Speaker 1: Everyone, Welcome to another episode of the Market Disruptor Show. Today,
Speaker 1: I am sitting down with Jeff Booth. He has written
Speaker 1: a book called The Price of Tomorrow and it's a
Speaker 1: very important book for today. It's a book that everybody's
Speaker 1: interesting because it talks about deflation. Everybody must know about
Speaker 1: inflation deflation. So anyway, Jeff, welcome to the show. Thanks
Speaker 1: a lot for having me. Mark. All right, Jeff so um,
Speaker 1: Like I said, you know, I know about your book.
Speaker 1: I've been following you, listen to your interviews. A lot
Speaker 1: of people maybe don't know. So why did you give
Speaker 1: his quick background? I kind of like who you are
Speaker 1: and what led you to this book. I'm a technology
Speaker 1: entrepreneur for first and foremost, started a number of companies,
Speaker 1: one that grew to over half a billion dollars in market,
Speaker 1: capp Um and Boards and and uh many technolog g companies,
Speaker 1: and founder a number of different technology companies. And I think,
Speaker 1: and I would say, I have a front seat of
Speaker 1: where technology is going because because I'm involved in so
Speaker 1: many technology companies and I'm a reluctant author. I didn't
Speaker 1: want to write the book. Okay, I wrote the book
Speaker 1: because because I looked at where society was going because
Speaker 1: of this, where technology was going out, where where technology
Speaker 1: going The government's trying to stop where technology was going.
Speaker 1: And I looked at the impact of society and looked
Speaker 1: at my kids, and I said, what type of world
Speaker 1: will I grow up in? And nobody was talking about
Speaker 1: kind of this problem and I was. I was super frustrated.
Speaker 1: So that's actually why I wrote the book. Yeah, great, Yeah,
Speaker 1: it's such an important conversation and it's and it's pretty
Speaker 1: deep one that has a lot of different facets and
Speaker 1: areas to it. But um, if we talk about kind
Speaker 1: of the technique, I want to talk about deflation overall,
Speaker 1: but we'll start with kind of the tech disruption of
Speaker 1: that deflation. UM. I know and probably a lot of
Speaker 1: people know. Like when the presidential kind of cycle was
Speaker 1: just getting started, we had a candidate Andrew Yang, and
Speaker 1: he was this tech entrepreneur and he was telling the
Speaker 1: whole world that tech was going to take everybody's jobs.
Speaker 1: AI was going to take everybody's jobs. And so because
Speaker 1: of that, the government needed to start paying everybody to
Speaker 1: not work. And I guess you see the exact opposite
Speaker 1: of that. So what do you think about that in
Speaker 1: part of Andrew's platform, at the part where technology how
Speaker 1: fast technology is moving and it's going to take jobs,
Speaker 1: He's completely right, right, that's how uh, that is what's coming,
Speaker 1: and it's been coming for some time. If you if
Speaker 1: you just think, what is the point of technology, it's
Speaker 1: two free our time. Right. No ceo that no no
Speaker 1: company I work with, gets up every morning and says,
Speaker 1: I have an idea for a great technology company. I'm
Speaker 1: gonna make it more expensive for people. Right. The point
Speaker 1: is you're using technology to recreate industry, reason make them
Speaker 1: more efficient, right, And and the byproduct of that takes
Speaker 1: jobs away, and the byproduct of that is deflationary. So
Speaker 1: so the byproduct that reduces prices. Now that's a that's
Speaker 1: a super interesting point because I mean I've I've studied
Speaker 1: like the technological revolutions, there's been like five the last
Speaker 1: two and fifty years, like the first one, really like
Speaker 1: the industrial revolution, right, and so um, they created equipment
Speaker 1: to help get things done faster in larger quantities, right,
Speaker 1: whether that's equipment for the field to help people get
Speaker 1: field work done faster, whether that was assembly lines to
Speaker 1: get cars done faster, whether it was telephones to get
Speaker 1: communication done faster. But everything as you're as you're saying,
Speaker 1: everything is made to make work less, are less. And
Speaker 1: let's stay on that point for a second, because there's
Speaker 1: an argument. You could make an argument that where we
Speaker 1: are in technology today, like the Industrial Revolution, detector they
Speaker 1: what what will happen as you automate a whole bunch
Speaker 1: of things and then you've created a whole bunch of
Speaker 1: new industries, that world will replace more jobs than they
Speaker 1: described and create a creative destruction. There's you would have
Speaker 1: to if you're going to accept my thesis, you would
Speaker 1: have to debate that topic. Right, is there a possibility
Speaker 1: that this could create more jobs in the future where
Speaker 1: we are in technology? And that's where I think a
Speaker 1: lot of people look back to history and say it's
Speaker 1: worked before. Right, You've gone through these periods, and those
Speaker 1: periods were always really tough. They always ended kind of
Speaker 1: in wars, right because you because a whole bunch of
Speaker 1: people but were being left out. Right, governments inflated against that,
Speaker 1: and you had revolutions and turned into wars. So forget
Speaker 1: the getting through that part. Let's just argue, let's just
Speaker 1: debate that topic. Could there me more jobs in the future.
Speaker 1: And I don't think anybody that's working in technology believes
Speaker 1: that could be true today. Oh really, that's interesting because
Speaker 1: because it would. And and if if that, if you
Speaker 1: find somebody, I'm happy to debate them on your show.
Speaker 1: Because if you know how fast, if you know what's
Speaker 1: happening in artificial intelligence, and artificial intelligence is replacing labor
Speaker 1: at a rate we've never seen before. At first, artificial
Speaker 1: intelligence needs a bunch of PhD researchers who are creating
Speaker 1: the algorithms. But then the algorithms see things we don't see,
Speaker 1: and it moves faster and faster. So the byproduct of
Speaker 1: what's happening here is when I first started my first company,
Speaker 1: it took me about five million dollars in capital to
Speaker 1: create version one of our website and transportation system. That
Speaker 1: same that same website transportation system is available to shot
Speaker 1: on Shopify today. Actually way better for fifty dollars a month. Yeah, right,
Speaker 1: and and so so so you're building on a stack
Speaker 1: that is moving so fast, little pieces of technology that
Speaker 1: are woven together that that costs almost nothing um for
Speaker 1: entrepreneurs to and and and why do you why do
Speaker 1: you think everything on your phone is free, right, right,
Speaker 1: we celebrate deflation and all of the monopolies with credit right,
Speaker 1: and the consumers if you look at Apple, if you
Speaker 1: look at Um and all those apps competing for your attention,
Speaker 1: have entrepreneurs on the other side competing for your attention,
Speaker 1: and they drive the price down to free. You don't
Speaker 1: you don't pay for your flashlight up. You don't pay
Speaker 1: for your guitartoon or you don't pay for a million
Speaker 1: or your camera anymore. You don't pay for anything um
Speaker 1: And that's the point. It just drives abundance just to
Speaker 1: humanity and price prices coming down. Yeah, I think you know.
Speaker 1: I I think people know that kind of inherently, but
Speaker 1: they haven't really thought through this. So. I mean when
Speaker 1: I was a kid, we had the jets in cartoon, right,
Speaker 1: and like they had like robots that were the maids
Speaker 1: and they were doing their housekeeping, and everybody thought, oh
Speaker 1: my gosh, when I grow up, I'm gonna have a
Speaker 1: robot and they're gonna do all my work for me.
Speaker 1: Like didn't we all want that? But but now we're
Speaker 1: threatened by it somehow, right, I guess is what you're saying. Well,
Speaker 1: we're threatened by it because we created a system that
Speaker 1: requires growth and inflation. Right, It's and we we got
Speaker 1: lulled into a belief that that was the way the
Speaker 1: world worked, and like a fundamental law of nature that
Speaker 1: you need inflation, right, And we were taught in economics
Speaker 1: in school. We were taught it. And and so what
Speaker 1: is inflection? Yeah, well let's let's save let's save that
Speaker 1: for a little bit, because I think that is the
Speaker 1: big thing that the discussions about. Right. It's like, don't
Speaker 1: we want deflation, but we have a system that needs inflation,
Speaker 1: and so the problem is what our once are versus
Speaker 1: what we have don't fit. But before we jump into that, um,
Speaker 1: just sticking back on the deflation thing for a minute. Uh,
Speaker 1: and I guess just generally, so we could kind of
Speaker 1: frame this for everybody when we're talking about deflation, what
Speaker 1: what are you kind of talking about? Generally? Um, So
Speaker 1: people may think like deflation, like the economy crashes. People
Speaker 1: might think deflation, prices go down. When we're talking about
Speaker 1: technology and this deflation, what do you what do you?
Speaker 1: How do you? So? So simply, deflation is when your
Speaker 1: money is worth more all the time, Right, So the
Speaker 1: value or your currency rises in relation to goods and
Speaker 1: services because and services go down, your value of your
Speaker 1: and relate. So so you're purchasing power goes up. Right,
Speaker 1: And if you ask any single person that question, would
Speaker 1: they want that? They would say, Wow, that's excellent. Right,
Speaker 1: that's what you're selling. That's what you want because it
Speaker 1: frees your time, all of your time to as your
Speaker 1: purchasing power goes up your time, you get an impact
Speaker 1: on your time. That seems like a pretty good thing,
Speaker 1: right yeah. Yeah, And as we roll that up into economy,
Speaker 1: we say, well, that's a bad thing because it just
Speaker 1: because and the truth it is a bad thing to
Speaker 1: the existing economy we've built because the existing your economy
Speaker 1: we've build requires inflation and it's it's almost a Ponzi
Speaker 1: scheme of credit. Yeah, it can't be paid back. And
Speaker 1: if you allow inflation to happen, the debt has to
Speaker 1: be reset and there and it becomes it becomes a depression.
Speaker 1: I think, Um, so I want so we'll talk about
Speaker 1: the inflation, we'll talk about the competing systems, and then
Speaker 1: I want to get into why maybe there's people, um
Speaker 1: that resist against that because um, it's not just the
Speaker 1: system that's resisting against it, it's also people. But before
Speaker 1: we jump into that, so back in the deflation, I mean,
Speaker 1: I think we frame that perfectly. And I've actually said
Speaker 1: that many times when people ask, well, don't we need inflation?
Speaker 1: And I say, let me ask you a question, would
Speaker 1: you rather her money by more goods and services in
Speaker 1: the future or less? Of course, everybody once more. I
Speaker 1: mean it's like, it's like the most rhetorical question ever. Um,
Speaker 1: so we want that, and that sounds good, but the
Speaker 1: thought of putting people out of work, that sounds bad.
Speaker 1: But don't we want don't we create the technology so
Speaker 1: we can or less? And I think I think if
Speaker 1: you kind of understand, um, how you know the system works,
Speaker 1: how from bartering to money exchange. Um, it was about specialization.
Speaker 1: And if I can specialize in growing food and you
Speaker 1: can specialize in raising animals, then then you save me time,
Speaker 1: I save you time, and we trade like it starts
Speaker 1: at the most basic level and we're only growing past that. Um.
Speaker 1: And that makes sense. Um, But you so I guess
Speaker 1: let's dive into the system now a little bit. So
Speaker 1: the system is set up inflationary, which means we're kind
Speaker 1: of like on this treadmill, we have to kind of
Speaker 1: keep always moving forward. But I guess maybe what you're
Speaker 1: saying is that if technology, if if we allowed technology
Speaker 1: to be deflationary, um, we could theoretically be working less
Speaker 1: and achieving the same thing if we didn't have this
Speaker 1: inflationary system. Is that we have a massive we have
Speaker 1: a massive ability to free our time, right, and and
Speaker 1: and and let's just forget what I want, forget what
Speaker 1: you want. Let's just look at the facts, right, forget
Speaker 1: what the central banks walked right, the fact Sometimes there's
Speaker 1: a structural change in business. You see, you've been an entrepreneur,
Speaker 1: I've been I'm an entrepreneur. In business, creative destruction happens,
Speaker 1: and it happens because it typically the incumbent can't see
Speaker 1: the structural change right, and they can't move their business
Speaker 1: fast enough. They even sometimes in case of Kodak, they
Speaker 1: invented the digital camera and twice the sass and tried
Speaker 1: to get it to get Kodak executives to understand the
Speaker 1: power of the digital camera and how it would replace
Speaker 1: their business. But they sold, They sold film, right, and
Speaker 1: they couldn't see their way through to what what Kodak
Speaker 1: could become. And you go back to that abundance thing
Speaker 1: I was talking about, we use we use way more
Speaker 1: photos today. Yeah, there's a whole bunch of new businesses
Speaker 1: that are created around photos, like Facebook, Google, Just the
Speaker 1: amount of new businesses that are around photos, and we
Speaker 1: use an abundance of them. With Instagram, they're they're free. Yeah, right,
Speaker 1: they're they're they're completely free. So we used to have
Speaker 1: to spend a bunch of money to take photos. I
Speaker 1: remember buying a roll of film taking it pay to
Speaker 1: get a process and you get to be very select
Speaker 1: if you had shots or whatever. Right, and today now
Speaker 1: I can just take as many of the one for
Speaker 1: free and pick the best one and then and delete
Speaker 1: the rest of That saves me a bunch of money
Speaker 1: that I don't have to go make now exactly. And
Speaker 1: so so in that in that example, you'll see the
Speaker 1: same thing. So now roll that up instead of a
Speaker 1: business example, roll that up to an entire system that
Speaker 1: we all live in. Right, and you have a system
Speaker 1: that's always required inflation, and we were taught that it's required,
Speaker 1: and in fact, it was designed to require inflation. And
Speaker 1: in that system, if you if you if you leverage
Speaker 1: with debt and pay the debt back later with cheaper money.
Speaker 1: Because it's you destroy the value of the currency, you're
Speaker 1: a winner, right, And so if you keep that run,
Speaker 1: that means asset prices keep rising and you if you
Speaker 1: can leverage that, you're a winner. So on that side,
Speaker 1: you're now that system competing against the deflationary the rate
Speaker 1: of technologies driving deflation. Continuing to do that deflate to
Speaker 1: that system is essentially pushing on a string. You create
Speaker 1: your massive debt creation, massive monetization. And if all the
Speaker 1: asset winners are also the belts, all the asset owners,
Speaker 1: you be a whole bunch of billionaires and everything they have.
Speaker 1: They have all the houses, most of the stocks, and
Speaker 1: everything else. And if you do that, they you enriching
Speaker 1: them at a crazy rate. Yes, let's go straight up.
Speaker 1: And and all the people who don't have assets, because
Speaker 1: you're destroying the value of currency, okay, and your currency
Speaker 1: value is going down, you're picking their pocket to give
Speaker 1: them the money, and so you get social disruption. Right.
Speaker 1: And what I would go say is it doesn't matter
Speaker 1: ultimately what we want um because what we want is
Speaker 1: based on first principles. It matters what physics or what
Speaker 1: what Where the trend is taking us, and inflation is
Speaker 1: where the trend is taking us. And so we have
Speaker 1: a couple of choices we could make to do that.
Speaker 1: Andrew Yang's who you mentioned. Choice is this in a nutshell.
Speaker 1: We're going to keep on pushing asset prices up. Assist.
Speaker 1: The system requires inflation, and we're going to do everything
Speaker 1: we can to keep us the prices high and then
Speaker 1: the very because we did that the very same people
Speaker 1: that we killed, because we did this right, We kept
Speaker 1: rents high we could because we let didn't let the
Speaker 1: system have a free market. The very syst those people
Speaker 1: are gonna come to government. We're gonna make government bigger
Speaker 1: to give them money to pay for the prices we
Speaker 1: uh us that's we artificially create. It's just illogical, right,
Speaker 1: and capitalism doesn't work that way, right, So um, and
Speaker 1: and so you have all roads U B I and everything.
Speaker 1: I just I totally understand why people want you be
Speaker 1: I because the system is doesn't work right now. So
Speaker 1: you're going to out you're gonna but but it won't.
Speaker 1: That won't. That's not the fix, right, That is not
Speaker 1: the fix. Yeah, So um, you have the system that
Speaker 1: creates inflation. So we talked about the FED basically printing
Speaker 1: money which is now pushing up asset prices um. And
Speaker 1: then so you're punishing the people, or I shouldn't say punishing.
Speaker 1: You're rewarding the people who have the assets. But then
Speaker 1: you're taking some of their profits and then redistribute back
Speaker 1: down to the people um. In other word, in other words,
Speaker 1: the government is the entire economy. The government. It looks
Speaker 1: it's communism. Yeah, it's socialism to communism. And we know
Speaker 1: how managed markets were, We know how manages just out
Speaker 1: his work. Right, Well, you and I you and I do. Yeah,
Speaker 1: you're you're robbing the entrepreneurial process of creatives destruction and
Speaker 1: and and you have subpart subpart gains to your economy.
Speaker 1: So you have to trust and been evlevent benevolent leaders
Speaker 1: and and and once you grab power, whether your generation
Speaker 1: has been evolent or the next one is once you
Speaker 1: that doesn't work. History shows us over and over that
Speaker 1: that path is just just a path to thugs controlling everything. Yeah,
Speaker 1: so you mentioned something called creative destruction and something that
Speaker 1: I've talked about a bunch of times. And so basically
Speaker 1: that means that the new way kills the old way.
Speaker 1: So I've created a new system that gets rid of
Speaker 1: an old system. Email was created and it killed the
Speaker 1: US Postal service or whatever it is, something like that.
Speaker 1: Um And and then you also mentioned capitalism or like
Speaker 1: a free market, and so in a free market we
Speaker 1: would typically see creative destruction. And as you said, code
Speaker 1: is too big, so a small instagram comes up and
Speaker 1: puts them out. But I think maybe also as the
Speaker 1: as the government gets bigger, the market is less and
Speaker 1: less free. I don't I don't see it as a
Speaker 1: light switch. It's not like we're free. We're not free, right,
Speaker 1: It's like degrees of less free. And as we've got
Speaker 1: less free, the corporations use government to entrench their positions
Speaker 1: and slow, if not stop, creative destruction. Do you see that? Yeah? Absolutely, Again,
Speaker 1: that's a feature of the system, not about so so
Speaker 1: so today. Let's let's a lot of times in this
Speaker 1: type of political everything gets politicized, right, and you people
Speaker 1: take sides and they can't see anything. Okay, let's just
Speaker 1: imagine you're a CEO of an airline, right, and and
Speaker 1: you made made a bunch of money this year and
Speaker 1: the government has a policy of negative interest rates, are
Speaker 1: near zero interest rates, and they effectively are saying, if
Speaker 1: you hold cash on your balance sheet, we're going to
Speaker 1: penalize you through inflection because it's gonna be worth next us.
Speaker 1: Next year, it's gonna be worth less than next year.
Speaker 1: So we're gonna hurt you if you hold cash on
Speaker 1: your balance sheet. So what would you do as a CEO?
Speaker 1: Probably buy back your stock, right, right, You're going to
Speaker 1: try to get a return on that money because the
Speaker 1: government is implying that we're not going to give you
Speaker 1: a return by saving for a any day. Right. So,
Speaker 1: now when you have an event where you need all
Speaker 1: of these people are going to be unemployed. Right, your
Speaker 1: airline is gonna go broken, everything else, what do you do?
Speaker 1: You go back to the government and instead of letting
Speaker 1: you fail, they inject a bunch of money to continue
Speaker 1: the whole the whole game. That game is in housing,
Speaker 1: it's in everything. So the government has prevented a free
Speaker 1: market society. Yeah, and or it's kind of like going
Speaker 1: back to being kids, like watching Star Trek and they
Speaker 1: could like they could beam themselves to another place or whatever. Right,
Speaker 1: So imagine like if an airline came across some technology
Speaker 1: where you could just beam yourself, you didn't have to
Speaker 1: get an airplane, and people would be able to do
Speaker 1: this for really, really cheap, and the airline see was like,
Speaker 1: oh my gosh, I could put us out of business.
Speaker 1: That could eatually all our profits. And there's really a
Speaker 1: way to monetize it because it's so cheap. So let's
Speaker 1: just use the government to say that that's unsafe, will
Speaker 1: create policies to say that that type of travel is banned,
Speaker 1: and we'll to force people to go in an airplane.
Speaker 1: Maybe that's kind of how it is, You're I'm laughing,
Speaker 1: because yesterday I saw a product demo from I can't
Speaker 1: say what, I can't say who it is and everything else,
Speaker 1: but from a friend of mine to a technology later
Speaker 1: a CEO of a different technology company, and that product
Speaker 1: demo had something that I would say, feels like a
Speaker 1: tele teleporter. Really what zoom is today? Think about think
Speaker 1: about an actual experience that feels totally different and it's
Speaker 1: native to native to a screen. It's so what's coming
Speaker 1: is what's not widely distributed yet, but it is available
Speaker 1: with technology would flow people's minds. Wow, that's incredible. So
Speaker 1: we didn't we didn't plan that UM and we've even
Speaker 1: seen it. So like obviously, if if anybody's watching this channel,
Speaker 1: they know I'm a big proponent of of bitcoin. I
Speaker 1: pound the table on that all the time to fight
Speaker 1: against what the FED is doing UM and what we've
Speaker 1: even seen UM from I mentioned earlier Christine Legarde from
Speaker 1: the ECB, she came out and said that we I
Speaker 1: forget the exact quote, but basically she said that we
Speaker 1: need to stop this UM technology because it's going to
Speaker 1: disrupt the entire financial system. But yes, isn't that the point?
Speaker 1: So there purposely she's even saying it, they're purposely going
Speaker 1: to try to shut down technology. I guess so so
Speaker 1: UM yes, And that's where, like you all of these
Speaker 1: roads again, if you come back to first principles, we
Speaker 1: are going to get into flesh. The only question is
Speaker 1: UM when so so so? So? Right now, I would
Speaker 1: say we have a deflationary environment and the only thing
Speaker 1: stopping that is massive liquidity injections. Most of that liquidity
Speaker 1: injection is going straight into asset prises, bitcoin, gold, housing,
Speaker 1: everything else. So it's driving those up and people in
Speaker 1: those are thinking they're going to go up forever. And
Speaker 1: and so so if we slow you can see what's
Speaker 1: happening in stock market right now. It's bouncing around, and
Speaker 1: it's you see a whole bunch more volatility in the
Speaker 1: US right now, and in the stock market. That's because
Speaker 1: there's no new stimulus. If if technology is creating deflation
Speaker 1: at this rate, then the debt creation has to be
Speaker 1: the amount of stimulus um and it's exponential, right, More
Speaker 1: and more technology is creating that that deflation, then it
Speaker 1: needs to be exponential monetary using. On the other side,
Speaker 1: any any stop in that exponential monetary using or printing
Speaker 1: of money, the whole thing collapses in it in the
Speaker 1: unwind would be so crazy from where we are. Stock
Speaker 1: prices would lose eighty percent of their value. Housing the
Speaker 1: if you think over the last twenty years, to stop deflation,
Speaker 1: trillion dollars of debt was created and and so so
Speaker 1: you had two fifty trillion dollars of debt running an
Speaker 1: eighty trillion dollar global economy. And that was before COVID, right,
Speaker 1: and and so that and trillion of that debt came
Speaker 1: in the last twenty years against that that path. And
Speaker 1: so when I wrote the book, I predicted what would
Speaker 1: happen next, right, and and all of these things any
Speaker 1: blepin growth because because the inflation requires of you after
Speaker 1: you have to keep going, and to do that, you're
Speaker 1: just piling more and more. So four dollars of four
Speaker 1: dollars of debt creation for one dollar of growth that debt,
Speaker 1: that debt. If you run kind of what the Fed
Speaker 1: is doing today and you assume that debt has to
Speaker 1: be paid back, right, then then it's more disinflationary right right,
Speaker 1: because it's not going into useful I think it's going
Speaker 1: into asset prices. It's going into and it has to
Speaker 1: be paid back tomorrow. So taxes are going to go
Speaker 1: way up, right, And so you pulled them in from
Speaker 1: the future. And that's where that we're trapped right now.
Speaker 1: It's such a big problem. And if you let it unwined,
Speaker 1: you have a depression, global depression. And if you keep
Speaker 1: doing if you keep doing it, you have outbreak of
Speaker 1: currency collapse, wars, everything out like it's just it's it's
Speaker 1: really ugly on both sides. Yeah, So we have I
Speaker 1: I see kind of two problems. One the technology, as
Speaker 1: you say, is causing deflation. It's causing things to go down. Um,
Speaker 1: there's charts. I'm sure you've seen them. I've seen them.
Speaker 1: I wish I had them handy, I can put them
Speaker 1: up on the screen. But basically it shows like different
Speaker 1: asset prices and you can see you know, a technology TVs, telephones,
Speaker 1: et cetera, all going down, but anything that the government controls, healthcare,
Speaker 1: education have gone up. And so you have like this
Speaker 1: this is like almost like v shape, where like technology
Speaker 1: is going down and government stuff is going up. So
Speaker 1: you have the technology pushing prices down, as you say,
Speaker 1: causing deflation. But back to what you said about the debt,
Speaker 1: I think there's even a bigger problem because the more
Speaker 1: the bigger that balloon gets, the harder it gets to
Speaker 1: reinflate that balloon. And what happens is in order to
Speaker 1: print a trillion dollars, you have to go through you know,
Speaker 1: government and Congress and all these things to get the
Speaker 1: trillion dollars printed. But a trillion dollars can disappear like
Speaker 1: that someone just a default on bankrupt and like it's
Speaker 1: just gone the count. So it's way easier to get
Speaker 1: rid of it than it's laid it back up and
Speaker 1: and let's let's stay with kind of that for a second,
Speaker 1: and again go back to first principles and ask where
Speaker 1: questions Because everybody thinks, oh, no, real estate always goes up, right,
Speaker 1: ask yourself this, without a hundred and eighty five trillion
Speaker 1: dollars of new money over the last twenty years, what
Speaker 1: would real estate prices be? Well, when you adjust for inflation,
Speaker 1: you see a whole different picture, you see, So if
Speaker 1: you would adjust for the cause of those real estate
Speaker 1: prices going up, you can see them, you can you
Speaker 1: can see what's happening. So we and then the next
Speaker 1: question has to be can you keep doing that? Right?
Speaker 1: Can you keep doing that at that scale? And if
Speaker 1: you can't, then what will what will it look like?
Speaker 1: Because you're right, once those defaults happen, it's just on
Speaker 1: wines really fast. Now, I suspect that the governments are
Speaker 1: not going to let on their watch right now all
Speaker 1: over the world, they're not going to let that happen.
Speaker 1: So what choice do they have? So today the federules
Speaker 1: prohibit kind of helicopter money, m m T. Everything else,
Speaker 1: so you'd be a They has to go to the banks,
Speaker 1: and it kind of trickles down at the top level,
Speaker 1: and and and and and the whole bunch of the
Speaker 1: population who because housing prices as are giving an example, sorry,
Speaker 1: before that, my my lakehouse that I'm currently in seven
Speaker 1: years ago, I tore down my small house that was
Speaker 1: here seven years ago. That house rented in the off
Speaker 1: season for six hundred dollars a month, and it was
Speaker 1: hard to get renters for six dollars a month. Down
Speaker 1: the block, there's another cabinet looks exactly like that that
Speaker 1: is now rents for fifteen a month seven years later. Yeah, So,
Speaker 1: so what that means and house prices have gone crazy
Speaker 1: and everything else, but what that means to to if
Speaker 1: your wages haven't gone up by double more than double,
Speaker 1: lost purchasing power. And there's a whole bunch of people
Speaker 1: that don't have assets that are in that that are
Speaker 1: in that camp. And so it's pretty logical that they
Speaker 1: would come and say what's going on and vote for
Speaker 1: people who will say I will give you money. Yeah, yeah,
Speaker 1: I think that's what you just said. They're like purchasing power.
Speaker 1: And I think if if people could look more in
Speaker 1: terms of purchasing power as opposed to an asset price
Speaker 1: in their in their fee currency. So you know, in America,
Speaker 1: we're looking at all priced in US dollars. In Canada
Speaker 1: maybe U S dollars or Canadian dollars or whatever. But
Speaker 1: when you only look at it in the v a
Speaker 1: currency is being inflated, you think, oh, my house went
Speaker 1: up and I made money or whatever. But when you
Speaker 1: look at it in purchasing power, which we started out
Speaker 1: with saying do you want to buy more or less
Speaker 1: in the future, you see a whole a totally different picture. So,
Speaker 1: so all inflation is is it's a hidden tax. Yeah. So,
Speaker 1: so if governments to carry on the services governments have
Speaker 1: without inflation, they would have to charge you the real taxes, right,
Speaker 1: and you would you would say government is too big,
Speaker 1: it needs to be smaller because you wouldn't put up
Speaker 1: with that that type of tax, right right, And so
Speaker 1: they hide a hidden tax and inflation. Yeah. But the
Speaker 1: problem with that hidden tax is it's on society is
Speaker 1: most unable to pay, yeah, right, and so so the
Speaker 1: But when you think about this, how crazy is it
Speaker 1: that the cure that the society is racing, especially the
Speaker 1: people left out, are racing to socialism as a cure
Speaker 1: for for the same thing that created it like you.
Speaker 1: So governments are creating as st price in flesh, and
Speaker 1: they're creating all of the prices to go out, and
Speaker 1: then they need more money that they don't have to
Speaker 1: give people a bunch of money to pay for the
Speaker 1: pay for the same prices that we're artificially inflated in
Speaker 1: the first place. Right, So to me, it's madness. And
Speaker 1: I don't see how people could want to vote for
Speaker 1: more of the problem that caused it in the first place.
Speaker 1: But they obviously are. Why do you think that is
Speaker 1: because because they haven't gone They haven't they're not as
Speaker 1: deep in this as you are, right, they're not as
Speaker 1: That's that's one of the things where what we're talking
Speaker 1: about right now, in inflation, it goes against every natural
Speaker 1: fiber ever being because we were taught something different. Well,
Speaker 1: it goes against not it go doesn't go against our
Speaker 1: natural being, it goes against our education. Our education, right
Speaker 1: and instead of and a lot of times you build
Speaker 1: foundations of knowledge and everything else is built on top
Speaker 1: of that and everything else, and you don't question your
Speaker 1: foundations of knowledge very often, right, And so if you're
Speaker 1: not intellectually curious enough to say, is this true? Right, then,
Speaker 1: then you'll just believe. It's easier to believe somebody like
Speaker 1: Andrew Yang or something saying, there are the problem, we
Speaker 1: need to give you money. It's just easier because it
Speaker 1: matches your picture of Instead of questioning should we have inflation?
Speaker 1: Should we not have inflation, which is a hard thing
Speaker 1: to go go down for most people, it's easy to
Speaker 1: build on top of a narrative that people already understand.
Speaker 1: It's actually the same thing that create such an opportunity
Speaker 1: to entrepreneurs to question why are they doing it that way? Right?
Speaker 1: That's it's exactly the same thing that creates creative destruction
Speaker 1: because somebody, an entrepreneur, looks at the world and says,
Speaker 1: that makes no sense anymore. Why am I carrying this thing?
Speaker 1: Why don't I just put in a wheelbarrel? Exactly. Yeah,
Speaker 1: that's a great point. And uh, it's one that I
Speaker 1: do just want to just drive home because I I
Speaker 1: believe in our natural being. I believe that we're all
Speaker 1: driven towards deflation. We're all looking for an easier way
Speaker 1: to do things. From the beginning of time, a division
Speaker 1: of labor. Hey you do this, I'll do this. Let's
Speaker 1: work together, right, like, hey, let me put in a
Speaker 1: wheebarrow Like I said, so, I think naturally we all
Speaker 1: gravitate towards free trade, free market, and deflationary things. But
Speaker 1: it's the education system that has continued to push this
Speaker 1: narrative indoctrination, if you want to call it that, I
Speaker 1: guess because their system demands it depends on it. And
Speaker 1: I would say most of those people, even at the
Speaker 1: top that you're saying, when it's easy to say that
Speaker 1: group of people at the top, most of those people
Speaker 1: haven't asked this question. A very senior economists who is
Speaker 1: in this circle right and everything else? Who's friends are
Speaker 1: all of the people that monetorization, everything else read my
Speaker 1: book called me and said, how do you see? How?
Speaker 1: How did you see something that the entire world miss misses,
Speaker 1: including I question everything that I teach and economics question
Speaker 1: and how did you see? How did you see it?
Speaker 1: But that's the thing. It's natural for somebody outside the
Speaker 1: system to be able to uh, to quite to question
Speaker 1: it because you're you're not you haven't been indoctrinated inside
Speaker 1: something that you So you're asking you're asking a deeper question,
Speaker 1: looking for the true answer instead of looking to build
Speaker 1: on top of that foundation and knowledge. Yeah, that's a
Speaker 1: great point. I want to talk about, as you said,
Speaker 1: the unwind and it not being smooth and and not
Speaker 1: being good. I want to talk about how you see
Speaker 1: this kind of playing out. But before we do, I
Speaker 1: just want to say one other thing is that, UM,
Speaker 1: you know we talk about I think people have been
Speaker 1: indoctrinated and they've been just trained to just kind of
Speaker 1: look at it one way. And then Andrew jankas, I'm
Speaker 1: gonna give a thousand bucks a month, and everyone says, yes,
Speaker 1: sign me up. I'll take the thousand bucks a month.
Speaker 1: I don't believe in that, but I mean, if we're
Speaker 1: gonna pass it out, I guess then something to me
Speaker 1: as well. Right. But UM, it seems that today, UM
Speaker 1: you also mentioned abundance, people don't have this abundance mindset.
Speaker 1: People have the scarcity mindset. And so UM it seems
Speaker 1: that with this deflation, UM, jobs get lost. I can't
Speaker 1: pick cotton anymore because now machine does it, UM, and
Speaker 1: so whatever. And yes, there will be more jobs created,
Speaker 1: and you said there was a debate about that, But
Speaker 1: it requires me or that person to go learn new
Speaker 1: skills and I have to do something different, have to
Speaker 1: try harder, and it's so much easier if I just
Speaker 1: stay home and watch TV and they just give me
Speaker 1: a thousand bucks. And it seems that we've had this
Speaker 1: massive shift where we have a large percentage of the
Speaker 1: population now that doesn't want to learn new skills or
Speaker 1: figure out how to offer the good and service to
Speaker 1: the economy. They wanted to be taken care of. I mean,
Speaker 1: do you see that as like a big push back
Speaker 1: to this whole system? Isn't that an irony that we're
Speaker 1: talking about this in the United States, which went through
Speaker 1: you and I growing up Russia and the United States,
Speaker 1: I know, and unbelievable, And it's unbelievable that that essentially
Speaker 1: the United States wants to be Russia. Right when when
Speaker 1: when you have when when you know what history looks like,
Speaker 1: they're and and a state can't manage is effectively there's
Speaker 1: only two ways to manage that many people globally, right,
Speaker 1: free markets, which or or control essentially or the biggest
Speaker 1: thug right, and and only two ways um and so
Speaker 1: neither is perfect, right, But so one thing about capitalism
Speaker 1: is it does if you just go kind of around
Speaker 1: the very ends, right, capitalism probably requires some sort of
Speaker 1: checks and balances, so uh to stop it from running
Speaker 1: away those checks and balances. On the other side is
Speaker 1: where U, B I and socialism go to write that
Speaker 1: looks at community and it robs from capitalism. And because
Speaker 1: nobody's asking where it does that. If you're if you're
Speaker 1: ruining the innovative potential of the free market by by
Speaker 1: saying everything goes to government, it can government outcompete the
Speaker 1: free market? Right? And if they can't, your your economy dives.
Speaker 1: And where does the money come from the people that
Speaker 1: the government is saying, well, I'm going to give you
Speaker 1: this money. Um. So, So that's that's the piece that
Speaker 1: it's unbelievable that the US for so long and they
Speaker 1: know what it looks like, right, because we've already played
Speaker 1: this game around the world. Yeah, it's it's interesting. I'm
Speaker 1: I'm I'm forty five. So I grew up kind of
Speaker 1: seeing that Cold War play out. I saw, you know,
Speaker 1: East West Berlin play out. We've seen obviously South Korea
Speaker 1: North Korea play out. Um And so yeah, for me
Speaker 1: to see people wanting that, I just I can't believe it.
Speaker 1: I remember people coming in Cuba trying to get to
Speaker 1: Florida and dying. You know, I'm like shark infested waters.
Speaker 1: I can't believe it? Um, so can I? Can I
Speaker 1: jump in there for one second? And this is this
Speaker 1: is actually, um, this is actually one of those sailing points.
Speaker 1: If you, you and I grew up in that world.
Speaker 1: We saw, We saw that. But a lot of people
Speaker 1: that are wanting you b I didn't. They haven't. They
Speaker 1: haven't read history of what it looks like. They haven't said,
Speaker 1: they haven't studied economics, they don't look you know what
Speaker 1: free markets look like. And the truth is they don't
Speaker 1: live in a free market. You have manipulated chrony capitalism
Speaker 1: that's hurting them, right, and so in an environment where
Speaker 1: you don't have a free market is a free market
Speaker 1: for the rich, right, and and and and so it's
Speaker 1: it's a managed market for where your stimulate government stimula.
Speaker 1: A natural cause is for those people to say there
Speaker 1: has to be a better way. So somebody when somebody
Speaker 1: waves a magic one and saying hey, I'm going to
Speaker 1: give I'm going to give you a better way that
Speaker 1: fits with your knowledge, you'll take it and you believe
Speaker 1: it all day long. Like how how many people believe
Speaker 1: that simple solution, which is not a solution at all
Speaker 1: when they in chaos is it is staggnerant and and
Speaker 1: and and I just continue just to say over and
Speaker 1: over it's just a complete failure of the education system,
Speaker 1: you know, just a complete filure. You know, when when
Speaker 1: you're a business owner, business the founder, and etcetera. You
Speaker 1: solve problems, right, that's what business owners do. And uh,
Speaker 1: and what we typically do is we look for examples
Speaker 1: of what's working and what's not working, and then we
Speaker 1: do more of what works and less of what doesn't work.
Speaker 1: And so we'd call that like looking So instead of
Speaker 1: just looking at a problem and how can we solve
Speaker 1: the problem? How can we solve the problem, you would
Speaker 1: look for a bright spot, where is it working somewhere else?
Speaker 1: And so when you look and see whatever, I don't know,
Speaker 1: two thirds of the world lives in extreme poverty, and
Speaker 1: one or two nations have been able to lift people
Speaker 1: out of poverty and become inventors and creators. You would
Speaker 1: just look at that, well, why why did they become
Speaker 1: in creators? And why are these stuck in third world countries?
Speaker 1: And you would just look at the systems It just
Speaker 1: seems so obvious. But again, I guess the education system
Speaker 1: just blinds people to that. Yeah, or or or When
Speaker 1: people can't pay their rent and feed their families, they
Speaker 1: look for easy narratives. Look look at what happened in
Speaker 1: the Romer Republic. That was a rise of Hitler. Right,
Speaker 1: it's it's natural. It's a totally natural phenomenon that people
Speaker 1: are looking for an answer that fits with their narrative.
Speaker 1: And so um again, these these systems are giant systems
Speaker 1: that have feedback loops and cause unintended consequences, and people
Speaker 1: aren't driving into the unintended consequences on either side of
Speaker 1: the aisle. Right, So so so on on in your economy,
Speaker 1: in a two party system, right, um uh, you have
Speaker 1: two sides yelling at each other, screaming, and camps developing
Speaker 1: on both sides of that, both unaware that they're sitting
Speaker 1: on top of a system that there's nothing they can
Speaker 1: do to keep it going. One side says we're going
Speaker 1: we're going to keep a free market, and it's not
Speaker 1: a free market, right, And the other side says we're
Speaker 1: going to give you money, right and not create more
Speaker 1: and more socialism. So there you have socialism for the
Speaker 1: rich on one side, socialism for the poor on on
Speaker 1: the other, and in both unaware that there's been a
Speaker 1: structural change to how a on them is need to run. Yeah,
Speaker 1: and they're preventing that structural change from happening and causing
Speaker 1: all of the things, all of the divide of society
Speaker 1: that they don't want. Yeah. And and it really comes
Speaker 1: down just that education, which is why you write that
Speaker 1: book The Price of Tomorrow, which I recommend everyone go get.
Speaker 1: It's why I do my YouTube videos as well. Um
Speaker 1: I want to talk about how this plays out then,
Speaker 1: And as you said, like the great Unwined you know,
Speaker 1: I was just thinking though before as you were talking.
Speaker 1: One one way that I look at it and I
Speaker 1: think people can maybe kind of put this into relation.
Speaker 1: Is that like a free market, as you kind of said,
Speaker 1: it's it's not always nice. I could spend a lot
Speaker 1: of time and effort and money to build a product
Speaker 1: and take it to the market and the market may
Speaker 1: not want it. Yeah, that's not nice, but it is
Speaker 1: what it is. Um. I look at it like imagine
Speaker 1: saying that it's that competition, what that entrepreneurs do that
Speaker 1: kind of yield asymmetric debts. Right if you're that is
Speaker 1: the core of innovation. Yep, right, it's that risk group
Speaker 1: turned profile, that having to invent something that really works
Speaker 1: for other people and and having everything on the line.
Speaker 1: That is the core of innovation. Without Without that, innovation
Speaker 1: stops and it's a matter of only going to the
Speaker 1: market with what people want, what solves their needs and problems.
Speaker 1: So people think business owners are greedy. Well, a business
Speaker 1: owner only succeeds by solving needs and problems of others,
Speaker 1: not themselves, of others. And if if it's not solving
Speaker 1: enough needs and problems, it doesn't succeed, I need to
Speaker 1: go back. It does exactly. Yeah, but I was just
Speaker 1: thinking about like nature again, these are natural laws, right,
Speaker 1: So like in nature, you imagine like an animal, a lion,
Speaker 1: right if you will, and or whatever whatever kind of animal.
Speaker 1: And uh, in nature, it's not nice. They may not
Speaker 1: have food for a few days, they might get eaten,
Speaker 1: they may not have a but put they're free to
Speaker 1: live their life. We could just put that animal in
Speaker 1: a cage at the zoo, make sure they're safe from
Speaker 1: from predators, give them one meal a day, and now
Speaker 1: they're safe and they have a meal, but they live
Speaker 1: in a cage. That's actually really good. I think that's
Speaker 1: a really good analogy because when when you when you
Speaker 1: say free markets or managed economy, that's what you're saying.
Speaker 1: You live in a cage under somebody else's control, or
Speaker 1: you live in a free market. Both sides which one
Speaker 1: is worse, right, So, so both both sides have have
Speaker 1: pros and cons and there's just more pros and a
Speaker 1: free market. Well, the problem is and and uh, you know,
Speaker 1: most of the world probably wants now to release all
Speaker 1: the animals and the zoos and whatnot, right, and so
Speaker 1: I think if you put it in as terms, but
Speaker 1: the problem is is that, um, you don't want to
Speaker 1: take a wild animal and put it into a cage,
Speaker 1: an animal that's been free and then put into a cage.
Speaker 1: But you also can't take animals that have been raised
Speaker 1: in cages and put them back into the wild. So
Speaker 1: that's where we at because what ends up happening is
Speaker 1: and that's actually that's why that analogy is probably useful
Speaker 1: because if if you haven't managed society in a cage,
Speaker 1: you lose company, you lose competitive edge for you. That's
Speaker 1: that's where you're taking the money from to put into
Speaker 1: the managed economy, and there is no competition anymore, so
Speaker 1: you lose that competitive edge. You don't have to be
Speaker 1: a competitive economy. That's what we're Yeah, and they just
Speaker 1: can they can't go back to the wild again. So
Speaker 1: so that leads me to the point of the grade
Speaker 1: and Wind. I know, we've got to wrap this up,
Speaker 1: so we'll finish on that. But so how do you
Speaker 1: see this plane out? I mean, technology wins. You said
Speaker 1: it could be very disruptive. I mean, is there an
Speaker 1: easy way to transition out of the system that we
Speaker 1: have into this new system? Or when I wrote the book,
Speaker 1: I was hopeful yes. And remember the book came up
Speaker 1: just before, so it predicts all these events and what
Speaker 1: happens next, right, Um, But and it came out January
Speaker 1: and January and then COVID hit and COVID was a
Speaker 1: great accelerator of the trends I'm talking about, right, So,
Speaker 1: so in response, what my hope was is that you
Speaker 1: could have policy discussions that would manage that on wind
Speaker 1: right in a slow way, and allow that to happen
Speaker 1: and save currencies. Since COVID accelerated technology, right, So you know,
Speaker 1: what's happening online where the rate of growth online and technology,
Speaker 1: all the technology companies are actually winners in this, all
Speaker 1: hitting records in this well, there's all this unemployment. Technology
Speaker 1: is a huge winner of this, so it excels. It's
Speaker 1: accelerated the trend. Also, because it's accelerated trend, it's accelerated
Speaker 1: government's response. So the amount of easing, the amount of
Speaker 1: debt creation, amount of everything else, essentially making the balloon bigger,
Speaker 1: is so outrageous today that that the governments, all governments
Speaker 1: are forced onto this path that's only going to get worse.
Speaker 1: So they will, so you will see way more stimulus.
Speaker 1: You'll see you'll see eventually the FED kind of the treasure,
Speaker 1: you'll bypass the fret FED and you'll get helicopter money.
Speaker 1: So you without without that right now, you're going to
Speaker 1: get more deflation and it's going to accelerate, and that
Speaker 1: deflation is going to accelerate, and you're gonna have this
Speaker 1: inequality that's building even faster than it's building today. So
Speaker 1: at some point you and you can expect rule changes,
Speaker 1: not just the FED, but globally at all the where
Speaker 1: there's direct bypasses of the banking institutions where money goes
Speaker 1: directly to citizens, right, and at that point you can
Speaker 1: expect hyper inflation where your where your wheelbarrows fow of money. Now,
Speaker 1: it might take some time to do that, right because
Speaker 1: because politicians cannot do it right. But you're on a
Speaker 1: path to at some point the currencies are going to
Speaker 1: be totally destroyed and then on the other side of
Speaker 1: that you're gonna have deflation. Right. So so if you
Speaker 1: think about where your bets are placed in that it's you.
Speaker 1: You have to diversify your portfolio because it's really ugly
Speaker 1: on this people are going to be completely wiped out.
Speaker 1: If you have if you have cash and you go
Speaker 1: to hyper inflation, your cash is worthless. If you if
Speaker 1: you have um, if you have stocks or or real
Speaker 1: estate and you go through the deflation and you have
Speaker 1: loans again against that, you're gonna get wiped out. So
Speaker 1: so you've gotta be really careful on those sides of
Speaker 1: those bets. But probably deflation change a change of FED
Speaker 1: FED rules and other government to bypass to bypass that
Speaker 1: creation of inflation because they're forced on that path now
Speaker 1: inflation leading to hyper inflation, reset of the reset of
Speaker 1: the game deflation. Yeah, yeah, that makes sense, and I
Speaker 1: think that it's very logical. I think that kind of
Speaker 1: see the same way. Uh, And so if I'm paraphrasing,
Speaker 1: and then basically, um, it continues to get worse and
Speaker 1: worse and worse the deflation. The FED continues to do
Speaker 1: more and more and more, which finally overshoot their goal,
Speaker 1: which leads to the hyper inflation, which is eventually the Fed.
Speaker 1: The FED can't create the inflation. They think they can,
Speaker 1: they can just signal the market. They can't. They can't
Speaker 1: because the federal requires that they fed money go to
Speaker 1: banking institutions, and the banking institutions won't lend. Right, So
Speaker 1: even though M one, all of you created all this money,
Speaker 1: it's not actually in velocity M two, people aren't spending
Speaker 1: it because it's not being lent out to to society.
Speaker 1: It's going straight into asset price. So asset prices are
Speaker 1: going up, but it's not creating the inflation. So to
Speaker 1: create the inflation, there has to be a bypass of
Speaker 1: that of that instrument to two people who will then
Speaker 1: spend it, who then then create a hyper inflation. Yeah, great,
Speaker 1: well we're going to wrap it up with that, because
Speaker 1: I know we're out of time, but I appreciate that. UM,
Speaker 1: for everybody that wants to know more about this, of course,
Speaker 1: go read the book The Prices tomorrow. I will link
Speaker 1: to it in the show notes. UM, is there anywhere
Speaker 1: else they should follow the website or you're on Twitter?
Speaker 1: I know on Twitter, just at Jeff Booth. Okay, so
Speaker 1: Jeff Booth. So I'm gonna go ahead and link to
Speaker 1: that in the show notes as well. UM, it's an
Speaker 1: important conversation. I think everybody needs to be more aware
Speaker 1: of what's going on. Like we've talked about, the lack
Speaker 1: of education is a big problem. So go educate yourself,
Speaker 1: get the book, and we'll wrap it up with that.
Speaker 1: Thanks so much, Jeff, Thanks Markus, Gregg