Tag Archives: finance

Post Labor Econonomics Videos – David Shapiro

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Update 7-27-2025 – He added a 5th video Post-Labor Economics Lecture 05 – “Bridging the Gap” (2025 Update)

as well as a long podcast – Full Post-Labor Economics Deep Dive and Book Preview! Interview with Dalibor Petrovic

I am looking forward to the book.

original post below

Over the past couple weeks, I’ve been diving deep into David Shapiro’s Post-Labor Economics lecture series (linked below — all around 40 min). I’ve listened to each one twice, and then used a mix of ChatGPT, Copilot, and Grok to create four 10-point summaries — one per video. Then I asked ChatGPT to synthesize those into a single meta-summary of the core ideas.

Here are the 4 videos. Each about 40 minutes long. 

Post-Labor Economics Lecture 04 – “Day 1 Implementation & Solutions” (2025 Update) 

Post-Labor Economics Lecture 02 – “Economic Agency Paradox” (2025 update)

Post-Labor Economics Lecture 03 – “That which gets measured gets managed!” (2025 update)

Post-Labor Economics Lecture 04 – “Day 1 Implementation & Solutions” (2025 Update)

ChatGPT – Here is a 10-bullet-point meta-summary that synthesizes the key themes and insights from all four “Post-Labor Economics” video summaries:

  1. Automation is Inevitable and Transformative: AI and robotics are displacing human labor across all sectors, making wage-based employment increasingly obsolete while simultaneously threatening consumer demand and economic stability.
  2. Economic Agency is the Core Concern: Individuals require labor rights, property ownership, and voting rights to retain agency. As labor rights erode, property rights become the cornerstone of financial autonomy.
  3. The Demand Paradox: Businesses want to automate to cut costs but still need paying customers. Without jobs, people can’t spend—creating a structural contradiction that leads to economic collapse unless resolved.
  4. Rethinking Metrics: The EAI: Traditional KPIs like GDP and unemployment are no longer sufficient. The Economic Agency Index (EAI) measures household income sources (property, wages, transfers) and highlights the need to prioritize ownership income.
  5. UBI: Helpful but Not Enough: Universal Basic Income is necessary as a safety net but inadequate on its own due to inflation risk, governance issues, and centralization. It must be paired with decentralized, property-based income streams.
  6. Ownership is the New Wages: Future economic resilience depends on expanding access to trusts, wealth funds, co-ops, patron equity programs, and digital tokens to replace lost labor income with ownership-based dividends.
  7. Counties as Innovation Labs: With 3,100 U.S. counties, local governments are ideal sites for experimenting with and scaling post-labor economic models, offering granular data and tailored policy solutions.
  8. Banks as Economic Interfaces: Banks will evolve into the primary economic hubs, managing dividend flows, investment portfolios, and identity verification, replacing the role of traditional employers in financial life.
  9. Guardrails Against Technofeudalism: Preventing elite capture and concentrated corporate control is critical. Transparency, participatory governance, and broad-based ownership are essential safeguards.
  10. Market-Driven, Not Ideological: Post-labor economics distinguishes itself from socialism and communism by preserving markets and private property. Its goal is not wealth redistribution through state control, but wealth inclusion through distributed ownership and market-based tools.

I continued to have a conversation with ChatGPT to understand further. 

I asked it “”How does post-labor economics differ from individuals simply investing in the stock market to generate passive income?”

It gave a very nicely formatted response, below. 

🧩 TL;DR: It’s Not Either/Or

Buying stocks is one tool — a good one — for individual financial freedom.

But post-labor economics is about designing an entire economy where capital income is as normal, widespread, and accessible as having a job once was.

It’s not just you winning the game — it’s everyone getting a seat at the table.

Great question — and an important one.

🤔 At first glance, post-labor economics might sound like:

“Just buy stocks and live off dividends — problem solved.”

But post-labor economics goes beyond that in a few key ways. Here’s how it’s different from individuals simply investing in the stock market:

🏛️ 1. System Design vs. Personal Strategy

  • Stock investing is an individual solution — you build capital and income for yourself.
  • Post-labor economics is a system-wide redesign — it’s about building structures where everyone can participate in ownership, even if they don’t have savings, brokerage accounts, or financial literacy.

💵 2. Barriers to Entry

  • The stock market requires:
    • Disposable income
    • Access to financial tools
    • Risk tolerance
    • Education
  • Post-labor models focus on lowering those barriers by:
    • Distributing residency-based dividends
    • Creating local trust funds
    • Offering non-transferable community equity (you don’t have to “buy in”)

🏘️ 3. Ownership of Local, Tangible Assets

  • The stock market mostly involves ownership of national or global corporations.
  • Post-labor economics emphasizes ownership of local assets: businesses, land, water rights, data, energy — things that create direct, community-level income streams.

Owning Amazon stock ≠ owning the gas station, solar field, or rental housing in your own town.

🤝 4. Shared Governance & Resilience

  • When you buy stock, you have no governance power, unless you’re a billionaire activist investor.
  • Post-labor structures are built on shared governance — resident voting, dividend boards, and community stewardship.

💬 5. Not Everyone Can or Will Invest

  • A huge portion of the population has no stock market exposure. About 45% of Americans own no equities at all — and among the bottom 50% of income, it’s more like 10–15%.
  • Post-labor economics seeks to bake ownership into the system so that even non-investors receive income from capital.

🧠 6. Ownership as Policy, Not Privilege

  • Stock investing is optional and personal.
  • Post-labor economics treats ownership as infrastructure — like roads or clean water. It should be available to all by design, not just those who planned ahead or got lucky.

🌐 7. Resisting Elite Capture

  • The stock market concentrates wealth — the top 10% own over 85% of equities.
  • Post-labor models try to decentralize ownership — giving communities a stake in the economy before everything gets bought up by private equity or mega-corps.

🛠️ 8. Designed for the Age of Automation

  • Stock market investing was never intended as a wage replacement for the masses.
  • Post-labor economics is explicitly built to answer:

“What happens when jobs disappear, but people still need income?”

My next question. 

“What mechanisms does post-labor economics use to avoid the tragedy of the commons when assets are collectively owned?”

✅ TL;DR:

Post-labor economics avoids the tragedy of the commons by turning shared access into structured, incentivized, accountable co-ownership.

It’s not a free-for-all — it’s a designed economy, where people are rewarded for taking care of what they collectively own.

Excellent question — and one of the core design challenges of post-labor economics.

The tragedy of the commons refers to a situation where a shared resource is overused or neglected because no one feels personal responsibility. In a post-labor economy — where ownership is distributed rather than concentrated — this is a real risk. But it’s not unsolvable.

Here’s how post-labor economics intentionally designs around the tragedy of the commons:

🧩 1. Move from “Common” to “Co-Owned”

  • The key shift is from open access (commons) to structured, governed co-ownership.
  • Think: community trusts, resident shares, dividend boards — where everyone has skin in the game, not just access.

📜 2. Define Clear Rights and Responsibilities

  • Successful post-labor models include smart governance charters:
    • Who can vote?
    • Who maintains assets?
    • How are profits used?
    • What happens if you leave?
  • This clarity prevents freeloading and aligns incentives for stewardship.

💰 3. Tie Participation to Rewards

  • Dividends aren’t just handed out — they can be tied to local contribution:
    • Show up to meetings
    • Volunteer hours
    • Local residency
    • Use the service or shop locally
  • This ensures that ownership feels earned, not distant or abstract.

📊 4. Transparency and Dashboards

  • Many models propose using public dashboards to show how community-owned assets are performing.
  • When people see the numbers — usage, revenue, maintenance costs — it creates accountability and pride.

🧑‍🤝‍🧑 5. Decentralized Governance Structures

  • Rather than one central authority, post-labor systems push decisions downward:
    • Counties manage their own trusts
    • Co-ops elect local boards
    • Banks help automate compliance and distribution
  • Local control = stronger stewardship.

🏦 6. Hybrid Ownership Models

  • Some assets are shared (like land or solar arrays), while others are individually owned (tokens, local equity).
  • This creates a blended structure where people benefit both as individuals and collectively, reducing the temptation to abuse shared goods.

🛡️ 7. Guardrails Against Elite Capture

  • Ironically, many “commons” in the modern economy (like housing or water) have already been captured — just not by the public.
  • Post-labor models bake in protections: voting caps, local-only ownership, anti-speculation rules, etc.

It’s a powerful framework. Personally, I’m still focused on achieving my own financial freedom — and I encourage everyone to do the same. But once we secure our own foundations, we’re in a much better position to help build a freer, more equitable world for everyone.

The Intellectual Stagnation in Academia: Ignoring the Corporate Shift to Bitcoin

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Introduction In recent years, the corporate world has witnessed a historic shift in treasury strategies, with several prominent companies incorporating Bitcoin into their reserves. Despite these significant changes, many finance professors continue to dismiss or ignore the implications of this trend. During my MBA studies, I have personally discussed or emailed with six finance professors over the last three years about Bitcoin. None of them have shown any curiosity or willingness to engage in meaningful discussions about this topic. While I cannot speak for all finance professors, this has been my experience with those I have interacted with. This paper aims to highlight the lack of intellectual curiosity among academics in the face of obvious transformations in corporate and global environments.

The Corporate Shift to Bitcoin The adoption of Bitcoin by companies such as MicroStrategy, Tesla, and Block Inc. marks a pivotal change in how corporate treasuries manage their assets. These companies view Bitcoin as a strategic asset, providing a hedge against inflation and currency debasement. MicroStrategy, for instance, has aggressively acquired Bitcoin, making it the largest Bitcoin treasury in the world. This trend began around 2020 and has continued to gain traction, signaling a shift in corporate treasury management.

In the last month, several other companies have also announced Bitcoin treasury strategies:

  • Genius Group: An AI-powered education group that has committed 90% or more of its current and future reserves to be held in Bitcoin 1.
  • Worksport: A U.S.-based provider of pickup truck solutions that is adding cryptocurrency to its corporate treasury strategy 1.
  • Rumble: A video platform targeting a conservative audience, planning to invest up to $20 million of surplus cash in Bitcoin 2.
  • Metaplanet: A company with clearly stated strategy reserve asset goals and reasoning 3.
  • Strategy (previously MicroStrategy): Continues to lead the way with its Bitcoin treasury strategy 3.

Government Recognition of Bitcoin The U.S. government has also acknowledged the significance of Bitcoin by establishing a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. This move underscores the growing acceptance of Bitcoin as a store of value and its potential role in national economic strategies.

Personal Experience with Academic Dismissal Over the past three years, I have personally discussed or emailed with six finance professors during my MBA studies about the topic of Bitcoin. Despite the clear and significant changes in corporate treasury strategies, none of these professors have shown any curiosity or willingness to engage in meaningful discussions about Bitcoin. This lack of interest is particularly surprising given the relevance of Bitcoin to contemporary financial practices and corporate strategies and the fact that there are not many innovations in Corporate Treasury operations. When a new idea comes along you would expect people to be interested to consider if it has any value.

The Importance of Intellectual Curiosity Intellectual curiosity is a cornerstone of academic excellence. It drives innovation, fosters critical thinking, and encourages the exploration of new ideas. The reluctance of finance professors to engage with the topic of Bitcoin reflects a stagnation in intellectual curiosity that is detrimental to both students and the broader academic community.

Conclusion The corporate shift to Bitcoin represents a significant change in treasury strategies that warrants academic attention. Professors should embrace intellectual curiosity and explore the implications of this trend, rather than dismissing it. By doing so, they can provide students with a comprehensive understanding of the evolving financial landscape and prepare them for the future.

Essay: Why Gary Stevenson Should Rethink Bitcoin

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@garyseconomics

Gary, your crusade against inequality is spot-on—the rich hoard wealth, wages stagnate, and housing slips out of reach. You’ve nailed how the system’s rigged, profiting off disparity as you did at Citibank. But your dismissal of Bitcoin as a “scam” or “musical chairs” misses its point. Let’s break it down through your lens. You see value in what’s tangible—property, bonds, cash flows. Bitcoin’s different: it’s digital scarcity, forged by energy-intensive mining, not free “points on the internet.” It costs real resources—miners burn electricity rivaling small nations to secure it. That’s not hype; that’s a backbone. You’ve said wealth concentration tanks demand, keeping rates low. Bitcoin flips that script. It’s not controlled by banks or governments printing money for the elite—it’s capped at 21 million coins, a hedge against inflation you’ve seen erode workers’ lives. You fear Satoshi’s a shadowy puppetmaster, selling off a million coins to dupe the masses. Check the blockchain—those wallets haven’t moved in 16 years. No secret dump, no conspiracy. Bitcoin’s transparent; anyone can verify it. You’d spot a scam in derivatives a mile away—apply that here. It’s not a rich man’s toy; it’s open to anyone with a phone, from East London to Lagos, leveling a field you know is uneven. You’re right about speculative bubbles, but Bitcoin’s survived crashes—$20K in 2017 to $3K, now thriving in 2025 with institutional buy-in. It’s not about quick riches; it’s a store of value, like digital gold, for a world you’ve seen fail the poor. You’ve bet against broken systems before. Bitcoin’s a bet for one—decentralized, fair, and tough as nails. Give it a trader’s eye, Gary. It’s not the enemy; it’s a tool.

@satmojoe

@Jcastweet

@PeterMcCormack

@HawkMcFlipster

@Oriflamme87

What Problem Does Bitcoin Solve? part 3 Buckminster Fuller, F.A Hayek & Henry Ford’s comments

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I’ve written a few things about why bitcoin is the solution to many problems. 

Here for What problem does Bitcoin solve part 1 and here for what problem does bitcoin solve part 2 and here for “Why Bitcoin?“

I wanted to share a few quotes from history to highlight that the control and debasement of money by governments has been an issue for a long time. The faster everyone understands this the faster we can all get on the bitcoin standard for value preservation. 

I explain here why we should support the bitcoin experiment. It solves the problem. If it ends up failing for some reason in the future, we need to recreate Bitcoin and address whatever issue made it fail because we need a currency that can’t be debased by governments. 

The Idea of Bitcoin Needs to Succeed, Even if Bitcoin Fails

“It is utterly clear to me that the highest priority need of world society at the present moment is a realistic economic accounting system which will rectify, for instance, such nonsense as the fact that a top toolmaker in India, the highest paid of all craftsman, gets only as much per month for his work in India as he could earn per day for the same work if he were employed in Detroit, Michigan.  – Page 112 Operating Manual For Spaceship Earth, Buckminster Fuller

F.A. Hayek in 1984: “I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.”

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

― Henry Ford

Ford, who founded Ford Motor Company in 1903, told the publication:

“Under the energy currency system the standard would be a certain amount of energy exerted for one hour that would be equal to one dollar. It’s simply a case of thinking and calculating in terms different from those laid down to us by the international banking group to which we have grown so accustomed that we think there is no other desirable standard.”

Bitcoin is $100k, Should I Buy It Now Or Is It Too Expensive?

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Bitcoin recently breached the $100k price per bitcoin on December 4th 2024. It has retreated slightly but has continued to hover between $90k -$108k/bitcoin. 

Historically bitcoin has had a performance of 3 positive years followed by 1 negative year. While you can’t expect history to repeat itself, it might!

Looking at the below chart you can see we are on track to repeat that performance so far. While not shown 2024 was also a great positive return year for bitcoin so we have 2 years of positive returns. 2025 would be the 3rd year. 

Due to that expectation I fully expect bitcoin to have a good performance in 2025. It is also possible that it has a negative year in 2026 if it continues to follow the historic trend. 

 Of course it is also possible it has a negative year in 2025! We could break the trend. 

We could also break the trend and see that we have a positive year in 2025 and 2026! The future is unknown and unknowable!

https://twitter.com/CryptoKidcom/status/1746139639809720395/photo/1

When people ask me if they should buy bitcoin now I say that they obviously don’t understand bitcoin. If you don’t understand it then I would say “No” you probably shouldn’t buy it. What I tell people is to continue to learn more about why other people buy it. 

Learn about “What problem bitcoin solves.” I have written 2 articles about that here. 

What Problem Does Bitcoin Solve?

We, every person in the world, is in a fight with their own government to keep as much of the value they create as they can.  The government explicitly taxes you, which we can debate but at least it is obvious.  But the government also stealthy steals value from your bank account or savings via inflation and money printing that you have no control over.

What is Money? (What Problem Does Bitcoin Solve -2)

Bitcoin is not an investment. Bitcoin is a store of value. The value you create. Bitcoin is an agreement between people who create value in the world that they will trade their value for other value. The value you create and store in Bitcoin cannot be debased or inflated away by any government by money printing.
I’ve also created a list of great resources to learn more about bitcoin here. 

Books & Videos to Learn About Bitcoin

What I generally recommend people to do is to buy just a little bitcoin so that they will start creating a little interest with themselves. This is how I did it. I bought just $100 and then that made me interested to learn more about what I had bought and why.
You should not plan to sell the bitcoin you buy. This is true for most investments, in my opinion. You should only be investing money you are ready to have invested for 5+ years. 

You shouldn’t try to time the market. You aren’t smart enough for that and neither am I. 

Just buy things that you understand and continue to do research. 

Why Bitcoin?

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I hope with my bitcoin advocacy to help people think more long term.

Why do I spend so much time thinking about bitcoin?

Why do I spend so much time trying to get others to understand bitcoin?

I have thought about a lot of other things in my lifetime. I am a mechanical engineer. I like making thing work. I am a philanthropist. I am a humanitarian. I care about making others’ lives better. I have worked at businesses and nonprofits that have helped make the world a better place. I have thought about how to create businesses and nonprofits that make the world a better place. 

Through it all, I keep looking for ways to make the world better. 

Bitcoin is the best way I have found to make an impact on EVERYTHING! It has become clear to me through all my reading and interacting with people and companies and nonprofits and thinking about issues that at the very base, fiat money is inherently causing a lot of problems in the world. 

Fiat money is unfair. 

The government causes as many or more issues than it solves by creating inflation through money printing. This is both in the USA and all other countries. 

I talked with a friend who was supporting a business in Sri Lanka. The business would dye clothes with natural processes. The point was to help people get a job that otherwise wouldn’t have access to a job. But the Sri Lankan economic crisis happened and the business failed. It made me think about the base infrastructure of all our economies. If the currency fails many businesses fail. A stable currency leads to long term planning and thinking. The fact that all countries have money that is steadily losing value leads to short term thinking. The rush for analysis of quarterly returns for public companies adds to this short term thinking, but steady inflation, caused by government money printing is a major contributor to the short term thinking. I wondered, what is the point of developing businesses if they will fail due to factors outside your control?

That is why I am so passionate about bitcoin. It fixes these short term problems. This is a problem is many countries around the world. 

People in many countries can’t save in their local currency because they lose value so fast. In the USA we recently had 1 year of 8% inflation and everyone went crazy! 

I fully expect that increased inflation to come back to the USA sometime in the next 10 years, unless we cut the yearly deficit. 

Even if it doesn’t come back for a few years, the way the current system is, fiat money, there is always steady inflation (3%-4%) which still incentivises short term thinking.

I hope with my bitcoin advocacy to help people think more long term. 

1 Bitcoin Per Day

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El Salvador, the first country to make Bitcoin legal tender, but unlikely to be the last, is buying 1 bitcoin a day. 

You can track their purchases here. 

https://bitinfocharts.com/bitcoin/address/32ixEdVJWo3kmvJGMTZq5jAQVZZeuwnqzo-nodusting

El Salvador actually started doing this on Nov. 18, 2022, when the bitcoin price was $16,600! Today it is $60,000.

There are 450 new bitcoin created each day through mining. There will only ever be 21 million created. Only 19,747,693.75 have been mined as of this writing (6-26-2024). 94%. The last bitcoin will be mined in 2140. 

El Salvador, a tiny country, is buying almost 1 full day’s worth of new bitcoin mined each year. Imagine how many other countries and companies could start buying this soon? 

I’ve already shared with this post, how many companies and pension funds have started buying bitcoin this year. 

The Wisconsin pension fund bought $160 million worth of bitcoin. 450 new bitcoin a day x $60k/btc = $27 million. So Wisconsin bought 5.9 days of new bitcoin supply. 

Do you think the state of Wisconsin will be the last Pension to buy bitcoin?

Bitcoin, A Withdrawal of Productive Capacity To A Fair Arena

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Atlas Shrugged is a 1,000+ page novel that most people will never read, so I don’t feel bad “spoiling” it here. An important part of the book centers around the question “Who is John Galt?”

It turns out John Galt is an inventor who is tired of having his work stolen, taxed or taken advantage of by the government and society. 

As a result John Galt organizes a protest of sorts, by hard working people. They all physically withdraw to Galt’s Gulch, a hidden valley where they set up their own society. They are all productive and trade value for value. They don’t take advantage of each other and they don’t print new money from a central bank to dilute the value that others have worked to store!

Bitcoin, in principle and in action, is a way for smart people to create their own productive society alongside the current society. We don’t need to physically withdraw ourselves. We merely need to withdraw our productive capacity and wealth from the system. You simply do this by buying some bitcoin and poof! You have entered the secret society where value is preserved!

Why would you want to enter this society though? Ask yourself “If I want to save $100 today to spend in 2 years how do I do that?”

It is actually a MUCH harder question to answer than it seems at first glance.

Sure you can just put a $100 bill under your mattress but as we have experienced in the last 2 years, you could lose 10% a year or more, and that is just in the USA. In places like argentina (until recently) you could see inflation of 100% a year meaning prices double each year.
You could put it in the stock market, which has a 75% chance of being up any 1 year. But it also has a chance of going down.
You could buy a bond but with changing interest rates it’s hard to know if you would actually have the same amount of money next year or not!

You could buy gold, but short term it has trading fees in and out and might be up or down in any 2 year period.
There is just no really good way to store value! This is all due to central banks and governments printing more money everyday!

As they print more money, the cash you hold becomes less valuable!

People just accept that this is the way things have to be. But it is not! Bitcoin has the potential to be an asset that slowly gains value every year. There is a fixed amount of bitcoin ever to be created, 21 million. These 21 million bitcoins measure the value of all goods in the world. As there is more abundance the value of the fixed amount of bitcoin continues to increase!

Many of the smart, productive, people that I know have purchased at least some bitcoin to join the community. They purchase goods and services from each other in bitcoin. You too can join this exclusive community of productive, smart people. Shoot me an email or leave a comment asking any questions you have about bitcoin!

The Idea of Bitcoin Needs to Succeed, Even if Bitcoin Fails

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The Truth heard one time sounds stranger than a lie heard a thousand times. 

The truth is, inflation is caused by the government printing money. There are only so many goods that are possible to be produced by the limited amount of resources in the economy. An infinite amount of dollars cannot create more goods. More money only causes the price of the existing goods to increase as there is more money chasing the same amount of goods. 

This is best described in a short book “Economics in One Lesson -Henry Hazlitt”.

This is what happens every time the government increases the money supply. This happens everyday. 

We have been in this system since everyone alive was born so it seems like it should be the natural system, but it is not. 

Ask a fish to describe air and they’d be confused because they are surrounded by water. We are surrounded by fiat currency so we don’t recognize a good sound money when we are exposed to it. 

We don’t need money distributed by the government. Money is an IOU. Money is a medium of exchange that people accept to pay for goods and services, and to repay loans. It’s a commodity that’s widely accepted, holds its value over time, and can be easily translated into prices. Money is the main measure of wealth, and it circulates between people and countries to facilitate trade.

Many things have been money over history, shells, gold, silver, copper, stones. Many of these have not been issued by governments. Fiat currency, money by decree, is a recent development. It inherently has no value. It only has value due to a fluke of history. Until 1971 USD was technically backed by gold. You were supposed to be able to trade in dollars for Gold. But that link was broken in 1933 by Executive order 6102 for individuals in the USA and in 1971 for any countries that wanted to exchange their USD for gold. Both were only supposed to be for a short time and both ended up being permanent, so far.  

Another truth is the Government takes value that you have accrued by printing new money. This would be much easier to recognize if the world consisted of 3 people and you each had $100 for a total of $300, but then 1 of the 3 people had the ability to create new money. If the 2 people wanted to buy something and they had $100 total each to bid on that thing but the 3rd person was able to create $500 out of thin air and bid against them the 2 people wouldn’t let that happen. They would recognize that the $500 wasn’t really as valuable as the original $100 that each person had because the individual had just written $500 on a piece of paper and said it had value. This is counterfeiting! Creating new money is illegal for individuals, but the government does it everyday. Why is that ok? This is the same for many governments in history. Governments always default to stealing value from the governed by printing new money. 

Why do we put up with this? We all have 1,000 different priorities in our lives. We have to take care of our kids, we have to take care of our parents, we have to take care of ourselves! We want to take a trip. We want to build a house. We want to take a vacation. We want to buy a car. We want to go out to eat or we have some other project we want to dedicate time to. In the USA inflation has been relatively low for many years so while we lose about 3% of the value we create each year, we just deal with it. 

But many places have experienced high inflation both recently and over time. Argentina has recently had 100% inflation for multiple years in a row. There is nothing inherently different from the operation of the Argentina economy and central bank from the USA central bank. Turkey, Germany, Zimbabwe, Sudan, they have all experienced hyperinflation at various times.

Physical money is just a replacement for an IOU. An IOU works between 2 individuals. But when you start accounting for goods and services delivered across continents between Billions of people an IOU doesn’t work. That is why IOU’s have been abstracted to Dollars or other currencies. 

But IOU’s between individuals don’t lose value. If someone does 1 hour of work for you you owe them 1 hour of work back. But if someone does 1 hour of work for you and you pay them $15 and then in a year they want you to do 1 hour of work for them, you will likely charge them $16 due to inflation. Why is this? It is because the accounting system, US Dollars, is broken! They dollars don’t hold value across time. 

This is because the government prints more dollars everyday. Every time the government prints a new dollar, every existing dollar loses value. 

The only way to fix this is an accounting system that has a fixed amount of units. That is what Bitcoin provides. There are only 21 million Bitcoin available. Each bitcoin can be broken down to 100 million satoshis. 

The only reason the price bitcoin is changing today is due to supply and demand for Bitcoin. But you need to look past the present day and envision the future. The future is where bitcoin has been fully adopted by everyone in the world who wants a sound money. In this future the value of all the bitcoin in existence will measure all the goods in the world. As the amount of goods grows with world productivity by about 3% a year the value of bitcoin will continue to grow at the same rate. There won’t be huge swings because there won’t be people speculating on the future price of Bitcoin. It’s price is just a measurement of the good in the world. And since there are 21 million bitcoin, a fixed amount, there is no devaluation of the Bitcoin because more new Bitcoin are not made. 

This is the fundamental idea and reason for Bitcoin. It is not a stock or a company. It is a ledger that measures value of things. It can’t be debased like existing USD ledgers. 

If you understand this problem, the government stealing value from you via money printing, the solution of Bitcoin appears obvious. 

The only question is, does Bitcoin actually solve this problem by being a fixed amount and will the system continue to function as it does today? If it continues to function as it does today, it should continue to gain value. If something comes along and changes how they Bitcoin system works then it’s possible that it could not function as described.
Currently, that would be an “unknown unknown”. There is no obvious thing that would cause Bitcoin to fail. But I always leave a possibility for something to happen that I don’t anticipate in any situation.


Because Bitcoin seems to fix the problems with USD and other fiat currencies (Euros, Yen, Yuan, etc) I believe we should support it’s continued development. That is why I try to educate individuals on the problem that Bitcoin fixes, like with this article. 


If you have any questions I’d be more than happy to discuss Bitcoin with you. Please comment or get in touch!

The Fed has no power to stop government spending, which is the root cause of inflation!

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The Fed has no power to stop government spending, which is the root cause of inflation!

Below is a quote from Senator Elizabeth Warren, during a grilling of Fed Chair Jerome Powell

Senator Warren: In other words, you don’t have a plan to stop a runaway train if it occurs. You know, Chair Powell, you are gambling with people’s lives. And there’s a pile of data showing the price gouging and supply chain kinks, and the war in Ukraine are driving up prices. 

You cling to the idea that there’s only one solution: lay off millions of workers. We need a Fed that will fight for families. And if you’re not going to lead that charge, we need someone with the Fed who will. – original link here. 

What does Senator Warren think he is going to do about price gouging and supply chain kinks, and the war in Ukraine?

The Federal Reserve literally has 1 tool in their tool box, and that is to raise rates. He can’t stop the war in Ukraine. He can’t fix supply chain kinks. While she has identified some things that are nominally impacting inflation, it’s not all of them. There is 1 big one she is missing, which she could impact as a Senator, Government Spending!

To be clear, what the Fed is trying to do is reduce spending by individuals so they aren’t buying so many things. They try to reduce spending by offering higher rates on bonds. The thought is that people will buy bonds paying 5% interest instead of spending their money on goods. The fewer people trying to buy goods, the less money is chasing the same amount of goods and the prices will go down. 

Elizabeth Warren lives in her own kayfabe financial world. She is bullying the Fed Chair, Jerome Powell, to lower interest rates because she thinks he is hurting the economy. She is right that higher rates are one of the things that is likely to hurt the economy in the long run. But the real thing that is driving inflation in the USA is government spending. The US government debt is rising by $1 trillion about every 100 days.

Like I mentioned above, if the goal is to reduce spending in the economy by taking individuals’ money out of circulation by getting them to buy bonds, then the government comes in and is spending $1T, there isn’t less money chasing the same amount of goods, there is more money!

The Fed has no power to stop government spending, which is the root cause of inflation!

More money chasing the same amount of goods causes inflation. It is that simple. 

Think of it as if you are at an auction and you have $100 in your wallet and 5 other people also have $100 in their wallets.. There is another bidder who has a printer who can literally print $100 bills at will and outbid you and all others at anything you want to buy. This bidder with unlimited buying power will bid up the price of things until they are beyond your reach. Are other bidders, who also all have $100 causing the problem? Or is the bidder with the money printing machine outbidding everyone causing the price of things at the auction to go higher?

It’s pretty clear in this situation that the money printer is driving prices higher. People don’t study fiscal policy (use of government spending and taxation to influence the economy) very often. Most people just want to work and then come home and live their lives. Because people don’t study it often, and it’s a pretty big and abstract thing to most people, it’s very hard to wrap their heads around. 

There is also, unfortunately, almost nothing anyone can personally do to impact government spending. 

I can only think of a few things you can do personally.

  1. Learn what is actually causing inflation instead of listening to the news tell you what they think is causing it.
    1. A couple of books I recommend to understand money and its role as a tool
    2. Broken Money: Why Our Financial System is Failing Us and How We Can Make it Better – Lyn Alden
    3. Gold: The Once and Future Money – Nathan Lewis
    4. Principles of Economics – Saifedean Ammous
  2. Have a personally sound balance sheet. Spend less than you make. Invest your excess income in sound assets. Stocks, Real Estate, Gold, Bitcoin. 
  3. Communicate with others about personal finances and government finances. If we all become more fiscally literate we might form a large enough coalition that we can start impacting government spending. But first we need to understand it ourselves. It is my hope that writing this and sharing it helps educate just 1 or 2 others about the topic. 
  4. listen to this podcast – Prices, Interest Payments, & The US Deficit: It’s All Going To Get Worse with Greg Crennan

As an addendum to the above, I have copied the 2023 Congressional Budget Office report below, in case it disappears in the future. It highlights how the government spending is projected to grow as a percent of GDP every year going forward. Do we really want the government spending more and more of our money? Do we think a central authority is better at knowing what we need than we ourselves do? I think not. 

I’ve also linked it below.

https://www.cbo.gov/publication/59014

Each year, the Congressional Budget Office publishes a report presenting its projections of what the federal budget and the economy would look like over the next 30 years if current laws generally remained unchanged. The long-term budget projections typically follow CBO’s 10-year baseline budget projections and then extend most of the concepts underlying them for an additional 20 years. This year, the long-term projections are based on CBO’s May 2023 baseline projections but also reflect the estimated budgetary effects of the Fiscal Responsibility Act of 2023 (Public Law 118-5), which was enacted on June 3, 2023.

Deficits

In CBO’s projections, the deficit equals 5.8 percent of gross domestic product (GDP) in 2023, declines to 5.0 percent by 2027, and then grows in every year, reaching 10.0 percent of GDP in 2053. Over the past century, that level has been exceeded only during World War II and the coronavirus pandemic. The increase in the total deficit results from faster growth in spending than in revenues. The primary deficit, which excludes interest costs, equals 3.3 percent of GDP in both 2023 and 2053, but the total deficit is boosted by rising interest costs.

Debt

By the end of 2023, federal debt held by the public equals 98 percent of GDP. Debt then rises in relation to GDP: It surpasses its historical high in 2029, when it reaches 107 percent of GDP, and climbs to 181 percent of GDP by 2053. Such high and rising debt would slow economic growth, push up interest payments to foreign holders of U.S. debt, and pose significant risks to the fiscal and economic outlook; it could also cause lawmakers to feel more constrained in their policy choices.

Spending

In 2023, outlays fall to 24.2 percent of GDP as federal spending in response to the pandemic diminishes. Outlays continue to decline through 2026 but increase thereafter, reaching 29.1 percent of GDP in 2053. (By comparison, from 1993 to 2022, outlays averaged 21.0 percent of GDP.) Rising interest rates and persistently large primary deficits cause interest costs to almost triple in relation to GDP between 2023 and 2053. Spending on the major health care programs and Social Security—driven by the aging of the population and growing health care costs—also boosts federal outlays significantly over the next 30 years.

Revenues

Revenues fall to 18.4 percent of GDP in 2023 and continue to drop until 2026, when the scheduled expiration of certain provisions of the 2017 tax act causes tax receipts to increase. Revenues generally rise thereafter, reaching 19.1 percent of GDP in 2053, as an increasing share of income is pushed into higher tax brackets. (By comparison, from 1993 to 2022, revenues averaged 17.2 percent of GDP.)

Changes From Previous Projections

Measured as a percentage of GDP, federal debt is now projected to be 2 percentage points higher in 2023 and 9 percentage points lower in 2052 than it was in last year’s report. Overall, CBO’s projections of debt have increased through 2042 and decreased in later years.