Inflation and Deflation
The Keynesian economics believe that deflation is bad and “moderate” inflation is good. Austrians believe deflation is a good thing and inflation by money printing is a bad thing. History is proving the Keynesians are probably incorrect. Will the elite listen before it’s too late (or do they even care?).
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December 11, 2022 Weekly Close (USD)
BTC – 17,072.51
ETH – 1,262.20
ADA – 0.307320
I can be reached by email at firstname.lastname@example.org and on twitter at @McIntoshFinTech. My mastodon handle is @email@example.com. Looking forward to hearing from you!
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Hey, Sat Stackers, it’s December the 12th and this is episode 86 of Generational Wealth for Cryptocurrency. I’m your host, McIntosh. Today’s episode is about inflation and deflation. Of course, no one on this podcast is a financial advisor, and all information presented on this podcast is for informational purposes only. Now that we have the legal stuff out of the way, let’s jump on in. All right, everybody, draw up your favorite listening chair, maybe a pair of headphones, certainly a nice drink. I am drinking the Earl Grey tonight, of course. And let’s talk about some economics.
So of course, this is a continuation of our series on Austrian versus Keynesian economics. And so I’ve broken it down. I’ll actually just go ahead and let this little bit out of the bag. Of course, we started two weeks ago with an overview. Last week, we talked about sound money, like Bitcoin versus stable money. This week, we’ll be talking about inflation versus deflation. Last week, consumption versus savings. On the 26th of December, business cycles and government intervention. And then we will wrap up on January the 2nd with Why Not Gold. So I hope you stick around for all of those. This has been very helpful for me. This has been very helpful for me as a person to clarify what I think. And as I said last week, I’ve discovered basically I’ve been an Austrian economist, if you want to call me that. And I’m not an economist, but that’s my tendencies because really for decades, since early college, certainly, probably, I don’t know exactly. Never really thought about it a whole lot, maybe even into high school because I’ve had an understanding for a long time about how governments print money, essentially. And that has never sat well with me, never. And that frankly is, as far as I can tell, a keystone of Keynesian economics. And of course, with Austrian economics, as we talked about last week, that is the antithesis of it. And money in Austrian terms is money that’s stable and money that doesn’t inflate. Gold typically. You will see a lot of buy-in with people, gold bugs, so-called gold bugs in Austrian economics. You’ll see a lot of talk in those circles about gold. I am not a gold bug. I own no gold. I actually own a little bit of silver. I don’t think I own any gold coinage at all. But I do understand where that comes from. So we’ll actually wrap up with that because that’s something that some people might have some questions about and could we ever return to a gold standard. So there we go. All right. So that’s what we’re going to talk about this week.
We will do our market news. Of course, to start things off. This week, I think everybody’s going to be shocked. We had some more sideways movement, ladies and gentlemen. Dear listeners of the podcast, I know that’s real news here, right? As it has been for, I don’t know, it seems like a month of Sundays. Looking back at the charts, it goes back to early November anyways. So we had a period of consolidation and then it bumped up and very briefly for about a week and then it dropped down much lower in November the 8th, I think, right around there. Yeah. And so there we’ve been and it’s now actually been a month and we’re still going sideways. The market closed for Bitcoin at $17,072.51 for the week earlier tonight. For Ethereum, the close was $1,262.20. And then for ADA, we had a weekly close of $0.307 basically. Now if you go back and compare those to the week before, they are very similar. Bitcoin is down slightly, Ethereum is down by 20 bucks, and ADA actually closed down $0.32 basically, so of the three ADA actually probably percentage-wise had the most drop, but all in all, pretty much sideways.
Now this week, I will throw this in as something that will probably be very important. We will have the federal, I don’t know, phone seat, federal open, I can never keep up with what it is, Federal Reserve meets Drone Power, blah, blah, blah. They’re going to get together and talk. He’s going to come out and make an announcement about interest rates, I believe that’s Wednesday. If I’m not mistaken, they start their meeting on Tuesday and then they do the general announcement on Wednesday, probably early afternoon, about interest rates. They have already signaled, I don’t understand, they go and they talk about this and then they go have a meeting and talk about it and then they do it. And I’m like, I just, I don’t know, this always gets me. So anyways, they’ve basically already said they’re going to slow down the interest rate hikes over the short term. So most likely, what most people think is that here on the 14th, that rate hike will be about half a percent. So our interest rates, it’s the borrowing rate, this is going to keep going up. We did start to see a drawback of inflation, we’ll see what those numbers are soon. Is that going to continue to go down or is it going to keep going up? We will see. So that’s where we’re at. That could definitely affect the markets this week. I don’t expect a dramatic change, to be honest, but we will see. So there we go.
Let’s move on to our weekly topic, which of course is inflation and deflation. And we touched on this last week, or two weeks ago as part of our overview. Just want to go into a little more detail here about this. So let’s talk. The Austrians believe that inflation is a result of an increase in the money supply. When that happens, it’s harmful. And this is something I would completely agree with. To give you a very simple thought exercise, if I had $100 and three people, and I divided up among those three people, everybody got $33.33 roughly, then if I added another $100, what is that going to do to the value of those $100? So if I double the money supply, it’s going to make those $33.33 that those three people hold worth much less. That’s inflation by money printing, if we want to call it that, in a nutshell.
Now they don’t double the printing of money, or the money supply I should say, in the course of a year, but it does go up fairly dramatically. And we know in fact, I think in the last two years, they’ve printed 40% of the money that’s in the US dollars that are in existence. Now think about that. From a logical basis, that’s going to cause inflation. From an Austrian economics basis, that’s going to cause inflation. And that is what we in fact see. Do the Keynesian economists agree with that statement? No, they do not. They do not believe, and they will say this. I truly don’t understand. I apologize. I don’t. I’m not trying to be mean, I just don’t understand it. And they truly don’t believe that. They just say, no, that’s not what causes inflation. So I don’t understand that.
The problem is that inflation that results is a tax. It’s a hidden tax. And it is particularly harmful to both the middle class and to lower income families. And virtually no one in political circles want to address that. The reason why it’s hidden, of course it’s not a tax, so if it makes it more difficult for people to live and thrive, prosper, and it’s not an actual tax, that’s where they get the hidden tax from. So let’s break this down for just a minute. If I am making, let’s just say $200,000 a year, a lot of money, by most people’s certainly imagination, and I have an inflation, a 7% inflation rate, my living expenses might total, let’s say my rent on $200,000 a year, $20,000, I should have prepared this beforehand. I did not think through these numbers. So if you’ll give me a second, more than in general, bring up the calculator. So $20,000 a year for rent divided by 12, okay, that’s $1,666. Now a lot of places, you can find a one-bedroom apartment for that amount or less. In fact, virtually, I would propose virtually everywhere except maybe outside of Los Angeles, New York, probably a few metropolitan areas like that. Okay, but let’s double that. Let’s just round that up. Let’s make that 20%. Let’s make it $30,000 a year roughly, and $40,000 a year, and roughly $3,000 a month. They would actually be like, what, $3,200, $3,300 I think if I do this, $3,300 a month. You could go anywhere in the United States, I would say probably anywhere, maybe even in Manhattan and downtown, I don’t know, like downtown LA, and find a one-bedroom. I may be mistaken about that, but certainly the vast majority of the United States. I can spend 20% of $200,000 and make a decent apartment, all right? But what happens, and if that goes up 7%, all right, because of inflation, and now I’m spending 7% more, that’s going to be $3,300 times 0.07, that’s $233 rent increase. Do you think somebody who’s making $200,000 can manage that? They may not like it, but they can manage it. Now let’s go down to somebody who’s making the national average, which is roughly $50,000. I really should have written all this out. That’s $10,000 a year divided by 12, $833. I know for a fact in my own hometown, you can’t get a one-bedroom apartment for $800. So that’s 20% of $50,000. If you tackle on another 7% on top of this, so 833 times 0.07 is 58 plus 833. That gives us now almost $900. Do you see how that starts to hurt the people who are making less? Because these increases are more substantial for them. So by the time they pay for rent, by the time they pay for their food, by the time they probably have a car payment, insurance payment, and so on and so forth, well, they don’t have anything left. And then you’re increasing that by 7%, and then they’re doing credit cards, and they’re doing all kinds of crazy things to make ends meet. Because they’re living on the edge already. Now just a little hint, many of those people making $200,000 a year, they are living on the edge as well. But they can back off from that. Maybe they’ve got two or three car payments, maybe they’ve got three car payments. They could sell one of those cars if they had to and still get by. Do you see what I’m saying? So that’s why we talk about a hidden tax on lower and middle class.
And also, the things that people, well, the lower class doesn’t invest. They don’t. They don’t have any money to. You find people very, very rarely at, say, who make below the median income who are investing. They don’t have money to do that. The median or the middle class, on the other hand, maybe they’ve got a little bit and they’ve got some money and an IRA maybe from their work job, but they don’t invest in real estate. They don’t invest outside of that. So when the money printing happens, like what we saw during the last couple of years, and real estate assets shoot up in part because of that inflation, because they don’t benefit from that. Now on the other hand, upper income people, what do they invest in? A lot of them will invest in real estate. They may have a vacation home, for example, or maybe they have rental properties and this kind of thing that they’re investing in. And as those appreciate in part because of that inflation, they are benefiting from that. So it’s not a tax on the rich in this case. It’s actually more of a tax on the poor and the middle class. And that’s actually one of the things I don’t understand. The Democrats in particular here in the United States, they’re always talking about we want to help the poor. We want to help the poor. We want to help the disenfranchised. Well, here’s a way you can help the disenfranchised. You can give them sound money, money that doesn’t inflate because the government prints it. Hello? Right?
Oh, and another note about this, by the way, this inflation is actually amplified in developing countries that are using the US dollar as their currency. Now, I’ve explained this before, for example, when we were talking about El Salvador. So El Salvador a little over a year ago, I think at this point, maybe 14 months or so, generalized Bitcoin as legal tender. And I believe, I am of the firm opinion that the president of El Salvador did that in a large part because the US dollar is the legal tender in El Salvador. It still is. And they were receiving no benefit from that and all of the downside. So as our money inflated, that was just inflation for them. So they were seeing food costs go up, energy costs go up, and so on and so forth. And they had no way of combating that. Well, now they do. Bitcoin is a legal tender there along with the US dollar. I believe eventually it will be the only form of legal tender there. That will be a very interesting experiment. And I don’t think that’s going to be anytime soon, by the way, but I think it’s coming because Bitcoin, unlike US dollar, there’s no printing of Bitcoin. There’s mining of Bitcoin, but it’s a predetermined number of Bitcoin and that will end. Now, when does it end, McIntosh? Oh, about 140 years, no, 2140. I always want to say 140 years. I think it’s 2140. So let’s be honest. Let’s have a moment of silence because McIntosh won’t be around in 2140, but it will end because it’s programmed into the protocol. Now, on the other hand, if the United States is still using the US dollar and politicians are still in control of the money supply and we still have a federal reserve, they will still be printing money into oblivion. And yes, I am a little worked up about this. One of the reasons why I’m involved in cryptocurrency and Bitcoin in particular is for this very reason. This is a chance for countries like El Salvador, developing continents like Africa, to get out of the thumb of the countries who are still oppressing them. Whether they’re doing it outright, like frankly France is, and I apologize to my French listeners, but this is true. You can go back and listen to the three episodes I did, I think it was three, about how France is running the currencies, essentially, and running the whole show in these African nations. Or maybe not directly, but countries like El Salvador, Panama, these countries that they use the United States dollar as their legal currency. So yes, it’s a stable currency that doesn’t hyperinflate at least yet, but on the other hand, they get the bad end of the stick when it comes to inflation. And the people in El Salvador are not out buying vacation homes and rental properties that go up because of inflation. So I get a little, this works me up a little bit, I’m sorry. I’m not sorry, actually, I’m not. I think this is very important.
All right, Austrians argue that deflation, on the other hand, is good as a price reduction or the result of productivity improvements made through the investments of savings. Go back to what I said at the overview, Austrians do what? They want people to save money. Why do they want people to save money? So they can invest, so they can build businesses, so they can expand, become more productive, build better widgets at a cheaper price, right? And the end result is the widgets can be produced at a cheaper price, therefore, more people can buy them. Now, to me, that seems to be a fairly straightforward argument. So let’s go see what the Keynesians say. Keynesians, on the other hand, argue that a steady rate of modest inflation is good for a growing economy. This frustrates the crap out of me, sorry, Stu. It does. They think we’re so stupid that they believe that we don’t understand that 2% inflation, which is their target, which they have not reached in 100 years, by the way, over the long term. I’ve got it written in here somewhere, 3.17%, by the way, since 1913, when they created the Federal Reserve and kicked all this junk off. We don’t have that 2% rate. We really have almost a 4% rate, but that’s okay. It doesn’t hurt you, it doesn’t hurt you, yeah, it doesn’t hurt you until you start thinking about 10 or 20 years, or 40, or 80, because by the time you save up some money and try and pass it on to your heirs, it’ll be all gone, it’ll be worthless. Thanks grandpa for this weird thing that doesn’t really, it’s not worth anything that you spent your life working for. It drives me nuts, sorry.
All right, one of their key reasons for this thought is that inflation makes borrowing more attractive to people. Borrowing is attractive in an inflationary environment as the amount you need to pay back gradually gets eroded by inflation over time. It’s a good thing to have inflation, because inflation means your money is worth less, so you can pay it back sooner. I’ve worked through that logic. This increase in borrowing in turn encourages consumer spending and therefore stimulates aggregate demand.
Ladies and gentlemen, once again, it goes back to aggregate demand. We got to get that GDP pumped up. That GDP is the most important figure when it comes to Keynesian economics. How much are people spending? I Googled, why is inflation good? Thebalancemoney.com said this. By the way, they don’t come out and say this, but this is very much a Keynesian view. So I’ll read this word for word. Inflation is good when it is mild. There are two situations where this occurs. The first is when inflation makes consumers expect prices to continue rising. When prices are going up, people want to buy now rather than pay more later. This increases demand in the short term. As a result, stores sell more and factories produce more now. They are more likely to hire new workers to meet demand. It creates a virtuous cycle, boosting economic growth. Because I’m going to go out and buy gasoline right now instead of a week from now because gas is going to go up $0.10 a gallon, they’re going to build more refineries. How’s that working for you? The second is when it removes the risk, and I quote that, the risk of deflation. That’s when prices fall. When this happens, people wait to see if prices will drop more before buying. It cuts back demand and businesses reduce their inventory. As a result, factories produce less and lay off workers. Unemployment rises, leading to wage deflation. Workers have less money to spend, which reduces demand even more. Businesses lower their prices. That makes deflation worse. For this reason, deflation is even more corrosive to economic growth than inflation. Prices fell 10% during the Worldwide Great Depression. Oh my God, save the women and children. Hallelujah. It’s hard for me to even read this, but this is what they think. I don’t know if I’ve ever heard of a factory shutting down because of deflation. I really would like to see a case study on that instead of just some mumbo jumbo being spewed out of some economist’s mouth.
Deflation of prices is considered bad by Keynesians as it encourages people to delay their spending. I argue with that very much. In other words, people will wait for prices to drop further before purchasing something. I am waiting for bitcoin to go down, but I am continuing to DCA on the other hand, so I guess I’m doing both. This reduction in spending reduces present consumption and is therefore considered harmful to the economy.
The value of the dollar in 1913 is equivalent in purchasing power to about $310 today, an increase of over $29.10 over 109 years. The dollar has an average annual inflation rate of 3.17% per year between 1913 and today, not 2%. Producing a cumulative, I apologize, my English is not so good tonight, a cumulative price increase of 2,910.22%.
So there you go. You’ve got the Austrians saying, inflation bad, deflation good. At some point, I’m going to do an entire podcast on deflation. I listened, and I think I’ve mentioned this already, but I listened to this great podcast by a guy named Jeff Booth. He was the guest on Peter McCormick’s What Bitcoin Did, I think that’s the name of his podcast about deflation being caused by technological progress and how that is a benefit. And if you stop for five milliseconds and think about this, it makes perfect sense. Technology is accelerating what people can do over time. A thousand years ago, one person could do very little today through the power of computers, internet, telephony, cellular service, this kind of thing, and so on. What they can do is virtually unlimited, and that’s all caused this technological revolution should be causing deflation, and yet it doesn’t, and my question would be why. It does in some cases, yes. I bought my first cell phone, I don’t know, mid-90s. The one I’ve got today, even though it’s not a very expensive model, it’s probably one of the cheapest actually, is 100 times better than that phone ever was. It costs more. Why is that? So I would argue that the difference is that all the money printing that’s going on and has gone on through much of this revolution, certainly the last 40 years of it, this technological revolution, is hiding this. Things should be cheaper. And they’re not, and it’s because I think there’s various reasons. I don’t want to get off on that, but anyways, it’s a great episode, you should go listen to it. Jeff Booth, Peter McCormick’s What Bitcoin Did podcast.
All right, so, Austrian’s inflation bad because we want sound money, and we think ultimately that so-called stable money will lead to what, to hyperinflation, to a currency debasement. We see this over and over again around the world. By the way, I’ve mentioned in the past, as far as I know, all countries at this point use fiat money, so-called stable money, I actually did see one reference that that is actually the case at this point. So I do not want to say that definitively, but it certainly appears to be the case. Keynesian people, on the other hand, think that, quote, modest inflation, which they define as 2%, now they’re fixing to raise that up. They’ve decided, hey, by the way, we can’t do 2%. We haven’t been able to do that for over 100 years, so we’re going to raise that up a little bit to 3% or 4%. That’s what they’re going to do, by the way. They’re not going to try and come back down to 2%. But, quote, modest inflation, to take away all your money, your spending power over very short periods of time, and deflation is bad because, my gosh, people won’t spend money immediately, and we need them spending money and pushing up that GDP. I would argue in the long term that Austrian economics, this idea that we save and invest is better in the long run, especially combined with sound money. Yes, so that’s it. So next week, like I said, we’ll be jumping into consumption versus saving. We’ll explore that a bit more. We had some supporters this week. I still think, to be honest, we’re dealing with issues. I’ve actually started talking to the Satoshi Stream support people or support person. From what I understand, there’s one person behind that project. I have not made the time yet to get that computer up and running. I was actually having a side conversation with Kyron over at Mayor Mortals. He is actually experiencing some of the same issues that I have been seeing, where I think we’re missing boosts, we’re missing streams, probably, and he’s seeing the same thing. In fact, he can point definitively to it. I can only point to it in one case where we had one listener that sent a boost. It was the 1776 boost, if I’m not mistaken. I want to say that was Martin. I have it written down somewhere, but that never got to me. But he had contacted me and told me that that was the case. Anyways, I’m still dealing with that. I do not want you guys to slow down. Anyways, like I said, it’s beta. It’s just beta. It just is, guys. We’re going to work through this and it’s going to get better in the long run. It will. It’s not beta necessarily because what I’m doing, that’s not what I mean. It’s beta because it’s early days for Lightning. It’s not early days for Bitcoin, obviously. All that being said, all right, excellent. So stream, stream, there’s our first boost. Speaking of Kyrin, 5500 Sats, Overview of Austrian and Keynesian Economics. And he said, really excited to hear these next episodes. I’ve only had a taste of the Austrian versus Keynesian argument, and so this will be really helpful for me. Can you also let us know what books you’re reading and have found useful? I can tell you what books I’m going to read. I can tell you what book I have read, and I thought it was actually quite good. At least I’ve read a decent portion of it. I’ll start with that one, The Ethics of Money Production by a German, I think, named Guido Holzman. We’ll go with his last name, I apologize, H-U-L-S-M-A-N-N. You can buy it online. You can actually read it online. There’s a free version of it, and it looks perfectly legitimate. These others I have not read yet, but I will tell you the list that I’ve got and the reasons why. On the Origins of Money by Karl Meninger. He was the creator, the founder, if you want to call it that, of Austrian economics. I wanted to start with the guy who kicked all this off. The Principles of Economics from A to Z, also by Karl Meninger. I probably will not be reading that one next, but I also think that it’s very important. The Theory of Money and Credit, I read out of this one last week. I love the information. You will have the same problem that I do in that I believe all of these were actually written in German, and so they’re translated to English in my case. It’s also fairly old. So a lot of times the phrasing is kind of difficult to read, if that makes sense. The Theory of Money and Credit, Ludwig von Mises, which I believe he was directly involved with Karl Meninger. A free market monetary system by Friedrich A. Hayek, and then also the denationalization of money, the argument refined by Friedrich A. Hayek as well, and Friedrich was a disciple of Ludwig von Mises, if you want to call him that, worked very closely with him. These are all kind of source material for Austrian economics.
I do not have any Keynesian economics books on my list. I will be honest, I do not think I can get through them. I read stuff like What I Read You, and I just get angry. I’m not an angry person, by the way, but I’m not angry. It’s frustrating because it’s just economic baloney, garbage, just gobbledygook. It’s frustrating. It doesn’t make me angry. I don’t want to portray myself as, I don’t know. I am angry in the sense that these policies have been implemented in all of these countries, and it’s hurting people. I would make the case that Keynesian economics has caused, in fact, much of the economic problems of the last 100 years. That’s what I’m angry about. That’s why I do get so worked up. Those are the books that I’m going to be reading through. I will let you know as I go through them. I have started with Ethics of Money Production, and I’ve already read a chapter out of The Theory of Money and Credit. I discussed some of that last week. Those are certainly good ones. I cannot imagine why any of these would be bad books, though. Some may be more difficult to read than the others, granted, but the information is still so super important. I am in particular looking forward to actually The Denationalization of Money, because we see money as a national tool right now. You have got the U.S. dollar, the British pound. The German used to be the German mark. Now it’s the euro, which is a conglomerate of all these nations, but it’s one currency. They wield it as an economic sword, in my opinion. Bitcoin brings that. Bitcoin is the culmination, in my mind, of what the Austrian economists were looking for.
Thank you, Kyrin, to get back to the list. Thank you very much, Kyron. I really appreciate that. 5,500 sats, and as I say basically every week, Kyrin is a great supporter of this podcast. He’s over at Mere Mortal’s podcast. You guys should take a listen. I dip in and out of there as much as I can. They have a lot of great content on self-help, this kind of thing. RDG 3, it’s a dilemma of security speed and decentralization, so that’s one of my promoted podcasts, the one that sits out there all the time being promoted. It’s 99 sats and said, cool podcast. Thanks a lot, RDG3. I appreciate that, and I hope you stick around and listen to some of our more new stuff. That one’s actually getting a little old at this point. It’s certainly relevant, but good stuff. Mayor Morrill’s streaming, thank you. And then another boost, 2,200 this time on the sound money versus stable money, so appreciate that. And again, great episode. McIntosh has helped me put a couple of pieces into place of why I also by default slide towards an Austrian viewpoint. I’ve always disliked consumerism, and I think the implicit assumption that a 2% interest rate is always encouraging spending is the root cause of that. I very much agree with that. The definitions at the start are very helpful as well. Thank you very much, Kyrin, appreciate that. And let’s see, I think there was another one, there’s two more. So it’s a Dilemma podcast, probably 100 Sats actually, 99, from Will Malenzuela. Thank you very much, Will. And then the sound money versus stable money, last week’s episode, 99 Sat boost, probably again, probably 100. From our friend Defunct Mode, I think that they have come through several times, so maybe they’re a great new regular listener, appreciate that, Defunct Mode, and thanks for listening.
All right, so there we go. And let’s jump into the news this week. I am going to try and find where I stopped. Some random tweets, some of this includes the news, of course, I’m kind of thinking about just going to this for my news, I don’t know. There may be times to include articles, I actually think there’s one that’s just a link to an article, and we’ll talk about that a little bit. Carla, the crypto couple, except they’ve got an O for the, and a 1 in couple. Wanting privacy shouldn’t be controversial, amen, sister.
Thank you very much. Satoshi Stacker, December the 9th, gave some points here. Kevin O’Leary, very famous entrepreneur, if you want to call him that. He’s on the Shark Tank, he’s been involved in, I think, crypto.com, as well as FTX. I’m not sure about crypto.com, so anyways. Kevin O’Leary says he put $9.7 million in crypto and lost it because of FTX. He did say that, I’ve seen it. Kevin O’Leary got paid $15 million to promote FTX, do the math. This is kind of like the whole value for value thing, in a sense. He’s out there saying that, oh, he lost $10 million on FTX, but he still thinks FTX is cool. It isn’t a Ponzi scheme, a fraud, whatever. That’s literally, I mean, he’s running around saying that. I’m not putting words into his mouth, but he also got paid $15 million to promote FTX. I don’t know.
Dustin Volts, by the way, you can see all these. You know what? You can see all these on my timeline, McIntoshFintech, Twitter.com, if you want to look up any of these people. Dustin Volts, FBI responds to Apple’s encryption announcement today, says it needs lawful access by design in tech to do its job effectively. What this is talking about is Apple has said that they will be offering, I believe, messaging encryption. But I know with their iCloud product that it will become a situation where you will own the keys, not your keys, not your crypto kind of thing. You will own the encryption keys. Apple will not have access to them. They’ve got the cloud product iCloud. You will, in theory, be able to store your data in iCloud without anyone else owning those keys.
The FBI said, quote, this hinders our ability to protect the American people from criminal acts ranging from cyber attacks and violence against children to drug trafficking, organized crime and terrorism. By the way, why do they always bring up these things? Because this is what they always bring up. I’m just asking. End-to-end and user-only access encryption erodes law enforcement’s ability to combat these threats and administer justice for the American public. And it goes on from there. Hey, FBI, there’s this thing called the Second Amendment, I think. Wait, not the Second Amendment. That’s the gun amendment, sorry. It’s the right to free speech. I don’t know. Sometimes I get them mixed up. Maybe I should put them on a big poster on my wall. And a right to privacy, by the way. I’m not okay with American citizens living in, well, whether they’re living in America or not, being spied upon by the FBI. Oh, we’ll just break your encryption because, you know, you might be a terrorist. We’ll just check on that. No, that’s not okay.
Benjamin M. FYI, worth noting that today’s $600 would have been equal to $78 in 1970 when the original Bank Secrecy Act, which places $10,000 cash limits on interstate transactions was first passed. So what is this talking about? The Biden administration has now said that if you spend more than $600 on a cash app or Venmo, or maybe it’s just Venmo only for some reason, you know, if you’re passing around more than $600, hey, we need to know about that. Really, Mr. Biden, President, respectfully, sir? And I mean that, I respect the title. I could do entire episodes on this stuff. It’s just so frustrating. It’s just frustrating watching it all break down. The good news is I can buy Bitcoin and, I don’t know, not worry about it.
Bitcoin magazine breaking, SBF Sam Bankman freed, Sam Bank whatever, let’s just call him fraudster, secretly funded crypto news site The Block by funneling money to its CEO. And the CEO, right after that, resigned. The Block is a news site, crypto news site. So they paid. Here’s what happened. I’m just going to go ahead and read between the very lines and it’s not difficult. They paid The Block to promote FTX. They paid The Block to paint FTX in a good picture.
So just a couple of days ago, I saw this on NBC News and this made me sad. Britain’s deepening hunger crisis leaves millions resorting to desperate measures. I have a link to an article about it. I did not realize, frankly, that things were quite as bad as they are, it sounds like, in Britain. I know Germany’s having lots of energy issues. Britain is as well and the Britain economy is falling apart. It is. Michael Saylor, which I retweeted this, Michael Saylor is a huge Bitcoin advocate. Sam used stolen and counterfeit money to corrupt the establishment and undermine Bitcoin. Right. Sam SBF, he never said anything good about Bitcoin. This is just the tip of the iceberg. How many other journalists, academics, money managers, politicians, charities, influencers, and lobbyists did he corrupt or co-opt? There’s a link to an article about the funding of that news site. I agree. We don’t know. We may never know. These people are not going to come forward and say, hey, he gave us a bunch of money and told us to keep our mouths quiet.
Bitcoin’s Lightning Network could get a privacy upgrade. There’s a new standard that’s been proposed. It’s been implemented by some of the Lightning nodes. I believe Lightning privacy will improve over the next few years. It’s not perfect yet. It is actually better, almost essentially better by default than Bitcoin, although both can be fairly private. Alex Gladstein, who’s a big advocate for human rights and somebody that I respect, even though I don’t agree with everything that he says, greatly, he said that the strike, talking about the strike app, send global feature is amazing. I just sent $5 from my US dollar balance to somebody in Lagos, which I believe is in Africa, and in under two minutes, he received the value as NAIRA, which I believe is the Nigerian currency, in his Nigerian account. All I had to enter was his phone number, bank account, bank name, made possible by strike. Strike could be huge in this Lightning economy.
The EU, Bitcoin magazine, the EU is trying to ban cash transactions over $10,000 and allow member states to implement lower limits if they wish. Guys, I’m just going to say this, and look, I will be the first person to tell you, the United States has a lot of problems. We do, and we have a lot of problems when it comes to crypto. But the EU is trying to be the poster child of how not to do this. If I lived in the EU, I would be preparing what I’m going to do when they clamp down.
Lynn Alden, Nigeria’s central bank, sharply reduced how much cash people can withdraw per day from 150,000 NAIRA to 20,000 NAIRA, which is about $45 worth. They are pushing adoption of the ENAIRA, which is their central bank digital currency, and restricting cash. Why? Because you can’t track cash.
UK wholesale, so the United Kingdom, wholesale day ahead electricity prices. So you’re buying prices at wholesale for the next day, surged to a record high as cold, dry, and calm weather cripples wind production and simultaneously sends demand soaring. The UK base load for Monday clears at 674 pounds, the British pound per megawatt, while evening peak load clears 2,000 pounds per megawatt. This is insane. I’ve said over and over and over, cheap, reliable, abundant energy is necessary for a functioning society, and we are seeing the breakdown of that.
The Dutch are now using Bitcoin mining to grow tulips. So they’re basically putting Bitcoin miners in the greenhouses and using the secondary, the waste heat from that to keep the air warm in the greenhouses so that they can produce their cash crop, plus they’re making Bitcoin. All right, James LaVish said FTX does not need a reboot, FTX needs a forensic investigation, and I say here, here, as they do in the British, what is it, House of Lords. These people are talking about restarting FTX, it’s insane. Stop the badness. If anybody can’t see that that whole thing was a…all right, I’m stopping.
One final thing, Paxful, which is an exchange, it’s supposed to be a peer-to-peer exchange. I don’t know a whole lot about it, but anyways, they are an exchange where you can buy and sell at least Bitcoin. I’m not going to read this whole thing, it’s a little too long, but the CEO of Paxful said, I’m responsible for the Bitcoin of over 11 million people. My sole responsibility is to help and serve you. That’s why today I am messaging all of our users to move your Bitcoin to self-custody. You should not keep your savings on Paxful or any exchange and only keep what you trade here. And then he goes on to explain why for so long people have trusted others to hold their money, blah, blah, blah. You’re at the mercy of those custodians and their morals. Bitcoin gives us a chance to be in control and we must take it. I thought that was spectacular. I’ve never used Paxful. I might go open an account there. That’s the kind of people we need. All right. And that pretty much was the news for the week. There really wasn’t a whole lot else going on. So we will wrap things up with that.
We’ve talked about our supporters. We talked about our news. The GWC podcast supports podcasting 2.0. I did not talk about this today during the episode, but there are so many examples of why value for value is so important. But we don’t have any sponsors. We don’t have any advertising. You can support the podcast in three ways by time, talent, and treasure. If you want to support the podcast and have some time, I could use some help with some transcripts. I was literally just working on a transcript from a couple of episodes ago last night, for example. And it took a while, but now it’s right. Treasure is just what it sounds like. If you find the content valuable, you can support the podcast by streaming sats or boosting from a podcasting 2.0 app. You can get those apps for the optimal listening experience at newpodcastapps.com. Go try them out. If you’ve not used any of them, start maybe with Fountain. That’s a great one. If you like the content, I would love it if you would tell your friends about the GWC podcast. Thanks for being here. I do hope this has been helpful. I hope it’s given you something to think about. And I know, I know I get, I would call it wound up sometimes, but this stuff is so important and it’s important that people understand it and it’s important that they act on it. You can change your financial future. I’m on Twitter at McIntoshFintech. I’m on mastendon at macintosh at podcastindex.social. My email, macintosh at genwealthcrypto.com. And of course, we’ve got the genwealthcrypto.com websites. Stay humble. Go out and make it a great week. I will talk to you all soon.