SLP285 Jeff Booth Bitcoin vs Fiat “Extend and Pretend”

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Jeff Booth, technology entrepreneur, author and bitcoin advocate rejoins me on the show to talk about: 

  • Bitcoin 2021 conference experience
  • Fiat system extending itself
  • MicroStrategy Bitcoin buying
  • Macro investors
  • Surveillance coins (CBDC) and what they would mean
  • Supercycle or no

Jeff Booth links:

Previous episode:

Sponsors: 

Stephan Livera links:

Podcast Transcript:

Stephan Livera:

Jeff welcome back to the show.

Jeff Booth:

Thanks. Great to be here.

Stephan Livera:

So Jeff you’re back in Canada, I saw all the photos from Bitcoin 2021. I’m feeling so much FOMO that I missed out on it. Tell us a little bit about what the experience was like and where your head’s at with Bitcoin these days.

Jeff Booth:

Bitcoin hasn’t changed at all. The experience was something that is hard to even put into words. I left the place thinking this is what it looks like when people aren’t manipulated by money. This is the best in human nature coming out. And so it was truly humbling to be a part of it — in that community truly humbling, like almost tears to your eyes, that the type of people, it matched everything else across the board. It was just [an] amazing experience.

Stephan Livera:

Yeah, that’s really cool. And I think it just, sometimes it feels like stepping into the future, right? Because when you’re there, everyone’s able to transact in Bitcoin and Lightning straight away. And yeah, everyone’s just doing everything over lightning and you really feel like you’re in the future because we feel like we’re able to do this now. Those of us in this world, there’s us, Bitcoin people and it’s like the rest of the world hasn’t woken up to this yet.

Jeff Booth:

I think it’s even more than that. So yes, that, and when you’re around a whole bunch of people that are first principle thinkers that are kind of deep across philosophy, a whole bunch of different pieces, and have really chased this to the ground and understand where the world’s going and everything else, those people are accountable. They’re learning all the time. Quite honestly, it blew my mind what I got from the experience of just being around all of these just wonderful people. Yes. Complete different cast of characters. Crazy. You could call me crazy though, too, but at the core, something that was really sound across everybody, so it was a really wonderful experience.

Stephan Livera:

That’s really cool. And so, were there any points where you thought your thinking shifted like that someone was giving a talk or there was a panel? Were there any points in your mind that actually shifted or you thought, yeah, that’s actually a new learning that I took from this recent few weeks.

Jeff Booth:

Yeah. Probably not a new learning on the core thesis, on Bitcoin or anything there, but more [on] how fast this was moving, how fast it was. So I would be lying if I said that I thought anywhere in my playbook that El Salvador would come on now and Jack would bring a country on. So that was new. It’s happening faster than I thought. And so they had adoption of lightning and everything else, and people actually seeing what this means is moving faster than I thought. And so all different types of thought around where, where that goes. But no, generally the thesis nothing changed there.

Stephan Livera:

And with the El Salvador adoption, I mean, there’s been no shortage of commentary on that, but I think it’s also interesting that well, legal tender laws are one thing, but it’s also about having a new group of people who become HODLers, who are holders. And I think that is an interesting aspect. And it’ll be, obviously, this is like historically unprecedented, right? So we’re going to see over the next few months, we are going to see how many people actually take it up. How many people start holding and there’s that aspect of merchant acceptance of Bitcoin, but then also how many of those people then go on to become orange pilled HODLers, right? And

Jeff Booth:

I’m not expecting specifically El Salvador to change the momentum specifically on Bitcoin price anytime soon. What I am expecting — and this is what just really, it was reinforced over and over again — it is super difficult to stop technology that empowers human beings, because you have to lie more to be able to stop it. You have to deceive. And so this technology that’s at the core of this, that does that, is bringing on more and more users faster and faster and faster. Yes. Some of them will hold. Some of them will come on and then think about it as, oh, it’s an altcoin or something like that. And then they’ll do a loop and come right back to Bitcoin and understand what it really is, but the message underneath this and what this means. I don’t think it can be stopped now.

Jeff Booth:

Not that the war is going to get any easier, but the advantage is now on Bitcoin’s side, because you have to — We’ve already talked about this. This is out of my book, you have one side, you have technology, that’s driving us one way, trying to drive prices down. And the only way to essentially stop that is concentrate, control, and government more and more and more. Unfortunately, lie to be able to do it by printing money, really stealing from people more and more and more it concentrates wealth and power on one side. But as we get further and further away from that Delta and one system is moving this way that the system is feeding back of both sides. So one system has to have more and more corruption and more lies to protect it. And one system is really the truth showing all the time, that thing is causing more people to look and say, what is this? Where as they might have been totally opposed to Bitcoin and not wanting to look at it. Now they’re starting to realize that their entire system they live in is based on a fraud and they’re starting to come on. And so once that starts to happen, it just reinforces on itself. And that’s what I think that’s what’s happening.

Stephan Livera:

Yeah. It’s a really good comment there around the corruption and the lies that are required to sustain the Fiat system. And it’s interesting because we look at some of fiat economists and the Bitcoin haters out there, and they will constantly be having to backpedal, right? Because in the early days, it was only for drug dealers. It’s only for crypto anarchist libertarians. It’s only for cypherpunks, it’s only for small companies. Now they’re saying, oh, it’s only for small countries. Right? And they were saying, oh, it’s not legal tender anyway. Well, now it is. Right?

Jeff Booth:

Play that forward. And so a lot of these things that there’s a lot of people outside of Bitcoin that still believe that noise because you’re caught in a system that reinforces it all the time. All the news media reinforces it all the time and everything else. So there’s many people including fiat economists that actually haven’t chased this all the way down to the ground. They’re just parroting what they’ve thought from somebody else. And so there’s a bunch of people, even in that world who are becoming, coming, moving over. I think what causes the most pain in the Bitcoin community is the people that know didn’t say it anyways, right? They know for sure, it’s all based on a lie and it’s all around a power privately. I got [information] and I won’t say who, but it’s somebody that is fairly well known on a direct Twitter exchange on a DM exchange that would be that camp and talking about why it needs to be an altcoin, so essentially he could control the rules. And I thought, what hypocrisy, what complete hypocrisy? And so for me about with Bitcoin, is it solves that by removing control of ego around people, it solves that issue and forever or hopefully forever, that’s a big deal. It’s a huge innovation. And I think people underestimate what that impact means. It means it doesn’t mean that society isn’t going to, like if you took the anarchists on one side and if you said it’s all citadels, I think that that really scares people in the existing system and makes them worried about what Bitcoin looks like, because they would think in that it’s just a transfer of power from these bad people. But the truth is what the anarchists don’t see as well. They’re measuring government by the size of government today and all the fraud in government today, when the system itself would change that government as a by-product would have to move fraud above the line, right?

Jeff Booth:

And tell the truth. And it would have to get way smaller as a result. And the world would look very different. So these opposing forces are getting worse and worse. And then when you think about a whole bunch of byproducts of the opposing forces, when you just think about in a personal relationship Stephan, if you trusted somebody and they deceived you and they completely lied to you for their own personal gain, would you trust them again?

Stephan Livera:

Yeah, of course not. Yeah.

Jeff Booth:

Of course not. So what’s happening is there’s a whole bunch of edge case theories about what the system is doing, and these people are doing to manipulate further away and a whole bunch of Bitcoiners end up looking like they’re wearing tinfoil hats on a whole range of issues, because you have mistrust in the money layer. And once you have a mistrust in the money layer, as a consequence, you have to have mistrust everywhere else. And so now, if somebody that is manipulating money is telling me one thing well, I know that it’s a lie. Am I going to trust them on anything? So a whole bunch of what people are jumping around and around around these, all these edge cases and conspiracy theories are actually a result of that.

Stephan Livera:

Yeah. So I think part of it is also to your point earlier about people trying to protect the system, or at least create an old coin where they can be the king of their own little land. It reminds me as well of people who get ideologically committed to certain things like one example. And it’s quite unfortunate in some ways, because Steve Hanke is one example of this kind of guy. Like he’s meant to be a free-market economist guy, but at the same time, every time there’s a problem in one of the developing nations, he is out there talking about why they need to have a currency board and go to the US Dollar. And any time you bring up Bitcoin, he’s like, oh, it’s a speculative asset. And oh my God, it’s going to die. And it’s like, aren’t, you meant to be pro freedom pro giving people a choice instead of mandating this whole currency, board, US Dollar, et cetera, the certain commitment to earlier, things like he’s got a hammer and everything’s a nail, right?

Jeff Booth:

And that’s it protecting their base of knowledge at all costs, even the truth, even whatever happens, because let’s investigate that for a bit specifically. Cause when you see El Salvador, a lot of people in the traditional media went highest crime rate, all of this nonsense and everything else with very little understanding that crime is a second order derivative of people not being able to pay their bills because there’s a shitty economy. Even if you have a US currency and a US currency requires, so their labor is just as expensive as US. How would they ever compete? So you have a whole bunch of crime sitting in a system because people are forced to a life of crime to pay for their family and everything else. And then we buy us that and we say, those are bad people, people aren’t bad or good, like across all of us, we have good and bad and everything else. And if the system forces us to that side. It’s just human nature. And that’s it. And that system all around the world, forces many people into a life of despair and crime and everything else. So it’s a system problem. It’s not a people, people are rational actors in a broken system. And, but again, what Steve’s saying, who did you say again?

Stephan Livera:

Steve Hanke.

Jeff Booth:

He’s actually misjudging the second order symptom from the root cause and Bitcoin fixes these things. It provides a free market system around the world, solves these issues at its root.

Stephan Livera:

It’s interesting as well, because we see other people who are perhaps famous or influential in some other field. And then they start talking about Bitcoin and they’re getting it really, really wrong. And then to add to that, they often have an ego about it. And they think they get offended when people come back to them and say, no, actually that idea was already tried and it failed for X, Y, and Z reason. And that’s why it’s not a thing in Bitcoin. Bitcoin is this, you need to humble yourself a little bit.

Jeff Booth:

If you have an ego going into Bitcoin, you’ve got a problem. Because people in Bitcoin that want it to be about them, and it’s not about them, it’s about a monetary layer that removes that from the system. So that’s what’s so important and that’s actually, what’s critical around some of the best Bitcoiners. It also — now I’ve got to be careful here — but some of the toxicity as well. And it’s not. Actually, funny enough, I’ve come way more on-site to understanding the toxicity, because when you understand something that [other] people don’t see, and you’re constantly barraged by a bunch of misinformation, a lot of times you become toxic, or if you feed, or if somebody becomes a hero of the community and then can manipulate results has become a bit, because they’re a hero of the community. You don’t want heroes of the community. You want people advocates of this, then hopefully you just kind of move back to bring more people on because it’s better for you. That’s what you want. So I totally understand why somebody with an ego where it’s all about them is propelled. Like they’re killed by this community.

Stephan Livera:

It’s a challenging thing because in some sense, the ego is what pushes us to actually work hard and produce and be productive, or really good at explaining things, or really good at doing a Bitcoin business. So that can be a good thing in that way. But then on the other side, on the flip side, it can be a downside. If people let it get ahead of it, get the better of them. And then they start thinking it’s all about them. And obviously in Bitcoin, we have this idea that there’s no person who speaks for Bitcoin, but we can advocate it. And you might be a well-known Bitcoin advocate while at the same time, not speaking, quote unquote for Bitcoin.

Jeff Booth:

And I think for me, a lot of these wars were already fought before I even understood Bitcoin. No, I understood that early on, but I was too busy in my business to be able to really dig dead. So a lot of these wars and former heroes that tried to take the network and make it about them and create a different altcoin so that they could rule it. Have always, or have been fought and Bitcoin keeps thriving throughout it. And I think that’s actually the core in this. I totally understand why it’s not about an individual person. It has to be about the community. But for new people that are used to having influence and making rules for other people, it’s a harsh reality. It’s a harsh, harsh reality.

Stephan Livera:

Yeah, exactly. And so we are seeing a lot more people coming into Bitcoin and I’m anticipating, I mean, personally, I’m anticipating a lot more people coming in over this next six months or so, and we’re seeing moves being made. Right? So for example, Michael Saylor just — I think as we speak, he’s probably doing that $500 million buy, and he’s also come out with this new idea of the 1 billion MicroStrategy shares stock issue. So then he could buy more Bitcoin with it. And so I’m wondering, do you have any thoughts on that?

Jeff Booth:

So I love what Michael Saylor is doing. I love it. So he has a thesis. He is all in. His existing company, If you look at the returns and what that would look like, it’s pre-Bitcoin, and what he’s doing in Bitcoin two radically different stories. For 22 years, that returned almost nothing. And now it’s returning as a staggering amount and he knows where this is going. So I think that ‘everybody should put every dollar of wealth into it’, might be a bridge too far. I understand why you’d want to, and that’s a risk return sort of scenario. And I don’t think anything could beat Bitcoin going forward, but what if I was wrong? And so I just leave that tiny possibility, what if I was wrong? So that I wouldn’t want everybody doing everything they ever had into it.

Jeff Booth:

And then you have to ask yourself, how much do you really need? If you had one Bitcoin there’s 21 hundred or so billionaires in the world today there’s 49 million millionaires. If you had one Bitcoin, you have more than most people could ever have. There’s not enough Bitcoin for everybody. So how much do you really need in the new world? So that leverage and everything else — again, because we’re just as likely if human beings are biased and two, we need more and more and more, then if that’s true for all humans. And it’s probably true for us too. And so we could easily get something and say, leverage, leverage, leverage, and if we win that bet, then does it make a difference if you’re 0.5 to 0.2 in the richest part of the world, is that going to make a difference in your life? And so I just think about, so what he’s doing, I completely understand it. And it’s a huge — Wow. And he’s good for the community. And he’s good for advocating for what this is. And I hope he makes trillions, should everybody go a hundred percent? I don’t know.

Stephan Livera:

Yeah. That’s a harder question. But I think to some extent it is part of the using the system against it, right? It’s like the judo move because in some ways stocks are getting bid up and up and up because obviously all the cheap money that’s flowing out there because of Fiat money, as we’ve mentioned on the podcast many times, and then in some sense, this is helping turn that in favor of the person acquiring more Bitcoins because they’re sort of saying, okay, fine. You’re just going to bid up the prices of the stocks. Well, we’re going to issue some more stocks and then use that to buy more Bitcoin. And then long-term, that’s probably a good move for everyone involved.

Jeff Booth:

For Michael Saylor and his shareholders in this, I think it’s a brilliant move and how much he’s brought knowledge of what’s happening from structure because of that move that people keep on biting on and keep on doing it. And he wins every time, and so do his shareholders. As a result, it’s brilliant. And again, as he’s doing it, you’re bringing — that’s what kind of, where they said, when a system has corruption in its base layer and it has to be more corrupt for the structure to — then you’re bringing more people, wait, is this what’s happening? And more people are starting to understand that game.

Stephan Livera:

And I guess part of that plays into this idea that now of course if hyperbitcoinization happens too quickly, well then yeah, that could be, and we spoke about this the last time is that that could be a real issue, but at the same time, it could also help wash away some of the problems of the current system. So it’s kind of like a balance there because if we can help people and help them into this new world, the Bitcoin world, then arguably it might help people get away from the Fiat problems and stop the fear, at least start this process of fixing society. So it’s kind of like, how do we kind of manage that transition? Not that you or I can manage that ourselves, but in terms of how can we help people?

Jeff Booth:

That’s actually why I love places like El Salvador and a whole bunch of Nigeria and a whole bunch of other countries that are starting to really take this serious because it’s bringing on hundreds of thousands and millions of people into this new economy at a rate that’s increasing faster and faster and faster. It’s really hard to see that stopping with all of the innovation. So it should keep on expanding and so ideally you want for Bitcoin is this to be broadly held.

Stephan Livera:

Yeah. And that’s right. And I think that’s a very important point you raised there about being broadly held. It’s a very important word because a lot of people get overly attached to the idea of, oh, where can I spend this Bitcoin? What merchants will accept it? No, what matters the most is the holder network effect. And that’s where I think Michael Saylor has been brilliant. He’s been an astonishing mind and astonishing explanations of why you should think of it as a reserve asset. You should be trying to hold it. And the most important part is getting people out there. Of course, being able to spend your Bitcoin matters too. But holding is probably the thing that most advances this process. And I think Michael Saylor and others have helped. And so I guess then the question is, who do you think follows next? Do you have any ideas on what other kinds of people are coming?

Jeff Booth:

On that chess board, it’s hard to like, because I think it could be anybody. I think there’s probably 20 different countries that could be next. And I think they’re going to fall like dominoes as you start to do this, I think the IMF is scared and they rightfully should be. And I think you’re going to get some pushback here, but it’s not going to be enough to stop it. And if they really tried to stop it would move underground and it would keep going just like countries that have stopped and or tried to regulate it and everything else, it just moves underground and it actually probably moves fast.

Stephan Livera:

Yeah. That’s been the story that apparently even with places like Nigeria, Pakistan — great example as well, because basically, yeah, they try to sort of regulate or slow put the brakes on this thing, but then it just, all these people start using it peer to peer and you just can’t really stop this thing.

Jeff Booth:

I said that to a politician in Canada and I said, listen, if government came after this in a big way, I know I’d just get on a plane. I take my businesses and I move somewhere else because I know what’s coming. It’s actually sending you a signal that you’re controlled by the system and you can’t get out. In fact, this is connected to something. I don’t think I’ve ever said this on a podcast, but I’ve thought a lot about [this] recently. Are property rights themselves and our infatuation about owning a home, a derivative of a system that has to leverage us into control. So that you’d put a 30 year mortgage and you’re locked into a system that makes the government bigger and bigger and bigger. And when you think about property rights through that lens, not that you can’t make a lot of money in that system, but when you think about that, you can’t take the property with you and the property can pay tax to a different rate, or it can be taken from you at some point in the future, Bitcoin is literally the only property, right? That a type of right that has ever existed that can’t be taken from you.

Stephan Livera:

That’s a great point you make there Jeff, because, and it may not be that there’s like a dark boardroom with all the evil people in the suits who are trying to intentionally make this happen. It’s more just like the incentives of the system kind of push it in that direction, right?

Jeff Booth:

And then you start out with something that might look like you could buy a home early on and you needed 25% down payment or 50% down payment. And you could only take a mortgage for 10 years and then 15 years, and then 20 years, 25 years, and then 30 years and the amount of money that you took to be able to buy that home, all leveraged, which actually cascaded into a system of control around housing that felt good for that you have to be a part of that system that kept you locked into a system, not realizing that you would become a slave to the system that you’re working two jobs that you’re working, everything else to be able to have a house that was really a property right? To make sure the system designed kept working. And it’s just an interesting, again, not bad people, not anything else, but as the design of a system that actually created that made people not even realize that they were stuck and they would do anything to get more stuck in a system so they could have a home so that they could be more of a slave in that system. That sounds edgy and everything else, but it’s worth exploring, right? Because that’s what that system does. And you can’t take your property with you. So it could later on be taxed, it could be taken at a different rate. It could be everything else. And so when I think about Bitcoin compared to that system, it’s a no-brainer.

Stephan Livera:

Absolutely. And so even with housing, because that’s often been part of the great American dream, the great Australian dream, and Canada has a crazy, well, certain parts of Canada obviously have crazy housing markets. Even here in Australia, it’s like a huge property cult you’ve got to own a property. And then what happened is what the deal that say the baby boomer generation and maybe some of the gen X people, the deal that they got is much like the multiple of their income that they had to pay to buy a home was much, much less than what it would be for say a millennial or a gen Z and many millennials and gen Z people are basically, they’re kind of checking out of that system almost because they feel like it’s not even in their reach anymore, or that like having to really reach and go leverage to the hilt to even have a chance, right? And it becomes…

Jeff Booth:

You know this from my book. But again, this lies into corruption of money against the natural order of things. So, but it’s why we get confused. So in the last 20 years it took — before COVID, $250 trillion of debt to run a global economy of 80 trillion thereabouts. And so you think about $250 trillion and you go, wow, that’s a big number. Could that ever be paid back? But on further investigation you realize 185 of that 250 trillion came in the last 20 years. so now just ask yourself, what would housing would be worth without 185 trillion of stimulus over 20 years? And you’d see the answer that the system itself that’s driving the housing prices up is a desperate, it’s all connected to the same system that’s levering essentially making your dollar worth more and trapping you onto a net into your time into being a slave for wages on that debt, to be able to get that property right? To be able to stay in the system while it’s getting further and further away. It’s not even close to what real markets should look like. It’s all an illusion based on the printing of money or the manipulation of money.

Stephan Livera:

And I’ll tell you what, one thing that’s interesting as well. It’s like bear markets are illegal. Property bear markets and stock markets are illegal, right? As soon as it starts to dip, it’s become a political football, right? It’s become a thing where they’ve bet their life on it. They’ve put their life savings on these properties and stock market to some extent. And so they don’t want to see it fall. So now the government will try to juice the economy again, lower the interest rates and keep the party going.

Jeff Booth:

Let’s imagine they don’t, it’s not a whole bunch of bad people. Now some are are delusional and everything else, but let’s imagine it’s not a whole bunch of it. Let’s just give the benefit of the doubt that they’re doing, what they can, what would you do?

Stephan Livera:

Well, yeah. It’s a difficult situation, obviously. I mean, knowing what I know, I’d be all about Bitcoin standard, all this, but obviously to the point of your question is assuming you don’t have that option. Well, they’re probably just going to have to try to, and I think in practice, this is what they are doing. They have things like macroprudential controls. They might try to play that balancing game of having a low interest rate, but still trying to keep the affordability working for some people. And in the end it just ends up being a very substandard outcome.

Jeff Booth:

Yeah. So, but it’s worse than that. So, now imagine two lines like this 30 years ago, you would have had from technologies, call it a 1% disinflationary power. And so interest rates were lowered and lowered to try to outrun prices coming down. And why? Because if prices came down, debt gets more expensive and debt has to be reset. You have colossal wipe out everything just keeps on. And because there’s nothing backing the debt, except for counterparty risk, there’s no gold backing it. It’s just the credit is the problem. And that debt getting more expensive, just cannot happen in that system. So 30 years ago you had, I’m just calling it 1% negative disinflation because of that. And so what central banks has tried to stop it by lowering interest rates and lowering them again, lowering them again and lowering them again.

Jeff Booth:

You were running out one line, deflation wanted to move this way. And one line had to move the other way. So you kept lowering interest rates causing debt binges and causing credit crisis of 2008 caused by the housing crisis of 2008, that you paper over and remember 500 billion at that time. And marches on wall street, breaking capitalism and everything else. It was just a function of what we’re talking about. And now the numbers are 5 trillion and 10 trillion, and they have to be 20 and 30 trillion in the future. And the further and further out from that point you go, you’re further and further away from the truth. So, here the fall, if you allowed deflation to happen today, every single bank would collapse. Every government would collapse. Every institution would collapse because it would keep spiraling. You would have a deflationary spiral that would keep going until everything reset.

Jeff Booth:

And so it’s not bad people, it’s a bad system that they’re caught in that they don’t know how to get out of. What I was so frustrated with after writing my book, there hasn’t been one person that’s actually given that a real credible first principle you’re wrong. And so what I wanted to do with writing the book is start because when, as an entrepreneur, when you understand the problem, all of the energy goes into the solution, right? And you think, okay, how do I solve this? And looking around, I really thought, okay, the book would be a impetus to try to, how do you solve this? And all I’ve seen is a system protecting itself and getting worse and worse and worse. And so Bitcoin becomes the solve for that.

Jeff Booth:

Because the system can’t solve it itself, but even on a central bank, can you imagine if the US came today, I’m not saying, hang it in the future. And openly said, we’re moving to Bitcoin standard. Everything does the same thing that I just said, everything just collapses. So you almost have to pretend more and keep the system going as in the background, people are moving to a new standard. And that’s actually why on Bitcoin, I think it’s the best path, or potentially the only path for a trend, for a peaceful transition to where we’re going.

Stephan Livera:

Yeah, right? So it’s like the saying — extend and pretend, right? That’s what you hear. Some people say about the fed and whatever macro and things like that. And so, yeah, maybe at some level that’s essentially what’s going to happen, right? The Fiat side, they’re going to try to keep the party going as long as they can. Meanwhile, anyone who’s smart is going to be buying Bitcoin and HODLing Bitcoin. And for hopefully when the dust settles, we’ve got a at the end and who knows when that is, that might be 10 years from now. It might be 15 years from now. We don’t know. But when the dust settles, then hopefully we’ll be living in a more long-term sustainable future on a Bitcoin standard where things are more honestly priced. And we have a more honest system, right?

Jeff Booth:

That’s right. So with where technology is going, you must have a digitally native currency that allows for deflation every, every single other path, besides what I just said, results in a concentration of wealth and power. And if you play the other scenario faster and I’m including every altcoin in there, why I wouldn’t ever buy one, it’s not because you couldn’t make some money into it. It’s a bigger deal than that. Because I do understand why would somebody else would want to centralize control. I totally get it, but Bitcoin might be the last chance for humanity to avoid that trap. So if you concentrate wealth and power through what we’re talking about against technology moving, the other way, technology is supposed to free your time, it’s supposed to give you more for less.

Jeff Booth:

That’s what it does. Any inflationary policy against that concentrates wealth and power as a by-product. And once you start doing it, government has to get bigger and bigger and bigger. And can you imagine a world where you have government control with artificial intelligence and robotics, and a very few very small number of people controlling what’s good for everybody else? What can be given to you can easily be taken away and look at countries around the world that live in dictatorships and everything else. And you’ll see the truth of what I just said. That’s what the truth, that’s what it looks like. I believe if we don’t have a Bitcoin standard.

Stephan Livera:

Right. And to touch into that particular thread as well, surveillance coins also known as central bank, digital currencies or CBDCs in the corporate press, they’re all on about this. Right? And so that may be the vector for exactly what you’re saying and who knows. Yeah.

Jeff Booth:

It’s just like gravity. We have two different operating systems and to run to, so I understand what they’re trying to do. So they’re pushing up inequality. So if they print a bunch of money and real estate prices go up and a whole bunch of people lose out on that, the people that lose out because of manipulating money, think it’s the people that got rich off the real estate or technology companies. And they go to government and they say, give us more money. Prices are up and so rents are higher than they should be because of that same thing and everything else. And so then government says, yes, because you’re the populist movement. You have more votes. We’ll go print more money to give to you not realizing that you’re actually stealing from them to do. But people will vote there all the time because they’ll vote for the short term benefit and miss the fact that really what they’re doing is concentrating power in few hands by a result of the short term.

Stephan Livera:

Yeah. And if we don’t successfully make the case, I mean, I see it, like Bitcoin is going to win, right? It’s because like, it’s just kind of the direction it’s going to go. But there will be an impact for people who don’t correctly understand what’s going on, right? If people don’t perceive the threat of surveillance coins or CBDCs, what are some of the ways they could control people? They could say, okay, we’re going to give you this stimmy, but you’re only allowed to spend it on this kind of food or this kind of thing. Because in our infinite wisdom, our technocratic overlords have decided that you must live in the pod and eat the bugs and all this stuff, and they will make your life contingent on your compliance and your papers, please.

Jeff Booth:

Yep. And once you see what’s happening here kind of on both systems and you see Bitcoin truly is about empowering people. Whereas every other system, I wish this wasn’t true, but it’s about power over other people, dominion over other people. And most of what you’ll see in Bitcoin is nobody wants dominion over somebody else, right? They want a network that provides fair rules than everything else. Yeah. So a whole bunch of people are going to get rich over that were in earlier. Yes. A whole bunch of [people] — so it’s not just for wealth for your family or anything else, it’s way bigger than that. But the real battle is about power over other people, dominion over other people, you make all the rules or empowering other people. To me, that’s the difference,

Stephan Livera:

Right? And becoming a Bitcoiner is actually learning that difference. And then actually being out there trying to educate or build or develop or review code or in some way, contribute to this new world where we’re trying to give everybody financial sovereignty, as opposed to, like you said, dominion, controlling them and mandating what they may spend their money on, what they may eat, where they may go, where they may travel, whether they’re on lockdown or not all these things, it sort of flows through into those other aspects of it. And I think it’s also interesting to see, because those of us who are kind of down here, the bottom of the rabbit hole and not — well, not the actual bottom of the rabbit hole, but those of us who are orange pilled and we’re watching the people who are coming in and learning. And so one really interesting example is a Paul Tudor Jones who I think last year he was saying, oh yeah, 1% Bitcoin allocate 1% Bitcoin. And now just recently he came, I think, oh, 5% allocation to Bitcoin. What do you think of this? And who’s going to follow him after this?

Jeff Booth:

So here’s the thing on Bitcoin. And that’s what it takes you. Because once you see the truth, you can’t understand why everybody else doesn’t see it. Look at Michael Saylor. Michael Saylor, look at his tweet from before he found it. Okay. A couple of years before he thought it was a scam.

Stephan Livera:

2013. Yeah.

Jeff Booth:

Exactly. Yeah. Then he’s only been in a year and he allocated a bit, a bit then more than, more than more. And now Paul Tudor Jones is doing the same thing. I did the same thing. There’s a belief that once you’ve seen this, that you always knew it and the truth is you didn’t and neither did I, as you start to investigate it. And by the way, we need to take that. And so for humility to allow other people to see it, that’s actually, what’s, I think important too. Again, it’s going to happen anyways, but do you want more people to join the ride and do want broad based holders and understanding for humanity?

Jeff Booth:

I do. I personally do. So I try to act in a way that I think, okay, there’s a hope. I’m going to give people the benefit of the doubt. They just don’t know. They’d be preconditioned into a world that looks really different and they have no clue. And so it’s not just that they’re ignorant. It’s not that they’re in a fog because they haven’t seen it in the same way. Michael Saylor might’ve been in the same way. I might’ve been in the same way. You might’ve been Stephan and same way. And as you start to open your eyes to this, you gain more conviction and you want to bring others on it. There’s a huge delta between understanding this or understanding this thinking. It’s just about making money and going around the loop and the theory and all these other altcoins and everything else. I’m thinking it’s a casino to coming back to Bitcoin. Some people make that loop. Some people don’t, but as they go through this this path.

Stephan Livera:

Yeah. Yep. And I think the other interesting thing is that obviously people like Paul Tudor Jones are highly influential, right? So he’s very wealthy. I think the Forbes estimate for him was like 7 billion is his net worth, right? And then not just his own money that he’s putting in, but it’s also who follows him. And what does that do to the conversation around, if we look on the mainstream kind of corporate press — financial press, where they come out and say, oh, Paul Tudor Jones said this about Bitcoin, and it gives you a property right and then it starts that process for other people. And now that his followers and other people who are reading those news articles might then also go on their own journey.

Jeff Booth:

And like El Salvador and other countries, now it makes it okay to look deeper and like, okay, something’s here. This sounds too good to be true. This sounds real. Whereas the rest of the world, it sounds like it’s getting more and more unstable and it’s more and more of a fraud. It sounds more real. And so I see the behind the scenes, you would not believe the number of people that I’m talking about in very, very influential places. And so they’ll all be at different level of path and everything else, but that is what’s happening. And I have no problem doing that because what I’m saying is true, right? It happens to be true. It’s integrity, it’s everything else. So I wouldn’t put a whole bunch of stuff in for me personally, on Bitcoin, most of my wealth kind of from companies and everything else, technology companies are kind of the byproduct of the other system. So for me personally, on Bitcoin, it’s not, and I’m not trying to create a business in Bitcoin. I don’t care if my book sells one more copy. It doesn’t matter for my own personal wealth or family. Well, I care about this for a way bigger reason. And so I think about it as a donation of my time for something that hopefully makes the world better for my kids and in a perfect world, as more and more people to understand this, you just back out just because you don’t need to be there anymore because the new system is taking over and it’s adopted so that if I could sculpt my own personal journey in there, that’s what it would look like.

Stephan Livera:

Yeah. And as everyone goes on their own journey, just like you did and, I did, and Paul Tudor Jones is going on that journey going from 1% to 5%, typically, as the price runs up, you start caring more about it. You start actually reading more into it and potentially putting more into it because you’re like, well, you know what, actually, I think this thing is real, this thing is working like it is a new system that I could be a part of. And so then I think the other question then is as we go towards the end of this year, there’ll be a of new people coming in. But also a lot of those new people have not been through a big drawdown, right? So some of us who’ve been in Bitcoin for a long time, we’ve been through multiple 80% drawdowns. And I’ll tell you what, that is brutal. That is really, really brutal. And I’m not precluding that outcome happening again, right? I think it could happen again we might have a crazy run up later this year and then have an 80% drop again. And then people will be like, oh, Bitcoin is dead and all the same things. But I guess what’s your view on that idea, how many people are going to get rekt in the next year or so?

Jeff Booth:

Yeah. And that’s actually why long-term holding and buy average cost in keep doing it. I’ve met lots of people who were at the very peak of the last cycle who kept buying all the way down and now they would teach that to lots of other people. So, but it will happen. By the way, the upward volatility is actually a good thing. It becomes anti-fragile, literally, and every cycle, actually, if you’re ever heard any, there is no bad news, right? For the [inaudible] and everything else. Every cycle brings more attention up down sideways. Every cycle brings more and more attention to this asset class. And people get more and more curious about it. The volatility brings on more traders, right? That brings on more other people to be able to say, okay, because traders make a ton of money off volatility that brings on other people too, in the whole system underneath, actually, those are some of the beautiful game theory and design of everything into this that actually feeds back on that system is the thing that makes it anti-fragile.

Stephan Livera:

I guess maybe a bit more of a fun speculative question all the discussion around super cycles, where do you stand on this kind of on this idea — on this notion, do you think it’s going to happen, not going to happen, or you don’t really have a view?

Jeff Booth:

Or are you talking about this cycle being a Supercycle? I suspect it’s not going to happen on this cycle and not that it couldn’t, but if I said the probabilities of it happening on this cycle, I don’t think the probabilities are high on this cycle because there’s a whole bunch of things that are likely from the existing system. Remember, this is still a small asset class in general, so lots more people onboarded, but the existing system could extend and pretend a long time and on the way there. So today trying to inflate that now, when rates go up, which it’s almost like we’re move accommodation and rates will back up, good luck because the minute rates go back up, everything collapses, and you see all the leverage exposed and you have that deflationary spiral. So you’ll get a whole bunch of head fakes there.

Jeff Booth:

If let’s just imagine, forget the Supercycle for a moment and say, let’s argue the other side, if central banks right now would raise interest rates, Bitcoin would collapse too. As everyone went raced to cash, feeling like a depression’s coming, and I need to have cash. And just like in March of 2020, the same thing. The same thing with that, your race to cash. And every asset would… Because the assets are so outrageous, just caused by printing and it needs more printing. So, if governments did that, you would have the opposite of the Supercycle, but then after that, the governments would have to actually print way more and more because if they kept that, it would keep on winding banks would fail everything else they could go in and nationalized banks maybe. But you’d have a shit show. So on the other side, you’d have to have a massive amount of easing and a lot more to be able to keep the party going. So this game is going to be played out and it’s kind of country by country. What would China do? What would you do as a rational actor? If somebody said they’re not going to pay them back in real dollars?

Stephan Livera:

Yeah. That’s going to be a problem.

Jeff Booth:

Would you buy their bonds? But you wouldn’t buy their bonds. You sure wouldn’t buy the bonds. You’d take their money and you’d buy rare earth minerals. You would lock up the supply of where the world’s going on technology, and you’d make sure critical assets were locked out. So some of the geopolitical, all of the geopolitical risks that you’re seeing, people are talking about it as being part of like, oh, where did that come from? And not realizing these are just signposts on a world that will look like this naturally on the existing system. So what is likely to happen as a result of that is governments. How do they control you on that? They create a bigger enemy, right? It’s not your fault that China took your jobs or this or that, or this happened. And then look, they’re locking this supply out from you, trade barriers and barriers and everything else.

Jeff Booth:

So we’re living in an interconnected system that we will, bias what we hear in the media and we’ll think, oh yeah, those bad people, when it’s all a system, that’s actually mostly driving all of this. And that’s a long way around on the Supercycle theory, but what I would — my base case is not this time on a, supercycle. Not that we couldn’t see a rise to 200,000 this year on Bitcoin. Not that — it may be more than collapsing, but the existing system is not going to die like that.

Stephan Livera:

Like that. Yeah. I’m with you there. I think I’m aligned with you on that. I think it’s possible, but unlikely this cycle. And to your point earlier about the signs were there all along, right? It’s just that how the media, or how the government will try to propagandize to try to, as you say, extend and pretend that there are all sorts of things that can be done there. And I guess one other interesting thing I’m wondering if you’ve got any thoughts on this idea is our dependence on semiconductor chips, right? So I know right now, TSMC is the big dog in that world. And we need — obviously from a Bitcoin perspective, we need chips, mining, and just technology in general, right? Phones, cars, whatever, you need, we need these chips. And so I’m wondering, do you see that situation improving anytime soon? Or do you see it like its going to take some time?

Jeff Booth:

Those factories take longer to spin up and the production around say rare earth mines and everything else too. So some of these things take longer to spin up, but I would say this has been known for some time. And some of the in behind the scenes, those things are spinning up. So there’s no solve for it immediately. but the supply and demand in the market, right, it creates — if you have these single point failures, the market typically solves it.

Stephan Livera:

Right. And as we’re saying some factories and there’s talk of factories being set up in other countries. And hopefully over time, the Bitcoin miner demand for space in those in those factories is more consistent. And so they will start to give factory space to the Bitcoin mining manufacturing companies as well, rather than giving it all to say apple as the tier one, et cetera. So that’s an interesting dynamic that we’ll see play out over the next few years maybe. But I think the message then is really is, let’s all strap in for the long haul I’m strapped in for the long haul. Let’s get ready. It’s not going to happen in two or three months. It’s going to be a long time but that’s –

Jeff Booth:

But Stephan, what an exciting time to be alive. If you think about all of these different changes that are happening at light speed, and you think that for the first time in human history, that you could put money to be decentralized and is not one person’s control cause gold wasn’t, it was always the threat that it could be confiscated, right? This is actually this is potentially the first time in history that you actually have this tied into where technology is moving and everything else. It’s a super exciting time to be alive, super, super exciting. And that’s actually what I see in most of the companies I’m working into to be able to work with companies, in an early startup phase, where investing your time or resources or money into the company, you can generate 300, 400 times your money on it and do good for humanity. It feels pretty special. So the world’s changing really fast and for curious people, that kind of, aren’t afraid of that change they want to explore it and say, where does this go? What are the new rules look like? What does that look? Just abundance, abundance everywhere.

Stephan Livera:

Yeah. So certainly we can be optimistic about the future if we have our eyes on the prize and focus on these things. So I think it’s probably a good spot to finish up here. So listeners make sure you follow Jeff on Twitter. You can find him, his Twitter @JeffBooth. And of course, check out his book, The Price of Tomorrow. Is there anything else that you’d like to shout out there just before we finish up, Jeff?

Jeff Booth:

No, it was just great seeing you again. I wish you were in Miami, but next time we’ll have to get together.

Stephan Livera:

I’m going to get out of here sooner or later, and I’ll be traveling around soon. So thank you for joining me, Jeff.

Jeff Booth:

Thanks.

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