Bitcoin Memorial Day Briefing

[0:00] Yo, welcome back to another episode of
[0:03] the Jack Mallers Show. I am your host
[0:05] Jack and you are listening to yet
[0:07] another edition of Mailbag Monday
[0:09] episode 119.
[0:13] A special holiday episode. It is
[0:15] Memorial Day weekend Monday, May 25th.
[0:19] So for those celebrating here in the
[0:20] United States of America, Memorial Day,
[0:22] I hope you guys are barbecuing. It's
[0:24] warm out here in Chicago. See the sun,
[0:26] see your family, enjoy some time off.
[0:30] Uh I wanted to squeeze an episode in.
[0:32] Okay, I'm I love just stacking days.
[0:34] Proof of work, just show up unless you
[0:37] really, really, really can't. Uh and I
[0:39] didn't want to let a week go by without
[0:40] saying what's up to you guys. So this
[0:42] will be a shorter episode. I got no
[0:43] Dylan. So I got no, you know, strike is
[0:46] off, 21 is off. Uh everyone in America
[0:49] is off on holiday. So this will be a
[0:51] shorter episode. Just market updates,
[0:54] make sure that we get some updates,
[0:56] check the Bitcoin price, see what's
[0:57] going on around the world, and then
[1:00] uh when I was making the episode this
[1:01] morning, I figured uh I'd talk about a
[1:04] little Austrian economics. For the last
[1:06] few weeks, we've been talking about
[1:08] topics like productivity. And I've been
[1:10] seeing some of the comments you guys
[1:11] have left. I figured it'd be a nice
[1:13] little
[1:14] uh little nugget, a little random
[1:16] holiday edition Austrian economics
[1:17] chapter. But then I got no grind my
[1:19] gears, no Q&A without Dylan. So shorter
[1:21] episode and we'll get back to normal
[1:23] scheduling next week. So without further
[1:26] ado, let's get in this Proof of Work.
[1:28] I'm talking to you all at a Bitcoin
[1:29] price of 77,340
[1:32] US dollars. That puts Bitcoin's market
[1:35] cap at 1.55 trillion clean on the nose.
[1:39] We are 38.7%
[1:42] from our all-time high we made on
[1:43] October 6th, 2025, which stands at
[1:46] 126,160
[1:48] dollars per Bitcoin. That is our
[1:50] all-time high. We made that 231 days
[1:52] ago.
[1:54] The last Bitcoin block mined since I hit
[1:56] stream.
[1:57] Block height 951,032.
[2:01] Okay.
[2:02] The title of today's show, Bitcoin
[2:04] Memorial Day Briefing. And as I said, I
[2:06] do have family stuff to get to at the
[2:09] top of the hour, so this will be a bit
[2:11] shorter, but let's get into the market
[2:14] roundup. Let's just check in what's
[2:16] going on around the world. Uh, it is a
[2:18] holiday in the US, but there's no
[2:20] shortage of drama.
[2:22] So, as we start every episode, the four
[2:25] questions. Is the Strait of Hormuz still
[2:27] closed? Yes. Is the conflict still
[2:29] ongoing? Yes. Are global supply chains
[2:32] still being disrupted? Yes. Can global
[2:35] debt, sovereign debt, nation-state debt,
[2:38] treasuries survive this level of
[2:40] disruption? No, they cannot. And I
[2:43] didn't even put in the political
[2:46] nonsense that's been going on this
[2:48] weekend. I mean, we've heard from Iran,
[2:52] Israel, the United States, Trump, and
[2:54] everyone made a deal, they didn't make a
[2:56] deal. They made a deal, they didn't make
[2:57] a deal. They made a deal, they didn't
[2:58] make a deal. And that's why we asked
[3:00] these four questions. We're not going to
[3:02] look like fools chasing around
[3:04] politicians and their headlines. I mean,
[3:06] there was even the Iran is claiming that
[3:09] everything Trump is saying is just for
[3:10] the media and he's lying. Trump is
[3:12] saying something about Israel. Israel is
[3:14] saying something about Iran. It's all
[3:16] nonsense. The point is, the Strait of
[3:18] Hormuz remains closed, the conflict is
[3:21] still ongoing, global supply chains are
[3:23] still disrupted, which we'll get into in
[3:25] a second, and the sovereign debt
[3:27] markets, the treasuries, bonds, all over
[3:30] the world, Western civilization is being
[3:32] economically challenged. All of that
[3:34] remains true. So, chapter one, market
[3:37] updates. Let's just shorten this up,
[3:39] make it quick, but give you guys a sense
[3:41] of what is going on. Consumer sentiment
[3:44] continues to fall. So, this from Joe
[3:47] from Bloomberg. Incredible how dismal
[3:49] consumer sentiment is now. It just keeps
[3:51] getting lower. U Mich final was expected
[3:54] to come in at 48.2, which is already an
[3:57] all-time low, but it missed by a long
[4:01] while. It fell all the way to 44.8.
[4:03] So, this is an all-time low consumer
[4:06] sentiment. Main Street, the everyday
[4:08] man, is in a tremendous amount of pain
[4:10] as we've talked about week over week
[4:12] over week. This whole K-shape economy is
[4:15] real. Tech continues to boom. The CapEx
[4:18] for AI continues to boom, but everybody
[4:21] else is in a tremendous amount of pain,
[4:25] okay?
[4:26] 44.8
[4:28] all-time low. This is lower consumer
[4:30] sentiment than COVID. Lower consumer
[4:33] consumer sentiment than the 2008
[4:35] financial crisis. Lower consumer
[4:37] consumer sentiment in the United States
[4:40] ever, all time, since we've been
[4:42] measuring it.
[4:44] So, let's check in on consumer
[4:46] delinquencies. US credit card accounts
[4:48] delinquent by 90-plus days, so 3 months
[4:52] of delinquent for credit cards have
[4:54] jumped to 13.1%.
[4:57] That's the highest level in 15 years,
[5:00] and we're closing in on the highest
[5:02] level ever.
[5:04] Okay, this chart shows you dating back
[5:07] all the way to almost 2000, and US
[5:09] credit card accounts that are delinquent
[5:11] by 3 months are about to reach an
[5:13] all-time high. So, again, sentiment on
[5:16] Main Street is bad. You're having
[5:18] knowledge workers, white-collar workers,
[5:20] getting fired due to AI. Delinquencies
[5:23] through the roof. Inflation is back.
[5:26] Across the board, not a good situation.
[5:29] They're going to have to print money at
[5:31] some point, or we're going to go through
[5:33] austerity. The whole system is going to
[5:35] fall apart. But, fiat, as we know it, is
[5:38] running into some very, very serious
[5:42] issues. Uh hold on. Let me pull up my uh
[5:45] speaker notes because there was a post
[5:48] by Luke that I thought did a really good
[5:50] job. Um
[5:53] Oh, here it is. So, Luke wrote, "We
[5:56] kicked the 2000 crash up to the housing
[5:59] market. We kicked the 2008 crash up to
[6:02] the US Treasuries market. We kicked the
[6:04] 2020 crash up to the dollar." And so,
[6:07] all of the debt and the borrowing and
[6:10] the misallocation of capital and the
[6:12] burdening to the common man keeps
[6:14] getting prolonged and prolonged and
[6:16] prolonged, kicking it up. So, in 2000,
[6:19] that crash kicked it to the housing
[6:21] market. The housing market fell apart in
[6:22] 2008, kicked it to the Treasuries
[6:24] market. The Treasuries market fell apart
[6:26] during COVID, kicked it to the currency.
[6:28] And now the currency is the only escape
[6:31] valve that we have left. There is no
[6:32] more can kicking. They're going to have
[6:34] to debase the currency if they want to
[6:37] avoid austerity and a depression greater
[6:40] than any depression that humans have
[6:42] ever lived through, okay? So, as we keep
[6:46] going,
[6:47] this is Wall Street versus Main Street.
[6:49] I feel like this slide is a mainstay in
[6:52] the show week after week. It's just
[6:54] showing
[6:56] S&P 500 continues to push towards
[6:58] all-time highs while consumer sentiment
[7:01] and Main Street continues to push
[7:02] towards all-time lows. If this doesn't
[7:04] scream to you that fiat is broken, it
[7:07] does not serve the people. It's not
[7:09] about equality, it's not about
[7:11] inclusiveness, it's not about proof of
[7:13] work and governed by Mother Nature and
[7:18] equal rights. It's not about any of that
[7:20] [ __ ] There's nothing less American than
[7:22] fiat. There's nothing less American than
[7:25] the US dollar. As we sit here on
[7:27] Memorial Day, you'd have to sit and look
[7:29] at things like this and say, "This is
[7:32] not American. This is not freedom. This
[7:34] is not democracy. This is garbage." And
[7:37] even if you, you know, equal weighted
[7:39] S&P 500, by the way, is not at all-time
[7:42] highs. This is K-shaped nonsense. This
[7:45] is a very certain sector of the economy
[7:49] is what is holding the economic data
[7:51] together. It is what's driving the S&P
[7:53] 500. So, when I say equal weighted, if
[7:56] the S&P 500, if all 500 companies had an
[7:59] equal weight to the index, but that's
[8:01] not how it works. Nvidia represents a
[8:03] lot of the S&P 500, right? And so, if
[8:05] you weight it how the S&P 500 is
[8:08] weighted, sure, all-time highs, but
[8:10] every other metric, Main Street, how
[8:14] every everything, once you peel the
[8:16] onion a little bit, pull on the thread a
[8:18] little bit, you realize that the
[8:21] consumer is down bad, Main Street is
[8:23] down bad, the everyday man is down bad,
[8:26] the US economic outlook is down bad, the
[8:28] US bond market is down bad. They have to
[8:31] print the money, and you know, on a more
[8:34] optimistic note,
[8:36] how lucky are we to have Bitcoin? How
[8:38] lucky are we to have Satoshi Nakamoto
[8:41] handed us, gifted humanity a engineered
[8:44] exit door, but our thesis as Bitcoiners
[8:48] and what the data is pointing us, it
[8:49] continues to get worse. So, breaking the
[8:51] 30-year mortgage is continuing up, and I
[8:54] reminded you guys, whether it's mortgage
[8:56] rates, car notes, credit cards, all of
[8:59] that is tied to the 10-year. And so, as
[9:02] we look, the 10-year Treasury has been
[9:05] on a tear, well, yields have been on a
[9:07] tear up,
[9:09] demand for these pieces of trash have
[9:12] has been crashing. And so, this is going
[9:15] back to late February, early March when
[9:17] the conflict in Iran started, and
[9:20] Treasury yields have been on a tear. And
[9:22] I told you guys, bond math, we we kind
[9:24] of go over this every other week at this
[9:26] point. Bond math is as demands for bonds
[9:29] go down and people sell bonds, yields go
[9:32] up. And so, when you see high yields,
[9:34] that means that demand for bonds is
[9:36] crashing. Nobody wants to lend to the
[9:38] United States. Nobody wants to own these
[9:40] things. And the United States
[9:43] when people say, "Oh, bond yields have
[9:45] been 13% before. They're only at 4 and
[9:47] 1/2%." That's fine. No, that's not fine
[9:50] because the United States has never been
[9:52] in $40 trillion of debt. You cannot have
[9:55] debt levels at this high with yields
[9:59] this high. It is untenable. They can't
[10:01] You know, you're going to get to a point
[10:03] where the only way to pay your interest
[10:05] expense, just the interest you owe on
[10:07] the debt, is by printing money. And that
[10:10] is like entering full Ponzinomics where
[10:12] they're just printing money out of thin
[10:14] air to make their interest payments.
[10:15] That I mean, we're we're literally like
[10:18] our true interest expense
[10:20] is
[10:21] I it depends on like a month-to-month
[10:22] basis. Sometimes it's more than
[10:24] receipts. Receipts meaning the revenue
[10:26] that they're collecting from things like
[10:28] our taxes. So, as soon as their expenses
[10:30] and their interest is is more than the
[10:32] revenue that they're collecting from us
[10:34] citizens, true Ponzinomics territory.
[10:37] And so, the interest expense cannot get
[10:39] much higher because it's already at true
[10:41] interest expense at about 100% of
[10:43] receipts. If true interest expense gets
[10:45] to 105, 110, 120, then they have to
[10:47] print money just to cover their interest
[10:49] expense. True Ponzinomics. That is a
[10:52] deep We're Set another way, set a
[10:54] simpler way, we are seeing Western
[10:57] civilization default. Our markets are
[10:59] starting to price in countries like the
[11:02] United States being broke, defaulting,
[11:05] not able to afford itself any longer.
[11:09] Now, I'm not saying the US is going to
[11:10] collapse. I'm not saying the dollar is
[11:12] going to cease to exist, but
[11:14] we will enter a new monetary era. Things
[11:17] like Bitcoin, things like gold will be
[11:19] monetized or remonetized. And things
[11:22] like sovereign debt will be demonetized.
[11:24] We are like it is in the charts. It is
[11:27] in the data. It is in the consumer
[11:28] sentiment. It is in Main Street. That is
[11:31] what we are living through.
[11:33] On that note, Turkey liquidated almost
[11:36] all of its treasury holdings in March.
[11:38] And so, the reason we talk about things
[11:40] like the Strait of Hormuz is because
[11:42] global conflict and taking 20% of the
[11:44] world's oil offline has grave
[11:47] consequences. And I made this little
[11:49] sovereign Maslow hierarchy of needs
[11:52] visual and
[11:54] why is Turkey selling its US Treasuries?
[11:56] Well, because you know what comes before
[11:58] US Treasuries on its Maslow hierarchy of
[12:01] needs? Things like energy, oil, food.
[12:05] If if people like people are now There
[12:08] are countries around the world putting
[12:09] in curfew, telling people to work from
[12:11] home, not get in their cars, basically
[12:13] not consume energy.
[12:16] And so, if you're a country and you need
[12:18] to make sure that your people don't
[12:19] starve or that your people can drive a
[12:21] car, get on a plane, turn on their
[12:23] lights, have air conditioning, not die
[12:26] from a heat stroke, you got to sell your
[12:28] assets. And as we've talked about US
[12:32] capital account, foreigners own a
[12:34] tremendous amount of US assets. So, if
[12:37] foreigners need to finance themselves in
[12:39] crisis, in war, in an energy shock, if
[12:43] if global trade is being disrupted,
[12:45] they're selling US assets. They're
[12:46] selling US Treasuries. They're selling
[12:48] US equities.
[12:49] And herein lies the problem. The United
[12:52] States has greatly depleted its SPR, its
[12:55] Strategic Petroleum Reserve, and you can
[12:57] think of that as like um
[12:59] we've talked about dollar swap lines
[13:01] that the US provides. Like, "Hey, hey,
[13:03] hey, don't sell those Treasuries."
[13:04] Remember when the UAE asked Scott
[13:07] Bessent, uh Treasury Secretary, UAE
[13:10] said, "Hey, Scott, if you don't give us
[13:12] a dollar swap line, we're going to have
[13:14] to dump a bunch of Treasuries and yields
[13:16] are going to go soaring, Treasuries are
[13:18] going to crash." And he was like, "Okay,
[13:20] okay, okay, okay, okay, here's a dollar
[13:21] swap line." Highly inflationary,
[13:23] printing the money, but just to avoid
[13:25] things from collapsing. Like, please
[13:27] don't sell. Like there's not enough
[13:29] buyers for you guys to be dumping all of
[13:31] these treasuries. Here's a dollar swap
[13:33] line. You can think of United States
[13:36] using its SPR, its strategic petroleum
[13:39] reserve, its oil reserves, you can think
[13:41] of that as like an oil swap line.
[13:44] Because what the United States is doing
[13:45] is it's depleting all we're depleting
[13:47] all of our reserves to ship out oil to
[13:51] other countries so they don't do what
[13:52] Turkey did, which is just dump their
[13:54] treasuries to help their citizens live.
[13:58] I mean, we saw I mean, a country like
[14:00] Australia, a developed nation, run out
[14:03] of oil.
[14:05] They had to run to Singapore and beg to
[14:08] buy their oil. And it's because Russia,
[14:11] I mean, excuse me, Australia imports
[14:13] their oil from China. And China put in
[14:16] restrictions and said, "We're not
[14:17] exporting any oil right now. All the oil
[14:19] we're producing, we're keeping to
[14:20] ourselves." Australia ran out of oil.
[14:22] And you're you're seeing developed
[14:24] nations, the countries that we've all
[14:28] probably live in, visited, going through
[14:31] uh early stages of crisis.
[14:34] And so, this is going to be very
[14:35] disorderly for the treasury market. Uh
[14:38] if I go back, no wonder the US 10-year
[14:41] yields remain above 5 and 1/2%. And look
[14:43] like they want to keep going higher. No
[14:45] young No wonder mortgage rates are
[14:47] getting higher. So, it's it's a very
[14:50] like um dominoes, very cyclically. So,
[14:54] the 10-year goes higher, 10-year goes
[14:56] higher, uh mortgage rates go higher,
[14:59] consumer sentiment, people stop
[15:00] spending, economy gets worse, receipts
[15:03] become in lower for the uh for the
[15:05] country, receipts come in lower, that
[15:07] means true interest expense comes in
[15:09] higher than receipts, that means they
[15:10] got to print the money, the currency
[15:11] gets worse, Main Street gets worse. It
[15:13] boom, boom, boom, boom, boom. It feeds
[15:15] on each other, it feeds on each other,
[15:16] it feeds on each other until you
[15:18] inevitably get a crisis. I don't know
[15:19] and I'm not going to predict when when
[15:22] that crisis is coming, but uh as you'll
[15:24] see, my market update is
[15:28] like as much as things stay the same,
[15:30] which they have. What's the same? Strait
[15:32] of Hormuz is still closed, the conflict
[15:34] is still ongoing, global trade is still
[15:36] disrupted, sovereign debt markets are
[15:38] still in a tremendous amount of pain and
[15:39] nearing crisis.
[15:41] Countries are still dumping treasuries,
[15:43] consumer sentiment is still at low. So,
[15:44] all of that remains the same week over
[15:46] week, but you this is not a natural
[15:48] state to persist. This is not a natural
[15:51] state to persist and you know, this
[15:53] episode has to be short. So, I'm not
[15:55] going to get into it, but having
[15:57] gunshots at the White House, these are
[15:59] topics that we've talked about on a week
[16:01] over week basis is that if you have
[16:02] consumer sentiment at these lows, when
[16:04] you have such a wealth gap in the
[16:06] country, when you've eviscerated the
[16:08] middle class, when your industrial base
[16:09] is no longer, you get political
[16:11] violence, you get assassination
[16:13] attempts. It is it is really not a
[16:15] situation that can persist. And so,
[16:18] something is going to break, something
[16:19] has to change. It seems like the United
[16:22] States is trying to figure out what they
[16:24] want to do in the Middle East and all of
[16:26] the um
[16:29] political headlines and reporting,
[16:31] Hormuz is open, it's closed, it's open,
[16:33] it's closed, it's open, it's closed,
[16:34] it's just jawboning trying to get
[16:36] markets to give uh the administration
[16:38] time.
[16:40] So, it's just not good and
[16:42] let's end the market updates
[16:45] uh on Bitcoin.
[16:46] So, I thought this diagram was
[16:48] interesting because there's many ways to
[16:50] show that Bitcoin sentiment's just at
[16:52] all-time lows. Well, all times may be a
[16:55] stretch. It's at lows, lows in recent
[16:57] memory. And I thought this visual was
[16:59] unique and interesting way to show that
[17:02] is this is the total venture capital
[17:04] activity and VC activity and Bitcoin
[17:07] usually go hand-in-hand because it's a
[17:09] new technology sector. And you know, I
[17:11] I've I've thought of Bitcoin as some
[17:14] combination of fiat liquidity plus
[17:16] technology and venture capital and
[17:19] investment in building companies,
[17:21] building infrastructure,
[17:22] disintermediating
[17:23] things like payments, cross border,
[17:25] store value, lending, credit. And VC has
[17:29] been highly invested over the last 15
[17:32] years in Bitcoin. And what we're seeing
[17:34] is the dark blue bars are lots of
[17:37] capital being invested. So there's never
[17:38] been more venture capital dollars
[17:41] invested, but the deal count has never
[17:44] been lower in the last five, six, seven,
[17:47] eight years. So what what does that
[17:49] mean? That means there's a highly
[17:50] concentrated amount of capital being
[17:53] deployed in a small amount of deals.
[17:56] Anthropic, Open AI, SpaceX. And this is
[18:00] another way of saying what I've been
[18:02] saying, K-shaped economy, AI economy,
[18:05] everyone else is in pain. So you're
[18:07] seeing SpaceX is going to be one of the
[18:09] biggest IPOs ever, Anthropic one of the
[18:12] fastest growing revenue run rates of all
[18:14] time, Open AI is going to be the second
[18:16] biggest IPO ever behind SpaceX. Boom,
[18:19] hype, hype, hype, all time highs, all
[18:20] time highs, all time highs. Then you
[18:22] look at Coinbase's earnings and Coinbase
[18:24] missed earnings by a mile.
[18:26] They got crushed.
[18:28] And so there's a it mean the K-shape is
[18:30] is not just uh the McDonald's fry worker
[18:33] and Sam Altman. That's not what I mean
[18:35] by K-shape, although that's obviously
[18:37] included. K-shape is like Coinbase is
[18:39] really struggling right now, while
[18:41] SpaceX is gearing up for a $2 trillion
[18:43] IPO. And this VC asset is super
[18:46] interesting is that yes, there's never
[18:48] been more capital being deployed,
[18:50] but the deployment of that capital is
[18:52] going into
[18:53] the smallest amount of hands that maybe
[18:55] we've ever seen in the venture capital
[18:56] era.
[18:57] And then the most obvious way to
[18:59] visualize that Bitcoin's just having a
[19:01] tough time right now with mind share and
[19:04] and and just overall consumer sentiment
[19:07] retail
[19:08] is it's Google search trends. So Bitcoin
[19:11] as a search term has not been lower than
[19:15] it is today in the last 5 years, like
[19:17] dating back to COVID days. So, like FTX,
[19:21] Sam Bankman-Fried, 2022,
[19:24] yeah, as far as a search term, like
[19:26] we're lower. We're lower than after
[19:27] that. When everyone mailed it in, give
[19:30] up on Bitcoin, it's a fraud, it's a
[19:31] scam.
[19:33] Like we're lower than that.
[19:35] And this is why Let me tell you guys
[19:36] something. One of the hardest things
[19:37] I've ever done in my life is stay humble
[19:39] and stack sats.
[19:41] Everyone that tells you it's easy or you
[19:43] got lucky, remember these times. It is
[19:45] not easy.
[19:47] It is not easy.
[19:49] It's one thing to buy a little bit of
[19:51] Bitcoin. It's an entirely different
[19:52] thing to hold it, remain convicted.
[19:55] Don't let them shake your conviction. As
[19:57] my dad always says, markets try and wear
[19:59] you out or scare you out.
[20:02] Hold strong, fasten your seatbelt, head
[20:04] down, low that lower that time
[20:06] preference.
[20:08] The you know, people fantasize about
[20:12] buying the lows, buying the dip.
[20:15] But when the dip hits them in the face,
[20:17] they get too scared to buy.
[20:20] It's why I highly encourage you guys,
[20:23] stay humble, stack sats, turn on those
[20:25] DCAs. At Strike, you can DCA on Strike
[20:28] for free, no fees. You can withdraw
[20:31] those Bitcoins to cold storage for no
[20:33] fees. You can even automate that whole
[20:35] thing.
[20:36] It It couldn't be a better time to
[20:38] average in to Bitcoin. Maybe Bitcoin
[20:41] dips a little bit from here, good,
[20:43] you're buying. Maybe Bitcoin appreciates
[20:45] from here, good, you've been buying. You
[20:47] can't lose as long as you've got a low
[20:49] time preference, you're earning more
[20:50] than you're spending, you're humble,
[20:53] you're patient, you're convicted.
[20:55] Okay.
[20:56] Like the world is in a very interesting
[20:59] spot. Disorderly Treasury market
[21:03] activity, MOVE Index Volatility Index is
[21:06] on the rise again, conflict in the
[21:08] Middle East. I mean,
[21:11] Warsh can't cut, he can't hike.
[21:14] I mean, we are everybody is starting to
[21:16] say the quiet part out loud. We're going
[21:18] to need some form of yield curve
[21:19] control, some form of Ponzinomics.
[21:22] The the Western civilization has kicked
[21:25] the the debt, the borrowing from our
[21:27] future, the misallocation of capital.
[21:29] $40 trillion
[21:30] pulled forward from our future and spent
[21:34] where we have nothing to show for it.
[21:36] And that was kicked from the dot-com
[21:39] bubble to the housing market, kicked
[21:41] from the housing market to the Treasury
[21:42] market, kicked from the Treasury market
[21:44] to the currency market, and here we are.
[21:46] Got to face the music.
[21:48] And the question is, there's $40
[21:50] trillion missing. Someone has to realize
[21:52] that loss, that
[21:53] that that time, that energy, that
[21:55] effort, that labor, that's gone.
[21:58] Who's realizing that loss? Who's paying
[22:00] the price?
[22:02] And as a Bitcoiner, every sat you stack,
[22:04] you're saying, I don't know, but it's
[22:06] not going to be me.
[22:09] I don't know I don't pretend to know the
[22:10] answers, I don't pretend to know the
[22:11] future, but I know that they can't take
[22:13] my time and energy.
[22:16] I'm not paying for the mistakes of the
[22:18] past. I'm not paying for the mistakes
[22:19] made by men and leaders
[22:22] before I was born.
[22:23] And I'm not letting men and leaders of
[22:26] today
[22:27] steal the time and energy of my future
[22:29] children.
[22:32] You guys have fun duking that out,
[22:33] battling that out, politicking that out,
[22:35] but it's not going to be mine.
[22:39] So, in summary,
[22:43] as much as uh things remain the same,
[22:46] sentiment at lows, war ongoing,
[22:48] inflation ticking up, Ponzinomics really
[22:51] hitting potential breaking point,
[22:56] I mean, stay humble and stack sats, man.
[22:58] Stay humble and stack sats. Okay. So,
[23:02] I wanted to uh over the last few weeks,
[23:05] I I want to say 3 weeks actually, um
[23:08] three episodes, I've been talking about
[23:10] this word productivity.
[23:12] And I'll talk about things like profit
[23:14] and productivity. And what whether it
[23:17] was AOC talking about it's impossible to
[23:20] earn a billion dollars and that if you
[23:22] have a billion dollars, you didn't earn
[23:24] it and we need to tax you and take that
[23:26] from you. And I've talked about
[23:28] productivity and profit and property
[23:30] rights. And I approach these topics from
[23:33] a school of Austrian economics. Uh and
[23:36] then some of the comments that I see you
[23:37] guys write, you're mistaking my words
[23:41] uh using a different English definition.
[23:44] Like you're thinking that I'm talking
[23:46] about whether someone is productive or
[23:47] not as like a moral judgment of their
[23:49] character. And so, we don't talk about
[23:53] literal Austrian economics much on the
[23:55] show. Um and so, given that this was
[23:57] going to be a shorter episode, I was
[23:59] going to breeze through some market
[24:00] updates and just remind you guys that
[24:02] stuff is still pretty [ __ ] up in fiat
[24:04] land and we need to stay humble and
[24:05] stack sats. Uh I would do a tiny tiny
[24:08] little teaser into Austrian economics,
[24:10] kind of just clear the air on this
[24:11] topic, use the confusion that I see in
[24:14] my YouTube comments as an excuse to go
[24:16] through some like fundamental Austrian
[24:17] economic concepts. Uh and then we can
[24:20] add this to our vocabulary and
[24:22] potentially include it in longer
[24:24] chapters on go forward if you guys
[24:25] really like this or in the Q&A, we can
[24:29] have some healthier back and forth in
[24:31] regards to the topics because, you know,
[24:34] we're just two ships passing in the
[24:35] night at this point. You guys are
[24:37] misunderstanding my point because we're
[24:40] not talking about the same thing. So,
[24:42] chapter two, the scoreboard,
[24:43] productivity, profit, and what they
[24:45] actually measure. So, first and
[24:47] foremost, on the topic of Austrian
[24:48] economics, I just want to talk about the
[24:50] premise here. From Carl Carl Menger in
[24:53] 1871,
[24:54] like there are two ideas that changed
[24:57] economics forever. Uh the first is that
[25:00] value is subjective, okay?
[25:03] It exists in your head, not in the
[25:05] object itself. Um
[25:07] value it is not it's not chemistry, it's
[25:10] not a physical property, it's a it's
[25:12] subjective. It is a man-made in your
[25:15] head. Uh it's not in the object itself.
[25:18] And then the other is that you never
[25:20] choose between having all of something
[25:23] or all of something else.
[25:25] Uh we make economic decisions at the
[25:28] margin, okay? And once you understand
[25:31] these two things, everything else in
[25:34] economic theory seems to fall into
[25:36] place. Um
[25:38] but what Carl Menger said in 1871, he
[25:41] said value is not inherent in goods.
[25:44] It is not physical or a chemical
[25:46] property.
[25:47] It is a judgment
[25:49] economizing men make about the
[25:51] importance of the goods at their
[25:53] disposal.
[25:54] So said another way, how much is and
[25:57] we'll talk about this later, how much is
[25:58] water worth?
[26:00] Well, we know we need water to live, so
[26:03] surely it's worth a lot.
[26:05] But when I go to the store, a bottle of
[26:07] water is like 50 cents.
[26:09] And so is water worth a lot or is it
[26:12] worth nothing?
[26:14] And that's when you realize there's no
[26:16] chemical or physical property that
[26:18] derives water's value. Water is it's a
[26:22] judgment call, it's a subjective
[26:24] judgment call that exists in my head.
[26:26] If I have gallons and gallons of water
[26:29] in my home,
[26:30] water is plentiful. I have an excess
[26:32] supply of water given the demand of
[26:34] whenever I'm thirsty. So it's not worth
[26:37] much. Maybe I need to buy some 50 cent
[26:39] bottles of water when I run out.
[26:41] If I am in a desert abandoned on an
[26:44] island like Cast Away and I'm parched
[26:46] and I'm dehydrated and I'm going to die,
[26:48] I would give everything to my name for
[26:51] water. I would give my entire net worth
[26:53] because it's life or death. And that
[26:55] shows you that value is subjective and
[26:58] that we make these decisions at the
[27:00] margins. I don't have to decide between
[27:03] what I rather have all the water in the
[27:05] world or no water at all.
[27:08] I subjectively make the decisions with
[27:09] today I don't want any more water cuz my
[27:12] fridge is full of water.
[27:14] But if I have a bunch of people over for
[27:16] Memorial Day
[27:17] and they drink all my water
[27:19] tomorrow I will make the marginal
[27:21] decision to increase the demand that I
[27:23] have for water.
[27:24] So that makes sense? So you have
[27:27] value is subjective
[27:29] and that you never choose between all of
[27:31] something or all of another thing. We
[27:33] make decisions at the margin and in the
[27:35] economy as we economize as humans. So
[27:40] on top of that
[27:42] I want to talk about scarcity as it
[27:44] relates to Austrian economics. And mind
[27:45] you guys like I'm speaking in economic
[27:48] terms. I'm not I'm not talking about the
[27:51] the definition of scarcity as an
[27:53] independent English word. I'm talking
[27:56] about the idea of scarcity as it
[27:58] pertains to economics and the point in
[28:01] Austrian economics is that scarcity is a
[28:03] permanent man-made construct. Meaning we
[28:06] will always have scarcity and scarcity
[28:08] is the reason that us humans economize
[28:11] in the first place. What do I mean by
[28:13] that? Well, scarcity is the very simple
[28:15] idea that it is easier to want something
[28:19] than it is to earn something. What do I
[28:22] mean by that?
[28:24] Billions of people around the world want
[28:26] a Ferrari.
[28:27] You can look at a Ferrari and be like
[28:29] damn, I want that. That's a cool car.
[28:33] However, billions of people cannot
[28:36] produce a Ferrari because it is much
[28:38] harder to produce the Ferrari than it is
[28:40] to want the Ferrari.
[28:42] Okay?
[28:44] Building a Ferrari takes engineering,
[28:46] takes capital, it takes supply chains,
[28:49] it takes
[28:50] R&D and pricing and cost. You have to
[28:53] raise the capital to build the car
[28:55] knowing that you'll actually be able to
[28:56] fulfill the sale and recoup costs.
[28:59] If we solved Ferraris,
[29:01] then we would want supersonic jets. If
[29:03] we solved supersonic jets, then we would
[29:05] want time travel and rocket ships. The
[29:07] point is desire is infinite. Okay, but
[29:11] resources are not.
[29:13] And that is the man-made construct that
[29:16] is scarcity. And it is for that reason
[29:19] that we economize.
[29:22] Because
[29:23] we are prioritizing one thing over
[29:26] another. If every Said another way, if
[29:28] everything was plentiful, if we had an
[29:30] excess of every everything that we ever
[29:32] wanted, if all I had to do was look at
[29:35] something and want it and therefore I
[29:36] got it, we would not need economics. We
[29:40] would not need to economize as men, as
[29:42] humans.
[29:44] A a a very clean way to think about that
[29:46] is that nobody argues about how to
[29:48] allocate air.
[29:50] You'll never hear people say like, "What
[29:52] the [ __ ] Tax that guy's air. I can't
[29:55] believe he gets more air than me." Why?
[29:59] Why is that not the case? Why aren't we
[30:00] arguing about the allocation of air? Why
[30:02] isn't AOC
[30:04] politically campaigning and saying,
[30:06] "Jeff Bezos has too much air. I can't
[30:09] believe that he has air and the people
[30:12] in the Bronx and Queens don't have the
[30:14] same air." It's because air is
[30:16] plentiful.
[30:17] There's always like you everyone has as
[30:20] much air as they want.
[30:22] We live in a world of plentiful amounts
[30:26] of air.
[30:27] Now, we do not live in a world of
[30:30] plentiful amounts of grass-fed meat, of
[30:33] Ferraris, of professional athletes.
[30:37] And that is the scarcity is that I can
[30:39] look at LeBron James and I can say, "I
[30:41] want to be that. I want the fame, I want
[30:44] to be 6'8", I want to be 260, I want to
[30:46] be able to dunk from the free throw
[30:47] line, but actually being able to do all
[30:50] those things is different than wanting
[30:53] that.
[30:55] And that is economic scarcity, meaning
[30:58] for that reason we economize.
[31:04] Make sense?
[31:06] Scarcity, for that reason by the way, is
[31:09] a permanent construct. I don't think
[31:11] scarcity will ever go away. It's like,
[31:13] "Hey guys, let's take a year off of
[31:15] fighting and conflict and stuff, and
[31:17] let's just make it abundance of
[31:18] everything so that we can like treat
[31:20] everything like air, where we all have
[31:22] just an abundance of everything." I
[31:23] think that that's impossible.
[31:26] Because it's always easier to want
[31:28] something than to earn something,
[31:30] always. And that arbitrage, that delta,
[31:33] is why economics and money and and
[31:36] economies exist in the first place.
[31:40] So, scarcity is what forces us to
[31:42] economize, to choose, to prioritize one
[31:45] thing over another.
[31:46] Make sense so far, hopefully. Okay. So,
[31:49] now let's get into some of the comments
[31:51] you guys have been leaving me. So,
[31:53] this first one, and this is not a diss
[31:54] or anything. I just figured this would
[31:56] be a a fun little chapter for for the
[31:58] holidays. Little kind of
[32:00] not ranting about bonds.
[32:03] Okay, so this comment from Mitch Be
[32:05] Healthy
[32:06] wrote, "Yo, in regards to your rant,
[32:08] Jack, I believe there's more nuance to
[32:10] what you're arguing. Does a teacher or
[32:12] educator bring value to society? Sure,
[32:15] they do. Do they get paid commensurate
[32:17] with that value? And this can be said
[32:19] about many professions. Does a
[32:21] billionaire grifter bring value to
[32:23] society, or do they steal from others?
[32:26] And if the argument is that society
[32:27] decides what is value, then that doesn't
[32:30] say much about man. Love you, man, but
[32:32] this topic goes much deeper than the
[32:34] surface argument made by AOC or by your
[32:37] rant. More thought must go into this.
[32:40] And then another comment
[32:42] writes, this is from Corey Oliphant
[32:46] 3762.
[32:48] I agree for the most part. However, what
[32:50] value is a professional sports player
[32:52] bringing to the world? What are they
[32:54] {quote} {unquote} producing?
[32:57] And so this these type of comments is
[32:59] what inspired me to do this section is
[33:03] because we are just talking past each
[33:05] other. We are two ships in the in the
[33:06] night passing right right by each other
[33:08] because we're not talking about the same
[33:11] thing.
[33:12] Um
[33:13] I'll I'll get I'll get into I'll react
[33:16] directly to these in a second, but let
[33:17] me keep going. Um so
[33:21] there's two separate concepts here. One
[33:24] is economic productivity, which is
[33:28] how much value are you creating for
[33:30] others? And there's a key part in here
[33:33] that's implied in in my worldview and in
[33:35] free markets and in Austrian economics,
[33:38] which is voluntarily.
[33:40] How much value are you creating for
[33:41] others voluntarily
[33:43] versus what you consume to do it?
[33:46] And that's measured in prices. That's
[33:48] measured in profit. That's measured in
[33:50] the opposite of profit, loss. It is
[33:52] objective,
[33:53] falsifiable. It is data.
[33:56] Okay? And the key point in there is
[33:58] voluntary. Meaning nobody forces anyone
[34:02] to use Amazon.
[34:04] They use Amazon because they want to.
[34:06] They voluntarily
[34:08] become a customer. They're never forced.
[34:12] Huge huge huge, but very important point
[34:15] there.
[34:16] Voluntary.
[34:18] Okay.
[34:19] Now, the other point that seems to be
[34:21] getting confused here is moral worth,
[34:24] which is how good or how noble or how
[34:26] essential somebody is.
[34:28] Now, that is not objective. That is
[34:32] subjective. That's philosophical. It's
[34:34] important, but it's an entirely
[34:36] different axis.
[34:38] Entirely different.
[34:40] Someone's economic productivity does not
[34:43] have moral implications.
[34:46] There are plenty of douchebags on Wall
[34:48] Street.
[34:49] Right? So,
[34:51] my point is
[34:52] that people are collapsing these two,
[34:55] which is fine. I mean, whatever. Like,
[34:57] you know, you're not going to solve
[34:58] every YouTube comments misunderstanding.
[35:00] But the I I think it's interesting, you
[35:02] know, I believe in Austrian economics,
[35:05] free markets, uh the way I talk about
[35:08] money and my worldview, and I think many
[35:10] Bitcoiners um are of Austrian economics
[35:12] grounding. And so, I think it it's cool
[35:15] to introduce these concepts formally
[35:17] into the show.
[35:19] Um and so, when people hear the word
[35:21] productive, they think that I'm ranking
[35:24] humans, where I'm saying, "Well,
[35:27] Bezos sits above a high school gym
[35:30] teacher." And that is not what I am
[35:32] saying. I am reading the economic
[35:35] output. I'm reading data. Totally
[35:38] different things. I'm not ranking
[35:40] people's moral, good, noble, or
[35:43] essential worth. Okay?
[35:46] So, back to profit. All profit is is
[35:50] information.
[35:51] Profit and loss is not a reward or a
[35:54] punishment. They're information signals.
[35:57] Profit tells you, a market participant,
[36:01] that you took scarce resources, combined
[36:04] them, and the output was worth more
[36:07] than the input.
[36:10] That's it.
[36:13] Again,
[36:14] scarce resources is because all
[36:17] resources are scarce compared to the
[36:20] infinite abundance of everyone wanting
[36:22] things. I look around. I want a
[36:24] penthouse. I want a Ferrari. I want to
[36:26] be a 6-7 professional athlete. I want to
[36:29] have a private jet. I'm infinitely want
[36:32] things. And once I have those things, I
[36:34] want more. I want to Once I'm a
[36:36] professional athlete, I want more
[36:38] championships than Michael Jordan. Once
[36:40] I have that, I want championships in
[36:42] another sport.
[36:45] So, all profit does you know, economics
[36:48] is largely in money money generally,
[36:50] like Bitcoin, it's just information.
[36:53] So, profit tells us
[36:55] that you took scarce resources, you
[36:57] combined those resources, and the output
[36:59] you produced with those resources is
[37:01] worth more to people in the market than
[37:03] the inputs themselves. That's it.
[37:06] And that is what is the definition of
[37:08] what we call creating value.
[37:10] Now, a loss tells you the opposite.
[37:13] Tells you that you took scarce
[37:14] resources, you combined them, and the
[37:16] output of those resources is worth less,
[37:19] and that you destroyed value, and you
[37:21] should stop doing that. And there's a
[37:23] form of Darwinism where obviously, if
[37:25] you continuously destroy value, you
[37:28] inevitably won't have the resources to
[37:30] keep going.
[37:32] And so, a truly free market doesn't
[37:35] allow scalable destruction of value, and
[37:38] incentivizes and encourages one to scale
[37:42] value creation. Make sense?
[37:45] And so, this is what Mises was getting
[37:47] at with economic calculation in Austrian
[37:50] economics.
[37:51] Without profit and loss we as market
[37:54] participants have no idea if we are
[37:56] helping or wasting.
[37:59] We are flying blind.
[38:01] The signal, the information
[38:04] is the entire point
[38:06] of economizing as humans.
[38:09] So, when I say Jeff Bezos is productive
[38:12] that just means that Amazon passed that
[38:15] test billions of times. Billions of
[38:18] people chose to hand over their money to
[38:22] Amazon. Voluntarily. Nobody forced them.
[38:25] Nobody put a gun to their head and said,
[38:27] "You must become an Amazon customer."
[38:31] So, Amazon took a bunch of scarce
[38:33] resources, combined them together,
[38:36] and the combination, the output was
[38:38] worth more to people than the inputs.
[38:41] And how much more was it worth? Well, a
[38:44] lot more. It's a multi-trillion-dollar
[38:46] company.
[38:48] And that was all voluntary, where Amazon
[38:50] and Jeff Bezos voluntarily collected
[38:53] resources to put together an output that
[38:56] is Amazon and their products,
[38:59] and the customers voluntarily exchanged
[39:01] money for those services.
[39:04] And the scoreboard of profit and loss is
[39:07] telling Jeff Bezos to keep going. You're
[39:09] creating more than you're consuming.
[39:12] You're creating value, not destroying
[39:14] it.
[39:16] So,
[39:17] another really important point, Jeff
[39:20] Bezos' net worth is not a pile that he
[39:22] took from someone. It is the receipt for
[39:25] value that he created. We'll get into
[39:28] this in a second, but it's not as if
[39:30] Jeff took money from somebody else.
[39:34] Okay.
[39:35] So,
[39:37] back to Bezos and being productive. Yes,
[39:40] it's true.
[39:41] From an economic standpoint, Jeff Bezos
[39:44] is more productive than a teacher.
[39:47] By the Austrian definition, that is
[39:50] unequivocally a fact. That is the number
[39:52] one is greater than the number zero.
[39:55] Super simple. Again, I don't know Jeff
[39:58] Bezos personally, so I cannot make a
[40:00] moral judgment on his character.
[40:03] And it's
[40:04] I don't find it a good use of time to
[40:06] speculate on his moral character versus
[40:09] teachers as like a broad term. We're not
[40:11] even talking about a teacher in
[40:13] specific.
[40:14] But the The is, as far as economics,
[40:16] which is information,
[40:19] Jeff created more economic value for
[40:22] more people as measured by voluntary
[40:25] exchange. Billions of transactions on
[40:28] Amazon. Billions of people choosing to
[40:30] hand him their money because he built
[40:33] and served them as customers.
[40:36] That does not make Jeff a better human
[40:38] or a better person. It does not make him
[40:40] noble. It doesn't make Jeff essential.
[40:43] Now, you can say Amazon is an essential
[40:46] business to the world, but that is
[40:48] different in a different totally
[40:50] different and separate point that you'd
[40:52] have to justify outside of Amazon being
[40:55] productive and profitable in the
[40:57] marketplace.
[40:58] It does not make him essential.
[41:01] If there is a profitable barber shop,
[41:03] and the barber shop ceases to exist,
[41:05] there could be plenty of other barber
[41:07] shops. It does not mean that the barber
[41:09] shop was essential.
[41:11] So, do not mistaken someone being
[41:13] productive as being noble or essential
[41:15] or more deserving of respect. That is
[41:18] That is politicians trying to trick you
[41:21] and get your emotions like AOC is trying
[41:23] to get you upset at billionaires. At
[41:26] least that's my opinion. You guys can
[41:27] agree or disagree with me. But, they're
[41:29] trying to say like get mad at these
[41:31] people. It's their fault. All the anger
[41:33] that you're feeling is not politicians
[41:36] and governments and central banks
[41:37] distorting the value of energy through
[41:41] through the destruction of currency.
[41:43] Don't get mad at that. Get mad at that
[41:45] guy. What I'm telling you is someone
[41:47] being productive and profitable has no
[41:49] implications on their nobleness, how
[41:51] essential they are, how deserving of
[41:53] respect they are.
[41:54] All it means is they are productive.
[41:57] Totally different words.
[42:00] Not everyone who is wealthy earned it
[42:03] this way that Jeff Bezos did. Some
[42:05] people inherited it. Some people won the
[42:07] lottery. Some people got lucky. But, if
[42:09] we want to talk about Jeff Bezos and
[42:11] Amazon, which is a great example.
[42:14] He built something that passed the
[42:16] profit test at scale.
[42:18] Fact, economic fact.
[42:21] The discomfort that people feel
[42:24] I think that this is political rhetoric.
[42:27] This is
[42:28] like government's gotten too big, fiat
[42:31] has gotten so destructive that you know
[42:35] the destruction of
[42:37] of energy and time and our ability like
[42:40] mind you understanding all these
[42:42] Austrian economic concepts now you
[42:44] understand how valuable a free market is
[42:46] and hard money is because if we don't
[42:48] have this information exchange of hey is
[42:51] what you are doing in the market
[42:53] productive or not? Is it profitable or
[42:55] not? Is it a net good or not? Then you
[42:58] start having people that are doing bad
[43:00] things but able to scale it because you
[43:02] can just print money, you could just
[43:03] bail out. You are distorting everyone's
[43:06] reality and ability to information
[43:09] exchange at scale.
[43:11] When we have things like the AI and the
[43:12] internet we're we're economizing amongst
[43:15] 8 billion people globally across
[43:17] languages, across borders, across
[43:18] cultures, across races.
[43:21] And it's incredibly important that we
[43:23] get the necessary information for us to
[43:25] economize.
[43:27] Cuz like I said, scarcity is a permanent
[43:30] We are always going to want more than we
[43:32] can earn. Always, always. So we must
[43:35] economize.
[43:37] But in order for us to economize, we
[43:38] have to have this information pass. And
[43:41] so things like the founder of Amazon is
[43:44] productive because they've scaled
[43:46] profit. That cannot be a political
[43:49] debate. That must be an economic fact. I
[43:53] am not saying Jeff Bezos is a better
[43:55] person. I'm saying he's more productive
[43:58] in the marketplace.
[44:00] Okay. Let's go on.
[44:02] Now, back to water.
[44:04] There is a very famous, the oldest
[44:06] paradox in economics called the diamonds
[44:09] and water paradox. Water keeps you
[44:12] alive. It is absolutely essential.
[44:14] However, water is almost free. In many
[44:17] cases, it is free. You go to the gym,
[44:20] you get free water. Just go to the water
[44:21] fountain, fill up your bottle.
[44:24] Diamonds are useless.
[44:26] Useless. We all survive without
[44:28] diamonds. We do not need diamonds in the
[44:30] slightest. However, they cost a fortune.
[44:35] My engagement ring to my fiance
[44:37] was not free.
[44:39] Right?
[44:41] So, what's the point? What's this
[44:42] paradox? Water is essential, diamonds
[44:44] are not, but diamonds cost more than
[44:46] water.
[44:48] What the hell?
[44:50] If economics was just purely based off
[44:53] utility,
[44:55] then water would be
[44:56] a billion times more expensive than
[44:58] diamonds because we need water. Diamonds
[45:01] could cease to exist and no one would
[45:02] give a [ __ ]
[45:04] I mean, people would care, but life goes
[45:06] on.
[45:07] This concept bothered economists forever
[45:11] until we realized that the marginal
[45:14] revolution settled it. Prices don't
[45:17] track total importance to life.
[45:21] Like Jeff Bezos being profitable or
[45:23] someone on Wall Street being profitable
[45:25] does not map to their importance or
[45:27] their morality
[45:29] or their deserving of respect.
[45:33] Prices do not track total importance to
[45:35] life. They track the value of the next
[45:37] unit at the margin. Water is abundant.
[45:41] For all the demand that we have for
[45:42] water, there is a ton of supply. The
[45:44] next glass of water is cheap. When you
[45:46] sit down at a restaurant, it's free.
[45:48] It's on the house while you order.
[45:50] Diamonds are scarce.
[45:53] The next stone is expensive. Most
[45:56] essential and most expensive were never
[45:59] the same claim.
[46:01] But to understand that, you have to
[46:03] understand very basic economic theory.
[46:06] Importance and price are not the same
[46:08] metric.
[46:10] Okay?
[46:11] So, back to this idea of let's just tax
[46:13] the rich.
[46:15] If wealth was something that one person
[46:19] takes from another person,
[46:21] if Jeff Bezos' wealth was something that
[46:23] he took
[46:25] from someone else, then clawing it back
[46:28] through taxes and through government
[46:30] sounds like justice. Sounds like a noble
[46:32] thing to do. Jeff Bezos took wealth from
[46:35] you, and you should elect me because I
[46:38] will take that wealth back from him and
[46:40] distribute it back to you. That sounds
[46:42] noble, that sounds righteous.
[46:44] But,
[46:46] involuntary exchange,
[46:49] wealth is not taken like that. Wealth is
[46:53] created.
[46:55] Hugely important difference.
[46:59] Involuntary exchange,
[47:02] free markets. And now, granted, the
[47:04] market we're living in today with as big
[47:06] as government has gotten and fiat
[47:07] currency, it's not Austrian economics
[47:10] level of free.
[47:11] But, Amazon is voluntary exchange. They
[47:15] created a product, they registered
[47:16] amazon.com, they sell you a service, and
[47:19] they don't force anyone to be a
[47:20] customer. All of us can decide we don't
[47:23] want to use Amazon anymore, and many
[47:26] people don't. Sometimes for ethical,
[47:28] principled reasons. They don't like Jeff
[47:30] Bezos, they don't want to give him their
[47:31] business, their time and energy and
[47:33] effort and labor.
[47:34] That's fine.
[47:36] But, the point is involuntary exchange
[47:38] in the market, wealth is not
[47:41] transferred, wealth is created.
[47:43] The buyer, the buyer, got something that
[47:47] they valued more than their cash. This
[47:49] is another very important point in
[47:51] Austrian economics.
[47:53] If I buy something for $10,
[47:57] in Austrian theory, we actually don't
[48:00] know that the thing I bought was worth
[48:03] $10.
[48:05] All I'm saying in in literal economic
[48:09] theory is that it's worth at least $10
[48:12] to me because I would rather have the
[48:14] thing than the $10 of cash cuz if that
[48:17] were not true, I wouldn't have handed
[48:19] over my $10 of cash for said thing.
[48:25] And so, this goes back to values being
[48:27] created. The buyer got something that
[48:29] they must have valued more than the cash
[48:31] they handed, and the seller got cash
[48:34] that they must have valued more than the
[48:35] product that they've created.
[48:38] If Jeff Bezos did not want to ship you
[48:40] the the service from Amazon in exchange
[48:43] for the cash, he wouldn't have. He must
[48:45] have valued the cash he charged you
[48:48] in order for the service that got
[48:49] delivered.
[48:50] The point of this is that both sides
[48:53] gained. Both sides' pies got bigger.
[48:57] Nobody lost.
[49:00] In the whole tax the rich political
[49:02] rhetoric, it's that
[49:03] billionaires took wealth from you. They
[49:07] won at your expense. And so, involuntary
[49:11] transactions in the marketplace, they
[49:14] won, you lost.
[49:16] But that's that is
[49:18] that is physically incorrect cuz in a
[49:21] voluntary free market, both parties win
[49:26] or else the transaction would not have
[49:28] taken place.
[49:30] If a customer hands over their cash, and
[49:33] again, voluntarily, if someone has a gun
[49:35] to my head and says, "Hand over the
[49:37] money," well, economic theory's out the
[49:39] window. It doesn't matter.
[49:41] But if I log on to amazon.com, enter my
[49:44] credit card information, and place an
[49:46] order,
[49:48] I voluntarily am signaling to the market
[49:51] that what I received from amazon.com was
[49:54] worth more to me than the cash that I
[49:56] have. Do you see?
[50:00] So, when you claw back money property
[50:03] from someone after the fact, you are not
[50:06] recovering stolen goods. Jeff Bezos did
[50:09] not steal from you.
[50:11] You are punishing the economic signal
[50:14] that told everyone where to create more
[50:17] value next. You are not fixing an issue.
[50:20] You are further damaging and breaking
[50:23] the marketplace.
[50:30] So, confiscating property via taxation
[50:32] does not redistribute wealth. It
[50:34] destroys
[50:36] the economic information that organizes
[50:38] society.
[50:41] We want society to get the signals to
[50:44] produce more value that is profitable.
[50:47] People taking scarce resources, summing
[50:50] them together to create something net
[50:52] good for those around them.
[50:54] We want more signals like that. You
[50:56] don't say, "Oh, all of you guys are
[50:59] creating immensely productive economic
[51:01] outcomes. Let us damage and destroy that
[51:05] so that you don't do that anymore."
[51:07] Anyone who creates a billion dollars
[51:09] worth of positive economic outcome must
[51:11] be punished.
[51:13] That's terrible for society.
[51:17] Terrible for society.
[51:19] And And one of the most important part
[51:22] parts about this slide and this rant is
[51:25] that everybody wins in an economic
[51:27] transaction or else the transaction
[51:28] would not have taken place.
[51:31] Both sides gain. The buyer got something
[51:34] they valued more than their cash, and
[51:35] the seller got cash that they valued
[51:37] more than their product.
[51:39] It's
[51:40] the whole pie gets bigger.
[51:43] Very important.
[51:46] Um So, anyways, we're getting close to
[51:49] the top of the hour.
[51:51] Productivity is not a measurement of how
[51:52] noble your job is. It's a measurement of
[51:55] how well you serve other people in the
[51:57] market, period. How much you give them
[52:00] is relative to what you take. That's it.
[52:02] It's a profit or a loss. It is numbers.
[52:05] It is data. It is information.
[52:08] The scoreboard doesn't care about your
[52:10] title, your degree, your intentions,
[52:12] your morality. It asks a very simple
[52:15] question. Did the people you served
[52:17] value what you gave them more than what
[52:19] it cost you to create? If yes, you
[52:22] created value for the world. If no, you
[52:24] consumed value from the world.
[52:27] That is not a judgment on your soul. It
[52:30] is honest feedback, honest economic
[52:33] information.
[52:34] And is the most important feedback
[52:37] mechanism society and us humans have
[52:39] ever built. Economizing and creating
[52:42] money allows us to scale past barter.
[52:46] We wouldn't be able to have a society
[52:48] more than a couple hundred people
[52:50] because our physical brains cannot
[52:52] construct social relationships past 100
[52:57] people.
[53:00] In order to have an economy larger than
[53:02] a small town, we must economize. We must
[53:06] have this feedback mechanism, this
[53:07] information sharing.
[53:09] So, it takes out guessing. It takes out
[53:11] manipulation. It lets the market and
[53:14] people and their interest tell you with
[53:16] their money, which the reason I talk
[53:18] about money as time and energy is it
[53:20] allows
[53:22] everyone's time, energy, effort, and
[53:24] labor to communicate whether you helped
[53:27] them or not.
[53:29] That's it.
[53:30] If someone hands you their money,
[53:32] that is signal and you ended up with
[53:34] more money than it cost you to produce,
[53:36] that is signal that you are being
[53:38] helpful to others.
[53:40] And we need that feedback cuz go do more
[53:42] of that. But then if I create a feature
[53:44] at Strike where I'm losing money, I'm
[53:46] being destructive to others. No, don't
[53:49] stop. Stop. Go back. Don't do that.
[53:51] Don't do that anymore.
[53:55] So, anyway, a little bit of Austrian
[53:58] economics.
[53:59] Uh
[54:00] I'm curious what the comments are. I'm
[54:01] sure, you know, people are still upset
[54:04] that some people have built wealth. I
[54:06] disagree with them. But um
[54:08] figured if you guys like that, maybe we
[54:10] can do more of that where the episodes
[54:12] are more informational, um like like
[54:15] mini educational classes.
[54:18] Uh and if not, I won't ever do it again.
[54:20] But maybe we can have a better dialogue
[54:22] in the Q&A. Cuz like when I'm reading
[54:24] these comments, it's like So, what?
[54:26] You're saying like what what are
[54:28] professional sports players creating?
[54:31] They're not productive. Well, I'm not
[54:32] saying productive like they're literally
[54:34] creating physical things.
[54:37] But like
[54:38] They
[54:39] So, you guys get it. You guys get it.
[54:40] Ho- Hopefully this is more constructive.
[54:42] Uh and uh I don't know. I I just had an
[54:44] itch to really explain what I was trying
[54:48] to communicate after reading some of
[54:49] your comments. Okay. Um
[54:51] I got no um Grind My Gears cuz it's top
[54:55] of the hour uh holiday. I got to go. No
[54:57] Grind My Gears. No Q&A. Um but real
[54:59] quickly with Strike, um we shipped What
[55:02] did we ship last week? You guys know I
[55:03] do this every week.
[55:04] Um
[55:05] term loans on the dashboard. So, people
[55:08] always say, "Can I use Strike on my
[55:09] desktop? Can I use Strike on the web?"
[55:11] Yes. We we have a desktop experience.
[55:14] You go log into the dashboard. So, on
[55:16] the dashboard, you now can do term loans
[55:18] and manage your bill pay on the
[55:19] dashboard. We lowered Pennsylvania
[55:21] consumer loans um to our $5,000 minimum.
[55:24] So, we continue to just chip away. We
[55:26] are just machines. Like whatever
[55:28] regulators need from us, whatever
[55:29] licenses we need, we want lower
[55:31] minimums, more access. We want to build
[55:34] the Bitcoin financial institution. And
[55:36] that there's no shortcuts to doing that.
[55:38] Um you got to just pound pavement, proof
[55:40] of work, put your head down, one license
[55:42] at a time, one feature at a time, one
[55:44] market at a time, just keep going. And
[55:47] so every week I like sharing these
[55:48] updates cuz we are just men and women on
[55:51] a mission to build the Bitcoin financial
[55:54] institution. And some of the things that
[55:56] are coming bigger bigger things that are
[55:58] coming from Strike cuz I know you guys
[55:59] with no Q&A, you guys are probably going
[56:01] to ask. Um our interest on cash is
[56:03] coming uh very soon. Really, really
[56:05] excited about it. Uh and then we also I
[56:08] announced at the Bitcoin conference
[56:10] liquidation-proof loans where you can
[56:12] pay a little bit of a premium. So, I'm
[56:14] just making numbers up off the top of my
[56:16] head. Let's say
[56:17] uh a loan is 8%. You pay 9% and that
[56:22] extra cost means we will never liquidate
[56:25] you. We take the extra cost that we're
[56:27] passing on to you to create market
[56:29] hedges to make sure that like literally
[56:32] liquidation's not an option. So, if
[56:34] someone wants to pay a little bit of a
[56:36] premium just to make sure that they can
[56:38] sleep well at night and they'll never
[56:40] get liquidated cuz I see people say,
[56:42] "Oh, you're liquidating people's
[56:43] Bitcoin. You're a terrible person." We
[56:45] don't want to do that and that actually
[56:47] inspired me to try and create a product
[56:49] where you can pay us that'll never
[56:51] happen.
[56:52] And so, we've been piloting it in an on
[56:54] an OTC basis and uh we're going to roll
[56:57] it into the app and make it accessible
[56:59] to everybody uh which is very, very
[57:01] exciting. So, I think that'll also come
[57:03] out very soon, too. So, the interest on
[57:04] cash and uh the uh liquidation-proof
[57:08] loans, I want to say those are both June
[57:10] and it's May 25th. So, those are both
[57:12] weeks away. Don't hold me to that.
[57:14] Building things is hard, but I know
[57:16] those are the two most requested things
[57:18] uh from you guys and we're super excited
[57:20] to deliver on it and just continue to
[57:22] make Strike like the Bitcoin bank, the
[57:24] best uh Bitcoin financial experience in
[57:27] the world.
[57:29] Um okay.
[57:30] Happy holidays, guys. Uh
[57:33] with all the banter that we have back
[57:34] and forth, um I appreciate you guys. I
[57:37] hope that you're enjoying the time with
[57:38] your family. Don't let the markets get
[57:39] you too down. Stay humble, stack sats.
[57:42] Uh we didn't get to choose what we
[57:44] inherited, but uh we do get to build
[57:46] whatever's next, and that's an honor and
[57:47] a privilege. So, I appreciate you guys
[57:49] tuning in and building uh Bitcoin with
[57:52] me. We're all we're all in this
[57:54] together. Um so, comments, feedback,
[57:57] questions, criticisms, uh leave them
[57:59] below. You guys know I read them. I take
[58:01] it seriously. I just want to be be uh a
[58:04] better Bitcoiner, better leader for you
[58:05] guys. So, give me all the uh feedback,
[58:07] and I'll talk to you next week. Peace
[58:09] and love. Take care.
[58:11] Bye.