This is a transcribed version of the “Bitcoin Magazine Podcast,” hosted by P and Q. In this episode, they are joined by Jimmy Song to talk about bitcoin adoption in El Salvador.
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Transcript
[00:00:06] Q: I’m excited to introduce our guest for today. None other than Jimmy song, Jimmy, thank you for joining us. How goes it?
[00:00:14] Jimmy Song: It goes, well, I just came back from El Salvador teaching some people there, Bitcoin programming. So it’s good to be back home. And you know, here with you guys, of course, I have to come back.
[00:00:24] Q: I appreciate you cutting your trip to El Salvador short, just to grace us with your presence. How was it, man? We saw some pictures. You were down there with Max and Stacy [Keiser]. And talk to us a little bit first about just what what’s, what does El Salvador feel like in a bear market?
[00:00:40] Jimmy Song: Well, it’s interesting. This was something that I was telling Max and Stacy, I was there six months ago, things have changed. Like, you can see things being built and stuff like that. There are bike lanes there now, which weren’t there before. They’re like, yeah, they put this in last week. It looks really nice. Everything is, you know, brand new, going up and, you know, things are building. And you, you can just sort of see in the country that there’s a lot more energy, a lot more building and it’s what you would expect it to look like if it wasn’t bogged down with, you know, different forms of oppression, I guess, whether it’s the IMF or, the M13 gangs and stuff like that.
So you, you can kind of see it as far as Bitcoin goes you know, there, there, you can still pay for stuff and Bitcoin and it’s, it’s pretty cool. I think there were a lot of people that sort of expected it to become like a libertarian paradise overnight. It’s not quite that fast, but I mean, it’s, it’s, it’s becoming something pretty pretty quickly.
I like being there. I was there to train some programmers because as you know, we need more programmers and El Salvador needs more programmers. Yeah, it it’s, it’s interesting cuz like you don’t get to see the day to day, but when you visit, you can clearly see progress and that’s, that’s what I saw.
[00:02:07] Q: You know, we hear a lot around this conversation that the people who most need Bitcoin today can’t excuse me, can’t afford these 80% drawdowns. You’ve been to El Salvador before. They’re now reeling with, you know, that 80% drawdown. I believe don’t quote me on this, but maybe it was around $40,000 when you were visiting. We’re down in the low twenties right now. So even a 50% draw down. Were there any concerns from El Salvadorians or was it still like, you know, this focus on continuing to build this ecosystem and learn as much as we can while we can?
[00:02:45] Jimmy Song: I don’t know if I’m the right person to ask because the people I tend to meet are very bullish on Bitcoin.
So, they’re kind of gonna be self-selected but the people I taught were very enthusiastic about Bitcoin and so on. So I wouldn’t, I would say that there’s still a lot of enthusiasm for it and there’s a lot of people wanting to build there’s you know, the, the government is still bullish on it and everything else.
They’re taking care of some other problems first. Namely the gangs, I think they’ve arrested something like 40,000 gang members. And they’re no longer sort of extorting money from like the PPOA vendor or whatever. And that’s a very good thing. It’s adding more money to people’s pockets and getting rid of these sort of extortionist/rent seekers.
[00:03:38] Q: I think it’s a very interesting thing that, you know, a lot of Western news outlets will try to portray Bal as this authoritarian leader. When in fact it seems like it’s just trying to combat corruption in his country, so remains to be seen how things pan out. Let’s talk a little bit about just sort of…
[00:03:59] P: Wait, wait, I do just wanna jump in though. It’s not necessarily that simple though, right? I mean, he also has said he is the world’s coolest dictator, and I think, you know, there are a lot of authoritarian things that he is doing and that he would very publicly say that he’s doing.
[00:04:13] Q: I mean, I mean,
[00:04:15] Jimmy Song: I think putting gang members in prison is not authoritarian per se. I mean, these are people that are going up to like the food vendor on the sidewalk and extorting them for half their profits for the day.
[00:04:32] P: And those people absolutely should be, you know, dried and figured out. I mean, I, I just will say that some of the videos that were coming out, like when that initially was happening again, huge fan of El Salvador, the World Economic Forum is absolutely trying to completely screw them over.
And you know, I think there’s a lot of amazing stuff that [President Nayib] Bukele is doing. But some of those videos that when they first came out around the gangs, seemed chilling. You know, it was like everybody sort of like there, for being forced to crab walk and stuff, and it was weird.
[00:05:04] Jimmy Song: Yeah, they’re gonna take like the worst videos and make it seem like that’s the norm and stuff like that. And that this is the IMS playbook. You know, there, there’s a whole thing about Pegasus and the journalists and stuff like that. You haven’t heard that story anymore, right? The reason why you haven’t is because they found out that some of Bukele’s government officials also had Pegasus installed out of them.
So it wasn’t the, it wasn’t their government installing it. It’s somebody else. We don’t know who, but it’s not, it’s not Bukele who’s doing it, but you know, everyone sort of automatically assumed that it was Bukele and oh, he’s this dictator that’s keeping tabs on journalists. Actually, we have no idea who’s keeping tabs on the journalist because it’s not just them. It’s like a bunch of Bukele’s friends that have the stuff installed on them. So I like that there’s a lot of propaganda going around about and the IMF is motivated to make them look as bad as possible, a hundred percent. But that’s not what I saw.
And you know, like, be careful about the news that you hear outside of El Salvador, because most of the people that are pushing a particular narrative have an agenda. The Washington Post, New York times, those places have a total agenda. Absolutely, and it’s to influence [Washington] DC and the lawmakers and keep this narrative of dictator alive so that they can essentially keep exploiting because think about it like El Salvador has been exploited significantly. Some of the stuff that I learned, for example, they are only allowed to import beef from their free trade zone, which is like the central American free trade zone.
I think it’s El Salvador, Nicaragua, Guatemala, Honduras and one other country, which I can’t remember, but those are the only ones that have a free trade zone. And then and, but other than that, if they wanna import beef, they have to do it from the U.S. So Argentinian beef is great. It’s grass fed, it’s delicious and it’s plentiful and it’s cheap, but they can’t import it because they have this weird trade deal with the U.S.
And the U.S. can have these very unfair sort of rules around stuff like that and keep them continuing to be oppressed because of the relationship that it’s able to enforce through the IMF loans. They’re finally kind of getting out from under it.
And, you know, this is kind of what happens. It’s like the beef that I ate there, cuz it was mostly from Nicaragua, but I would love to eat Argentinian beef. That’s like not stuff, you know, like why, why isn’t that available? And that’s not the only one, there’s all sorts of stuff.
Particularly around food exports and stuff, which the U.S. totally takes advantage of. There’s a reason why there’s this narrative of Bukele being a dictator. I will tell you though, that there are 6 million people in El Salvador, there are 3 million outside of El Salvador.
Most of them are in the U.S. and Bukele has as high or higher approval rating among the diaspora than he does at home. So that tells you something that’s, that’s not the case for, you know, Raul Castro or, you know, [Cesar] Chavez or whoever. That’s a very, very different thing.
[00:08:32] Q: You know, I think also, and I don’t want to go too into detail because, I’m admitting that and maybe, maybe this will hold me accountable. I’m trying to do some research on a potential article, but there was a big narrative about 20 years ago that the president of Singapore was this authoritarian leader who ought not to be trusted and we shouldn’t be doing business with them.
And you know, if you had invested in Singapore in their growth 20 years ago, you would’ve made a very, very good bet. And I candidly think the IMF is running a very similar playbook against BHA and El Salvador that fast forward in 10, 20, 30 years, people are gonna be like, oh shit, El Salvador was a no brainer.
Just like doing an investment in Singapore now. I mean, at this point now Singapore is almost overdone. So I, I do think that there’s a big narrative. There’s that chart that Bloomberg posted of the 19 next countries that could default on their debt after what we saw out of Sri Lanka. And top of the list is El Salvador. I can’t help a chuckle.
[00:09:42] Jimmy Song: What are they defaulting on though? That’s the key difference. So if they default on the IMF debt, they actually can kind of afford to do that. Because then they can go and raise money using the volcano bonds. And that, that, that may be the direction that they go in because IMF loans come with a lot of strings attached.
You have to spend money a certain way. You can only put a certain percentage towards infrastructure, for example. And and for whatever reason, a lot of the leaders in countries that take IMF loans end up embezzling it, I think it has something to do with the fact that it’s money from foreigners and they don’t feel that bad about taking it from their, from foreigners as opposed to their own people or something like that.
But yeah, I, I mean, I, I wouldn’t worry too much about you know, stuff like that. It’s what, what you can see on the ground is clearly that they are building and you can, you can see it. And it’s beautiful. I was commenting to Max and Stacy, like there’s a hotel that we stayed at that whole neighborhood.
If you walk around. You couldn’t tell the difference between that and like, you know, a suburb of, of the United States or like, you know, LA or something like that. It’s, it’s, it’s beautiful. Like it’s well manicured every, like maybe the Chinese embassy has razor wire at the top, something like that.
But other than that, like everything is like growing. And that’s the best evidence. I saw that whatever they’re doing is working now, is it authoritarian? It really depends what you mean by that. Because in a sense that the things that people complain most about are with respect to civil liberties.
But I mean like gangs that are extorting people, that’s, that’s not really civil liberties. I mean, the things that usually the people in the U.S. are complaining about are related to. Okay, well, these M13 gang members you know, they’re not given, you know, perfect due process or something like that rather than, okay.
Like these guys were harassing all of these you know, street vendors and taking, you know, half their wage every day. And now it’s now they’re able to keep their full wage, like those are good things. If you wanna call that a call getting rid of criminals, like authoritarianism, it just seems kind of ridiculous to me.
[00:12:19] Q: Well, to be honest, it’s beautiful when you put it like that, but Jimmy let’s think about this for a second. Mm-hmm while these criminals are doing that to the individual citizens, how is that any different than the way the IMF is doing that to the country itself, with the way they’re forcing them to.
So, Hey, you have to pay us in this certain way and do these certain things. And if you don’t like we hold you by the balls.
[00:12:42] Jimmy Song: Yeah. I mean, it kind of is, it’s just that there’s no real recourse after that. There’s no higher authority to appeal to basically, and this is kind of, the problem is the U.S. is the dominant, it’s the equivalent of the Supreme court or whatever it’s you know, their decision it’s final and that’s it.
And that’s, that’s what, that’s the situation we have. And, you know, it’s, it’s gonna take some time. But I, I think El Salvador’s on its way to like, actually like growing and. Doing some good things. And it’ll be interesting to see if the other central American countries follow cuz. I mean, certainly people in Guatemala are very interested.
People in Nicaragua, Honduras, Costa Rica, they’re, they’re all watching. And if this volcano bond thing goes through which you know who, who knows when it’s gonna happen, but I suspect somewhere around the one year anniversary, which is around September you know, they’re, they’re gonna have cash without IMFs assistance, in which case then, okay, now, now they can actually go build stuff without needing to stay strictly in the lane of the international monetary order.
[00:13:57] Q: Was there anything that this trip surprised you or stood out in comparison to the last time you went.
[00:14:03] Jimmy Song: Well, I, I didn’t stay very long, so , I, I literally flew there Sunday and came back yesterday. So it was like, and two of those days I was just straight up teaching the whole time. So I, I didn’t really get to go out or anything.
But you know, the biggest things were mostly just kind of visual, just yeah, things just look safer. I don’t know. Like, it looks more beautiful. Things are building though those are the, those are the things that stood out to me. And now, I mean, granted, I stayed in like, sort of like a posh area of San Salvador, but you can kind of see it everywhere.
It’s everything, everyone is building. Everyone is doing more stuff because the bad guys are out. I don’t know. And and you know, what, what the president there is doing is making a difference.
[00:14:52] Q: You know, now that you’re back in America, how, how disappointed are you? How much do you just come back here? You’re like, God damn it. I’m back to the same old shit. Nothing changed.
[00:15:02] Jimmy Song: well, I I’m, I’m optimistic because of Bitcoin. I mean, I, I wrote about this in the, in the article this week. It it’s you know, there, if you have Bitcoin, you have this like, sort of hope, right?
Cause you’re, you’re not on the rat race, treadmill, whatever. And instead you you’re, you have the space to think about life a little more deeply and try to Accomplish something that’s meaningful rather than, Hey, let’s just go after what everyone else is going after, which is essentially rent seeking positions.
And that, that’s, that’s a good thing. I, I don’t know. I, I’m not really disappointed per se ever with Bitcoin cuz the people that attack Bitcoin, they it’s, it’s pretty obvious to me that they are, you know, affinity, scammers or whatever. I, I don’t need or want their approval in any way, shape or form.
The people in the Fiat world, I, I don’t want need or you know, want their approval either. It’s I, I, I feel like I have a different sort of mindset than a lot of other people because there’s this thing called Bitcoin. I, and I have savings. So. I don’t have to think about, okay, how can I make rent this month?
Or how do I make sure I’m progressing in my career in the next year that is in line with my colleagues or something like that. I, I don’t have to do any of that. I, I can just continue to focus on the long term things. For me, that’s bringing sound money to the world and that’s Bitcoin and I, I can think about, okay, well, how can I best achieve that?
How do I, how do I influence things to go in in that direction? Certainly like training developers in El Salvador is a small step in that direction, but it’s something that I can do that that maybe not that many people can. So I, I like thinking about those things and building things for the long term.
And I think a lot of other Bitcoiners are as well. And that’s, that’s, you know, what gives me optimism is, is that. At least in this community. You know, I, a lot of my friends in the Bitcoin community, like they’re, they’re thinking, okay, how do I make sure that I leave a legacy so that like, you know, my Bitcoin turns into like, you know, a family that has generational wealth.
You know, we, you know, my name, my last name can be like the Rockefellers or something from, you know, a hundred years ago. I mean, not like their corrupt parts, but you know, just the, the fact that they’re able to last and leave legacies and stuff like that. You know, those, those are things I, I, I think are more meaningful and I, I, I don’t know.
It’s, it’s not depressing to me the least .
[00:17:52] Q: Fair fair. I always just love going and seeing other cultures in other parts of the world in the country. I dig guess though, I think you, while you were in El Salvador, we were actually having this conversation. Wow. Yeah, we had it here on BI Bitcoin magazine.
I was like, did we have it on Bitcoin magazine spaces? Where we were kind of, we talked about this idea of like, you know, the narrative that was fed to, to my generation, that, you know, your generation, the generation before U’s generation was feeding saying like, you know, you can be anything you wanna be.
And the idea of like dreams and just how, you know, unfortunately everyone just wanted to be a fucking pro-athlete or a fucking famous movie star or a TikTok star. And then lo and behold, I think it was James lavish who was quoted the other day or no, it was Luke Groman say that there were more people more.
Individual human beings drafted into the major league in major league baseballs draft, then graduated with a chemical engineering degree last year. Like that’s how far we’ve kind of fallen. And I think that actually feeds into a little bit of a little bit of what you talked about in your most recent piece, how replacing reality with Fiat falsehoods destroys meeting and just the idea of like, where is our purpose coming from and what, what is real from the, the figments of our imagination that we’ve created?
[00:19:16] Jimmy Song: Hmm. Yeah. And and it, it was, it was a fun piece for me to write because it it’s sort of like. Conglomerated a lot of the other things that I had been writing about. And I realized like a lot of the values that we get taught are not from family anymore, as much as it is Fiat education. So you’re taught what to believe and how to behave.
And what’s good and what’s bad from school, right? Like, you’re, you’re told, okay. You know, thi this is what, you know, being a good citizen means rather than here’s who you are as a member of this family, that, that used to be a much stronger part of your identity. It’s it really has sort of like equalized and, or diminished over the years where people don’t identify with their family so much as maybe the school that they graduated from.
And that that’s more their identity and it gives sort of like a flavor of what you might believe and so on. And it it’s, it’s very uniform. It’s very conformist. It’s very sort of status and emphasizing compliance to the state, something like that, rather than I think a family identity, which is way more based on loyalty and love and, you know, family identity, if you will which tend to be a lot.
Stronger as an identity because you know, you, first of all, you share a lot of genes and stuff like that. So it’s a, there there’s sort of like a, a biological component to your identity. That’s not necessarily there when you’re, you know, graduating from a class it’s, it’s not like ideological as, or it could be, but like, you know, there, there’s sort of like a physical biological component to your identity within family that that’s kind of missing in Fiat education in, in our sort of like haste to make everything equal.
We’ve kind of removed a lot of meaning. And it’s been taken over by Fe the Fiat system to essentially make everyone like drones or something, you know, like, very compliant cogs in the Fiat system. You know, that Fiat companies and Fiat politics all, all of those sort of like. Are the versions of things that we’re supposed to get meaning out of.
And really all, all three of those are very empty. They’re mostly around compliance or rent seeking or you know, getting artificially outraged or something like that. And those are not really good sources of meaning because what’s there today is gone tomorrow. They’re, they’re all very short term, very high time preference things.
Whereas, you know, you know, family, community, religion, like the, those have actually created things that have lasted a very long time. And it’s, it’s much easier to get meaning out of those because you’re contributing something to something that’s bigger than yourself that isn’t going away. Right. Like that, that, that’s a, that’s a very important and.
Thing for most people and you know, writing about it and seeing how it’s related to all of these other things. It, it, it led down to like this idea of the basement, the idea that, you know, Fiat money is the base money and Fiat, meaning is the base meaning Fiat or education is the base education Fiat, you know, companies are the base communities and, you know, Fiat philosophy is essentially the base religion.
It it’s, it’s very you know, it, it removes sort of like the meat or the, the, the really valuable parts and leaves you with sort of like the husk or something. And that, that, that’s what I think most people find. So unsatisfying about modern life.
[00:23:17] Q: How much like, and I don’t mean to harp on this, but I have a big belief that the way our education system is designed, it’s designed to create these thoughtless robots that just complete tasks at hand, without really thinking through what needs to get done. How much do you attribute things like our public public education system to feeding and perpetuating the Fiat system to then grow into exactly this like thoughtless people who just sort of do what they’re told to do, because that’s what you’ve done your whole life.
Hmm.
[00:23:49] Jimmy Song: Yeah. And, and it’s actually even worse than what you say. Cause it’s not just about compliance to the state. It’s, it’s giving you sort of like trinkets to go after. So, you know, if you’re in high school, what do you wanna do you want to get into a good college, maybe an Ivy league college, maybe Harvard, right?
Like, and then once you get into Harvard, what do you wanna do? Well, You wanna get to the next thing? What’s the next thing? Well, it’s an investment banking job at Goldman Sachs, right. At a college, or, you know, maybe you go to law school and try to get a position at a top tier law firm, or maybe you go to med school and get into a really prestigious residency program.
And, you know, I mean like these it’s it’s not just like meaningless cogs in a wheel it’s cogs that appear meaningful, but once you achieve them, they, they really have very little meaning. And it it’s just sort of like this filtering mechanism and it’s it’s based not on its intrinsic meaningfulness, but this, but because of an artificial scarcity that is created by Fiat money, right?
Like, we have very abundant money, so you have to have scarcity elsewhere and it’s in, you know, The number of doctors in the country. For example, I, I don’t know if you know this, but the number of doctors that come in every year, so there’s always like retirements and debts and stuff like that. So a bunch of doctors go away from the market, the number of new doctors that come in, that’s entirely controlled by the American medical association, they decide exactly how many new doctors are that are gonna be.
And they, they represent the, you know, group of doctors that already exist. So what are they gonna do? Well, they’re gonna make sure that every doctor that comes in has, or that there isn’t a saturation of extra doctors instead, there’s just enough to cover everybody because they don’t want any doctor to go out of business.
Of course, that’s like a horrible incentive because in a sense, like if you have a bad doctor, Like it, it’s kind of hard to get rid of them and there isn’t as much competition. And, you know, we think about why healthcare’s so messed up. That’s part of it. It’s if everybody got to be a doctor that wanted to be a doctor, this would be a very different market.
But that’s not the case. It’s, it’s a monopoly controlled by a single entity. So you have this sort of like artificial scarcity created by the Fiat system at all levels. Whether it’s college or, you know, Fiat companies or these extraordinary like achievement things. And the ironic thing is like the people that get them feel so proud that they have, right?
Like the, the PhD from Harvard or whatever it’s considered super prestigious or whatever. But like most of those are actually like the most Rente of the rent seekest and like, they probably have tremendous amounts of ability, but. It’s being channeled towards these Fiat games rather than to the market with entrepreneurship and stuff.
Like you, you have all this talent and you’re, you’re gonna spend it like doing postdoc after postdoc and academia, rather than like trying to invent something that might be useful to the market. Like the, this is, this is why the Fiat system is, has been so, you know, draining to to everything. It, it, it sucks the creativity and energy and life out of almost everything including the very people that it’s supposed to help.
It, it, it, through Fiat education and Fiat companies and Fiat politics and everything else just like demotivates them tremendously puts them wrong incentives in front of them and makes them. Play games that really people don’t wanna play. Right. Politics. And, you know, I mean, if you’re, if you’re an academic you’re, you’re writing grant proposals all the time.
You’re, you’re spending like, you know, many months writing a freaking grant proposal rather than doing the thing you love, which is, you know, trying to figure out, expand the limits of human knowledge and that this is and if you’re, if you’re in a comp, if you’re a coder in a company, I can’t tell you how many times I had to be in useless meetings, not getting to actually code or write software.
It’s it’s you know, arguing about what features we should have and whatever it, I mean, this is what Fiat things do is it sucks the life out of them.
[00:28:16] Q: You mean to tell me that staff meeting that could have very easily just have been a meeting or an email. that that’s a good use of your time, effort and energy.
I fucking used to hate that. I actually like sidetrack a little bit, but like in, in my Fiat days, in my Fiat career, like it was honestly before COVID attended in the office was mandatory for 99% of jobs. And I remember once I became an agent and you kind of, you now had access to your computer out of the office.
I got my laptop set up to where, okay, now I can access like the softwares that we use in the office, all my personal laptop. And there were a couple days where I just got pulled into all these meetings on the other side of LA. And I was like, I can either drive back into the office or I can just start working remotely and my bosses signed off on it.
And then there, there were days where I would just go home at two and I would just work from home. And the first day, I, the first day I just worked out of the office, I’m rolling calls with my assistant and it’s like four 30 and I’m like, wait, did we just finish everything for the day? And she was like, yeah, like at, at this point you’ve actually made calls and done stuff that are supposed to be done next week.
Like, we’re going ahead. And I’m like, see, this is what happens when I don’t have everyone like swinging by the office, asked for like, Hey, like how’s Bitcoin doing? Or like, who should I start on my fans football team. It’s like, fuck, I get so much more shit done when no one’s around here trying to fucking talk to.
But apparently that didn’t mesh well with the company culture and the environment. It was very much like a, Hey, don’t work, work hard, but don’t work too hard to where you make everyone look bad, fucking stupid ass, dumb ass. I’m still salty.
[00:30:04] Jimmy Song: Yeah. I, and you kind of should be because I mean, that, that, that sort of sucks the life out of you, right?
Like when, when when you have these like political things that you have to deal with, it, it like drains all motivation from like your normal work, the, the actual productive work that you ought to be doing. And the, this is the Fiat disease it’s because of the presence of the money printer because of the can on effects, politics just becomes way more important.
And you know, entire companies are sustained by sort of, political maneuvering and so on. So, I mean, think about like every airliner I wrote about that a long a while ago. But they they’ve all gone bankrupt multiple times. The only reason they exist is because of government subsidies, but that’s also why they’re so poorly run and why we have all these delay.
Like I, I flew back yesterday, we had a three hour delay and and the flight attendant told us what happened. And it was like one bureaucratic mess after another, the, it was delayed three hours because the plane that was supposed to get to San Salvador couldn’t take off. And the reason why I couldn’t take off from Miami was because the pilot seat spring was broken.
So they had to replace the entire seat. Now I, I’m not a pilot, but I think you can fly with the spring and maybe, maybe fix that overnight instead of like delaying everybody. But that’s what they had to do. And then they found another issue. There was like a dent in one of the Propellers, I guess, well, not, not it’s a jet engine, so it’s a, it’s a metal part that had a dent.
So they had to replace that. But that wasn’t the problem. I mean, they, they should do that. Of course. The, the problem was that they filled out the paperwork on how they completed it incorrectly. So that caused another hour delay. And then at that point, the pilot had worked some like 15 hours in a row.
So they, they there’s like some regulation that says you can’t work more than 17. And the flight would’ve taken two hours. So like, it, it would’ve gone over the limit. So they had to call in another pilot. That took an hour. And then there were flight attendant, union rules, which said that you can’t work so many hours in a row.
And two of the flight attendants would’ve worked too many hours in a row. So they, they had to be flown back according to the union rules and they had to get, so all of that took like three hours and it wasted a whole bunch of time because of all the Fiat regulation stuff. Right? Like, and this, this sort of stuff is so typical of anything Fiat related.
It’s all political. There are sort of like, kind of weird rules that waste a lot of time and things like that. And that, that that’s, that’s kind of what it came, comes to. It’s a, it’s a sad state and it drains all, meaning it drains life. It drains like motivation. It’s it’s no wonder people are depressed.
You’re like you, you get stuck in like, sort of weird red tape than. You stay in sort of like a, you get into more and more of a Kafkas world. It it’s you know, it gets very depressing.
[00:33:18] Q: Let, let’s keep diving down these RA rabbit holes like you you brought some sort of parallels to, I wanna be careful how I say this before YouTube shuts down our account a European quote, unquote power that came to be in the thirties, into the forties. That was maybe the enemy of world war II and draw some parallels to what they did to what, some of the decisions, not all of the, just some of the decision the us government is making.
Can we unpack this a little bit and, and, and dissect that,
[00:33:50] Jimmy Song: Just why I mean, Essentially what the us is becoming is it’s becoming more of a centrally planned economy. And and we’re, we’re going in that direction. And, you know, typically this is called socialism and this is from Carl Marks who said that after capitalism, there would be socialism and after socialism, there will be communism.
And, you know, socialism is usually understood to be like the us Sr or something like that. But actually there’s that’s just the leftist version of socialism there’s you know, politically right versions of socialism, which a lot of people call fascism, but it’s the same. It’s it’s Government control of corporations rather than like direct government control of everything, which is more the leftist version.
And you know, honestly, that, that was what Nazi Germany did. That’s what a lot of other countries did. And you know, us tends to go more in that direction. You don’t need to look much further than the healthcare system. There’s a whole bureaucracy that that is, you know, health insurance, that, and these are, you know, there’s like six giant conglomerates that control most of it.
And they they’re like sort of a tax that you have to pay if you want healthcare at all. Or even if you don’t need healthcare, you still have to pay them. It’s, it’s, it’s this very very strange system. And it it’s set up that way because it’s, it’s a form of central planning. And that’s. So unfortunately the direction that the us has been going in ever since 1971, or even before that, I guess the beginning of the fed and so on used to be very much that each state could determine what they wanted to do now.
It’s all so centrally controlled that, you know, like Caitlin long has to Sue the, you know, the fed to get a banking license. I, I mean, it’s, it’s, it’s ridiculous. The, this is, this is what central banking central plan economies look like. And you know, the more I write these articles, the more I realize like every one of these it’s like, okay, this is exactly what Soviet Russia did.
or communist China did and it’s, and they’re spinning it as a good thing. It it’s just so strange. Cause it’s so obvious that it doesn’t work, but you keep trying it.
[00:37:03] Q: How like, On a scale to just actually I’ll simplify it. On a scale of one to 10, like current laws and regulations in place in the us, how socialists are we?
10 being the leftist paradise of the USSR and one being communist China.
[00:37:30] Jimmy Song: Wait, I dunno if that’s actually fair scale. That’s not the right scale. Both ends of the scale are like super socialists. So that right. You’re
[00:37:37] Q: right. I retract one being the free market, pure capitalist market that we do not actually have.
Sorry. Did I get put
[00:37:46] Jimmy Song: biased in. Yeah. So I, I, I would probably put it at like seven it’s, it’s pretty controlled economy and we don’t have anything like the anarchical capitalist, libertarian paradise that that I think would be a one or something like that. And we’re not anywhere near it. I maybe like 1880s, 1890s.
We were like four or five three or four somewhere around there. But right, right now it’s it’s, it’s gone way more towards socialism. Yeah. And that’s, that’s, it’s where we’re nowhere near that.
[00:38:23] Q: What, what are things that you are keeping an eye on out of any government officials, whether it’s federal state level or local that would be a step towards that number 10 .
[00:38:36] Jimmy Song: Well,
[00:38:38] Q: when are, when are Jimmy’s warning, warning flight lights, and sounds
[00:38:42] Jimmy Song: gonna go off. Yeah, universal basic income universal healthcare universal housing a C B, D C.
Yeah, I Mo most thing, whatever you’re getting for free, it’s going to require a lot of coercion in order to get, right. So, you know, if you have free healthcare, for example, or, or you, you know, the government says you have a right to healthcare. Well, that means that somebody has to provide that service.
How are you gonna force them to provide it, especially if you don’t have enough labor and thi this is what every country with like, socialized medicine ends up being is they don’t have enough doctors or they’re not paying them, or it’s all centrally controlled. So the doctors are always like, what, what the heck?
And not getting paid enough. So they’ll move to the us ironically enough, because. They could get paid more. Why, why would you stay in a country? That’s not paying you very well and where you you’re essentially forced to work for a wage. That’s not really voluntary. There there’s coercion involved whenever you’re giving stuff out for free.
And that’s the other side of the equation that I think a lot of people don’t realize. And the thing is these things aren’t free anyway. I don’t know if you remember during COVID, but it was oh all, all these people that are not taking vaccinations, they should, they should, you know, like, we shouldn’t let them into emergency rooms.
We shouldn’t treat any of their wounds and we shouldn’t give them any healthcare. It’s like, yeah, this is exactly how free stuff becomes like a mode of compliance is if you don’t do what we say, we’re gonna take stuff away that is supposed to be free. And I, I don’t know if I told this story on, on, on this show or not, but it’s probably worth telling again I, I was talking to Taho the north Korean defect.
And and I was asking him, Hey, what, what, how did North Korea come into? Or how did Kim Jon Kim song like consolidate all this power? He said, just gave stuff away for free. That’s what he did. You know, at first it was healthcare, then a guaranteed job and housing, everything else. And he gave him, he gave it all away for free.
And of course, in order to build all that stuff, you had to draft everybody and everyone became essentially a government employee. And at that point it was okay, well, you know, you can have free housing, but you have to do what the regime says. And if you don’t follow our rules, then we’re gonna take your house away.
We’re gonna throw you into a prison camp or something. And that that’s the, that way lies hearing me. And if you’re talking about stuff like universal basic income, well, who who’s, it’s clear, who’s benefiting, but who’s hurting well, It’s everybody else that gets diluted as a result of all that money that got printed or the people that got taxed to pay for it.
And that, that that’s where coercion comes in. You can’t give away free stuff, unless you take it from somebody else or you coerce somebody else into providing that service. So that for me is the biggest indicator of the March towards the communist socialist way of government. And that’s not a happy place to be and, you know, ask anyone that lived through communism.
It, it it’s, it’s not good in any way, shape or form. So yeah, that, that would be my major indicators. But yeah, it’s all the, it, it always comes with sort of like good sounding rhetoric. Don’t you want healthcare for everybody? Don’t you want everyone to have their own house? It’s like, Yeah, those are good things, but who’s providing those that, that, that’s the thing.
If, unless you can conjure it out of thin air which you can’t, you’re either stealing from somebody or you’re forcing somebody to do it. You can’t do that. And and you have to look at the other side of the equation and if you’re not taking that into account, then you might be a socialist.
[00:42:39] Q: I’m not feeling spicy enough to bite
But, but I wanna, I do wanna touch on and, and maybe ask you to sort of,
we had a long conversation with CK yesterday about this idea that, you know, Bitcoin succeeding has. It can either fully succeed or it will fail where it sits right now in this sort of like middle, maybe along with all the other crypto bullshit and gold is still being talked about. And then you have Fiat just running rampant.
It won’t exist in this ecosystem forever, but it can really only exist in an ecosystem where it is the ultimate thing, or it just fails utterly. I wanna focus on the, when it actually comes to coming into power. You know, one of the things we talked about yesterday was this idea that in the Fiat system, people hide so much wealth in their houses.
And you know, the idea that he continued to push that I don’t necessarily agree with is, you know, the cost of housing will become much cheaper as a result of moving off of this Fiat standard and moving onto a more Bitcoin oriented world.
Do you agree with that type of, sort of through line that, you know, housing in general can become more affordable once you remove, once we remove ourselves off of this Fiat
[00:44:12] Jimmy Song: standard? Yeah, a absolutely. And I, I mean, you don’t, you really don’t need to look further than like a place like Vancouver or New York or Toronto or something like that.
Large number of those houses were bought by Chinese people that are trying to store their wealth. If you remove more that demand that like store a value demand and they they’re buying it because they don’t think their cash is going to hold their value. Whereas real estate is if you remove that demand, then of course, if like the price drops, right.
And you know, you don’t, you probably don’t have nearly the supply either, but but you know, like it’ll be a lot more affordable. What, one of the things about real estate though that. That really wrinkles me is just how regulated it is. But at the same time, how sort of like cheaply, everything is made.
And this is something that I touched on in the Fiat real estate piece, but so, so much of the real estate right now is like not built permanently. I mean, it’s you know, you look at medieval stuff, it’s you know, a lot of that stuff has lasted cuz they built it outta stone. You know, the, the homes that we live in, you know, it’s gonna last maybe 25 years and then it’s gonna be, you know, crushed because somebody wants like a newer designer thing.
It’s kind of like wasted work, right? Like if, if you can have a house that can last a hundred years, all the rebuilding, all those materials and stuff can go towards something else and build something cooler. And we’re not really like expanding technology or anything like that. We’re I mean, maybe there’s a little bit on the 3d printing side or whatever.
but but you know, because of this artificial demand of real estate, there’s not really that much incentive to optimize things very much, cuz everyone’s making money. And this is the thing like the, the analogy I’m gonna give is like, compared this to Bitcoin mining, where if you’re an inefficient Bitcoin minor, you will go out of business.
If you’re, you know, you have to be like sort of hyper-efficient and very, very good at what you do in order to survive. As a home builder, you don’t, you don’t actually need to be that great. like you, you just, you just cuz there’s just so much demand you, you could just sort of be like mediocre and still make tons of money.
There there’s not enough pressure to optimize or innovate or you know, make things more efficient because the way that. Real estate is it’s heavily regulated. So you kind of have to build a certain way. And and you know, getting a permit, for example, to do like a 3d printed house is like gonna be very, very difficult that almost every jurisdiction, because the, you know, people in charge won’t want it like that.
There, there just isn’t that much room for any of that, because, you know, there there’s all this artificial money just sort of coming into real estate. So you know, all of that combined and, and despite all that, you know, homes have at least like building materials and technology. I mean, people live in like much more per person square footage than they were like 50 years ago, because you know, that, that’s the thing that’s most important to them.
A there, there is some innovation there. There could be a lot more innovation. I think what, as you sort of optimize and put natural market forces toward it, and yeah, I think it’ll get more affordable on two fronts. One it’ll be more affordable because there won’t be the artificial store of value to them, but there’s two, there’s this O other sort of direction of innovation and better materials and, you know, things that last longer and things like that, which, which come as a result of a more Bitcoin standard people are just not gonna pay for crappy built houses.
They’re gonna pay for the ones that are gonna last a long time and that they can pass down to their children. And I, I, I think that’s the, those are the two sort of like opposing forces that eventually make housing way more affordable than it is now.
P P you’re muted still. Oh my God.
[00:48:25] P: Thanks for for letting me know, you’re saying that basically, as we move closer to a Bitcoin standard there will be stronger incentive to use longer lasting building materials.
[00:48:35] Jimmy Song: Yeah. I mean, not just like having longer lasting real estate, but also you know, just better tech, construction techniques and stuff like that.
It what, so, one, one interesting anecdote that I, I read about recently that, that struck me was towards the late Roman empire they wanted to build like new buildings except like a lot of the knowledge on how to build those buildings. Like we’re lost. So what they ended up doing was you know, taking parts from old buildings to making them again to, to make new buildings.
Oh shit look. Cause because they, they just didn’t, they kind of stopped innovating cuz of all the, the. Dilution and rent seeking and all that stuff. Wow. Like, doesn’t it feel a little bit like we’re going that direction, especially with something like airlines, right? Like airplanes have not improved in 50 years, like at all.
I mean, yeah, maybe you get wifi on board now, but but really it’s took like
[00:49:33] P: decades, wifi I’d been around for like 10 years before they were like, all right, fine.
[00:49:37] Jimmy Song: Maybe if you’re like, but, but the actual planes, they don’t go faster. They don’t, you know, they don’t have larger capacity. They don’t like it.
It’s, it’s the same technology. Right. Like it, and it’s we we’ve lost a lot of, and we, you alluded to this earlier with the petroleum engineers versus the number of people drafted into major league baseball. I mean, we’re, we’re gonna start losing some of the innovative ideas and like, because there’s so much of a brain drain into.
Rent seeking careers. I mean, most of them are going into wall street and doing, being investment bankers instead of Lockheed Martin to improve you know, jet engines or to come up with a completely new design that’s like much faster and runs on like a different kind of fuel or, you know, uranium or something, you know, like these, these are all possible.
Just, no, one’s, we’re, we’re just completely stagnant on, on those fronts because of Fiat money there. There’s a and I imagine that’s the case for housing as well. There, there’re probably way better ways to do stuff. It’s just, you know, the, the people that are building build exactly what they know and that’s it.
There, there, isn’t sort of like innovation going into that. You’re not putting brains towards that. The, the brains are all going towards, how do I get people to click a few more ads? You know, that, that, that’s what they’re doing instead of. How do I make this industrial material like last, longer and easier and mold more, multiple, and easier to deploy and all that.
Like, tho those are things that would actually improve housing tremendously, but instead, you know, all, all those brain cells are going towards, how do I extract, like a few more sense from this guy from each viewer of this article or how do I get them more addicted to porn? So they’ll pay us more money or how do I you know, make this game more addictive.
So they’ll buy all the, you know, trinkets that go along with it like that. This is what financialization does. It’s, it’s, it’s it encourages this sort of like rent seeking behavior, which doesn’t necessarily add very much the, the things that would add a ton, you know, like making a nuclear powered.
Super Sonic jet or you know, I don’t want, I want that like housing or a 3d printed house that can go up in a few days and last for a hundred years, like, like those are things that I think would be very useful, but very few people are working on them, relatively speaking. Most people would, a lot of those people are instead, you know, Hawking all coins or you know, being an investment banker or I don’t know, like just very Rente key positions that don’t do anything.
That that’s what they’re focused on and that it’s a it’s, you know, it’s ultimately kind of meaningless to go do those, but they pay well because Fiat subsidizes them. So that’s that, that’s the state that we’re in. Interesting.
[00:52:49] P: Well, we’re almost at a time. I, I feel like the. . I mean, I agree with you on, on a lot of what you’re saying.
I feel like maybe there’s, you’re painting with like slightly too broad of a brush around the categories of things that are like, you know, like Fiat incentivized. I feel like you know what I was gonna ask you like a question that would’ve taken like 15 minutes to answer, but I I guess could do that.
You draw, where do you draw the line? Like, how are you determining what is sort of like rent seeking specifically because of a broken monetary system, which we clearly live in one, right. Versus things that are I don’t, I don’t, I don’t know, like things that are basically just market dynamic. And, and I’m kind of going the direction of like subsidized industries or industries, as you said, that are like bailed out constantly versus mm-hmm non ones, but I don’t know how to draw that distinction.
I’m curious of you.
[00:53:36] Jimmy Song: Yeah. And I I’ve thought about this a lot and I I’ve come to the conclusion. There’s there’s not a very easy or clear line that you can draw. because everything is interrelated. The reason why people want to play video games and watch porn all day is because their jobs are meaningless and don’t contribute anything.
And their their moral character has been debate along with the money. And that in turn incentivizes more rent seeking sort of jobs where, you know, people are. Making stuff that don’t contribute anything. So it, it’s all sort of like interrelated and it’s hard to say exactly how much is exactly from Fiat money.
How much is just sort of like general moral character de degradation from the degradation of money and how much of it is just, you know, partisan politics or, you know, other things or the effects of technology or whatever. I, I mean, all of it is related. I, and I, I, I believe that you know, character degrades along with the money, I believe that you know, materials and everyday things that we use the grades along with the money and, and everything else.
So it it’s you know, where do you, where do I don’t I don’t really draw a line. I, I do know that Fiat has at least something to do with all of these things. And it, it, if it’s not completely responsible, it at least contributes to it significantly through sort at, at the very least a high time preference behavior of everybody.
Which, which is the result of the money, the basing so quickly. So, you know, all that is to say that, you know, I, I just sort of do paint it with a broad brush because I think it’s going to hit more so than it doesn’t you know, I could be wrong and I I’m happy to be happy for people to point out where I am.
But you know, the, the, the series of articles has all been about, okay, well, let’s think about this. How does Fiat money affect this thing? And you could almost chase everything back to it. It’s kind of sad, but it really is sort of a root of all kinds of evil.
[00:55:48] Q: Yeah. I think I’ve exited the matrix. I think I’m, I’m now back, I talked too much. You come back to us. I talked too much of that. The Kosky twins and I got caught up in the matrix, but Jimmy, I do wanna just, I, I don’t mean to like, just go for the biggest story on Twitter, but you know, we are a ratings driven show and that’s how he and I collect our stats.
What, what was your initial gut punch reaction or just, did you laugh audibly loud when you heard about Elon Musk and Twitter selling their Bitcoin?
[00:56:15] Jimmy Song: No. I mean, I didn’t laugh or anything. It was like just sort of, I, I think this was his move. The whole time was whenever he would be in financial trouble, let’s go and do this.
Right. Like, and he expected Bitcoin to be going up in price. So he’d look like a genius and, you know, people would be more more forgiving of what happened, but he had to sell at a loss. So he looks a little bit more foolish now. But the, I, I think this was his plan. The whole time was to dampen the volatility.
And it naturality, if you think about like, Tesla stock price versus versus Bitcoin, I think he actually made out better storing it in Bitcoin than in Tesla stock. So, you know, if you think of it that way, like the alternative, I guess would’ve been to do like a buyback of the stock or something like that, which would’ve essentially been that.
And it, it would’ve, it probably would’ve gone worse. But. Yeah. I mean, he he’s he’s one of those rent seekers. I think like, if you think about it, he’s gotten so many subsidies off of, for his cars and stuff. And I mean, his company’s not doing very well. You know, like they, without that Bitcoin sale, they would’ve lost a lot of money.
Of course they also have a lot of money, but yeah. I mean, this is these, these are Fiat companies. Like it’s, it’s just kind of crazy. I, I did a calculation for Coinbase the other day, right? Like just trying to figure out like what their financial situation is. And I don’t know, maybe, maybe this will get your ratings, but let’s, let’s just do the math.
Right. They did an 18% layoff and they gave some numbers. It was like 1200 people, something like that. So that if you, if you do the math, that means that they’re left with about 5,000 people, 5,000 people in Silicon valley. Now let’s just like, Estimate how much that’s gonna cost. You know, some of them are gonna be call center people, but others are also gonna be like principal engineers and stuff.
So I don’t know all with healthcare, 401k stock grants and options and all that stuff. Let’s just say that’s about 200,000 per person. It’s about a billion dollars a year, just in personnel, a billion dollars. Right. And that, that doesn’t include servers, regulatory stuff, advertising you know, all, all the software licenses, you have to pay all the buildings that you’re renting, all the perks that you’re giving to your engineers, including the cafeteria food and whatever it doesn’t include any of that.
So, and you, you include all that. It’s like, huh? Yeah, I can, I can see why they’re, they’re probably going to be more compliant with the state going forward because they have $6 billion. but but you know, like they’re, they have a huge personnel cost. They have a lot of other costs. They’ve probably taken out loans and things like that.
Like, I, I, I think we’re kind of seeing a company turn into a Fiat company in real time. And, you know, like they’re, they’re starting, there was a story earlier today about you know, somebody doing insider trading. I will bet you anything that this person will be punished like crazy. And they will put in all sorts of controls and do whatever the state tells them because they’re, they, they they’re gonna need it.
they, they need to comply with the state in order to have a chance at at staying relevant. And you know, this is the fate of every, every Fiat company is in a sense like Coinbase was. 2013, there were like the only place you reasonable place that you could go buy Bitcoin and there, and Brian Armstrong at that time was a Bitcoin, you know, enthusiast and stuff.
He since like sort of slowly gone down the all coin route and now they’re probably gonna become like a very Fiat company, but that that’s sort of like the evolution of things and that’s, that’s how things happen.
[01:00:08] Q: So one thing, I mean, I’ll just say the, the thing I’ll push back on JBA is I don’t think Tesla is just now becoming a Fiat company to your point.
Like, yeah,
[01:00:18] P: they’ve been, they were a Fiat when they hatched out of the egg. And when long
[01:00:22] Q: before Elon even purchased them, they were forged in the fires of Fiat hell. Like the only reason they’ve ever been profitable is because of the all ESG and all the carbon credits. And I, I brought this up at the beginning of the show and this will be the, the final point I make before Jimmy, I give you the last word.
This is exactly what happened in the Q3. Yeah. Q3 20, 21 earnings reports when they came in at a fucking loss and they were selling carbon credits and the only reason they were profitable and their earnings came even profitable was because they sold carbon credits in the same way that they would’ve had negative earnings this last quarter, if they didn’t sell Bitcoin.
So the Fiat company can be damned to hell for all I care, but Jimmy final word.
[01:01:07] Jimmy Song: Well, I mean, my final work today is, Hey, like it, it is kind of like a weird time in our space right now, cuz for whatever reason, Ethereum is pumping and I don’t know, it, it always pains me when Ethereum pumps like this and, and almost drags Bitcoin, along with it, it feels like it’s an artificial pump.
A normal pump looks like where Bitcoin leads everything else. And then things catch up later because you get people that are foing or something like that. It’s a little weird. So it’s not something, something doesn’t smell right in the market right now. And I, I’m not sure what it is, but you know, we, we just sort of have to wait and see, which is basically the virtue of every holder you’re supposed to wait and.
you’re supposed to have patients you’re supposed to not get affected so much by day to day news. Like Elon did this, or, you know, Coinbase employee did this or whatever. The key to being a Bitcoin Bitcoin holder is to sort of let that all wash over you. And and you know, there are sort of things that I think would bother you if you were more anxious about things, but if you’ve been saving in Bitcoin, you have some savings, you have a runway.
You can relax and you can start thinking about other stuff. Like the long term, like what you’re going to do 20 years from now, what sort of legacy you wanna leave. And those are honestly, way more interesting and meaningful questions for your life rather than is Bitcoin gonna go up next week, which is what every show focuses on.
And I get it. It’s, it’s more fun to talk about that, but it’s gonna be more meaningful to talk about what you’re gonna do in 30 years. So I encourage you all the U you two and all the viewers that are watching the show think about what’s gonna happen in 30 years. And what sort of legacy you wanna leave when at the end of your life,
[01:03:02] P: as someone who is a host of a show that talks about what is the price of Bitcoin gonna be next week?
I could not agree with you more. that is the, you, you, you hit the nail in the head. Jimmy, the right question to ask is where do we wanna be in. You know, at the very lowest, I would say a year and more likely 30. Mm. Thank you so much for joining us, man. I I always appreciate our chats.
[01:03:28] Jimmy Song: Yeah. Thanks for having me guys.
It was fun.
[01:03:30] P: Absolutely. I wanna remind everyone one final time that tickets for Bitcoin Amsterdam are on sale prices. Go up in the near future. The censorship resistant issue of Bitcoin magazine is available in, I believe Barnes and noble and is absolutely incredible if you haven’t checked it out, check it out.
It’s our best magazine yet. Really, really fantastic investigative journalism there. And. That’s all we got, we will see you tomorrow. Same time, same place. We’re gonna be doing news and notes for 30 minutes. And then we’re gonna dive over to Twitter spaces and have a conversation about Bitcoin, the lightning network the insanity of the Bitcoin space right now.
And we’re gonna be having that conversation with none other than Shinobi. So it’ll be a fantastic time,
[01:04:17] Q: all that, like I’m gonna piss Chino off, but then also I’m definitely gonna piss George off and say, ticket prices are literally going up. They’re negotiating right now. How do I say this? It’s gonna go up so much that the 10% discount code to use BM live will not make the tickets cheaper than what they are today.
I’ll I’ll leave you with that. My friends. So lock them in first time hearing about it, the lock them in they’re going up. It’s not gonna be cheap. Come party with us in Amsterdam. By my friends,
[01:04:46] Jimmy Song: See you later.
