← Tom Bilyeu's Impact Theory
Tom Bilyeu's Impact Theory
The Government’s Biggest Scam? Inflation & Money Printing EXPLAINED | Robert Breedlove PT 2
00:48:03
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- [00:01]
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Tom Bilyeu
I'm Tom Bilyeu and this is Impact Theory. Welcome back to part two of my conversation with Robert Breedlove. If you're just joining us, go back to part one and start there because we've already covered how the financial system is rigged against you, why your money loses value every day, and how central banks are tightening their grip on the economy. Today we're getting straight into what happens next, how bitcoin challenges the banks, what digital currencies really mean for your freedom, and why the financial elites are fighting to keep their grip on power. Let's jump right back in with Robert Breedlove. What do you think when you look out at the world and you see every civilization of any size has a government?
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Robert Breedlove
Yeah. I think it is a reality of physical force, like I said, like we
- [01:31]
Tom Bilyeu
do, that people want somebody to take care of them.
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Robert Breedlove
Well, it's, it's not that you want, it's, it's a protection service. Right. So if we look at the origin point of government, it comes in the agricultural age, once we stop being hunters and gatherers and we settle down in one place and we start to create an economic surplus. Right. We've got grain in the silo, so to speak. Well, you now need to defend that grain in the silo from other people that want, that are hungry, that want to come and take it. So the local area defense network that protects intruders from taking the grain in the silo is basically the origin point of government. And so that's what you want it to do, defend the property and lives and liberty of the individuals living within a territory. However, it's a very complicated and bloody history. Right. Because once you give people that physical power, that monopoly on force, what do they start to do? They extract tribute from people inside of the territory. Right. And so how do you. This has been like the age old problem is how do we create a central monopoly on force? And entrust people to run that monopoly on force in a way that they won't bend it to serve their own interest. Right. And we've, there's been many experiments on how to do this best across time. I would say the United States and the founding Fathers are the best one we've done yet. Right. The. The decentralization of power, checks and balances. You know, the US Constitution was written basically to prevent the implementation of a central bank to maximize local state power and to minimize central state power. You know, we were, we were founded as a constitutional republic. So a constitution being an enumerated list of things the government can never do. Right. This is the Bill of Rights. Right. Cannot infringe on the freedom of speech, cannot infringe on the right to bear arms, etc. These were meant to be absolutes that absolute spheres of human freedom that government could not violate. However, after three attempts, we got the central bank, right? We got the Fed in 1913.
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Tom Bilyeu
What is it people are clamoring for? So they clamor for protection when they put in a government. Protection and coordination, I would say is probably fair. And then what are they clamoring for when they say yes to a central bank?
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Robert Breedlove
Well, we don't really say yes to a central bank. I mean, if you read, at least in the United States, you could read the book the Creature from Jekyll Island. This thing was snuck in over a holiday weekend after a private meeting off, at an. On an island off the coast of Georgia called Jekyll Island.
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Tom Bilyeu
But are there any modern economies of any significance that don't have a central bank?
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Robert Breedlove
There are not these, you know, a lot of this.
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Tom Bilyeu
Someone somewhere is clamoring for something.
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Robert Breedlove
You're not voting it in though. Like these things, they're private banks that are basically installed. It's not the will of the people. That is choosing to have this thing installed.
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Tom Bilyeu
Is it a signal of corruption?
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Robert Breedlove
It is the ultimate institution of corruption, in my opinion.
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Tom Bilyeu
So you look out at all the governments having one of these and you're like, that is a tower to memorialize the corruption in the country.
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Drew (Producer)
It.
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Robert Breedlove
Okay, again, if we define corruption as the uneven application of rules. While a central bank has the legal authority to counterfeit money, if anyone else counterfeits money, they go to jail.
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Tom Bilyeu
Let me give you a.
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Robert Breedlove
How is that? Like those are. That is the bifurcation of rules, right? If you and I go and play basketball and I put a gun to your head and say, my shots count four, your shots count two. Is that a corrupt game Or I can print points for myself and you can't.
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Tom Bilyeu
If I were playing against my wife, it would be very fair. And I think that's going to be one of the arguments. So there's that. I think the, you're probably not recognizing the power of people who want things to be fair in this whole equation. But the reason I think that people are clamoring for a, a central bank, even if they didn't vote for it, is the promise of stability. Hey, we're going to manage things. You're not going to have the Great Depression, you're not going to have people jumping off of buildings and Wall street because we're going to make sure that you're protected. Yes, it's fractional reserve banking, but it's FDIC insured. And so that the same desire that makes them want to have a government to protect them from a bully. They want the central bank to be able to print money because they don't understand inflation and they feel like, ah, I'm now protected.
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Robert Breedlove
Yeah, but they're not protected. I mean, yes, the aims of the Federal Reserve are low and stable unemployment and stable prices. Right. Low and predictable inflation. Have either one of those things happened? I mean, you can look at the purchasing power of the dollar since 1913. I think it's down 99%. Does that sound like stable prices to you? That means the prices of everything have gone up a hundredfold in over 100 years. We've had worsening boom and bust business cycle. Each time we have a bust, we have to print exponentially more money than we did the round before, because each time we print money, we inject more liabilities into the system. It's just, it just doesn't work. And Austrian economists like Mises, you can read his book, the Theory of Money and Credit, he has laid out a very strong theoretical foundation for why printing money, counterfeiting money, centrally planning money doesn't work. And I, I don't know any honest intellectual on this planet who has ever sat here and said that it does work. The only thing it does is act as a source of limitless purchasing power extraction for the shareholders of central banks at the expense of everyone forced to use the currency via legal tender laws and other acts of compulsion. So I don't know how you could ever justify that morally, ethically, pragmatically, economically. It just doesn't make any sense to me whatsoever. And I think the corruption of money also leads to the corruption of many other things in the world. Right. When you're printing money and you can steal purchasing power from everyone. Well, then you can use that purchasing power to buy narrative or to buy mainstream media outlets, or to create fake news or to wage wars. It. It is a very insidious power, right? If Lord Acton said power corrupts and absolute power corrupts absolutely, I don't think there's anything closer in the sphere of human affairs to absolute power other than the printing of money, considering it is the thing that everyone works for. And if you are the institution that can create it without performing any work, and you can use it to extract the work energy of other people, well, then you will do everything in your power to deceive them into believing that it is good and necessary for them and their economy. Which is indeed what Keynesian economics does. It's a pseudo scientific paradigm that tells us every time there's a problem in the economy, the government just needs to pull that lever and print more money, baby, and everything's going to be all right this time. Don't worry about it. It'll be fine. And what happens? Well, we get to look recent history. We print 700 billion in 2008. That was a big number back then. We thought that was a very serious amount. That's less than one tenth of what we printed in the post pandemic world. Printed $8 trillion. Okay, give it a few years. We're going to print 10x that. It doesn't stop until the currency hyperinflates into worthlessness. And I don't mean to be the bearer of bad news, but anyone that wants to challenge me on this, open a fucking history book about fiat currency, tell me how all of them end. Either the country gets conquered or the currency hyperinflates. Right? The oldest and most successful fiat currency today, I think, is still the British pound, which has lost over 99% of its value in 320 years. So those countries, UK, US, we're still in power. Fiat currency is still working. But all of those before us have failed, been conquered or hyperinflated. So, you know, how many, how many times do we need to learn this lesson?
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Crypto Enthusiast
A lot.
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Tom Bilyeu
All right, so you've got a magic wand. You, you're holding tight to that magic wand. Trump comes to you and he says, robert Breedlove, with your magic wand, what do we do? We want to make everything better. What do you do? If you were going to do three big things, and I mean, you can do anything, what are the three big things you would do to right the
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Robert Breedlove
ship, promote bitcoin education and help people transition to a Sound money economy, you say. Bitcoin and gold for that matter, I'm not actually partial. People want to stick with gold and that's their thing. Freedom.
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Tom Bilyeu
So not make bitcoin the official currency.
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Robert Breedlove
Well, here's what I don't like about that. Because it's legal tender, tends to be the compulsory use of something. So I don't want to tell people they have to use Bitcoin, but just educate people about, oh, this is how money actually works. We suggest this as the best money. It's the ultimate sound money. However, gold also works if you want to use that. Or I could also have free banking, right? Just let banks issue their currency and go through that whole painful experience of different banks blowing up and people learning their lessons the hard way and let the market sort it out. So, I mean, I'm admittedly radical in my views as an anarcho capitalist. Like, I think we need just the preservation of life, liberty and property. And then the market solves everything else better than any central institution possibly can. And so the big theme of those three things is just minimizing statism, minimizing revenues to the state, therefore shrinking the state and maximizing human, human freedom and the market process. I think that solves the most problems with the least effort.
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Tom Bilyeu
All right, if you abolish taxation, you're saying the government has no sources of revenue or the government has to become a maker.
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Robert Breedlove
Well, so the, again, pre income tax the US Government used to fund itself through tariffs. Right? So it's actually charging taxes on imports. Those are at least imposed on outside countries, and those are countries that want to access domestic markets. I'm not, I still don't think that's a good idea. I think that actually is still destructive to net wealth. You know, people would probably accuse me of being an idealist or utopian in this respect, but I don't think nation state structure really works. I'd like to see a world more of like free private cities. Instead of 200 some odd nation states, we have 20,000 free private cities that can trade with one another with very little friction. You know, if there have to be tariffs to fund that security network, so be it. Maybe they charge a flat tax just on land. Right? They're actually defending land. Ultimately. Maybe the owners of that land need to pay a consensual, not even a tax, a consensual protection fee. So you're paying a percentage to that protection service to provide that protection, that physical protection from foreign invasion. And again, you know, it's, it's the Devil's in the details. Because when you put that power in the hands of one group of people, it's very difficult to prevent them from using that power to extract more resources than the consensual protection fee was agreed to be. And so that is like an ever present risk or threat. And I think that's where something like Bitcoin is very important. Because if a jurisdiction starts to treat people unfairly, let's say they agree to a certain protection fee and then the state says actually we're going to take 2x3x whatever it is, people can vote with their feet very effectively, right? They can leave that jurisdiction with their purchasing power intact, their Bitcoin private keys intact. Even if the government gets nasty and starts seizing their physical assets, well then people still have a much better chance basically of leaving with purchasing power and a digital bearer asset and therefore incentivizing. You're like creating a free market competition dynamic between different jurisdictions. So all of a sudden jurisdictions now that can't print money, they are accountable to their P and L, right? Their revenues are protection service fees and their expenses are providing physical security. If they mistreat their citizens, well, their citizens will leave with their capital. So that will actually decrease their revenue. So you will be incentivized as one of these free private cities to be accountable to the preferences of your customer. You want to keep them. And you already see a little bit again, like, you know, a place like UAE I think is kind of competing basically for global talent and capital by offering really low taxation. So that's more of an ideal world that I would like to see
- [14:50]
Tom Bilyeu
that certainly that was not the answer I was expecting. Now do you think that there's an element of chaos that's going to be born out of that? Because as you're describing it, I'm like running through my head, I'm like, okay, gangs are definitely going to rise up in some of these cities. They're going to coerce you into staying. I know they're not supposed to, but of course they will. People try to leave, they'll put capital controls on it. Like they'll find a way, even if it's just a wrench attack. But then people will escape as much as they can. It just feels like, whoa, I get why in my mind I get why people try to consolidate into larger groups of people. Where there's a stable non corrupt government feels like the human tendency. But play that scenario out. Where do you think the what would be the points of friction you would worry about?
- [15:38]
Robert Breedlove
Well, I mean, so you're worried that gangs will rise up? I mean that's what governments are, frankly. Government is the biggest gang in the room, right? They have out competed all the other gangs and deemed themselves to be the legal authority of the land.
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Tom Bilyeu
More with Robert Breedlove after this.
- [15:59]
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- [16:29]
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Tom Bilyeu
Thanks for sticking around. Let's get right back into the action.
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Robert Breedlove
Government is the biggest gang in the room, right? They have out competed all the other gangs and deemed themselves to be the legal authority of the land. So I don't think that the absence of the biggest, most centralized gang is actually going to create. Yeah, you're gonna have. When we say gang, it's like, yeah, people organize themselves into groups and those groups compete for their self interest. You know, what we associate with gangs is that they tend to engage in physical coercion and crime. Right. So in a world where people do have digital bearer assets, I think it is much more difficult, much less profitable, let's say to engage, to engage in traditional gang activity like trying to physically coerce people and take their stuff. Much easier to do that in a world where, where people are using physical cash or physical gold. So yeah, would it be more chaotic? It's like there's this example of wildfires in California which, you know, there's like this kind of the same topography that's in California also is the same and down in Mexico. And so there was a lot of government intervention and this is like Baja California area where they were trying to manage forest fires basically. Right. That they would burn, they would try to burn. Every time one of these fires would start, they would extinguish the fire and try to basically dampen it. Whereas down in Mexico, they would just let these fires burn. Basically, right. As more anarchy, if you will, they just let the fires burn. Well, what happened is that when you prevented those fires, micro fires from burning, underbrush accumulated until a big fire did hit, and then it burned so fucking hot that it burns away the topsoil and does a lot more damage. Basically, it becomes this giant conflagration. Whereas down in, you know, Mexico is just this sequence of smaller fires. There's more of a natural process. And so it's that pressure release kind of mechanism where when we try to centrally plan something, sometimes we create the unforeseen consequence of creating something much bigger and worse. You know, we could say, oh, we've had this long period of peace in the 20th century and this nuclear stalemate and everything's been great. But what is that setting us up for? You know, we don't really know. Is it better to just have, you know, disputes resolved at a smaller scale more frequently, rather than having disputes delayed and resolved with a very low frequency, but with a lot more catastrophe? You know, an author like Taleb would say delayed volatility is exacerbated volatility. So we have to be careful when we're trying to manage systems and dampen volatility, because ultimately volatility is a reconciliation to reality. And if we stop that reconciliation to reality and engage in it much less frequently, then the ultimate reconciliation can be a lot more painful. So I think the argument for decentralization is just you want more, you want less, more power, more widely distributed, basically, so that you get whatever pressure needs to be released. It's released in smaller, more frequent pockets and places rather than being compressed for many decades and blowing up in World War III or whatever the catastrophe might be.
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Tom Bilyeu
Okay. Absolutely fascinating. Few answers have ever made me want to write a story set inside of the world I imagined than that one. I utterly, utterly fascinating idea. Now I'm going to take away the magic wand right now. You've got Trump coming into power. He it looks like he's going to have Senate, probably House, Judiciary, and the Supreme Court's pretty much on his side. What do you want to see him do in order to take steps to alleviate some of the wealth inequality that we have, start moving towards stronger personal freedoms, private property. You mentioned tariffs earlier. He didn't seem to love the idea. What, what should he do in the real world, starting when he takes office?
- [21:25]
Robert Breedlove
Yeah, I mean, he's flirted with the idea of Abolishing the irs, that's a great first start, right? You abolish the irs, you abolish a lot of wasted human energy navigating. I think the IRS tax code is somewhere between when I have a master's degree in taxation, when we studied it in college, I want to say it was like 9 million words long. Good Lord. It is literally impossible to navigate. Also impossible to comply with. You comply with one law, you're out of compliance with another law. It's like it's designed to just be this trap, basically. And there's so much human cognitive energy pouring into gaming this thing, right? Like this whole army of tax accountants and tax attorneys, like trying to find loopholes and exploit loopholes and all of that's non productive energy, right? If we had a simplified or preferably a non existent tax code, these guys could go be engineers and build something that people actually use rather than just navigating a purposelessly complicated set of rules that have just emerged because of, you know, I think it's the fiat currency complex, right? It's a lot of people having these competing interests inside of the rule structure trying to benefit themselves. When you looked at these things in the tax code, it's like, okay, here was the original law, then it was modified this way. Well, then it was modified that way because someone didn't like, you know, this lobby group, they didn't like what they got, so they lobbied for this counter proposal. And then on it goes and you read this law and there's all these exceptions and back and forth and rules. And by the time you're doing this, you know, we have things like the, the alternative minimum tax, for instance. I don't know if you've heard of this. It is this weird other like, parallel calculation you have to do on yourself in your tax world. It's like if you meet certain criteria, then all of a sudden you have this other giant tax liability that just pops out of nowhere. And so anyways, I won't go into it because I don't, frankly, I haven't looked at it in a decade, but it was just a nightmare to learn about in college. It didn't make any sense. It's totally arbitrary. It doesn't map onto anything in the real world, right? It's like we're just putting ourselves in this cognitive trap. So to abolish all of that and liberate all that cognitive human labor and reduce all the associated violation of private property, I think that would be a huge win. So if Trump's going to make Good on that promise. That would be absolutely massive. I don't know what he said about the central bank, if anything. I mean, he has said that we're going to start stockpiling a national reserve of bitcoin. He wants the United States to be a leader in what he says. Crypto and bitcoin mining. I think, you know, he's still suffering from the conflation between crypto and bitcoin. Only bitcoin mining would be of any geopolitical significance so far as I can tell. That would also be a huge win just to get, you know, it's contributing to the monetization of bitcoin. Obviously that would put the United States in a better position economically as against other countries. But I think also by contributing to the monetization or the acceleration of Bitcoin's monetization, this accelerates the d monetization of the state. Right, or the defunding of the state by removing in the long run money printing as a revenue option. And then ultimately you're, you know, enriching this asset that's hyper portable, hyper concealable and lets people vote with their feet very effectively. So all of that would be good for our move away from centralized statism towards a more decentralized world. What other promises has he made? I, you know, I think just, you know, the general theme of deregulation that tends to come with Republican administrations. That's a good thing, right?
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Tom Bilyeu
Do you think Elon has a shot at actually doing something meaningful there?
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Robert Breedlove
He's flirting with this idea of the Government Efficiency Agency.
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Tom Bilyeu
Oh, cutting Department of Governmental efficiency.
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Robert Breedlove
Yes, cutting 2 to 3 trillion of government spending. I mean like all the government spending, by the way, euphemism for stolen purchasing power. Right. So you're reducing the stealing of purchasing power. You're increasing the integrity of taxpayer private property. Again, that's a step in the right direction. So yeah, I don't know. Like I, you know, I don't trust these guys any further than I can throw them. I mean maybe I can throw them a little bit far, but I don't trust them.
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Tom Bilyeu
I'll be able to throw some of these guys.
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Robert Breedlove
I We'll see, we'll see what plays out. I, I, My general philosophy would be never trust a politician. Don't think that a politician's coming to save you. There's very few instances in human history where politicians have, have stuck to their word. Maybe now would be a good time to bring up Mr. George Washington though is, I don't know if I'd classify Him as a politician necessarily, but he was a president. He was a president, but he was different, right? This is one of the founding fathers of the United States, the leader of the American army that rebelled against the British Empire. I think their decisive victory was this. I think it's 1781, the battle at Yorktown, if I recall correctly, where Washington defeated General Cornwallis of the British Empire. And you know, we had been fighting for these principles of establishing the United States as a constitutional republic, right? It was largely a tax rebellion against the British Empire, also a rebellion against the bank of England, which was the central bank of England. People wanted to be free, right? These were highly educated men. These were very strong Christian men. Mostly the, the seal on Benjamin Franklin's house, I think said rebellion to tyranny is obedience to God. Like, these were guys that were very, very serious about expanding human freedom. And the thing I like about George Washington is that he led and won the ragtag group of rebels, American soldiers, against the British Empire. Now, we had help too, but we won, right? He earned the victory, right? He had skin in the game. He was a leader of men. He went to war and he won years and years and years.
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Tom Bilyeu
An incredible story.
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Robert Breedlove
And at the end when he, he achieved victory, they wanted to make this man king, right? We fought to become a constitutional republic, but at the end of that it was. They put the keys of power into the hand of this man and all he had to do was accept and close his hand. And frankly, he earned it, right? He led the army, he conquered the new territory. But the old way of kings, well, he is the new king. He would have been the new, you know, the king of the American Empire and his lineage and his descendants would have become the next kings to who we all paid tribute and homage and forevermore. And what did he do? He channeled this like, it's really like a staggering amount of philosopher king energy. You could call it Christ consciousness, right? He refused that temptation to near absolute power. He put the interest of the human family above the interest of his own family lineage in a way. And he said, absolutely not. I will not be your king. I will be your president and I will be your two term president and I will refuse the third term. And we will be the constitutional republic that we set out to be. So he put the interest of human freedom above his own direct, more selfish genetic self interest, let's say. And that is just a staggering accomplishment as far as I can tell. Like, we often talk about Marcus Aurelius as a very significant philosopher king and he was. But I don't think we give enough credit to George Washington. And I hope that, you know, we can cultivate more male leaders like that that actually take the larger perspective on what this is all about. Like, we're trying to advance human freedom in its totality, not just trying to advance me and my freedom here and now and for my future descendants, right? That's the, that's an old game and it's a bloody game and it's nasty and it, it's, you know, it gave us the life that was brutish and short that someone said. And by channeling this, you know, Christian sort of value framework, this philosopher king energy, if you will, by doing what's right in the greater scope of humanity. You know, this was a man that was integral to his word in a way that few people possibly can be. But he sets a very powerful example for all future leaders. And so I hope we can get back to that. You know, it's.
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Tom Bilyeu
How do we get back to that?
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Robert Breedlove
Well, so he's a trustworthy man, right? Because he did what he said he would do even in the face of great temptation. And the words trust and truth share an etymological origin. They're both related to a word that basically means steadfast, true, solid, right? Something that's dependable, reliable, has integrity, right? Whether, if it's the truth, it's a representation of reality that is high fidelity, right? It's an accurate portrayal of reality. And if someone's trustworthy, that means they do what they say they will do, right? He is a man of his word. He is integral. His words and his action are integrated together. Bitcoin is a system of absolute truth, right? If money is a language of human action or a language of power, it's a language in which lies cannot be told. It's something that incentivizes people to interact cooperatively rather than coercively because, you know, it's hard to steal, impossible to inflate all these things we talked about. And, you know, there's a saying that no man is better than his incentives. So I guess as an open question to how much does that honest incentive system induce honest, integral moral development in men? I'm not sure, but I hope that Bitcoin enables the process of individuation in a way that helps people become more like the. The spirit that the founding Fathers were tapped into. Like taking seriously the collective human enterprise, not any specific nation state, not any specific lineage, but creating something that's sustainable for all of us across time, right? That, that ideal of equality in the eyes of the law, the ideal of innocent until proven guilty, freedom of speech, right to bear arms, all these things that give us a symmetry of power such that there's no asymmetries where one group is exploiting another group. Like this is the ideal. This is the principle. And so my hope is that bitcoin can enable the cultivation of more men like Mr. Washington.
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Tom Bilyeu
George, the could have been bitcoiner.
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Robert Breedlove
Yeah, yeah, I think so.
- [33:10]
Tom Bilyeu
All right, we've got some speed round stuff from our fearless producer over here. Drew, what do you have for us?
- [33:19]
Drew (Producer)
Yes, I have a couple clips and a couple tweets. Just want to get your opinion on it. Quick take minute, 30 seconds, nothing crazy.
- [33:26]
Tom Bilyeu
Hang tight, we'll be back in just a moment. All right, thanks for sticking with us. Let's jump right back in.
- [33:35]
Guest Commentator 1
Money is just a number in a database. That's what it is. And it's primarily an information mechanism for labor allocation. My opinion of Bitcoin is that, I mean, I think bitcoin is probably a good thing. I think it's primarily going to be a means of doing illegal transactions. But that's not necessarily entirely bad. Something should be, maybe shouldn't be illegal. It will be useful for legal and illegal transactions. Otherwise it would have no value as a use of, for legal transactions. Because you have to have a legal to illegal bridge. I don't own any bitcoin.
- [34:08]
Drew (Producer)
All right, is that a hot take or a not take?
- [34:12]
Robert Breedlove
I think it's a useful definition of money that it is a database of labor. Right? It's. You could think about it as tokenized human labor as we described earlier. Someone goes to work, they provide labor, they receive money in return. That money is redeemable for labor from others later. Right. So to call money a. What did he call it? A labor information system? Is that what he. The term he used? Or a database for labor? It's basically a spreadsheet tracking who has provided what favors and who has rendered what favors and who is due what favors. Basically. That's a useful definition. What I think he misses though is that Bitcoin is the only error proof database. It's the only database that can't be manipulated. Right? So when a central bank owns that database and all of a sudden they award new tokens, you know, new units of tokenized human labor energy to themselves or whoever is nearest the currency spigot, they are debasing the units of tokenized labor energy of everyone else. So they are introducing an error or entropy to that database, this corrupts the signal that money facilitates, which is the price signal. It also disincentivizes savers from saving and incentivizes savers to become debtors, right, to accumulate debt, as we described earlier. So yeah, you could call money a database of tracking labor. However, the ideal database would be one that is error proof, one that cannot be manipulated or changed or willy nilly by the whim of any bureaucrat. You want something that can only be changed by those who are actually rendering useful work to other people. And that's what Bitcoin is.
- [36:05]
Tom Bilyeu
Very interesting. So I'll say that was a weird take. There's two things that I want to get to and it's weird because he's obviously, this is so old, so I think he's sort of just encountering it. But there's two things. One, once you understand that money's a technology that allows people to capture the energetic value of their labor to be used at a future date, then all of a sudden it's like, whoa, that's really incredible that we came up with a way, whether it was shells back in the old day, grain, salt, whatever, that you were able to say, I went and did this thing and I have a reward for that that I don't have to spend now, I could spend later. It's equal in the importance to giving somebody else food so they can store fat in your behalf.
- [36:52]
Robert Breedlove
Equal the language, I would say huge. Yeah.
- [36:55]
Tom Bilyeu
The other thing that I want to focus on is this idea that I think is incredibly important now as you see the Chinese government ratchet up, what they're doing with the social credit score is you, you need to allow things to have a potential illegal use. And if you try to get illegality down to zero, you have to go into the pre cog business where now all of a sudden you are trying so hard to eliminate every possible way that somebody could do something wrong that you do end up with a 1984 thought crime stuff. And so he said it a little bit awkwardly. But even if money, Bitcoin, whatever is used for illegal transactions, if it has a real utility, you should let that in. It's just like freedom of speech. Of course people are going to use speech to say hateful, horrible things. But that doesn't mean that you eradicate speech.
- [37:45]
Robert Breedlove
Yeah, or just like US Dollars, right? US dollars are used for all kinds of illegal activities. Doesn't mean they, they turn off US dollars. Or an invention as simple as the knife, right? Where people use knives to prepare dinner every night and Other people use knives to kill people. So we don't make knives illegal. People have used cars to run people over. So you're not going to make cars illegal. I guess the tool is amoral, right? Money is a tool. You can't impute any morality. The tool like, oh, someone used this for an illegal purpose. We need to illegalize the tool. That is fucking nonsense. Makes no sense whatsoever. Reach.
- [38:20]
Drew (Producer)
All right, number two, a hot take from Andrew Take.
- [38:23]
Guest Commentator 1
What do you think about cryptocurrency? Are you invested?
- [38:26]
Crypto Enthusiast
Yeah. So I'm, I'm a proponent of crypto. I do use crypto. Bitcoin, eth. The big ones.
- [38:31]
Guest Commentator 2
Okay.
- [38:31]
Crypto Enthusiast
I think that chasing crypto pumps is now over.
- [38:34]
Guest Commentator 2
We're not.
- [38:35]
Crypto Enthusiast
The bull runs over. The stupid money is gone. I see. They launch these coins and then they start a telegram community. Everyone's like, yeah, we're all in this together. No, you're not. You're not in this together. If you buy crypto at a dollar and then you sell it at $10, someone bought it off you at $10, they start these stupid communities. So all of you sit there and don't dump so that the developer could dump. Yeah, you're all dummies. You're all dummies.
- [38:57]
Robert Breedlove
That's a pretty good description of crypto, not bitcoin. Yeah, it's. In general, crypto could be described favorably as gambling devices and unfavorably as pump and dump schemes, as he's describing. Right. You create a token, you create a community, some kind of value proposition, a website, a white paper, whatever. You create this hype, you know, it's going to be the next decentralized world computer whatever, whatever. And you get people to buy this hype, this innovation theater, as I call it, the price goes up.
- [39:32]
Guest Commentator 2
That's good.
- [39:32]
Robert Breedlove
You're the original issuer of the token, and then you just dump It After It's 10X Or Whatever your, your multiple is. And so, yeah, that's basically what crypto is. They're pump and dump schemes. The, the, you know, people are basically being used as exit liquidity. So people are getting rug pulled all the time. And that's why it's such a disgusting space. Overall, what's unique about bitcoin, once you understand like the properties of good money, like we've talked about before, and bitcoin is basically this ultimate sound money. You know, call it digital sound money. It's, it's an ideal asset. You have that same type of dynamic, but there's no better asset to dump it into Actually, so, you know, when it 10 X's. Well, what are you going to do if you're going to sell your bitcoin? For what? Like for Dot? Well, you don't want to sell over dollars because dollars get debased. You don't want to sell over gold because gold has, you know, more season, has a more higher inflation rate. All these things that make it inferior to Bitcoin. So bitcoin, you're left with just this perpetual pump scheme. Basically, it just goes up because it is the most superior monetary technology we've ever had. So it's, you know. Yeah, crypto is pump and dump, and then bitcoin is crypto minus the dump. There's just no better asset to dump it into. So therefore, it just pumps.
- [41:01]
Tom Bilyeu
For me, I think people need to understand that all capital markets are gambling full stop. And there's something about the way that it gets crystallized and manipulated in crypto that's extra creepy. But if you fail to understand that the stock market is a big gambling pool that attracts gamblers, you will be very confused. Now, that doesn't mean that I don't like them. It doesn't mean that I don't think that there's a huge purpose to the capital markets.
- [41:30]
Guest Commentator 1
There are.
- [41:30]
Tom Bilyeu
But you. A hedge fund is literally betting against things for things. It's going to go up, it's going to go down like it's gambling.
- [41:39]
Robert Breedlove
So, yeah, Mises would say all human action is speculative because we can never know with certainty that our actions will create our intended outcomes ever. Right. So it's all speculative. It's all gambling. Right? It's all gambling. You don't. You don't know. Anything that you're trying to do is going to work out in your favor. So we're dealing with probabilities in every step of our lives. Yeah.
- [42:06]
Drew (Producer)
All right. This one you're familiar with. You've seen this one before.
- [42:10]
Guest Commentator 2
The US Government can't go bankrupt because we can print our own money.
- [42:15]
Robert Breedlove
It obviously begs the question, why exactly
- [42:17]
Tom Bilyeu
are we borrowing in a currency that we print ourselves? I'm waiting for someone to stand up
- [42:22]
Commercial Narrator
and say, why do we borrow our
- [42:24]
Tom Bilyeu
own currency in the first place?
- [42:28]
Commercial Narrator
Like you said, they print the dollar. So why does the government even borrow?
- [42:32]
Robert Breedlove
Well,
- [42:38]
Guest Commentator 2
I mean, again, some of this stuff gets. Some of the language that the. Mm. Some of the language and concepts are just confusing. I mean, the government definitely prints money and it definitely lends that money, which is why the government definitely prints money and then it lends that money by Selling bonds. Is that what they do? Yeah, they sell bonds. Yeah, they sell bonds. Right, because they sell bonds and people buy the bonds and lend them the money. Yeah. So a lot of times, at least to my year with mmt, the language and the concepts can be kind of unnecessarily confusing. But there is no question that the government prints money and then it uses that money to. So, yeah, I guess I'm just. I can't really talk. I don't. I don't get it. I don't know what they're talking about, like. Because it's like, Jesus. The government clearly prints money. It does it all the time and it clearly borrows. Otherwise we wouldn't be having this debt and deficit conversation. So I don't think there's anything confusing there, bro.
- [43:51]
Tom Bilyeu
He lied on his resume. Like, that is crazy. That. That clip is crazy.
- [43:58]
Robert Breedlove
It's crazy.
- [43:59]
Tom Bilyeu
It. I've seen it titled as the scariest clip on the Internet. That is by far the scariest clip on the Internet. That guy was actually advising President Biden on his economic policy. That's insane. I can't. I can't fathom.
- [44:14]
Robert Breedlove
I think he has a music degree or something. Like, he doesn't even have a degree in economics, clearly. I would say, in short, that's your brain on fiat, basically. Like, it just makes no sense whatsoever. If I were to try and demystify what he's saying us.
- [44:32]
Tom Bilyeu
He doesn't know what he's saying.
- [44:34]
Robert Breedlove
Well, I think. What.
- [44:35]
Tom Bilyeu
I think if you could answer her question.
- [44:37]
Robert Breedlove
Yeah.
- [44:37]
Tom Bilyeu
What he wishes he understood.
- [44:40]
Robert Breedlove
Here's what's going on, and I'll try to say it in as simple terms as possible. US Government issues shitcoin called US Treasury. It can issue as many of these shitcoins as it wants. Right. This is debt. Creates it out of thin air. Uses Treasuries to borrow dollars from the Fed, the central bank of the United States that can also issue US Dollar shitcoin out of thin air ad infinitum. Right? So US Government issues US T shitcoin as many as they want to borrow as many USD shitcoin from the Federal Reserve as they want. The dollar. That's how dollars come into the system. They are born at interest. They are borrowed into existence. There's an interest rate paid to the private owners or of the shareholders of the Federal Reserve, whose names we don't know, but we have some ideas about it. Right. In general, that's the circle jerk that's going on here. And the cost of that is externalized. Onto everyone using USD as a savings vehicle. They're getting their purchasing power debased with each new dollar that is counterfeited into existence via this mechanism. And this is what, this is the circle jerk that bitcoin fixes.
- [46:01]
Tom Bilyeu
Yeah. I still can't believe that clip is real. It looks like parody, but it's not.
- [46:08]
Robert Breedlove
Clown world. Jesus. Clown world.
- [46:10]
Drew (Producer)
All right, last one after bitcoin just hit an all time high. Somebody was right. But I know this is not financial advice. Disclaimer Disclaimer Disclaimer. How bananas do you think it's going to go?
- [46:21]
Robert Breedlove
Yeah, so this is a tweet I put out on March 6, 2024. This was right around the bitcoin halving, which I believe was May 2024 this year. Someone could check me on that, but I think it was May. And historically, bitcoin puts in a new all time high price roughly approximately 18 months after the having. So I put this tweet out, you know, I hope you guys like bananas, because over the next 12 to 18 months, Bitcoin is going to go bananas. And I retweeted it today or yesterday, sometime recently here in November because, well, bitcoin's at a new all time high price. But I think we're just getting started. I think we're going to put in a really face melting number by the end of 2025 and you're going to. I'm already getting bombarded by the way. It's so weird to be in bitcoin because you go through this entire cycle of drama where bitcoin price goes up. People are all texting me, fomoing how do I buy? And then as soon as bitcoin price goes down, they're like, oh my God, it's going to zero, right? Like it's all over. Like, should I sell it? And then bitcoin goes into sidebound trading for three years, you know, between having cycles before it goes into that giant blow off top and everyone's quiet. Everyone thinks, oh, bitcoin's still a thing. Like no one talks to me. It's radio silence. You know, you're still into that. What's wrong with you? I was like, I've seen this. This is the third cycle I guess I'm going into now. And sure enough, you know, Trump got elected. I'm getting blown up with people asking me questions about it. And so, you know, those who live by the crystal ball are bound to eat glass. I am not making this prediction for any reason other than entertainment purposes. This is not financial advice. This was just my read on Bitcoin's prior price movements as it relates to prior range bound trading and mapped over its having cycles. But I, I put this prediction out I think three years ago at this point that I thought it would trade north of $300,000 by its next market cycle peak. That was my prediction three years ago. So I'll just stick to that one for entertainment purposes only.
- [48:38]
Tom Bilyeu
And what time duration is that before
- [48:40]
Robert Breedlove
the end of 2025. Wow.
- [48:42]
Drew (Producer)
300K. Before the end of 2025.
- [48:44]
Robert Breedlove
Above 300K.
- [48:46]
Drew (Producer)
Nice.
- [48:47]
Robert Breedlove
Wow.
- [48:48]
Tom Bilyeu
Well if it hits that number my friend, I'll take you out for a very nice thing.
- [48:54]
Robert Breedlove
And that would put it around a little bit less than half of gold's market cap. Gold's market cap's around 15 and a half trillion. I think that would put Bitcoin probably around 5 or 6 trillion. Market cap again, someone could check me on that, but I think that's about right. Five or six trillion seems like a reasonable number for this cycle. And then next cycle I would expect it to eclipse gold's market cap and, and go on up from there.
- [49:18]
Tom Bilyeu
Be fascinating to watch. And speaking of which, where can people follow along with you to see what you're up to?
- [49:23]
Robert Breedlove
Yeah, thank you for having me. Always love talking to you. A lot of fun. I'm whatismoneypodcast.com and I'm on Twitter reedlove22.
- [49:31]
Tom Bilyeu
I love it. All right everybody, speaking of other things that I love, if you haven't already, be sure to subscribe. And until next time, my friends, be legendary. Take care. Peace.