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Saifedean Ammous

lines on the record: 287
first: 2022-05-11
most recent: 2022-05-11
sittings or episodes: 1
sources: podcast

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“Perhaps, but what matters ultimately is that the thing works without him. The things worked for 11 years without him. And I think this is the really important thing. If they had stuck around for whatever reason and they had continued to meddle with it, it's not clear to me how decentralized it could have been. This is the problem with the other currencies. It's like how do you lose control of the Frankenstein that you've created? The only way that this Frankenstein continues to survive is if the person in charge of it continues to feed it. And so it continues to be yours. And that's the problem with all the other digital currencies. If you've heard about any of the other 16,000 digital currencies out there, you've only heard about it because there's a small group of people behind it that are working on it, that are promoting it. And that's why, and I think, you know, Michael Sado's discussion with you was a magnificent illustration of the difference between Bitcoin and altcoins in that, they are securities. And I think he makes...”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“To not get into not want to meddle with their invention so much, even if they, you know, they might have had the self-control to mine the first million coins to get the network going and then throw away the coins or send them to an address that they don't have the key to because they really just wanted the network to take off. They may have no access to the coins and that's why they can't move them. I could see that happening, but I find it harder to believe that they would resist the temptation to mess with the network.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Its faith or serendipity that has given us this very vital, very, very, very vital building ingredient in Bitcoin, which no other digital currency would ever recreate, which is that because it was the first, it was the one that was able to establish the first mover advantage and get all of the people who were interested in the technology to get into it. And so that's an enormous advantage. or what made the whole thing really function well is the fact that the guy who made it disappeared and that it continued to operate, which is just a clear illustration that this is a network with no admins. And I'm tempted to think that they're incapacitated in some way, probably dead or gone because I can't believe I don't believe any human being would have this level of self-control.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“I've considered all these questions many times. It's very hard to formulate a definitive answer to all of them. I don't know who it is, and I don't know why he or them or she are not spending the coins that they most likely have. I think what really matters in Bitcoin about Satoshi is the fact that he's not there. And this is what's truly astonishing about it. The fact, the most important fact in Bitcoin is the fact that the creator has disappeared and the thing has continued to operate now for almost 12 years without him being there, or 11 years, I think it's been since he's left. And this is really the most important thing. And maybe he died or she died or they got into an accident on a road trip or whatever. And that's why they haven't accessed their coins. Maybe they are incapacitated for some reason. But whatever reason it is, I really think...”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Billion dollars across the ocean and have final settlement on them. It's not just that you've sent a credit obligation that's going to need weeks and months to settle, which is the case with fiat. So it is faster than fiat, effectively. So it's harder than gold and faster than fiat. That's a good way of putting it.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if you remember when he asked me what is the advantage of fiat, what is the advantage it offers us? It's cheaper to move fiat across space than it is to move gold with the current fiat monetary system for all of its flaws. You can send money from my bank account in the US to a bank account in China in a couple of days or in Britain, in France, in a day or two, which is much faster than you could do with gold and much cheaper than you could do with gold. But in reality with fiat, the reason Bitcoin improves on that is that with Bitcoin, you're actually selling, you're sending final settlement in a couple of hours. So you send the Bitcoin transaction, you get six confirmations in an hour, you get above 12 confirmations in two hours on average with 12 confirmations, you know, you're pretty definitely clearly safe on this. So within a couple of hours, you could send...”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“You need to find somebody who wants the exact house that you have with the exact specifications that you have. And because houses are not identical, there's no liquid giant market for people to just buy and sell identical houses from. So gold, for instance, has good saleability as money because it's a liquid good, it's uniform, and people are always buying it. Fiat dollars have great sellability because everybody's always buying and exchanging dollars for other goods. So if you have $100 bill, you can easily get rid of it and you'll get $100 worth of stuff for it. If you have $100 worth of stuff, it's harder to get rid of it. If you have $100 worth of phone, it's not as easy to spend it as $100 bill. That's saleability.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Salability is the essential property of money, it's the ability of a good to be sold easily on the market, specifically to be sold without much loss in its value. So houses are great for living in, but they're not very saleable. If you want to sell a house, you can just click a button and sell a house and have a giant market.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“And caused by government having access to essentially an infinite recourse to people's wealth. And I think Bitcoin fixes this because it allows us to have money that has the stability of gold across time, meaning it holds its value across time like gold, but much better than gold. But also it has similar to fiat in that fiat can travel quickly, but Bitcoin can travel even faster than fiat. combines gold salability across time with fiat salability across space in one immutable package that nobody can change and nobody can control”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“It's available for anybody in the world. It's the hardest money ever invented. And it is absolutely, I think, an enormously enormously significant invention. Because if you read the fiat standard and the Bitcoin standard as well, you'll see my perspective for why I think a very large number of problems on the world in the world are caused by easy money, are caused by inflation.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Is diluted by one and a half percent every year. Ideally, you'd like it to be zero. Bitcoin is currently at around 1.8%, headed towards zero. So it's the first money that we've ever had that goes to zero in terms of terminal supply. So there'll never be more than 21 million Bitcoin. And I think that's a huge deal because, you know, as I said earlier, money is always whatever is the hardest to make. And now Bitcoin is the hardest thing to make. And then the second property, which is extremely important as well, is the fact that it operates without the need to trust in anybody. It doesn't have a party that is in charge of it. It doesn't have a central authority that can, you know, it's, as I said, it's peer-to-peer. So it only has users. It doesn't have any admins. There's no authority in charge of Bitcoin that can take your Bitcoin, that can stop you from using Bitcoin, that can change the rules of Bitcoin. They can't make more of it. So it's fixed.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“And that seems like, you know, just a simple software game. But the reason this is such a big deal is I believe Bitcoin is the most advanced form of money ever invented. And the reason for that comes from two properties that this network has. The first one is that the currency is the hardest money ever invented. It's the money whose supply is the most resistant to inflation. It's the first monetary asset that we've ever invented that is guaranteed to be fixed in its supply that cannot be increased beyond a certain number. So there's only ever going to be 21 million Bitcoins. And that's a qualitative leap forward in our technologies of money. All of our monies leak essentially because people can always make more and more and more of them. You know, the best money is the one that leaks the least, which is gold because it only leaks 1.5%. In other words, your share of the gold stock.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Bitcoin is a software and it's a distributed software to operate a peer-to-peer network between members who are all equal on the network. They're all peers. And what this software does is that it allows you to operate a payment network between those peers. And that payment network has its own currency.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“So unfortunately, I think we're going to go through a few years, maybe many years of learning the lesson the hard way, of trying to accumulate these commodities and seeing the limitations that make them unsuitable as money today.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd love it not to be, but it doesn't look like there is any kind of desire in China or in Russia to switch to a Bitcoin basis.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the point of this discussion is that we run through all these other options, a Chinese-based system, why it probably won't work, commodity-based system why it won't work, and a gold-based system why it won't work. I think they might have to learn this the wrong way. I mean, the hard way. But eventually, I don't see them doing it now, but eventually I think the winning move is going to be to go on a Bitcoin-based monetary system”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“And I mean, Russia seems to have done that. I'm not so sure. It's very difficult to get reliable information. I'm trying to look into this more. They seem to have said that they're fixing the price of gold in rubles. So they will buy and sell gold at a fixed rubble rate, which effectively means you're on a gold standard. Now, I'm not sure how serious this is, how they've managed to stick to it, but it seems to have stabilized the rubble and in fact brought it back to its pre-war level, which I found absolutely astonishing, you know, considering all the sanctions going on. In the short run, it's obviously much better than having your currency pegged to nothing. But in the long run, I also don't think gold is going to cut it in the 21st century.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Impact on the world economy. You're going to have central banks bidding up the price of essential commodities that people need for real uses in order to back their currencies with them and then just incentivizing the producers to make more and more and more of it and then bringing the price back down. So it's going to be a very expensive mistake where we raise the price of copper, destroy a lot of industries dependent on copper. It's not just copper but also food. And then increase the supply beyond what we need and the end result is copper miners make out well. Governments go broke. And we end up with a lot of rusting copper in government warehouses. That's why I don't think it works for the to use commodities that are not monetary commodities. Then the question is maybe gold. Can we go back on another gold standard?”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Iron and so on doesn't matter. You're just going to have to stockpile those things in order to make a market in them. And then if you stockpile those things, you're just raising their value, inviting them producers to make more, flood the market. I hope they don't try this.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“And of course, you can't discount that with all of the escalation that you see, that is a possibility that it could turn into a real war. But then even so, I think ultimately you can't fight wars forever. It's going to end at some point. And we're going to be back at square one, or well, not square one. We're going to be back at the same dilemma of who's going to have the global monetary system. And so one alternative is that what the Chinese and the Russians could do is they could base it on a commodity. So a lot of people are now saying, well, they're going to base it on copper and corn and agricultural commodities. And that's the analysis of saleability that we discuss in the Bitcoin standard and the fiat standard. I don't think that's workable. If you end up basing the monetary system on copper, as we said earlier, it doesn't matter how many governments say that we're going to make a new monetary system based on copper grains and nickel and”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, this is the scary part of it. And this is basically how World War II happened, you know, because there's an old historian who used to say when, oh, I think his name is Otto Mallory, and I quote him in the Bitcoin standard, if goods don't cross borders, then bombs will. If people trade with one another, they have an incentive for each other's well-being and then they have less of an incentive to fight. And it was the death of global trade in the 1930s because of the failure of the fiat system that brought about the rise of the populism and the rise of all those leaders that hated each other and helped finance the war and bring it about. So that is the scary possibility.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“There are billions of Chinese people and billions of dollar based people, and they're going to want to trade with one another. And the power to want to trade with one another is too strong. We can't just split the world economy into two monetary systems that don't trade with one another. So then they're going to want to trade with one another.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“It's possible, but I don't think it's sustainable. Again, money wants to be won, and that's the kind of thing that I argue in that seminar. So we could see this emerge based around the yuan. And, you know, likely, I mean, Russia is obviously going to hurt economically from what happened, from the confiscation of the reserves and from the sanctions. So it's not going to be in a position, and of course, because it's outside of the US-based system, it's not in the strongest negotiating position with the Chinese. So the Chinese might be able to get them to join their yuan-based system. But I don't think that's sustainable in the long run because these governments can issue their laws and make their designs and then make their monetary systems, but ultimately...”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, it's true, and it's the most likely scenario, perhaps, if we were to witness something like this, is going to be a Chinese-based system.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Russia to some extent saying that we want to build an alternative to the US dollar based system. And yet they haven't. And I think there's very good reasons they haven't. And the reason is, what do you do based on? How do you build it? So you can do a credit based system, but then who's going to be the big boss? Is it going to be China? Is it going to be Russia? Is it going to be Iran? Is it going to be India? None of these countries wants to be, you know, they don't want to jump out of the US-based system to get into somebody else's system. So China doesn't want to use the Russian system. Russia doesn't want to use a Chinese system. And so therefore, you can't use their own central bank's currencies.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“And the US has confiscated their reserves. And I don't have political opinions about the war. It's not something I'm very familiar with. It's outside of my area of expertise. I'm just analyzing the monetary aspects of it. It is, on the one hand, whether you think the war is justified or the sanctions are justified is not something I can opine on. But the implication of this is that effectively the US might be shooting itself in the foot because it's telling everybody in the world your money in our system is not really your money. It's just a token to play in our arcade. And any point in time, if you misbehave, we kick you out of the arcade and we take your tokens. And so, I mean, this is something that China, Russia, Iran, and many countries have made a lot of noise about over the past decades. It got real this year. But it's been decades of China, Iran.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“And when I wrote the Bitcoin standard, initially I used to be much more of a gold bug. And in my mind, gold bugs have spent the last 50 years saying the global monetary system is going to collapse next week and we're going to go back to a gold standard. And writing the fiat standard gave me a very good appreciation for why this hasn't happened and why it's not very likely to happen. I think the reason is, as I said earlier, just gold is very expensive to move around and perhaps more importantly, it's very expensive to verify. That's really the problem with it. It's very expensive to verify that the gold that you're receiving is original gold. So the only way to do this properly is to melt the gold bars down and recast them, which is pretty expensive. So we have this situation now where Russia, which is one of the biggest economies in the world, has been kicked off to varying degrees off the global monetary system.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“So, with Bitcoin, it's the same thing. It doesn't care about your passport. If you have the private key, you click send and the money goes, well, it doesn't really go, but effectively it does go anywhere it wants and the money can move without having to abide by political situations. And the point here is not to bash U.S. foreign policy much as that might be deserved. I'm just going to discuss it from a kind of technical perspective. It has to be a political system with fiat because ultimately it relies on credit and then the government is the one that has the guns and the government is going to decide who gets to pay their loans anyway and the government's going to have to make its own rules about who gets to play and who doesn't. And so it has to be political as this kind of fiat system.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so Swift is the network that the U.S. Federal Reserve uses for moving money around the world. So basically the U.S. government can sanction you off of SWIFT, as they've done with Russian banks, as they've done with Iran, and as they've done with Afghanistan. So effectively, I mean, this is really the catastrophe of the current monetary system, is that in order to be able to trade as a citizen of your country, you need your monopoly local central bank, to be on good terms with the U.S. government so that they would let them operate it. And this is really on top of the aspects of the hardness of money. This is the other really powerful thing about Bitcoin, which is that it's just purely a technological thing. It doesn't matter if you're Russian, if you're Iranian, if you're American, if you're Chinese. It's a technology. And so it's like a spoon or a knife or a car, you operate it properly and it works.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Because all central banks have dollar reserves, and because all central banks use the dollar's clearing mechanisms. So that's why you're basically playing in the dollar system. This seems to have changed over the last couple of months with the sanctions on Russia and the confiscation of Russian reserves. It remains to be seen what that's going to do and how that's going to change. It is looking like this dollar system is clearly unsustainable. It's not sustainable for the US. It's not sustainable for anybody.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, there is no competition. There is no second best, as Michael Saylor would say. And money is like that. Gold was a winner-take-all by the end of the 19th century. The global monetary market is effectively a winner-take-all for the dollar. And if we get it to Bitcoin, you'll know I also think digital currencies are also going to be a winner-take-all situation. So money wants to be won. In fact, there is no such thing as multiple currencies. Multiple currencies is just a step back to barter. Money is one. If you go back to a system of several currencies, you're just reinventing barter. So in the case of the dollar system, the global dollar system is built around the dollar.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you could say that, but I think it's more realistic looking at how it has actually evolved over the past few decades. It's really a dollar system. It's not a system of currencies vying with one another. It's a dollar system and all other currencies are just basically, I like to call them dollar plus country risk.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“The richest people in the world are the biggest borrowers in the world, the most powerful entities in the world, the governments are the biggest borrowers in the world. And that's how they are the richest and the most powerful. Because every time you're borrowing, you're giving the bank an excuse to print new money. So you're devaluing everybody else's money and you're getting a bit of the cut. If you're going to buy a house with your savings, you're accumulating the savings and they're losing value. If I were to go buy the same house with credit, I'm getting the bank to print money for me. So obviously they can cut me in on that deal. And that's why it's much cheaper for everybody to buy with credit. That's why everybody buys everything on credit.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Intellectually, the conclusion of the fiat system is you need to be short fiat as much as you can. That's the smart winning move. So human wisdom over thousands of years is to save, try and not borrow as much as you can, try and accumulate as much savings as you can. That's reversed under fiat. If you're saving money, you're just subsidizing everybody else taking on loans. If you're taking on loans, you're benefiting from all the people that are borrowing. So the winning move under the fiat system, and this is what rich people do, is you borrow. Rich people under the fiat monetary system, they don't hold assets. If you're worth a billion dollars today, you don't have a billion dollars in a checking account. You've got maybe $100,000, a million, five million or something like that, a tiny fraction of your money is held in cash. The majority is going to be held in all kinds of other hard assets. And you're going to be borrowing.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. They're forced to provide the safety net for you and me to go and make that loan. And that safety net is the valuation of the currency. That's how the whole thing actually works. So this is why I wrote the Bitcoin standard explaining Bitcoin and then basically the takeaway message of the Bitcoin standard is you need to stack as much Bitcoin as you can because this is the best money that has ever been invented. And we'll talk about that, why Bitcoin is a hard or the hardest. Yeah. But with fiat, the conclusion of the fiat standard, and again, this is not financial advice. I'm a lowly academic. You should have listened to me on issues of money. But I think theoretically...”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I think what's bad is anything, in my opinion, anything that is consensual. I want to borrow money from you and we agree the terms, I can't object to that. As long as you and I both agree, I can't object to that. But in the case of the fiat system, it's not just you and the bank who come to an agreement. Everybody who uses the currency is forced to be part of that agreement because if you default, effectively what's protecting the bank from you is the fact that the government can just print a bunch of money and make the bank whole. So effectively...”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Loans backed by the central banks, backed by the currency, you are effectively creating new currency, new money every time you issue the loan.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“The way that we make fiat money, the way that fiat is mined into existence is through credit creation. Most people think of fiat money as being something that happens when government prints money. And we still use the term government's printing money. But the vast majority of fiat is not physical. And in fact, fiat is not created when it is printed physically. It's created when it is lent. So when you go to a bank to get a $1 million loan to buy a house, that bank is not going to give you a million dollars from their own money or from their depositor's money. They're going to make a fresh new million dollars. When you walk out of that bank, the money supply has increased by $1 million to finance your home. So what Fiat does is, I mean, it was basically born out of government credit and the credit of banks that are backed by the central bank and the government. So if you're part of the institutions that are allowed fiat privilege, where you can just issue”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“It's directly back to economic reality in that there's a hard money out there that what you're spending money, you want to build your airplane factory, you need to get actual resources so you get actual gold, either yours or somebody else's. You borrow it or you give them equity. But there's real resources. Now what happened with the fiat system, and this is the first part of the book where I look at it from an engineering kind of perspective, is essentially, and I think this is like the breakthrough inside of the book, what fiat does is that it replaces gold mining with credit creation.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, this is the thing. Under the gold standard, the way that people financed things was predominantly with capital, with equity. So you would, because you had gold savings, I had gold savings, everybody had gold savings, when you wanted to start a business, you could use your own savings or somebody else's savings. So you didn't need to get into debt. Well, you could get equity from others, and you could also get debt from others. So, but it's...”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“The New York Times said it's never going to happen the same month in which the Wright brothers did it. And they continued to deny that it was going to happen even two years after they did it. But why could they do that? Because they had savings in gold. They had the security with something that you know is going to be there. And then you can take a risk with the stuff that is extra. I have, say, three years expenditures in gold under my mattress. And I know that I could take a risk with everything else because whatever bad things happen with all of my dreams, like even flying, think about how insane that is, I still can go back to the three years of gold that I have saved.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“In 1903, we were confirming that the possibility of flight has been debunked as unscientific. Lord Kelvin said, not in a million years we're going to be flying. Thomas Edison said it's never going to happen. No, I think it was Edison who said a million years, but Kelvin also said it's never going to happen”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you're more likely to be taking the leap in the unknown when you have a little bit of gold in the mattress than when you don't. I think this is the thing. If you look at the late 19th century, and I discussed this in the Bitcoin standard, that was the arguably the most innovative period in human history. You know, there's qualitative evidence. You look at the world around you today, pretty much everything that we use was invented in that period. The car, the airplane, the telegraph, the telephone, the camera, pretty much modern life as late 19th century, you know, the period between 1870 and 1914, because the whole world was practically on a gold standard. The whole world was using the same money, and the whole world could save in the same currency. That meant that a bicycle shop owner, two bicycle shop owning brothers in North Carolina, could go and try and fly, even as all the scientific experts.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Very unlikely. But also, it's reflected not just economically, it's also reflected in all aspects of morality, on all the way in which we deal with each other as human beings. When your survival is precarious, how much are you invested in the notion of being a good citizen, on caring about your reputation, on caring about not getting caught in a crime? All of these things become harder to value. So people start committing crime, people start caring less and less about the future. And we see it reflected in everything. And I argue you see it reflected in architecture. You know, we used to build houses in the 19th century that last until today. And then in the 20th century, we build essentially disposable cardboard boxes that get scrapped in 20 years.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“To essentially, what we see in the 20th century all over under not hyperinflation, but under low inflation, you know, 10, 15% that you see across the board most of the time, is just slow motion hyperinflation. So what happens in hyperinflation? Everybody gets their paychecks, they run straight to the supermarket, they spend all of their money. Nobody thinks about savings. Nobody thinks about the future. Survival until the end of this month is highly uncertain. How likely are you to be planning for what you're going to be doing five years from now?”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“What's happening in the wars and what's happening with foreign policy and Russia and the US and all of those things under the gold standard you didn't care about any of that stuff your gold coin worked regardless of all of those things so what this means is the future so first of all you know we have all of the problems I mentioned but also it means that the future becomes much more uncertain so you're far less likely to provide for yourself 10 years from now I'm far less likely to find an easy way to give yourself value 10 years from now and so you become more short-termist and that is reflected economically in a lower savings rate and we see savings rates decline but it is also reflected in all manners of decision making and I think if you really want to see what it is take a look at a society that goes through hyperinflation and look at what happens there you know how do people change under hyperinflation and compare that”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Just in order to be able to save and earn the money that you've already earned. That's the criminal thing about it. Like, I've already earned that money being a doctor, being a dentist, being an athlete, being an engineer. I've built a house for somebody. And I got that money. And all I want to do is just make sure that I can have it 10 years from now. The only way to do so is to become a crappy engineer because you have to spend half your time not doing engineering and instead spend half of that time learning about Japanese central bank monetary policy and commodity markets and what's going to happen to copper.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. Saving is essential for us as a civilization. And what Fiat did is it took that away from us. And then it forced everybody to become an investor or more accurately a gambler because you're not just even because the money itself is broken because the money itself is constantly changing in value. Investing is becoming more of a crapshoot. I mean, value investing is completely underperforming compared to market analysis. You listen to the Fed and what matters to the price of individual companies is monetary policy much more than it is their own performance. So basically you need to be a junkie watching the Fed and following all the world's central banks and need to learn macroeconomics and you need to learn what all the central banks are doing and you need to understand how commodity markets work and you need to understand how equity markets work and bond markets and real estate markets. You need to do all of those things.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“The majority of them can't beat inflation, not as measured by CPI, which is completely fraudulent. But if you remember... Yeah, that 14%, or even, you know, the 7%, like if you look at just the increase in the money supply, which I think is a much better metric. And this is what's reflected on the desirable goods. Like if you look at the price of real estate in Miami Beach, as Michael Saylor mentioned in your example, it goes up at around 6-7% per year on average over the last century. So that's, you know, if you want to live in a nice area, that's what happening to real estate. If you want to go to the good universities, that's what's going up. It's going up at a rate that's similar to the increase in the money supply. And you can beat CPI, but CPI is designed so you can beat it, but you can't really beat the appreciation in the things that you actually want to buy, in the price of good food, the price of good real estate. And, you know, most investment professionals fail at doing that. So what hope does a doctor or an engineer or a scientist or an athlete have in doing those things?”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source
“And it could work, it could not work. If it works, you get a positive return, you get more gold back. If it fails, you might not get any of your gold back. So taking on risk is something very different from saving. Saving is just a way of buying the future. Investing is taking on a risk and you could lose everything with it. So what ends up happening, and this is, you know, the Keynesian objection, I think, is very wrong and bad because investment is a job in itself. To figure out what to do with your money in order to beat inflation is something that there are professionals out there on Wall Street that have PhDs in finance, that have enormous computers, and they have enormous staffs of PhDs and master's degrees and math nerds that are crunching numbers and figuring out how to allocate your portfolio so that you can beat inflation. And guess what? The majority of them don't beat inflation.”
2022-05-11 · Lex Fridman Podcast · #284 – Saifedean Ammous: Bitcoin, Anarchy, and Austrian Economics · IDENTIFIED FROM THE TRANSCRIPT · source