Tag Archives: money

Letter to Iowa State Senator Kevin Alons about Bitcoin

Posted on by
Reply

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

Posted on by
Reply

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

Posted on by
3

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

Posted on by
1

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

Posted on by
2

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)

Posted on by
3

‘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 Giving Solution

Posted on by
Reply

The financial advising industry doesn’t work for most people. Advisors charge 1%-2% a year which can cost clients $10k-$40k a year! That is money that people could be living off of instead of giving to advisors. 

Other people might have so little money (usually less than $500k is “little” to financial advisors”) that they won’t work with people. 

The Giving Solution is a non-profit that provides free financial advising for anyone. If you have $50 or $50 million, The Giving Solution will connect you with a Fee-Only Financial that they have deemed is a trustworthy advisor and will invest in a way that is best for your personal net worth growth.  You pay nothing.

If you would like to get free financial advising, you can connect with me and I can refer you to The Giving Solution or you can connect with The Giving Solution, via their website.

They will meet with you via Zoom or other online options if you are unable to meet with them locally. They will meet with anyone, anywhere in the world!

Connect with them yourself.

Share with others who you think could benefit from financial advising.

Let’s succeed together!

Monetary Premium

Posted on by
Reply

I keep thinking of new ways to think about what value Bitcoin provides. Below is the way I thought about it today. It started while talking with a friend at a coffee shop about money. We discussed the gold standard and he asked how it would be possible to go to a gold standard today. The market capitalization of all the gold in the world today is only about $13.7 trillion and the value of all the money in the world is around $450 trillion. Gold currently costs about $2,000/oz. To fully back the $450 trillion of money with gold the gold would have to significantly appreciate. It would increase it’s monetary premium. In fact some central banks have explicitly said they are buying more gold in case this happens!

In a recent interview the Dutch central bank (DNB) shares it has equalized its gold reserves, relative to GDP, to other countries in the eurozone and outside of Europe. This has been a political decision. If there is a financial crisis the gold price will skyrocket,

This website, gold survival guide, did a calculation of what you’d have to reprice gold to, in US dollars, to get only a 26% backing. They determined that you’d need gold to be worth $33,690/oz. This would be a significant monetary premium on gold over what it is worth today. 

To reach a 26% gold backing, the price of gold would need to increase 17.31 times. ($8.76 trillion or $8,760 billion divided by $506 billion = 17.31).

That is a gold price of $33,690 per troy ounce.

Conclusion: To match the 1934 and 1980 “reset” prices and back US debt by the same percentage of 26%, gold would need to be priced at just under US$33,700 per troy ounce!

Many things that are semi-scarce have a monetary premium. A monetary premium is the premium that the market gives a good that has the ability to perform the functions of a money. Money’s primary function is to serve as a medium of exchange. However, before society will use something as a medium of exchange, the good must first be able to function as a store of value. Therefore, one of the functions of a money is to store value.

Gold is the most commonly thought of thing that has a monetary premium. Houses are a good example of something that people don’t often think of that has a monetary premium. Many houses are bought by speculators to store value. For example:

Chinese homebuyers accounted for nearly one-third of Vancouver’s real estate market during 2015, spending approximately $9.6 billion of the $29 billion of total real estate sales, according to a new study by the National Bank of Canada.

Rich Chinese buyers are willing to use houses, which are not very liquid, to store value outside of China. It is a lot simpler way to get value out of the country. It would look a lot more suspicious if they just shipped hundreds of thousands of dollars out of China and parked it in a bank. But to buy a property is an “acceptable” reason to take money out of the country. People are resourceful and will find ways to store value. 

People want assets that will rise with inflation. They can be willing to pay more than the utility value of the asset to acquire it. Unfortunately, it’s never explicitly stated or even talked about that some things have a monetary premium on top of their utility value. Commodities like corn or oil have very little or usually no monetary premium.Their only value is from the things they can be used to do. They don’t store well. To have a monetary premium a good has to have a long life, like gold or houses. Stocks are another thing that has a monetary premium.


One thing that also has a monetary premium that is not often talked about is money! People like to talk about the fact that Bitcoin has no “intrinsic value”. Do you know what is another thing that has no intrinsic value? US dollars. Think about it. What gives a dollar its value? It is it’s network effects. It is accepted as valuable by others. Gold has a utility value as well as a monetary premium. Some people get confused by gold having a utility value and they think that any money has to have a utility value. But that is not true, as evidenced by the US dollar, the primary money in the world, having no intrinsic value! In fact there is really only 1 major difference between US dollars and bitcoin. US dollars can be created at will by the US government, and are everyday. This reduces the purchasing power of every existing dollar, including the ones you own and worked to earn. 

Bitcoin has a fixed supply. Once you own a fraction of a bitcoin, you own that much of the total bitcoin network. There is no  way for anyone to steal your percentage of the network by creating more bitcoin

I often say, if the government quit printing dollars, we wouldn’t need bitcoin. Every government that has had their own currency in history has always printed and debased that currency until it has lost all value. See the Romans. They literally has physical silver coins. They would periodically recall them, melt them down, dilute the silver percentage and reissue them. Initially they would act like they were the same value of coin, but as people came to realize that new coins had less silver they would require more coins for the same goods. 
So back to the monetary premium. US dollars have no inherent value. Neither does bitcoin. But US dollars have a created monetary premium from their acceptance as a means of payment. There is no reason that bitcoin, or anything else that a group of individuals choose to use as a store of value and means of payment could become that and gain some of the monetary premium that dollars have. In essence we can transfer the monetary premium from dollars to bitcoin, if we choose to. In El Salvador bitcoin is already accepted as a means of payment. Many individuals and businesses around the world have already individually chosen to accept bitcoin as a means of payment.
SInce dollars don’t reliably store value, due to the ability of the government to print more, why wouldn’t people choose to store value in a tool that it is impossible to make more of? That is why I choose to store some of my value in bitcoin. If you are interested in talking about the idea of monetary premium more, or the idea of transferring monetary premium from one good to another, get in touch!

Why Bitcoin? And Why Social Security Is Awful.

Posted on by
Reply

Why do I spend so much time reading about Bitcoin and writing about Bitcoin and telling others about Bitcoin? I do it because I want the world to be a better place. Historically, I have given money to many charities to try to make the world a better place. I think that is still a good thing to do. But I’ve always wondered why the world is so messed up in the first place? Many things don’t seem to work. 

At a more naive point in my life I told a friend “I want to work to get rid of money.” Because I had this feeling that somehow money was making the world a worse place. I have obviously grown in my thinking immensely since then.
I now see money as the clear tool it is to foster trade and specialization. Money is actually imperative to a functioning society.
Trade and specialization increase efficiency and make the world a more abundant place.

Unfortunately, the money we have is not functional itself. There are over 100 fiat currencies in the world, Yen, Yuan, USD, Euro, and a hundred more.
So while there is more abundance for some, the abundance is actually concentrated and many are exploited.

Each currency is dysfunctional in the same way. New units are created everyday, reducing the value of each existing Dollar, Euro, Yen, etc.
It is no wonder that there are so many issues in the world when an entity, (the Government) is able to print money and manipulate the market to purchase as much as they want for any pet project that a politician has.

Just 1 example that I am highly against is Social Security.
I went through and created a hypothetical person who started working in 1984 at the age of 25 (after being born in 1959). 

If that person started making $10k in 1984 that would be equivalent to $30k/year in 2024.
I gave this person a 3% raise a year. You can see that in the “income column” below. So this person would have ended working in 2024 with a salary of $32k/year (being 65 years old).

The next column shows the 12.5%/year that this person + their employer is paying into Social Security. After 40 years this person would have paid $98k into Social Security.
I went through and put all the earnings data into the Social Security website benefit calculator, found here. 

https://www.ssa.gov/benefits/retirement/planner/AnypiaApplet.html

It provided an estimate of $1,378/month or $16,536/year. 

I provided an alternative column, where you would instead take that 12.5%/year and invest that in the S&P 500 for 40 years.

As of January 26, 2024, the S&P 500’s price is 4,890.97. If you invested $100 in the S&P 500 at the beginning of 1984, you would have about $6,606.25 at the end of 2023, assuming you reinvested all dividends. This is a return on investment of 6,506.25%, or 11.14% per year.
This person would have $1,074,860.37  in their 401k. They could safely withdraw $42,944/year from this (4%) as well as having a portfolio worth $1 million dollars! This is making a relatively low $30k per year equivalent for 40 years!

But most people I know who have made $30k a year for 40 years do not have a million dollar portfolio. Why is that?

It’s because they are unable to invest 12% of their salary a year, because it is required to go to the government and the Social Security Fund. This is robbing millions of workers of $25k/year in their retirement. 

You could go through this same exercise. Simply go to https://www.ssa.gov/benefits/retirement/planner/AnypiaApplet.html

And input the dollar amount in the table for each year to find the benefit. 

This is bad enough for a $30k/year equivalent worker. The more money you make though, the worse of a deal Social Security is. This is because of the “knee points” in the Social Security return table. The more you pay in, the less you get out. https://retireby40.org/early-retirement-impact-social-security-benefit/

While Social Security being a terrible return on your money is something of a first world problem, there are plenty of other instances of money losing value in other countries that really hurts people in those countries. 

You can read from Alex Gladstein to learn about some of those. 

“The rate of inflation in the U.S. is paltry compared to many other countries worldwide. The chief strategy officer for the Human Rights Foundation, Alex Gladstein highlighted this issue on Monday in a series of tweets. Gladstein is also a bitcoin (BTC) proponent and has been an evangelist for the leading crypto asset for quite some time.

“Many might think that extreme inflation is a rare occurrence in today’s modern world,” Gladstein said to his 27,000 Twitter followers on Monday. “That’s simply not the case. There are 1.2 billion people currently living in countries experiencing double or triple-digit inflation,” Gladstein insisted.”

https://news.bitcoin.com/1-2-billion-people-live-under-double-digit-inflation-many-have-found-escape-in-bitcoin-says-hrfs-alex-gladstein/

Why Bitcoin Makes The World Better – The Bitcoin Layer and “How My Co-worker Identified the Issues Without Identifying The Causes”

Posted on by
Reply

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.”

First 15 minutes of the podcast “Why Bitcoin Makes The World Better – The Bitcoin Layer”- I think this is a great 15 minute video to learn about “why Bitcoin” if you aren’t sure what “problem Bitcoin is trying to solve”.

Full episode – Why Bitcoin Makes The World Better – The Bitcoin Layer

Inflation/money printing by the government is a hidden tax, or more nefariously, theft of your savings.

I received the below email from a coworker related to this home for sale.

https://www.homesofiowa.com/idx/listing/IA-WCFMLS/20233854/4426-Granite-Ridge-Road-Cedar-Falls-IA-50613

I was walking the dog tonight and there are several new houses down the street. I looked up what they go for. There is a video of it on the page, it’s a just a house.  Nothing huge, with some basement finished. – coworker

I shared the below picture with this coworker. If you are measuring the world in USD then things are getting more expensive. But if you are measuring in Bitcoin, things are getting cheaper, as Jeff Booth explains in the initial Youtube video I shared above. 

Below is the rest of my reply to this coworker. 

You could always try to put multiple families together in one house, as times will get desperate. That would be the historic solution. And as you said, as people are poorer, they will just have to do it again.

There are plenty of very poor both in the USA and abroad already living this way.

As referenced from the trip I just got back from India from.

Most of the world is ALREADY poor. The USA has benefited from being able to export inflation to the rest of the world for the last 50 years.

We do this by everyone having to buy USD to buy oil. Then every country has a huge pile of US treasuries/dollars. Then we print more.
Printing money is effectively stealing value from people who hold dollars.
That is why NO ONE ever wants to have cash for longer than they have to.

Don’t you think that’s kind of crazy that no one actually wants US dollars “money”?

We buy bonds, gold, real estate, stocks, anything to store the value because we know that dollars lose value over time. It’s wild!

It’s even more obvious in countries like Argentina or Turkey where they have REALLY awful money. But our money also sucks for preserving value over time.

It all started with 1971 and removing the gold backing of the USD. Well really that started in 1930 with executive order 6102 which the government confiscated people’s gold. Paid them $20.67/oz of gold. Then repriced the dollar to $35/oz! they literally stole $15 worth for every oz of gold they took. It is crazy!

$15 was real money back then!

Gold, Silver, Debt To GDP, Wealth Preservation

So I’m just saying you are noticing the results, extremely high home prices. Things getting more expensive. I am telling you there is a clear history to how we got here. And there is literally 1 solution to this problem. Well 2 but 1 will never happen.

If the US government quit over spending and printing new dollars that would fix it. But that will NEVER happen.
So the alternate solution is to save in a currency that has a maximum limit, 21 million bitcoin.

If we DON’T support the bitcoin network we will continue down this path of everything getting more expensive.
I have read so many books about the history of money and governments messing with money. It always happens this way.

The Romans debased their money, see below.


See quote below.

I really encourage you to learn more about bitcoin. It is our only hope.

Super short book, 2 hours on audible, but it’s really great.

The Bullish Case for Bitcoin Paperback – May 8, 2021

by Vijay Boyapati (Author)

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.”