We look at the economic problems of cracking down on bitcoin, and how that's working out for governments trying it. What can we learn from prohibition of drugs & alcohol? Will India's recent ban on bitcoin be as big a historic mistake as staying on the silver standard in the nineteenth century?
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THE BITCOIN STANDARD TOOLKIT/SPONSORS
I couldn't help noticing, Turkey is going crazy, and I wanted to find out what you would have to say about what's going on there, because I don't know.
Yes, honestly, I don't really have anything informative to add beyond it being one of the hyperinflationary national shitcoin. I don't really particularly follow Turkish politics; I don't really know what's going on. I know that the president sacked the chief of the central bank, and that's what caused their shitcoin to tank. The general idea of governmental shitcoins being very bad for you, I don't really have much to add to this. Ahmed might be following! Do you have anything to share with us about the Turkish shitcoin? If you measure inflation in terms of how much the currency has been destroyed, I think Turkey might be the overall winner of the 20th century. I think their currency was debased more than anybody else, because at some point they knocked off six zeros from the currency.
I think it was in 2001. They moved from the Turkish Lira at that time, which was at an exchange rate of 1 dollar for 2 million or 1,5 million, and they changed it to the new Turkish Lira, which was 1 million to 1. Supposedly, when they moved that, it was supposed to mean an era of monetary improvement, and indeed it did! To be fair, the period from 2000 until 2015 or so, the Turkish Lira held up pretty well, and the Turkish economy was doing quite well because of that. The Turkish Lira was pretty good in terms of its performance. It wasn't devaluing very quickly, but now it's beginning to get back into that old familiar pattern. It's amazing, no matter how much changes in politics, politicians always find a way of abusing the printing press and destroying the currency, and they always find a way of blaming it on the other guy. That's just how it's always going to be, sad.
Well, it's not sad anymore because bitcoin fixes this. I know there's a telegram group in Lebanon that now has something like 8,000 people on it who are trading, which is huge. A few months ago, it was nowhere as big as that. It's taken a while, but I think it's beginning to take off now. More and more are familiar with it, more and more people are realizing that it could be useful. It is, in a sense, undermining of the ability of the US imposed sanctions, but the way that I ultimately see it is, if the US tries to fight it, it would be counterproductive - if they try and ban bitcoin and fight it, I think it would be counterproductive because it would just make those countries collect more and more bitcoin.
It seems to be that the way things are going is, the US is open to bitcoin, and in a sense, it makes sense because if bitcoin was going to continue to grow, Americans today, because of their magic money printer - their magic fiat printers, they're able to buy up a lot more bitcoin than countries whose currencies are constantly collapsing. Even if bitcoin adoption is taking off in places like Turkey and Iran, even if there are a lot of buyers there and even if these places end up with more bitcoiners in terms of raw numbers than the US, it's not going to be more bitcoin than the US. It's not going to be more bitcoin than the people in the US. Because of the US, even though it might be fewer people that are buying bitcoin, they are probably going to be buying much larger quantities because they have a much higher purchasing power and because their currency isn't constantly collapsing.
That helps preserve their purchasing power to buy bitcoin with. You may think that it undermines the US in a certain way, but I can't really see it making that big of a difference. Particularly, there's another aspect here which is that in these places, people are most likely adopting bitcoin. If they're doing it to get around sanctions, or doing it to get around capital controls, bankrupt banks and corrupt central banks, a lot of that might not be a lot of long-term halving demand, of course there will be halving demand and there will be people that want to hold bitcoin for the long term. I think a lot of it is, say in Iran; “let's mine bitcoin so that we can use it to settle bills abroad, use it as a foreign exchange”, and a lot of it will get used up. Because of the hyperinflation, because of the fact that the Iranian and similar currencies are not being very valuable, people are having to resort to these other methods like bitcoin. It's not entirely clear that you have that significant amount of hodling to the point where it's going to allow these countries overall to benefit from the appreciation in a very meaningful way.
Perhaps I'm wrong but I think the fact that the US is open to this means that even if a smaller percentage of Americans gets into bitcoin, it's going to be much more bitcoin. Therefore, if you think the rise of bitcoin would undermine the US because a lot of the countries that are (???) to the US, have a lot of bitcoin. I'm not sure I would agree with that, but I could be wrong, who knows. What do you think?
Well, we also have some large institutions in the US invested in bitcoin, it seems that makes a huge difference too, it's not just individual hodlers, right?
The whole insurance thing, that puts not just Michael Saylor, but even in some ways more than that - what was the insurance company?
Right, yes. That's stability on a level that's so tight. If that's so tied in with the central banking system, I'm not sure how you would ever separate that, and that was a pretty big investment that they made. That seemed to me like a real turning point. Yeah, we got both feet in the water here!
But what you're saying is that countries with more unstable currencies where there have been collapses are going to have to use bitcoin to actually make settlements, like settle debt and make payments so they won't be able to hold it? Is that what you were saying?
Well, I'm sure they will hold it, but if you're going through a currency collapse, it's far more difficult for you to continue to hold significant quantities of bitcoin. The economy is collapsing all around you and things are bad. That's when you have to liquidate your gold and all your digital gold. That's when you have to resort to these financial statements. That's when the NEC get in and handle it, the NEC can get to an out! It's not very easy to keep hodling with all these price appreciations.
If you look at Venezuela, there has been significant bitcoin movement around Venezuela for the past 5 years or so, but we're still not at a point where it's made Venezuela rich. It's because most Venezuelans who get some of the appreciation will have to cash out some of it. The government, when it tries to catch those things, when it tries to control the mining operations and utilize bitcoin, when the government is doing these things, they start to run them less efficiently so, most things begin to fall apart and then they aren't as productive as they'd like to be. This idea that it's going to be the savior for tyrannical regimes, I think is misguided. I can't see tyrannical regimes being able to benefit so much from bitcoin rising.
They may be able to use it a little bit, maybe benefit from it but I can't see it being a major shift in geopolitics. If it does end up being like that, people are going to laugh about this podcast for a very long time!
Maybe not the regimes but the people?
Yeah, but again I think the same thing. The people of these countries, going through financial crisis, it's hard to save, it's hard to keep accumulating more savings. Even as bitcoin appreciates, they have to take profit and they have to sell parts of it because of bills to pay.
Yeah, that's life. Then we've got India, aren't they on the brink of completely banning it?
Yeah. It's absolutely amazing. Their ban seems to be one of the more draconian that we're seeing out there. It's pretty sad because, first of all, it's impossibly unworkable. What happens now, if you're a bitcoin holder and you travel to India. Somebody was asking the question, I saw it on Twitter, I can't remember who it was but, what if Elon Musk goes to India now, will he be arrested for owning a digital currency? It's a pretty insane law but we get a lot of insane laws all over the world. I think the impact from something like this is going to be, on the one hand, it will lightly delay the ability of Indians to adopt bitcoin, on the other hand, it will lead to the growth of bitcoin in a completely black-market kind of way. Rather than having large exchanges and the government being able to track bitcoin gains and tax them, what's going to happen is bitcoin will go into the black market.
People will be buying and selling bitcoin from one another with cash or with digital payment means. There will still be a bitcoin market, but the government won't be able to tax people. They're going to likely delay the adoption of bitcoin and reduce the taxes that they would have been able to make from it. Whereas if they had facilitated something like this, they would have been able to have a full registry of all of these exchanges and who they're selling to. They would know who has the bitcoin and then they could start taxing it. They could make some nice coins out of it. I think it's a massively dangerous counterproductive move by the Indian government. Ironically, I've used India as an example in my book of what happens when you pick the wrong monetary horse. India and China, during the 19th century, were on the silver standard.
A lot of countries were still on the silver standard at the beginning of the 19th century, but by the end of the 19th century, there was only China and India among the major economies of the world and major countries of the world. It was only China and India who were still on the silver standard. Specifically, the turning point was 1870 when Germany switched from the silver standard to the gold standard. That really signaled the end for silver. Once Germany shifted, you already had the major economies of the UK, US, Switzerland, France and Holland were all on the gold standard. When Germany joined, the balance had shifted decisively in the favor of gold.
From then on, everybody wanted to dump their silver and move toward gold. With that began the slow and steady demonetization of silver. At that price, an ounce of gold was 15 ounces of silver, today it's closer to 100. The value of silver has been dropping in terms of gold since then because gold became money all over the world, more and more countries started switching from the silver standard to the gold standard. China and India were very late in doing that and I think that was massively hindering to their economic development because they were on a weaker money that was constantly getting devalued next to the British Pound and to the European currencies that were backed by gold.
Everything in China and India was becoming cheaper for foreigners because the people's savings were continuously getting devalued in real terms because silver was being devalued, not because there's a central bank who can print silver but because silver miners were making more and more. Central banks all over the world were shifting to gold rather than silver, so the price of silver began to drop in real terms. China and India were, if you think about just how much devaluation is taking place, in that period, you can see quite a big problem, and if they had been on a gold standard, their economic fortunes would have been far better over time. It's really sad to see them repeat the same mistake a century and a half later, two centuries later.
Now, sticking to essentially the dollar standard at a time when the world is moving onto the bitcoin standard is going to be extremely expensive as well. If you think about it from the perspective of India, they're not on a rupee standard, they're on a dollar standard. The Indian Rupee is effectively backed by the dollar. It's essentially the dollar + India's country risk. That's what all fiat currencies are. It's just dollar + the country risk. The Indian Rupee is on a dollar standard so, what India is doing is effectively hitching all of its wagons on to the dollar and deciding: “we're going to have all of our people, more than a billion people, have no choice for a monetary asset that can be sent across borders except dollars". They can have gold or jewelry, but they can't bank with gold. You can't send gold in and out of the country, and you can't make payments backed with gold, so you have to stick to the dollar and the rupee.
At a time when the dollar could just depreciate against bitcoin, this could be extremely expensive. It's also quite telling when governments start thinking about banning bitcoin, they're generally the governments that have good reason to be afraid of bitcoin and that is because they generally have tenable monetary policies, and they provide terrible money. The Indian central bank, a couple of years ago decided to recall a whole bunch of its currencies and replace them with new currencies and at the time, it essentially froze the country's economy and really harmed people's lives. The idea was: "we're going to clamp down on crime and tax evasion". It ended up paralyzing people's economies.
If you think about it, no market provider would ever do something like that. On a free market, money wouldn't do this to you, it wouldn't stop working as a surprise for a couple of weeks. It's just scaring you into handing over your coins and not evading taxes. That's not what good money would do. It's like taking a technological leap backward when they do it this way. It saddens me to see it, but a lot of countries seem to be heading in that direction. Hopefully, with the internet and with communication being so strong, so fast around the world, these people in these countries will figure this out quickly and realize, you can't hurt bitcoin by banning bitcoin, you can only hurt yourself by banning yourself from bitcoin. You're just allowing others to accumulate more of the hardest money ever invented.
Is the motivation: "we're going to strengthen the rupee this way"? Is that the thought process there?
Yeah, I think it's tax evasion and not wanting to have to deal with currency that they are not printing. The people should be using the government's currency and not other currencies, that's it.
One of the things, maybe this is a little bit of a parallel, that I've been seeing in the United States - well it happens anywhere, anytime you criminalize something that people are naturally doing you create a hornet's nest. Right now, in the US, there's a lot of, because of the democrats being in power for instance, they would love to get rid of guns completely - well, then you're going to criminalize millions and millions of people who have been gunrunners for a long time. That's a long-standing thing as opposed to a new thing, but the example that comes to mind even more than that is what's happening with cannabis, right? Finally, certain states decided to legalize marijuana, which if they had done a long time ago, they could've gotten a lot of tax money from, but they didn't.
Then certain states start legalizing it, and then they tax it so onerously that they now created a second black market because of over taxation of something they should've legalized a long time ago. There's a cycle there, I think. I don't know how this would relate to bitcoin, but you could see the psychology of that, the more you try to control something, the worse it gets. The more you try to control things, the more out of control things get.
Yeah. I think the war on drugs is a great example of this, in the sense that without the war on drugs, drugs are usually a small problem in any particular society. Some people will be doing it but because it is generally socially frowned upon, they're not very public about it and they're not extremely vocal and outgoing about it and many people can essentially protect themselves from being exposed to this kind of world because it's just not very open. On the other hand, when you criminalize it and persecute it, you lead to publicizing this thing, you're telling people this thing is too dangerous. That naturally draws human curiosity.
When a human being is told they shouldn't do something, they immediate natural response is to question why? Why can't I? Why shouldn't I? Why shouldn't I do this? There's that aspect of it and then there's the other aspect which is that once it becomes underground and it becomes bought, then there's an incentive for people to provide it in a way that is criminal and illegal which then ends up, basically turning it into a way for criminals to finance themselves. You look at alcohol today for instance, alcohol is sold in little grocery stores, large department stores, small mom & pop shops, and restaurants. You can get it served like that because it's just a legal good that anybody can buy.
In those places, anyone can make money from the alcohol industry by offering a good product and by figuring out a way to make a good margin. You get a good product and you put it in a nice restaurant, and you sell it at a markup, and you make money from it. Anybody can do that! People are creative about how to do it in the best way, the nicest way and the most rewarding way to the customer. The way they can afford to give the customer the best experience at the most suitable price. Everybody is motivated to think of it this way, but then think about what the alcohol industry looked like under prohibition.
When you had prohibition, regular, normal, well adjusted, law abiding people were no longer interested in getting into the alcohol industry. The only people who were interested were people who are criminals, or who are happy to break the law and do things that are illegal and can get them into jail. These people start getting into this because that's where all the money is. The more things you criminalize, the more you drive sources of revenue for criminals. You're just essentially creating demand for criminals because there's always going to be demand for alcohol.
Whatever you do and whatever the government is going to do, in all times and places, people have always found ways around prohibitions on substances. As long as there is demand, there will be somebody who will supply it. All that the law is doing, it's not eliminating demand, it's raising the cost of meeting that demand, so it raises the price and makes it extremely lucrative for people to engage in criminal activity to provide this good for its providers. In a sense, market restrictions by governments never really work because ultimately, what they do is they drive the incentive for people to break them. They increase incentive for people to engage in breaking those laws.
We can apply the same kind of analysis to bitcoin, if you remember, in economics 11, we studied that book Forty Centuries of Wage and Price Controls by Schuettinger and Butler, Eamonn Butler. It's a great book that looks at all of these examples of governments trying to impose price and wage controls and failing miserably. In all the ways in which they tried to fight inflation by imposing all of these controls, which ended up backfiring spectacularly every time they tried it. There's no reason to think they suddenly the laws of economics could be subverted, and they could crack down on bitcoin. They're going to make it costly for themselves and for many of their citizens, particularly law-abiding citizens to get bitcoin. Given the way that bitcoin has been acting, given the price history, given from what we can expect from the future, we can see how this could be an extremely expensive mistake.
Well as you say, no publicity is bad publicity is how they've coined that. The other thing that struck me about what you're saying is, a lot of times they'll talk about, there hasn't been a war on bitcoin so far, but the war on drugs they mention, anytime they say war on whatever it's never a war on the thing, it's a war on people. It's a war on the people who are either using the illicit substance, or for instance if they say war on cancer, you can bet that any war is not going to enhance people's health. I don’t know, it's just always the opposite of what they say and it's always a war on the people themselves. It's not ever in support of a good outcome for the populace, is what I've noticed. When you see what's going on in India, they might as well be calling that a war on bitcoin. It's not likely it can end well for people there.
Yup, exactly. The history of all of these wars is quite obvious, fallouts, (???), poverty. All of these things seem to get a massive boost whenever they have a war launched on them by a government. A part of that is, first of all, you're providing the incentive for people to continue to do the thing by engaging them, and secondly, you're also providing an incentive for the bureaucracies that are charged with waging this war.
They now have an incentive in perpetuating the war, not in ending it. You see this in many places like the agencies that are in charge of drugs - the agencies that go after drugs end up essentially being controlled by drug cartels. The people who are in charge of prohibiting alcohol end up being in cahoots with the bootleggers. Simply because that job then becomes most valuable for the people who are affected by it. The bootleggers are going to find a way to get their guy into the jobs because that job is worth more to them than anybody else (???). You can see how the incentive for perpetuating this conflict and continuing to engage in it because what ends up happening is that once the bootleggers are in charge of the agency that clamps down on alcohol, then they need the war on alcohol to continue because that's how they keep out the competition.
The war on drugs, effectively ends up being an enforcement of the monopoly of the cartels that are in power, that are the most powerful. It undercuts their competition effectively, and it just allows them to impose a monopoly. All of these incentives that we see, all the goods in all the markets will apply in the case of bitcoin but will be almost a thousand-fold supercharged by the fact that bitcoin is digital and it's highly salable across space, it can be moved very quickly and it can be moved without government even knowing that it is moving, and it is highly salable across time, which means it holds onto its value very well across time.
We're watching a global dash of people wanting to accumulate bitcoin. The incentive for it is enormous. Governments have found it impossible, almost everywhere, to end the consumption of drugs. Drugs need to be grown and produced and processed and distributed in a far more complex supply chain than what needs to happen with bitcoin, which can be done on billions of global devices all over the world and can be done without even being detected. The notion of a government war on bitcoin is really, I think much more dangerous for the governments and their people than it is for bitcoin.
I had initially thought that bitcoin would be of tremendous value to people living in countries where their currency is collapsing, where there is hyperinflation and so on, but what you've said really indicates that it's a short-term solution, unless the country accepts the bitcoin or the control measures with the currency seize them, circling back to what you started out talking about earlier.
We should distinguish what I was saying was not that bitcoin won't matter to people here, it's people who are living in these places that have hyperinflation or very high inflation, they will benefit from using bitcoin enormously. It'll save their lives almost literally, not just their financial lives in some cases. They'll be able to maintain their wealth as everything around them falls apart or at least a part of it. It can make a huge difference. What I was referring to was the fact that it won't make a huge dent in the stock of bitcoins. In other words, these people in these countries won't have a lot of purchasing power to be buying a lot of bitcoin as compared to people who have stable currencies and stable paychecks, large savings and who can move large quantities of their life savings into bitcoin and acquire large positions very quickly. It's going to move them from being comfortable financially, to being very well off maybe.
It might not be that much of a transformative, or life changing or lifesaving impact on their lives as the people who live in hyperinflationary economies, but in terms of who is going to stack more sats, I think it's still going to be the people in the rich countries with the stable currencies because they're able to stack much larger quantities. The people in the smaller countries, they won't be able to hold on to their savings for much longer. As the price goes up and everything else in their portfolio falls apart because of inflation, recessions and so on, they're going to have to sell some of it, I think.
Also, initially I've thought about bitcoin as an opportunity for a tremendous transfer of wealth to happen from conventional holders of wealth to another whole sector of the population. Of course, we don't know exactly who is invested in it, we don't know who's invested in it unless they make that public and meanwhile, we're also seeing more conventional institutions invest in bitcoin. That's one thing I've been wondering about lately, what's really happening with the wealth transfer? Is it really shifting who holds wealth? I know bitcoin is still a small percentage of wealth and my sense is, of course mostly focused on the US, but do you see that happening?
You know, it's really difficult to tell. As I was saying earlier, I was explaining why I think early adoption for countries that have hyperinflation won't necessarily result in wealth transfer for them because they have little to begin with because their currencies are collapsing. They'll have a little bit more but it's not going to be much more I think, because of all the reasons I've been mentioning. Ultimately, the rich can afford to buy more bitcoin and as bitcoin appreciates, they'll benefit from it. It's very difficult to be able to predict which way this will go. Whether the net effect is that it increases how much the rich people have or decreases how much money they have compared to the poorest people. In my mind really, money is not a contest where everybody is out there comparing balances.
Money is a tool, a mechanism of the market economy. To be obsessed with how much money you have, and other people have is kind of an illness, really. It's not really productive use of your time. Instead of trying to think about who has how much, I think the far more productive thing to think about is who gets the right to make more money. That's the real inequality. The real inequality is between people who have to work for money and people who can just make money without having to work for it. That's what bitcoin eliminates. From then on, any inequality that comes along from early adoption is, in my mind, something that I cannot have any problem with, whatever the outcome is.
It's something that the market process will determine and it's not something I can be angry about. It's peaceful people buying bitcoin at whatever price they want and choosing to hold it for as long as they want. There's nothing fundamentally wrong with it but there is something fundamentally wrong, in my mind, with being able to print money. Bitcoin fixes that and removes that. That's really the inequality that matters. I don't think the inequality of who has how much is something that I find productive to dwell on.
Well certainly there's nothing to be angry about in the adoption of bitcoin. What's not to like?
A bunch of people will find a lot of things to not like.
Yeah, well that's true. I was just thinking of how it maybe will give opportunities to people who would not have had opportunities to be more productive, be more creative with how they're productive. I'm talking about myself, really, but not just myself, look at what Michael Saylor is doing, he's a really ingenious creative guy. Maybe it brings more creativity into the market because it brings new people who are willing to take it on and even think about it, accept it are maybe more forward-thinking people. I don't know, that's maybe a false assumption, it's just an idea.
If I were to say about the implications of bitcoin, I'm beginning to lean more and more toward the fact that it's not going to play out according to national or geographic lines so, it's not going to be very useful to talk about: "this country is going to win, that country is going to lose".
It's really going to be more about individuals within countries and maybe even personality traits. Bitcoin's going to be a massive wealth transfer from the incurious to the curious.
From the kind of snarky smartass who is just looking for a way to sound smart, to the people who actually like to use their brains and try and think about what's going on. There's a personality type which is always negative to whatever is new, and these people are always at the forefront of coming up with useless thoughts for dismissing bitcoin. These people are going to be the last because they're always just:" this is new so, that means stupid and I am smart because I know."
Bitcoin is a tax on being one of those people. It's a subsidy to being open minded and willing to consider new things and being able to wade through swamps of confusion in order to arrive to the safe shoreline of hodling for the long term. Bitcoin is kind of an IQ test as well. In other words, it's kind of a beneficial force for humanity because it's taking resources away from people who are not very creative and productive toward people who are very creative and productive, who are willing to open their mind, and think critically. That's an amazing thing! Fiat does the opposite, fiat effectively rewards obedience rather than creativity.
Fiat is top down. It's money as government brownie points, basically. It's constantly rewarding people for conforming and for following instructions of authority. That's, in my mind, been devastating for the human soul all over the world. It's created a lot of frustrated geniuses and awarded a lot of undeserving scoundrels, in my mind. Bitcoin fixes this.
Yeah, this is exactly what I mean by wealth transfer. The fact that it's not divided geographically is part of the whole overall change that's happening, what the internet has also done. It brings to mind an article I recently read, I don't remember where I saw it, something about bitcoiners - we're also risk takers, it's people who are willing to take risk in a different way. Do you think there's been much of a transfer of wealth from the stock market to bitcoin?
Not really, no. Bitcoin is still a drop in the bucket. Obviously there has been, but not really meaningful in terms of the stock market, it's not like bitcoin has eaten the stock market, yet at least. Global stocks are somewhere in the range of 100 trillion dollars, bitcoin is still at 1. There's still an enormous amount of growth to be had from eating the share of some of the value stored in stocks. A lot of the people who buy stocks, don't buy them because they are investing or because they're convinced of wanting to invest, they buy stocks because they want to store value. They're not looking for a return, an increase in their wealth, they're looking for wealth preservation. They're looking for something that can remain as a sure bet into the future.
That's very hard to have when your money is constantly devaluing, so people have to end up resorting to stocks. I think a lot of that demand for stocks will be eaten by bitcoin. Mostly, bonds will be eaten as we were discussing in the previous seminar here. Bonds, I think, are the more obvious competition for bitcoin. First, bitcoin is going to eat gold's monetary share, lead to gold being demonetized almost, and become more of an industrial metal. Bonds are going to be eaten next by bitcoin. Then, a little bit of stocks, a little bit of real estate, they're going to lose a lot of their value as wealth storage. People will own homes if they want to live in the house. They'll own homes as a consumption but not as an investment good.
Yeah, and we're talking about over a period of years, I think.
Yeah, absolutely. Years, maybe even decades.
Yeah, we have to trade in stocks. That's not just going to disappear.
I think there's definitely a lot of value for a capital market. I'm a huge fan of capital markets. Mises says that whether a society is a capital society or a socialist society is the existence of a stock market. If you have a stock market, people are able to buy and sell capital. The mechanism for allocating capital in society is the market economy. Anyone can own capital, anyone can buy capital, anyone can sell their capital. People who end up owning and controlling the capital are the people who end up using it productively because they're the ones who are able to afford it. On the other hand, in an economy in which you don't have a capital market, then capital allocation happens at the behest of government, and in these cases it's inefficient, unproductive and it's a big mess.
Right, as I recall one of the questions, and I recommend anyone listening to this podcast that you take Saifedean's seminar, one of the questions in one of the courses at the end of one of the lessons is looking at which countries have a stock market, don't you have a question like that? Name countries that have stock markets and ones that don't and see what's happened with their economies. It's a very clear marker that humans are born to trade. If you try to stop it, it's like choking someone. It's as natural as making music, we trade, that's the way we are. We wouldn't survive without it.
Yes, if the stock market is shut down in a place, things are going to get bad very quickly. It doesn't seem so obvious, and the way economics is taught, in the fiat economy the stock market appears to be just one giant casino because all these rich people coming in with a lot of money and coming out with even more money, clearly they're not doing anything productive there, they're just robbing society.
That's what it appears to look like under a fiat economy because in a fiat economy, trading is highly manipulated by the fact that money can be produced by the government and the central bank and can alter what happens in the economy. But, in a bitcoin economy, in a hard money economy where you have a capital market, in that kind of world, capital has to be allocated by the market process. It ends up being used far more efficiently.
(???), do you mind if I jump in? I think that's a nice segue to what happened overnight in Turkey, have we talked about that at all yet? I think the Lira dropped 70% against the USD overnight.
Yeah, we were mentioning that a little bit earlier before you came in, Daniel.
Yeah, fiat man...
There's no other word for it!
Yeah. Number go down, huh? Number go up technology is not working anymore, it was fun while it lasted. (???) you were right!
Yeah. Let's get back on his side of the fence, of course. I guess it is ultimately number go down technology if you price goods and services in bitcoin.
No, it's number go up because you get more of all the other goods and services. You can get more of a number of goods and services over time.
Yeah, you get more of the number, (???) price would be less, okay.
No, others just joking, saying: „Yea it's a bubble", number goes down, it's a bubble, they're right. The bubble popped.
The suckers left holding the dollar.
It's incredible because when number goes up, they say: „See? This is a bubble! It's inflating too quickly, it's got to be a bubble.", and when number goes down, they say: "See? It's a bubble! It's popping!". There's nothing that can happen that can make them change their mind. If the price stays the same, if it goes up, if it goes down, it's always a bad thing.
Yeah. Nocoiners don't have to make sense, do they? I guess that's it for today, thank you very much guys for joining, and I'll see you on Thursday for our next seminar! Take care!