, but it's also short term versus long term impact.

• 9:05Speaker 03

  Absolutely. It's but but again, if you just if you think about every single business and what they do typically when they see technology impacting their business. Is they entrenched further in their business? So Blockbuster is a good example that I use all the time. Blockbuster added candy aisles to their stores. When all that changed is download speeds went faster and all of a sudden you could download a movie and Netflix took over. When that when that happened, it rendered the 9,000 stores of Blockbuster irrelevant almost overnight. But what did they do? Pretty standard operating procedure to protect the legacy business. That framework is important because it's exactly the same framework that central banks are doing

• 9:51Speaker 03

  in a in an economy level, at an economy level in our entire monetary policy. And that and that is having cascading consequences across society. But it's important to so it's not, I would say generally, it's not bad people. It's they people that don't understand how fast technology is moving and what that change means to an existing system. They just can't see it because the system is designed differently. In fact, I would say to a lot of your listeners that they too measure the system. Everything that I saw a little bit of your segment before. We're measuring the in the system from the system. So we're measuring climate change from a system that inflation equals climate change.

• 10:34Speaker 03

  And to to you can't grow forever on a finite planet or grow goods forever on a finite planet like they're measuring. So you create more monetary units to create more to create more growth, which is climate change. When you think about that, so but again, we get caught measuring a system. We measure house prices from that same system and we don't ask the question, would house prices have gone up if we didn't print, if we didn't juice an economy by 185 trillion dollars over 20 years? So we don't, again, we measure the system from the system. So it's really hard to see how a different system could operate.

• 11:13Anthony Pompliano?

  One of the pieces that we spent a ton of time talking about here is what I call like the education gap, but the way that it manifests itself is you essentially have this juicing of the economy or the central bank activities and there's a portion of the population, you know, 50 to 60% of the population that understands whether directly or indirectly, the best way to benefit from this is to simply own assets. Don't save all of your money in cash. Try to get some sort of job that they increase the pay on an annual basis to combat inflation, etc. But there's still, you know, 40 to 50% of the country, specifically in the United States, they hold no investable assets and they live paycheck to paycheck,

• 11:57Anthony Pompliano?

  save everything in dollars and they get really hurt by this. And so we get this widening inequality gap. You had this tweet recently that basically was talking about like the manipulation of money to ensure that prices continually rise, but basically it creates for the vast portion of population, this kind of modern day slavery to a monetary system. Like you can't get ahead, right? Everything keeps rising in costs around you and you're just on that rat wheel and you just can't get off. Talk a little bit more about, you know, is that a feature of the system or is that more so a bug that it's a way to have the kind of fiat monetary system, but not have this specific negative impact?

• 12:36Speaker 03

  Now, so, so remember, and this is where I want to be careful that a system will reinforce a system. And so it's a way bigger consequence and it's easy to look at people in the system instead of a system naturally reinforcing a system. I know it's, and why that's important is it is a feature of this system. Inflation is theft. It's a hidden theft and that theft enriches some people at the expense of other people. Inflation, as you said on your last segment, inflation, the other side of the coin is wage and savings deflation. So your real, the wages you're getting are going down in real terms. And so when you have

• 13:21Speaker 03

  a small number of people at the top, And more people at the bottom and you drive inflation, you're hurting the people at the bottom more and more and more and you're enriching the people at the top. What the people at the top don't see though as well is this societal collapse of that creates kind of the next step of that and us versus them and revolution comes. So if you look at, if you look at Germany in the 30s, same thing was happening and who do you think the wealthy were? And when what happens next is, is a revolutionary leader comes in and changes the narrative to say, we're going to take back those assets. And, and so in that, in that environment and what ends up happening with the wealthy

• 14:06Speaker 03

  in that environment too, is they think they're safe because their assets are in hard assets like real estate and everything else, but those real estates are in the country that is, that is creating that inflation and those, and because of what happens next, those assets are, are often seized or, or, or taken back.

• 14:29Anthony Pompliano?

  When you think about what people can do, is it simply just buy assets? Like the assets that will benefit from this, hold those assets for a long period of time and that is the kind of escape hatch for folks? Or does that not even work? Or how do you think about like, what can people do about this?

• 14:46Speaker 03

  And, and this is, this is where I think we'll get to Bitcoin. And I think that is the safest asset and it's an asymmetric bet. It's the safest assets. It's the king of all assets in this time. But more importantly than, than that, it's a vote of what you want the future to look like. You, I think you, I think you either believe that, that it's okay for a small number of people to control all others and, and they can print money all they want and everybody else is a slave to that system, or it's not. And if you believe that it is okay for, for that to happen, who should those people be?

• 15:29Speaker 03

  Because throughout time, what people, throughout history, you see people changing their minds, ego, arrogance, humans are, humans change their minds. And, and I would do want, I want to trust monetary policy to people who change their minds and create that. And if you kind of play that forward, where things are moving with AI and robotics, I don't want to concentrate that power in a small number of people to make decisions over everybody else. I would rather have that decentralized. So prices, and what would happen on Bitcoin standard is prices would constantly come down. So it would enable the free market.

• 16:11Speaker 03

  So prices would, so the abundance gained from technology would be more broadly distributed. Yes, it is the primary asset I would own in today's market because of the safety, you can move it anywhere. And you're not, so if you remember 12 words, you can get on a plane and go anywhere you want. And there's going to be countries competing for, for, for capital and entrepreneurs. The same way they do now on a fiat system, they're going to be competing on a Bitcoin system. So that provides a relative safety for family, wealth, gain, everything else. But more importantly, because the system can't change itself, you need a phase, you need a transition mechanism to allow you to get to the other side

• 16:55Speaker 03

  from an inflationary monetary policy, which might have worked for a long time, to one that allows deflation, which must be, must work, which must be enabled with technology, with where technology is going.

• 17:10Anthony Pompliano?

  When you think about Bitcoin specifically, why do you say that it's superior to all of the other assets? Is it something to do with the structure of it? Is the sovereignty, is it everything in totality? Like, how do you think through the various options that someone has? Maybe equities, real estate, other commodities, currencies and Bitcoin?

• 17:28Speaker 03

  Well, let's, let's look at, over last hundred years, real estate would have been the top asset class. And it's top asset class because you can, you can lever it. And you can pay back the debt in money that's being devalued over time. And and so you you take on debts and use the system to be able to pay back debt in cheaper dollars tomorrow. And your asset price rises now. And then if you own ten houses and your neighbor owns one, you're richer than your neighbor. Because now you can rent those up, rents go up and again with along with inflation as well. If you own a hundred houses, you you're wealthier.

• 18:09Speaker 03

  If you're blackstone and competing against private buyers in the real estate market, you own more of the wealth. So so that system, and then if you don't own houses, obviously you're a slave to that to that system, working harder and harder as your rent, food, everything else is is is going up. So you can see the example I'm making through real estate alone, but that's been the top performing asset class over the last, call it a hundred years. Um, next would be equities. But all of those, all of those assets are in the existing system and being priced in devaluing dollars. And that's not the, that's one risk, those dollars being devalued.

• 18:51Speaker 03

  And if you think that that's the only risk, then continue to own predominantly real estate equities and everything else, because you'll have some sort of safety in that. But that's not the primary risk, that's not the only risk. The other risk is the system collapse. Um, and Bitcoin protects against both, both of those risks. Um, and today it would be hard to see, uh, because you don't have, you know, uh, in Bitcoin, there's two network effects. One of the store of value that is growing the primary kind of layer one, which be would be like investing in the internet itself, TCP IP.

• 19:32Speaker 03

  Um, and then layer two on lightning and such, and you know a lot about this, but but today, if if you if you project, if you said today where we are, people say, well, I can't use Bitcoin as as a currency. In most places, it's just harder, hard to use as a currency. But remember what we do, what all businesses do, we we project our current reality forward, thinking we're projecting the future. Instead of projecting the trend of technology forward and what that will mean. And what that means and what's happening on Layer 2 and Bitcoin is you have two network effects feeding back against each other and it will, and I think it will highly

• 20:15Speaker 03

  likely to become a currency that you can use and the best store of value. So in first world countries, we don't see that because we've had a system that operates pretty fairly for a lot of years. But if you're in a third world country like El Salvador and you don't, even the Bitcoin is upwardly volatile, it is less risk to use that as a currency than an existing currency. And so what you see is lots of other countries starting to use this as a medium of exchange as well.

• 20:51Anthony Pompliano?

  Got it. And so when you start to think about the Lightning Network, I know that you've spent some time on this. I've seen you tweet about it a couple of times over the last couple of weeks. What's your assessment as to where we are today and kind of why are you so excited about that? You know, I'm very, very bullish. I feel like I'm so biased at this point that I can't even be honest about my analysis anymore. So maybe you can kind of explain to folks why you're so bullish on it.

• 21:16Speaker 03

  Well, just it's probably easier just to use a specific example and think about what might happen in the market, what we do, what you might do if you're a business. Visa charges between 2.5 and 3.5% to businesses. Lightning is almost zero. So that means as a business, you could increase your net profits or you could increase your profits by that amount. And when businesses are operating on low margins, that's a big amount to be able to increase their profits by. So businesses are going to enable this and they're going to encourage users to use more and they'll give discounts likely to users who use more

• 21:59Speaker 03

  of Lightning Network. And once that starts, you see McDonald's in El Salvador, you see Starbucks in El Salvador using Lightning. So.

• 22:08Speaker 03

  In an instant, it's available in El Salvador. What do you think is going to happen next when McDonald's looks across the world at their other stores and where else can we implement this because we make more money? And if we make more money and all businesses are starting to make more money as a result, then competition will come to lower prices again. And again, technology that empowers people and lowers the price of things is very, very hard to stop. And the question is, why would you want to stop it? Because you're saying, we can't stop, we won't allow this because it helps people. And so, so as a result of that, you're going to see this explode in, I think, around the

• 22:53Speaker 03

  world because there's an incentive structure that helps people.

• 22:57Anthony Pompliano?

  When you start to think about the adoption of this asset, we've recently seen El Salvador obviously make it legal tender. To me, we've seen something similar maybe in the past where if you look at like M-Pesa and mobile banking, there's a number of countries in Africa that seem to have leapfrogged the United States, right? You talked a little bit earlier about the developed nation really having almost a privilege, right? That we have something that works good enough and so we don't think about the cutting-edge technology and the need to be innovative and adopt that. Is that what's happening here? Is these developed nations basically are saying, hey, we're so far behind and the only way that we can make progress is to kind of make this giant leap forward. This is the best technology today and so let's go ahead and kind of make a bet on

• 23:42Anthony Pompliano?

  it? Or is there something else at play with the developed nation, developing nations? Whether it's El Salvador, somewhere like a Nigeria that seem to really be embracing this technology?

• 23:53Speaker 03

  I think a little bit of both, but, but, again, going back to a business example, and I'll use myself, one of my first company. Yahoo and a bunch of different media companies. Yahoo specifically, it was tech-enabled, but it charges a minimum of 5,000 a month for advertising. Google was free. So where did we build our resources? We built it to Google. And besides Yahoo, the rest of the infrastructure look like large

• 24:28Speaker 03

  Media empires that we couldn't afford to advertise on. So what ended up happening is what the the smaller companies, the long tail of all of the small companies drive adoption first. Same thing happened in the internet in general. It's the small companies that drive adoption, not the big ones, because the big ones have access and they have privileged access already. They don't see it. Same thing happened on Amazon. It wasn't all of the all of the stores or all the merchants that were in Walmart that went on Amazon. It was all the merchants that didn't have access to Walmart. So what you can see in that is when you have a technology that empowers people, what happens is the people that are most underprivileged

• 25:13Speaker 03

  or who don't have access to the existing system use it first. And they create a network effect that more and more users and they create more and more value in that network as they use it, which brings on bigger and bigger players all the time. If you looked at what was happening on Bitcoin and Lightning, that's exactly what's happening. And you could just abstract instead of just just happening at the company or personal level, it's now happening at a country level as well.

• 25:46Anthony Pompliano?

  I don't think I've ever asked you this, so I apologize. So I'm putting you on the spot a little bit. But how do you think about if you have, you know, $1 or one unit of fiat currency, the opportunity to buy Bitcoin versus invest in the infrastructure of Bitcoin and kind of what's being built around it versus, let's say, equity or real estate? Do you have some sort of like mental framework in terms of almost like a portfolio construction strategy? Or do you think that we've gotten to the point where certain parts of this are so de-risked that you feel more comfortable having like overexposure compared to like the traditional frameworks?

• 26:23Speaker 03

  Yeah, I'll answer that, but I want to be careful in the answer because because everybody's position is different, right? And I want to, I don't want somebody to just copy my position because because, again, if Bitcoin went to zero, I would be, I'd be fine. If the rest of my portfolio went to zero, I would be fine. So, so, so I kind of have this barbell strategy that I realize what

• 26:53Speaker 03

  If I looked at the probabilities of what's going to happen, the probabilities are, the higher probability is this. Government's going to pretend to ease or try to signal easing, and they're not going to be able to, and they're going to print a bunch more money, and that's going to continue. And society is going to... If you think about what people are talking about today, which is kind of two orders away from the primary thing that we're talking about, and everybody's... What you see is almost kind of this early versions of societal collapse happening as a result of this. That's going to continue. And so in that, I think Bitcoin is a very, very safe bet

• 27:38Speaker 03

  and something I have to have for my family, because I can get on a plane, go anywhere. As far as Lightning Layer 2, in some of the... If I said Bitcoin was investing in the TCP/IP, the Internet, Lightning Layer 2 is kind of the company formation on top of that. I think there's going to be tons of opportunity in that. I know you're in strike. I think there's some incredible opportunity in that, like investing in Amazon or Google in the year 2000, something like that. That's kind of Bitcoin.

• 28:22Speaker 03

  I do own some real estate. I own a real estate technology company. I own many, many technology companies or quite a large investor in many different technology companies. When I look at all of these things, I look at where can... Where is technology able to provide a structural change to the market that helps people? And what entrepreneurs... So Bitcoin is obviously a giant thesis in that, because that's one of those areas. But there's lots of other areas like that. Agriculture would be one that's undergoing a structural change because of technology.

• 29:05Speaker 03

  And the winners of that are going to provide value no matter what. So I typically look at kind of real estate technology companies and Bitcoin would be how I'd look at my assets.

• 29:18Anthony Pompliano?

  What questions, Joe, John, do you guys have?

• 29:21Speaker 04

  Mine would be around El Salvador. So we saw that they made Bitcoin Legal Tender went live, I believe, last week. And a lot of the people that we talked to here, especially in kind of the US and other Americans, I think sometimes take kind of our strong financial system for granted. So I'm curious, Jeff, kind of what your thoughts are on, on the impact that Bitcoin could potentially have in El Salvador and how you think kind of the technology and the network and how it may play a role in the future of kind of not only the economic piece of their country, but also the individuals that live there.

• 29:55Speaker 03

  Yeah, and I'll just build on that other comment I made before. Early, early users of a new network that's gaining traction like this are most enriched by it. And an example would be early Instagram stars, right? And it's not a really good example for Bitcoin. But if you're early on a network that's exploding and delivering more and more value, you ride that value. And you and so try to be, try to become an Instagram star today or a YouTube star today. You have a lot more work. You have to deliver a lot more value than somebody who rode the network up in the beginning. And so, so just like, just,

• 30:38Speaker 03

  just like an existing system, the existing system El Salvador, it was in. We look at crime rates, we look at everything else, and we forget to realize that those crime rates are a result of having an economic system that is impoverished as most people. And so people turn to crime as a result of that. Having a system like this empowers people. And prices come down, prices come down as a result. And those people, prices coming down or Bitcoin value going up is the same thing. They will be, El Salvador could look like the new G7 going forward if, if people don't move as fast, if other countries don't

• 31:21Speaker 03

  move as fast. So the advantage moves to the, the person without all the legacy in a country. Without all the legacy infrastructure, just like the advantage to move to Netflix without the legacy infrastructure of Blockbuster. And that that promises for for El Salvadorian people, that that promise is an incredible promise. There's going to be, it's not going to be a straight line. There's going to be a lot of noise along this. There's going to be a lot of people that are going to discount how big that is. But it's a huge, it's monumental change in what they, what what's possible in their in El Salvador.

• 32:03Anthony Pompliano?

  John, what do you think?

• 32:04Speaker 01

  Yeah, Jeff, thank you for doing this. I actually just ordered your book while you were talking. I'm excited.

• 32:16Speaker 01

  I am curious what you think about like inflation as a whole for our economy in the United States, right? So what are the solutions that the people in place can put? Is it adopt Bitcoin? Is is the infrastructure that we have right now a blocker to adoption? Like, what can they do to kind of help fight inflation as a whole?

• 32:34Speaker 03

  So, so, so remember, if you don't have inflation, you're going to have a complete collapse. So, so, well, it's easy to talk about that. What is the Fed doing? They're creating this worse. Think about, think about this. Here's a 20 years ago, you might have been able to transition easier.

• 32:57Speaker 03

  And and instead, interest rates went down to try to grow. Interest rates went down to try to grow, creating bubbles everywhere. Dot com crisis, dot com market, housing crisis, everything else. Instead of those bubbles going away, we papered over those with more and more printing. So now, if you think about these two trends, way back here, when technology was only kind of disinflationary, call it at 1% a year. It it looked like we were still operating in the old environment like Blockbuster thinking Netflix is not. But now, as we move further and further down this trend, technology might might be producing prices at negative four percent per year.

• 33:42Speaker 03

  But we measure inflation off zero and we're further and further away. So it takes an exponential amount of debt and money printing to combat an exponential exponential technology moving the other way. And that drop now from a height that's unimaginable is what is what central bankers are trying to stop. But I don't know if they're going to be, I don't believe they're going to be able to stop. In your last segment, you talked about inflation and inflation expectations. Look at bond yields. Look at long term bond yields. The bond yields where the majority of the market is are expecting deflation.

• 34:21Speaker 03

  And and and so and and and so when when markets turn and they move to deflation or disinflation, what what people will look at and they'll say, see, the Fed was right. They didn't do enough. They need to print more, unaware that that that same thing is driving the societal collapse. And so so expect, like in that environment, you're going to have a lot of head fakes back and forth. But again, the system can't change the system. There's nothing that they can do. No matter who's in power and no matter who's elected, it's just all noise.

• 35:03Speaker 03

  What should happen, what could happen is if, and you're starting to see this, politicians are starting to understand this. Some politicians are starting to understand this. And and and starting to say, we need to be on Bitcoin. We need to drive our financial system into something that can make this transition. And so so I would encourage that, but I think you're going to see it anyways because it's gonna, if it doesn't happen at a federal level, it'll happen at a state level and you're starting to see that.

• 35:35Anthony Pompliano?

  It's incredible how quickly people are getting a crash course in economics, inflation, deflation, monetary policy, fiscal policy. And I try to wonder, without the bias of hindsight, how many people knew in other places this stuff? And the answer is probably not many. And they kind of got a crash course. And the example that I always use with people is if I ask somebody here in the US or in Canada, you know, what's the exchange rate of X currency to another? They got no clue, right? If I say, you know, what's the US Euro exchange rate? A person on the street would be like, what's an exchange rate? Right? You go to Venezuela, everyone knows the exchange rate. Right?

• 36:20Anthony Pompliano?

  And so I do think that there is this element of the faster people can learn, at least the basics, not to be an expert, you have to try to become an economist, but just the basics alone, it gives you a little bit more foresight into what's happening and it allows you to, you know, just kind of make decisions where you don't even have to be 100% right. I think if you're just directionally making good decisions, you're going to end up much, much better than if you simply say, I don't know what any of this means. I'm just going to sit here, hold dollars and, you know, cross my fingers, hope that it works.

• 36:49Speaker 03

  On that, and I think this is what your show does, is really, really great. And a whole bunch of people in the Bitcoin community, because to understand Bitcoin, you have to understand game theory, you have to understand a whole bunch of different pieces of economics. But if you just simplify this, really simplify this, why do we believe we need inflation? So inflation is a hidden tax. And we say we need inflation at 2%. Why? So we must have a hidden tax that our money loses value at 2% a year. Why? Is that required for a productive society?

• 37:30Speaker 03

  So if you ask some of these questions to anybody, it's easier for them to see it. Or how about this? What is more believable? Especially, it's all around it every day. Technology makes your life more efficient, essentially saves you time, gives you more for less, and prices drop as a result, or?

• 37:54Speaker 03

  Prices need to rise forever and we're going to manipulate money to make that happen. Like what, if you just ask some really logical questions, it starts to break people's kind of mental models of what they formerly believed that had to be true. And, and what ends up happening is we build our foundation of knowledge and then we build on top of that foundation. So we don't question that foundation very often. And inflation is one of those foundational knowledges that we don't, pieces of foundation knowledge that no one is even questioned. And so why, why can't a productive society work without stealing money at 2% a year? I just don't get it.

• 38:36Anthony Pompliano?

  I, uh, my brothers will laugh when they hear me say this because I say all the time, you can't be rational in an irrational world, right? You can't ask serious, important questions like that. You just gotta go with the flow. What are you doing trying to actually be smart when everyone else is being stupid? That's, uh, that's illegal now. Tell us about the book real quick before we let you go. I know we're running out of time, but tell us a little bit about the book and the process in terms of writing it. It's fantastic. Now John is going to read it as well. Give us a little book review, maybe next week. But, but, but tell us a little bit about it.

• 39:08Speaker 03

  I, you know, again, it, it, it turned out to be great. It turned into a bestseller around the world, but I didn't write it for the, I wrote it because of what we're talking about now. I looked at my kids and I said, they're not going to grow up in the same world that I'm in. I could not understand why everything around us, I sit at the intersection of technology. I sit at the intersection, I'm on robotics companies, boards, I'm on AI company boards. I see how fast this is moving into every part of our society. And it didn't make sense to me that, uh, that what was, uh, that prices were rising in that, until I investigated and realized, wow, we've created 185 trillion dollars of debt to the world globally,

• 39:53Speaker 03

  to, to grow the economy by 46 trillion in 20 years. And, and that's why that's the smoking gun, that it's getting, and that, and that has to get worse and worse and worse than the existing system. And so as I started to see that, I started to see this is a, this is really a phase transition of, of this is going to reset, the state is going to be reset one way or another. Um, how are, throughout history, how are those typically handled? And they're handled through revolution and war as people turn people against other people and to get elected. And then, once they're elected, they need to create a bigger enemy, which is outside of the border. So that's how it's traditionally been handled throughout human

• 40:35Speaker 03

  history. And I didn't want that to happen with my kids. So as I investigated this and everything else, I said, I have to write this book. Um, and, and there's, there's literally one paragraph about Bitcoin at the end of the book. It's not a Bitcoin book. It's a where are we going book. Um, but then as a deeper and deeper, I believe that Bitcoin is the only transmission mechanism that doesn't have that negative, that, that negative outcome. So, so, so anyway, that's why I wrote, I wrote the book for my kids.

• 41:09Anthony Pompliano?

  There are multiple people in the chat right now saying, how the hell did I not know about this guy beforehand? We are completely aligned in the way that we think about the world. So I think, I think your message is definitely resonating. I'm putting right now in the, uh, in the chat, people can go and follow you on Twitter. Um, is there anywhere else that you want to send them? Uh, I put the, the link to the book and then obviously, uh, Taft folks, uh, go ahead and follow you on Twitter, anywhere else?

• 41:34Speaker 03

  That's probably great. That's why, that's perfect.

• 41:36Anthony Pompliano?

  All right, my friend. Listen, thank you so much for taking the time to do this. I, I, uh, I know that you've just been hammering away at the message and, uh, people are listening. So keep going. I, I really enjoyed the book. I could not recommend it more to folks. Uh, so if you're watching this, go, uh, go buy it and then give Jeff a follow on Twitter. He actually is, uh, what I call a reasonable Bitcoiner in that, uh, he says smart things and doesn't shitpost at all, which I can appreciate as well. You know, sometimes I get a little shitposting in there myself.

• 42:04Speaker 03

  Thanks, buddy.

• 42:07Anthony Pompliano?

  All right, buddy. Sounds good. Thanks so much for doing this. We'll talk soon.

• 42:09Speaker 03

  Okay. See ya.

• 42:11Anthony Pompliano?

  All right. Bye. Thanks, Jeff.