A Masterclass in Economic Calculation (Bitcoin Podcast) - Deepstash

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A discussion on inflation, hurdle rates, and the mass adoption of Bitcoin.

A Masterclass in Economic Calculation (Bitcoin Podcast)

A Masterclass in Economic Calculation (Bitcoin Podcast)

We Study Billionaires - The Investor’s Podcast Network

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MICHAEL SAYLOR

Bitcoin is going to, in a constructive way, infect everybody’s minds

Defining inflation

The consumer price index (CPI) is a poor inflation metric. The goods in it are picked so that it cannot indicate any inflation and thus permit money printing to go unchecked.

Inflation is the rate of price appreciation in a basket of goods, services or assets that you want to ac...

Three scenarios for CEOs:

  1. In a deflationary currency environment, the prices of goods and services will decline, and the currency will appreciate. If I keep the money and wait, the value of my money will accrete. 
  2. If monetary expansion ...

Technology turns products into energy

Technology companies take products and services and turn them into information networks. As a result, whatever they touch becomes deflationary while they become billion-dollar companies in the process.

For example, Google dematerialised every library and every piece for...

Bitcoin as a scarce asset

When you compare Bitcoin to other assets, Bitcoin is a scarce piece of property. 

Bitcoin is liquid, global, fungible, there’s no property tax on it, no state taxing. It’s hard to produce Bitcoins. 

Monetary expansion was 24% in 2020, with a forecast of 10% to 15% for the next five years. Under 15% annual money supply expansion, if a company makes a 5% margin on its business, it will lose 10% of its value every year. That means in four years, half of its wealth will be destr...

The main store of value buckets are fiat instruments, such as bonds, stocks and commercial real estate.

For bonds: Investors will have to beat the hurdle rate or drop interest rates.

For commercial real estate: Rent has to keep up with the hurdle rate...

 MICHAEL SAYLOR

The Road to Serfdom consists of working exponentially harder in order to earn a currency growing exponentially weaker

The road to ruin

When we raise the hurdle rate, individuals have to work harder or take more risks. They have to compete against big tech companies that have money and power, resulting in many small businesses getting crushed.

To preserve value, companies will either have to leverage up to buy back stock or...

Cash is a liability, not an asset. Therefore, every fiat instrument based on cash should be discounted at 15% per year, such as stocks, bonds, and real estate.

While Bitcoin is volatile short-term, it is always worth more over five years.

If you generate cash flows in...

Big tech adopting Bitcoin

Bitcoin is a growing asset. It’s also the world’s first engineered monetary network that is growing faster than 100%. Corporations can add their balance sheets or PnL into this monetary network.

Square and PayPal compete against both big tech companies and banks. They offer...

To stay competitive, the mutual fund business needs to build bitcoin into their product offering. Similarly, traditional banks have to build bitcoin into their business, such as trading, banking, lending, yield, custody, etc.

People will know that public companies can buy bitcoin and then r...

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