➡ The discussion revolves around the current economic situation, with a focus on the increasing debt and the potential for another round of money printing. The speakers discuss the resilience of the dollar despite the rising debt, explaining that the demand for dollars increases as the debt grows. They also touch on the concept of consuming capital, likening it to a farmer eating his seed corn, which could lead to a dangerous tipping point. The conversation ends with an example of how a bull market can lead to the conversion of one party’s wealth into another’s income, using a hypothetical digital asset as an example.
➡ The text discusses the economic theories of Keynes, focusing on his idea of driving interest rates to zero. It argues that this approach can lead to inflation and a bull market, where asset prices rise but consumer prices may not. The text also suggests that Keynes’ theories can lead to wealth being converted into income, which is then spent, causing significant consumption. It criticizes Keynes for his views, suggesting they can lead to economic instability and unfair wealth distribution.
➡ The text discusses the impact of inflation and interest rates on retirement savings, suggesting that due to hyperinflation, a retiree in 2015 or 2019 would need significantly more savings to maintain a median lifestyle compared to a retiree in 1979. It also criticizes the current economic system for being manipulated and not free, leading to confusion between good and bad profits. The text suggests that the solution is to invest in real money like gold, which can finance real businesses and build capital regardless of the economy’s state. It ends by discussing the potential future of the monetary system, suggesting that gold and bitcoin are the only serious contenders to replace the dollar.
➡ The text discusses the economic implications of Bitcoin and gold. It criticizes the idea of hoarding Bitcoin to increase its value, calling it economically unproductive. The text emphasizes the importance of interest in making assets like gold circulate in the market. It also argues that gold, due to its physical and economic characteristics, is a better form of money than Bitcoin, which is seen as an intangible asset. The text concludes by advocating for the re-monetization of gold.
➡ The text discusses the problems with our current monetary system, which the author views as dishonest and corrupt. They believe that this system encourages cheating and dishonesty, leading to a degradation of society. The author hopes for a shift back to a gold-based monetary system, which they believe would lead to a more honest and decentralized society. They also criticize the idea of inflation and the concept of money as a point system, arguing that it dilutes the value of credit.
➡ The speaker discusses the value of gold as a long-term investment, highlighting that it can be profitable even when its price isn’t rising if you earn interest on it. They criticize the mentality of buying gold only to sell it when its price increases, as this contradicts the belief that the dollar is losing value. They also express skepticism towards Bitcoin, arguing that its supporters are primarily interested in quick profits and are not genuine. The speaker encourages considering gold as a permanent part of one’s portfolio, emphasizing the need for a return on investment.

What is the nothing? It’s the emptiness that’s left. Hey, guys. Raf here from the Endgame investor. And I got one of my favorite guests. Recurring guests on the channel today. That’s Keith Weiner of Monetary Metals, where you can lease your gold and silver out and be paid in gold and silver terms. Check out Monetary Metals. I am a client. So you know the Hair Club for men and that kind of thing. Anyway, Keith, how are you doing? What’s up and where are you now? I’m in Dubai. Abu Dhabi. You’re what they lack. Abu Dhabi. Now you’re all packed.

Abu Dhabi apart commute doing good. Good to be back here. Thanks for having me. And the world’s gone mad, hasn’t it? Yeah. Yeah. What are you. What are you struggling with in the madness? Because there’s. There’s so much to pick from, you know, And. And it makes me comfortable that other people also feel that the world is going mad. Because I. I often. I wake up and I. I feel like I’m crazy. It’s not as. As sharp as it was during COVID when everyone was a complete lunatic, but it’s. It feels that way that we’re in some kind of COVID after party that.

That just never ends. You know, in the US we had one party that was openly socialist, and the other party that you had to vote for to prevent the socialists from getting power, are now talking about grabbing chunks of companies. US Steel, Intel, Pharmaceuticals. Openly, you know, give me. Give me a big chunk of your. Of your equity. Trump said to. Of the pharma companies. Oh, he did? Yeah. On tv, always bragging about. I. I don’t think he actually. The guy wasn’t on the tv, but he was talking about that. And, you know, I don’t recognize my country anymore.

The debt’s obviously just, you know, you know, it’s in the vertical phase. The spending is insane. That’s nuts. Yeah. So that. That I think, deals with or touches on our disagreement, which I just think is on timing. I don’t see much time left. And now you’re saying debt is going vertical and everything is nuts, but yet I still think you’re on the side of. We have several more years yet until everything implodes, and we definitely don’t want to be in that zombie apocalypse, and it would be absolutely horrible. Whereas I’m like, I think we’ll figure our way out of it.

I. I don’t know exactly how, or maybe I just wishful thinking on my part because I want to think that we’re in all on a terrible tailspin. Society’s about to collapse. But I’m not as afraid of it as you are. And maybe that’s why I think there’s going to be one more printing round and that’ll be it. But like, how do you, how do you come to your conclusion that there’s going to be another printing round soon when either the repo market locks up or banks fail again? They’re going to print five, six trillion dollars, whatever it was, like, like Covid, but bigger, because every round is bigger than the one before it.

How does the dollar survive another printing round in your view? The thing that makes the dollar resilient and the thing that gives its value despite. I mean, the joke is that the Austrian school has predicted 17 of the past zero hyperinflations of the dollar because people are looking at the quantity of the dollar and say, okay, when it goes vertical, that should be the end of the. What they’re missing is that the other side of the dollar is the debt. They are one and the same. And the debtors have to come up with revenues to service their debt.

So the bid on the dollar goes up ferociously, exponentially as the debt goes up. Think about it. If you borrow a dollar, go into debt for $1, what’s your demand for dollars of revenue? Well, if your Profit margin is 5%, then to get a dollar of gross profit, you need $20 in revenue. So the demand for dollars is much, much, much higher than the debt, and the debt’s going exponential. Isn’t that always the case? That’s always the case. The higher the dollar goes, the higher the debt goes, therefore, the higher the demand to service. But that goes on no matter how high you get.

So at some point something changes. That’s right. But the point is that it’s not a matter of, oh, suddenly people come to their senses. Most of them are in debt up to their eyeballs. There’s no. Whether you come to your senses or don’t come to your senses, you have no choice. If you don’t service your debt, the bank is going to take everything. So, okay, well, what changes? I argue that underlying all this is we’re consuming the capital that supports our advanced industrial civilization. And the civilization depends on the ability to produce particularly food and energy at vast industrial scale.

And you take North America without fertilizer, without insecticide, without diesel power. I think the estimates that I’ve read the North American continent could support maybe 30 million people. Well, there’s 400 million people in the North American continent, 370 of which can’t be supported. If we fail to produce food and energy, meanwhile we’re consuming the capital that makes that production possible. So I think something breaks in that when the capital is consumed past a certain point, you get a very dangerous tipping point. That’s not about anybody waking up. It’s about the capital’s not there if you’re a farmer.

The best analogy that I can think of for capital and Mises used it and Ayn Rand used it, perhaps because Mises did, and that is the seed corn. If you’re a farmer on the frontier and you know you grow whatever, you know, wheat crop that you grow and then you harvest it, a certain amount is for eating, a certain amount is for seed to plant next year’s crop. No matter how bad the winter gets, you do not dare eat the seed corn because if you do, you won’t be a new crop to plant in the spring and next, next winter, you’re going to starve.

And what monetary policy does is it stimulates. You know, they call it stimulating the economy, but what it stimulates is the perverse incentives that get people to consume the seed corn. Somehow I question your motives. That is because you haven’t been properly stealing stimulated yet. Can you give me an example of consuming the seed corn and how monetary policy forces the consumption of that seed corn in real world? What’s going on right now? Yeah, so take any, I don’t want to just say any bull market, but any monetary fueled bull market. So these are bull markets that just run and run and run and run and run and run.

A bull market becomes a machine that is fueling the conversion. And I use the word conversion understanding. There’s a legal overtone if you walk into a criminal court and talk about conversion. It’s an illicit usage or taking of somebody’s property for something against, not necessarily like stealing it, but maybe you occupy somebody’s land and then grow a crop on it for a year. Okay, give him his land back at the end. Yeah, but that was a conversion of the, the property. It’s a machine for conversion of one party’s wealth into another party’s income. Now the thing about income is people consume their income, nobody wants to consume their wealth.

So imagine you had a thing and we’ll call it BitAsset, not to be too overly explicit in what we mean. And bit asset starts at a dollar and then you put in 10,000 of your hard earned dollars of capital and you give that away to whoever manufactured. You know, it’s a guy with a laptop and a little card, and he cranks away and manufactures Bitasset and you buy it from him. So now he has 10,000 of your dollars to spend and consume, which you never. That’s your savings. You wouldn’t have consumed it. But he goes to Las Vegas and does a lot of drinking and a lot of gambling, and it’s dissipated.

But that’s okay because you think you’re going to get your $10,000 back plus a gain. Well, it’s not your $10,000 back that has been consumed by the guy with the laptop and the graphics card. Well, the dollars still exist, though. They just represent less goods and services, because those. Because when you go to Las Vegas and you gamble it away, you’re buying entertainment. Entertainment goes out into the wind to nothing. The dollars are still there. They just represent fewer goods and services all around. But the capital has been dissipated. So the guy who got the $10,000 spent it on consumer goods.

He doesn’t have it. The people who earned it in Las Vegas, they’re just making a living. There’s no. SO capital has been accumulated. And. But the point is, now you did this because you expected Bitasset to go to $10. Supposing you’re right, supposing it did so, it goes to $10 and you sell it to the next guy. You sell it to me. Let’s say I’m the next guy that bought it. Now I give you. What do we just say? I give you $100,000 of my hard earned capital. So you have $90,000 profit plus the return of your $10,000.

So let’s say you keep 20,000 to invest in the next, you know, scheme and you have 80,000 to consume. That’s my savings that you’re burning. Now, I wouldn’t have burned my savings because I respect my savings, but I think I have. I think you were duped into thinking you were duped into thinking you were saving by buying bid asset. Right? I have $100,000 worth of bid assets, so I think I’m good. And then meanwhile, if I’m right and bet asset goes up to $100, I now have a million dollars worth of bet asset. I sell it, I take my 200,000 of capital, and I spend 800,000 of the next guy’s capital.

And so every time it goes up and it changes hands, someone is getting revenue, someone’s getting income, but that income is simply someone else’s wealth fed to him as income. So we’re converting wealth into income and the income is being spent and enormous amounts of consumption is occurring because of these endless bull markets. Of what I call Keynes. I wrote an article, the only one in which I’ve ever dropped a curse like an F bomb. And the article was titled, is titled Keynes was a vicious bastard. Oh yes, he definitely was. Sum up, Keynes, arrogant, sadistic, power besotted bully, deliberate and systemic liar, intellectually irresponsible, an opponent of principle in favor of short term hedonism, a nihilistic opponent of bourgeois morality in all of its areas, a hater of thrift, an imperialist, an anti Semite and a fascist.

Outside of that, I guess he was a great guy and you know, pedophile. Leaving that aside, you know, socialist, leaving that aside, he talks about, and I love when people deflect. Oh, it’s not me saying this, it was Lennon who said the surest way to overthrow the capitalist order is debauching the money. I’m not saying anybody should debauch the money, I’m just pointing to this guy Lenin over here. Except Keynes was a socialist and an admirer of socialist, you know, theory, if not necessarily Lenin, maybe. We know that Mussolini praised Keynes, so you know, there’s that.

But anyways, debauching the money, blah blah, blah, blah blah. Most people assume that he means inflation. You know, consumer prices go up because if you print double the quantity of dollars, then you know, it takes twice as many dollars to buy consumer goods. Which I don’t agree with that theory, but that’s what most people assume. However, when you get to the end of the quote, he says, and by engaging all the hidden forces of economics, which today we would use the word incentives, Adam Smith’s invisible hand and hidden force economics, incentives. By engaging incentives in favor of destruction, and not one in a million can diagnose how their world is being burned down by this mad evil plan.

Okay, now if Keynes is saying that inflation is something that not one in a million would recognize, he was a moron. Because I think you may be old enough, I’m old enough to remember the late 1970s when everybody talked about inflation every day. It was on the nightly news five days a week. They had the misery index, so called inflation plus unemployment, constantly. Everybody was talking about inflation and today people are talking about inflation constantly too. So if that’s what Keynes meant, the declining purchasing power of the currency, he was an idiot and a fool. And I don’t think Keynes was an idiot or fool.

I think he was, I think he was a genius. I mean evil But I think he was a genius. I don’t think that’s what he meant either. I think, I think he meant, I mean, continue where you’re going, but I think he just meant no one can pinpoint the culprit of inflation and they’ll blame it on greedy shopkeepers or whatever. He’s saying nobody’s going to recognize that it’s happening, let alone diagnose the cost. Now, separately, not in that particular quote, but he is famous for calling for the interest rate to be driven to zero, to euthanize the rent here, blah, blah, blah, blah, blah, blah, blah.

He wants zero interest rates because capital is abundant and all these things, which is all rubbish and so drives the interest rate to zero. And you combine that with him saying, no one’s going to recognize what’s going on. Yeah, that’s right, because everybody loves a bull market. Asset prices are inverse to interest rates. If you have a halving of the interest rate, if you go from 4% to 2%, then perpetual assets such as equities and real estate should double approximately in value. And then if you cut from 2 to 1, 1 to 0.5, 0.5 to 0.25 with each halving, you get a doubling of asset prices.

Now, doubling of asset price is called a bull market. It’s wonderful fun to be a player in a bull market. I mean, all you have to do is throw darts. There’s so many dart boards and they’re so big and you can’t possibly miss and everything makes money and it’s wonderful. And how can you say anything? How can you say the economy is bad? Look, it’s a bull market. And I just shake my head every time people talk about, well, the stock market’s going up, the economy can’t be bad. As if the two equivalent, right? Which they’re not.

So Keynes wanted to drive the interest rate to zero, which he recognized as a debauchery of the money, but a worse form because he talks about in other places, it breaks the sacred bond between creditor and debtor, turns everything upside down, impoverishes generally, but arbitrarily enriches a few, that the few bourgeois that are enriched by this will be hated even by most of their fellow bourgeois, because everyone can understand it’s arbitrary, capricious and unjust. And, you know, on and on and on. He recognized exactly what would happen if you push the interest rate to zero. And as far as I can tell, his critics failed to pick up on this and fail to see it as it’s been happening in real time since 1981.

So you’re saying, so you’re saying that Keynes was. Keynes was saying that no one would recognize inflation because they’d be so busy counting their gains in the stock market that he wouldn’t even care that they wouldn’t recognize the falling interest rate as a debauchery of sort of a different sort. And when you have a falling interest rate, I don’t know if Keynes realized this or not. It’s possible because at that time they were aware of Gibson’s so called Gibson’s paradox. Knut Wixel found this in the 1890s that the price level does not correlate to the quantity of money it correlates to interest rates.

Later deemed Gibson’s paradox Keynes, which probably would have been aware of. I assume. So it’s not a time of rapidly rising consumer prices. When you have a falling interest rate, it’s rapidly rising asset prices, but not consumer prices. And consumer prices could be falling or at least soft. And I argue extensively in my own writings why not necessarily falling? In this era we have ever rising regulatory burdens, what I call useless ingredients. But it’s not a time of, you know, if you’re looking at the purchasing power of the currency, it isn’t falling. So I developed a concept and wrote a whole series on this called Yield purchasing power.

So purchasing power says, okay, if I got 100 bucks, how many groceries can I buy? Yield purchasing power says I’ve got 100 bucks and I deposit it in a bank and put it in a three month time deposit. How many groceries can I buy on the interest? Now what’s interesting is if you look at purchasing power post 1981, it’s actually pretty good. I mean you had this loss of purchasing power 1960s, 1970s, after about 1983 or so, it looks like they got inflation under control. Everything’s fine. Volcker is a hero, Greenspan is the maestro, etc. So you’re saying continue, but I just want to make sure I understand for now.

You’re saying that as long as people can earn through interest what they lose through rising consumer prices, then everything’s fine and that’s where we are now. No, no, no, I’m saying the opposite. I’m saying if you look at conventional purchasing power post, post 1981, when the interest rate begins to fall, inflation, loss of purchasing power as conventionally understood, the problem is over. They licked it. The conventional view is Volcker fixed the problem. Reagan and Volcker were brilliant. Greenspan Continued the alleged brilliance. Everything’s fine. If you look at purchasing power, it’s fine. Now if you look at yield purchasing power, that is how much you can buy on the fixed income that you earn on your savings, then you see what looks like the beginning of a hyperinflation that starts in the mid-1980s.

And so I wrote an article comparing a hypothetical guy who retired in 1979 with a hypothetical guy who retired in, I don’t know when, what year I wrote this article, 2015 or something like that. And if each of them had the median savings, so let’s say a skilled blue collar guy, like a shop foreman, 1979, retired with $100,000. Inflation rate was X, but the interest rate was right there too. He was able to earn the median income or 2/3 of median income is kind of the role for retiree because you don’t have commuting expenses, don’t have kids, you’re not paying for their college degree anymore and your house is paid off.

He was able to live the median lifestyle on the interest on his savings. If he retired in 1979 with a median savings of around $100,000. If I remember, the guy who retired in 2015 or 2019 would have needed $120 million to live the median lifestyle on the interest that it could get on the, you know, the yield purchasing power had collapsed. There had been absolutely hyperinflation. So in that view, yeah, there’s incredible debauchery of the money, but people aren’t seeing it because they see the asset prices going up. And an asset going up is treated as fully as good as or if not better than yield.

People say to me, geez, why should I care about 4% yield on my gold? All I have to do is buy Bitcoin, it’s going to double in a year. Okay, well, I mean, from the individual trader’s perspective, if that’s true, if you could really be certain it was going to double in a year. Now ask anybody who was certain of that a few months ago and bought at $125,000, if that’s working out so good. But if that was really true, okay, fine, but what does that do economy wide, if everybody is buying something and it’s endlessly doubling, and my argument is it’s consuming the capital that our civilization depends on and it’s leading us to a bad, bad.

Okay, I understand what you’re saying, so let me put it in this fork. So if you have a perverse incentive economy of artificially suppressed interest Rates that when you make an investment, you can’t simply just say, well, this is going to double and then I’m going to have this much money and so therefore for me I’m saving. Whereas you would be able to say that in a natural economy, I don’t know. Forget about the definition of what, what’s a natural account, Like a less manipulated economy where let’s say interest rates are allowed to float, you can make entirely selfish decisions and then manage your own account and then be, be reasonably certain that what’s good for you is good for the gander.

Right. But in this economy you can’t. You, you have to take into account what you’re doing on a, on a global basis or like a, a larger pool, how what you’re doing is affecting other things which humans are not designed to do in their economic. So most of us cannot do this. Even, even, you know, us, we’ve, we’ve tried to train ourselves to do this sort of thing because we know what world we’re living in, we’re not that great at it. I 100% agree. If you are in a free market, to make a profit means to serve your fellow man.

You’ve done good by doing good. There is no other way to make a profit in a free market. In a non free market such as what we have now, we have the vestiges of a market, but it’s increasingly under government control. Then to make a profit may mean that you’re serving your fellow man, or it may mean that you’re profiteering on some non free aspect, such as the falling interest rate. That’s the time you don’t even know. The problem is you only have one signal, one incentive, which is to make a profit. And how are you supposed to sort out, well, this is a good profit and that’s a bad profit.

You don’t even have the information to do that unless you sit here and study economics to death. And then secondly, you have no incentive. Even if you understood that. I mean, if you can buy something and it’s going to double, have at it. And so I always say blame the Fed. Don’t blame the people that are forced to play the Fed’s game. You know, it’s the Fed that’s created this. I blame everybody who votes for the Fed, supports the Fed, endorses the Fed, defends it, justifies it, you know, et cetera, and says, well, you can have George Seljan, who I like to peck on for this point, you can have a free banking system.

He says, and he said this at the Objectivist conference in California some years back. You can have a free banking system built on a fiat currency and central bank. I have very few regrets in my life for Effie. One of them, I’m a big guy and I can have a very boomy sort of tender baritone voice if I choose to. My wife was always like, calm down, Shh. Everybody can hear you in the restaurant. One of my regrets in my life, one of my few regrets is I did not stand up and heckle him and I did not say, but I should have.

That is not a free banking system, sir. And I should have said that and boom, that out for the entire room to hear. And I didn’t. And I’m still kicking myself for that. We have central planning of the interest rate and so, you know, assets go up and people love it and they don’t regard it as a debauchery. Keynes was absolutely right. It’s even less, it’s even more rare than that. It’s not one in a million who gets it, it’s we. Ragtag few, you know, listen to abstract arguments, listen to Keith go on about this. And some of the people hear that.

Yeah, yeah, you know, that actually makes sense. So this is, this is actually a really good segue because we agree that even no matter how good we think we are in separating real profit that helps our fellow man from debauched economic activity, I.e. rent seeking or whatever, that we shouldn’t be doing. There’s one thing that, that if we, if we separate enough, we can be sure that we are helping our fellow man. And that is exiting the system as much as we can and buying real money and then earning income on that capital without selling it.

Right. That’s where you come. I don’t know if you meant to make this segue, but what you’re saying is that that decision to, let’s say, put money in monetary metals, which I have some, and, and then watch it, and then lease it out at a certain interest rate, whatever the profit rate is, and then you don’t have to spend your gold, but you are producing actual wealth in the gold that you’re earning and that is building capital no matter what kind of economy we’re in. That’s right. And we’re doing that by financing real businesses. It’s not a self referential speculative game where everything works as long as the price is going up.

It works with the price of going up, it works with the price going sideways, it works with the price going down because we’re financing something real in the real world now, the importance of it. And I agree with everything you said and support of that is that. And I’m writing a chapter right now for a book on kind of the next monetary system. And my argument is that whatever it is that you think is the next money, when the dollar fails, I mean, I think the idea of the dollar is failing isn’t as lunatic fringe as it used to be.

If you said that pre 2008, I mean, they’d lock you up in a padded room. I mean, that was like way out there. Post 2008, there were a few normies, I guess, myself included came to kind of realize that. But it was still pretty fringe post Covid. A little less fringe. I think today it’s becoming a bit. I mean, it’s not a majority of you, but it’s a lot less wacky that, okay, the dollar’s failing and you can start to talk about what’s going to replace it. Now, the unserious people, and sorry for saying this, if I offend anybody watching this, the unserious people say a BRICS currency or a basket or average or combination of them is ludicrous.

No, they have capital controls to keep their people locked in because if the people of these countries were allowed to dump their currency to get dollars, they all would en masse. Currency would go to collapse to zero very quickly. But if you start to think about what is going to be the next monetary system, there’s really only two candidates and there’s bitcoin and gold. And I’m not even sure what else. Just for the sake of completeness, if I was a journalist or an analyst saying what else should be included put on the table next to gold and bitcoin, I’m not even sure there’s a contender.

Why is bitcoin even a candidate? Well, it’s not. I mean, in a certain sense, because there’s a lot of people that are saying it is, but it’s not actually a serious contender at all. And the reason is it cannot be used to finance real productive enterprise activity. And that finance is the key to the whole thing because interest is what will draw it into circulation. Everybody today in the bitcoin world, while talking about the utopian endgame that they allege bitcoin has, they’re all about, well, the US government should buy a strategic reserve and there should be more bitcoin treasury companies.

Everything is about borrowing up to the hilt to buy this and lock the bitcoin away forever so that there’s fewer and fewer Bitcoin on the market. Quantity theory of money says the price goes up. They all want a higher price. Okay, fine, but that’s economically. Not only is it causing capital consumption, it’s sterile. Economically, it doesn’t do anything. This all seems like a 21st century version of mercantilism, but stupider. Or John Law. Yeah. Or tulips. Right, so. Or Charles Ponzi. But anyway, the point I make in this chapter that I’m writing and the point I want to make right now is that interest is the key to drawing something out of private hoards into the market.

Not to be dumped, to be sold because the price went up. And now you want to speculate on the next bubble, but to be used and ultimately to circulate as a medium of exchange, be used as a unit of account, store value, et cetera, et cetera, et cetera is. Interest is the key to the whole damn thing. So what we’re doing, yes, anybody who participates individually has a selfish interest and gaining more gold. If you have 100 ounces and we pay 4% today, then at the end of the year, we give you back 104 ounces. It’s an increase by 4 ounces.

Okay, great. That makes sense. And that is self interest. Now, whether you are in retirement and you need to spend the interest, don’t spend the principal, but spend the interest. Or whether you’re younger and you’re in the accumulation phase and you add that, and now Your principal is 104, and next year you get 108.0.16 or whatever the math works out to be. You’re making a gain, and you’re making a gain in terms of money that can’t be debased or debauched. But you’re also working to the good of your fellow man by helping gold reemerge as something that’s used.

I’m reluctant to say gold standard because the term carries so much baggage. Yeah, I know. Does that mean a Fed price fixing scheme? Does that mean the government has a monopoly on issuance of the currency? Like, what does that mean? Does it mean. Bretton Woods? Does it mean gold standard has so many different. So many different definitions from the, the, the stages through which we eroded it. It was all called gold standard, no matter how much it was eroded. And then suddenly in 1971, that was the last erosion. But everything from, let’s say, like the 17th century to 1971 was all gold standard, even though those systems were all radically different depending on how much it was eroded.

That’s right. And it was never a free market. Certainly in the US the closest it came was Scotland at one point. The free banking era of Scotland. But anyways, leaving aside that term and the baggage that it’s loaded with to bring back the use of gold in savings and in finance and in the economy, whether a medium exchange, whether it’s just being alternative to the dollar, whatever it may be, to bring it back into use so that gold no longer fits into Warren Buffett’s neat little category. Number one, he says it has no yield. Okay, that’s not true anymore.

And number two, it’s neither procreative nor productive. It has no use. It’s pointless. We pay all these guys to dig it out of the ground. Then we pay more guys to put it back underground and guard it again. It’s pointless. It’s useless. It has no utility. Actually size that utility. And we are working to bring back the utility that gold always had and can have again and will have again. And anybody participating it is helping is onboard a movement to remonetize gold. I, if people would just understand. I’m starting to see this single issue as the, the maybe original sin, you could say, or the core error that everybody makes who makes the bitcoin mistake and doesn’t realize that gold is money, right? There’s two camps.

There’s either money, this is my camp, and you might phrase it slightly different than I phrase it, but. But money is the most liquid physical commodity within a given economic system. If it’s a. If it’s a jail, if it’s a prison, it’s whatever cigarettes or tins of mackerel, whatever it is. But if it’s a global economy, it’s going to be gold no matter how much credit is being tossed around. And the other camp is, well, money is only what people say or agree on. It is. And value is only what other people will pay for that value, which is a circular.

Which. It’s a circular argument that rests on nothing, that just spins out of control until it just spins into nothing, like, like an exploding star. I mean, if you understand that money is not a point system, it’s not a magic thing where people suddenly agree on a value and then it just gets rooted because like, enough people adopted it that never, ever happened that way ever in all of human history. But no matter how many times you say that, they still think that that money is an imagination, it’s an imaginary thing. And smart people believe this too.

And it’s so tragic that I Remember one of my guys I really want to get in touch with, who I think could understand this point and help change the world, was like, Brett Weinstein. He’s talking to Joe Rogan, and they’re both agreeing that that money is a. Is. Is a fiction. We got to get rid of it for some better system. And I’m like, no, you can’t. You just have to get the crap out and go back to the money. Yeah, the, I guess, classic dichotomy over the centuries, is it intrinsic, meaning that something is, you know, valued in and of itself, or is it subjective, meaning it’s arbitrary in anything anybody feels like it should be at the moment.

And being myself an objectivist, I.e. an adherent of the philosophy of Ayn Rand. So actually, there’s a third way that’s a false alternative, and that is that money, gold has certain physical characteristics and also certain economic characteristics that no other thing has. And if you think about, number one, in any credit system, there is a need for people to be able to take their marbles and leave the sandbox and go home. Whether they don’t like the terms, they don’t trust the counterparties, they don’t like the interest rate, whatever the case may be. How do you take your marbles and go home? It has to be a physical thing.

We are physical beings that live in a physical world, and we hold stuff in our hand, and the only thing you can take home is something you can hold in your hand. So it has to be a physical commodity of some sort or another. It can’t just be government credit or somebody’s promise or a number. Nothing. I love your tweets about Bitcoin. It’s a nothing that everybody can measure its quantity precisely, but quantity of what? It’s nothing. But. So it has to be a physical something. And when you look at the world of physical somethings, you quickly realize it has to be a metal.

Because only a metal is infinitely divisible, down to the smallest spec, but just as importantly, recombinable. Supposing diamonds were divisible, which they’re not. You can never recombine them. Once you’ve cut it, that’s it. A metal can be melted and recombined. So, okay, you’re down to a metal, and now you’re into metals that don’t corrode or tarnish easily or at all, in the case of gold, you know, into something. And now you get economic characteristics. It has to be relatively scarce. But Unobtainium wouldn’t work as Money either. It has to be abundant enough that everybody can have at least a little bit of it and it has to have other properties that make it desirable at an emotional level that people want the stuff.

And gold has a couple of things. It’s shiny, its color is unique, and it’s really, really, really heavy. For anybody who hasn’t held gold, go get a piece of 24 karat gold. It’s much, much, much, much heavier than it has any right to be. For its size, something the size of the original iPhone, the small factor would be a kilo, two and a quarter pounds for something that size, it’s astonishingly heavy. And for whatever the reason, people respond to it viscerally. You know, you hold up gold, people sort of lean, you know, they lean in. It’s exciting.

They want it. Coming. Get me, come and get me, come and get me. Coming get me. And you know, gold has all these properties and more. And it was adopted over a period, as far as we know, of thousands of years. There’s no like instantaneous revelation where some king declared it to be gold and it’s evolved to be money in multiple different, you know, closed loop systems where in different societies and different civilizations didn’t know about each other and independently evolve to gold because it has all the right properties. It’s not subjective. It’s not. Well, it’s.

Society happens to agree on it and therefore it is. No, it has reasons why it works as money. Just like, you know, weed has reasons why it works as food. And you can’t substitute the two, you can’t eat the gold and you can’t use the wheat. People did use wheat as a currency of sorts, but doesn’t work that well because the spoils and it’s consumed. So anyways, yeah, well, if we don’t get out of this, I guess my final comment, and you can riff off it, if we don’t get in my, in my view, if we don’t get out of this soon, if we don’t get it as derivative world where derivatives are stuffing themselves in every crevice of society and then we end up with derivative medicine and derivative education, which isn’t really education and medicine, which isn’t really medicine and politics, which isn’t even really politics, it’s all just stupid baby nonsense and derivative food.

We’re not eating food anymore, reading food, like substances that are, you know, a lot of them are chemically altered, everything becomes derivative. And so we have to get back to the real money. And from there we can actually get back to real food, real education, real medicine, whatever you want to say. That’s why I’m hoping, you know, you started out this, this talk with, you know, if, if, if the dollar collapses, then North America could only support 30 million people. There’s 400 million. You know, I might be wrong, but the way that I’m fantasizing about it, the way that I, that, that I’m putting it together in my head is that that once the dollar collapses, all this centralized stuff that requires huge amounts of credit that you can only produce in a fiat system that goes away and then big farms split into smaller farms and you have little backyard farms, little decentralized farms and hopefully we can grow at least close to the same amount of food.

But I don’t know, maybe I’m just fantasizing. I’m just, I’m hoping that everything gets decentralized and then you have different little farms and different little schools and different little hospitals and different little clinics that would, that would sprout up in a non centralized way. Because that’s what would happen under a gold money system, however that system is structured. I will riff on one thing that you said, which is you didn’t state this explicitly, but it was implied in everything you said that when there is a dishonesty, a cheating or cheaters at the root of a system and the money is pretty much the root of the economy, and my definition of inflation is counterfeiting, it’s not about the quantity of the stuff.

And one of my criticisms by the way, of the quantity theory of money is that this is a so called theory that doesn’t concern itself with the nature of the thing, it just says whatever it is, its quantity is the only thing that matters. And I ask the question, is the driver? Is the cause and effect of gold mining under a gold standard the same thing, the same driver and the same cause and the same effect as honest expansion of credit in a gold standard? And is the cause and effect of that the same as expansion of credit in an irredeemable currency? That’s counterfeit credit.

Are those the same one and the same three things? Of course not. The cause of gold mining is one thing, the cause of honest credit is another, and the cause of dishonest credit and the effects are a third. So any theory that ignores those distinctions and treats it all the same says the only thing you need to do is add up the quantity is just not even wrong. It’s medieval and it’s a superstition, it’s not a theory. So my Definition of inflation is the counterfeiting. It’s calling it credit when the borrower has neither the means nor intent to ever repay.

And yet we call it credit anyway. We call it a loan, call it a bond, it’s bullshit. It’s not ever to be repaid. And of course a redeemable currency, there isn’t a mechanism to repay it anyway. So the counterfeiting is the root of the whole thing. The money itself is cheating. It’s a monetary fraud. Monetary fraud is the root of the monetary system. So what happens when you have a system like that? Well, the people that are attracted to rule over it are themselves, you know, counterfeiters and fraudsters of a sort. Now I’m not saying they’ve broken any laws.

In most cases they’re law abiding people. They may even believe they’re doing good. Yeah, you know, that’s the, that’s the, that’s the sick thing. You know, if you look at, you know, the 1930s and in Germany and Italy, a lot of those people thought or seemingly thought or said they believed that they were doing the right thing. That’s what’s so terrifying about it. And you read Tolkien and you know, there’s a theme there that, you know, with the ring, which is kind of an analogy to that kind of power that people start out thinking, I’m going to do good with this.

But regardless of whether they believe it to be good or not, it isn’t. And the point is it has a, absolutely has a corrupting, debauching, debasing, degrading effect on everybody. Downstream from that people start to think, well, if this is what our monetary authorities look like and this is what they’re doing, and of course that affects the politics. This is what our politicians look at their they’re doing, why shouldn’t I? And then insert whatever petty little dishonesty that somebody may want to get away with. Why shouldn’t I get away with this? Why shouldn’t I do this? Well, and by that logic there isn’t any reason why you shouldn’t.

I mean, if the system is a cheater system that rewards cheaters and cheating, why shouldn’t you cheat? Well, why not? Right? I mean, other than the thing called morality. But anyways, yeah, the whole system degrades and all sorts of rubbish thrives that otherwise in a more rational culture, it’s not that you’d ever stamp it out, but it would be on the lunatic fringes where nobody would take certain ideas seriously and there’s a degradation of language I mean, you talk about the language of the pandemic and this idea of quarantine. Well, a quarantine, the legitimate concept is take somebody who you know has the disease and say, okay, you have to sequester yourself because you’re contagious.

And now we’ve inverted it and say, okay, we have to take an entire society of millions of people and force everybody to behave as if they all had a disease. We’ve inverted it. And all the concepts pertaining to virtue and rectitude and fiscal soundness, we now have whole movements, let alone the monetarists and the Keynesians, the MMT people are trumpeting that the idea of living within your means is absurd and frivolous. And there’s no need to do so because, hey, we as a society can print the currency that we use. There’s no limit to what the government can dole out $30 trillion for a green New Deal.

It’s fine. We just have to decide we want to do it. Right. And that would never be possible in a more rational culture and it would never be possible in a more honest monetary regime. It would be obvious you can’t do that. So that’s why they hate gold. That’s why the world went in the direction that it did. It’s the socialist desire. I always say socialism is two things. It’s magical thinking. It’s, hey, everyone’s going to have first, you know, first rate, first world health care if we just declare it to be a human right. And then it’s envy on the other side.

Well, any society, the existence of a billionaire is disgusting. They’ll say that we should obliterate all the billionaires. Yeah, until chewing gum is worth a billion dollars, then everybody needs to be a billionaire. But then we’ll kill the trillionaires. But yeah, yeah, okay, the, the way that you can, you can trace this down again to what you, what you think money is. If money is just a point system and you’re a socialist, you could say, well, I can just like take the points and then, and then invest in whatever I think is going to save the world.

And that should help everybody because I think it will. Right? But what you’re really doing when you, when you think money’s a point system, you’re leeching off of an existing money, which is gold, and you’re expanding that exchange rate so that the price of gold goes ever higher as your inflation continue. Menus. And you’re just, you’re, you’re diluting the value of credit. But that’s that’s how it happens. So is there anything you want to say about Monetary Metals? If you want to become a client, of course, you can click the link in the description below. I recommend it.

I don’t have to worry about it. I don’t have to worry about. About storing it here and I can also watch it grow. And that’s. It’s pretty exciting thing to see, especially because I don’t have to spend any of it. And yeah. What do you want people to know about monetary metals? Where to find it and what to look for. I love that you said that you had money on deposit at Monetary Metals. Gold is the money. Yes, I love that. As most people say, oh well, there’s money. Send money to buy gold. I cringe every time I hear that.

But we’re solving an interesting problem that if and I hadn’t really thought about at the beginning of this, which is when the gold price, when the gold price isn’t going up, a lot of people say there’s no point in owning gold when the gold price is going up. There’s no way to profit from owning gold except by selling it. So you bought gold because you distrust the dollar. You think the dollar is not going in a good direction. It turns out you’re right. The price of gold goes up, which is simply a reflection of the dollar being worth less.

And then what do you do? You sell the gold for more dollars that you just said were going to be worthless soon. That doesn’t make any sense. But if there’s no interest on the gold, there’s no yield on it. There’s no other way to profit from owning the gold other than by selling it. But if you can earn interest on it now, suddenly there’s no need to sell it anymore. It becomes a forever asset. Which I think it’s not me talking my book and saying everybody should own some gold forever. Although, yes, I’m talking my book and yes, I am saying that.

But I think we’re in a different market mode than we were, let’s say 2009 to 2011 or even post Covid in that more and more mainstream and even institutional players are all thinking about gold and not just as a flip, not just looking at a technical chart saying, okay, gold hit 4400, it’s now down to 4000. Buy it because it’s going to balance to 4200 and then sell it. Take your profits. They’re thinking of, okay, I want X percent of my portfolio to be gold as a permanent position as soon as you flip to that mode, as soon as you realize that, then it becomes clear, okay, now I need to get a return on it.

Yeah, otherwise, otherwise, otherwise what he’s doing there. Yeah, otherwise it’s like inhaling without exhaling. Okay, you bought it. But if you can’t sell it, there’s no profit ever. And that doesn’t make any sense. I mean the bitcoiners are, you know, I love when there’s anonymous accounts, you know, on X on Twitter and they’re like, bro, one for all, all for one. We’re going to hold our older bitcoin forever and each person is planning to defect them. You know, the game theory prisoner. Still am I kind of, kind of situation. But everyone is psyching up all the, all the readers.

No, no, never sell it. Never sell it, never sell it. And it’s totally disingenuous. They’re all planning to sell it. That’s the whole point. Right. If number go up and when it hits your target, you know, you sell it. And that’s one of, that’s one of the things, one of the reasons just viscerally, I know logically and I understand, I understand monetary pyramids and how bitcoin is on the top of it, not at the bottom. I get that. But like more viscerally I understand to the, to the depths of my religious existence that bitcoin must fail because the people behind it, so many of them are such nothings and they, they’re just embarrassing.

And their comments and in their behavior, I don’t want to mention any names but like a lot of these people are just fake and it’s so clear and it’s, and it hurts me like how can the ethos is get rich quick? And if you say something that interrupts that, you know, that chain, then they attack you and you have one staying poor and not going to make it and study bitcoin and you know, yeah, okay, yeah, it’s vapid. It is. Well, it, it will end maybe soon. Maybe that’s why I started this like this spree of tweeting about nothing.

Because it’s. I don’t know, something, something is just welling up in me that, that I can’t stand the nothingness. It’s like the, the never ending story. The nothing is like filling everything up and everything’s hollow. It’s like that. That’s what bitcoin, it’s just. It drives me nuts. What is the nothing? People who have no hopes are easy to control. And I’ll regain my composure at some point, but right now, it’s hard to looking everything that’s going on. But, Keith, thank you so much for coming on. And I really like, anytime you want to come on, just ask, because I always enjoy my conversations with you.

Yeah, it’s fun. I appreciate it. Thank you. All right.
[tr:tra].

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