Tag Archives: inflation

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.

Metaplanet – Japanese Public Company Buying Bitcoin as a Treasury Reserve Asset

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Metaplanet  – Japanese Public Company Buying Bitcoin as a Treasury Reserve Asset

Metaplanet is a publicly traded company in Japan that has set Bitcoin as its primary treasury reserve asset. You can read about it here. You will have to click on their link to their “official disclosure” or you can link directly to the PDF of the official disclosure here. 

You can listen to Dylan LeClair, the Director of Bitcoin Strategy at MetaPlanet, here talk about MetaPlanet and their Bitcoin Strategy. The link takes you to the correct timestamp in the Youtube Video.

 I highly recommend everyone reads this. It lays out in simple, clear language, the benefits to the company of buying bitcoin as their treasury reserve asset. Most of their reasoning applies to individuals also.  I’d like to repost it here directly, but they have requested no reproductions. I have emailed them asking if it’s possible to repost it and will if they allow it. But if not, you can read at the link above. It’s only a 3 page document. 

Metaplanet is the first public company in Japan I am aware of that has started using Bitcoin as it’s treasury reserve asset. But it wasn’t the first worldwide and I’m sure it won’t be the last. 


Here is a previous article I wrote about companies and pension funds starting to buy Bitcoin. 

A short list of those companies is below.

Metaplanet – Metaplanet direct link to PDF

Microstrategy 

Mara – Bitcoin miner

Semler Scientific

Onemed

Block (formally Square, owns Square processing points and Cashapp app)

Private company –

Tahini’s (corporate page) – Restaurant in Canada – Tahini bitcoin article

As well as all these companies continually buying bitcoin, there are 2 US state pension funds that have bought bitcoin they have disclosed so far.

Wisconsin Pension Fund

Michigan Pension Fund

And one, Arizona, that has a resolution for their pension fund to learn about it. Here is the resolution directly.

There are a few other countries that are involved in mining bitcoin. 

Bhutan 

Oman

Ethiopia

Finally, El Salvador is the first country to adopt bitcoin as legal tender. It is also committed to buying 1 bitcoin a day. You can follow directly in their bitcoin address. 

Again, it was the first ,but I doubt it will be the last. 

At this link is a list of all companies holding bitcoin. The above lists are more recent companies and companies that are actively proclaiming that they are accumulating more bitcoin aggressively. 

A second link with entities holding bitcoin. 

0.1 Bitcoin

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There are about 8 billion (8,000,000,000) people in the world. 

According to Kiplinger, globally there are about 59 million millionaires. 

59,000,000/8,000,000,000 = 0.007375 =  0.7375% of people in the world are millionaires. So less than 1% of people are millionaires. 

If you divided the 21 million (21,000,000) bitcoin among the 8 billion people

21,000,000/8,000,000,000 = 0.002625

0.002625 x $60,000/btc = $157.50

You only need to buy $157.50 worth of bitcoin to get “your share” today. 

There are 21 million bitcoin that will ever be made. 

There are 59 million millionaires. So it’s not possible for every millionaire to have 1 bitcoin. 

If we divide the 21 million bitcoin by 59 million millionaires we get 

21/59 = 0.35593220 btc per millionaire.

 0.35593220 x $60,000/btc = $21,355.93 if every millionaire wanted to get “their share” of bitcoin and it was only split among millionaires.

If we go down to units of 0.1 bitcoin then 210 million people could own 0.1 bitcoin.

That is still only 

210,000,000 people/ 8,000,000,000 people = 0.02625 = 2.625% of people would have 0.1 bitcoin.

0.1 bitcoin x $60k/bitcoin = $6,000 to buy 0.1 bitcoin today.

If I was someone with no bitcoin today I’d think hard about setting a goal of getting to 0.1 bitcoin. 

The market capitalization of Gold is $16,590,000,000,000 ($16.59 Trillion) as of 8-11-2024 when I write this.  Note that this changes daily as the price of gold fluctuates and as more gold is mined each year. 

If bitcoin was to attaining the same market capitalization  

$16,590,000,000,000/21,000,000 bitcoin = $790,000 per bitcoin

$790,000 x 0.1 bitcoin = $79,000

If bitcoin was to reach a value of $10 million per Bitcoin then 0.1 bitcoin would be worth $1 million. 

Plenty of people have made a prediction in the millions for the future price of bitcoin. You will have to do research for yourself to determine if you think this is reasonable. But I would encourage you to be inquisitive about why people are prediction such a high price for Bitcoin. 

This isn’t all to tell you you have to buy bitcoin. But it’s to encourage you to look into why many people think bitcoin has value. 


There is not much bitcoin and we are still early as far as world wide adoption. You don’t need to buy much (0.1 bitcoin = $6k today) to potentially have $1 million in the future. 


Of course, only buy as much as you are able to lose! Many people are able to have a risky bet of $6k and if it did happen to go to $0 (which is of course a possibility) they’d still be fine. 

But if that is not you then definitely DON’T buy bitcoin. 


But if you are a person who has sufficient assets, you might try thinking about why so many people have such a high conviction in bitcoin. 

Letter to Iowa State Senator Kevin Alons about Bitcoin

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I sent the below letter to Iowa State Senator, Kevin Alons, related to Bitcoin. I encourage you to copy and send, or modify and send, to him at kevin.alons@legis.iowa.gov

Senator Alons

I read through your bill IA SF2273 related to gold and silver coinage. I appreciate the sentiment and wish you luck with your bill in the future if you continue to pursue it. 


I wanted to appeal to your hard money side with some data about the emerging hardest money ever created, Bitcoin.


As you know, Gold backed currency has failed in many different countries in history for the same reason. The government always centralizes the gold and prints more paper than can back the bills. Even in Ancient Rome when the money was silver, there was coin clipping and physical debasement where existing coins were recalled and melted down to a lower percentage of gold. 

Another issue with Gold is that we don’t actually know how much there is. More gold is mined everyday and more is mined as the price goes up. 

Bitcoin addresses all the shortcomings of Gold that have caused it to fail in the past. 


Bitcoin has a perfectly limited amount, 21 million.

Bitcoin is quickly and easily transmitted across the world. You need a lot of military hardware to transport any significant amount of gold.
Bitcoin is also easily transacted in very small amounts. The smallest unit of 1 bitcoin is 1 satoshi. There are 100,000,000 satoshis in 1 bitcoin. 

0.00000001 Bitcoin = 1 Satoshi. 

Bitcoin currently has a market capitalization of about $1 trillion.

Once 1 BTC = $1 million, it will have a market capitalization of $21 trillion and 1 satoshi will = 

$0.01

Using the lightning network consumers are easily able to make very small transactions such as at a grocery store or a restaurant. 

If you read this post on my website, https://mywheellife.com/2024/06/23/2024-bitcoin-adoption/, you will see that there are a lot of large institutions like the Wisconsin state pension adding bitcoin to their portfolio.
It is also legal tender in El Salvador and they are buying 1 bitcoin a day also to ad to their treasury.

As you have probably seen there are now ETF’s available that have bought 1 million bitcoin this year in the USA only. 


The available supply of 21 million bitcoin is draining quickly. 

I would encourage you to investigate more about bitcoin.

Perhaps you have heard that President Trump has recently endorsed Bitcoin. He is speaking at the Bitcoin Conference in Tennessee this Sunday, 7-28-2024. You should be able to find it on Youtube later.


I would also point you to this video that just came out “Thank God For Bitcoin”

It is one of the best videos I’ve seen to explain the benefits of Bitcoin.

I’d encourage you to introduce a bill, similar to Arizona, to direct the IPERS pension fund to investigate adding bitcoin to the IPERS portfolio. That would be a first step.

A 2nd step would be to have a state reserve of Bitcoin.


Thank you for your time.

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?

2024 Bitcoin Adoption

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Bitcoin adoption has been progressing rapidly in the first 6 months of 2024. 

Wisconsin’s pension fund has added bitcoin to its balance sheets, buying more than $160 million worth of shares in two newly approved funds earlier this year.

While $160 million is a lot of money, Krause said it’s a small fraction of Wisconsin’s overall pension fund. At the end of December, SWIB held more than $155 billion in assets, with the vast majority of that representing assets in the Wisconsin Retirement System.

“Like any good portfolio manager, you want to diversify,” Krause said. “And now that bitcoin has been around for well over a decade, we’re aware that not only does it offer pretty strong returns — sometimes over periods of time quite phenomenal returns — but it also has diversification capabilities. It doesn’t move directly, in tandem with stocks and bonds.”

I suspect this won’t be the last pension to buy bitcoin,  especially since “The Arizona State Senate is considering a proposal to encourage the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement System (PSPRS) to explore the inclusion of Bitcoin ETFs in their investment portfolios.”

Also, Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund by assets under management, announced that it is seeking information on “illiquidity assets,” including bitcoin, as part of its exploration into potential new investments. 


In addition to various pension funds, more companies have started using bitcoin as their treasury reserve asset. 

The Japanese company, Metaplanet, has set bitcoin as it’s treasury reserve asset. 

The Metaplanet, treasury, was christened with the 1 billion Japanese Yen (worth approximately $6.5 million) injection into Bitcoin by the former. Metaplanet said it is set to make Bitcoin its treasury asset moving forward. It said it will start making Bitcoin bets to mimic the related embrace of the coin by American business intelligence and software firm MicroStrategy.

Another company, Semler Scientific, Inc. (Nasdaq: SMLR), a pioneer in developing and marketing technology products and services to healthcare providers to combat chronic diseases, announced today that its board of directors has adopted bitcoin as its primary treasury reserve asset. In addition, Semler Scientific announced that it has purchased 581 bitcoins for an aggregate amount of $40 million, inclusive of fees and expenses.

The pioneer company of this strategy, Microstrategy, has also Acquired 11.9K More Bitcoin for $786M in June 2024. This is after in March 2024, the company added 9,245 BTC for $623 million after raising money in a similar debt issuance.

In addition to launching 12 Bitcoin Spot ETFs in the USA in January 2024, other countries are continuing to also launch Bitcoin Spot ETF. Australia was the latest. 

Finally, some interesting nation state interest has been shown in Bitcoin. 

El Salvador’s President Nayib Bukele, has been reelected for a 2nd 5 year term. He made bitcoin legal tender in El Salvador in 2021. No country has followed, yet. But there have been many positive developments since then in El Salvador. It seems only a matter of time before another country makes it legal tender. 

Perhaps Argentina?

During an exchange on X (formerly Twitter), he (Argentina’s President) declared: “There will be a free competition of currencies, so if you wish to use Bitcoin, there will be no problem.”

Bitcoin Miner Marathon Digital Signs Deal With Kenya to Invest in Green Energy Projects

The company will help monetize stranded energy in the African country and help manage its renewable energy production.

The “problem bitcoin solves” is described in this article. 

Many people are obviously waking up and realizing that bitcoin solves a problem they have.
 

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!

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

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‘This Is Immoral’: David Schweikert Issues Dire Economic Warning To House Colleagues

This representative discusses the issue with US debt. 

Below are a few related articles I’ve written related to this topic. 

What Problem Does Bitcoin Solve?

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

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.

What is money?

The Google AI answer is below. 

 “Money is a widely accepted medium of exchange that can be used to pay for goods and services, repay loans, and store value. It’s also a unit of account that can be easily translated into prices. Money can take many forms, including:

Cowrie shells, Copper ingots, Rum, Gold coins, Paper banknotes, Digital bank records, Barley, Peppercorns, and Silver.”

A different way to think about it is money is a store of value provided to you in exchange for something of actual value (good or service) you have created, that you can cash in at a future date. You work all week, but you don’t need to spend all that value you created at the end of the week. So you try to store the value you have created in US Dollars. 

There is an obvious problem with the main money we use in the world today, the US Dollar. It loses value every day. 

Not every form of store of value has this problem. If you borrow a cup of sugar from someone and they repay you with a cup of sugar later, they don’t usually give you 95% of the sugar you gave them. They usually pay you back the exact same amount of value you gave them.

If you work for someone for an hour as a favor they don’t come work for your for 55 minutes. They pay you back the full hour. 

So why if we are paid $100 for our work and we hold it in the bank are we willing to have that money lose value while it sits in the bank? It is still the same $100 later, but the value the $100 can purchase has decreased over time. 


This is reflected in higher prices for good, inflation. 


What causes inflation?

According to Milton Friedman, “inflation is always and everywhere a monetary phenomenon”. This means that inflation is a rise in the general price level, and can only be produced by a more rapid increase in the quantity of money than in output.”

Meaning, the government causes inflation by printing money. Contrary to what politicians want you to believe (that greedy business people cause inflation), politicians themselves are the cause of the inflation! People need to understand how the system works. Businesses raise or lower prices with demand. If demand lowers, they will lower prices or they won’t be able to sell products. They also have to raise prices faster than inflation so they can stay ahead of inflation and stay profitable. Businesses are not the cause of inflation, the government printing more money, that is being spent on the same amount of goods, is what causes inflation. This has happened many times in history, from the Roman Empire to Revolutionary France. Inflation is always produced by governments printing money to try to buy goods. 

Bitcoin puts handcuffs on the government. It is impossible to print more bitcoin. There will only ever be 21 million bitcoin. Bitcoin is the only chance we have at reigning in government spending and stopping inflation. 


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.

Until you understand the exact problem, you won’t see bitcoin in the right way. You will see it’s value, denominated in dollars. As it goes up you will be happy you have more dollars. But more dollars is not the goal. More bitcoin is the goal. 

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.