QUESTION: On a global BTC standard, what type of economic policy could replace fiat economic policy?

00:00 If the entire world switched to a 00:02 Bitcoin system, a Bitcoin standard, what 00:05 would monetary policy be? What would be 00:08 the policies of money? Well, that's the 00:10 beauty. There aren't any. The only 00:13 policy is there's 21 million Bitcoin and 00:15 you get to use it as money, which means 00:17 there's nobody manipulating interest 00:19 rates. Interest rates go up and down 00:22 based on human time preference, which is 00:24 the way it should work. Jerome Powell 00:26 and the Federal Reserve should not be 00:28 deciding the cost of capital, the cost 00:31 of money, what it costs to loan someone 00:33 money. That should be entirely dependent 00:36 on the supply and demand of people's 00:38 savings. So, if people are saving a lot, 00:41 then you can borrow money cheaply 00:43 because interest rates are low because 00:44 there's lots of savings and lots of 00:46 people willing to lend money. If 00:48 people's time preferences are high, 00:51 meaning they want stuff fast and now, 00:54 well, then interest rates will be high 00:56 because not a lot of people will be 00:58 loaning money. But what that keeps h 01:00 from happening is it keeps the boom by 01:03 bus cycle from happening because the way 01:04 the boom bus cycle happens is the 01:07 Federal Reserve keeps interest rates 01:08 low. Lots of people borrow money for 01:10 stuff that the consumers don't have the 01:13 future spending power to buy and then 01:15 ultimately the business is unsustainable 01:17 and you go through these booms and busts 01:19 and booms and busts and booms and busts. 01:21 Those booms and busts would not happen 01:23 on a Bitcoin standard. Now that doesn't 01:25 mean you might not get a little bubble 01:27 around AI or something like that, but 01:29 it'd be very localized to specific 01:31 technologies and anticipation of how big 01:33 of an an impact they would have. you 01:35 would not get these 2008 recession sort 01:37 of level events because those are only 01:40 possible when the Federal Reserve is 01:42 manipulating interest rates. So beauty 01:44 of what is monetary policy on a Bitcoin 01:47 standard? There isn't one. It's entirely 01:49 based on supply and demand of 01:51 individuals based on whether they want 01:53 to spend their Bitcoin now or save it 01:55 for later. And if they want to save it 01:57 for later, at what interest rate are 01:59 they willing to loan it out to other 02:00 people at? It's that simple. And that's 02:02 the way the entire economy should work 02:04 and that's the way it will work when the 02:06 world's on a a Bitcoin standard. And 02:08 then all of the manipulation goes away. 02:10 The Federal Reserve goes away. There's 02:12 no more manipulation of interest rates. 02:14 There's no more adjustable rate 02:16 mortgages that jack up after the first 5 02:18 years. Like all of the shenanigans, all 02:21 of the insanity, all of cheap the cheap 02:23 credit that drives booms that result in 02:25 bust. All of that is no longer part of 02:27 the economy when we're on a Bitcoin 02:29 standard. Now the second part of this 02:31 person's question is what about wealth 02:33 inequality caused by people who were 02:36 early to Bitcoin? That is not a problem 02:38 because when people are wealthy they 02:40 spend their money. Nobody just sits 02:42 around hoarding money forever. So yes, 02:44 there are a small number of people that 02:46 are a lot wealthier because they were 02:48 early in Bitcoin. And you know what 02:49 those people are doing? They're doing 02:51 exactly what every other wealthy person 02:53 does, which means they are spending 02:55 their wealth. The wealthier people get 02:58 by being early in the adoption of a 02:60 technology, whether that's Bitcoin, AI, 03:03 the internet, no matter what technology, 03:05 the wealthier they get, the more they 03:07 desire to improve their quality of life 03:09 and the quality of lives of their 03:11 families. Uh, and same with generations. 03:14 Usually, no matter how wealthy someone 03:15 is, it is rare that there's any money 03:18 left beyond their grandkids because no, 03:22 no matter how prudent they are and how 03:24 much they try to, you know, they 03:26 accumulate wealth, their kids spend most 03:29 of it and their grandkids spend the rest 03:31 of it and there's nothing left. So, um, 03:34 wealth has a way of distributing itself 03:36 naturally, which has happened with 03:38 Bitcoin as well. The very early adopters 03:40 of Bitcoin bought stuff. They improved 03:43 their lives. They paid off apartments. 03:45 They bought houses. They went on nice 03:48 vacations. They they did all of the 03:50 things wealthy people do who bought 03:53 $1,000 of Bitcoin that ended up being 03:55 worth a million dollars. Well, most of 03:58 those people on the way up, they sold 03:60 that Bitcoin little bits at a time to 04:02 buy things to improve the lives of 04:03 themselves and their family. So there is 04:06 shockingly little wealth inequality in 04:09 the Bitcoin ecosystem because everybody 04:12 in the Bitcoin ecosystem had to work for 04:14 the Bitcoin they owned. They either had 04:16 to recognize the technology uh early and 04:20 be willing to take the risk of being a 04:22 very early adopter in technology which 04:24 is again the same way a bunch of people 04:26 got wealthy on the internet and 04:28 investing in internet companies because 04:30 they recognized it was going to be a big 04:32 deal and they were willing to take the 04:33 risk. So everybody who has a lot of 04:35 Bitcoin, unless they bought it recently 04:37 with US dollars that they earned 04:39 somehow, they got in earlier and they 04:42 benefit from the price appreciation. But 04:44 all of those people like clockwork, as 04:47 the price of Bitcoin appreciates, they 04:50 suddenly alter, not suddenly, they 04:52 inevitably alter their lifestyle to 04:56 improve the lives of themselves and 04:57 their families. And they do that by 04:59 spending Bitcoin, which results in their 05:01 percentage of the 21 million Bitcoin 05:04 going down over time. And the higher the 05:07 price of Bitcoin goes, the more the 05:09 people that own that early Bitcoin 05:12 distribute it. You've seen that every 05:14 single cycle in Bitcoin where the higher 05:17 the price goes, the more the OGs, the 05:19 originals, the early adopters, the more 05:22 they can, you know, buy stuff with their 05:24 Bitcoin. And someone who didn't have 05:26 Bitcoin anymore now has some Bitcoin. 05:29 And yeah, all of those people look back 05:30 and think, well, I could have had more 05:33 Bitcoin if I hadn't spent any of it. But 05:35 you know what? Life is short. So 05:36 everybody who owns Bitcoin eventually, 05:39 once their wealth has increased enough 05:41 as a result of the price appreciation of 05:43 their Bitcoin, everyone eventually goes 05:46 and spends some of their Bitcoin to 05:48 improve the lives of themselves and 05:49 their families, which is the way all 05:51 money works. And the difference in the 05:53 world of Bitcoin is there's not a bunch 05:55 of shenanigans with it. There's nobody 05:56 printing money out of thin air and 05:58 giving it to their cronies. It's just an 05:60 entirely different, more fair, more 06:03 equitable, and more just world than the 06:05 one we live in today. And I look forward 06:07 to the world on a true Bitcoin standard 06:10 worldwide.