Bitcoin's Next Peak Is Further Away Than You Think. Here's Why | Saifedean Ammous

Scott Melker (0:01)

Bitcoin's next peak may be further away than you think. We're going to discuss why. But today, I'm actually looking much more forward to have an incredible conversation with a very special guest that I've never had on before, Saifedean Ammous, the author of The Bitcoin Standard. We're going to talk about why the peak may be further away than you think, because there may never be a peak with how much money printing is likely coming. We'll discuss that and a lot more now. Let's go.

Good morning, everybody, and welcome to The Makeshift Studio. You may notice that I'm back in my home office after we had an internet collapse 20 minutes before the show. We're making it work. There was no way that I was missing this show today. I'm going to go ahead and bring on a very special guest right now. Good morning, sir. How are you?

Saifedean Ammous (0:59)

I'm very good. Thanks for having me, Scott.

Scott Melker (1:01)

You're giving me background envy. I need much better lighting for all these records that are behind my head today. Yours looks great. Thank you. So I guess we can start with the breaking news of the moment, which is that CPI inflation came in hot. 3.7 percent above expectations of 3.6 percent. Core rises to 2.6 above expectations of 2.5. Third highest US inflation reading since September 23 Rate height expectations are rising on the news. So I'll just put it in context. I don't buy any of it.

I'm at the point where every time I see a job number revised or a CPI come in versus an expectation that's arbitrarily set in the first place, that we're just being gaslit. I don't even think I'm a conspiracy theorist. I just think you have to look at the facts. I would love your opinion on it and why Bitcoin matters in this context more than ever.

Saifedean Ammous (1:59)

Yeah, this is one of my favorite conspiracy facts to riff on. The whole 2% inflation is such a ridiculous, Psyop, really, there's no other way of putting it. Somehow in the 1980s, economists decided that 2% inflation is ideal, and there's never really been any kind of explanation for why 2%. Why not one? Why not three? Why not five? If two is good, why wouldn't three be better?

It's just always been assumed that this is the case. The closest thing to an explanation for it is that New Zealand tried this in the 1980s and they managed to keep inflation down. And when they got it down to 2%, they managed to get manageable, a decent amount of growth with not enough inflation. And then everybody just went with this as being the magic number. And so since then, they're always targeting 2%.

And I think now it's been 6 years or so that the rate in the US has not hit 2%. It's always been over 2%, I think even significantly over.

Probably never gone down below 2.5 or maybe 3 I don't remember the exact detail. But that's the official number. And of course, the official number is heavily manipulated in order to bring it down. And it's manipulated because they're always coming up with new creative ways of measuring it. But also, I think a very important point to try and make in my books, and I've not heard a single coherent counter argument to it, is that these numbers are by design, they are essentially manipulated downward. They're manipulated in order to make them look better.

And it just has to be the way the number is measured is going to always understate inflation. And the reason is that what is measured here is the prices of a basket of goods. And so what goes into the basket of goods is dependent on the price. So the whole thing is mathematically invalid from the first place, because what goes into your basket depends on the price. So measuring the prices based on the contents of the basket is really a circular loop. It's like when Excel gives you a broken reference, because you're measuring the change in the prices based on what goes into your basket of goods, but what goes into your basket of goods is determined by what happens to the prices. So my favorite example is meat. As you may know, I'm a carnivore. I eat nothing but meat. So for me, this is the most important thing. I only consume meat, basically. Everything else that I consume is pretty much inconsequential nonsense that I can do without. But meat is the only thing that matters. And I would say it's the most important food for people. It's the only thing that's essential and complete for people to eat. And its price goes up a lot more than the CPI shows. So if you look at the rise in the price of beef over the last year, five years, 20 years, 50 years, it exceeds the rises in the CPI. So the reason the CPI essentially understates the inflation, the rise in prices, is because once the price of beef goes up, people don't just manage to afford to pay the higher prices for beef. They substitute away from beef. They start eating soy instead of beef. So your consumer goods basket now contains soy instead of beef. You're still spending the same amount of money, but you're eating soy instead of beef. The CPI shows that it's stable or 1% or 2%, but you've replaced the nutritious, healthy, good beef that your body needs with poisonous, toxic soy.