Texas, Pierre Rashard Pierre, Texas Hold'em discussed on Liquid Lunch with John Tabacco


We're recording live here from the Biz TV studios in Dallas Fort Worth, Texas. Everybody's moving to Texas. From what I understand. And from Texas. I'm being joined from Austin, Texas, by Pierre Rashard Pierre. Let's get this going again. Now. We were just talking about Bitcoin. We were talking about money in general and the Fed Now we're talking about Bitcoin. One of the things I found interesting was the fact. That you said with money, Fiat money US dollars. You have to invest those. So you don't lose money. If you just set them in your vault or keep them You're going to have less money or less purchasing power when the year is over, But with Bitcoin since Bitcoin is actually gaining value If you hold your Bitcoin, you have more purchasing power. The next year instead of less purchasing power. How is that going to change the way people conduct business in the way society runs the day in the country by having people not have to spend their money people to me? I never want to spend my Bitcoin because I know that I've heard stories like my friend bought a pair of sunglasses with his Bitcoin. Nine years ago. And now those sunglasses the amount of Bitcoin he spent. It's like a $7000 pair of sunglasses. So you don't want to spend your Bitcoin because you know that you're going to regret it later. How is that going to affect us? Yeah, So I think it changes the timing of the cash flows. I think that people are still going to spend their money, but they're going to do it when they want to, rather than when they get pressured into doing so, and the metaphor I would use format pressure is Texas Hold'em. I think that you know almost everyone watching. This has some familiarity with poker. If you have blinds in poker that are increasing, that is used to accelerate the game so that people play more hands because they're getting their chip stack text. And it's very analogous to an inflation tax in that now it makes people play hands that are weaker and of lower quality than the otherwise would. So. In a deflationary economy. People are able to hold their cash, hold their chip stack and wait for a really strong hand. That is wait for high quality investments rather than settling for whatever low quality investment comes along, Uh, in order to avoid inflation, So I think that you know if we if we're in this economy where people are thinking long term And are making higher quality investments that ultimately what we'll have is hired economic growth. It's just about the timing of the cash flows and politicians specifically want to bring cash flows forward from the future. Because they want to get reelected. Um and they're getting reelected in one year or two years or whatever the case is, and they want people to spend money now so that the economy is doing well under their term, And so then they get re elected, which is great for politicians. But it's bad for everyone else because we're having to make compromises. And how we actually want to consume and invest. I like your your analogy there with playing poker there, and with that blind going up, so I know every time I've been in the tournament made it to that last table. I've like had to bet on the first one or two hands or I was going to run out of money. And I would have never bet on those hands. But I knew that I didn't Would be out to game in 3 to 4 hands unless I wan one of the first 2 to 3. And so I think that's pretty there. Yeah, Yeah, uh and it's become rationalized by the economic profession and really, they don't think about it from first principles They really think about it from short term incentives. In order to, uh have short term economic policy, and their rationale is always that well, you know, it's very important to have people not be unemployed. Um and I actually disagree. I think that it's okay to have some level of unemployment in the economy because unemployment is actually representative of Restructuring is happening in the macro economy, so as firms are growing in certain industries and shrinking and other industries due to technological improvements, and you know due to our understanding of the natural world, improving some scientific breakthroughs. And or due to crises like coronavirus, right where we're seeing certain you know, Internet industries do much better stand retail in person sales, so These restructurings are always going to be going on in any kind of dynamic capitalist economy, and the unemployment rate is just kind of a measure of the amount of friction going out in the labour market where there are people who are temporarily unemployed until they re skill or retrained to be able to find other roles in the economy. And trying to artificially suppressed that it's actually going to cause ossification where now your economy doesn't your your labor market doesn't adapt as quickly as it otherwise could to changing economic conditions and, frankly, not only changing economic conditions. Generally this is because there's growth going on and in growth, you know firms are taking market share from others and causing them to fire people. But at the same time hiring as they're taking market share, and so they're just needs to be some liquidity in the labor pool. So politicians talking about that I think are really Going down the wrong path and it's causing all sorts of negative effects across the economy, where we saw it with the financial crisis of people making really bad short term investments because they're just trying to stay ahead of inflation. So they go buy some triple A subprime, You know, securitisation deals to just get some help. So I think that there is increasing recognition that, um, there is something broken about the not just the financial system. But the underlying monetary system, which is what is enabling this bad behavior of the financial system..

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