00:00:00.000 What can I talk about? This is a very quick episode. It's just about something that's going on right now
00:00:09.600 cryptocurrency and the reason I'm talking about this is because I see so much emotion out there and of course this happens in financial markets
00:00:23.360 in financial markets, there's a lot of emotion and this is a really new
00:00:28.400 innovative part of the economy crypto currency ever since crypto began enthusiasts have said something like well
00:00:37.040 Fiat money is fake anyways. Well, what's Fiat money for anyone who's brand new to this?
00:00:44.480 Well, let's begin there government controlled currencies the dollars and pounds that we're familiar with
00:00:51.840 Have not always existed. They used to be based on something. They used to be based on the gold standard
00:00:56.480 Which is to say your $100 represented $100 stored somewhere in the form of gold usually and if you wanted
00:01:04.080 You could trade your $100 cash for the equivalent amount of gold
00:01:08.400 That's called representative money and it no longer exists around the world as far as I know
00:01:13.360 It was apparently the American president Richard Nixon who decided in 1971 to get a law pass that meant the US dollar no longer represented
00:01:23.920 So the gold had a certain value based on supply and demand and the dollar was pegged to that
00:01:41.040 Changed the value of the gold. I guess it could itself buy up lots of gold and that would cause the value of the gold to go
00:01:46.800 Which would cause the value of the dollar to go
00:01:48.800 But it was harder than to just manufacture more gold. They couldn't create gold out of thin air
00:01:54.480 But when the dollar was decoupled from the gold standard in 1971 and the other governments of the world followed suit
00:02:02.960 It meant that governments could just print more money create more money out of
00:02:08.160 thin air now like they could have you know with the representative
00:02:11.680 Currency had just printed more money as well, but they would have been legal problems with this after all
00:02:19.200 The law was that the dollar was worth a certain amount of gold and so printing money in this way was much harder
00:02:25.360 So changing the law to a fiat currency by fiat you could just decide
00:02:29.760 Fiat means you can just decide arbitrarily and so fiat currency means the government can just decide arbitrarily
00:02:36.080 The worth of the dollar now people don't care much about this
00:02:46.560 Younger people are more interested now in economics than I think they have been ever before
00:02:55.280 Cryptocurrency, but still the typical consumer or taxpayer in the economy doesn't I think
00:03:03.520 The value of the dollar unless they're traveling overseas or something like that
00:03:07.680 If the government prints more money or is being said to print more money by economists
00:03:12.720 The average person doesn't seem to care and the economists seem to like this idea
00:03:17.280 And one of the reasons I like it is because it's called modern monetary policy, which is another word for printing money
00:03:24.000 It's another word for socialism. I'll come to that. Why should any of this matter?
00:03:28.160 Well because it causes inflation so if you're a person who's watching this you know nothing about
00:03:35.200 Nothing about how money is printed the relationship between government and money
00:03:39.280 And what cryptocurrency is then maybe there's videos for you. It's a very baby understanding of things and what's going on right now as well
00:03:46.960 Let's just consider an example and for many people watching who usually watch my videos
00:03:52.000 This is going to be teaching grandma to suck eggs. You know teaching something teaching you something you already know but
00:04:00.000 Let's say there's something out in the world there that's hard won
00:04:05.040 Something is difficult. Let's to produce. Let's say like a banana. Okay, it's not trivial to create a banana
00:04:16.800 And at the moment it's worth a dollar precisely because
00:04:20.240 That is what I am charging for the banana. I might put it on eBay or something say it by my banana
00:04:24.960 It's a dollar and it's worth a dollar precisely if someone's willing to pay a dollar for it and not otherwise
00:04:32.240 If no one ever pays a dollar for my banana, then it's not actually worth that
00:04:36.880 It's worth nothing at all because eventually it ends up like this and then it gets even worse than that
00:04:43.040 And if I don't eat it well if I eat it then it has some value it has value to me
00:04:46.560 But otherwise it just becomes rotten decays away into nothingness and that worth that value is gone from the universe
00:04:53.200 But if I sell it if I'm able to put it on to eBay and I sell it for a dollar
00:04:57.920 Then it's worth a dollar. Let's say I've got lots and lots of bananas. I'm a banana grower
00:05:02.880 And I put my bananas onto eBay. Of course. It's not this simple. I go to a market whatever
00:05:09.040 I take my bananas for a dollar and I put them on to eBay and I start selling them
00:05:12.480 But they start to sell really quickly now. I notice this I notice they're selling very very quickly
00:05:17.200 So I raised the price I raised the price to five dollars per banana
00:05:23.360 But now five dollars that's too much of a price increase and because there's so much more expensive you get this
00:05:33.600 There is a price point beyond which people refuse to pay
00:05:37.440 So if it's worth a dollar it's worth a dollar because that is what someone's willing to pay
00:05:42.240 But maybe I am selling lots and lots of bananas really fast at a dollar so I decide well
00:05:49.600 I'm gonna raise the price to just two dollars and okay
00:05:53.440 The rate at which I sell bananas goes down because not every one can now afford my two dollar bananas
00:05:58.400 But I can get away with selling them for two dollars
00:06:01.200 And I can sell lots and I can make a lot more money than before
00:06:05.040 And importantly, I can sell maybe the maximum amount before I run out and before any of them turn out like this
00:06:12.080 What's that got to do with anything? Well, let's say the government prints money
00:06:15.440 What happens then? Well suddenly lots of people in particular the government itself will come back to that
00:06:21.680 But let's say the government itself, but if the government prints lots of money and they have lots of dollars
00:06:26.880 The government agent whoever represents the government can come along to me with their two dollars and say
00:06:34.080 I'm gonna buy your bananas for two dollars and they can start buying up all the bananas
00:06:37.920 And of course what do I do as someone selling bananas? Well, I raise the price of my bananas because apparently the government who wants to buy by my bananas
00:06:44.960 Has an unlimited supply of cash, so I just raise it to five now the person from the government doesn't care
00:06:50.800 Why should they care they can just keep on printing money? They can print as much money as I can ask for now
00:06:56.640 Not only can they can they buy up all my bananas for whatever price whatever price that I
00:07:02.640 Ask for they can just print more money and they'll be able to give it to me
00:07:06.320 Not only for my bananas, but for every public good
00:07:08.720 They can just start buying it up and so the price of everything goes up
00:07:15.200 Because they don't get this money that the government has printed
00:07:18.960 But the government needs to buy stuff for whatever reason for its own offices for its military for
00:07:25.680 Paying back stuff to other governments that it's borrowed money from maybe wants to send resources overseas
00:07:31.520 We sell our coal to China let's say so if we print the money and start buying all the coal and we can send it to China because maybe
00:07:37.920 We've borrowed money from China for example the price of everything goes up and if the price of coal goes up by the way
00:07:43.120 So there's electricity this that's how inflation works so they're in lies the problem if the government prints money
00:07:50.800 Then that causes the price of everything else to go up
00:07:54.960 To whatever the government is willing to pay and those people who can't just print their own money and now forced out of the market
00:08:04.880 No one can buy the bananas except for the government person or you might think well you're the government
00:08:12.720 If you're a good socialist, you might think to yourself. Well, why doesn't the government just print money a heap of money and give it to the people
00:08:21.200 Okay, give everyone a thousand dollars. This has been happening recently around the world stimulus checks
00:08:28.560 Which by the way, I think is quite moral because the government has stopped people from working
00:08:34.160 And those people have hit the two being paying taxes so they deserve to get somewhere back
00:08:39.920 If you're a socialist, you might very well think to yourself
00:08:42.080 Well, why doesn't the government just print enough money so that everyone's a billionaire
00:08:45.680 Everyone is a billionaire. We'll just give everyone a billion dollars. Forget a thousand dollars stimulus check
00:08:50.000 Or ten thousand dollars. Give everyone a billion. Why not? What is the limit? What is the reasonable limit? We can get but seriously
00:08:55.600 Why not make everyone a billionaire by printing money?
00:09:01.520 Sometimes people don't know where to draw the line
00:09:04.800 With things like minimum wage. They say minimum wage should be raised to $15
00:09:09.040 One that raised to 20 or 50 or 100. They say well the companies can't afford it. Ah, the companies can't afford it
00:09:18.160 But how do you know or the government know what the companies can afford? Companies typically make pretty low profits
00:09:23.680 And those profits get reinvested back into the company to make better products
00:09:27.760 As well as to pay the wages of their staff and to employ more people more people is the key thing
00:09:32.960 You raise the minimum wage. That'll employ less people because they only have a certain amount of money
00:09:41.120 That that quantity of money X is either going to be spread among a thousand employees at
00:09:47.760 $15 an hour or it's going to be spread among 800 employees at
00:09:52.320 $18 an hour or whatever the maths worked out to be you get the idea they can't just arbitrarily start to employ more people at a higher wage
00:10:01.440 Businesses don't work like that now minimum wages kind of like this idea of printing money the
00:10:06.880 Universal basic income is kind of like this idea of printing money. You just giving people more money
00:10:12.000 When there's not more money to give because the money has to represent something
00:10:16.880 Unless you're the government and you've got a fiat currency
00:10:20.080 And you can just print as much money as you like
00:10:23.440 So I'm just going to put aside the issue of minimum wage and
00:10:26.480 Universal basic income it's related, but it's not the same when you just give people money
00:10:31.040 Especially newly printed money such that everyone is way more wealthy and for argument's sake with thinking everyone gets
00:10:37.520 A billion dollars in cash by the government. What happens to my bananas?
00:10:42.800 Just the same as the argument is before because if everyone's got a billion dollars now
00:10:46.880 I'm not going to charge a dollar for this. I'm going to raise it a hundred dollars people still pay a hundred dollars
00:10:52.480 One day because a hundred dollars to them now is nothing. It's like it's what a dollar was before
00:10:58.000 It's much much different to that actually they probably pay a thousand or even ten thousand dollars from my banana
00:11:03.840 It almost doesn't matter because there'll be someone there to meet the asking price and that's just for bananas
00:11:09.280 Of course you repeat this for luxury cars and computers, you know
00:11:13.040 The Rolls Royce cars, you know, if everyone became a billionaire in Australia
00:11:18.080 The price of a Rolls Royce here in Australia would skyrocket to well over a billion dollars because
00:11:24.240 Someone would be willing to pay it. Someone would have the amount of cash to pay it. In other words, your one billion dollars
00:11:30.160 You might be a billionaire doesn't pay for anything anymore. It buys way less than what a billion dollars did
00:11:38.000 A week ago before the government printed all this money
00:11:40.800 That's called inflation the price of things going up because there's too much money out there now
00:11:50.400 The currency of the kind that we have allows government to very much control the price of things in this way a central authority
00:12:03.440 And to some extent the supply and demand because they can print money for themselves and not for others
00:12:08.480 Or they can even print it for others as well either way it changes the price of stuff
00:12:12.560 They've got their hand on the lever of supply and demand and therefore price controls
00:12:17.760 Which is precisely what happens in communist regimes
00:12:21.920 And this is what makes cryptocurrency so attractive to many of us
00:12:31.440 It's at a distance from the government that allows individuals to then exchange goods and services between each other without the middleman anymore
00:12:40.560 Without worrying about what the price of commodities is that the government is trying to set price of bananas is
00:12:46.400 I can just deal with someone else without worrying about what the government thinks the value of something is
00:12:54.480 Especially when they're printing money and they print money in an unethical way for unethical reasons
00:12:59.760 Namely to pay for things today. They cannot afford right now
00:13:04.240 And you might think well, that's what I do with alone
00:13:06.560 Except that the government is not the entity with the money
00:13:10.080 It's population is so they're borrowing on behalf of people who don't want to take the loan out
00:13:20.240 If they borrow money today typically they're not even expecting taxpayers of today to pay the money back
00:13:25.280 But taxpayers of tomorrow or the next generation rather because the debt is carried through for
00:13:32.480 Decades sometimes there's no guarantee the economies continue to grow
00:13:37.760 Of course, this is the hope and this is the expectation. It's the expectation even of
00:13:43.280 You know someone with my worldview that thinks that progress causes
00:13:47.600 Knowledge creation which causes economic growth
00:13:50.160 But not invariably and not with bad economic decisions. There's no guarantee this happens
00:13:57.120 This happens given certain conditions like capitalism namely the opposite of what is going on with modern monetary policy with the printing of money
00:14:06.400 So the fact that governments can by fee it one might say print more money to pay their own bills
00:14:13.440 Especially to their own people is absurd and perverse
00:14:16.960 This modern monetary policy is absolutely socialism by another name
00:14:23.600 Crypto is a way out of this crypto currency is a way out of this. Not only is is crypto currency
00:14:29.760 Impossible to just arbitrarily print more crypto currency. It just does not work
00:14:34.240 It's not only not allowed. It's not physically possible
00:14:38.560 But even if it were at least it's not the government doing it and the other thing about crypto is it's no one else's business
00:14:47.040 Like it's not the business of the government if Jane and Joe decided to exchange crypto for bananas
00:14:52.880 It's no one else's business. Everyone else can keep their noses out of it unless someone's being coerced
00:14:58.400 I'm having force used against them. It's not anyone's business if Jane and Joe are engaged in a transaction
00:15:05.200 Even today under normal circumstances, but even more so with crypto. Yes, and this is just brings me to today
00:15:12.800 Being upset about the volatility of crypto because yes, there are liabilities with crypto currencies
00:15:19.440 There is the volatility and perhaps they will be for some time
00:15:23.200 Even if the trend has been broadly upwards. There's no guarantee. It will continue to rise
00:15:28.880 But nor with fiat currency other there's absolutely no guarantee
00:15:33.600 Didn't inflation what happened because the government is not guaranteed not to print money indeed
00:15:37.680 Apparently, they're just going to continue to print money. So inflation is a real risk at the moment
00:15:44.400 There are liabilities with either currency. It's just at least with crypto
00:15:49.280 You don't have government control and your ability to just start printing stuff and moreover
00:15:54.160 All we need all is that is needed for crypto to continue to succeed despite the volatility
00:16:01.600 That has either to been happening especially over the last month in particular
00:16:05.680 Now it's just a constant population or an increasing growing population of people to be involved in crypto buying Bitcoin buying
00:16:13.760 Ether buying the various other cryptocurrencies
00:16:17.120 But that's true for a nation as a whole you need a
00:16:21.360 Constantly growing or at least stable population if the population starts to decrease then you encounter some problems
00:16:27.600 But as I say, there are liabilities. There are some liabilities with crypto
00:16:30.560 But it's no worse than fiat currencies indeed. It's better than those existing alternatives
00:16:39.520 Resolve conflicts when people otherwise engage in the use of force
00:16:55.840 Abarent and it's causing all sorts of economic problems government need not be involved in currency
00:17:06.960 It's a little more than the barter system. I have a banana. You have a pen
00:17:12.240 You want the banana. I want the pen were swapping
00:17:14.800 But but instead of like meeting up and you know me carrying bananas around and you're carrying around pens
00:17:20.880 We have this thing called money which is far more convenient
00:17:24.000 And you know we've been carrying around cash for a long time. We've been using banks to keep the money and that kind of thing
00:17:29.280 And governments are getting involved as well. They never needed to be involved. They never needed to be involved in the first place
00:17:40.960 Simultaneous with this issue of crypto and me talking about it
00:17:45.360 Is the US government this has been funny to me the US government
00:17:50.320 Talking about parts of the US government talking about parts of the US military
00:17:54.480 Talking about the fact they have footage evidence of
00:18:02.000 You know the cage you about it UFOs and I'm just with Neil address Tyson on this, you know
00:18:06.080 It's it's called an unidentified flying object unidentified
00:18:09.280 You don't know what's a flying object. Who knows what it is my own favorite theory is well
00:18:16.400 Experimenting on their own military. Why wouldn't you this has done all the time?
00:18:20.160 It's always been done historically. This is what military is do. There is part of the military that tests out other parts of military
00:18:25.520 I know what happens here in Australia our special forces for example
00:18:31.520 To test out something called our border force, which isn't quite military. It's quasi military
00:18:36.000 You know, they're the border guards and if the special forces if our
00:18:42.480 Can get into the country dressed as illegal immigrants, then they know they found a weakness in border protection now
00:18:51.360 This sort of thing happens, you know, it's why wouldn't there be a top secret part of the US military?
00:19:03.040 vast naval ships and fighter pilots can be tricked
00:19:07.440 Into thinking that there's something there when there's nothing there
00:19:10.640 Could not happen and wouldn't that be useful if they're invaded by the Chinese one day?
00:19:15.360 The Chinese are modern air force if they can flick a switch and suddenly all those pilots are seeing tick-tacks
00:19:24.800 That means that the US military now has an advantage because they can distract pilots
00:19:29.520 And why wouldn't you do it to your own pilots first just to check out what their response is and then you don't tell anyone about it
00:19:35.680 In fact, you so much don't tell anyone about it
00:19:38.080 That your own military is absolutely convinced they've encountered UFOs over the last few years
00:19:43.840 And they're willing to tell Congress about it and they're willing to go public about it because they can't explain it
00:19:48.560 Meanwhile the top secret parts of I don't know what the Pentagon is just not saying anything. I was very sad the people have said
00:19:57.680 The point is the government is made up of people and a lot of these people are incompetent who don't know anything
00:20:04.160 But whether it's about currencies and finance or
00:20:08.800 About UFOs and military stuff even if they're in the military if they won't know everything the military of the USA is absolutely vast
00:20:16.160 Who was talking recently? Oh, yes, it was Sam Harris
00:20:23.440 Produced a graph. Elon Musk produced his graph saying that although the number of mobile phones and
00:20:30.160 The resolution of their cameras have exponentially increased over the last
00:20:38.400 Resolution of pictures taken of UFOs has not increased exponentially. It's remained a flat line. It's still grainy and hard to see
00:20:48.720 That's a bit revealing. Okay, so anyway, that's that my main reason for making this video today
00:20:53.880 It's just to observe that there is volatility in the crypto market right now
00:20:58.360 The price is fluctuating a lot people have variously concerned or bemused or related the trend in the long term is nevertheless an
00:21:07.080 Ongoing rise. Can we guarantee it will continue? Not at all
00:21:11.400 But the underlying explanation for why people want into this is
00:21:16.600 Coupled to the same groups the people who are interested in crypto the same groups a version
00:21:21.800 Skepticism of government interventions into stuff and those feelings won't be going anywhere
00:21:28.360 Yeah, there's a whole other group of people the socialists and so on the people who love the government who love the state
00:21:34.040 Who want the state to have as much or even more power than they do right now?
00:21:39.000 They want the state to do lots of things for them employ them cure them treat them house them give them money
00:21:46.840 And there are others who reject all that and moreover want to extricate themselves from part of the government
00:21:54.600 But part of the government to try and get away from this control as they see it of the state on the individual and those
00:22:03.200 People are increasing in number which means that the number of people just in general is increasing of course
00:22:09.880 But these people that are interested in crypto who have this skepticism of government and fee at currency and what the government does with money
00:22:16.320 Is only going to increase and the number of places where crypto is going to be useful and used and accepted
00:22:23.440 Are only going to increase as well look it used to be
00:22:26.880 The government controlled information and in some places still controls information North Korea and China and so on
00:22:34.960 Governments are trying to control information too and so-called big tech is trying to do that
00:22:40.560 But most people realize in the West at least that the internet now the internet now is such that knowledge of
00:22:50.160 Such that any attempt by a Western government to control the flow of information is
00:22:59.760 The tech heads and smart people are in the main not inside the governments
00:23:07.680 The smart people the tech savvy people are outside the governments the Western governments cannot control the flow of information
00:23:13.040 Indeed in many places like the USA. There are laws and institutions in place already that prevent the government from intervening much into this area
00:23:21.840 Currency is just another kind of information that crypto currency is another kind of information
00:23:26.640 And so any attempt to control this or to fiddle with the knobs and I think like Elon Musk
00:23:32.400 You know, he first he said he loved Bitcoin so the price went up and then he said he was out of Bitcoin
00:23:37.600 He wasn't allowing people to pay for Tesla's Bitcoin. So it went down again
00:23:40.480 This is one of the liabilities of crypto currencies for the moment
00:23:44.800 But there are a new technology and eventually things will stabilize
00:23:49.520 But I don't think they're going away and I wouldn't be concerned about the fact that for the moment
00:23:58.160 It's a virtuous market like other markets worlds providing value and it's providing a means whereby individuals
00:24:04.480 Can control to some extent their interactions with each other without having a third party specifically the government
00:24:13.760 Because those people in the government don't know what they're doing. They're not expert in much at all except
00:24:20.720 Government stuff and that's not finance that's not information. That's not science
00:24:26.480 That's a whole bunch of things that they're not expert in. So don't be concerned about volatility this to show pass
