An Insight into Monetary Systems

What's The Problem? - Joe Bryan

Estimated read time: 1:20

Summary

In an engaging presentation by Joe Bryan, the concept of flawed monetary systems is explored, focusing on the significant issues stemming from them. The story revolves around a fictional island split into two societies, each with different currency values, demonstrating how currency management (or mismanagement) affects the economy, society, and overall well-being. The ultimate solution, as proposed towards the end, is transitioning to a new form of currency, Bitcoin, to solve the global monetary problems.

Highlights

The fictional narrative highlights how monetary quality controls society's trajectory 🚢.
Introducing the 'Big Red Button' allegory to explain economic mismanagement's consequences 🔴.
Demonstrating a comparison between traditional fiat currencies and Bitcoin as a solution to financial instability 📊.
Illustrating the cascade of issues arising from poor monetary policies, highlighting escalating crises and social decline 📉.
Emphasizing the transformative potential of Bitcoin in creating a stable economic environment 🌐.

Key Takeaways

The quality of our money is the root cause of many global issues 🌍.
Perfect money has seven key characteristics - scarcity, verifiability, portability, divisibility, durability, fungibility, and censorship resistance, which contrasts with traditional currencies 💰.
Mismanagement through money printing creates wealth inequality and social issues 🏦.
The concept of the 'Big Red Button' represents the destructive power of altering money supply without accountability 🔴.
Bitcoin, described as the 'Satoshis,' is presented as a viable solution to fix these monetary problems and improve global social health 🚀.

Overview

In this creatively structured presentation, Joe Bryan uses an island allegory to dissect the profound impact that monetary systems have on society. Initially, two distinct societies are depicted to illustrate the contrast in outcomes between restrictive and flexible monetary policies, shedding light on how the stability of money can impact every facet of life.

The narrative introduces a pivotal moment with the so-called 'Big Red Button,' which serves as an allegory for the federal choice to print money. This action, meant to address governmental deficits, results in negative consequences, such as the depreciation of currency value and compounding economic and social crises, emphasizing the pressing need for responsible fiscal management.

The presentation concludes with a powerful proposition: embracing Bitcoin (‘Satoshis’) as a revolutionary way to rectify economic mismanagement. Through this digital currency, Bryan suggests, we can circumvent the systemic issues inherent in traditional money systems, enhancing economic health and stability globally.

Chapters

00:00 - 00:30: Introduction In the chapter titled 'Introduction,' the speakers, Joe and another unidentified person, discuss the existence of a significant problem. The conversation implies a sense of urgency and concern, noting that many people remain unaware of this issue. The discussion is characterized by a tone that suggests the importance of the problem, regardless of personal opinions or beliefs, indicating the need for awareness and addressing the matter at hand.
00:30 - 03:00: Understanding the Problem The chapter titled 'Understanding the Problem' opens by discussing the universality of the problems we face, noting that regardless of one's politics, religion, or location, once a problem is seen, it cannot be unseen. This realization is likened to passing through a one-way door, symbolizing irreversible awareness. However, there's optimism as a solution is proposed, and the speaker expresses a strong passion for sharing this solution, which fuels their hope for the future. The chapter poses a challenge: emphasizing that people can't fully appreciate a solution without first comprehending the problem.
03:00 - 09:00: Perfect Money and the Island Story The chapter opens with the narrator discussing the creation of a presentation intended for friends, aimed at explaining a certain problem. The narrator assumes the audience has basic human life experience and was encouraged to make this presentation available to a wider audience through video format. The chapter sets the stage for discussing the unspecified 'problem' that is suggested to be complex and multifaceted.
09:00 - 15:00: Divergent Paths: Satoshi vs. Fiatello This chapter explores the contrasting paths of Satoshi and Fiatello, capturing a prevalent feeling of unease. The narrative delves into how many individuals sense that things are not progressing positively in their personal lives and the broader world context. It highlights the growing perception that life is becoming increasingly difficult for most people.
15:00 - 23:00: Consequences of Money Printing The chapter explores the interconnectedness of various aspects of life and illustrates how these elements, though seemingly unrelated, are actually linked through the quality of money. The narrative is driven by a story of a group of intelligent individuals whose ship becomes wrecked on a deserted location, symbolizing the broader implications of financial mismanagement.
23:00 - 33:00: Long-Term Effects on Society In this chapter titled 'Long-Term Effects on Society,' the story unfolds on a deserted island, isolated from the rest of the world but rich in resources. This island is inhabited by people from an advanced civilization who are cut off from their previous society. They have the knowledge to rebuild society from scratch, even starting with nothing. As they begin this process, one of the crucial decisions they face is establishing a system of trade, which necessitates the creation of a new form of currency. This foundational step highlights the importance of economic systems in societal reconstruction.
33:00 - 43:00: Erosion of Trust and Economic Decline The chapter "Erosion of Trust and Economic Decline" opens with a pointed discussion about societies' ability to create their own monetary systems. The focus is on the theoretical concept of 'perfect money' – a monetary system designed with ideal characteristics. The criteria for 'good money' are introduced, totaling seven key elements. An essential characteristic emphasized is scarcity, implying a fixed supply perpetually. This sets the stage for further exploration of trust and economic systems as the narrative progresses.
43:00 - 55:00: The Real-world Parallel and the US Dollar The chapter discusses the concept of perfect money in a real-world context, emphasizing that perfect money should be easily verifiable by everyone at no cost. It should also be portable, divisible, infinitely divisible, and durable, meaning that it does not deteriorate over time and can exist indefinitely. These characteristics are paralleled with real-world currencies like the US Dollar, bringing into question what truly constitutes an ideal currency.
55:00 - 62:00: Solution: Separation of Money and State In the chapter titled 'Solution: Separation of Money and State,' the transcript highlights key properties that a form of money must possess. These include fungibility, ensuring that every piece of currency is identical and interchangeable with any other piece. Additionally, it must be widely acceptable, allowing for global transactions between any two parties. Most critically, it emphasizes the need for censorship resistance, where individuals maintain full control over their currency, making it immune to unauthorized confiscation or transaction blocks. This underscores the importance of individuals holding their money independently, without interference from any centralized authority.
62:00 - 65:30: Conclusion and Call to Action In the concluding chapter titled 'Conclusion and Call to Action', a conflict arises between two leaders over the concept of perfect money. Satoshi believes that the characteristics of perfect money should be immutable and unchanging throughout time. On the other hand, Fiatello accepts the idea of perfect money but questions the rigidity of its characteristics and implies a need for adaptability. This sets the stage for a debate between stability and flexibility in economic systems, urging readers to consider which approach leads to optimal financial governance.

What's The Problem? - Joe Bryan Transcription

00:00 - 00:30 [Music] Hey Joe. Hey. "What's this all about then? Well we have a problem and it's a very big problem, and unfortunately most people aren't aware of it. It doesn't matter what your personal views are,
00:30 - 01:00 your politics, your religion or where you are, and once you see the problem you can't unsee it. It's like a one-way door. But thankfully we also have the solution and it's this solution that I'm so passionate about sharing and it's what makes me just so optimistic for the future. The challenge I find though is how can anybody fully value a solution unless they understand what
01:00 - 01:30 the problem is. And so, I put this presentation together for some friends and it assumes no knowledge other than just being a human being with some life experience and they encouraged me then to make this presentation into a video so I can share it with everyone. So, I hope you enjoy. Welcome to 'What's The Problem?'. So, what is the problem? Too many unfortunately. I probably could
01:30 - 02:00 have written twice as many things down on this slide. I think we all have that sense of unease; we all feel internally that things are not moving in the right direction in our lives, in the world. Things are becoming harder not easier, and I think for most of us we would
02:00 - 02:30 recognize some elements of these things on the screen as touching our lives directly, or indirectly, and what I'm here today to show you is that all these things may seem unconnected but they're really not. The primary cause of all of these is the quality of our money. Now, we're going to do this through a story. So, imagine there's this far off world where you have hundreds of smart people traveling on a ship and this ship gets wrecked on a deserted
02:30 - 03:00 island. This deserted island is so far from everywhere else they're effectively cut off, but the island is resource rich - it has everything they could possibly need to rebuild society. Because these people have come from an advanced civilization they know exactly where they're ultimately going to get back to but now, they're starting again with nothing. What's also clear is that they need some way of trading with each other once they start to rebuild so they prioritize deciding on what to use for their new money. And suspend your
03:00 - 03:30 disbelief slightly further, in that they have, despite not having anything, the ability to create whatever monetary system they want with whatever characteristics. So the first question they need to answer is - what makes good money? There are seven things. So these guys have the ability to create whatever they want so instead of just creating good money they create the perfect money. The perfect money is scarce which means it has a fixed Supply forever and is instantly
03:30 - 04:00 and costlessly verifiable by everybody. So if everybody can check it whenever they want at no cost then you can verify for yourself that nobody's creating any extra. It needs to be portable so you can effortlessly move and store it with negligible costs. It needs to be divisible, and the perfect money would be infinitely divisible. It needs to be durable - it can't rot or go off. It can't deteriorate. So the perfect money exists forever.
04:00 - 04:30 It's fungible which means every piece is forever the same as every other piece. It needs to be acceptable so everyone anywhere can both send and receive. And the really important one is it needs to be censorship resistant - you hold it yourself. Nobody can take it away from you without your permission and no one can stop you sending or receiving.
04:30 - 05:00 So this is great, they decide on perfect money. But then there's a disagreement. Two leaders emerge from within the population. The first, Satoshi, he says, "Well, given these are the characteristics of perfect money, that's going to be true today, true tomorrow and true forever, so we should lock them in, and you should never change. Whereas Fiatello - he says, "Well I get that. I get these characteristics of perfect money and I totally agree *but* what if
05:00 - 05:30 there's an emergency? What if we need to change something? What if the people we put in charge of our money feel like it's not working and need to make an adjustment? I think we should have the perfect money, but we should also have a Big Red Button which allows someone to press it and change any of the characteristics if we need to. Of course, no one ever will, but just in case." This becomes an irreconcilable disagreement so a fairly drastic solution,
05:30 - 06:00 but they build a huge wall right down the middle of this island. On one side they create the currency called Satoshis, which is perfect money always, and on the other side are Fiatellos, which is perfect money but with the option to change it. Now this wall is so big it cuts off the communication and the trade between both sides on the island so effectively they're cut off from one another. So to begin with nobody has anything on either side of the island so everyone's starting from zero. Initially people have to be self-sufficient - each person is fishing for their food,
06:00 - 06:30 cutting down trees for their wood to make fires and also for houses, and they're also building their own shelters. Now even though they have perfect money there's very limited trading here because people are working hard just to satisfy their day-to-day needs across all of these goods. But people are different. Some people are better at some things than others and so people quickly realize that if I spend my time focusing on the things I'm good at and reducing the amount of time
06:30 - 07:00 I spend on things that I'm poor at then I can contribute more to society. I can increase the amount of goods I can provide to society in the same amount of time as the average person. So the wood cutter spends all his time now cutting down wood. He stops fishing, he stops building shelters and because he's spending his time cutting down wood, he increases the quantity of wood available to everyone else versus three people spending a third of their time each because he's good at it.
07:00 - 07:30 Not only does the increase in the quantity of wood available reduce the price of wood for everybody on the island the quality is also higher - he's better at doing it. He produces a higher quality output, so prices fall and quality increases. And not only that, he's not the only wood cutter, there are multiple wood cutters, so they're all competing to supply wood to everybody else and they're competing on price and in terms of quality. And now what happens is because the wood cutter needs other goods to survive,
07:30 - 08:00 he has to sell the wood to buy fish, he has to sell the wood to pay for the services of the home builder. So now everybody is actively trading in this perfect money. Because processes continue to improve the wood cutter can now satisfy the needs of the rest of the population for wood in a smaller amount of time. He can then take that time and think about his own processes, his own Innovations, maybe he can make cutting down wood even more efficient and if he does that it drives prices lower, it drives quality higher.
08:00 - 08:30 Maybe he reaches the end of his Innovation within his wood cutting and then uses the excess money and excess capital he has to invest in other people. Maybe he lends it to the fisherman who then builds a boat to increase the amount of fish the fisherman can catch for everybody. So, what happens over time in a free market with perfect money: *prices go down forever and quality goes up forever*.
08:30 - 09:00 So what people see on both sides of the island is that the purchasing power of their money starts to increase. Goods cost less tomorrow than they do today so the price of tomorrow is lower. The purchasing power of both currencies is increasing at about 3% a year and this lifts the quality of life. Life becomes cheaper and cheaper over time for everybody, not just those people who are most productive in society. But the key thing is *the money itself is becoming more valuable over time*.
09:00 - 09:30 That is, until these guys come along. So now because the society is growing and the population's growing both sides of the island elect a government. Now it doesn't matter if the government is left or right, big, small, up, down doesn't matter they are all the same - when it comes to this. However well-run the government is, inevitably it will hit a deficit at some point and that means
09:30 - 10:00 it's spending more than it's receiving. That could be through mismanagement, but it could just be through external circumstance like a natural disaster, or something like this. The causes are not important, but it will happen over the course of time, inevitably. But now we see a divergence across both sides of the island. Satoshi - he only has two choices here. To balance the budget, he needs to either raise taxes or cut spending,
10:00 - 10:30 or maybe a combination of the two. Whereas Fiatello, he has exactly the same choices... but he also has a Big Red Button. The important thing here is they're both up for re-election and Fiatello knows that if he raises taxes or he cuts spending it's going to cost him votes. So, just this time, he decides to press The Big Red Button and print a little bit of extra money for the government. Okay, so what are the consequences? Well, for Satoshi - not great. He cannot hide
10:30 - 11:00 those changes from the population because they're paying more in taxes or they're getting less back from the government from its spending, so he loses the election. But government reduces in size naturally so now overall the efficiency in the economy has increased but not only this - the social balance is improved within the economy because people now realize there is no free money.
11:00 - 11:30 Taxes need to balance spending. But the important thing is prices continue to fall and quality continues to increase. Now for Fiatello - great news, he gets re-elected and to start with it's consequence free. He thinks this is the greatest thing ever - I get re-elected and there's no downside... but something's changed. So, what's happened? Fiatello's pressed The Big Red Button which has printed some money for the government which has debased the currency.
11:30 - 12:00 So, what does that mean? He's increased the amount of money in the economy overnight, but he hasn't increased the amount of goods and services available in the economy overnight so now there's more Fiatellos washing around compared to yesterday for each piece of the goods and services. This has three major impacts; the first is a distortion of price signals, the second is that increases input costs for businesses, and the third - it leads to asset inflation.
12:00 - 12:30 That first one, distorting price signals, well, prior to Fiatello pressing The Big Red Button here all price changes in the economy were purely a function of demand and supply because this was a free market with perfect money. But what's happened now is that money has entered the economy, not to everybody equally or even in proportion to the amount of money everybody holds. The money has entered the economy via the government. It enters via the government into the accounts of companies and people connected directly or
12:30 - 13:00 indirectly to the government. So, what Fiatello starts to see is price increases in certain parts of the economy. So the signal to everybody else in the economy is that there's an imbalance of supply and demand just in these sectors. So you see a misallocation of capital by the entrepreneurs in the market caused by the money printer but not only that, it's human capital, it's smart people, it's active people who are trying to be productive - they get
13:00 - 13:30 sucked in closer to the government and not servicing the rest of the economy. The second is that business input costs increase. Now every single business in Fiatello's country has at least a human being and some raw material inputs like energy or even some harder raw materials. Because the costs of these things have gone up these businesses now need to try and change something about their product to maintain the small profit
13:30 - 14:00 margins that ensure that they can continue in business. The first and most obvious one is just to pass on the price increase to the customer. The second is to keep the price the same and the quality the same but just shrink the product so instead of having 100 grams it's now 90 grams but for the same price. Or the third one is to reduce the input costs. This is where consumer inflation comes from. This is the only source of
14:00 - 14:30 consumer inflation - is the money printer, causing businesses to make these changes. But if a business passes on the price increase outright, or it shrinks the product and the customer now just needs to buy more of it to satisfy the fact that they needed 100 grams not 90 grams, both of those things reduce affordability. So the population is becoming poorer. They're going to have less disposable income despite buying the same as what they bought yesterday.
14:30 - 15:00 If instead, the business chooses to keep the price the same, the size the same, but just reduce the cost, the most obvious thing to do is just to fire people which leads to unemployment. Now there are fewer people with jobs which reduces the overall affordability for the population in Fiatello's world. But not only that, now the government's got a second issue it needs to solve - how does it help support all these people who are recently unemployed? But the most insidious way is for companies to reduce their input *quality* and so what
15:00 - 15:30 Fiatello starts to see is there's a rise in obesity across the population because the food that was previously fresh and had high quality ingredients is replaced with ever lower quality ingredients and more industrialized sludge. This leads to obesity; it also leads to a myriad of secondary health issues which causes a Health crisis and now the government has to step in and figure out how it needs to support all these people who are now unhealthy.
15:30 - 16:00 The third is asset inflation. Since Fiatello pressed The Big Red Button asset prices have been going up. The stock market goes higher and higher and higher, house prices go higher and higher and higher. He thinks, "I'm some sort of economic genius". But they're going up in price because he's just created more Fiatellos, so anybody who knows that there are more Fiatellos in the system of course wouldn't sell their asset for the same as they did yesterday. They would take into account the fact that there were just more Fiatellos in the system,
16:00 - 16:30 so this is what is driving these prices up. But this asset increase is good for the people who own the assets but not for the people who don't. He has a wealth inequality begin to emerge across the economy and not just that, because house prices are now more expensive the rent is more expensive. So he sees increased levels of homelessness and this increased levels of homelessness, guess what, requires more government intervention to try and deal with. Now asset prices are flying,
16:30 - 17:00 the stock market's on fire, the prevailing perception across the population is, "Why would I not invest? Why would I just keep the money? I should be buying the stock market, I should be invested, I should be buying a second home to rent out, I should be buying speculative assets because they never go down, they just go up. If I don't invest, I'm a fool." Because the assets are going up the banks are pushing ever more leverage for people. Pushing bigger and bigger mortgages to individuals, loans to companies but now that house prices have gone up
17:00 - 17:30 and now that everyone has more debt, at the same time as families are struggling with affordability of day-to-day life, it's now much harder to buy a house. So families where previously they could have one main earner and afford to buy a house with a mortgage can't anymore. You now need both parents working. Both parents working to afford the mortgage and afford to live, and when that happens people spend less time together. You start to see the breakdown of
17:30 - 18:00 the nuclear family. They spend less time with their children. They can afford to have fewer children. now because you have declining birth rates Fiatello starts to see a change in his demographics across the population. Fewer children are being born whereas the older generations are living longer, and he now starts to realize that the promises he made to these older generations about being able to retire at a certain age or having a good quality of life, or defined income, in their retirement can't be delivered upon.
18:00 - 18:30 For those not lucky enough to be able to buy a house who are maybe stuck renting, whereas before they could think about renting the same place for 3 years or 5 years - because the rent goes up too much every year, now they're thinking about one year maybe two years. You're planning less for the future maybe you're putting off getting married, putting off having children. You start to prioritize today at the expense of tomorrow. People see that saving their Fiatellos never gets them anywhere because the asset prices are going
18:30 - 19:00 up too quickly - they'll never be able to buy a house. So if you'll never be able to buy a house then prioritize 'living your best life' and going on holiday and spending more, enjoying yourself. But for those not fortunate to be in this position for those that every day has a struggle, feeding themselves and their families, housing themselves and their families - they're stuck on a treadmill of decline. Every day is harder which leads to a growth in addiction,
19:00 - 19:30 various forms of addiction, including opioids across Fiatello's Island which leads to yet more of a Health crisis and yet more intervention from the government. And all of this leads to a mental health crisis across the population. Now the government finds itself in a position where because it pressed The Big Red Button it's created a whole range of secondary issues that now it needs to step in and try and solve. Because it has to step in and try and solve these things it means the government needs to divert more capital
19:30 - 20:00 to these areas of the economy which, again, is a greater misallocation of capital which pulls more entrepreneurs into the wrong parts of the economy through the distortion of the price signals. Between the increased leverage in the economy driven by the Banks and the misallocation of capital it sows the seeds of the next emergency... and Fiatello has only one choice - and that's to press The Big Red Button again! Now he's starting to realize that actually this wasn't consequence free.
20:00 - 20:30 Now he's lurching from crisis to ever bigger crisis. He presses The Big Red Button which debases the currency, which leads to bigger government and more involvement in everything. And now not only is the government bigger but the government has spawned a series of parasitic Industries attached to it. Big Pharma who are increasingly involved with the government to try to deal with the symptoms, but not the causes, of the various Health Crises. Never incentivized is to actually cure a patient just to treat them long term because a healthy customer is a lost customer.
20:30 - 21:00 Big Food pushes for ever lower food standards across the economy. The Military-Industrial Complex pushes for ever greater spending on defence both at home and on foreign shores. Wall Street are up to their eyeballs in debt and now so leveraged that the government wants to protect them. They can't be allowed to fail - because if the banks fail, the population loses their money, the government falls.
21:00 - 21:30 The government also continues to make unproductive investments. Investments trying to deal with the secondary issues it's created but also investments driven from whatever political ideology the government has. All of these things are effectively now *crony corporatism*. It's very hard to see where the government ends, and these industries begin. The success of the government is deeply intertwined with the success of the industries. These industries start to ask the government to
21:30 - 22:00 become regulated. "You need to regulate us to protect the public". But this regulation all it does is make competition harder. The one, two, three companies in each of these areas and now very very close to the government. They supply the people for the regulator, when the regulators end their tenure, they go back and work for these companies. It stops smaller companies coming in and competing with them to then supply the government on better terms with higher quality product. So quality starts to decline and prices start to rise which,
22:00 - 22:30 of course, is great news for these companies because profit margins go up. What happens then is the media gets captured. The government is teetering to maintain social stability. It's now protecting these industries at the expense of the population rather than the other way around and because of this social balance that it needs to maintain it can't allow Free Speech, dissent, alternative opinions or questioning of anything
22:30 - 23:00 that undermines the legitimacy of the government in anyway. Not only that, the biggest advertisers for the media companies are companies connected to the government, so the media companies increasingly don't want to upset their advertisers. When you have a captured media and a military industrial complex fomenting strife on foreign shores you get the creation of the Forever Wars. And the wars themselves are actively supported by the Fiatello population because all they
23:00 - 23:30 see in their media is that "we have to do this because it's the right thing to do." And, between the Forever Wars and the banking system bailouts and the excessive debt it leads to the next emergency but this time it's just so much bigger, and the only choice he has is to press The Big Red Button again. But this time it's different. It's a massive erosion of trust. Every time he presses the button more and more people become aware of what is happening, and this goes round and round and round until something breaks.
23:30 - 24:00 And now Fiatello is starting to get quite worried. So what's happening to the money? Well, instead of increasing 3% a year in purchasing power he's now losing 7% a year because he's printing 10% a year of extra money. Not only that, he's undermining the productivity in the economy by distorting all the price signals. So what happens to the Fiatello island population? Well, the poor who are on fixed wages, have very low-income security
24:00 - 24:30 and no assets - they can't win. They just get poorer every single year. For the middle earners, who have fixed salaries and mixed income security - they're not the first to be fired - they often have a home, but they can never sell the home and realize any gain because you've got to live somewhere, if you sell one home you've got to buy another home. You might have some Investments, but they are becoming the new poor. Well surely the wealthy are doing well? Their income is largely from asset yields
24:30 - 25:00 from operating businesses or investing. Their income security is high because they can't get fired but for them it's death-by-a-thousand-cuts. They see their wealth as a number continue to increase but they feel like they're getting poorer. Life continues to get harder and that's because the rate at which they're earning money, their yield on their assets, is below the rate which Fiatello is printing money so they're slowly having their wealth
25:00 - 25:30 siphoned away by the politically connected. Those that are government funded and have fully insulated income security and, perversely, their income goes up and becomes even more valuable as society continues to decline because the government needs more and more intervention. It's really just industrialized theft at this point from everyone else in society. But now so much time has passed that the wall down the middle of the island starts to crack,
25:30 - 26:00 and it starts to crack in such a way that both people and money can start to flow from one side to the other. So, on the one side you've got the Satoshis increasing their purchasing power at 3% a year, on the other side you've got the Fiatellos that are losing 7% purchasing power every year. So, what happens and why? What Fiatello starts to see is that money and people start to leave because they don't trust their ability to save using Fiatellos, they want Satoshis.
26:00 - 26:30 Okay, so this sums it up: on a Fiatello standard your money is stealing from you whereas on a Satoshi standard the whole world is working 24/7 to increase your purchasing power. But now the Escape valve is open. People realize they can't save in Fiatellos so they start selling Fiatellos to buy Satoshis, so the Fiatellos decline further in value, triggering yet more budgetary and currency crises for Fiatello to deal with... and the
26:30 - 27:00 only choice is to press The Big Red Button again! But this time printing money is not enough because value is leaking out of Fiatello's side of the island. He needs to change another characteristic of perfect money which is to remove the censorship resistant nature of it. The Fiatello population used to be able to hold the money themselves, now Fiatello says you're no longer allowed to hold it yourselves. You have to put it in the banks.
27:00 - 27:30 The banks are going to hold everybody's money. The population now feel that they are guilty until proven innocent for making any transaction - the banks will check every transaction to 'protect you' which means when people are trying to buy certain things, including Satoshis the banks now say "No... it's because of this, it's because of that, it's because of the other". He restricts the flow of capital out of Fiatello's side of the island. He may even just
27:30 - 28:00 create explicit capital controls - "You're now no longer allowed to buy Satoshis at all". But people always find a way and more and more people are waking up to what is happening, and the cycle continues. The important thing is the wealth, and the people flee to the uncorrupted money. Now Fiatello is beginning to really panic So where does it end for Fiatello? Well, if he's lucky, with sustained inflation allowing
28:00 - 28:30 the government to inflate away its debts and slowly siphon away the wealth of the public. This may even border on hyperinflation. I say "lucky" because it's very hard to do that and maintain social cohesion and something is likely to go wrong. It will *definitely* be asset seizures. Now that all the money is held in the banks one day Fiatello will decree that "we're all in it together" and the banks will hand over a
28:30 - 29:00 proportion of that capital to the government. Just like in Cyprus in 2013 - if you held over €100,000 in the bank, overnight 45% of that went to the government. The public was effectively bailed in to bailout the banks and the government from their own mismanagement. It also happened in the US in 1933. They made gold holdings for the individual illegal,
29:00 - 29:30 and this lasted for almost 40 years. If you held more than $100 of gold and you were caught: $10,000 fine or 10 years in prison, and this was when $10,000 was a *huge* amount of money. Fiatello sees a rise in political extremism on both ends of the spectrum. The government never explains to the population where these problems are coming from. They don't tell them it's because of the money printing via The Big Red Button. They control the
29:30 - 30:00 media. The government is protective of itself. They don't tell the population the truth. They don't help the population join the dots. They don't explain the link from The Big Red Button to the issues. They blame it on the 'greedy businessmen' or 'the billionaires' or 'that foreign dictator' or this or that. Then what happens is, people ask for more help and more support from the government to deal with all of these issues and so the only solution is the government's involved in everything. At every step of this journey
30:00 - 30:30 the solution to all the problems has always been *more government involvement* and so the people see these problems and vote for more government involvement to solve them... or something worse. But in all scenarios people want to hold Satoshis and not Fiatellos. So if we go back to that list of seven characteristics of perfect money - Fiatello
30:30 - 31:00 only changed two of them. The other five are still exactly the same and look where he ended up. Now the reveal (and some of you may be slightly ahead of me here). The US Dollar is just a terrible version of the Fiatello. The US Dollar is corrupted on the same two key issues that the Fiatellos were but on the other five it's materially worse as well.
31:00 - 31:30 In terms of portability - it's easy to carry, easy to pay but it's not great for merchants. You pay instantly but the merchant doesn't get the money for multiple days and that's if there was no fraud or chargebacks. It's divisible but only to a point and removes the ability to do microtransactions which will unlock potentially completely different economic models. It's durable, in digital form, but we have a cash component, and that cash component is constantly
31:30 - 32:00 undermined. The notes are reprinted in terms of design every 15 or 20 years so there's no ability for an individual to save outside the banking system. If you put notes under your bed or under the floorboards and leave them 25 years they're worthless. Those types of notes have gone out of circulation, so you need to take the notes every 15 or 20 years to the bank hand them in and get new notes. They recentralize everything periodically, out of choice.
32:00 - 32:30 They're fungible which means every dollar is the same as every other dollar... until it's not. Some countries around the world have already introduced what are known as CBDCs - which is central bank digital currency, but effectively it's programmable money. A specific dollar may have an expiration date - you need to spend it before this period of time elapses or else it disappears. Or a dollar may have only specific use cases - you must spend this dollar on X or Y, or you must not spend this dollar on ABC.
32:30 - 33:00 The Dollar is very acceptable around the world, but you can't pay with it everywhere and typically most national currencies are only acceptable in their own country. And the US has a major Fiatello problem. This is the budget for 2024 - the budget not the actuals which of course were worse -a deficit of almost $2 trillion on a spend just over $6 trillion. That's a loss in one year. Now to
33:00 - 33:30 put that in context they'd have to double the amount of individual income taxes for everybody in the US just to balance that and on the cost side they can make some improvements but there are some key things there you just cannot remove like the debt interest. And the consequences? Well, this is a chart of the amount of money in the system in dollars and the amount of debt issued by the US government over time. Now I've labelled 1971 on here because
33:30 - 34:00 that's when the US came unilaterally off the gold standard. Prior to 1971 you could give your dollars back and receive gold in return. Nixon took the US off the gold standard and every currency in the world followed and since then it's allowed the US to print unlimited amounts of money to satisfy its own needs. The red chart on the left-hand axis shows that amount of money is now $22 trillion and on the right hand side you've got the US government debt which,
34:00 - 34:30 even a month later, this chart is now out of date - it's now $36 trillion! And this doesn't include the unfunded liabilities - the amount of money the US government has committed to pay at some point in the future through Social Security, Medicare, Medicaid etc but it hasn't had to write the cheque yet. Now depending on how you calculate that it's between $50 and $200 trillion, on top of 36 trillion of debt!
34:30 - 35:00 The only way to solve that is more money printing. The money printer is systematically destroying the purchasing power of the Dollar. Now you may think I have something against the Dollar. I absolutely don't! The Dollar is the *best* that we have. I would love to be able to use the Dollar, as would the vast majority of people around the world but unfortunately most people just aren't as lucky. This is the performance of all the other currencies versus the Dollar over the last 10 years. Some have near enough disappeared completely and some absolutely have,
35:00 - 35:30 they've ceased to exist. The people who saved their economic energy in those currencies have seen them vanish. The unfortunate reality here as the wonderful Lyn Alden repeatedly says Is "Nothing Stops This Train". There is no way out for governments. The only solution is to keep pressing The Big Red Button. And so, the conclusion is a quote from Hayek who was an economist of the Austrian School,
35:30 - 36:00 "The history of government management of money has except for a few short happy periods been one of incessant fraud and deception." And he said this in 1988. Now, that would all be pretty depressing if there wasn't a solution but thankfully there is. The only solution here is *the separation of money
36:00 - 36:30 and state*. The government cannot be allowed access to a Big Red Button. And Hayek again and this time the quote is from 1984. "I don't believe we shall ever have good money again until we take it out of the hands of government, we can't take it violently out of their hands. All we can do is by some sly, roundabout way introduce something they just can't stop". Brilliant quote.
36:30 - 37:00 So, I hope now with these links between The Big Red Button and the money printer and all of these issues that we see in our lives today that it's now much clearer that if we can fix the money we'll fix the world. The good news here, and this is the best news, is that Satoshis are real and even Fiatello is now a convert.
37:00 - 37:30 The solution is Bitcoin. One Bitcoin is 100 million Satoshis in the same way that $1 is 100 cents Now, you may feel you know about Bitcoin already because of something you've been told by friends or you read in the media. I would encourage you to start again. When we derive our information from the media or from people who have derived
37:30 - 38:00 their information from the media, and that media is connected to the people who own and benefit from the money printer, it tends not to be necessarily the most accurate information. So don't trust, verify. Come to SatsVsFiat.com - we've set up a website which helps people get up and running. If you're just getting started, maybe even never heard of Bitcoin before, come sign up and we'll send you some information so you can learn about it for yourself and make your own decisions about Bitcoin.
38:00 - 38:30 If you're further along and maybe even call yourself a Bitcoin already then amazing. This is not a commercial enterprise for me, this is a charitable one, and so any support from within the Bitcoin Community, or from further afield, I would love to receive. If people want to give this talk themselves to their friends or just share it more broadly or even volunteer to give a presentation as part of our group, then just get in touch. And the third one is inviting us to speak - we want as many people as
38:30 - 39:00 possible to see this presentation because the information contained within it about what the problem is is so important. So we'd love to speak, if you'll have us, at schools, universities, industry conferences, events, even at workplaces if people are interested to learn more. So please just get in touch. Here's the QR code which will take you directly to the website. Alternatively, if you are on X and want to come and say hi and join the conversation with us then please, please do.
39:00 - 39:30 Firstly, thank you for watching. I hope you enjoyed it. Please share this with anyone you care about. And, if there's one thing that you take away from this is I hope you will remember that: if we fix the money, we'll fix the world thank you [Music]