Berkshire Hathaway was built atop a system that Bitcoin was created to destroy

The Oracle of Omaha’s second banana has pronounced judgement on crypto. It was even more unhinged than previous attacks (“rat poison”), as Munger applauded communist China’s technocratic dictatorship as a sensible ideal we should be following here in the West.

“the communist government of China recently banned cryptocurrencies because it wisely concluded that they would provide more harm than benefit…What should the U.S. do after a ban of cryptocurrencies is in place? Well, one more action might make sense: Thank the Chinese communist leader for his splendid example of uncommon sense.”

The fact that Munger is able to aggrandize a communist police state that maintains concentration camps, engages in organ harvesting and forced labour with impunity is a testament to his insular position (not to mention the lopsidedness of our political zeitgeist).

Munger is a Cantillionaire – after Richard Cantillion who wrote one of the first economic treatise in the eighteenth century describing how proximity to the monetary inputs of a society confer special advantages at the expense of wider populus.

Munger’s crocodile tears for those who lose out in the economic game of life are ironic, given that Berkshire Hathaway’s mantra (and Westco, Munger’s sidecar conglomerate) for decades has been to buy often distressed businesses that are out of fashion but have a “durable competitive advantage ” or “moat”.

Those are euphemisms for monopolies, and both Buffet and Munger love owning them. Despite their branding as folksy, avunculars, they don’t seem to mind if their vast empire includes monopolies that draw rentier like returns from monetizing low income housing or opioid addiction.

Munger and Buffet’s dynastic wealth was built on the crest of three structural tailwinds:

If there is such thing as “structural inequality”, it has more to do with the way the monetary system is constructed to benefit people who are already super-wealthy than anything else. “Fix the money, fix the world”.

The first of these pillars below is more of a dynamic than a structure, and one that there’s nothing wrong with, actually.

But it seemed odd to hear Munger, a man who made his fortune exploiting valuation gaps in publicly traded companies, singing on the virtues of  England’s “bann[ing of] all public trading in new common stocks and kee[ping] this ban in place for about 100 years.” .

That happened back in the 1700’s when Richard Cantillon was figuring out that the monetary system was structurally rigged, even then.

So while Buffet and Munger’s investing acumen is not in dispute, these three forces acted as the lubricant, if not steroids, for their astonishing returns over the decades:

1) Value investing

…is the foundation upon which Buffet (and Munger) built Berkshire. It is buying companies or assets below their perceived intrinsic value.  The fact that other investors have lost money on it is a prerequisite, otherwise they wouldn’t be “value plays”. “All this wild and wooly capitalism”  that Munger is ruminating about in his WSJ op-ed is what created the valuation asymmetries that Berkshire Hathaway has exploited ever since the duo took it over, in 1965.

2)  Fiat currency debasement

The Cantillon Effect makes inflation acutely pernicious, widening wealth inequality as the asset values of the ultra-wealthy get higher, it drives up the cost of living for everybody else.

Buffet and Munger have been playing inflation like a fiddle for decades. They both know that all fiat currencies are headed for zero, so they gravitate toward “inflation proof” assets with “pricing power” and “moats” (…because inflation-proofing goes better with monopolies.)

Then when things run too hot, they can play the populists and urge government to raise taxes on the wealthy (suggesting tax structures which would barely impact themselves, if at all) and chide the central bank to “reign in inflation, even if it causes a recession”. Like nearly all super-wealthy elites, they love to make policy recommendations that impact everybody else, yet put them in a position capitalize on the second-order effects: Recessions cause unemployment, bankruptcies and a plethora of valuation asymmetries where they can reload on durable assets and businesses at discounted prices.

3) A 40-year decline in cost-of-capital

At the age of 52, Warren Buffet’s net worth was 0.3% of what it is today, and the correlation of Munger’s personal wealth to Buffet’s is basically 1.

That was 1982, which marked the beginning of a bond super-cycle that saw the cost of capital decline to zero by the end of it.

Real rates are still negative today, and all of this compounded with the fiat currency debasement that lifted Buffet and Munger’s boats and accentuated their returns for decades.

I’m not saying that currency debasement and secularly suppressed cost-of-capital are the sole factors for Berkshire Hathaway’s success.

But they were indisputably beneficiaries of the fiat system structure over decades. Also during periods of dislocation, like when it was weaponized against the plebes during lockdowns and the Fed started buying up Berkshire’s debt (along with every other billion and trillion dollar juggernaut) while lending rapidly devaluing dollars to small and independent businesses (that is, if they weren’t simply banned from operating).

Berkshire Hathaway was built atop a system that Bitcoin was created to destroy

Many years ago I found myself sitting in a Bay St. conference room at one of Canada’s “Big Four” banks. There was a representative there from three of those Big Four, plus an Entrepreneur-in-Residence from the Business Development Bank of Canada (BDC) who shall remain nameless, and had organized the meeting at the behest of another BDC contact.

We were there to talk Bitcoin.

He told me a story. More of a parable. Maybe it was just the facts of life.

He said, basically this (paraphrasing),

“when a new disruptive technology comes along, you want to be out front with big investment money behind you, you want to engage with government, the banks and policy makers right away, from the start – and you develop your relationships and your platform, all the while you are engaging with policy makers and the system incumbents to develop the rules.

When the government finally moves on regulating the new space, you are already there and you are on the right side of it, because you helped shape the policies.

Then the regulatory hurdles keep getting higher, and you’re always on the right side of it, while all the later entrants are playing catch up or falling behind.

In other words (and I remember this exactly, along the with the big, smug smile he had on his face when he said it):

You get to turn around and pull the ladder up behind you!”

I left that meeting not sure what had just happened and nothing more ever came of it, at least with me.

But Bitcoin is more than a disruptive technology. It’s a decentralized counter-attack against a structurally unsustainable and predatory financial system.

Whenever I hear Buffet, Munger, Jamie Dimon, Larry Fink or any other High Priests of the Gerontocracy complaining about Bitcoin specifically, or crypto-currencies in general, I feel like that’s what I’m listening to: a bunch of super-rich Sith Lords frantically  trying to pull up the ladder behind them.

Because the last thing they want or can fathom, is to wind up back on a level playing field.

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Buffett and Munger Pillory Bitcoin and Rationalize Cantillon Mercantilism at Berkshire AGM

There is nothing sadder than watching those who inspired you on your journey into contrarianism degenerate into mummified shills for a morally bankrupt status quo.

The Berkshire-Hathaway AGM was this past Saturday, and Warren Buffett and Charlie Munger didn’t sugarcoat their animus toward Bitcoin, saying

“Whether it goes up or down in the next year, or five or 10 years, I don’t know. But the one thing I’m pretty sure of is that it doesn’t produce anything,”

Munger went further, calling it evil, ultimately headed for zero and a problem “because it undermines The Fed”.

Obviously, Buffett and Munger are hitting back at the hordes of laser-eyed barbarians for being labeled part of The Gerontocracy by Peter Thiel at his keynote address to Bitcoin2022 in Miami (I was there, it was epic).

The AGM happened after I had already sent the month-end Crypto Capitalist Letter to the editors so it was too late to cover it there.

It does warrant some comment, because there’s arguably some cognitive dissonance: The Crypto Capitalist covers publicly traded crypto companies. We don’t do technical analysis, we don’t do charting or Elliot Waves anything like that. Buffett is the patron saint of value investing, and I got into crypto stocks because I saw them as value stocks. For real.

Discovering the Crypto Value Play

The year was 2020, the world had completely lost its shit overreacting to a not-cataclysmic COVID pandemic, our brilliant (unelected) technocrats imposed lockdowns across the entire world and so, like many people, I decided to use my time as productively as possible, deciding to double-down on my investment education. Loading up on books like The Joy of Compounding, The Book of Value and listening to endless Value After Hours podcasts (love that show), I  started combing through nanocap and microcaps looking for value plays.

I’d always been value oriented. I’ve got the Warren Buffett shareholder letters, dog-eared and underlined from several passthroughs. I’ve got two copies of Bevelin’s “Seeking Wisdom from Darwin to Munger” because one of them is signed by Munger and I wanted another copy to mark up and underline. Despite everything I’m about to say about Buffett and Munger, I’m still currently reading Adam J Mead’s Complete Financial History of Berkshire Hathaway. It’s fascinating stuff.

Over the course of immersing myself in the craft of value investing during lockdowns it turned out I kept finding it in a peculiar place: crypto stocks. With Bitcoin hitting all time highs, you would expect all the crypto stocks to be screaming higher at expanding multiples to nosebleed levels even more extreme than the underlying cryptos themselves. You see this in gold bull markets, in fact gold stocks typically lead the metal (both on the way up and the on the way down).

Not so in cryptos. At least not in the latter half of 2020. With Bitcoin, Ethereum and everything else ripping higher to fresh all-time highs, I was finding Bitcoin miners who were trading for less than the value of the Bitcoin on their balance sheet, with no debt. That would make them honest-to-God Ben Graham style net/nets.

It just seemed very asymmetric so I started loading up on names like Hut8, Hive, Bitfarms, Fortress Technologies (now Cathedra), Neptune Digital and this tiny little crypto-conglomerate nobody was paying attention to called Galaxy Digital.  There were a couple of stinkers in there too, but overall it didn’t really make a difference. I was finding genuine value in an entirely new and ascendent asset class. Buffett would be proud! Wouldn’t he?

Buffett and Munger loathe Bitcoin. If Bitcoin is “digital gold” (it is), Buffett has never liked gold either. There was a lot of excitement in goldbug circles when a Berkshire-Hathaway 13-F revealed they had bought a chunk of Barrick. The BRK-fanboys dissected the trade religiously and wondered out loud if that was an actual Buffett trade or one of the inner-circle who were being groomed for succession.

It didn’t matter, because barely a year later, Berkshire had exited the trade anyway.

Buffett and Munger eschew monetary assets – like cash, or gold, because they are unproductive. They don’t generate any yield and when you can own a business that does generate returns, it doesn’t make any sense to keep anything on the sidelines. Especially when you can pick ’em the way Buffett and Munger can.

Yet they have also been known historically for steering clear of tech in general (despite now holding numerous tech investments which they entered far later in the respective companie’s lifespans).

Buy it now, or buy it later

Back in the dotcom boom, Buffett famously avoided tech stocks because he deemed them outside his circle of competence. He was ridiculed at the time as being out of touch, but he was eventually vindicated when the dotCom bubble imploded. Still, he could have bought Apple for a song in the wreckage, at (split adjusted ) prices ranging from under $1 to $2.50 or so up until mid-2006. It wasn’t until 2016 that Berkshire Hathaway backed up the truck and loaded up around the $100/share mark (pre 2020 split). By the end of 2021 nearly 40% of Berkshire’s portfolio was Apple!

But Apple wasn’t by any means the first transformative tech company Buffett eschewed at first. In 1968 Bob Noyce, was leaving Fairfield Semiconductor to start a new company Integrated Electronics and was raising an initial $2.5M seed round. Both Buffett and Noyce were trustees for Grinnell College’s endowment fund. Buffett signed off on an investment for the college, but declined to put any of Buffett Partnership’s capital into “Intel”. He wouldn’t be invested in the behemoth until 2011, and even then, he was out within a year.

Despite the general aversion to the tech sector, Buffett never called integrated circuits, personal computing or the internet “rat poison”.

I believe the reason for the visceral hatred toward monetary assets, like gold or Bitcoin is because on some subconscious level, Buffett knows that one of the major tailwinds of his stellar investment career has been the destruction of the monetary base layer and The Cantillon Effect.

Uncle Warren, Poor Charlie and Cantillion Mercantilism

Buffett and Munger’s belief is that the only reason for owning gold (or now Bitcoin) is in the hope of selling it to somebody at a higher price in the future. Yet, in Buffett’s own words, he likes to own businesses he understands when he

“like[s] the price at which they’re selling relative to their future prospects, and thinks 10 years from now that they’ll be worth more money” 

There is a strange kind of tunnel vision here. All investment seeks to either preserve or accumulate wealth, and everybody does a variation of the same thing: deploying capital where they feel will hold or gain value in the future.

Buffet, who’s “favourite holding time is ‘forever'” should perhaps think more deeply around why he would rather hold his wealth in productive businesses rather than unproductive gold, or even the ostensibly risk-free asset that is cash.

John Maynard Keynes once said of inflation:

“By this means the government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.”

Buffett is of those men, saying:

“Inflation swindles the bond investor … it swindles the person who keeps their cash under their mattress, it swindles almost everybody,” 

The most important word in this sentence is “almost”. Inflation swindles (steals, defrauds) almost everybody. But there are a few people whom inflation doesn’t rob, but actually enriches. Those people are Cantillionaires. Buffett and Munger, as skilled as they may be in investing,  belong to the Cantillionaire class.

Richard Cantillion, the British Irish-French entrepreneur who wrote one of the earliest economic treatise was the first to formalize how expanding the money supply is experienced in two different ways within an economy:

The elites who have direct proximity to the new money experience it as rising asset prices, making them wealthier, and giving them the ability to further compound their wealth by buying up even more of society’s assets.

Everybody else, the plebes, the rabble, the permanent underclass, they don’t experience it as rising asset prices, because they can’t afford to acquire any assets. They live on a permanent treadmill that keeps accelerating while the incline constantly increases… Euphemistically characterized by policy makers as “inflation”.

When you see the picture that lays out how the dynamics of Cantillon Mercantilism works, it makes more sense why the uber-wealthy like Munger and Buffett might rationalize hard money assets such as gold as “unproductive” and Bitcoin as “rat poison”. It’s because that magic money printer at the center of their world can’t print hard assets.

But it can and does print cash which even though they know it decays, and the more the machine prints the faster it decays, they also know that they’re first in line to get it.  That means they can use it to inflate the value of their own assets before it hits the outer fringes society where it inflates the cost of staying alive.

In the 2008 Global Financial Crisis: Berkshire-Hathaway didn’t receive bailouts directly, but at least four of their holdings did, to the tune of nearly $100 Billion USD (Wells Fargo, American Express, Bank of America, and Goldman Sachs).

During the COVID Panic: The Fed directly purchased Berkshire-Hathaway bonds (along with those of numerous other companies, all of whom were worth over $100 Billion USD).

Bitcoin Fixes This

Bitcoin, when widely adapted as money and a store of value puts an end to the Cantillon Effect. Because it is an inelastic, deflationary and asset based money, it gains purchasing power over time (volatility aside, which I expect to smooth out over the coming years).

For those who feel running an economy on deflationary, inelastic money is impossible I would suggest reading, Nik Bhatia’s Layered Money, Saifedean Ammous’ The Bitcoin Standard, or Detlev Schlichter’s Paper Money Collapse first edition of which came out before Bitcoin was barely on anybody’s radar (2011).

There is no barrier to entry for asset accumulation with Bitcoin, because you can start with a microscopic amount and watch it gain purchasing power over time. It enables savings and capital formation.

Ordinarily, enlightened capitalists like Buffett and Munger should be on board with this. But they instead recoil from it with every fibre of their being. Perhaps, without being consciously aware of it, they understand on some level that  Bitcoin presents a direct assault on Cantillion Mercantilism.

On the surface, Munger and Buffett bring living example to the famous Upton Sinclair quote: “It is impossible to get a man to understand something whose livelihood depends on them not understanding it”

However, being as they are among the few who recognize inflation for what it is (wealth destruction for everybody else, asset compounding lubricant for themselves), they probably understand Bitcoin more than most no-coiners, and what it represents.

What amplifies the dissonance around their posture toward crypto-currencies is that this is one of the few sectors of genuine value in the equities markets right now. In other words, right now, in Q2 2022, crypto stocks are value stocks. Granted, it’s been widely acknowledged that Buffett (and Berkshire) ceased being value investors a long time ago, optimizing more for “growth at a reasonable price”. It’s hard to find value at the scale BRK operates at.

Were Buffett to retrench to his value roots he could buy up Galaxy Digital ($4.6B), Silvergate Bank ($4B) and Coinbase ($30B) and still not really move the needle. This shows just how early it still is in the Bitcoin and crypto story.

Size matters, and sometimes not in a good way: BRK’s outperformance has been in secular decline for decades….

It would be fair play should the likes of Buffett and Munger simply dismiss crypto-currencies as outside their circle of competence thus uninvestable for them. They’ve done that continually throughout their career and it has served them well and been a great lesson in discipline for all aspiring investors.

But the venom with which they demonize Bitcoin smacks of “methinks doth protest too much”

People who understand #bitcoin buy it. People who don’t understand #bitcoin talk about it.

— Michael Saylor (@saylor) May 3, 2022

Maybe, on the other hand they understand it all too well.

I write about the decentralized revolution and the rise of crypto-currencies on Bombthrower.com, get my investment thesis free when you sign up for the mailing list here. Follow me on as @bombthrower on Gettr or on Twitter here. The Crypto Capitalist Letter covers global macro as it pertains to Bitcoin with a tactical focus on crypto stocks. 

The Five Big Takeaways from #Bitcoin2022 Miami

Last week was a blur: planes, trains and automobiles from Toronto through to Salt Lake City to tape a couple segments for Revealed Films. Then on to Miami for the largest cryptocurrency conference in the world, with an estimated 30,000-ish attendees showing up to take the decentralized revolution to the next level.

Here are the five big take-aways from this year’s conference:

#1) Bitcoin is well past the “here to stay” phase.

We’ve been hearing the “crypto is here to stay” mantra for a few years now. It’s not wrong, but frankly, we’re well beyond that point.  I knew as far back as 2017 that crypto wasn’t going anywhere, even after the 2018 bear market set in.

We’re now into the “Bitcoin is taking over the world” phase, a.k.a the early innings of hyper-Bitcoinization. Same as what happened with the Internet after the dotcom bust. Any credentialed experts who said the Internet was a glorified fax machine (ahem, Krugman) were wrong then and anybody still pounding the table about cryptos being backed by nothing and headed for zero (Schiff) are being proven wrong now.

The only question is to what extent Bitcoin overtakes the fiat economy, whether it becomes an official global reserve asset or functions outside the system entirely as increasingly more individuals and locales opt-out of the fiat world order.

Two more political autonomous zones did just that, announcing Bitcoin as legal tender:

• Madeira, an autonomous region of Portugal
• Prosperos, a private chartered city in Honduras

While Mexican Senator Indira Kempis came to the conference to announce that she’s introducing legislation to make Bitcoin legal tender in Mexico (Edit: Or not. She introduced a Bill to create a CBDC instead).

#2 There will be no crypto ban in the developed world

This is still a major factor in many people’s calculus on whether they should get involved with cryptos or not. It’s been clear in the US since at least the tuck-in to the COVID infrastructure bill (as ill formed as it is) that the US approach toward crypto will be a regulatory one, not prohibitory.

In the Cathy Woods, Michael Saylor fireside at the conference, Woods noted the change in rhetoric coming out of Janet Yellen in just the last year:

Last year Yellen was harping on  crypto’s use in illicit transactions. Now she’s talking about how they “are playing a significant role, not really so much in transactions, but in investment decisions of lots of Americans.”

“Somebody has been whispering into Yellen’s ear” opined Woods, her guess? SEC head Gary Gensler.

Saylor put the Biden executive order into context: “When was the last time the sitting President of the United States issued an executive order for all Federal agencies to get up to speed on an asset class?” – framing that as not presaging a crypto ban, but the de facto green light for the entire space.

There are numerous reasons for this, including:

1. Being a leading innovator in crypto is increasingly seen as a net-positive economically for the countries that adopt it
2. They provide a strategic advantage over countries that are attempting to ban it (China)
3. There is already too much institutional money already involved or positioning to get involved
4. With more than 30 million Americans and 300 million citizens globally HODL-ing, Bitcoiners are already a political constituency. There’s even a Bitcoin backed SuperPAC now whose stated aim is to rid the government of anti-Bitcoin politicians like Brad Sherman and Elizabeth Warren

#3 There can only be one

Over the past half year or so, as The Crypto Capitalist Letter was starting to gain steam, forcing me to pay even closer attention to all this, I noticed that I was becoming more of a Bitcoin Maximalist. Hopefully not a toxic one.

I still try to think like an investor and in that sense there will be successful projects and ecosystems outside of Bitcoin. I like Helium, for example. The idea of a mesh network being driven by incentives of hotspot operators is a compelling one. Given my dayjob running easyDNS, I pay particular attention to decentralized naming initiatives like ENS, HNS, Unstoppable and Stacks, although I still don’t see any clear winners here yet. On the privacy side, especially since the FreedomConvoy debacle here in Canada, I’ve become more interested in Monero.

But, like stocks (the tactical focus of TCC being crypto stocks), and as the case in most asset classes, the vast majority of contenders and aspirants are garbage, money grabs, often both.

Alas, where I had been previously thinking of Ethereum as the undisputed runner-up to Bitcoin, the silver to gold, the shine has been coming off for me.

The biggest existential challenge facing Ethereum is and always has been the gas fees.

The entire time I was monitoring Ethereum’s all encompassing transformation from Proof-of-Work to Proof-of-Stake, I just assumed that the merge to ETH2 would fix this. Then in late ’21, in places like Bankless and elsewhere, I started to see this notion being walked back.

Unpopular opinion (?) – but I find the entire effort of morphing into ETH2, screwing all the miners, radically restructuring everything and STILL not solving the gas fee problem… totally pointless. https://t.co/RM3xG0Vl8d

— https://bombthrower.com/wp-content/uploads/2019/03/shutterstock_1030471843-e1551983495127-1.jpg E. Jeftovic, The Crypto Capitalist (@StuntPope) April 10, 2022

It almost seems like Ethereum’s central management (which isn’t really a thing in Bitcoin, btw) decided to prioritize the perceived ESG (Environment/Social/Governance) benefits – which is most important to people who don’t actually understand crypto. Otherwise they would be cognizant of mining’s true energy usage (220 TWh for Bitcoin vs 160,000 TWh total global use = 0.0013). Further they would understand how PoW incentivizes clean and waste energy capture more effectively than anything else.

If you’re going to totally re-architect your protocol and marginalize those who were securing your network (the miners), at least address the single, core issue instead of all this technocratic posturing.

Ethereum is still a centralized and highly concentrated around a single key-man. They’ve changed their core monetary policy, they have a history of giving bailouts via hard forks (this is why we have Ethereum/ETH and Ethereum Classic/ETC).

Which means: Ethereum’s monetary policy is not immutable, and that means in the future anything can happen. Where Bitcoin will only ever have 21M BTC and always be Proof-of-Work, Ethereum could become an amusement park.

That doesn’t prevent Ethereum, or various projects deployed on it, from vastly increasing in price as cryptos continue their overall ascent. But if you make a boatload of money on it, move the profits into Bitcoin. If you build your project on Ethereum, you’ll want to have support for competing Layer 1’s. Especially if you’re successful.

This brings to light a paradox for Ethereum: any projects that launch and succeed on Ethereum will almost certainly branch out into other Layer 1 protocols (Polkadot, Near, Avalanche, Terra/LUNA, even  Binance Smart Chain) and cannibalize Ethereum. At least as long as they don’t address this gas fee issue, and they’re in the process of squandering their last best chance to do so.

Said differently, I don’t see anything on the horizon that could dethrone Bitcoin as the preeminent monetary crypto-asset. But I see plenty of competitors all chipping away at Ethereum. This includes Bitcoin’s own extensions that are building momentum. Lightning not only has the potential to provide Visa-level transaction processing throughput, but messaging and who knows what else. With Taproot here, we have the foundation for adding asset issuance functionality with proposals like Taro.

What finally did it for me was to see the early innings of cancel culture within the Ethereum community. It made me realize we’re dealing increasingly with virtue signalling and less so with the decentralized revolution. Make no mistake: Cancel culture is cancer. Once it gains a foothold and becomes normalized, the host is doomed. I fear that failure will be the norm for most DAOs as those who are able to shriek the loudest will distort and hijack most of them from their core missions, whatever those may be.

As I thought all this through last week I moved about 20% of my ETH into wBTC, which (sooner than later) I’ll move across a bridge into native BTC. I have about 40% staked on Beacon Chain, which I’m fine leaving there to earn some yield (approx. 4.5% APY).

#4 This is more than an asset, it’s a spiritual philosophy

The Thank God For Bitcoin conference ran a one day event concurrent with Bitcoin2022. There is a larger contingent of Christians within Bitcoin than I realized. Beyond that there is a general sense of the underlying spirituality behind a movement that truly restores economic sovereignty to anybody who wants it, with effectively zero barriers to entry.

That there is a spiritual component to sound money is not new. Gold carried (carries?) the same gravitas amongst the most highly respected and penetrating intellectual minds throughout history that has endured into today.

Jordan B Peterson came to #Bitcoin2022 and one of his most well known lectures is around the psychological meaning of the Tower of Babel parable. In a fireside with Tuur Demester he drew a through line from it to Austrian School Economics to Brexit. And it made perfect sense because Babel is a story of technocratic hubris, very similar to what we are subjected to on a mass scale today.

He built on that in the after-conference event with Robert Breedlove, citing the Austrian school notion that monetary integrity and moral integrity are inextricably linked.

“What is Money?” dialogue between @Breedlove22 and @jordanbpeterson #Bitcoin2022 pic.twitter.com/Wlt1pjsY4B

— https://bombthrower.com/wp-content/uploads/2019/03/shutterstock_1030471843-e1551983495127-1.jpg E. Jeftovic, The Crypto Capitalist (@StuntPope) April 9, 2022

This exact sentiment has always been considered the  very nature of sound money. The legendary commentator Harry Shultz, as quoted by Ferdinand Lips in his seminal work Gold Wars:

“Money sets a standard that spreads into every area of human activity. No paper money backing, no morality….Layer by layer we are corrupted when money loses certainty… Big Brother was made possible through the absence of automatic controls and loss of individual freedom via non-convertible currency. So, pass the word. Fight for gold. Not for profits, though they are helpful and help us fight for individual freedom, but for a future that returns to sanity in various standards. If we have a gold standard we get golden human standard! The two are intertwined. They are the ultimate cause and effect. Gold blesses.”

There really is something below the surface, something much more than Bitcoin as digital gold, or cryptos as a new asset class or even a global monetary regime change. For me it comes down to what I think will be considered the geocentrism of our age. Geocentrism was the belief that the heavens revolved around the Earth, which was the center of the cosmos. This was “settled science” for thousands of years and in those days “deniers” were burned at the stake.

Today’s geocentric pseudo-science is the idea that material reality precedes consciousness. That our minds are a byproduct of our brains. This is actually backwards. All manifest reality really emanates  from a non-material something (call it, “God”, Spirit, quantum foam, Bohm’s implicate order, etc) and global, historical currents and directionality comes from there. Somewhere.

In “Faith of a Futurist” George Gilder (pro gold, pro Bitcoin) posits a reversion from the radical material reductionism of the 20th century as we rediscover the spiritual core of existence and regain our ascent into global prosperity:

The twentieth century has been an era when an atheistic belief in the ultimacy of matter and the triviality of man led to the horrors of Nazism, Communism, and an epoch of total war. Now sweeping through the global economy, the overthrow of matter will unleash an undertow of [spiritual] belief that will make the new millennium a time of awakening to the oceanic grandeur and goodness of the universe. An economy of ideas and innovations ultimately means an economy ruled by spirit and faith.

That’s where the impetus toward civilization originates, its where universal human rights emerge from, it why consciousness evolves over time up an ascending scale of increasing mental abstraction and it’s from where this impulse toward decentralization and non-State money germinates.  That’s why it is unstoppable.

At the conference I found this underlying spiritual driver behind Bitcoin to be palpable.

#5 The War on ‘Woke’ Capitalism has begun

Finally, we come to the punchline to Bitcoin2022….

That was Peter Thiel’s keynote which I described as a declaration of war against “Woke Capitalism”.

You can view it in it’s entirety below,

A more accurate TL,DR (from somebody who was in the room) is that Peter Thiel called out “The Gerontocracy” – filled with oligarchs and plutocrats like Warren Buffet, Jamie Dimon and Larry Fink and he said they were driving this ESG narrative to further ensconce their own interests and power. Further, the logical outcome of ESG is China-style social credit.

Of course Thiel is right. We can focus on the energy usage question alone: if we concede that any outside “authority” has the moral claim to moderate energy usage for Proof-of-Work mining then you just ceded discretion over all of your energy usage to that authority.

Just suppose that Bitcoin mining were to be somehow squashed today on environmental grounds (and you may agree, provided you’re completely ignorant of Bitcoin’s actual energy usage and incentives).

That means tomorrow you’ll earn demerits for turning on your dishwasher during peak hours. Heated bathroom floors will be banned as Bourgeoisie decadence. This will all be decided by committees that you aren’t on or algos you have zero control over or visibility into.

The True Cost of Wokeness

Germany is scrambling, looking at rationing power and in the early stages of reversing their own policy of shutting down their nuclear reactors. They are even considering recommissioning coal fired plants. It turns out you can’t heat the nation on hot air and platitudes.

Meanwhile the US government is begging Communist a dictatorship like Venezuela and a fundamentalist theocracy like Iran for oil, while Canada’s tar sands, among the highest proven reserves on earth, literally next door, can’t fulfill demand because the Liberal Socialists incumbent in both countries won’t let the pipeline projects be completed (But rail lines are packed to capacity moving that same oil, more dangerously and at lower throughputs… that may be bad for the country but business is booming for railway owners, including Uncle Buffet).

As these externalities and second-order effects come home to roost, Thiel’s speech came at an inflection point. He finally said what many have known or suspected for a long time, but may have ben hesitant to vocalize because the completely captive media and Big Tech cartel would unleash legions of cancel culture beserkers upon anybody foolhardy enough to speak the truth.

The true cost of wokeness is beginning to hit home, we’re seeing it first at the gas pumps here in North America. We’re seeing it in energy shortages and rationing abroad.

Next up: out of control food inflation. They don’t call them “meal”-worms for nothing…

Here’s the summary I did for Steve Bannon’s Warroom after the conference

The veneer on Woke Capitalism is coming off, and everybody knows it.

The world is undergoing a monetary regime change. Get the Crypto Capitalist Manifesto free, when you join the Bombthrower mailing list. Follow me as @bombthrower on Gettr or if you haven’t been kicked off Twitter (yet), @StuntPope