BR #22: Fiat Smart Billionaire + Podcast host?

(2-minute read)

BIG SIDE NOTE: I am looking to find one or two hosts (co-founders) for a new big podcast project about Bitcoin and sports (this can go huge!). See details here. If you or someone you know might be a good fit, shoot me a message.

The Fiat Smart billionaire ⬇️

 Many look up to highly successful people in traditional finance as leaders, who can guide us to take the right financial decisions.

For instance, Ray Dalio is the billionaire investor and hedge fund manager, who co-founded the world's largest hedge fund, Bridgewater Associates.

You can certainly learn a lot from Dalio.

I learned a ton from his book "Principles".

Yet, Dalio is not all-knowing and he can also say complete nonsense.

Like he did in this 1-minute video.

Here is a summary:

• We need an "inflation-linked" digital coin;
• A coin that can preserve your buying power;
• Because everyone wants a coin that preserves buying power;
• Saving in Bitcoin is not good, because it goes goes up & down, and "who knows what will happen";
• But if you created "a coin that can save your buying power and transact with that would be a good coin".

What a piece of nonsense!

Here is why:

• Dalio starts from a fiat-first mindset;
• He offers an "inflation-linked" coin as a hypothetical solution to the high inflation we have all experienced;
• Please note, he DOES NOT look for the root problem;
• He DOES NOT explain why we have inflation in the first place;
• And he knows extremely well that the only reason we have prolonged inflation is because of money printing and the availability of artificially cheap credit in the economy.

So here is my simple but big question for Ray Dalio:

Where would the money come from to create this coin that protects our buying power? Where from???

Money does not fall from the sky.

It needs to come from somewhere (or from someone else's pocket).

Let's turn to the laws of nature to understand where can money come from:

• The first law of thermodynamics states: "energy can be neither destroyed nor created; it can only change its form or be passed from one object to another one".
• Money is really just a store of energy. We produce something today, we sell it and then we store that energy in money (monetary energy) until a future moment in time when we convert this stored monetary energy back into a good or service.
• So in order for you to create "an inflation-protected coin" you MUST either take that energy from someone else or transform one type of monetary energy into another one! You cannot create "protection" out of thin air. It is physically impossible!
• Just like you cannot create heat out of thin air - you need sun, electricity, coal, gas, or some other source of energy.
• Money works in an identical: you cannot create inflation production out of thin air: you need to finance it with some other forms of monetary energy.

And so the "idea" of Dalio is plain wrong, illogical, and also unethical.

His idea can ONLY become a reality for some people at the expense of others.

For me to get protected by inflation someone else needs to pay my protection.

I can go on and on but I will end with the following clear distinction between fiat & bitcoin:

1. How we create fiat: the elites print it through the financial system -> buying power moves from savers to those with the ability to print (by the way that is also how Proof of Stake cryptocurrencies such as Ethereum work).
2. How we create bitcoin: Anyone can mine bitcoin as long as they find real-world energy, transform it into electrical energy, and then transform it into Bitcoins - monetary energy. There are no shortcuts and no printers. No privileges. Everyone MUST put in the work.

End of rant.

Till next Saturday!

P.S.Whenever you are ready, I would be glad to have you as a student at my Bitcoin Masterclass and then generously remunerate you for sharing that knowledge with others ;) And those others will be forever grateful you opened their eyes.