Michael Saylor: Bitcoin, Inflation, and the Future of Money | Lex Fridman Podcast #276

remember george washington you know how

he died well-meaning physicians bled him

to death and this was the most important

patient

in the country

maybe in the history of the country

and it's and we bled him to death trying

to help him

so when you're actually inflating the

money supply at seven percent but you're

calling it two percent because you want

to help the economy

you're literally bleeding

the the free market to death

but the sad fact is george washington

went along with it

because he thought that they were going

to do him good

and

the majority of of uh the society most

companies

most most conventional thinkers

you know

the working class

they go along with this because they

think that someone has their best

interest in mind and the people that are

bleeding them to death

believe

they they believe that prescription

because their mental models are just so

defective

the following is a conversation with

michael saylor one of the most prominent

and brilliant bitcoin proponents in the

world

he is the ceo of microstrategy

founder of sailor academy graduate of

mit

and michael is one of the most

fascinating and rigorous thinkers i've

ever gotten a chance to explore ideas

with he can effortlessly zoom out to the

big perspectives of human civilization

in human history and zoom back in to the

technical details of blockchains markets

governments and financial systems

this is the lex friedman podcast to

support it please check out our sponsors

in the description and now dear friends

here's michael

saylor

let's start with a big question of truth

and wisdom

when advanced humans or aliens or ai

systems let's say five to ten centuries

from now look back at earth

on this early 21st century

how much do you think they would say we

understood about

money and economics or even about

engineering science life death meaning

intelligence consciousness all the big

interesting questions

i think they would uh

probably give us a

b minus on engineering on all the

engineering things the hard sciences the

passing grade

like we're doing okay we're working our

way through rockets and jets and

electric cars and uh

electricity transport systems and

nuclear power and space flight

and the like

and you know if you if you look at the

walls

that uh grace the great court at mit

it's full of all the great thinkers and

and they're all pretty admirable you

know if you could be with newton or

gauss or

madame curie or

einstein

you know you would respect them

i would say they'd give us like a

a d minus on economics

like

you know an f plus or a d minus you you

have an optimistic vision first of all

optimistic vision of engineering

because everybody you've listed

not everybody most people you've listed

is just over the past couple of

centuries

and maybe it stretches a little farther

back but mostly

all the cool stuff we've done in

engineering is the past couple centuries

i mean archimedes

you know had his virtues

you know i studied the history of

science at mit and i also studied

aerospace engineering and and so i

clearly have a bias in favor of science

and if i look at the past 10 000 years

and i consider

all of the philosophy and the politics

and their impact on the human condition

i think it's a wash for every politician

that came up with a good idea another

politician came up with a bad idea yeah

right and it's not clear to me that you

know most of the political and

philosophical you know

contributions to the to the human race

and the human conditions have advanced

so much i mean we're still taking

you know taking guidance and admiring

aristotle and plato and seneca and the

and on the other hand

you know if you think about uh what has

made the human condition better

fire

water harnessing of wind energy like try

to row across an ocean

right not easy and for people who are

just listening or watching there's a

beautiful sexy ship from

16

century this is a 19th century handmade

model of a 17th century

sailing ship which is of the type that

the dutch east india's company used to

sail the world and trade so that was

made you know the original was made

sometime in the 1600s and then this

model is made in the 19th

century by individuals both the model

and the ship itself is engineering at

its best and just imagine just like

raucous flying out to space how much

hope this filled people with exploring

the unknown going into the mystery

uh

both the entrepreneurs and the business

people and the engineers and just humans

what's out there what's out there to be

discovered yeah the metaphor of human

beings leaving shore or sailing across

the horizon risking their lives in

pursuit of a better life is an

incredibly powerful one

in

1900 i suppose the average life

expectancy is 50.

during the revolutionary war you know

while our founding fathers were fighting

to establish you know life liberty

pursuit of happiness the constitution

average life expectancy of it's like 32.

some between 32 and 36.

so all the sound in the fury doesn't

make you live past 32 but what does

right antibiotics

conquest of infectious diseases if we

understand the science of

of infectious disease they're you know

sterilizing

a knife

and harnessing antibiotics gets you from

50 to 70 and that happened fast right

that happens from 1900 to 1950 or

something like that

and i i think if you look

look at the human condition

you ever get on one of those rowing

machines where they actually keep track

of your watts output when you're on that

yeah you know it's like 200 is a lot

okay 200

is a lot so a kilowatt hour

is like all the energy that a human a

trained athlete can deliver in

a day

and probably not one percent of the

people in the in the world could deliver

a kilowatt hour in a day and the

commercial value of a kilowatt hour the

retail value is 11 cents today and uh

the wholesale value is two cents

so you have to look at the contribution

of politicians and philosophers and

economists to the human condition

and and it's it's like at best to wash

one way or the other and then if you

look at the contribution of john d

rockefeller

when he delivered you a barrel of oil

yeah and then you know the energy and in

oil liquid energy or the contribution of

tesla

you know as we deliver electricity

and what's the impact of the human

condition if i have

electric power

if i have chemical power if i have wind

energy

if i if i can actually set up a

reservoir create a dam spin a turbine

and generate energy from a hydraulic

source

that's extraordinary

right and and so our ability to cross

the ocean

our ability to grow food our ability to

live

it's it's technology that gets the human

race from

a brutal life where life expectancy is

30

to

a world where life expectancy is 80.

you gave a d minus the economist so are

they two like the politicians awash

in terms of there's good ideas and bad

ideas and and that tiny delta between

good and

and bad is how you squeak past the f

plus onto the d minus territory

i think most economic ideas are bad

ideas like most

you know like um

take us back to mit and you want to

solve uh a fluid dynamics problem like

like design the shape of the whole of

that ship

or you want to design an airfoil a wing

or if you want to design

an engine or a

a nozzle and a rocket ship

you wouldn't do it with simple

arithmetic

you wouldn't do it with a scalar there's

not a single number right is vector it's

vector math you know computational fluid

dynamics is n dimensional

higher level math you know complicated

stuff

so when when an economist says the

inflation rate is two percent that's a

scalar and when an economist says

it's not a problem to print more money

because the velocity of the money is

very low the monetary velocity is low

that's another scalar

okay so

the truth of the matter is

inflation is not a scalar inflation is

an in-dimensional vector

money velocity is not a scalar

um

develo saying what's the velocity of

money oh oh it's slow or it's fast

it ignores the question of

what medium is the money moving through

in the same way that you know

what's the speed of sound

okay well what is sound right

sound you know sound is uh is a

compression wave it's energy uh moving

through a medium but the speed is

different

so for example the speed of sound

through air is different than the speed

of sound through water

and and a sound moves faster through

water it moves faster through a solid

and it moves faster to a stiffer solid

so there isn't one

what is the fundamental problem with the

way economists reduce the world down to

a model is it too simple

or is it just even the first principles

of constructing the model is wrong i

think that uh the fundamental problem is

if you see the world as a scalar you

simply pick

the one number which is

which supports whatever you want to do

and you ignore

the universe of other

consequences from your behavior

in general i don't know if you've heard

of

like eric watson has been talking about

this with gage theory so different

different kinds of approaches

from the physics world from the

mathematical world to

extend past this

scalar view of economics so gauge theory

is one way that comes from physics

do you find that

a way of exploring economics interesting

so outside of cryptocurrency outside of

the actual technologies and so on just

analysis of how economics works do you

find that interesting

yeah i i think that if we're going to

want to really make any scientific

progress in economics we have to apply

much

much more computationally intensive and

richer forms of mathematics

so simulation perhaps or

yeah you know when i was at mit i

studied system dynamics

you know they taught it at the sloan

school it was developed by jay forrester

who

who who

was an extraordinary computer scientist

when we've created models

economic behavior they were all

multi-dimensional non-linear models so

if you want to describe how

anything works in the real world you

have to start with the concept of

feedback

if i double the price of something

demand will fall and attempts to

to create supply will increase and there

will be a delay

before the capacity increases there'll

be an instant demand

change and there'll be rippling effects

throughout every other segment of the

economy downstream and upstream of such

thing

so it's kind of common sense

but most economics most classical

economics it's always

you know taught with linear models

you know fairly simplistic linear models

and oftentimes even i'm really shocked

today

that the entire

mainstream dialogue of economics has

been captured by

scalar arithmetic

for example

if if you read

you know read any article in new york

times or the wall street journal right

they just refer to there's an inflation

number or the the cpi or

the inflation rate is x

and if you look at all the historic

studies

of the impact of inflation

generally they're all based upon

the idea that inflation equals cpi and

then they try to extrapolate from that

and you just get nowhere with it

so

at the very least we should be

considering inflation and other

economics concept as a non-linear

dynamical system so non-linearity and

also just embracing the full complexity

of just how the variables interact maybe

through simulation maybe some have some

interesting models around that wouldn't

it be refreshing if somebody for once

published a table of the change in price

of every product every service and every

asset in every place

over time

you said table some of that also is the

task of visualization

how to extract from this complex set of

numbers

patterns that

uh somehow indicate something

fundamental about what's happening so

like each summarization of data is still

important perhaps summarization not down

to a single scalar value but looking at

that whole sea of numbers you have to

find

patterns like what is inflation in a

particular sector what is maybe uh

change over time maybe different

geographical regions

things of that nature i think that's

kind of i don't know even what that task

is uh you know that's what you could

look at machine learning you can look at

ai with that perspective which is like

how do you represent

what's happening efficiently

as efficiently as possible that's never

going to be a single number but it might

be a compressed model that captures

something

something beautiful something

fundamental about what's happening

it's an opportunity

for sure

right um

if we take um for example during the

pandemic

the

the response of the political apparatus

was to lower interest rates to zero

and to start to

start buying assets in essence printing

money

and the defense was there's no inflation

yeah

but of course you had one part of the

economy where it was locked down so it

was illegal to buy anything

but you couldn't you know it was either

illegal or it was impractical

so it would be impossible for demand to

manifest so of course there is no

inflation

on the other hand

there was instantaneous immediate

inflation in another part of the economy

for example um

you lowered the interest rates uh to

zero one point we saw the uh the swap

rate on the 30-year note go to 72 basis

points

okay that means that the value of a long

dated bond immediately inflates so the

bond market had hyper inflation within

minutes

of these

financial decisions the asset market had

hyperinflation

we had

what you call a case shape recovery what

we affectionately call a shake k shape

recovery main street shutdown

wall street recovered all within six

weeks

the inflation was in the assets

like in the stocks in the bonds uh

you know if you look today you see that

a

typical house according to case-shiller

index today is up 19.2 percent

year-over-year

if you're a first-time home buyer the

inflation rate is 19 percent

uh the formal cpi announced a 7.9

percent

you can pretty much

create any inflation rate you want by

constructing a market basket a weighted

basket of products or services or assets

that yield you the answer

i think that

you know the fundamental failing of

economist is is first of all

they don't really have a term for asset

right what's an asset what's asset

hyperinflation you mentioned bond market

swap rate and asset is where the all

majority of the hyperinflation happened

what's inflation what's hyperinflation

what's an asset what's an asset market

i'm going to ask so many dumb questions

in the conventional economic world you

would you would treat inflation as uh

the rate of increase in price of a

market basket of consumer products

defined by a government agency

so they have a like traditional things

that a regular consumer would be buying

the government selects like toilet paper

food

toaster

refrigerator electronics all that kind

of stuff and it's like a representative

a basket of goods

that lead to a content existence on this

earth for a regular consumer they define

a synthetic metric right i mean i i'm

going to say you should have a thousand

square foot apartment and you should

have

a used car and you should eat you know

three hamburgers a week

now ten years go by and the apartment

costs more

i could adjust the market basket

by a you know they call them hedonic

adjustments i could decide that it used

to be in 1970 to a thousand square feet

but in the year 2020 you only need 700

square feet because we've many

miniaturized televisions

and we've got more efficient electric

appliances and because things have

collapsed into the iphone you just don't

need as much space

so now i you know it may be that the

apartment costs 50 percent more but

after the hedonic adjustment there is no

inflation because i just downgraded the

expectation of what a normal person

should have so the synthetic nature of

the metric allows for manipulation

by people in power

pretty much

i guess my criticism of economist is

rather than embracing inflation

based upon its fundamental idea which is

the rate at which the price of things go

up

right

they've been captured

by a

mainstream conventional thinking to

immediately equate inflation to

the government issued cpi or

government-issued pce or

government-issued ppi measure which

was never the rate at which things go up

it's simply the rate at which a

synthetic basket of

products and services the government

wishes to track go up

now the problem with that

is is

two big things one thing is the

government gets to create the market

basket and so they keep changing what's

in the basket

so i mean if

if i keep tr if i said three years ago

you should go see ten concerts a year

and the concert tickets now cost two

hundred dollars each now it's two

thousand dollars a year to go see

concerts

now i'm in charge of calculating

inflation so i redefine you know your

entertainment quota for the year to be

eight netflix streaming concerts and now

they don't cost two thousand dollars

they cost nothing and there is no

inflation but you don't get your

concerts right so the problem starts

with

continually changing the definition of

the market basket but in my opinion

that's not the biggest problem

the more

the more egregious problem

is the the fundamental idea that assets

aren't products or services

assets can't be inflated with an asset a

house

a share of apple stock

um a bond

um any a bitcoin is an asset um or uh a

picasso painting so

not a consumable good

not a uh not not an apple that you can

eat

right if i throw away an asset

then uh i'm not on the hook to track the

inflation rate for it so

what happens if i change the policy such

that

let's take the class example a million

dollar bond at a five percent interest

rate gives you fifty thousand dollars a

year in risk-free income

you might retire on fifty thousand

dollars a year in a low-cost

jurisdiction

so the cost of social security or early

retirement is one million dollars when

the interest rate is five percent

uh during the the crisis of march of

2020 the interest rate went on a 10-year

bond went to 50 basis points

okay so now the cost of that bond is 10

million dollars

okay the cost of social security went

from a million dollars to 10 million

dollars

so if you wanted to work your entire

life save money and then retire

risk-free and live happily ever after on

a 50 000 salary living on a beach in

mexico wherever you wanted to go

you had hyperinflation the cost of your

aspiration increased by a factor of 10

over the course of

you know some amount of time in fact

in that case that was like over the

course of about 12 years

right as the inflation rate ground down

the asset traded up

but the you know the conventional view

is oh that's not a problem because it's

good that that assets it's good that the

bond is highly priced because we own the

bond

or um

what's the problem with the inflation

rate in housing being 19

it's an awful problem for a 22 year old

that's starting their first job that's

saving money to buy a house

but it would be characterized as a

benefit to society by a conventional

economist who would say well

housing

asset values are higher because of

interest rate fluctuation and now the

economy's got more wealth

and uh and so that's that's viewed as a

benefit

so the what's being missed here

like the suffering of the average person

or the

uh the struggle the suffering the pain

of the average person

like metrics that captured that within

the economic system is that is it when

you talk about one way to say it is a

conventional

view of inflation as cpi understates the

human misery that's in inflicted upon

and and on uh mainstream companies

by uh

by the political class and so it's a

massive shift of wealth from the working

class to the property class

it's a massive shift of power from the

free market uh to the centrally governed

or the controlled market

people to the government and and

maybe one one more illustrative point

here alexis

is uh what do you think the inflation

rate's been for the past 100 years

oh you talking about the scalar again if

you if you took a survey of everybody on

the street and you asked them what do

they think inflation was uh what is it

remember when jerome powell said our

target's two percent but we're not there

if you go

around the corner i have uh posted the

deed to this house sold in 1930.

okay and uh

the number on that deed is one hundred

thousand dollars

1930. and if you go on zillow

and you get the z estimate is it higher

than that no 30 million 500 000

that's uh 92 years 1930 or

2022

and in 92 years we've had 305

x increase in price of the house

now if you actually back calculate you

can you come to a conclusion that the

inflation rate was approximately six and

a half percent a year

every year

for 92 years

okay and and there's nobody

nobody in government no conventional

economist that would ever admit to an

inflation rate of seven percent a year

in the us dollar over the last century

now

if you if you uh dig deeper i mean one

one guy that's done a great job working

on this is seifidin amus who wrote who

wrote the book the bitcoin standard and

he notes that on average it looks like

the inflation rate and the money supply

is about seven percent a year all the

way up to the year 2020

if you look at the s p index which is a

market basket of scarce desirable stocks

it returned about 10 percent

if you talk to 10 a year for 100 years

the money supply is expanding at 7 100

years

if you actually talk to economists or

you look at the the economy and you ask

the question how fast does the economy

grow

in its entirety year over year

generally about two to three percent

like the sum total impact of all this

technology and human ingenuity

might get you a two and a half three

percent improvement a year as measured

by gdp

is that are you okay with that not sure

i'm not sure i'd go that far yet but i

would just say that

if you had the human race doing stuff

yeah and if you ask the question how

much more efficiently will we do the

stuff next year than this year or how

what's the value of all of our

innovations and inventions and

investments in the past 12 months

you'd be hard-pressed to say we get two

percent better

typical investor thinks they they're 10

better every year

so if you look at what's going on really

when you're holding a million dollars of

stocks and you're getting a 10 gain a

year you really get a seven percent

expansion of the money supply

you're getting a two or three percent

gain under best circumstances

another way to say that is

if the money supply stopped expanding at

seven percent a year the s p yield might

be three percent and not ten percent it

probably should be

now that that gets you to start to ask a

bunch of other fundamental questions

like if i borrow a billion dollars and

pay three percent interest and the money

supply expands at seven to ten percent a

year and

i ended up making a ten percent return

on a you know billion dollar investment

paying three percent interest is that

fair

and who who suffered

so that i could do that because

in an environment where you're just

inflating the money supply and you're

holding the assets constant

it stands the reason that the price of

all the assets is going to appreciate

somewhat proportional to the money

supply

and the difference in asset

appreciations is going to be a function

of the scarce desirable quality of the

assets and to what extent can i make

more of them and to what extent are they

are they truly limited in supply

yeah so we'll we'll get to a lot of the

words you said there the scarcity

uh and it's so good connected to how

limited they are and the value of those

assets but you also said so the

expansion of the money supply you just

put another way is printing money and so

is is that always bad the expansion of

the money supply is this just uh to put

some terms on the table so we understand

them

you nonchalantly say it's always

the on average expanding every year the

money supply is expanding every year by

seven percent that's a bad thing that's

a universally bad thing

it's awful

well i guess i guess to be precise

uh it's the currency

that i mean

my money uh i would say money is

monetary energy or economic energy

and the economic energy has to find its

way into a medium so if you want to move

it rapidly as a medium of exchange has

to find its way into currency but the

money can also flow into property like a

house or gold

if the money flows into property

it'll probably

hold its value much better if the money

flows into currency right if you had put

a hundred thousand dollars in this house

you would have 305 x return over 92

years but if you had put the money a

hundred thousand dollars in a safe

deposit box and buried it in the

basement

you would have lost 99.7

percent of your wealth over the same

time period

so um so the the expansion of the

currency

creates uh creates a massive

inefficiency in the society what i'll

call an adiabatic lapse

it's

what we're doing is we're bleeding

the civilization to death right the

antibiotic adiabatic what's that word

that's

adiabatic adiabatic

right and aerospace engineering you want

to solve any problem they they start

with the phrase assume an adiabatic

system and what that means is a closed

system okay so i've got it i've got a

container and in that container no air

leaves and no air enters no energy exits

or enters so it's a closed system

so you got the closed system lapse

okay

okay i'm going to use a there's a leak

in the ship i'm going to use a physical

metaphor for you because you're the

jujitsu right like like you got 10 pints

of blood in your body

and so before your next

workout i'm going to take one pint from

you

now you're going to go exercise but

you're one point you've lost 10 percent

of your blood

you're not going to perform as well it

takes about one month for your body to

replace the red blood platelets so what

if i tell you every month you got to

show up and i'm going to bleed you

yeah okay so uh so if i'm draining the

energy i'm drink i'm draining the blood

from your body you can't perform

if you adiabatic lapse is when you go up

in altitude every thousand feet you lose

three degrees

you go 50 000 feet you're 150 degrees

colder than sea level that's why you you

know you look at your

instruments and instead of 80 degrees

your minus 70 degrees

why is the temperature falling

temperatures falling because it's not a

closed system it's an open system as the

air expands the density falls

right the ener

the energy

per

per cubic whatever you know falls and

therefore the temperature falls right

the heat's falling out of the solution

when you're inflating let's say you're

inflating the money so the currency

supply by six percent you're sucking six

percent of the energy

out of the fluid that the economy is

using to function so the currency this

kind of ocean of currency that's a nice

way for the economy to function it's the

most kind of uh

it's being inefficient when you expand

the money supply but it's uh

that look it's the liquid i'm trying to

find the right kind of adjective here

it's how you do transactions at a scale

of billions

currency is the asset we use uh to move

monetary energy around and you could use

the dollar or you could use the peso or

you could use the bolivar selling houses

and buying houses is much more

inefficient

or like

you can't

transact between billions of people with

houses yeah properties don't make such

good mediums of exchange they make

better stores of value and they they

have utility value if it's a if it's a

ship or a house or or a plane or a

bushel of corn

can i zoom out just for yeah can we zoom

out keep zooming out until we reach the

origin of human civilization but on the

way

ask

you gave economists a d-minus

i'm not even going to ask you what you

give to governments

do you think their failure economist and

government failure is malevolence or

incompetence

i think uh

policymakers are well-intentioned but

generally all all government policy is

inflationary and all government it's

inflammatory and inflationary so what i

mean by that is

you know when you have a policy uh

pursuing

supply chain independence if you have an

energy policy if you have a labor policy

if you have a trade policy if you have a

you know any any kind of foreign policy

a domestic policy

a manufacturing policy every one of

these medical policy

every one of these policies

interferes with the free market and and

generally prevents some rational actor

from doing it in a cheaper more

efficient way

so when you layer them

on top of each other they all have to be

paid for

if you want to shut down the entire

economy for a year you have to pay for

it right if you want to fight a war you

have to pay for it

right if you don't want to use oil or

natural gas you have to pay for it if

you don't want to manufacture

semiconductors in china and you want to

manufacture them in the u.s you got to

pay for it if i rebuild the entire

supply chain in pennsylvania and i hire

a bunch of employees and then i unionize

the employees

then not only am i

i idle the factory in the far east it

goes to 50 capacity so so whatever it

sells it has to raise the price on and

then i drive up the cost of labor for

every other manufacturer in the us

because i competing against them

right i'm changing their conditions so

everything gets less efficient

everything gets more expensive and of

course the government couldn't really

pay for

uh its policies and its wars with taxes

we didn't pay for world war one with tax

we didn't pay for world war ii with tax

we didn't pay for vietnam with tax in

fact you know when you trace this what

you realize is the government never pays

for all of its policies with taxes

to ask to raise the taxes to truly

transparently pay for the things you're

doing with taxes with taxpayer money

because they feel that's one

interpretation or it's just too

transparent like if people if people

understood the the the true cost of war

they wouldn't want to go to war if you

were told that you would lose 95 of your

assets you know and 90 of everything you

will be ever will be taken from you

you might

reprioritize your thought about a given

policy and you might not vote for that

politician but you're still saying

incompetence not malevolence

so fundamentally government creates a

bureaucracy of incompetence is kind of

how you look at it

i think a lack of humility right

like uh like

if if people had more humility then they

would realize

humility about how little they know

how little they understand about the

function of complexity this is the

phrase from queen eastwood's movie

unforgiven where he says a man's got to

know his limitations

[Laughter]

i i think that a lot of people

overestimate

what they can accomplish and experience

experience in life causes you

to uh

to reevaluate that so i mean i've done a

lot of things in my life and and

generally

my mistakes were always my good ideas

that i enthusiastically pursued

to the detriment of my

great ideas that required

150 of my attention

to prosper so i think people pursue too

many good ideas and you know they all

sound good

but there's just a limit to to what you

can accomplish

and everybody underestimates the

challenges

of of implementing an idea

right and uh and they always

overestimate the benefits

of the pursuit of that so i think it's

an overconfidence that causes an over

exuberance and pursuit of policies and

as the ambition of the government

expands so must the currency supply

you know i could say the money survival

let's say the currency supply

you can triple the number of pesos in

the economy

but it doesn't triple uh the amount of

manufacturing capacity in the said

economy

and it doesn't triple the amount of

assets in the economy it just triples

the pesos so as you

increase the currency supply

then the price of all those scarce

desirable things will tend to go up

rapidly

and the confidence

all of the institutions the corporations

and the individual actors

and trading partners will will collapse

if we take a tangent on a tangent and we

will

return soon to the uh the big human

civilization question

so if government

naturally wants to buy stuff it can't

afford

what's the best form of government

uh anarchism

libertarianism so not even go there's

not even armies there's no

borders that's anarchism the least

the smallest possible

the smallest possible the last the best

government would be the least and the

debate will be over

that when you think about the stuff

do you think about okay government is

the way it is i

as a person that can generate great

ideas how do i operate in this world or

do you also think about the big picture

if we start a new

civilization somewhere on mars do you

think about what's the ultimate form of

government

what's uh at least a promising thing to

try

i have laser eyes on my profile on

twitter

what does that mean and the significance

of laser eyes is to focus on the thing

that can make a difference yes and um

if i look at the civilization

um i would say

half the problems in the civilization

are due to the fact that our

understanding of economics and money is

half

50

i don't know it's worth 500 trillion

dollars worth of problems like

money uh money represents all the

economic energy and the civilization and

it kind of equates to all the products

all the services and all the assets that

we have and we're ever gonna have so

that's half

the other half of the problems in the

civilization are medical

and military and political

and philosophical

and you know

and uh

and i think that there are a lot of

different solutions

to all those problems and they're all

they are all uh

honorable professions and

and they all merit a lifetime of

consideration for the specialist in all

those areas

i i think that

what i could offer it's constructive is

inflation is completely misunderstood

it's a much bigger problem

than we understand it to be

we need to introduce engineering and

science techniques into economics if we

want to further the human condition

all government policy is inflationary

you know and another pernicious myth

is uh inflation is always

and everywhere a monetary phenomena so

you know a famous quote by milton

friedman i believe it's like it's a

monetary phenomena that is inflation

comes from expanding the currency supply

it's a nice phrase

and it's oftentimes quoted by people

that are anti-inflation

but again it it just signifies a lack of

appreciation of what the issue is

inflation is if i if i had a currency

which was completely

non-inflationary if if i never printed

another dollar

and if i eliminated fractional reserve

banking from the face of the earth

we'd still have inflation and we'd have

inflation as long as we have government

that that is capable of pursuing

any kind of policies that are in the in

themselves inflationary and generally

they all are so in general

inflationary is the big

characteristic of human nature that

governments collection of groups that

have power over others and allocate

other people's resources

try to

intentionally or not hide the costs of

those

allocations like in some tricky ways

whatever the options ever available

you know hiding the cost is like is like