Transcript:
Let's start with what is the problem? The problem is the most important place to start, because if you don't understand what the problem is, then the solution may not make sense. What we're talking about is the state of today's financial markets. First, let's start with the Federal Reserve and central banking in general. A central bank is merely the national bank, given the privilege to control the production and distribution of money and credit for a nation.

That bank is in charge of manipulating, controlling and also producing money. It was established in 1913 with the passage of the Federal Reserve Act. We're talking about an organization that is just over 100 years old, that is in charge of the production and distribution of money and credit in the US. It has a specific goal. They are to provide the country with a safe, flexible and stable monetary and financial system.

Since inception, they've presided over 16 economic recessions. Their balance sheet has grown by almost 100% since March 2020, and their purchasing power of the US dollar since 1913 has fallen 96%. We'll get to that in a second. When you hear about the central bank in the decisions or meetings, etc., there's something known as the Federal Open Market Committee.

This is the FOMC and is comprised of 12 individuals. They are responsible for the formulation of monetary policy, 12 people that are responsible to come up with monetary policy now affecting 330 million Americans. That doesn't even include the people who are non-Americans who also end up either holding, using, transacting, or trying to store value in dollars. What they have been doing is no secret from Satoshi Nakamoto.

The root problem with conventional currency is all the trust that's required to make it work. We have to trust that the central banks are doing what they're supposed to do. The central bank must be trusted not to debase the currency. But the history of fiat currencies is full of breaches of that trust. What exactly does that mean? If I had $1.50 years ago, that dollar may be able to buy me five.

Coca-Cola's today. $1 doesn't buy me five Cokes. It doesn't even buy me one Coke. It's not that the Coca-Cola itself became more valuable. It's that the dollar has become less valuable. If the dollar becomes less and less valuable, then you need more of them to buy the same assets. It's why you've probably heard your parents or grandparents or friends or family say real estate always goes up.

Well, it's not so much that real estate itself is becoming more valuable. It's that the dollar is guaranteed to lose value over time. They're going to debase it, devalue the currency. This is not specific to the Federal Reserve. This happens with all central banks, whether it's the Federal Reserve or other countries. They all continue to increase their total assets.

They continue to debase their currencies. If you are sitting with dollars or fiat currency in your bank account, you end up having less and less purchasing power. Your wealth is being devalued away as you sit there and simply hold it. This brings up the idea of the gold standard versus the Fiat standard. The gold standard is really important to understand because the gold standard is what we used to have before 1971.

The entire monetary system was backed by gold. What does that mean? If you go all the way back 5000 years, gold has served as money. But ultimately, gold isn't great to use in transactions. It's heavy to carry around. It's really hard if I put it on a table and you need to actually measure how much there is. If I want to break off a piece to give it to Alice or Bob, that's really difficult as well.

From a transaction standpoint, gold is horrible, but it was a great store of value. And in an attempt to make gold more usable and provide more utility for it, we created paper claims on gold. Those paper claims allowed somebody to say, I'm not going to carry around my gold bars or any more of my gold coins. Too heavy, too hard to use, and instead going to leave them at a bank or in a vault somewhere.

And I'm going to carry around these pieces of paper, and these pieces of paper would allow me to go and actually use them for transactions. I can go to a general store where I could buy a horse back in the day, and I could say, hey, here's a piece of paper that has a claim on my gold that's sitting at a bank or in a vault.

If you would like, you can simply hold on to the claim and use it for yourself. Or you can actually go to the bank and turn in this claim and they'll give you gold. Gold was able to hold value and be a store of value, but we had paper claims to the gold. The entire idea was that countries agreed to convert paper money into a fixed amount of gold.

The United States used this gold standard up until 1971, and gold was valuable because it had sound money principles. All sound money principles means is that it's outside of the system and it was resistant to intentional devaluation by others. You couldn't create more gold. The only way to get more gold was to dig it up out of the ground.

In 1971, we transitioned from a gold standard to the Fiat standard. It was originally presented to the American people as a temporary measure, but as we know, one of the surest ways to ensure a permanent program is for the government to create a temporary program. The Fiat standard said. Why don't we keep using those paper claims, but rather than have the ability to turn them in for gold, what if we just use the paper instead?

We don't actually need to back it by gold anymore. Fiat money, which is the dollar along with things like the euro, etc. is simply government issued currency not backed by a physical commodity, and it's just issued and controlled by the government. The central bank issues it. They're able to control the production and distribution of the money. That money is not backed by anything.

It is simply paper or an electronic format. This gives central banks greater control over the economy, because now they can control how much money is printed. They don't need to go dig up more gold in order to create more dollars. They can simply create it by either pushing a button on a printing press, or now in the electronic world, they just edit their bank account.

Just like you can't go into Bank of America or JPMorgan Chase and say, hey, rather than, I have $1,000, I want to have $10,000 in my bank account. Just let me edit the number. You can't do that. But they can do that. They can simply edit the number in their bank account. Every fiat currency that has existed in history has eventually failed.

There's over 500 examples of this that are helpful in the short term, like in March 2020 when their economic crises, we can respond to them by increasing the monetary supply, injecting capital into the economy. There are positive side effects to this, but the long term trend is that every fiat currency in existence has eventually failed. If you go back and you look at this $100 bill was redeemable in gold.

This is before we ended the gold standard on the actual dollar bill itself. It said redeemable in gold on demand at the United States Treasury, or in gold or lawful money at any Federal Reserve Bank. This was the ultimate manifestation of those paper claims on gold. The dollars were backed by gold. You now look after the gold standard has been removed.

It says this note is legal tender for all debts, public and private. There's no reference to actually being able to redeem these dollars for gold or for any other commodity. What exactly happened since 1971? What we have here is a period of time called the Great Prosperity, and the entire idea can be summed up with one sentence. Pay rose with productivity.

It means that as productivity of workers and corporations went up, so did the pay that they actually receive for the wages. Overall compensation continued to increase, and they tracked almost perfectly to the increases in production. But after 1971, once we unpack the dollar from gold, we went on to the fiat standard. Productivity. That top line continued upwards. It actually accelerated in terms of how quickly it was growing, but the average hourly compensation and the average hourly wage, the pay the workers actually received went sideways.

We no longer saw pay rising with productivity. What that means is, in purchasing power terms, people started to get paid less and less and less. This is the feeling of I can't get ahead. I'm stuck in a rat race. This is the purchasing power of the US dollar. On the far left, you can go all the way to 1913, the Federal Reserve.

That creates a central bank with the ability to manage the country's money supply. And we have seen increases and decreases in purchasing power. But the long term trend is that we continue to see a massive devaluation of the purchasing power of U.S. dollars. Along the bottom, you can see here what is $1 buy in 1913. $1 would buy 30 Hershey's chocolate bars, the equivalent of $26.14 today.

In 1929, it was ten rolls of toilet paper. 1933 ten bottles of beer. 1953 ten bags of pretzels, 1971 17 oranges, 1997 four grapefruits, 2008 two lemons and today $1 can only buy one small McDonald's coffee. The purchasing power of the dollar continues to get less and less valuable. It's not that the Hershey's chocolate bars became more valuable, it's that the dollar lost purchasing power.

This is why the belief that savers end up losing in today's economy is so true. If you simply spend less than you make, take dollars, put them in your bank account and you just let them sit there. There's a big, big, big chance that you're just going to watch your purchasing power actually be degraded. That means you're going to have less and less money from a purchasing power standpoint.

If you have $100,000, let's say that you could buy a single family home today. If you wait 20 years, that same amount of dollars is not going to be able to buy that same single family home. It's not because the house became more valuable. It's because the dollars became less valuable. And that is the erosion of purchasing power.

Many of your grandparents and parents and friends have told you all you have to do to get financial security is simply save. Well, that was true before 1971. But in today's world, the erosion of the purchasing power of the US dollar means that you can no longer do that. You have to convert those dollars that are losing value into something else in order to protect that purchasing power.

What we have here is the M2 money stock, and we continue to just get an absolute explosion. Over 40% of the US dollars in circulation were printed since March 2020. This is undisciplined monetary and fiscal policy. In a pure chart. If you look at CPI or inflation, you feel it. You see the gasoline is up a lot. You know that when you go to the grocery store, your grocery bill is much higher than it used to be.

Your electricity bills higher. Everything you go to the store to purchase is higher and higher and higher, and you feel like you can't get ahead. That is inflation at work. What many people don't know is that the way they count inflation has changed many times. But the big, big change was in 1980. They actually changed the calculation for inflation.

They no longer say a loaf of bread was zero last year. Now it's why instead they mess with the weightings in the actual measurement. They change what they measure, how they measure and when they measure. And it has shown a lower and lower number. Look at this. These are unofficial inflation numbers from Shadow Stats, which is a website that may or may not be the best, most accurate representation.

But it is one of the many, many examples that shows much higher inflation numbers. What this is showing is that if you were to calculate inflation based on the 1980 methodology, we would be having somewhere in the 13 to 14% official inflation numbers had they not changed the methodology. A singular example is the official CPI rent index. The way they measure rent in the United States, their claiming that is up only 2% over the last 12 months.

But if you were to look at something like Zillow or apartments.com or one of these websites that has hundreds of millions of data points, they measure in real time, they are showing anywhere between 8 to 15% for the methodology of the rent index. They're only surveying. They literally ask people, what did you pay in rent last year? What did you pay this year?

That number is just hundreds of households at a time and it's self-reported. You tell them what the changes. They have no ability to actually confirm the information. They're only looking at a couple hundred or 1000 data points. But when you look at the actual data points, it's a more real time, accurate data set. They're showing numbers that are much, much higher than what we see in the official numbers.

Inflation is high and the real inflation is probably much higher than what the official numbers are actually telling us. Many of you probably remember that recently politicians started to say, if we don't raise the debt ceiling, if we don't take on more debt, we will not be able to pay our bills. The United States will default on their debt.

Now, of course, the United States has never defaulted before. We probably won't default because we'll just continue to raise the debt ceiling more and more. The kind of layman's example would be if you had a credit card and that credit card bill was due, but you didn't have the money to pay the credit card. What the government does is they take out a second credit card, and they take on more debt to pay off the first debt, and they continue to play this round robin game more and more, borrowing simply to pay off the old bills.

It's unsustainable. Unless you run some sort of balanced budget, it's nearly impossible to do that forever. If you remember the idea of a central bank currency, that we have to trust that the central bank and politicians are not going to debase it. When they debase the currency, they are stealing our purchasing power. That is where Bitcoin comes in.

Bitcoin is a decentralized digital currency. That's it. It's decentralized. No one owns it. No one controls it. It's digital. There's no physical form. There are not gold coins. It is a digital currency. And obviously currency means that it serves as both a store of value, a medium of exchange, and as a unit of account. What we have here is a quote from the Bitcoin standard.

Bitcoin represents the first truly digital solution to the problem of money. And in it we find a potential solution to the problems of scalability, soundness and sovereignty. If we look at what is making Bitcoin so attractive to people, well the first is that it's globally accessible. Anyone, anywhere in the world with an internet connection can use. It does not matter who you are, what language you speak, where you were born, who your parents are, what your education level is, what your wealth status is, what you do for a living, who you know, or where you live.

Anyone with an internet connection can buy, sell or store it, and they don't need to ask permission from anyone. This is a decentralized system, meaning that there are no gatekeepers. There's nobody who says you may use it or you may not use it. It is decentralized in nature. When you have a global population of billions of people that now have access to a global store of value and monetary network, that no one can stop them from using, it becomes very interesting.

Obviously, in many countries around the world, people would like dollars, especially in countries where their currency is failing. If you look at somewhere like Venezuela or Zimbabwe or Turkey or Lebanon, those people would love to have dollars. They believe in the full faith and credit of the US government. They want dollars. The problem is it's very hard to get dollars.

The accessibility of dollars is low in those countries. They actually may have dollars confiscated if they sit in a bank account. It's expensive and also dangerous to acquire dollars on the black market. If people have trouble getting dollars, then this global accessibility of a digital currency becomes very interesting to them. The second feature that people find interesting is this idea of a programmatic monetary policy.

Now the whole idea of monetary policy in the United States is that there's 12 people. They come together and they make decisions around monetary policy. They're able to actually affect interest rates. But those people, they're human. They can make mistakes and they make variable decisions, meaning that sometimes they actually do things that make the currency more valuable or less.

They strengthen it or weaken it. And they're trying to respond to economic situations. But if people want to trust the central bank, we needed to do two things. The best central bank is predictable and independent. Independent, meaning it's not subject to any sort of influence or manipulation from outside sources. Politicians cannot influence the decision making and neither can anyone else.

There is nothing more independent as a central bank, that a decentralized system where there's nobody, no human or organization in charge. There's a programmatic monetary policy, meaning it is written into software, and that software executes regardless of what is going on in the world. It doesn't care who's president, what political party is in control, what you at home think, nor your neighbors or anyone on the news.

It simply continues to execute that software based on what was written over a decade ago. The second thing is that it's actually predictable. Obviously, if I asked you right now, what are the monetary policy decisions that are going to be made over the next year? You don't know how many people literally watch from around the world. They watch these press conferences with the central bankers, and they try to see what color is their tie.

Did they use the word "ish" or not? When somebody asks them a question, they raise their eyebrows or not? How long was the speech? Does that have any correlation to future decision making? They're all trying to speculate on what these humans are going to do in the future. The humans don't even know what they're going to do in the future.

Ultimately, people are finding it very valuable to have a programmatic monetary policy, something that is predictable, something that is unchanged, something that you can depend on and something that no one controls, that programmatic monetary policy is a 180-degree difference than anything in the fiat world. What is Bitcoin's monetary policy? There will only ever be 21 million Bitcoin.

If I ask you how many dollars there will be, there's an infinite number. They can create as many of them as they want. They can create more and more and more and more and more. But with Bitcoin, there will only ever be 21 million Bitcoin in the entire world. That is set and cannot be changed unless more than 51% of people came together and agreed to change it every single day.

Right now there are 900 new Bitcoin that come into the circulating supply. If I asked you how many dollars were created, nobody knows. If I asked you how many dollars are created yesterday, nobody knows. If I ask you how many dollars are going to be created tomorrow, nobody knows. If I asked you to show me the transactions that happen with dollars today, nobody can do it.

Bitcoin is a transparent system that is programmatic in nature, and not only can tell you that 900 Bitcoin were created today, but I can go to a blockchain and I can show you and verify it for you. I can prove to you that only 900 Bitcoin were created today and put into the circulating supply. And most of the bitcoin that there will ever be are already in circulation.

So of the 21 million total that will ever be made. There's only a small predictable amount left that will be created. But over the next hundred years, we will continue to get a little more and a little more Bitcoin coming into the circulation every day until we hit that 21 million total Bitcoin. This is important because in a system in the legacy world where nobody knows what future decisions are, nobody knows what's happening right now, and no one can even prove to you what happened last week or last month or last year.

They can simply tell you what happened, but they cannot prove it. What we have with the Bitcoin system is full transparency. Audited every single day, hundreds of thousands of times by millions of people. Everyone knows what is happening and you can watch it in real time. You can prove it and know for certainty what will happen in the future, because you can actually read the software and see what programmatically will occur.

What are the implications of this new monetary policy? Well, the first is that it has created an absolutely incredibly attractive store of value and medium of exchange. We have watched Bitcoin continue to rise in global adoption. If anyone is a student of economics, if you have a fixed supply asset and demand increases, then the price has to increase in order to accommodate everyone.

So that store of value compared to the dollar, which allows your purchasing power to be devalued over time. Bitcoin has actually seen an appreciation of purchasing power. If you sat with $100 in your bank account ten years ago to today, you can buy less things with that $100. But if you had put that same amount of money into Bitcoin ten years ago, it would have been able to buy many more goods or services.

Your purchasing power has increased with Bitcoin while your dollar purchasing power has decreased. It's the exact opposite of the legacy system. Bitcoin has become the best tool in the world to preserve your purchasing power. It is defending your purchasing power. A decentralized network that cannot be changed by any one individual or any one organization, will not allow for the depreciation of your purchasing power over long periods of time.

And that is why millions and millions and millions of people around the world continue to find it attractive. Bitcoins is the first store of value for which its supply is entirely unaffected by increased demand. No matter how much demand there is. The Bitcoin monetary policy will not change if all the demand went away tomorrow. Bitcoin's monetary policy will not change if there is a global pandemic.

Bitcoin's monetary policy will not change if there is World War three, Bitcoin's monetary policy will not change. If you don't like Bitcoin, Bitcoin's monetary policy will not change. No matter what happens in the world, Bitcoin will not change. You can watch it every single day. You can audit it and you can verify it. And that is why Bitcoin has become the best tool in the world to preserve our purchasing power.

If you line up Bitcoin with gold and fiat currencies, Bitcoin is superior in every single aspect except for one. How long it has been around in terms of being able to actually verify the supply and the transactions. Bitcoin is superior to the other two in terms of portability, how easy is it to actually move around the world? Bitcoin is superior to gold and fiat gold.

Super heavy fiat. We have electronic money, but it's not nearly as good as Bitcoin. It never closes, not on weekends, non-working hours or bank holidays. Bitcoin is always open divisibility. Bitcoin is super divisible. Gold and fiat are less divisible. Scarcity. Bitcoin is way more scarce than gold or fiat. Now established history is interesting because Bitcoin has been around for a little over ten years.

Gold has been around for 5000 years. It's by far the longest established history. Fiat has only been around since 1971. So while Bitcoin has only been around for over a decade, fiat currency has only been around for about 50 years. So it's definitely been around longer than Bitcoin. But compared to gold, Bitcoin and fiat have been around for almost the same amount of time compared to thousands and thousands of years of history.

Censorship resistance. Bitcoin is much more compelling from that standpoint. Programmable and decentralized. Same thing. Bitcoin is superior to gold and fiat in every single aspect other than established history, where gold has survived for 5000 plus years. Where is Bitcoin today? It is grown from this crazy experiment to a globally accepted digital currency, with about $1 trillion in total value and over 100 million users.

Even with this incredible progress, it is still smaller than a single company like Amazon. The entire crypto industry is only two, $2.5 trillion. Gold's 11 trillion. The US dollar M1 is 18.7 trillion. Treasury bonds are 19 trillion and the US stock market's $49 trillion. Bitcoin, while it has gone from 0 to 1 trillion in about 12 years, is minuscule in the entire global financial system.

The ten-year compound annual growth rate of Bitcoin has been absolutely insane 173%. Amazon coming in second with 34. Bitcoin has been by far the single best investment you could have made over the last ten years. But what could happen next? Let's look at the adoption curve. In the orange, we have the total crypto users and white. We have the total global internet users measured between 1992 and 2006.

We have been growing at about an 80% average annual growth. We are somewhere in the 1998 equivalent of Bitcoin adoption compared to the internet, and at a much faster pace. Ultimately, we'll get to some point of tapering off so that 80% annual average yearly growth is likely to go somewhere in the 33% annual average growth. At that point, we'll have over a billion users already on board.

There's still tons and tons of growth to go. That's what Bitcoin has in front of it. Most people will ask, am I too late to Bitcoin? Did I miss it? This on the top left is a post on Reddit. It said too little, too late. Honestly, I feel like I missed the boat. This was in 2015. Somebody's thinking they're too late to buy Bitcoin at a price of 250 per bitcoin.

If you believe Bitcoin is on a path to continue to be, or to have a chance to be the world's dominant store of value, there's still significant upside. If it's a fixed supply asset and demand continues to increase, then ultimately the US dollar price has to go up in order to accommodate everyone. And you don't have to buy just one full Bitcoin.

You can buy a fraction of a Bitcoin. Each Bitcoin is divisible into 100 million satoshis. That's similar to 100 cents. Make up a dollar 100 million Satoshis make up one Bitcoin so you don't have to spend tens of thousands of dollars in order to start buying Bitcoin. You can start off with as little as $0.50. With a few hundred dollars, you could buy a million satoshis and be a Satoshi millionaire.

The bottom line is that it's a fixed supply asset. Only 21 million will ever be made. And to put it in perspective, there's over 50 million millionaires in the world. If you own one or just point one Bitcoin, you'll have more than the majority of the world.