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Ben Prentice and Mark Moss: Swan Signal Live E19

Posted 7/17/20 by Brady Swenson

Join Mark Moss, famous investor and host of the Market Disrup­tors Podcast, and Ben Prentice, creator of WTFhappenedin1971.com, as they discuss how they got inter­ested in Bitcoin, defla­tion, the role of money in an economy, govern­mental pushback on Bitcoin, and Bitcoin’s game theory. As always, Swan Signal is hosted by Swan’s Head of Educa­tion Brady Swenson.

Subscribe to the Swan Signal YouTube channel and Swan Signal podcast.

Summary

00:00:00 — Intro­duc­tions

00:01:46 — Mark’s Bitcoin story

00:07:20 — Ben’s Bitcoin story

00:11:59 — How the Fed is marketing Bitcoin

00:13:47 — Broken fiat, hoarding, and defla­tion vs infla­tion

00:21:03 — Human culture and the influ­ence of money

00:23:54 — Special­iza­tion

00:25:51 — Money as tool for collab­o­ra­tion

00:28:43 — Keynes (friend or foe?) and tech as a defla­tionary force

00:32:41 — Bitcoin Renais­sance, unjust money, and capping the state’s power

00:38:22 — Predicting Bitcoin

00:40:09 — Govern­mental pushback

00:44:33 — Geopo­lit­ical impli­ca­tions

00:49:39 — Power of the intran­si­gent minority

00:52:24 — Closing thoughts

Transcript

Brady Swenson:

Got a couple of great guests today to talk Bitcoin. Of course, before we dive in, I want to talk to you a little bit about Swan. You all know about Swan. Swan is the sponsor of this podcast of course. We have built the best way to accumu­late Bitcoin with automatic recur­ring buys. It’s super simple, you just set it and forget it. You can connect your bank account and Auto Fund-USD, then we’ll auto-stack that Bitcoin for you and you can set up automatic withdrawals. So if you hit a certain threshold, we’ll automat­i­cally trigger withdraw. You just confirm that withdraw on your email, boom, withdraw to your address. So it’s as simple as could possibly be. We do all this with low fees, dedica­tion to Bitcoin educa­tion and Bitcoin only. So join us at swanbitcoin.com/hrf for the Human Rights Founda­tion, and we’ll drop $10 of Bitcoin into your account. And your purchases, every one of your recur­ring purchases, will benefit the Human Rights Founda­tion. And of course, we are a big fan of Alex Gladstone’s work in his support of Bitcoin and evange­lism for it. So check that out. That’s swanbitcoin.com/hrf.

Brady Swenson:

All right. One more thing, on telegram, we’re chatting on telegram t.me/swansignal. You can join us in there. You can ask questions of our guests and I’ll be watching the chat. So let’s get to today’s show. We have two great guests. We have Ben Prentice. He’s the co-creator of wtfhappenedin1971.com, a simple yet profound website that will tip you over the edge of the Bitcoin rabbit hole. And Mark Moss. He’s the host of Market Disrup­tors Podcast and he’s a YouTuber. Welcome to both you guys. Thanks so much for taking time to join us.

Ben Prentice:

Thanks, Brady.

Mark Moss:

Yeah, thanks for having us. Appre­ciate it.

Brady Swenson:

Yeah, man. I’m really excited for this conver­sa­tion. All right. So let’s dive in. Mark with you, I want to start with you. Just kind of giving us your background, talk to our audience about how you got into markets and finance and how you see Bitcoin fitting into the markets of finance landscape.

Mark Moss:

Yeah. So I’ll try to run through it pretty quickly because it’s a big story. But I was I guess, lucky enough to have been raised in kind of a conser­v­a­tive home where my parents were kind of grass­roots active. So I kind of grew up already under­standing some of this stuff. My parents actually sent me when I was in high school to a camp called the John Birch Camp. And if anybody’s deep down the rabbit hole, they know what that means. And that’s pretty serious. If not, look it up. So I’ve kind of already had this viewpoint. I started an internet business at the bottom of the Dot Com crash in 2001 and everyone told me I was an idiot. I spent a bunch of money to build an e‑commerce store. There was no such thing as like Shopify back then. When I was running ads in the magazine, there was no one online to adver­tise to. I was the only Dot Com in the magazine. Every­thing else was mail order at that time. So for those of you too young you’d be like, “Cut it out and mail it and mail it with a check.”

Mark Moss:

And I went to these brands, and I said, “Hey, I built this website.” I think it cost me 15, 20 grand to build the website back then. “I want to sell your products on my website.” And they told me, “You’re an idiot. No one’s ever going to buy anything online.” And I said, “Well, I think they will and I want to give you my money.” And they said, “We won’t even take your money. We don’t want our products on the internet thing.” And rewind, so I started investing in about 1995 in real estate. I was 18 years old, and I started buying and selling real estate. The late 90s, ’98, ’99, I got into this thing, this crazy thing, and we were trading these things called internet stocks. My roommate quit his job at the time. He was day trading. And we’re trading these internet stocks and “Oh, you do those internet stocks.” Kind of like crypto is today.

Mark Moss:

Then fast forward, I started the internet company. So I was kind of involved in business, investing, technology. Fast forward, by 2008, I had done really well. Multiple Fortune 500 exits and tons of — - $20 million of real estate, but I got completely wiped out in 2008. And that was a very painful lesson. I thought I was on top of the world. I had every­thing figured out. I just had my first kid and next thing you know, I’m millions of dollars in debt. And I’m like, “What the heck happened? Like I know how to make money, but I don’t know what this finan­cial game thing is. What the heck, right?” So I started digging in deep and that’s really where I found gold. And I found sound money. Mike Maloney helped me a lot with that journey. And that’s why I love Ben’s website. I refer­ence it all the time. Because really it’s all sudden I’m make sound money. Yes, we have to have it.

Mark Moss:

As I continued further down that rabbit hole, still investing in different markets, building businesses, etc., internet-based businesses, Bitcoin popped up onto my radar. Obviously, I’m in the tech world and I see Bitcoin and I see it rise and I see it fall. And I thought about buying some but it was like a specu­la­tive asset and I wasn’t really that concerned with it. I started following this newsletter called “Sover­eign Man” and it’s written by a guy named Simon Black. And the basis of the newsletter is that we should all be a sover­eign man. You wouldn’t put all your money in one stock, why would you have your whole life in one country? Doesn’t make any sense. He sells multiple… Get multiple passports, multiple bank accounts, all these things.

Mark Moss:

So I was going down this path, and it was about 2015, I think. And I was actually in the process of setting up a offshore trust in Panama, bank accounts in Panama. And doing all this work, I was looking at Hong Kong, I was looking to Panama, the good banking centers. And I took another look at Bitcoin and I said, “You know what? Bitcoin is exactly what I’m trying to do, get money out of this banking system, but it’s way easier way to do it.” So I’m like, “Okay. I’m going to put a bunch of money into Bitcoin.” And at that point, that’s kind of… I guess I came for the funda­men­tals at that point. Obviously, I think at that time, price was a couple hundred bucks. And I was just doing like kind of what Swan Bitcoin does where every two weeks, just auto-buy, auto-buy, auto-buy, auto-buy.

Mark Moss:

And next thing you know, I had built up quite a bit and it started being worth a lot of money. And of course, then you start getting more inter­ested, which is why I always tell people, “Just buy $10 worth, right? Because you’ll build that interest level.” And I guess I should also say after 2008, and then ’11, ’12 ’13, I became very disil­lu­sioned with the polit­ical system. And again, growing up in that world, even going to John Birch camp, I kind of had this vision of it. And I became very disil­lu­sioned and I remember telling my wife like, “Things are going downhill and I don’t want to be a freedom fighter.” I’m a surfer. I live in Southern California. I’m like, “I’ll be in Costa Rica or Nicaragua, living on a beach and I’ll be fishing and surfing every day. I’m not going to be a freedom fighter.”

Mark Moss:

Even though I’m a two A advocate, and I have a stock­pile of weapons, I don’t want to use them, I’m going to be gone. But then when I found Bitcoin, I’m like, “We have a tool. We finally have something we can fight back.” And I said at that point, “I got to tell the whole world about this. I’m going to do every­thing I can to push Bitcoin as much as I can.” And then, boom, that leads me to where I’m at today. And as a matter of fact, we’re celebrating a very big milestone today with every­body here. I start a YouTube channel to talk about Bitcoin. My first four part video series was about Wall Street and Bitcoin. And I just passed the hundred thousand subscriber mark today.

Brady Swenson:

That’s huge, man. Congrat­u­la­tions. That’s amazing.

Mark Moss:

So anyway, sorry, that’s a long story. I try to compress it as much as I can. But that kind of gives you the overall journey of how I got to Bitcoin and why I want to tell every­body about it so much.

Brady Swenson:

It’s awesome, man. Appre­ciate that story. Ben, can you talk about Mark’s story? I know it’s familiar to you, it’s probably somewhat similar. And I know you have a term that I really love to use, it’s called number-go-up technology, right? Number-go-up technology is what really hooks us. You come into Bitcoin and maybe you know the sound money before you’ve learned about sound money so it’s attracted to you because you’ve heard about it through Gold, or something like that. But then it’s a lot different than gold. Gold has been around for a long time. It’s very much a stable USD price compared to Bitcoin. So when you start seeing the sound money that’s at the begin­ning of this moneti­za­tion process, that has incred­ible poten­tial, number-go-up poten­tial. That’s when people get really excited.

Ben Prentice:

Yeah. There’s some similar­i­ties to Mark’s story. And then there’s definitely some things that are different. Like for example, I was not raised in a very conser­v­a­tive house­hold, but like Mark, I had seen it early and under­stood a little bit about what Bitcoin was as a digital money and how… That was actually a very fasci­nating thing. But like you said, the number-go-up or NgU technology which is built into Bitcoin, or as Matt Odell likes to say, “Bitcoin is the best money ever.” So as more people realize that, the price should appre­ciate. That essen­tially in 2017, I saw the price appre­ci­ating and hadn’t really taken a close look yet. And it was at this point then I said, “I need to take a closer look at what this thing is.” And it took a long time and a lot of research and looking down a lot of rabbit holes. And one of those rabbit holes was trying to under­stand what economics really are.

Ben Prentice:

And it was tough because I started arguing with people on the internet and realizing I didn’t actually under­stand enough of the economics to argue for Bitcoin. Because I was kind of in it for the end NgU technology at the time more. But there was also… I went down the Andreas rabbit hole and under­stood that it was good for freedom and stuff like that. But when I really started going down the economics rabbit hole, as Mark talks about on this channel, I got into Austrian economics, probably credit that to Pierre Rochard for really showing Austrian economics hard. And one thing that I was raised with in my house­hold was a really solid grasp of logic and reasoning. And to always ask the question why and try to under­stand why things are the way they are. And that infinite asking that question why, that I think leads people further down the Bitcoin or a rabbit hole.

Ben Prentice:

And it was in my journey of trying to under­stand the economics that I had to dig into Gold as money and the end of the Gold standard. And it was just looking around and Wikipedia articles about the Nixon shock and Bretton Woods, and if you go down those rabbit holes and follow some of those hyper­links, you’ll see some of the same charts that are in our website. And that was where I started collecting these charts of things that started these inflec­tion points in the data of what happened when we stopped using sound money and when infla­tion took off. And at some point, we were just like, “Let’s just throw these up on the website and ask the question, inten­tion­ally rhetor­ical question.” And it seems to have caught on.

Brady Swenson:

Yeah. I mean, it’s the perfect question to start learning what money really is. And I think there’s more and more of us. I think the percentage of people that come into Bitcoin are being taught what money really is but Bitcoin is growing rapidly. I think it’s, like I said earlier, there’s like liber­tarian sound money advocates, Ron Paul supporters, those kind of low hanging fruit have sort of been picked by maybe a few years into Bitcoin. And like ever since then, the percentage of bitcoiners who are just being taught what money really is, is growing rapidly. And I have the same story as you Ben. I grew up in a more liberal house­hold, default Keyne­sian. And I had no idea that this money was, that the Fed prints money and they control the supply and they target interest rates.

Brady Swenson:

I had a basic under­standing from macro economics in college but no mention of sound money or of any alter­na­tive to the Keyne­sian system we live in now. So yeah, Bitcoin is waking a lot of us up. So, Mark I mean, we’re in a very inter­esting monetary era right now that’s really kicked off in 2008. And is been doubled down upon in this year. So how do you think this kind of drastic monetary measures that we’ve seen the govern­ment take, the Fed take, in the past six months will affect the future of Bitcoin?

Mark Moss:

Well, I mean, I think the thing that I’ve always tried to get through is not what is Bitcoin or how does Bitcoin work, for me my whole message is why Bitcoin? And I guess what I would say to answer your question is that I think they’re doing a lot of marketing for us. And a lot of people, especially in the United States, don’t under­stand why we need Bitcoin. “The dollar’s fine. Why do we need Bitcoin?” If you’re in Iran or Lebanon or something like that, you get it a little bit better, or if you hear it from Iran. But I think back to your question, by the Fed doing these loose monetary policies, destroying the currency, bailing out the stock market and all these things, I think they’re just helping us with our message and they’re showing people why we need to go back to a sound money.

Mark Moss:

And most people… People come in curious on Bitcoin, “What is it and what’s this mining thing and all these things?” But they’ve never stopped to think “Well, what is the current system that we have?” And so it’s starting to raise those questions. “What do you mean they just printed $6 trillion? What does that mean?” And so now they’re having questions that they didn’t have before. And so I think ultimately it helps us with our mission of trying to get people to see that there is an alter­na­tive. And ultimately, it accel­er­ates the end game. I made a video just last week and it was about the fight for our money and I talked about the inevitable showdown that’s finally coming to a climax, right? The showdown between the dollar and Bitcoin. And they’re accel­er­ating that point of where we’re going to have that showdown and it’s coming pretty quickly.

Ben Prentice:

Yeah, Saifedean has this kind of funny way of talking about how Fiat dollars just tend to leak into bitcoin, just the same way they leak into Gold and leak into stocks. And I think part of under­standing why this is is to under­stand that our money is actually really broken. When you can inflate the supply of money, money tends to leak into harder assets. And what that has caused in our current monetary and finan­cial paradigm is the moneti­za­tion of assets that really aren’t neces­sarily good monies because, essen­tially, people need to still restore their wealth, so they were storing their wealth in stocks. They’re storing their wealth in real estate. And this actually disrupts the economic use of these assets. The real use of these assets. Stocks aren’t bad, right?

Ben Prentice:

It’s equity invest­ment, they are supposed to diligently do research and allocate capital to compa­nies that can effec­tively use that capital. But when people just park all their money in index funds and park their money in real estate that sits vacant in New York City, one the largest cities in the world, you know that there’s an issue here. And what’s freaking so funny to me is that you’ll hear Keyne­sian say, “Well, if we don’t inflate the money, then people won’t invest enough.” But they’ll hoard their money, right? You heard this, they’ll hoard their money. But instead we have people hoarding assets, and which is way, way worse. Hoarding money confers a benefit to every­body else, because it increases the purchasing power of their money. But hoarding assets is actually terrible because it disrupts the economic use of those as evidenced by those vacant proper­ties in New York City.

Ben Prentice:

And I think that proves exactly what Mark is saying, is that the more that they increase the money supply we’ve seen since 2008, that a lot of the infla­tion we’ve seen hasn’t manifested in the CPI. It’s manifested in the infla­tion and asset prices, which is driving wealth inequality, which is driving populism. And it’s driving revolu­tion in some ways that you’re seeing people really frustrated with what is happening econom­i­cally speaking. And it’s kind of this accel­er­a­tionist kind of policy that you’re trying to allude to that, right?

Mark Moss:

Yeah. And I think I can sum up what you just said in one sentence. And that is, again, I started investing in real estate when I was 18, so I’ve been living this life my whole life basically. And I learned a concept that’s very simple, and it’s money goes where it’s treated best. So wherever money’s going to be treated best, that’s where it goes. And I think about that from an investing term, I want my money to get the best yield or the safest or best risk return whatever it is. But even back to your thing, right? Like, I can’t store it in Fiat, it’s not being treated well there, it’s losing value. So then I’m going to put it into houses or stocks or whatever it may be. And so yeah, money is always going to go where it’s treated best. Always go to where it’s going to get the best risk and reward ratio based off of what your needs are.

Mark Moss:

But back to one comment you made, which is probably at least one of the top three or four objec­tions that we hear about Bitcoin or I should say sound money, I would say, is what you’ve said, which is, “Well, if we have sound money, how are people going to spend?” Every­one’s going to hoard? And it’s such a ridicu­lous argument if you actually would just stop and think. And the one thing that you said, Ben, is that you came from a family that asked questions, and today more than ever, we’ve seen that no one’s allowed to ask questions, and that’s a very scary road to go down. But if you ask a question, does sound money lead to hoarding?

Mark Moss:

Well, aren’t we still going to need to eat? Aren’t we still going to need clothes? Don’t I still need a house? Aren’t I still going to want a vacation? And I still going to want enter­tain­ment? Like I mean, why would I just start hoarding money all the sudden because I have a sound money? It makes absolutely no sense, Now, the invest­ment thing, why would you invest money if you have sound money? “Well, because I want a return on my money.” I mean, that argument holds no weight if you just think about it for even a minute or two.

Ben Prentice:

Right. And if defla­tion causes people to not spend, then why are Apple and Huawei are the largest corpo­ra­tions in the world that sells defla­tionary technology that gets cheaper every year and has more computing power every single year? I mean, they just must be in a defla­tionary spiral and nobody’s spending any money on electronics, right? I mean, clearly defla­tion is destroying the world, right? It’s asinine.

Mark Moss:

I asked one simple question. Tell me the answer to this. Would you rather, it’s a rhetor­ical question for you obviously, but someone that was asking this question, rhetor­i­cally, I would just say would you rather have your money buy more stuff in the future or less stuff?

Ben Prentice:

Let me think about that for a while.

Mark Moss:

Come on, right?

Ben Prentice:

Well, I’d like to get–

Mark Moss:

Go ahead.

Ben Prentice:

I’d like to get into this because you raise a really impor­tant point here, is that making things cheaper is not only desir­able. I mean, we want things to be cheaper as you point out, but is the natural progres­sion of economic activity. I’m trying to compete with Mark’s company. So I’m going to make widget for slightly cheaper. And a way I’m going to do that is I’m going to use a little piece of technology that we just invented or refined, or maybe we’re using a spread­sheet or a tool, to compete with somebody else. And this is what technology does, is it increases produc­tivity and decreases costs. So that is natural economic progres­sion. And if you read Jeff Booth book, The Price of Tomorrow, you’ll see that that defla­tion is coming and accel­er­ating at rates that is even diffi­cult to imagine for people that that defla­tion is coming and we must embrace that defla­tion instead of printing money to nominally target increases in prices. That is the insanity, right?

Mark Moss:

It is the insanity and the only person that… And this is the response that I get to people when I ask that question, and they say, “But what about debt? It makes debt more expen­sive.” So the only benefit really to infla­tion is it’s cheaper to pay back your debt. And debt is bad. The average person should not be taking on bad debt. I mean, good debt is obviously good and that’s okay if it’s more expen­sive because the good debts paying for itself. And so the only argument is debt and that’s the wrong argument to be in. But yeah, it’s a dangerous human condi­tion. And one of the things that makes it diffi­cult to under­stand Bitcoin, is that it covers so many subjects, right? So you have to under­stand money and technology and philos­ophy and human nature and all these things.

Mark Moss:

And to your point, what you just said, Ben, is I saw this thing on Twitter today and was very disturbing. And I retweeted it. And I try not to jump into politics too much. But sometimes they’re just so inter­twined that you can’t help, right? And it was basically part of this whole work culture and white culture or whatever. And it was this infograph that just got put out, and it basically said, “Aspects and assump­tions of white­ness and white culture.” And there’s all these things that are just absolutely crazy. And I’m not going to go through the whole thing, but one of the things that it says, to your point, is a future orien­ta­tion. Plan for the future, delayed grati­fi­ca­tion, that’s white­ness. To future orien­ta­tion, and plan for the future and delayed grati­fi­ca­tion.

Brady Swenson:

Isn’t one of the things in there focused on science too?

Mark Moss:

Oh, yeah. I didn’t go on there. So they said, “Emphasis on scien­tific method, objec­tive, rational, linear thinking.”

Brady Swenson:

Yeah, that’s terrible.

Mark Moss:

Cause and effect relation­ships.

Ben Prentice:

That’s so horrible.

Brady Swenson:

Yeah. These are like human traits, is human culture, right? I mean, these are ideas that, yeah, are indepen­dent I think from race. And that’s I think your point, right?

Mark Moss:

Well, and I was specif­i­cally just talking about the time prefer­ence, right?

Brady Swenson:

Exactly. Yeah.

Mark Moss:

So future orien­ta­tion, plan for the future, delayed grati­fi­ca­tion. And so obviously, Keyne­sian is not about that, right? Spend as fast as you can. Austrian is save, invest, plan. And so they’re saying that’s white­ness, and that’s bad. But no, right? We need to save our capital so we can redeploy it. And we need to invest that capital, but invest capital that’s been saved.

Ben Prentice:

Yeah. And I would add in there that we should invest that capital in a sound manner, right? I was talking earlier about parking money in index funds which is what probably 90% of the middle class does. They just throw it in a 401k or they throw in an index fund. So who’s allocating that capital? I guess it’s whoever these hedge fund managers, right? And all this stuff. But the term of malin­vest­ment needs to be taken into account here. And infla­tion creates malin­vest­ment because free money just flying around going into every­thing. Also the concept of the zombie economy where all these businesses are being propped up on cheap, zero, free credit, which is we’re seeing right now, printing $6 trillion, or whatever it is to keep all these businesses alive that haven’t accumu­lated any capital and can’t weather a short disrup­tion to their business All the things you need to consider in unison.

Mark Moss:

Yeah. And something even bigger, Ben, one thing I’ve always been excited to talk to you about is just because I know we’re both kind of fans of history. I love history, I go a little bit further back a lot of times. And Safe talks about it in his book, right? And really like having sound money, a good store of value really is what has led to special­iza­tion. And special­iza­tion is what’s allowed the world to have abundance. And actually, I think it was Naval made a point that wealth is not a zero-sum game. Status is a zero-sum game. So wealth is not meaning. If I get more wealthy, that does not make you less wealthy. Status is. Like in order for me to get ahead, you have to get behind. If I’m number one, you have to be number two. But wealth is not like that. And he says that all the wealth in the world has been created. We used to live in dark. Every­thing that you see has been created. There’s no limit to the amount of wealth we can have. But a lot of it comes to special­iza­tion.

Mark Moss:

So if you study history, whatever after the dark ages, the whole world in the 14, 1500 has got on to a unified money system, right? Where all the money was the same size and weight. And that allowed free trade. And we had free trade, and it allowed special­iza­tion. So I can be the best at what I do, you can be the best that you do. And what’s happened today is now I’m a brain surgeon, but I can’t be the best brain surgeon because I also have to learn how to invest my money. Now I have to be this investor. And I have to know about real estate and I have to know about stocks. And I have to know about all these things. And as we chase this down, as we look at like, “Where does this lead us to 5, 10, 20 years down the road?”

Mark Moss:

It takes away from special­iza­tion, which slows down progress, which slows down defla­tion, which we argue is a good thing. And all those things. And so without that sound money, and that’s why we say Bitcoin fixes this, without having that sound money, it just creates all these problems and it just continues to just grow and grow and grow.

Ben Prentice:

Yeah, I definitely agree. See money is a tool that humans collab­o­rate. And it’s my under­standing that you can go all the way back to even like the fall of Rome when they started debasing their currency. You can look at modern times and Venezuela and Zimbabwe, that the those monies are as unsound as you can possibly imagine. Even to a lesser extent and I think Turkey, you can look at Sudan, Argentina, all these places where infla­tion is rampant. You can see the fabric of society breaking down when people can’t store their wealth. Because money is supposed to move wealth through space and move wealth through time. And as you’re trying to talk about that, it is this way that we collab­o­rate, right?

Ben Prentice:

And how does that happen? In order to under­stand how that happens, why money is a tool that allows us to collab­o­rate, you have to under­stand prices and what sets prices and why you can’t set prices from a central­ized source, is because prices emerge on a free market. It’s the aggre­gate data of what people value and are willing to do. And there’s the idea of the miracle of the pencil, which if you haven’t seen that talk, or that video, is amazing to teach you how this one little pencil that costs one cent or whatever it is, is actually the collab­o­ra­tion of all these people all around the world. And how do these people know to collab­o­rate? How do they know that get the wood there and the metal here and the rubber there? How do they know that? It’s because the price system, it’s the aggre­gate price system.

Ben Prentice:

So when we’re constantly inflating the supply of money, supply is the recip­rocal of demand. So you’re actually changing the prices, you’re sending inaccu­rate market signals to the market itself. You’re destroying this price signal mecha­nism, right? And that’s what you can see happening in these countries that I was talking about. And that’s why the society tends to break down when you have more infla­tion.

Mark Moss:

And that’s exactly right. Money is commu­ni­ca­tion. And so when you distort money, you distort commu­ni­ca­tion. And now people don’t under­stand what is happening. They don’t under­stand that because commu­ni­ca­tion is now broken. And so yeah, it’s a good point. I have read that. As a matter of fact, I got kids and there’s an author that makes a set of books for kids… I’m trying to draw them. “The Tuttle Twins.” For anyone who has kids, they’re called “The Tuttle Twins.” And he has all these stories for kids that teach these types of concepts and they have one on the pencil. That’s pretty good. But yeah, good point.

Brady Swenson:

So even Keynes in 1930 wrote a paper that predicted that we’d have a 15 hour workweek in a couple of gener­a­tions. So I get the power of defla­tion has been under­stood for a long time. And he argued that it was due to the improve­ments in technology. And so his predic­tion was correct. However, the prescrip­tion that govern­ments, kind of the academic justi­fi­ca­tion given to govern­ments for control­ling monetary policy was ironi­cally the thing that’s prevented this predic­tion from coming true. So I’ve recently been looking back into that and think it’s really inter­esting.

Ben Prentice:

Yeah. And Cory recently, Cory Klipp­sten from Swan actually recently pointed out to me, do you know when he predicted that would happen?

Brady Swenson:

I just know it was around 1930. Well, what was the partic­ular–

Ben Prentice:

No, when he predicted it would happen. That we’d have 15 hours.

Brady Swenson:

It was like a couple gener­a­tions. Like now.

Ben Prentice:

It’s like now. And what’s amazing about Keynes too, when he talks about infla­tion, is there’s quotes of him talking about how infla­tion debases society itself. So I think he was a very confused little man because he actually said some really intel­li­gent things about infla­tion. And it’s possible that maybe he just wrote a lot of different things or maybe he changed his views over time. But it’s possible that Keyne­sianism is just a misnomer that the govern­ment’s basically co-opted what he was writing. Because if you do look, you can go find those quotes that infla­tion is like debouching the currency. I don’t have the quote handy, but he talked about infla­tion would liter­ally destroy society.

Ben Prentice:

So it’s not like he was the one prescribing all this infla­tion all the time. And the way that we perpe­trate infla­tion today, I mentioned this earlier, is this nominal price targeting, right? That we must increase prices by 2% per year. But if you consider what he was talking about earlier with the fact that technology is decreasing prices, right? We under­stand that we can look at electronics and see that happening. But if that’s happening more and more rapidly, but we continue to target nominally 2% infla­tion, that means more and more money must be printed as a percentage of the total every single year in order to keep those prices down when they should be falling.

Ben Prentice:

And we should just let those prices fall. And we wouldn’t have as many problems with automa­tion, taking away our jobs, because we could benefit as a society like Mark was talking about, by increasing all of our wealth, right? Increasing all of our buying power, be able to get things for cheaper. That’s the goal, right? Stable prices are not the goal, falling prices are.

Mark Moss:

The problem is that people don’t want to put out the effort for that and per that infograph that I showed you, that’s discour­aged now, right? The fact that you are willing to call it out specif­i­cally, be respon­sible for yourself. And so, the argument of technology is going to get rid of all these jobs and all these people are going to be homeless. And Andrew Yang ran on that platform saying we need to get UBI. That’s not the case, right? They’ve been arguing that since the Indus­trial Revolu­tion, every new technology. Electricity put out candle makers suppos­edly, right?

Mark Moss:

It just requires you to learn something different. And again, back to the special­iza­tion, and I should have the time to do… I should want to do that, right? I should want to learn. And really the argument is is that technology, it frees us up of all the mundane crap to allow us to do higher level stuff. But the downside, which I guess I under­stand why people don’t like that argument is because they have to put out a little bit effort and they have to learn something, and they have to do something.

Brady Swenson:

Yeah. But I think the point is here that we need to make is that the money, the infla­tionary money that we have is preventing people from really engaging in the work that they want to do, that they’re passionate about. It makes you have to do something for a job just to keep up with that 2% infla­tion, keep up with the asset price infla­tion. And I’d say a large majority of Ameri­cans and people around the world, who are just working on this sort of hamster wheel just to try to keep up and they don’t even have the oppor­tu­nity, the excess cash to invest in assets, that have become money, essen­tially have a large monetary premium on them.

Brady Swenson:

So if we have this infla­tionary money, and a better money, a real natural money like Bitcoin, the sound money, then we have the ability to store wealth in the actual money form itself, save our time for the future. And if we… This 15 hour workweek comes to fruition because of something like that, maybe even less, then people will just naturally pursue what they’re inter­ested in, right? They’ll be able to hone their craft and really elevates human ingenuity to another level, right? That’s why I like to call this the Bitcoin renais­sance, the dawn of Bitcoin renais­sance because I really think that we’ll see human poten­tial really unleashed because of Bitcoin.

Mark Moss:

Yeah. Well, Tim Ferriss sold me on the “Four-Hour Workweek.” So that’s what I’ve been working towards. You guys go to the 15-hour, I’m going to go to the four-hour. But again, back to Bitcoin Fixes This because every­thing… You have all these big complex problems and then you try to boil them down, but they’re not easy to boil down because they’re so complex. You know? But I was on a walk with my wife I think a day or two ago and I was kind of thinking through this. I was talking with her and her eyes glazed over when I started talking to her. But I was thinking about why every­one’s so mad these days and so much division and all these things, right?

Mark Moss:

There’s so much hate towards people that are successful, hate towards people that are rich, all these things, right? And if you think about it, why do they hate this and not hate this? And really, I started kind of boiling it down to we don’t have a just system, right? The elite obviously don’t follow the same laws. I mean, they can do insider trading, we can’t, right? They don’t get crimes, we do. And that goes to the money system, right? So the money isn’t… The Cantillon Effect, right? It’s not just. They get money that we don’t. They get interest rates that we don’t. And so this whole system is unjust.

Mark Moss:

So if you look at sports, nobody hates LeBron James. Well, I don’t really like his polit­ical view right now. But you don’t hate that he’s a good basket­ball player because you view sports as being fair. It’s when you see the system is rigged against you that it makes you angry. And so you see all these people mad today and marching in the streets. They’re not really sure what they’re mad about, but they know the system is rigged against them. And it really starts with the money. Right? And the money system is rigged against people.

Ben Prentice:

Yeah, and that’s why I created the website because I think it’s very clear that people all around the world today know something is wrong. And I have this website now I can point to and go, “Go look at the data. What the fuck happened in 1971?” Because it’s just staggering and trying to go off something you said there is that essen­tially, sound money allows you to store your wealth and that the problem we have in society today is that we can’t do that. And this dispro­por­tion­ately affects the poorest people among us because the system strat­i­fies wealth. I pulls the rich richer and it pulls the poor poorer because it’s more diffi­cult when you’re poor and you’re living paycheck to paycheck to throw money in a finan­cial index fund or to own real estate and to benefit from asset infla­tion.

Ben Prentice:

And yes, there’s a Cantillon Effect. There’s the people that take out more debt can dispro­por­tion­ately benefit from infla­tion itself. But this asset infla­tion problem is why that system is rigged. That anybody that holds assets is going to dispro­por­tion­ately benefit from increases in monetary supply because of that money leaking into those assets as we talked about earlier. That’s why the system is broken. If it was money that went up in value and the value of every­thing else went down in real terms, then we wouldn’t have that strat­i­fi­ca­tion. We wouldn’t have that hollowing out of the middle class, right?

Mark Moss:

Right. I think the real value propo­si­tion of Bitcoin, though, is to your point, yes, we can store our wealth now, which allows us to not get priced out of a house in my neigh­bor­hood or not in all these things. But really, it’s not about me being able to store my wealth, which is obviously a benefit, but it’s taken away or handi­cap­ping the govern­ment’s ability to manip­u­late it. And so by taking away their ability to manip­u­late it, now I have a good sound money again, right? And so it’s kind of both, right? If we can take away their ability to manip­u­late and all these things, now I have a chance to have sound money. And so it ends wars and all these things. So yeah, it’s big.

Brady Swenson:

So this is a good segue in a question I wanted to get to. Ben, do you want to wrap something up and then I can ask?

Ben Prentice:

Yeah. No, I was just going to say never under­es­ti­mate the tempta­tion to print money and redis­tribute wealth.

Mark Moss:

No, you can’t. Human nature is human nature. And that’s why I love FA Hayek’s quote, right? They’ll never have to sell money again until we take it from the hands of the govern­ment. Right? That we’re all separate, money and state here. Right? So that we all see that.

Brady Swenson:

All right, little sidebar question. Do you guys think FA Hayek was time traveling from the future and knew about Bitcoin? Because I don’t see any other way that we could have done this without the technology like Bitcoin, taking money back for the people. He was imagining some way. He at least imagined that it was possible when no one else did. So fasci­nating.

Ben Prentice:

It is so fasci­nating. I mean, even Jorg Guido Hulsmann was writing about digital monies in 2008, the year before Bitcoin was released to the world, and basically came to the conclu­sion that he didn’t think digital monies were possible. Because bits and bytes, you can just change them and you can inflate the supply of those bits and bytes, so to speak. And the genius of what Satoshi Nakamoto did with Bitcoin to find a way to limit the supply and under­standing how he did that is just a whole rabbit hole in itself. How you create a supply and then open-source software, right?

Ben Prentice:

But yeah, I love that quote too. We put that quote at the bottom of the WTF website because I think he just logic’ed it out. I think he just said, “I don’t know how you’re going to do it. You better figure out some sly round­about way to do it because trying to take it force­fully out of the hands of the govern­ment’s just ain’t going to work.” And I think that makes sense. Maybe it’s the time.

Brady Swenson:

And maybe it’s the time, totally. Yeah. I think the word sly round­about to me make me think that he didn’t think that there was a polit­ical path, right? That’s obviously not a sly round­about.

Mark Moss:

He knew there wasn’t. The system had been way too captured at that point. I think he said that in the 80s, right? Like ’84 or something. Yeah. By then, the system was captured. He knew it at that point. There’s no way it would ever be given up. And to be honest, that’s always been my viewpoint. And if we want to look at the dangers of Bitcoin, I mean, and that’s still maybe one of the biggest complaints or objec­tions I hear is the govern­ment’s going to shut it down. And you have to know that the banking cartel, the banksters, whatever, they pretty much run the world, right? And they don’t want to see their power taken away. And they’re going to unleash the fury of hell to keep that power.

Mark Moss:

He saw it back in the 80s. I mean, we see it today. And it’s going to be inter­esting to see how that plays out. I don’t know what I think happens through that. I don’t know if you guys have any…

Brady Swenson:

I was just going to ask that, Mark. And you lead in perfectly to it like how do you think govern­ments and central banks will put up a fight against Bitcoin because so far, it’s been just kind of like under the radar for the most part. It’s treated as just another commodity. They don’t seem to be too worried about it. We even have a few Bitcoin advocates in the US legis­la­ture. What will the reaction be if Bitcoin really starts to approach gold’s market cap and be taken seriously as a form of money as opposed to just a commodity?

Mark Moss:

Well, my viewpoint has drasti­cally changed in the last six months. If you would have asked me this question six months ago, I would have had a different answer. I would say just quickly, though, obviously, gold market’s 10 trillion and banks, they don’t seem to care about that. Offshore banking is $30 to $40 trillion. So Bitcoin doesn’t have to reach mass adoption. Offshore banking is $30 to $40 trillion. Not every­body has an offshore bank account. But what I would have said six months ago has changed a little bit today. And what I would have said six months ago is Bitcoin is built on game theory.

Mark Moss:

And so one country has to decide to let it happen and the others don’t. If we look at that book, “The Sover­eign Individual,” it talks about, again, being a sover­eign individual. And hopefully, I guess my dream would be that govern­ments start to compete for us. And like I just saw just this week, Barbados announced, “Hey, if you’re working from home, we’re going to give you a year visa. Come work from Barbados, right?” And Bali is doing the same thing.

Mark Moss:

So I would like to see countries start competing. And so one country says, “Hey, Bitcoin’s legal here.” And America says you’re going to die if we catch you with it. Well, people start going to where it’s allowed. That’s what I would like to happen. I’ve never seen in history the world been able to agree on anything until now. And that’s why I say my view has changed somewhat now. I honestly never thought I would live to see the day to see what I’m seeing happening right now where I’m not allowed to go to church anymore. I’m not allowed to do anything. That’s crazy. But I’ve never seen the world collab­o­rate like they have before where every single country has bought in and locked down in mass and the whole deal.

Mark Moss:

And so like I said before, I thought, “Oh, game theory, one country is not going to do it.” But my view is changing a little bit. I don’t know. What do you think, Ben?

Ben Prentice:

Well, I’m taking this from the other side of it, how do govern­ments compete with Bitcoin? And all they have to do is stop printing money. And then we win anyway because then you have sound money again. I mean, I’m not going to sell my Bitcoin if Richard Nixon promises this, his fingers crossed, that he’s going to stop printing money and go to a gold standard again. Of course. But regard­less, if they stop printing money, then that solves the problem too. But are they going to compete on seizure­ship resis­tance and censor­ship resis­tance and permis­sion­less­ness and open proto­cols that can be innovated ad infinitum without permis­sion from central govern­ments and border­less, neutral, all these other things.

Ben Prentice:

I mean, good luck on that. And if they do that too, then it’s like, “O, you created Bitcoin number two, and that might be just as good too.” But good luck trying to do that because Bitcoin already did that. So Bitcoin already fixed that. So how are you going to fix that? So there’s not really much they can do, right?

Mark Moss:

I mean, that’s a great point, right? So as you asked the question earlier, what they’re doing now is pushing us more in towards that. And by making it illegal only proves why we need it that much more. So really, the best way to beat it is to take away the need for it, which is what Ben is saying, but we know that human nature never in history has people ever lived within their means. Human nature isn’t going to do that. The Roman Empire inflated their currency. And so that’s always going to happen. So that would be the best answer. I don’t see that happening.

Mark Moss:

But I live in California. Our great rep, Brad Sherman, he went before Congress or whatever, and said, “We have to outlaw Bitcoin. It takes away the US dollar dominance.” And he said specif­i­cally, basically kind of paraphrasing and quoting, he said, “It takes away our ability to slap sanctions on countries like Iran.” And I just imagine, Iran’s over there going, “Really? Really? Huh. We should probably use Bitcoin, right? We can get out of US sanctions?”

Mark Moss:

And so I’ve kind of envisioned if the US made it illegal to own it, then it would just go live in the free part of the world. But back to I think your point was that the one thing that’s a little bit encour­aging as we have seen the finan­cial system, which is a little bit weird, it’s meant to put them out of business, but they’re embracing it. So Fidelity, TD Ameri­trade, whatever, right? And I would imagine collec­tively, they spent billions of dollars, NYSE and all that, they probably spent billions of dollars to get into the Bitcoin market. And they lobby. They lobby the govern­ment. They’re spending a lot of money. They’re the biggest lobby­ists.

Mark Moss:

So they’re not going to want to lose their billions of dollars they’ve invested. And so hopefully, they’re at least on our side for now, and they’re going to be pushing policy, hopefully lobbying. I like to put some faith and hope in that.

Ben Prentice:

Yeah. And when you were talking about the nations that might benefit from every­body else banning it, I immedi­ately thought of North Korea or Venezuela because these people have almost nothing to lose, right? Even if North Korea agrees, they all get together and like, “Oh, we all agree. Let’s ban Bitcoin.” North Korea has got their fingers crossed too, and they’re like, “Yeah, we have tons of money.” I mean, not that I’m saying we shall move to North Korea for sure. It’s like check­mate, right? You can’t prevent people from crossing their fingers and behind their back mining Bitcoin.

Ben Prentice:

Iran, I think is supporting Bitcoin mining. We’re pretty sure the Venezuelan govern­ment confis­cated all these Bitcoin miners and then turned them on with their free electricity, whatever. So yeah, that’s…

Mark Moss:

And you can’t you can’t extin­guish human ingenuity. And Ben, you hinted earlier to kind of these like populist upris­ings. And I was listening to this podcast just a couple days ago, and it was giving this inter­esting take and it was basically saying like you only need about a 15% partic­i­pa­tion to overthrow an existing govern­ment. You don’t need a majority. You need about 15%. And so they can’t get rid of Bitcoin. They can’t get rid of drugs. Drugs, you got to grow it and pack, and process it and ship it. They can’t even keep it out of a prison, right?

Mark Moss:

How are they going to keep something digital out? Obviously, if they catch you and they kill you, it takes the desire away, but they can’t get rid of it. But all you need is about 15% of the people. And people want to say that the US dollar is always going to be the reserve currency because of the guns. Right? We have the military, but that doesn’t hold any weight in my opinion because Venezuela has guns too and no one wants to use their currency. At the end of the day, I’m going to use what you’re going to accept, Ben. And if you’re not going to accept my Bolivias, then I got to pay you with batteries or water, I guess. Right?

Mark Moss:

And so they can put the gun to us and say, “Hey, you have to use this currency,” but as we’ve seen in Venezuela, it doesn’t matter. It’s just lining the streets. Money is commu­ni­ca­tion. If we’re going to trade, I have to give you what you’re going to accept, and if you don’t want those fake dollars. At the end of the day, there’s just nothing they can do. They’re going to lose in my opinion.

Ben Prentice:

Yeah. It’s funny from a global geopo­lit­ical macro perspec­tive too, is that we’re talking about what if a govern­ment tries to compete with Bitcoin by stopping printing money, for example, or even going back to a gold standard? And that still requires trust. And you look at countries like Russia and China right now that are buying immense amounts of gold. There’s a good reason because when you hold the gold yourself, you don’t answer to anybody and that asset is neutral and global, right? Gold will be accepted as a payment between govern­ments probably for some time to come unless Bitcoin unseats that as well, but it’s that same idea. And even Keynes had… I don’t know why we keep talking about Keynes, but he had this idea of the bank core, which was this inter­na­tional reserve asset right? Which I believe Bitcoin really is in a sense. It’s this neutral asset that cannot be debased, that’s verifi­able, that can move anywhere almost effort­lessly.

Ben Prentice:

And I think it’s just such a natural conclu­sion for countries like Russia and China and Iran to come to. And really, they should all just realize that they can stand to benefit from this if they just start to embrace it.

Mark Moss:

But they’re never going to embrace living within their means. It’s not human nature. Only by force, right? They’re going to have to be forced into it.

Ben Prentice:

May just happen that way. I don’t know.

Mark Moss:

Yeah.

Brady Swenson:

I want to go back to this topic that Mark was talking about, the 10 million bitcoiners, or sorry, 15% of the people. Cory, our founder, wrote about this on the Swam Bitcoin blog. Check it out at swanbitcoin.com. It’s 10 million bitcoiners, the intran­si­gent minority. And it’s the idea that Nassim Taleb really talks about this, kind of develops the idea that we just need to have about 10 million bitcoiners that are really just like dedicated to Bitcoin like, “We want this to be our money,” right?

Brady Swenson:

And the example that’s always used is kosher food and halal food. There’s a minority that really demand that food be prepared in a certain way. And so compa­nies just do that because it’s not as that big a deal to them and no one else really cares, one way or the other. So they might as well, right? And so I think that could be a peaceful path that Bitcoin could take.

Mark Moss:

I think right now, so I’m sure you guys have seen just over the last couple days, it’s just been this last week. Pictures are popping up of all over that places aren’t accepting coins, right? There’s a national coin shortage. I was going to do a video about it. There’s a national coin shortage and the Treasury is going to shut down. They can’t make coins, whatever the situa­tion is. Money is dirty, contains COVID, whatever. And all the sudden within a week, I’m seeing stores all over aren’t accepting it.

Mark Moss:

So what if the bitcoiners today when they go into the store, okay, you’re not accepting cash, would you consider taking Bitcoin? Would you consider it, right? And if every­body that was into Bitcoin would just ask when they went into the store, imagine how quickly it could happen like right now.

Ben Prentice:

Yeah. And going back to what he’s saying is about the kosher foods that I think people that don’t eat kosher food don’t care about the food. Whether it’s kosher or not, so they’ll eat anything. And I think the same thing is true with money. They got PayPal. They got Venmo. They got Cash App. Nobody has an intrinsic love for the US dollar itself. They’re just these little numbers on the screen and if you keep seeing the price of Bitcoin go up and up and up and they’re like, “Well, I’ll use that instead. I guess it doesn’t really matter.” And they can use it custo­di­ally too if they want to but the great thing about Bitcoin is the option­ality that you can use it and hold it yourself.

Ben Prentice:

So all the current paradigm systems can be built on top of Bitcoin. But you can’t build the Bitcoin-like features like censor­ship resis­tance and decen­tral­iza­tion, seizure­ship resis­tance, all that stuff. You can’t build that on top of the US dollar. So I think it just kind of wins eventu­ally, you know?

Mark Moss:

Yeah.

Brady Swenson:

All right, guys. We’re going to wrap it up right there. I think that was an amazing conver­sa­tion. I had a lot more in the outline. But I love this format because two great minds can just come in and talk to each other. I love giving this forum for just episodes like this. This keeps happening, and we’re really excited about future episodes. We’ve got three great pairs lined up. I’ll be announcing those on Twitter soon. So guys, thank you so much for partic­i­pating in this discus­sion. I think we got a lot of good feedback on YouTube and Twitter about it. So appre­ciate your time, guys. Thank you so much.

Mark Moss:

Appre­ciate it.

Brady Swenson:

Take care.

Other Episodes

Episode 8 –Andy Edstrom and Ansel Linder

Episode 9 –Rockstar Devel­oper and Jeremy Rubin

Episode 10 – Bitcoin TINA and CK Snarks

Episode 11– Gigi and Knut Svanholm

Episode 12 –Adam Back and Preston Pysh

Episode 13 –Alex Gladstein and Matt Odell

Episode 14 –Robert Breedlove and Tuur Demeester

Episode 15 –Isaiah Jackson and Max Keiser

Episode 16 –Gigi and Udi Wertheimer

Episode 17 –Aleks Svetski and Jimmy Song

Episode 18 –Stephan Livera and Marty Bent

Episode 20 –Samson Mow and Parker Lewis

Episode 21 — Lyn Alden and Jeff Booth

Links:

Swan Bitcoin

Mark Moss

Mark’s Podcast –Market Disrup­tors

Mark’s Personal Website

Mark Moss on Youtube

Ben Prentice

Ben Prentice on Twitter

Ben Prentice’s Podcast– The Bitcoin Echo Chamber

WTFhappenedin1971.com

This blog offers thoughts and opinions on Bitcoin from the Swan Bitcoin team and friends. Swan Bitcoin is the easiest way to buy Bitcoin using your bank account automatically every week, month, or paycheck, starting with as little as $10. Sign up or learn more here.

Brady Swenson

Brady is the Head of Education at Swan Bitcoin, the best place to buy Bitcoin with easy recurring purchases straight from your bank account. Brady also hosts Citizen Bitcoin, a podcast focused on documenting his journey learning Bitcoin, featuring some of the biggest names in the Bitcoin world.

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