We're all excited about Bitcoin hitting a new all time high, but
what if I told you that this rise might be scarier than you
think? It may mean Lambos and vacations
for some, but for many, it means that the market is anticipating
a money printing event in a big way.
Today, I'm going to break down why Bitcoin's price rise might
be the beginning of tough times ahead.
Stick around to the end of this video and find out why being
bullish might actually be bearish imotions.
This is beyond Bitcoin. Let's dive in.
All time highs always feel good. You wake up 1 morning and see
that price ripping, getting texts from friends.
Like damn I should have listened to you.
And you think about how much closer you are to reaching
escape velocity. But this price doesn't come
without a cost. You probably know this already
because you keep up with all the Bitcoin news, right?
You better, but we are in the age of money printing.
Did you know that 80% of all dollars in existence were
printed in the last five years? You probably knew that, right?
You better. The dollar is inflating at a
rapid pace and we have a limited time to get on the Bitcoin
train. So you can say that as Bitcoin
rises in value and hits new all time highs, it's almost like
Bitcoin tracks inflation. Florida State.
So as these prices rise in Bitcoin and it makes its new all
time highs, It means that on the back end that more and more
dollars are being printed or are in anticipation of being
printed. The higher Bitcoin goes, the
more of an indicator we are getting debased and the speed in
which that is happening. You know what else bitcoins new
all time high tells us about the state of the economy.
What's that? I'll tell you right after the
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Go to sat123.com. OK, so let me tell you what I
think bitcoins new all time high tells US1 we are going to get
the base faster. When bitcoins hitting new all
time highs starts to happen more and more frequently, it's an
indicator of the speed of the print.
Don't it just feel like a print is coming?
2 If more printing is coming, what does it mean for the people
who don't hold their own keys? What does it mean for the no
quarters? It could be the beginnings of an
accelerated loss in the quality of life when it becomes too
expensive for shelter or clean food.
Money is broken, class systems arise, and freedom becomes
expensive. But I'm getting off topic.
Here's a Michael Saylor clip while I gather my thoughts.
The problem starts with continually changing the
definition of the Market Basket. But in my opinion, that's not
the biggest problem. The more the more egregious
problem is the the fundamental idea that assets aren't products
or services. Assets can't be inflated.
What's an asset? A house, a share of Apple stock,
a bond, a Bitcoin is an asset. Or a Picasso painting so.
Not a consumable good. Not a not not not an apple that
you can eat. Right.
If I throw away an asset then I'm not on the hook to track the
inflation rate for it. So what happens if I change the
policy such that let's let's take the classic example,
$1,000,000 bond at a 5% interest rate gives you $50,000 a year in
risk free income. You might retire on $50,000 a
year in a low cost jurisdiction. So the cost of Social Security
or early retirement is $1 million when the interest rate
is 5%. During the the crisis of March
of 2020, the interest rate went on a 10 year bond went to 50
basis points. So now the cost of that bond is
$10 million. OK.
The cost of Social Security went from $1,000,000 to $10 million.
So if you wanted to work your entire life, save money and then
retire risk free and live happily ever after on a $50,000
salary living on a beach in Mexico, wherever you wanted to
go, you had hyperinflation. The cost of your aspiration
increased by a factor of 10 over the course of, you know, some
amount of time. In fact, in that case, that was
like over the course of about 12 years, right?
As the inflation rate ground down, the asset traded up.
But the, you know, the conventional view is, oh, that's
not a problem because it's good that that assets, that it's good
that the bond is highly priced because we own the bond or what?
What's the problem with the inflation rate in housing being
19%? It's an awful problem for a 22
year old that's starting their first job, that's saving money
to buy a house. But it would be characterized as
a benefit to society by a conventional economist who would
say, well, housing asset values are higher because of interest
rate fluctuation, and now the economy's got more wealth.
Buying Bitcoin today means you have a money that matches up
with the rate of inflation, not what the federal funds rate says
the inflation rate is. Bitcoin is an inflation meter,
if you will, forever ticking upward.
If you think about it, the Fiat price continuing to climb will
bring prosperity to few but well health to many.
And the more you get into Bitcoin the more you stay into
Bitcoin. Bitcoin is a one way Rd. with
off ramps. If you had the human race doing
stuff and if you ask the question how much more
efficiently will we do the stuff next year than this year or how,
what's the value of all of our innovations and inventions and
investments in the past 12 months, you'd be hard pressed to
say we get 2% better. Typical investor thinks they
they're 10% better every year. So if you look at what's going
on, really when you're holding $1,000,000 of stocks and you're
getting a 10% gain a year, you really get a 7% expansion of the
money supply. You're getting a 2 or 3% gain
under best circumstances. And another way to say that is
if the money supply stopped expanding at 7% a year, the S&P
yield might be 3% and not 10%. It probably should be.
Now that that that gets you to start to ask a bunch of other
fundamental questions like if I borrow a billion dollars and pay
3% interest and the money supply expands at 7 to 10% a year and I
ended up making a 10% return on a, you know, billion dollar
investment paying 3% interest. Is that fair?
And who, who, who suffered so that I could do that?
Because in an environment where you're just inflating the money
supply and you're holding the assets constant, it stands to
reason that the price of all the assets is going to appreciate
somewhat proportional to the money supply.
And the difference in asset appreciation is going to be a
function of the scarce desirable quality of the assets.
And to what extent can I make more of them?
And to what extent are they? Are they truly limited in
supply? If you're not in Bitcoin, an all
time high could mean that you're getting deeper and deeper into
debt. Bitcoin might be the only thing
that could pull you out of it. Higher Bitcoin prices means
higher inflation, which means higher chances of war, poverty
and corruption. A widening of the wealth gap.
There will be more concentration of wealth in the hands of the
few, but maybe, just maybe, the pie will grow, Bitcoin gets
adopted, and the wealth will spread.
Buy some Bitcoin, study Bitcoin, do what you got to do.
But whatever you do, don't get caught on the wrong side of this
trade. Thank you so much for watching
the show. I just want to take a moment and
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this show. I'm oceans.
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