Money is broken – and it’s your time and energy at stake

There are two kinds of people.

The one on the right, representing the vast majority of people, unknowingly allows their time to be stolen by the money printing parasites.

While the government may not be officially in charge of how much money gets printed, in practice the veil between the politicians and central bankers is thin at best. The only real reason why money is printed at all is to pay for government excess. Money printing (the source of inflation) is a hidden tax, the benefit of which is mainly collected by the state. There are also other beneficiaries of this: large companies and other actors at the top rungs of the “fiat pyramid”.

This top-favoring benefit is called the Cantillon effect, and it is the main source of unfair inequality in our societies… and it’s growing, because the money printing is heating up.

Chasing dollars will keep you on the hamster wheel forever, because fiat money (dollars, euros etc) is designed to make you do exactly that.

If the government can print money, why do you need to pay taxes?

No amount of money printing produces any goods or services. People do. You need to pay your taxes in order for the government to have something real to collect, and money is printed to keep you producing these real goods and services faster while getting less and less of the benefit for yourself.

The governments can’t print bitcoin, and are therefore unable to make you run faster (except by increasing taxation, but that has an upper limit) – but only if you keep your savings in bitcoin.

Keeping money in government paper means that your purchasing power will get diluted. Their debt loads give them no other choice! This problem comes both with fiat cash (physical or money on bank accounts), and with bonds, which are a promise to give you more fiat later.

In the past, bonds were considered to barely beat at least nominal (if not real) inflation, but not anymore. The governments handing out these debt promises are too bankrupt to ever be able to pay back those promises in full. They will have no choice but to print the money to pay back the debt, devaluing it in the process. Real purchasing power can’t be printed.

What about the stock market?

Stocks are not inherently “fiat money”, but they are effectively used as a savings vehicle, and therefore a large portion of this overall fiat problem “flows downstream” into stocks as well. The S&P 500 isn’t gaining in value against the money printer – it’s stayed essentially flat against the money supply growth since the 2008 financial crisis.

Therefore, if you invest in the stock market, you can maintain your purchasing power, but you are carrying the risk of owning those companies – and many of them are zombie companies, as a result of the stock market being used as a savings vehicle.

Because stocks are used as “money substitutes”, the price to earnings (P/E) ratios of these companies have gotten completely out of hand. Personally, I wouldn’t want to get caught up in the process of those stocks getting repriced to sane levels…

When a company gets into the S&P 500, their stock price goes up “automatically” because of the automated money flows into the index. At that point that company can kick back, relax and essentially forget about working hard for their customers – the stock price will go up if they just keep up the appearances of being a company in a competitive free market. They don’t really need to compete – it’s enough to just keep their old operations going while making their profits from all kinds of financial shenanigans.

This short video clip from the interview of Sotheby’s ex-ceo is worth watching.

So, what’s that ultimate and final answer to whether it’s a good time to buy bitcoin?

I would ask that same question in a different way:

Is now a good time to start your journey off the fiat hamster wheel of having to run ever faster while being paid in ever-dwindling purchase power?

I don’t know – if I were you I’d do it like yesterday, but it really is up to you.

You won’t get off the hamster wheel immediately, which is what most people are looking for. They end up aping their money into different scam projects and have to run even faster just to make that money back.

Understanding the basics discussed above goes against everything most people have learned about money, and so most people will stay on the fiat hamster wheel.

I’ve learned to accept that, and I’m not going to fight anyone on this. You do you, and I’ll do me.

The above facts about the money being broken are so obvious to us bitcoiners that often we, especially the new ones, are shouting these things from the rooftops trying to get everyone we know to start stacking as fast as possible. Then they get ridiculed, or, if they do manage to convince some people to buy, get yelled at when the price takes an almost unavoidable downturn.

Trying to convince people on bitcoin is a thankless mission. You really have to do your own thinking on this.

Bitcoin is an asset for long term saving, not for speculating

If you do decide you want to do something about the hamster wheel problem, don’t try to be smart with timing the market – that’s behaviour of someone who still has those dollar signs in their eyes, chasing, running… just like they need you to be.

Nobody can time the market reliably. We’re really in an uncharted territory – the discovery of an absolutely scarce asset is a once in a civilization event, and we have no idea how the price action will play out. It can reasonably be expected that the journey will be volatile…

…but even that is unclear now that the nation states are starting their race to get their part of this extremely scarce asset… before their competitors can get more than them. Unlike gold, bitcoin is the first asset in the history of humankind where the supply doesn’t go up when the price increases!

I really don’t know what will happen with the price in the short or medium term, and neither does anyone else. Don’t think you can predict the short term price fluctuations, and instead study bitcoin and keep in mind that there can only ever be 21 million – and nobody can print more.

The best way to do bitcoin is to first study it, and then understand that it is a LONG-TERM savings account. If it’s money you need in the next year or two, maybe put it in the stock market instead and sleep tight. If you put it in bitcoin, the volatility may really hurt you (drawdowns of 85% have happened, and can happen again). Get in for the long term and strap in tight, because the ride will be rough. Accept the volatility – this is very much worth it – and study more!