← The "What is Money?" Show
The "What is Money?" Show
The Schizophrenia of Fiat | The Pysh Series | Episode 3 (WiM074)
01:33:42
Preston Pysh joins me for a multi-episode conversation exploring two books: 1) The Brain by David Eagleman, and 2) The Seat of the Soul by Gary Zukav.
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- [00:00]
A
Foreign. Welcome back to the what is Money show for session two of the pitch series.
- [00:18]
B
Let's do it.
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A
So we're talking about the Brain by David Eagleman, which is an excellent book you recommended and a book that just makes you think differently about thinking, I guess you could say. And I think we left off, we're talking about that reality actually as we perceive it, is really just a biological interface. And we touched a little bit on that other book, the Case Against Reality, which you said you read and kind of just thought was intuitive. So I think it's your background on reading about the brain is probably books like this you already really understood or you considered reality a biological interface. But for someone like me, I started out with an astrophysics and whatnot. I've always kind of thought we perceived objective reality as it is. So that was a real flip in my mind. And I think a lot of people's minds would just see the world in a different way. And so the way Eagleman puts this, as he says, your interpretation of physical objects has everything to do with the historical trajectory of your brain and little to do with the objects themselves, which to me is just mind blowing. So it's like, so we don't even see what's real. We see what our brain is designed to see.
- [01:47]
B
Yeah, and it goes to, we talked about this a little bit in the first part with the labeling piece of how your brain labels things and how it uses biological value through either fear or happiness or whatever to label things. And we talked about the example of the child looking at the snake. And so when you think about this statement by Eagleman, your interpretation of physical objects has everything to do with your history and your trajectory and the cognitive conditioning of what you've experienced and then the biological value that's being assigned to that history and those events as you experience them, and the participants and other people that are with you through those experience because they have a way to, especially early on, have a way. And even when you're older, here's a great bitcoin example. We just experienced this big, giant, massive sell off. If you're surrounded with a bunch of really knowledgeable friends that understand the fundamentals of what's going on, your ability to manage your emotions through that situation, heck, you might, you might not even have a real deep understanding. But if you have trust and you value the other people you're around and their knowledge and they're there buying, what are you going to do? You're going to be buying with them. But if you've surrounded Yourself with friends that are just total morons and have no idea what in the world they even own. And they're all like, dude, it's going to die. Sell it all. Right now you're going to sell it all. And then my opinion is the price is going to drastically recover. And if that would play out, the people who sold at the bottom after that big emotional experience, then the price goes up. And then the labeling and the history that they're experiencing, that trajectory and that cognitive conditioning is. That thing over there is poisonous. I'm never touching it again. And all the other people that made money off of my back are evil people versus the other person who was with knowledgeable participants. My opinion on how this is going to play out, but they're going to view it completely differently. And so, I mean, it's kind of crazy that the same exact event can get cognitively conditioned into a person's brain completely differently. And it was the exact same situation, just the participants and how they were viewing it optically was different based on their knowledge of what they know and what they don't know, which is another thing that was preceded in how they arrived at that moment in time.
- [04:47]
A
Yeah, it's a great point just for the audience. We're recording right now, May 20, 2021. So Bitcoin just had. Sounds like a 50% drawdown from its local maximum.
- [04:58]
B
Massive. Massive.
- [04:59]
A
Yeah, massive. And, yeah, there's this. Jordan Peterson makes the point that we actually outsource our sanity to those around us. So this is kind of like economic specialization is we can't be experts in every domain. Right. We can't be our own barber and our own dentist and our own computer engineer. Like, we need to specialize in trade. And that's how we become more than the sum of our parts. But we also do that at a neurological level. Sounds right. With, like, the people around us that maybe they have an ability to see what we can't see or help us overcome our blind spots. But that, to me, that's dangerous, too. Cause that has a dark side, because that can become group think, right? Where everyone's just sort of following a herd mentality.
- [05:52]
B
So these are shortcuts that serve the person well in almost all instances of their life. If you want to read a book that's just incredible, it's called Influence by Robert Cialdini. And boy, you want to talk about. When you finish this book, you will walk around and you will view the world through a different lens than you did before, before reading that book. And in fact, One of the main reasons I found it was Charlie Munger is on the record for saying this is one of his favorite books of all time. And he's a maniac when it comes to reading books. But in that book, the thing that Robert Cialdini, he opens it up. I don't know if it's in the first chapter, but it's early on in the book, he talks about this lady who is in the business of selling blue topaz jewelry. You see this a lot in Arizona and kind of in that part of the country. And the woman was trying to get rid of it because she had too much inventory or something like that, if I'm remembering the story correctly. But she was going on vacation, and so she left her employee a note that said, hey, we need to get rid of the inventory. Mark it down. Half was basically how she wrote it. So somehow the note was misinterpreted, or the handoff to the employee was misinterpreted, and the employee marked the jewelry up double. Okay? So it was the exact opposite of what she had asked for to happen. And the way that this got written into the book is the person who. Who this happened to, they wrote a note and they sent it to Robert Cialdini after it happened, saying, I can't understand what happened here. Help me understand this. So, long story short, the person comes back from their vacation to find that all the jewelry was sold. They had sold faster than they've ever sold it before. And she was like. And then she's looking at the receipts, and she's made twice as much as she's normally made on the inventory. She's like, what in the world is going on? Lo and behold. So she sent this off to Robert, and Robert did his analysis. Well, she was selling the jewelry in a location where there's a lot of tourists and vacationers. And there's a psychological or a cognitive bias that people have that if something's expensive relative to another thing, there's an automatic bias that it's higher quality. And in this situation, there's other jewelry stores with blue topaz in it and same size and same make or whatever, and they go to this one and it's twice the price. And the vacationers were looking at that and saying, well, this one must be super high quality, and therefore I'm going to buy that over the one that's half as much. And you see this in marketing, too. Some of these purses that people sell for $5,000 a purse or whatever for Louis Vuitton or You name it, people are looking at that, and it has scarcity into it and all these other properties that we talk about when we're talking about money. But I think the important point that we're getting at with this is just your brain cannot be an expert on Blue Topaz as a person. The capacity of all the things that you have to be an expert on exceeds your capacity of past experiences to know certain things. And so people will default. And so the whole book is about what are these things that we do in our life that are shortcuts, that we rely on heavily, that influence us in certain ways that we don't necessarily know. If this is interesting, I can give you one more story which I find absolutely fascinating. So this one here, and this is all about commitments. People have a cognitive bias to seem consistent. They want to seem consistent. So let me tell you the story. So they did this study where they wanted to see how much a person could uphold this cognitive bias of commitment bias. So they asked the person to. They went door to door and they asked them to support a political candidate for a local political race. They started off and they went to, I don't, you know, let's say they went to 20 houses or whatever, and they gave a person a really, really small, like little bumper sticker or something that a person could just stick in the window of their car. Very tiny. And the people that said yes, you know, they kept track of like how many houses said yes. Let's just, for example, say that 50% of the houses said yes, that they would put that in there or they would accept it and take it and put it up there. So then they went back to those same houses and they asked them to put a sign in the yard. And of the houses that took the sticker versus the ones that. Versus houses that they never went to, because there's obviously the political party one side or the other. They went to a whole new set of houses that they've never gone to, and then they saw how many people accepted the sign. And now let's go back to the houses that accepted the sticker and see how many of them accept the sign. Then they went back and they ran a whole nother third sample and they made a sign so big that it was the size of the house that they were trying to get the person to stick in the front yard. And as they went to the third set of people that are seeing this massive sign for the first time, everybody said, no, I'm not putting that thing in my yard. But the people who had accepted and stepped, progressively stepped up, accepted this crazy giant sign to stick in their yard. And what they concluded with this study is that people do not want to look inconsistent. You see this on Twitter. You see this in the office. You see this if you're sitting in a boardroom and a person had previously said that, I think we should do X, Y and Z, they don't want to look like they change their mind because they don't want to look like they have a cognitive inconsistency of saying one thing and then doing the other. And so this drives cognitive behavior. And so we have all these shortcuts. And so people are like that because they don't want to be judged as this flip floppy kind of person that can't manage and live their life in a consistent kind of way. And so when we see that, we typically will say, that person's inconsistent. So I don't want to associate with them. And so the reaction is people have this consistency bite. And so you have all these little things that are happening in the brain and these shortcuts that are taking place that serve us very well, really well most of the time. But there's these instances where it will absolutely fail you if you don't ask why five times and use critical thinking. When I look at a guy like Stan Druckenmiller, he is so adamant. Anytime he does an interview, he's like, well, that's the way I see it today. But tomorrow, I might have the exact opposite opinion. In fact, I might even take the exact opposite position in my portfolio tomorrow. He takes pride in not having a consistency bias because look at his profession. His profession requires it. And so just some interesting things to think about and how the brain does get wired and how we rely on these shortcuts and biases.
- [14:09]
A
Yeah, they're very hardwired into us and very dangerous in investing because you can just get unconsciously making decisions that can get you into a lot of trouble. That book by Shaldani is called Influence. Is that right?
- [14:26]
B
Yeah, he has two. One is called Influence. The other one is called Pre Suasion.
- [14:31]
A
I think Pre Suasion, that's the one I read. I didn't read Influence.
- [14:37]
B
So I think Pre Suasion is a very good book. I think Influence is way better. But persuasion gets into, as, you know, a little bit more of the cognitive precursors that influence people in ways that they would probably not believe were true. So, for example, if you go into a wine store and you hear German music playing in the background, your Chances of buying a German wine is way higher. Like, statistically, provably higher. But if you ask the person as they came out of the store whether they were influenced by the music, they would laugh at you.
- [15:16]
A
Yeah, no, that's so interesting. So there. I remember in Persuasion he talked about. I think it was an insurance salesman that had. He would just like, was an order of magnitude better salesman than everyone else in the country.
- [15:29]
B
Yeah.
- [15:30]
A
So someone had monitored his performance to see what he was doing different. And to your point about building towards. Yes, like people not wanting to seem inconsistent. This salesman had a technique where he would go into their home, start to present to them, and then he would say, oh, you know, I left my keys or presentation materials in the car. Do you mind if I let myself back in the front door? And that getting people to say yes to that, everyone's going to say yes to that. Right. That was. Not only was he getting a yes, but he's also building rapport with them that you're just letting someone voluntarily come in your front door. So he just, through that little technique apparently translated into just a lot more deals closed, which I thought was really interesting. And then you were talking about the Topaz. I think in economics they call that a Veblen Good. When something has a higher price, demand actually goes up, which is contrary to Econ101. Do you think money in that context is the ultimate Veblen Good in a way, Everyone always prefers the money with the most network, most liquidity, most purchasing power to all others.
- [16:47]
B
Yes, for sure. Especially as you're looking at a ticker that is happening 24 hours a day, seven days a week, and the value keeps going up relative to what they're used to measuring everything in.
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A
And that's number go up in a nutshell. Right? Number go up. Technology. Yeah. It's really interesting that we're building this reality, but there's just so much inertia built into us genetically. Like we just have these, you know, inherent tendencies, I guess, and it's all. It's borderline manipulative, you know, it's like, where do you draw the line between influence and manipulation? Because if, you know, if you're aware of these biases, not only are you resistant, somewhat more resistant to them, still not perfectly, but you can also exploit them in others.
- [17:42]
B
Well, and so what does that come to? It comes to what we briefly mentioned on the last discussion, which is intentions. If you know these things, if you know all how these things work and you're using them in a manner that is an intention, that is self serving solely at the cost of somebody else. I would tell you you're creating pain for yourself in your future. If you're a person who is leveraging, you know this. I mean, it's like knowing how to use the force in Star Wars. Right? Like, if you know how to use the force, you can use it for the good or you can use it for the bad. What are your intentions?
- [18:26]
A
Yeah, right. Yeah. That even, I mean, that's kind of a definition of evil in a way. Right. When you're knowingly, maliciously harming someone to benefit yourself.
- [18:37]
B
I hesitate to use the word evil. I would probably use it more as parasitic. You're a parasitic being, meaning you feed on the environment around you, you devour it, you consume it at the expense of somebody else.
- [18:55]
A
Right. Instead of creating value, you're siphoning value.
- [19:00]
B
Yeah.
- [19:02]
A
So this just has me thinking, when you brought up the term parasitic, I've referred to the central bank many times as an economic parasite. I'll say. I'm convinced that the founders of the Federal Reserve knew exactly what they were doing. They knew exactly what the institution was designed to do. Do you think the Jerome Powell and other governors of the modern age, do you think they know what they're doing or they literally have, they just drank the Keynesian Kool Aid and they're just along for the ride?
- [19:36]
B
I like to think that from their vantage point they are trying their best to keep order. Right. And when you look at what's the opposite of order? The opposite of order is chaos. When you look at how they're trying to manage it, they're pulling the levers to extend order as long as possible. Now is that a good thing or a bad thing? Well, is there another solution that they could implement? Yes, there is. And this solution is effectively stop manipulating the money. Now if they do that, they're going to create chaos almost immediately. And so I think they're in a catch 22 situation. It's the ultimate catch 22. Because if they do that, a most of your market participants, a majority of your market participants are not going to understand the why. They're not going to agree with the decision. They're going to have social unrest and what would that spiral into? So it's almost like a known chaos that they would implement with the hope of order restoring itself in some kind of peaceful way. Whereas if they continue to do what they're doing, which is qe, which is free money for people that have assets, or the free bidding of the Valuation of assets, because they're just stepping into the market and manipulating the bond market. Ubi, they're doing that, which is instead of giving it to the rich people, which is pretty much what QE does, they're now giving it to everybody else. But now they're creating a net nasty incentive structure where people don't want to work and not be productive members of society either choice to add more money into the system so that there is just some type of liquidity in the system to be used, because it's all nesting itself and pooling itself into the valuation of assets, asset values. They're in this really odd situation that neither one of those things really solves the problem. Now, what's really interesting about Bitcoin is it supplies a solution to what we're describing. Central bankers don't necessarily have to say they like it, but at the same time might see it as a solution. And if they would, if they would see it as a solution, let's say I'm Jerome Powell and I understand how Bitcoin works, but I also understand how more and more liquidity needs to be provided into the system so chaos doesn't ensue like a bridging event where the money flows into this new thing. And maybe there's this chance. So that could absolutely be the case, because his actions would not be any different than what they are right now and what they will likely be in the future. So I guess for me, I'm a little hesitant and maybe my Twitter is different than what I'm saying right now. But deep down inside, I think that even if they understood all of this, I don't think it would necessarily require them to change what they're doing. I think, in fact, they would actually have to continue to do what they're doing to probably supply the most orderly redistribution of wealth the world has ever seen.
- [23:33]
A
So continue on the current path. But they would add bitcoin advocation. Just saying.
- [23:42]
B
No, I don't think they have to do that. I think as long as they're mute on the issue, it's probably because, think about it, if they start coming out and saying, hey, you should probably be buying bitcoin with all this money we're printing and stuffing into your hands, it'd be a free for all.
- [23:57]
A
Yeah.
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B
Be a free for all. So. So maybe you could make the moral argument that what they're doing is probably best for an orderly changeover. I don't know. Yeah, but I don't see them as bad people. I don't see Them as bad people. I see them as maybe lacking all the facts.
- [24:17]
A
Yeah. Are they silent on the issue though? I think he's. I'm not sure if he's. I think he's just given the general response. It's a speculative non currency. Too volatile. Yeah. It's interesting.
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B
I'd be a little surprised if some of them didn't understand it, to be honest with you, Robert. I think they do understand it.
- [24:41]
A
One lie does come to mind is when he's saying that monetary policy and wealth inequality are unrelated. I remember him saying that not too many months ago.
- [24:52]
B
Think about what would happen. This is how I like to uncover for me what I believe to be the truth. I always just take the 180 of whatever it is. Where you were going with that question. Let's take the 180 of it. Let's say that he goes out and he doesn't say that. He says it is causing major social unrest. All this money we printed for the last 10 years went straight into the wealthy. We have all the charts right here. Proves it. Right. People would. It would be disaster. It'd be chaos. It would be chaos. So they can't say that. Right. So let's look at their intentions. Are their intentions to create chaos or are their intentions to create calm and a semblance of order?
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A
Man, this is so sticky and ambiguous to me.
- [25:51]
B
Yeah. And I don't want to sound like I'm sticking up for them. Trust me, I'm not. Because when I look at the damage that was done, this situation that we're in and how we got here, in my very humble opinion, was the result of decisions that happened from the 1940s up until the 1980s. Those decisions were made in that space, in that time where the input, almost like you were pushing a swing, that was the input that has delivered this situation that we're actually experiencing now in 2020, it's just taken a really long time to play out.
- [26:28]
A
Yeah, I agree with you, man. It is an impossible job. Because now it's like, okay, yeah, yeah.
- [26:35]
B
They'Ve got an impossible job right now.
- [26:36]
A
Can't tell the absolute truth. Or you just throw things into pure chaos. So then you're forced to like, I mean, maybe not be deceptive, maybe just not conceal. Maybe just conceal part of the truth to try and maintain this veneer of order as long as possible. It's just. It's a very ugly catch 22.
- [26:59]
B
Chaos is going to ha. Well, I don't want to say chaos, but disruption is going to happen.
- [27:04]
A
Yeah.
- [27:05]
B
That is because the input for the disruption was already supplied. You can't take it back. You can't get in a time machine and take it back. So if that's true, and please, I'm using the word if, in my opinion it's true, the disruption is going to happen one way or another. It's just how it happens and what supplies it. And so you had your discussions with Jeff. He does such an eloquent job talking about how this inflationary monetary policy, especially when it's supplied for 80 years, has this massive, massive technological incentive structure to create this deflationary force that becomes so large. It's like if you went to the beach and there's a tidal wave coming, the biggest tidal wave you can imagine looking at other people on the beach and saying, yeah, we can stop that. It's crazy talk. It's going to hit. It's just a matter of how it hits and where you're at when it hits.
- [28:09]
A
This gets to the core lesson we need to learn as a species, which I guess bitcoin is really just going to be the answer once and for all, is that manipulation of the money always ends in disaster. You either have deflationary shock back to reality, or you have inflationary crack up, boom, back to, which is hyperinflation. It's never worked out any other way. It's not like we've ever.
- [28:33]
B
It's a force of manipulation that's supplied into the environment. And when that happens, the environment will react. If I went and I poured toxic waste into a pond, the pond's gonna naturally try to figure out a way to decompose that. Now it might result in like these, this weird, like red plants growing on the side of the pond. The pond is figuring out a way to deal with the toxic waste that was poured into it. My opinion is when you look at Bitcoin, Bitcoin is the red grass that's taking the blow of the toxic waste that's been poured into the manipulation that's been poured into the global economy. It's just a reaction. It's a natural biological response to financial market manipulation.
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A
Yeah, that's a great point. To tie this back into the brain, I was struck by.
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B
We got off topic there.
- [29:46]
A
Well, I think the theme is the same though, because money is coordinating the global hive mind, basically. Right. So I think the connection, or at least the analog for me here in the brain is that the neurons or all these individual cells of the brain, they're coordinated by neurotransmitters. The book goes into some sickness and different debilitations that affect the signaling mechanism, which is, that's what money is to an economy, what a neurotransmitter is to the brain and, and how it results in these different pathologies. So I think to your point, it's like, yeah, we have a pathology that we've introduced, I guess unknowingly, you might say, just sort of incrementally, we. We manipulated the money a little bit here and there until we got into this really irrecoverable situation where it's. It's going to be bad. Um, do you see, like, do you think money is like a. I mean, is it the dynamics that play out for a neurotransmitter? Are they similar to the money? There's coordination mechanisms. So is that how you look at this? Again, we talked about these fractal. The brain is a market in a way, and then the market is a network of brains.
- [31:01]
B
You might say, yeah, I would look at it as a similar dynamic to that. I think I'll just leave it as a yes, I do think that that's how it works. Without getting into further description.
- [31:21]
A
The author, he says this quote is pretty cool. It says, quote, everything you experience, every sight, sound, smell, rather than being direct experience, is an electrochemical rendition in a dark theater. Vision emerges from the coordination of billions of neurons working together in a particular complex symphony, unquote.
- [31:46]
B
I mean, so this is amazing. So when some of the research that, that he has done is how can we develop other things as sensors to perform certain actions? So I think he's. And I might be wrong about the exact description of this, but in general, he's set up a camera that provides inputs, sensory inputs, onto your skin. I also believe that they're doing this on the tongue where they've put sensors that basically convert a video signal to these sensors that then rest on this on the tongue. I think they're also doing it on the back with like, like a matrix of, like, impressions. And then they wire, and then your brain wires and interprets this as meaningful information to see. So, you know, let's. If you're, if you're blind and you have this, You've had this surgery to have these sensors added to your body, and you're walking down the street, you can sense a person coming. You can sense that there's a wall there. Those are things that are being provided. Now what I ask myself is, so I know what that looks like based on how my eye is supplying this information to my brain. But it's just neurons firing that are making me feel like this is a real thing that I'm looking at. So what is that person, quote unquote seeing? And that's what you're getting at with that quote that you just read. What is it? And so I often think about dogs, too. So when you see a dog, they're so dependent on smell because it just makes up. When you run a deep neural net on, like I was telling you to do the TensorFlow thing, you can see how certain neural nets that you set up drive the solution set for the pattern and for how the brain is seeing something. And with dogs, they're highly reliant on their nose, much more so than anything else. I don't know if you've ever had a dog. You come back and immediately the smell, they know it's you. But if you're, I've done this on like a Skype call. I'm talking to my wife and the dog's there and I'll like, call the dog. And you can, you can see the dog does not get it at all. Like, it's not reliant on its ears. And hearing my voice, it doesn't get excited. It just lays there. It does nothing because my smell and my scent is not in that room. And so I just wondered, like, for, for various animals and things like that, like, their perceptions are driven way more as humans. I think if you would look at how our brain, the dominance of how the neural net is driving our decision making and how we're viewing the world, so much of its optics, like what's coming through your eyes. But for other animals, it is not. It is other things that just cognitively putting a huge demand on their brain.
- [35:09]
A
Yeah. And towards the end of the book, he's talking about this wearable technology which I think you're getting here is this, what do you call, the Variable Extra Sensory transducer, which was the acronym vest. And it allows you, I guess you basically say to feel data. Right. I think that an actual vest, he.
- [35:32]
B
Hooked it up to the stock market for people like. Yeah, yeah.
- [35:36]
A
And somehow the brain, I think there's a bit of a learning curve, but the brain figures it out. Like, you figure out a way to feel these different data inputs and the brain sort of adapts to it.
- [35:46]
B
Just like a deep neural net can figure out whether it's a cat picture. Like it's going to go through the training, whatever, whatever data and pictures you're, you're training it with. After a while it starts to just like when they were first doing TensorFlow was really big on playing chess and the game of Go. What they found with Go, when they were first training it, they were giving it, they fed it some training models of, hey, here's what great games look like. And then they let it play itself and it played itself a million times, and it played the next time they went around, they gave it no training whatsoever. They just said, here's your constraints, now play yourself and then play yourself a hundred million times. What they found is the one that didn't have the human cognitive bias on how chess is played is the one that played better. So when they conditioned the first neural net with this is how we think you should play the game. These are the best players in the world now. Now, condition yourself after we taught you that versus we're never going to teach you anything, just condition yourself. But you're going to do it in a million, you know, 10 million or whatever. How many? However many runs I do. And that's the one that actually beat the previous version.
- [37:11]
A
And that was after computer had beat a human at chess. Right. Because Go, I think Go is just more complex than chess.
- [37:18]
B
Go is way more complex than chess, like way more. And so, yeah, and there's never been a computer that's ever beat a person at Go, a human at Go.
- [37:30]
A
Is that still true today?
- [37:31]
B
No. Tensorflows.
- [37:33]
A
Yeah, yeah.
- [37:35]
B
Google did it. They conditionally programmed a deep neural net and they put it up against a human. And you want to listen to a really interesting thing, Go back and watch the like, professional GO players watching Google AlphaGo play the number one player in the world. And when they're doing the commentary, it was like somewhere in the middle of the game, AlphaGo made this move and the professional grand masters that were watching were like, oh, that was weird. That doesn't make any sense. We have no idea why the computer just made that move, only to find out a hundred moves later or whatever because of that move that they didn't understand, it all came into view and they were like, oh my God. Because of that really strange move, like a hundred moves ago, we just, oh my God. This is like watching God play a human being at Go, right? It just makes sure the hairs on your arms stand up when you listen to the commentary.
- [38:42]
A
It's wild that that's like, yeah, scary and exciting all at once in a way. And I wonder. So the author talks about the potential of actually changing the sensory port, our own sensory portals to the world that we may be actually able through These wearable technologies to tweak how we interface with the world at some point.
- [39:05]
B
Well, just think of. Yeah, just think about it. All you're doing is you're just adding more sensing mechanisms and then you're tying it into the brain. Now when you're, when you're adding these sensors and you're using the skin like your, your sense of touch as the interface. Cause it's already interfaced into your brain. There's, there's limitations and constraints there because maybe your sense of touch makes up, and I have no idea what this is, but it makes up whatever amount of gray matter in your total, the number of lobes and everything that you got in your brain. But if you could take some of these sensors and go direct. And Elon Musk, you know, he's obviously interested in this space with the neural link stuff, which I think they're way off, Way, way, way off of, of this becoming something that's. That's real. But imagine if you could tap into much more gray matter with a sensor that's providing you especially a sensor that's way outside of the senses that we have today. But you're going into part of the spectrum, the electromagnetic spectrum, for sensing in an area that's just not an area that we are even remotely. Let's say you go into the hyperspectral space and you have some type of access that you could then tie into your brain. And what would that mean for your ability to operate within your normal environment, that you would then have conscious awareness of that nobody else can even see? You're just totally blind to that. It's.
- [40:37]
A
I mean, we're like superhuman or cyborg at that point, right? We can start to see. I don't know. I guess you could just see any form of data, right? You could see very obviously infrared, ultraviolet would be kind of the immediate things. But then you could actually see, I don't know, market data, maybe weather patterns.
- [40:57]
B
I got a little taste of this whenever I flew. So, you know, when you fly an Apache, you're flying with IR in one of your eyes, and it's a camera that's on the aircraft. And as you're looking around, you're seeing everything in heat, like, almost like predator vision. And so you're able to see things and make decisions that are a little bit different than what you see when you're looking through the visible spectrum. And so, yeah, there's neat things like that and eoir. So I'd have sensors that I could do. Eoir. So you're Flying in Afghanistan and you're taking fire, if you're using IR lens, well, you don't see it real well if you've got an eoir on your eyeballs. It looks like Armageddon.
- [41:53]
A
Yeah.
- [41:54]
B
So you just, you know, and that's just like a really simple example of something that's very close. Like, those spectrums that I'm talking about are very close to your visible spectrum. But I'm curious, like, what if we get outside, like, spectrums that we're just not used to having access to? Like, what would that mean? And like. Yeah, dude, it's fascinating stuff.
- [42:16]
A
I mean, X ray, like, all these.
- [42:19]
B
Whatever we only see.
- [42:21]
A
I think the author quoted that to 1/10 trillionth of the light spectrum.
- [42:27]
B
So the whole energy spectrum, so you have all this energy that's all around you. Like, we're talking right now. And there's countless radio stations that are happening in this room that I'm sitting in right now. I have no conscious awareness of them because I don't have. I don't have a sensor to pick up those specific frequency bands and run them into my neural net. But if I did, could you imagine the conscious tuning of the thalamus to be able to handle all those inputs? But we're doing this stuff right now. I think if you would look at a much simpler being. Let's say we were an earthworm and we were looking at all the signals that a human being is processing. We'd be like, you know, as an earthworm, you'd be looking and be like, how are they handling all of that?
- [43:16]
A
Right. Yeah, yeah. The author. So it's very hard to imagine because I just. I don't know. How do you imagine outside of your own perceptions? Difficult, if not impossible. But he says that in the course of these experiments, they've determined that there's no currently no known limit on the kinds of signals the brain could learn to incorporate.
- [43:40]
B
Yeah.
- [43:40]
A
So it's as if the brain is just constantly adapting to its input sources.
- [43:45]
B
Yeah. And. But what I would tell you is, and there's many examples of, like, taxi drivers, that after they've driven a cab for 30 years, that their lobe in the back that manages their spatial orientation and awareness is way larger and takes over a bigger chunk of their gray matter than somebody who was not a cab driver or somebody who's doing that. So your brain adapts. It has a lot of. What's the word I'm looking for?
- [44:19]
A
Neuroplasticity?
- [44:20]
B
Plasticity. Thank you. Has a lot of plasticity. To make those adjustments. Where I was going with that, though, is where I have concerns with. Let's say we start getting all these different sensors that you can start wiring into the brain. I don't know how well it'll be managed. We were talking about the thalamus and its ability to control what gets into conscious awareness versus what's happening in the background. Most of it. All the processing that's happening in your brain is happening in the background. So would your brain be flowing this up through the thalamus, and would it actually get into some type of part of your neocortex that you could actually start using that in a way that would be useful?
- [45:04]
A
Yeah.
- [45:04]
B
I don't know. You'd have to talk to a neuroscientist or somebody to see what their opinions on something like that would be. I don't know.
- [45:10]
A
Yeah. Man, it's so mind blowing. Literally. I want to read this one quote, because this points to where it could end up one day. He says, quote, our great, great, great, great grandchildren may one day struggle to understand who we were and what was important to us. At this moment in history, we may have more in common with our Stone Age ancestors than with our near future descendants, unquote. So, like we have now.
- [45:41]
B
I mean, he's getting at what we're talking about. Yeah, yeah.
- [45:44]
A
Through these technologies, we're entering this co creative relationship with evolution in a really serious way.
- [45:53]
B
Yeah, yeah, yeah. It's like, where does this all go? I don't know. I know one thing, it's fascinating.
- [46:03]
A
Yeah. And I just keep. I sort of think that to a much milder extent, money as a tool helps us see the world through the eyes of others in a way. Right. Like we're through the price signal. We're getting a lot of data compressed into a number. But what if that's just kind of like the beginning? What if we figure out new ways to compress data even further? It's just mind boggling. Don't even know what we've become. Everything would change. Everything. Our relationships, our lifestyle.
- [46:38]
B
I have a theory and I've talked it over with Jeff Booth. He disagrees with me. But when I think about what does Bitcoin mean for the future and what does it do for productivity, technological advancement, and just the path that we're moving forward. Because right now it feels like technology is about ready to eat everything. What I've noticed in financial markets is just when you think everything's about to go parabolic in one direction, it actually starts to move in the opposite direction. So when I think about what bitcoin supplies, it supplies sound investment for things that have a very high probability of a win. Because nobody that's dealing with, especially right now as you're going through the transition of fiat turning into bitcoin and the value that it's going to continue to appreciate relative to fiat. I don't know about you, but I know how to do a discount cash flow model on the valuation of what I think something's going to produce. And when I compare that to what I think the appreciation of bitcoin is going to be, I'm not going to sell my Bitcoin. And so I think about how am I going to act as a person who has bitcoin five or ten years from now? And if I'm going to invest in something, that thing better be kicking off a. A ton of free cash flows. Not only that, but it better be priced in a price point that gives me a really high return on those free cash flows. And when I think about what does that mean for the broader global economy, it means higher discount rates. It means the amount of people willing to put their capital into the market to advance some of these crazy technologies that we're talking about. If you used to have 10 people willing to do that, I think in the future you might have three people willing to do that. And so if you only have three people willing to do that, they're only investing in the really high probability technologies that have a lot of technical maturation versus ones that today would get money in the snap of a finger because there's currency everywhere.
- [49:09]
A
Spacs.
- [49:10]
B
Spacs. It's just like, I don't want to label certain people. Right? Yeah. So I just look at that. I look at this technology growth and this trend, and I think that you're going to continue to see it go because there's so much momentum based on all this money and the incentive structure of inflationary monetary policy and then not getting turned on its head. That trend is going to continue to go up. But eventually I think bitcoin is going to start slowing this down. And I think it needs the slowdown. Because if I was going to use an example of what I see is happening in the global economy right now, we literally have Lord Helmut sitting in the spacecraft and he's trying to go to ludicrous speed with the economy. And everybody in the ship is like, God, Lord Helmut, slow us down, slow us down. And I see bitcoin being like, remember when they pulled the power levers back and Then Lord Helmut goes flying to the front of the thing and smashes his helmet. He's like, ah, I'm surrounded by idiots or whatever. So I see Bitcoin as being, we're going to pull the power levers back and we're going to be getting this whole different incentive structure, especially when it comes to capital investment. And you're going to have free and open markets. So it's going to be a good thing.
- [50:43]
A
Yeah, it's the return of value investing.
- [50:47]
B
It's going to be the return of value investing. I think that when I look around at the global economy, what I see is technology is outstripping mankind's ability to handle it. We have so much. Do you ever just stop and think, how in the world did we invent all of this stuff just in the last 80 years? But you go back through time and technical growth, technology growth was a snail space. And then out of nowhere, just in the last 80 years, well, you had a dollar that became the global reserve currency. And every other currency on the planet for the first time pegged itself to the dollar. We acted like there was a gold standard. It was a nice briefing narrative thing. But at the end of the day, they kept adjusting the money multiplier, which made that completely. Only in word and letter, only that. That was a real thing. We come off that and then we run it for another 40 years with no backing of any kind. And through that entire time, we were debasing the buying power, which is an inflationary monetary policy for 80 years. Well, what do you think you're going to get? You created the biggest incentive structure the world has ever seen for capital investment to chase anything and everything that's technology.
- [52:23]
A
Related to.
- [52:27]
B
Get where we're at right now.
- [52:29]
A
Yeah. Just imposes riskier behavior. Right. Cause you're just. Everyone's in a race to outpace inflation.
- [52:40]
B
Basically, with riskier behavior, that's rewarded. I think that's a really important caveat to what you said, is the big players, they got too big to fail. Right. So we can't let anybody fail, but we're going to let them devour and eat every little small cap company and take more and more market share so that there's two players in any space, you know, two major players in any space. So there's still competition.
- [53:11]
A
Right, right, right. Which then it just. You've. You've stunted capitalism, you've stunted creative destruction. So eventually it gets rigid and it collapses and that's right. Yeah. I would say you're seeing that in A lot of industries today and it's only going to get worse with this wave of inflation. No, Jeff and I, we talked about that a lot too. And man really reinforces the importance of humility because there's that quote that the human inability to understand the exponential function is our greatest shortcoming. Something to that effect.
- [53:46]
B
That's right.
- [53:46]
A
It's like exponential change. We live in an age of accelerating exponential change. So if you think you've got it figured out or you think you know what's going on, that really works against you. I think when things are moving this fast, so you have to be super humble, you've got to bring a beginner's mind to every situation. You've got to be a first principles thinker about all things. And I think it, yeah, it's the corruption of the money is just kind of corrupted our outlook in a way. I'm not saying us like you and me or anyone in particular, but in general.
- [54:27]
B
I think this is what's led me to the brain, is when you start to understand how you have these biases and it's not something you can necessarily control. The only thing that you can do is question everything that you think you know. So I think I know that bitcoin is sound money. Well, why, to be quite honest with you, the reason I'm on Twitter so much, duking it out with everybody is because I'm trying to find somebody that can tell me why I'm wrong. I'm trying to find somebody who can shoot holes through an argument that has first principles, thinking that they're not just spewing something that they want to hear and they're approaching it from a constructive way. Because typically if they're not approaching it from a constructive way, they probably have big gaps and blemishes in the way that they think about a lot of other things. So it's hard for me, and this is a cognitive bias, it's hard for me to listen to people like that.
- [55:29]
A
Yeah, no, I hear you 100% on that topic. Actually, maybe I could ask you. So I'm doing the same thing I've been asking myself, how do you stop bitcoin? I'm trying to figure it out just like everyone else. Been asking myself that for five years nonstop. One that came up recently that I think has a little bit of credibility to it is this idea of a state co opting a proof of stake coin. If a nation state came out, let's just say in support of Ethereum and they're just full on this is our money now. We're going to build systems on top of it, we're buying a ton of it. And then they simultaneously just put a total disparagement, campaign and regulatory attack, political attack on Bitcoin. There's a social layer attack vector that might work a little bit there. And then if you were ever able to execute that so effectively that you actually flipped the market caps, because you could drive Bitcoin's or Ethereum's market cap. If you're the Fed, you just print money all day, keep buying Ethereum, you pump it to high heaven and you could try to suppress Bitcoin with everything you got now that you could really stop it. Do you think that's a viable attack vector? Do you think we'll see anyone taking.
- [56:50]
B
That doesn't mean they won't try it. And is it viable? Sure. My definition of viable is can they do it? Yes. Would it work? No. So the market cap of the dollar is, is hundreds of trillions of dollars. If we're using market cap as a stick to say whether one's more valuable than the other, that's a bad stick. It's that trend that you're looking at, the appreciation of the one versus the other. And more importantly, especially when you get into the end game, it's about trust of the other. So we go back to the Weimar example. Like, hey, they had hundred trillion dollars, just like you see in nation states right now where you got $100 trillion bills. Doesn't mean that it's more valuable and has the trust. Right. Whatever central bank, digital currency comes onto the scene, whatever it is, whether they take an existing token, whether they stand up their own token, they still have the same problem with the dollar. The problem is this, they have to continue to debase it in order to allow enough capital into the market so that people are still willing to play the game with their currency. That's the problem. If we're using the Monopoly example, think about every player at the board except for one. The one is loaded, they own everything. And all the other players just keep going around and paying that one person that owns all the equity until they get back around the go and then they get their check again and then they go back to their slave job and then they just continue to pay that one person every time they go around the board. You're going to get to a point where people do not want to keep playing that game.
- [58:44]
A
Right.
- [58:45]
B
And the government right now is in a situation where all the equity is owned because of the incentive structures and not allowing businesses to fail. One person, you know, I'm speaking in generalities here. One person owns all that equity and the government's saying no, no, no, no, keep playing, we'll give you, we'll put it in your bank account. Keep playing. Right?
- [59:10]
A
Go straight to go, right?
- [59:12]
B
That's right. Go straight to go. Hey, you know what? Don't pay your tax. You know what? Three more months until you have to pay your taxes. This time.
- [59:20]
A
Yeah.
- [59:21]
B
Next time it'll be six months instead of I know your rent's getting a little high because that one person on the board keeps raising it. Maybe we'll just give you $300 next time you go around. Go. Even though your rent on average around the board went from 200 to 400.
- [59:40]
A
Right, right, right.
- [59:42]
B
Keep playing the game, you slave.
- [59:45]
A
So this thing. Yeah. Agree that it's self annihilating the fiat currency complex. I did have concerns about that. If they were to try and push people onto, I'm just using Ethereum as an example, I'm sure it'd more likely be their own centralized smart contract platform or whatever.
- [60:11]
B
If the central bank digital currencies come on the scene, my concern with them is more on the data side of the house, the access that they're going to have to the data, than just the central bank digital currency. In a way it's going to help the market from a liquidity standpoint, instant settlement standpoint. In my opinion. The whole reason you have stable coins right now is because you don't have anything that can immediately clear in a counterparty type trade. So let's say you don't want to sell your Bitcoin to pay your taxes. So you're going to go out and borrow against your Bitcoin. So you have to set up a contract that allows that dollar to clear immediately. If the value of your Bitcoin drops below what's in escrow, it has to immediately settle. Right. Because everything in this space is over collateralized. Immediately settling assets, you're not doing that. You're going to get tore up, especially with the volatility. So they're serving that purpose. And I think if you have a central bank digital currency that immediately clears, I think that's going to be a good thing because now you don't have to trust whether tether has the reserves that they say they have. It doesn't matter anymore but you're getting the clearance mechanism that's coming. Now the downside with this is, like I said, the data that's going to be associated and their ability to say, oh, I know we gave you $1,000, but now we just programmatically said that you can't spend it for the month of May because they can do that with programmable money. Now you got to have some technical folks that are able to do these things, which I think is a. That's a big hurdle for a government. Yeah, that's a pretty big technical hurdle right there.
- [62:00]
A
But the point's well taken is you don't want politicians being able to program your money. I mean, that's just a really dystopian outcome.
- [62:12]
B
And when you're talking about money, you're talking about trust, buying power for the work you've already performed, still being there for you in the future. The thing that I've noticed about this is bitcoin feeds on manipulation. It devours it. Almost like if it was this monster, it would. It would literally live on fear. It lives on breed. It lives on manipulation. It lives on people that take out a bunch of level leverage to pull their productivity to the left instead of it happening when it actually happened. Like, it feeds on it.
- [62:51]
A
Yeah.
- [62:52]
B
So, like, anytime I see somebody, like, trying to manipulate or whatever, I'm just like, oh, there we go. Feed the beast, baby. Feed this thing. It needs fed.
- [63:02]
A
And then it's a beast that just ultimately seems like it humbles everyone in one way or another. No doubt about it, no matter which way you look at it, to the upside, to the downside. Rule number one that I've learned in bitcoin is always expected to do the unexpected. I mean, it is. It's just the craziest asset I've ever seen, ever.
- [63:26]
B
Because it's almost like it's from a different dimension from how you and I were raised since kids. Everything we know about how economies work, everything we know about incentive structures are now being completely flipped on their heads. So whatever worked in that old system, you might want to start doing the exact opposite. When you're dealing with this system, it's.
- [63:49]
A
It's. It creates its own reality, which. Back to the brain. That's what the brain does. Right. We're creating our own little internal model. And to the author's point, it's like anytime you see something, it's more. It says more about the shape of your brain than it does what's actually out there, which is just incredible. So, yeah, you know what?
- [64:13]
B
You. You have appreciation for other people when you study the brain, in my opinion. Because the thing that if I see somebody, let's say I Get in an argument with somebody about something. I come to that when I look at how the other person's responding and how they're acting, all their past events, and let's say they're 40 years old. For 40 years, that person's brain has been conditioned to lead them to this moment for them to have the exact opposite opinion of me. And so when I look at that person and what they're saying to me, which might be the exact opposite of what I think, it's almost like I have these two realities that are clashing. And for me just to say, you're wrong, you're an idiot. What I'm really doing is I'm looking at 40 years of cognitive conditioning and saying that experience is completely invalid, that experience is wrong. And maybe it is, and it might be. But I think you step into a discussion with somebody else with a whole lot more humility and the potential for you being wrong when you think about it, maybe from that vantage point.
- [65:26]
A
Yeah.
- [65:28]
B
Political parties is a perfect example. I'm politics agnostic. I think that there's arguments on both sides of both political parties that have led people to both sides. And so the power isn't knowing the one side versus the other. The power is knowing both arguments and then knowing how to kind of sit in between both of them and leverage the ones that add the most value to the most participants as possible for this. And sometimes it's not. It's a catch 22. There's a reason that the divide exists.
- [66:04]
A
Right.
- [66:04]
B
It's just your past experiences make you want to identify with one side or the other as being valid.
- [66:10]
A
Right.
- [66:11]
B
Because you haven't lived that other experience.
- [66:14]
A
Yeah. Yeah. I think there's a lot of studies out there saying that it's actually your psychological profile maps really well to your politics. I don't know the exact. But the big five personality traits maps really well to what your political leanings are. But that's a great point, too. I'm same as you, apolitical. I just think all politics is a charade. I don't pay attention to it. I want nothing to do with it. And that, for me is one of the most exciting things about bitcoin, is that in a way, politics presupposes that force and coercion are effective in the world, that you can go out and pass a law, and if people don't abide by it, you'll take their money or throw them in jail or do whatever. Bitcoin dampens that a lot. In a bitcoin world. First of all, you can't fund a lot of this legislation. A lot of it just wouldn't be enforceable. And second of all, citizens, the governed would, in theory, have a lot more options. They just have a lot other. They could take their capital anywhere. They're not trapped in any one jurisdiction. And that seems like something clearly. We'll talk about the soul later. But that seems like a good step towards operating more from the soul and less from the ego, where we're trying to coerce people into doing what we want.
- [67:32]
B
Your typical person doesn't pay any taxes. They might think that they do, but when you look at how much money they get back and how much they paid in, for the most part, they didn't really have any type of tax burden that was meaningful for a majority of the participants in the system. So when they think about government, they don't necessarily see that as a bill. Now, if you start dealing with sound money and people's value of what they're holding is appreciating tremendously and they do have to start paying taxes, all of a sudden they start valuing the service that they're receiving way differently than they did in the old system where they weren't really paying for any of those services. I think what you're going to just naturally see is that, and we're obviously talking in a very long time horizon here, you're going to see that sound money will automatically start to align incentives of what is being spent on public service and diminish the amount of expenses and the size. And all those things start to become politically popular as opposed to where we're at right now, which is let's build it as big as we can and hand out as much free money as we can and all that kind of stuff. The incentive structure has supplied what we see right now. And I think if you change the incentive structure, you're going to get a different result.
- [68:54]
A
Absolutely. Because governments can just siphon off of their tax base now through inflation. It's almost the incentive is to create more dependency on government. Whereas on a hard money world, the tax bill has to be consensually negotiated and it has to be visible. You can't inflate, essentially. So you have to actually send them a bill. And I forget which. Maybe it was Ron Paul that made the point that if we sent Americans, every household in America, an $80,000 tax bill every year to pay for the war in the Middle east, it'd be over in one year immediately. It's interesting to think about it that way. And I couldn't help. I noticed this.
- [69:42]
B
So fiat currency, another one that I like, and this is one that Buffett had proposed. If you don't send up a balanced budget, meaning your spending is higher than the tax receipts. If you don't pass a budget like that that's balanced, the people that are passing it are not eligible for reelection or there's a lottery that no one can control, there's 10% or 25% of the people that are in office are going to lose their seat. And it's random.
- [70:21]
A
Oh yeah.
- [70:22]
B
All of a sudden you start getting different incentives for the way that the budget is being managed.
- [70:29]
A
You know what that is? That is the law of decimation. The ancient Romans used that.
- [70:34]
B
Oh, really?
- [70:35]
A
Yeah. If they, if the, the phalanx, I guess, the row of shield shielded soldiers. If they broke ranks, you know, and let the. Let the enemy come through their lines, the generals would implement the law of decimation, which means they'd kill one out of every soldiers at random. So everyone had a really big disincentive to malperformance. So everyone would hold the line.
- [71:00]
B
I did not know that.
- [71:02]
A
Yeah, that's so cool. I didn't know that about that. Buffett proposed that. But that's perfect. I couldn't help but notice this. So author's talking about this patient that had a schizophrenic episode. And the way he describes schizophrenia was this accumulation of false realities.
- [71:25]
B
Yeah.
- [71:27]
A
And this fiat world we're in, I mean, it creates false realities. All these unicorn companies, all this capital misallocation, all these. I think it's like fake people even pushing fake businesses. Scamming and deception and political polarization, it's all just become the norm.
- [71:48]
B
Shitcoins.
- [71:50]
A
Shitcoins like gambling. So it's. It's almost like inflation induces this schizophrenia like behavior. And it's all because schizophrenia again, it's the neurotransmitter is distorted effectively and with capital misallocation. It's the prices that are distorted.
- [72:11]
B
It's the biological valuation system in the brain malfunctioning and creating distortions in how the person sees reality. And the fear that the person has is that they don't know what's real. What they think is their reality they know is maybe true or maybe false. And so they're scared of everything. And they don't trust anything. And think about socially where we're at globally right now. It describes that to a T. No one trusts anything that they see. It's like if they See some story or whatever on the news. Well, that's probably not true.
- [72:56]
A
Right.
- [72:58]
B
It's a schizophrenic mindset.
- [73:01]
A
I wonder how much mutual influence there is. If you're living at the bottom of a socioeconomic hierarchy in a fiat currency regime, you're probably more likely to develop schizophrenia just based on all the false realities you're dealing with.
- [73:21]
B
Yeah, I would maybe hesitate to go that far. I would just say that collectively, if you were looking at just the globe and you got this collective conscious, I think that it's a perfect representation of where we're at with that.
- [73:39]
A
Yeah. Hmm. I just feel there. Seems like there's a science here that's not been developed yet, you know, like this connection between money and mind, mind and money. We're using money to see through the eyes of others. So if you corrupt that perceptual system.
- [73:57]
B
Yeah.
- [73:57]
A
It's like it feeds back into your neural systems and then corrupts them. Not necessarily.
- [74:03]
B
It's reflexive, I would say. I would agree with that. I think it's reflexive for sure.
- [74:09]
A
But nobody talks about this.
- [74:12]
B
That's because it exists. Yeah, that's because it exists. And they're one of those neurons that are misfiring, not because they're a bad person, is because of the environment that they've been served in or that they've been conditioned in. And so that's why, I guess I pushed back on. I was saying that it was a parasitic environment instead of a. I forget what word was used. But when I look at the situation, I don't like to look at somebody as being bad or good. I look at it more as that's how they've been conditioned. That's the environment that they were served into. And that's why they're just naturally playing out the environment. In a way, a person is their environment that they've been exposed to through all those years, and they're just playing that out in real time.
- [75:15]
A
Yeah. Quite literally. They're running the programs that have been etched on to their. The patterns that have been etched onto their neural architecture from the patterns of action they've been involved in. Yeah, it's lost my train of thought, but it's. It's scary in a way that it is such. It's everywhere. Right. It's hidden in plain sight.
- [75:48]
B
But it's. It's nature. It's. I don't see it as scary. I see it as nature just playing itself out.
- [75:53]
A
Well, what I'm getting with scary, I'm saying it's scary to me that no one's talking or thinking about this. It's just like I feel like we're onto something really. This is part of the bitcoin rabbit hole, I guess. It's just like, hey guys, the money's really broken and it's screwing you up at every single level. Like psychologically, economically, socially, every level of being is just corrupted because the money's corrupted. But no one's. I don't know either. We're just figuring this out. Maybe as a species.
- [76:26]
B
If you pour the toxic waste into the lake, are the fish going to swim around? Normally.
- [76:34]
A
You'Re going to look like the three eyed fish on the Simpsons.
- [76:36]
B
Simpsons.
- [76:39]
A
Hey everybody. As you've no doubt learned by watching this show, Bitcoin is the single most important asset you can own in the 21st century. And one of the most important companies in Bitcoin today is NYDIG. NYDIG's mission is to get bitcoin into the hands of as many people as possible. One of the ways they are accomplishing this mission is by empowering banks and financial technology companies to offer their own bitcoin products and services. As a true game changer in the industry, NYDIG is safely unlocking the power of bitcoin for forward thinking individuals and institutions alike. Led by Robbie Gutman, Yin Zhao and Ross Stevens, NYDIG has absolutely exploded onto the bitcoin scene recently and has quickly become a leader in this space. So whether you are a professional investor looking for asset management services or a company looking to white label your own bitcoin product or service, consider nydig, your single source solution for everything Bitcoin. The author makes the point that every brain's carrying its own narrative. Essentially it's got its own unique pattern etched into itself. And then there's the 7 billion or 8 billion brains around the planet working together. So he's saying that basically each brain contains its own truth. Its own. If we say truth isn't. Yeah, which maybe this isn't technically truth because I say truth typically means an accurate portrayal of reality. But it sounds like our brain really is more like an accurate portrayal of what we need to see as an organism. It's a local truth. Yeah, like a local truth. Yeah. But then we're wiring all, at least in for humans, we're wiring all these local truths together through prices, through words to try and get to a more generalized.
- [78:45]
B
And then the expected value of all those opinions per topic are the collective truth as the human race sees it.
- [79:00]
A
Yeah, I was Going to ask, what is reality? And then he has this answer, says, it's like a television show that only you can see and you can't turn it off.
- [79:13]
B
Yeah, I mean, the case against reality, like you had brought up earlier, is an interesting read that I think kind of complements a lot of the stuff that we're talking about here. Of course, no one knows. You can't even. You can't really answer the question. All you can do is really kind of try to understand how you fit into it and then what you can do to shape your environment from what it is you desire and what it is that you're trying to accomplish in your life. And it goes back to the example I talked about on our first recording of being on the boat. Where you want to go, why do you want to go there? What's the impact? What's more importantly, what's your intention? Because I think that there's deep repercussions for those questions and the way that you react to them and how you're going to enjoy your life experience. So I think those are the important things to focus on when you're looking.
- [80:20]
A
At it and your years of experience and got to get a head on your shoulders. I think the work you do is really valuable for people. I'm sure that is very fulfilling for you. If you were going to advise younger people how to find that meaningfulness or that to steer the boat well, do you have any general advice or wisdom you would share?
- [80:51]
B
I would tell you, if you've had a painful experience in your life, pay particular attention to that, because you probably had it for a reason. And you probably had it as. I think most people when they have a painful experience, they look back at and they're saying, well, that was the worst thing that ever happened to me and I never want to think about it again. But when you analyze what put me in that situation or why did I go through it, a lot of the times you can find your life's work with that and really harness it into something for good. I would start there. And then if you can mix it with something that you just naturally love doing. So for me, I really enjoy financial valuation a lot. I could sit here at my computer and I could look up a company's 10k or 10q and I could just plow through it and do what I think the value is. I don't know why. I don't know why I'm wired like that, but for some strange reason, I love it. So for me, doing the show and Doing this investing podcast, I do it for free. I just love doing it. It's fun. So people got to find. And if you can match things that have maybe been a painful experience with things that you enjoy, that can be turned into a thing of good. And one other thing that I would tell you is when you look at the impact you can have on other people's lives, that is something that's going to pay you long lasting dividends and a sense of accomplishment is when you feel like you're helping other people, not just yourself. When you help yourself. When you go out, perfect example, just go buy a new car. You're going to be so happy. You're going to be happy for three months and then it's going to wear off and you're going to be like, why the hell did I buy this car? But if you can go out and really help somebody, I think you're going to find that the happiness is way more enduring.
- [83:03]
A
Yeah. Wow, that's. That's good advice. The, especially the pain part, because we. Your pain is information. Right. It's your, your body or mind or experience telling you something's misfit. It didn't work. And you can get a lot of learning out of that, I think, if you look at it the right way. Yeah, but to your, to your point, it's all about your perspective. If you just try to block it out and, you know, run away from it, you might not get that. That revelation that you need.
- [83:32]
B
Yep.
- [83:35]
A
Do you try to operate a lot in a flow state? Do you try to do anything to get there for your work?
- [83:42]
B
I've read that book. I didn't like it. Yeah, that's not something I think about, really. Robert, I can tell you this. Like, if I'm doing a podcast and I'm having a, an interesting conversation with somebody, it'll literally go by for me in the blink of an eye. So that's what you're really getting at when you're talking about flow. So if you're getting yourself in that state often, you're going to have found that thing that you love doing. So piano players or somebody who's playing a musical instrument, sometimes a guitar player, they can go do these things and hours go by and it's like nothing, right?
- [84:27]
A
Yeah. Yeah. The author, it just talks about this state of. I've never read the book flow state. He says the brain enters a state of hypofrontality, which I guess means you're not using the prefrontal cortex as much. You're Sort of, yeah.
- [84:46]
B
So here. This is a really good book. I can't remember the name of this. It's a tennis book, and the author. I can't remember the name.
- [84:56]
A
I've heard of this book. I think it's about competition, right?
- [85:00]
B
No, this book is about flow and really kind of allowing your subconscious to play the game instead of overthinking. So tennis players, they might step up there to the line. They're dribbling the ball, and they'll be like, don't hit this into the net, you idiot.
- [85:15]
A
Right?
- [85:15]
B
And they'll go up there and they'll hit it, and straight into the net, and. God. Right. And so what the book is telling you is when you're playing the game like that, you're using your frontal lobe, right? You're trying to control something that you might have hit 100,000 serves in your life. I have no idea what those numbers would be. But when you look at, oh, there's a video of Roger Federer. This video blew my mind. And Roger goes out there, he's doing some type of photo shoot with some people, and they were like, roger, can you just hit one shot here in the photo studio? And he's like, yeah, sure. He's like, here, watch this. And he goes to the one person, he says, here, put this can on your head like a soda can. He goes off in the distance, dribbles the tennis ball. Look this up on the Internet. I'm sure it's on YouTube. I think I had it sent to me via text. But he dribbles the ball, he throws it in the air, and, I mean, he smashes the living hell out of this tennis ball, and it comes right over and knocks the Coke can off the person's head.
- [86:29]
A
Wow.
- [86:30]
B
And so when you think about how a person hits that, do you really think Roger Federer is stepping up there saying, oh, boy, I hope I don't miss, and smash this person's face and put him in the hospital. Right? Like, he's stepping up there, and you know what he's telling him? So he's like, I'm gonna crush this ball, and that. That can right off this guy's head. And everyone is gonna cheer, right? Like, that's what that guy's thinking about. And then he just dribbles it and just does it. He's not thinking about where he needs to snap his wrist. He's not thinking about any. Anything doing it. And so the book is about. And you don't have to be Roger Federer. The book is about leverage your Subconscious to play the game. And so before you go to hit, don't think about things. Bring yourself into this almost a meditative state and do the things that you've already conditioned your body to do. And then the more times you practice and the more times you go, like, if you're hitting a golf ball is. Allow that cognitive conditioning to swing the club, allow it to swing the racket, like, so. I forget how we even got on that topic, but we're just talking about flow state. Yeah, yeah, that's a flow state. That's why. Okay. Yeah.
- [87:51]
A
I think the book is the Inner Game of Tennis. I just looked it up here.
- [87:55]
B
That's it. That's the game. That's the book.
- [88:00]
A
I haven't read it yet, but I've heard really good things about it. People saying it's a great book on, I think, training and flow state in general.
- [88:11]
B
You see this with chess players, too. Just like. I mean, they can literally look at the board, have no idea why they would move a piece, but they'll just be like, oh, yeah, I need to move this piece right here. Just instantly.
- [88:25]
A
Is that unconscious mind? Right.
- [88:28]
B
They've played that many games that they don't even have to think about it.
- [88:31]
A
Did you get a chance to listen to that podcast I sent you? That was Jordan Peterson and Ian McGilchrist.
- [88:37]
B
No, I didn't. I'm so sorry.
- [88:39]
A
No, it's fine. When you check it out, I'd love to hear what you think about it. He makes the case that he wrote a book called the Master and His Emissary. And he says that the left hemisphere, which is associated with your right hand, is your active awareness. Reductionist. Tries to turn. Use. Tries to turn everything into a word or a symbol or a pattern or program. Like, it's. It's your analytical side.
- [89:05]
B
Right. And the other side is your creative side.
- [89:07]
A
Yeah, and the other side's a creative side. But the master, he said, we've flipped, we've inverted and made the analytical side the master in Western Civilization. But to be good and competent and to get into a flow state, you actually have to learn to make the right side the master because it's more powerful. But then you use the analytical side. It's more like your active awareness versus your, I guess, basic awareness. I haven't read the book yet. I'm not doing it justice, but I thought it was really germane to what we've been talking about.
- [89:43]
B
What I think is a dangerous thing for people to do do is to label themselves one or the other. I tell myself a lot how much I like math and I like to do the evaluation stuff. And that's probably a bad thing. I should probably exercise labeling of myself as being creative in those things as well. Because what I think happens is over time, I kind of feel like the healthiest type of thinker and just person. For yourself and your skills and your ability to contribute to society is the more balance between the two that you can really manifest or tell yourself that you have? I think it's way more powerful.
- [90:31]
A
Yeah, definitely. You are the story you tell yourself in a way. Right?
- [90:37]
B
No, no doubt about it. Like, be careful what you tell yourself. Cause you might just realize it.
- [90:43]
A
Yeah, it's a great point. Another thing about the unconscious that I've experienced myself a lot is this. This flash of insight thing where you're just. I mean, sometimes you get it in the middle of the night or when you just wake up, or sometimes the shower thought is kind of the infamous version where you're just really not thinking about anything, especially a problem you've been working on for a really long time. And then the answer or something will just hit you like a bolt of lightning.
- [91:13]
B
And you're doing them. You're doing a mundane task that you don't have to think about.
- [91:18]
A
Yep.
- [91:19]
B
Sometimes you're just kind of like just relaxing or whatever. And then your subconscious is allowed. Is able to flow it forward.
- [91:26]
A
Right.
- [91:26]
B
Without it getting log jam with you. Trying to use that thinking part of your brain, the frontal lobe, all the time.
- [91:34]
A
Yeah, yeah. It's like almost like your brain has innovated the answer. But you can't force innovation. It has to come, has to emerge naturally. And I've just noticed with writing, I always like to give myself a lot of time to like write it, reread it, edit it, rewrite it. Because if you just give yourself plenty of time to marinate, you get all these little flashes of insight along the way when you're not actively doing it. So kind of like the more time you give yourself, the more opportunity you have for those.
- [92:04]
B
Yeah.
- [92:08]
A
Um, yeah, I think you mentioned this earlier, but I thought just to mention one more time, this concept of priming, which is when he could have a patient holding a warm drink and then they would describe their relationship with a family member more favorably. Like physical warmth transmuted into relationship warmth.
- [92:35]
B
If people want to learn more about that, they need to go read the Cialdini book that you mentioned earlier.
- [92:41]
A
The pre suasion.
- [92:43]
B
The pre suasion one. Yeah, man, that could give you. I mean, it's just such a great book for that particular time topic.
- [92:50]
A
Yeah. The other one was. This one's a little more funny that men tended to tip twice as much to dancers that were ovulating, meaning they were fertile, as opposed to when she was menstruating, not fertile. So talk about your dog sniffing you and happy to see you when you come home. It's like humans are doing it, too. In the strip club.
- [93:12]
B
Yeah. You're doing it subconsciously that you are paying attention to cues that you don't that are not hitting your conscious access.
- [93:22]
A
That's so funny. And good.
- [93:23]
B
Just like the toilet paper tube thing we were talking about last year. You know, like, you're not. You're not seeing it, but your brain is registering it.
- [93:31]
A
Yeah.
- [93:31]
B
You just don't have conscious access to it.