0:04 - Introduction to Bitcoin's Impact
6:33 - The New Imperialism: Bitcoin's Role
8:01 - Passion for Bitcoin and Intergenerational Wealth
14:51 - Bitcoin Addresses and Profitability
18:08 - Understanding Bitcoin Supply and Demand
24:40 - The Future of Bitcoin and Fiat
32:07 - Governments and Bitcoin: A Potential Solution
35:48 - Closing Thoughts and Future Prospects
The lecture explores the current landscape of Bitcoin, detailing its tumultuous journey through the financial upheaval of recent years. Starting with the behind-the-scenes mechanics of the Federal Reserve's interest rate hikes and their negative impact on Bitcoin's valuation, the discussion draws attention to significant events such as the FTX collapse at the end of 2022, which contributed to a notable crash in Bitcoin's price. The conversation shifts to a brighter horizon in 2024, as the approval of Bitcoin ETFs by the government attracted immense capital influx, marking what is described as a historical launch in the cryptocurrency's journey.
The speaker emphasizes that the insights shared should be considered opinions rather than financial advice, underscoring the importance of independent research in investment decisions. Drawing parallels between historical epochs of imperialism and the current era of Bitcoin, the lecture posits that Bitcoin has emerged as a new instrument of dominance for nation-states. It argues that, unlike traditional imperialism through land conquest, the focus now shifts to financial dominance via cryptocurrency, especially as countries explore Bitcoin to mitigate the risks associated with inflation and devaluation of fiat currencies.
A critical analysis of Bitcoin relative to real world assets illustrates the massive depreciation of traditional investments, with a stark statistic showing that the price of homes when denominated in Bitcoin has plummeted by 99% compared to its rise against fiat currency. This drastic reduction raises questions about the future of national debts and what this shift means for governments. The speaker proposes that acquiring Bitcoin could present a viable strategy for countries to pay off their national debts effectively, without triggering hyperinflation scenarios.
The concept of hyperinflation is discussed extensively, arguing that while fiat currencies continue to inflate, Bitcoin's purchasing power has dramatically increased, positioning it as a valuable asset. The dialogue dives into the idea that nation-states are rushing to claim their stake in Bitcoin, driven by the need to secure financial stability amidst potential economic collapses. The notion that the historical resource extraction practices of imperial powers have transformed into a new financial imperialism focused on Bitcoin creates a dynamic tension between traditional economic models and emerging digital currencies.
Reflection on intergenerational wealth transfer further underlines Bitcoin's potential to disrupt existing financial structures where resources tend to flow from the young to the old. By championing Bitcoin as a wealth accumulation tool for younger generations, the speaker advocates for a paradigm shift that could finally reverse this trend and benefit those yet to reap the rewards of traditional financial systems.
The lecture concludes with implications of the current Bitcoin landscape on broader economic structures, suggesting a future where Bitcoin might effectively supplant fiat currency as a primary medium of exchange. As the economics of Bitcoin evolve, the role of government interactions and the potential for it to become an internationally accepted reserve currency in the face of dwindling confidence in fiat systems is posited as a transformative outcome for global finance. The final exhortation reinforces the urgency of understanding these dynamics as critical to navigating the evolving financial environment.
[0:01] So, I mean, some of the roller coaster stuff is crazy, right?
[0:05] So, 2022, the Fed hiked interest rates from 0% to 5%, which was bad for Bitcoin. At the end of 22, there was FTX and others that went down, so Bitcoin crashed. And then 2024, at the beginning, government approved Bitcoin ETFs. Capital poured in. It was the greatest launch in history.
[0:25] And it's been quite the roller coaster, to put it mildly. So let's talk about what's going on. Again, I'm just going to put in the caveats because it is really, really important, right? I mean, these are just my opinions. I don't have, sorry, crusty eye. These are just my opinions. I don't have any empirical or objective proof. I'm not a financial advisor or analyst or expert of any kind. So these are just my opinions. Do your own research. None of this is investment advice. Okay, that hasn't been said. So in the past in the age of imperialism when people figured out how to safely, traverse the oceans and you started to get insurance which made it possible to do those kinds of things without losing your shirt or making too much money right so you had insurance so that you could insure ships because of mathematical advances so there was a paint the world your country's color gold rush that went on in the age of imperialism right germany did it, France did it, England did it, the Netherlands did it, Spain did it, of course, in the New World, it was go capture the planet for your country, right? Now, that's not going to happen anymore, right? I mean, there'll be color revolutions, there'll be fundings of destabilization and so on, but you can't just go and invade the planet and take it for yourself. So, what now is the new imperialism for nation states is Bitcoin.
[1:51] Bitcoin is the new imperialism for the nation states. Bitcoin is the way that the nation states avoids financial collapse because of hyperprinted currency. So you've probably heard this meme or seen this meme, it's more than a meme, it's mathematically true, that even before this current run, the price of houses denominated in Bitcoin dropped 99%. The price of houses denominated in Bitcoin dropped 99% and in not even more than a couple of years, right? You know that meme where it's like the boomers dancing because they bought their house for 12 blueberries in 1965? So a 99% reduction in the cost of real world items denominated in Bitcoin, or to put it another way, Bitcoin rose 100-fold in value relative to real world items.
[2:56] Now, if you can reduce the cost of something by 99%, follow me here, this is really, really important. If you can reduce the cost of something by 99%, why can't that something be the national debt? This is why I posted yesterday to donors, like you know that Donald Trump is planning on paying off. I'm not saying he's planning, I'm just saying that this is how it's going to roll out. I have no idea what the guy thinks about all of that. But the people who are around him have seen, and this is just one of many things, a reduction in the price of housing relative to Bitcoin by 99%. I mean, what is it, the 10,000 Bitcoin pizza? You can go even further, right?
[3:47] So if countries can get bitcoin they can wipe out their national debt without hyperinflation, which is a wild wild thing to think about hit me if this makes sense like i'm not saying do you agree with it but do you understand? Do you understand the argument that I'm making? Again, I'm not saying do you pay attention? Do you follow the argument? Does this make sense as an argument? Not.
[4:32] Do you necessarily agree, but do you follow the chain of reasoning? Right? And that's on me, right? On me to explain that. Am I making sense? Not do you agree? Okay.
[4:50] Because there is not hyperinflation relative to goods and services, but there is, at the moment, hyperinflation relative to Bitcoin. Follow this, right? And I'm sorry to be condescending. I hope I'm not being annoying. I'm just, this is so important to get into your bones, right? There is already hyperinflation relative to Bitcoin. Because Bitcoin has gone up a zillion percent relative to when it started. And if a currency goes, it's reduced in value by 99%, that clearly is hyperinflation. And if Bitcoin just over the last couple of years, or five, seven years, if Bitcoin has risen in value relative to real estate a hundredfold, then there is already hyperinflation, in Bitcoin. Relative to Bitcoin, hyperinflation is hitting Zimbabwe levels. So when you see the price of Bitcoin go up, that is not measured, to me, relative to dollars, or that's not the end of the world. It is relative to what those dollars buys. What those dollars buys. What those dollars buy.
[6:19] I want to make sure I'm building the case here carefully and gradually. So again, this is not any like, do you get it? Am I making sense in what I'm saying to you? And again, it doesn't say necessarily whether you inflate.
[6:33] So hyperinflation is hyper deflation of the purchasing power, right? Okay.
[6:46] Are we hanging in there, right? Are we hanging in there? So nation states are rushing to stake on Bitcoin in the way that they used to stake on indigenous populations' land all over, right? So whenever there is a new resource that is discovered, Whenever a new resource is discovered, governments colonize it for the sake of ego, vanity, pretend economic value, and strip mining and pillaging, right? So when the new world is discovered, England and France and Spain all rush, as do other countries, all rush to colonize it. So Bitcoin is the new world. Bitcoin is the undiscovered country. It is the new resource being colonized by states that are finally beginning to get it.
[8:02] Permission to uncork passion. I don't want to lose the argument in the passion, but I feel pretty fucking strongly about this. If you'd like me to stay more calm and reasonable, I can do that too, but it won't be easy.
[8:27] Granted, you guys are fine with that. Alright, here we fucking go. So, in general, the history of the state is the transfer of resources from young to old.
[8:47] Look at COVID. It was a transfer of resources, this being ambition, capacity, time, social life, from the young to the old. That was COVID. The national debt is the transfer of resources from the unborn and the young to the old. Social security. There's nothing there. Nothing. So they're vampiric-like sucking on the jugulus of the young in order to feed the watery veins of the old. Government is screwing the young for the sake of the aged.
[9:35] But no more! No fucking more! Bitcoin reverses this. Bitcoin is the final boss of intergenerational wealth transfer from the old to the young. Ah, it is a consummation devoutly to be wished. Thank fucking God that the vampires of the aged can finally be peeled off the arteries of the young. Ah, fucking A, Bubba. Ah, fucking A, Bubba. That's just one of the many benefits of this.
[10:35] Somebody asks, would gold, oil, and other such commodities increase in value along with Bitcoin? Well, yes, but not nearly as much. Because you'd still get, especially if the capital gains taxes repeal for Bitcoin sales. But no, no, because those things need to be stored, transported, secured, and so on, right? But fiat does not. Sorry, Bitcoin does not, right? Bitcoin is digital. You can't go from place to place in the world, with a million dollars worth of gold in a bag but you can go from place to place in the world with a bunch of words in your head and access your money wherever. So... The other thing that happens is, in general, the people who lend money to the government are going to get kind of screwed.
[11:46] People who lend money to the government, so the typical thing is that you lend money to the government, and if they print a lot of money, which they'll have to at some point, then you get paid back in fairly worthless money. I mean, it's funny, all the way back to when I was maybe seven or eight years old, I was given a book on, you know, the greatest disasters of the 20th century. And in it was the story of the Weimar Republic. And of course, I've done a whole show on this, The Life and Death of Fiat Currencies on... What happened in France. And I remember, you know, absolutely chilling things. Thank you for the tip. Absolutely chilling things. So I remember, of course, you know, you've seen these wheelbarrows of money and people had to roll wheelbarrows. People had to get paid in this money, this fiat currency, and they had to rush as quickly as they could to cash it because it was losing value between getting paid and getting to the bank. Banks were closed. Nobody could give change in a restaurant for a $100 US bill or a $10 US bill, it was absolutely terrible. What happened?
[13:03] So people lend money to the government and they get paid back with paper too crinkly and stiff to even provide the benefit of wiping your ass with. So there will come a time, okay let me ask you this let's make this participatory right let me ask you this, what percentage of bitcoin addresses are currently in profit what percentage of bitcoin addresses are currently in profit? Give me some numbers. Give me some numeros. What's your guess? What percentage of Bitcoin addresses are currently in profit?
[13:59] What's your estimate? 95%. 99.5%, 95, 99. I don't understand that 100%. So the question is, how many Bitcoin addresses bought or received their Bitcoin at a price lower than the current price? So it is 99.95% of Bitcoin addresses are now in profit. I need you to massage that into your economic bone marrow.
[14:52] 99.95% of Bitcoin addresses are now in profit.
[15:05] What percentage of Bitcoins have not moved in the past two years? What percentage of Bitcoins have not moved in the past, two years? So in terms, because you need to look not at the total value or number of Bitcoin available, but you need to look at what is in play. Right? So when you're buying a house, what matters is not how many houses there are, but how many are up for sale. Right? I mean, there are apartment buildings like high-end condo where, uh, nothing's gone up for sale in five years. So you just, you can't move there, right? Because the apartments aren't moving. You think of those, Key apartments in New York where they have had rent control since like the 1800s or something. And those apartments don't get sold because the moment they get sold, the rent is allowed to be readjusted, goes up. So they've got these crazy low rents. So 50% of bitcoins have not moved in the past two years. Two out of three bitcoins have not moved in the past year.
[16:28] So 66.66 infinity percent of Bitcoins have not moved in the past year. So you think of the ones that have been lost, and you think of the ones that don't appear to be open for sale, and then you look at the supply chalk of the halving, where you had a halving right before you had a massive increase in the demand through the ETFs, 50% less assets are coming to market as a result of the halving. So one out of two not moved in the past two years, two out of three not moved in the past year. There's a supply shock from the halving combined with the demand from governments and the ETFs.
[17:11] How many bitcoins are for sale? How many? Now, of course, we know how many bitcoins are for sale because bitcoins are currently cooking at 120,000. So some fucking idiots are selling Bitcoin at 120,000. Okay. Thank you, Stef. Thank you. Thank you. I'm making sure my kids will have a financial future. Thanks to you. I appreciate that. I So, how many are available? Now, if the Trump administration follows through on what seems to be its commitment to buy a whack ton of Bitcoins and to hold them forever, then those Bitcoins are being taken off the market.
[18:02] Those Bitcoins are being taken off the market. You know, there was a guy in Germany who had a USB key that only allowed him to guess 10 times the password.
[18:09] He'd lost the password and he lost, I don't know, God knows how many Bitcoins, but it was appalling.
[18:21] So, there will be a time when people finally understand Bitcoin and they just won't fucking traded for fiat, right? So hit me with a Y if you're in a happy romantic relationship. Hit me with a Y. I'll put my Y in there. Hit me with a Y if you're in a happy financial relationship. Please to tell, please to tell if you are in a happy romantic relationship. Okay we got some nests yeses we've got some no you knows we got a lot of yeses okay so, i very clearly remember i very clearly remember when i, finally looked at my wife i remember my wife-to-be right, and I looked at her, we were on a hike, she was walking up a hill, we just had a great conversation, it had been, and I was just like, I can't upgrade, there's nobody better. There's nobody better.
[19:43] There's nobody better. And I felt that at the time, this is 23 years ago, so almost a quarter century ago, I felt that at the time. And I have felt that all the more ever since. I looked at her and I just a huge amount of relief and release. I no longer have to look for anyone better. There's no upgrade from here. This is my person. This is my person for the rest of my life. I'm her person for the rest of our lives. And we've, we've ridden some, we've ridden some wild, wild rides over the course of our lives together. And I love worship and adore her even more than I did almost a quarter century ago when I first realized that I couldn't do better. I couldn't, there's no, not only could I not do better, like for me, there's no better. There's no better. So the reason I'm saying all of that is not to sort of quote, brag about my marriage or anything like that, but to ask you, if you're in a lovely happy loving romantic relationship are you still looking for.
[20:55] Other men or women right, there's a time where you just go oh okay she's the one she's the one he's the one it doesn't get better, and yay, wonderful, fantastic, thank you, right? So that's Bitcoin and fiat, right? Do you see what I mean? That's Bitcoin and fiat.
[21:28] When you look at Bitcoin and you say, that's money, this shit is not even toilet paper, the fiat, right? That's when you get it. That's when you get it. So a lot of people lend money to the government and governments, once governments start buying up Bitcoin, they do so with the intent of being able to pay off their national debts without the hyperinflation of fiat currency, because the hyperinflation is happening relative to Bitcoin.
[22:07] Now, I get the objection I completely understand is to say, well, wait a minute, they're going to have to transfer their money to fiat in order to pay off those who've lent. Well, that's an interesting question. Could it be the case that people who have lent money to the government would ever take Bitcoin as payment without it going through fiat? And of course if it jumps into fiat for like 10 seconds and then jumps back to bitcoin that's one thing but at some point i believe this is going to be the case, so if you've ever a friend of mine has one of these zimbabwe you know million dollar bills or billion dollar bill or whatever it is right and nobody will take that right nobody will take that right? In the Weimar Republic during the hyperinflation, that was a result in many ways of the Versailles Treaty, demanding that Germany pay an impossible amount of money. So people would put fiat currency into their stoves to heat their homes and to cook, because they're fire-based, right? Because it was cheaper to burn the money than to use the money to buy, wood or coal to burn.
[23:32] So there will be a time when people, even if the fiat is not hyperinflated, but relative to what you can buy with Bitcoin, right? It's not like the currency, I'm sorry to be confusing about this. It's hard to explain for me. Maybe other people would find it easier. Maybe you've already got there and I'm just thrashing around, but Bitcoin has gained in value more than a hundredfold, just five, seven years or whatever, right? So Bitcoin has gained in value, let's just say a hundredfold, but fiat currency has not lost in value a hundredfold. That is a delta that's really, really important to understand. So Bitcoin relative to say real estate is a hundred times more valuable, but not because Fiat has lost a hundred percent of its value, 99% of its value. I'm getting a little lost. Isn't this going to be the death of the dollar?
[24:41] Why not hyperinflate and switch?
[24:49] Well, hyperinflation destroys the economy, right? So there will be a parallel economy in Bitcoin and perhaps Lightning Network and so on. So there will be a parallel economy. In the same way that Bitcoin was a parallel economy, Bitcoin was a parallel economy with fiat, fiat will become a parallel economy with Bitcoin. So Bitcoin for a long time and still is a parallel economy that's an appendage of the fiat currency economy, but it will be the other way around. So if at some point, and I think this will happen at some point, people will say, I will not sell Bitcoin for fiat. Now, of course, there'll be some people, again, it takes a while for some people to get it, but there will be a lot of people who say, I will not sell my Bitcoin for fiat. Now, if that's going to be the case, then people who have obligations in fiat might have to take Bitcoin.
[26:04] Now, if that's the case, then the national debt could potentially be paid off for relatively little in the current market.
[26:22] Because people will pay their debts in Bitcoin, but they may not trade Bitcoin for fiat. So if you have an asset that is going to go up 10,000 times, and people are willing to take that asset in exchange for dollar-based debts, such as government bonds and government debts and so on, then you have effectively or you could potentially effectively virtually eliminate the national debt by getting hold of Bitcoin now and then paying off those who have government obligations owed to them, paying those off in Bitcoin. Now, for some of the really elderly people and so on, right, if they have bonds or maybe eventually it could even be something like Social Security, there will be people who will manage things for them. But if governments get and this is i'm telling you this is why it is a stampede of imperialism bitcoin if governments can get a hold of bitcoin and bitcoin goes up the degree to which at least i think it's going to go up and lots of other people think it's going to go up then it is potentially the case that the national debt could be paid off through Bitcoin, because the Bitcoin relative to its purchasing power to physical objects will have gone up so much that people will take that.
[27:50] Let me know if this still makes sense or not, right? Because again, I sort of remind you that Bitcoin has gained a hundred times value relative to real estate, but it's not that the fiat in the general market has lost 99% of its value. So Bitcoin has gained much more value than fiat has lost. Yeah, sorry, I'm right at the edge of my explanatory ability, for which I apologize. I would wish I could just sort of upload it. Right, so for instance, the peak of 69K, is in dollar denominated is, what is it 79k or something like that right so in terms of inflation adjusted dollars the dollar has lost a certain percentage of its value but bitcoin has gained a lot more, i don't understand the importance of paying people in the currency they expect, well of course if you lend money to the u.s government the u.s government is going to have to pay you back in dollars, right?
[29:08] But if the value of Bitcoin has gone up enormously, then you would rather be paid in Bitcoin than dollars. So let me ask you this. I mean, so the difference is this. If you had, let's say Simon and Adrian, right? We got two, They're twins, right? Now, one of them bought Bitcoin half a decade ago, and the other one invested in real estate, right?
[29:43] So the value of Simon's Bitcoin has gone up 100 times relative to the real estate holdings of his brother. But it's not because the value of the dollar has gone down by 99%. Bitcoin's value has increased far faster than fiat currency's value has gone down. Does this make sense?
[30:24] Let me just... I'm going to get the actual math here. All right. So this is from Anthony Pompliano, and this is a very interesting argument. Okay, I like it when it says find on page, right? Okay, so he says, in 2016, the average median home in America cost 664 Bitcoin. Today, that same house costs just six Bitcoins, and it's even less now, a staggering 99% reduction in price when measured in Bitcoin. If someone had invested $5,000 in Bitcoin in 2016, they could now afford to buy a house with that investment.
[31:26] So, what I'm saying is that if governments around the world invest in Bitcoin, then this is eight years, right? 2016, I said five to seven, sorry, it's eight years. So, if governments buy Bitcoin, then let's say over eight years, let's just say over eight years, the value of Bitcoin relative to fiat, in this case, it's relative to home prices. So if the price of Bitcoin relative to fiat goes up 100 times over the next eight years, then effectively the governments have dropped the value of their fiat debt by 99%.
[32:08] In other words, if you look at the average median home in America as the national debt, right, the average median home in 2016 costs 664 Bitcoin. Today, the same house costs just 6 Bitcoin. It's probably down to four now.
[32:26] So you can pay off the debt by holding Bitcoin. Possibly it's a, I mean, to me, that would be the most sane strategy. That would be the most sane strategy by far. So if you think of the house as the national debt, then if the national debt, eight years ago, paying it off cost 664 Bitcoin, now you could pay off the same national debt, which is five or six Bitcoin.
[32:56] Tell me if this follows.
[33:04] Yeah, if Trump wants to eliminate the income tax as well. I mean, or a flat tax or something like that, right? That would be a big plus. That would be a big plus. If you think of it as physical force, Bitcoin's upward acceleration of purchasing power is greater than fiat currency's downward acceleration of value. Please, could you kindly read out my tip? Of course, my friend. Let me just see here. 2020 vision. Top P, top P, top P, Stef is the top philosopher. Thank you. I appreciate that. All right. Any other questions or comments? That's really one I wanted to get across. Now, if governments figure this out, if governments figure this out, there's going to be, in my opinion, no expectation for sure, but in my opinion, there's going to be a bull run that's going to be completely mental. That makes sense if government actually wants to pay off the debt. Debt gets resolved one way or another. It either gets resolved by hyperinflation or default or something like that, right? Debt gets resolved one way or another. All right, let me just see if you have any other questions. But the government doesn't want to pay off the debt, but the government wants to continue.
[34:32] So if you think about bitcoin relative to physical assets rather than just fiat then you get the real story about its increase in value if that makes sense.
[34:45] All right. How will this relate to economic collapse? Stave it off? Well, sure. Yeah, of course. Of course. Because if the government can eliminate the debt through its acquisition of Bitcoin, which is incomprehensible, but I think could be mathematically possible, if the government fulfills its obligations with Bitcoin, and it will require some education, but then what will happen is Bitcoin becomes the default currency of the planet, right? Because if people want to get paid off in Bitcoin rather than fiat, Bitcoin becomes the international reserve currency, which means that a significant proportion of the world's economic activity has to flow through Bitcoin, in which case, holy shitballs, Batman. Right? That's why it's wild to me that people are willing to sell Bitcoin. It's just wild. I mean, unless there's some particular emergency. And again, you know, if you're older, you probably want to sell some Bitcoin to go and have some fun and enjoy your money.
[35:49] I get all of that. So I'm not saying it's all that case. That's not all terrible, but it's just wild to me as a whole.
[36:01] All right. Any other thoughts, issues, challenges, questions? Will Peter Schiff admit he was wrong? I love, I love me some Peter, but I don't consider that imminent. I don't consider that imminent.
[36:32] All right. Well, I really, really appreciate your time. Thank you so much, everybody, today. I hope that you find this stuff to be of value. This is pretty spicy stuff. If you repeat it to people, don't have to reference me. Just, you know, pretend you came up with it yourself. That's totally fine. But that's the macro view that I see. And again, none of this is investment advice. Do your own research. I don't know what I'm talking about as a whole. This is just idiot opinions from the ethernet so but yeah i really really do appreciate that inverse kramer a lot of times that's just made up because it's just become like a meme like a sam hyde thing so uh really check the source but yes i uh i appreciate that you know and this to me this to me is a big test of whether somebody has any integrity at all which is uh will they admit that they were wrong about this will they admit that they're wrong will they admit that they're wrong about this right what's the timeline for that legislation i mean nobody knows nobody knows but at least there's a chance and that's a big big step in the right direction all right well thanks everybody have yourself a wonderful wonderful afternoon i appreciate you dropping by and uh have yourself a great day as a whole and lots of love from up here uh i guess i will see you guys what is it tuesday and i uh yours donate uh yeah you can donate in bitcoin uh for free domain. That would be gratefully appreciated and humbly accepted. I thank you for that.
[37:58] So have yourself a great day. We'll talk to you tomorrow. Bye.
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