True Cost of Inflation | Michael Saylor and Lex Fridman
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- เผยแพร่เมื่อ 15 เม.ย. 2022
- Lex Fridman Podcast full episode: • Michael Saylor: Bitcoi...
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Michael Saylor is the CEO of MicroStrategy and a prominent holder and proponent of Bitcoin.
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Dude is super smart and articulated the concepts extremely well. This excerpt is extremely valuable for everyone to listen and understand.
lol ...... you clearly haven't a clue who Michael Saylor is dude!
@@ChiPpification how do you mean?
"It is the government that makes our inflation. The policy of the Treasury, and nothing else." Ludwig von Mises, Economic Freedom and Interventionism, Chapter 20.
At this point it’s the fact we have the federal reserve and a fiat currency. Get rid of both. Go to an asset based currency. Unless that asset has a surplus of inventory, inflation can’t really exist.
I'm not going to act like I'm an economist and perhaps you can explain how I'm wrong, but I don't think that's entirely correct to say the government and central banks are the only reason for inflation.
Supply and demand is still an obvious reason. It wouldn't matter if you were trading in today's money or trading a commodity in abundance for a highly sought after commodity.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered" - Thomas Jefferson
Wow, that was really eye opening. I like how he describes this so clearly.
If you didn't get a 10% raise in the past year or two you're officially making less money then you did before! Awesome!
Yupp, not that I can, but if you can create enough leverage every year to get a 5-7% raise, you're going to be doing pretty good. Unfortunately, there aren't many companies that work like that, so try to find one :D
Smart men....fantastic interview. I'm inspired ✨️
Brilliant analysis!
He’s more right than he is wrong. I inherited property that was purchased in 1970, 1974 and 2005. Similar adjustment. The issue I face is income, because the assets appreciate faster than my income, which appreciated > than average but not at 6%~year.
Well stated...
From what I understand about giving a metric for a conventional basket of goods to determine the value of a certain currency, it seems like economics and inflation isnt a hard science and that the term “inflation” is equivocated in this field.
As a laymen, I barely understand inflation, but I usually see it portrayed as a justification to promulgate some agenda.
This just makes me extremely skeptical now about media and their economics.
Great talk!
He’s right about a lot of stuff but he is misrepresenting the 1930’s housing price vs 2022 housing prices as a metric for inflation. You’re comparing Great Depression prices to the biggest financial bubble we have ever seen. And real estate isn’t the only metric for inflation.
Yes, housing should definitely be considered, especially middle class housing in insignificant areas, or an average with a lot of weight on housing surrounding larger cities. But a random (very nice) house used alone as a measure is definitely a misrepresentation. However, at the end of the day, food and housing need to be among the top 3 measures. They just have to be averaged intelligently.
Also, I would assume his house is in some sort of prime location where extra land to build a new home in his area would be very hard to find if not nonexistent. So, his 7% might be 3-4% inflation and 3-4% increasing desirable scarcity
Check out art inflation, shit is crazy.
Woooooow, that hit hard.
There is no need for defined inflation indices. Growth of the money supply, M2, is the definition of monetary inflation. That causes both price inflation and asset inflation. Monitoring M2 is the key to seeing the dynamics of true inflation.
damn someone just explained what ive been thinking all this time. but now im worried its confirmation bias even though I have a hard time poking a hole in it.
Inflation is a large concern; however, the economic stagnation that follows heavy regulation and high taxes is a grander concern.
The typical big government solutions for the giant problems the government created.
@@jimmytimmy3680 I think he does
@@jimmytimmy3680 can you tell me why it would be deregulation? I honestly want to learn
Go tell that to the Jan 6th commission
When was America's economic golden age? You'll see that regulation and high taxes were in place to provide the best standard of living for most ...those days are over ...
I’m also noting that mr Saylor is happy to make all his arguments using “scalars” when he in this very interview was so very critical of the use of scalars in economics (instead of more advanced mathematics).
He’s talking about using scales to define the entirety of the economic inflation, not entirely dismissing their usefulness rather simply their lack of full depiction of reality.
Saylor is what I'd call an accelerationist when it comes to inflation. He'll hone in on facts that make it seem simple and deterministic. His 100 year view of the value of the house. Going up 300x. There's way more to it than just supply, demand, and currency debasement.
I think the term Lex was missing was 'financial stress' basically it's great if governments give first home buyers grants and such but if the salary isn't growing the repayments will increase as a % of the home owners Ivonne causing significant stress to the owners
@Joshua William *income
Housing can only very arguably be called an asset. To understand the concept of an asset, one can look at bonds (mathematically simple) and also to industrial machinery. An asset must be income producing. This is just Accounting 101. The way we force fit our home into the concept of an asset is we come up with the concept of imputed rent which is the rent you didn't pay if you had been renting.
In fact, a house only becomes an asset if you're the landlord earning rental income off of that property. But then, the political economy (macroeconomics) would get into trouble; so they have to call houses assets even though they're long duration consumption items. Next question: Are cars assets? Well, uhm, yes? Yes! Dump trucks definitely are, so yes. What determines it being an asset if it is not income generating? Hmm, how about the economic life, the durability of it. So, if I buy a gigantic bag of flour that I finish only in 5 years, is that an asset? No!
That's economics. Don't major in it.
Bam
This is why real estate is so attractive.
Inflation should be measured by the total number of units of currency in circulation from one time compared to another time period.
So if there are $200 trillion dollars in circulation in 2020 and then in 2021 there are $400 trillion dollars in circulation that would be a 100% inflation rate.
It is far more accurate and makes more sense than the insanity that is currently the CPI today.
If we could deregulate the banks and get away from a centralized currency, we wouldn't have to suffer from a government that thinks they can spend and tax their way out of every inconvenience that a person is beset with.
This market basket in Turkey includes tennis balls 🤦♂️ ...no wonder the economy here is so screwed...
About the argumentation about economists fundamental ideas about inflation made at 6:39….
In my first semester of economics we studied this precisely. We looked at different measurements of inflation, housing price index being one of them. So to me this looks like a complete misunderstanding of what fundamental ideas economists actually have. I’ve only taken undergraduate courses so far but to me it’s fundamental that assets inflate.
Yes assets inflate for different reasons. They can inflate because more demand from the market is pushing up the price. However, he’s stating the big reason houses are up 20%-40% across the last 2 years is because we are printing tons of money not because of demand. And that’s bad for people who are 18 and want to save money to buy a house. It just got way more expensive to them.
Your way of life is the cost
@@1guitar12 Even dying is expensive. 1.6 x 3 meters just for a plot of real estate, headstone, funeral service etc. Even an urn & cremation cost an arm & a leg. Donating your body to science I guess is free but it's going to be subjected to public humiliation and experimentations? Not for me.
6.5% isn't a fair estimate of inflation either. I'm sure that house has had massive improvements that cost lots of money and increased it's value over the years. It's still high, but I doubt 6.5%. If we were keeping 6.5% inflation each year we would be in a very bad way.
Bro it’s even worse then that and we are in a horrible state lmao companies are about to fall out of the sky when the parties over in a year
15-20% would be fair.
So inflation is -13% this year because bitcoin is down 13%?
The problem is that they have to adjust the basket of goods every year. Otherwise we'd still be talking about typewriters and ice chests rather than computers and refrigerators. And there is no real neutral way to adjust the basket so the best we can hope for is transparency.
Inflation is useful for comparing this year to last year, but not so useful in comparing 50 years ago.
I like when he say "a shift from the free market to the centrally controlled market" like if such thing really exist
It does, but what you don't pay with money you pay with blood.
@@ruhloflaw6709 you mean debt ?
"...in my opinion that's not the biggest problem. The more egregious problem is the fundamental idea that assets aren't products or services. Assets can't be inflated."
Completely agree with you Michael Saylor! Well said. That asset prices aren't captured in inflation metrics is screwed up.
In my first semester of economics we studied this precisely. We looked at different measurements of inflation, housing price index being one of them. So to me this looks like a complete misunderstanding of what fundamental ideas economists actually have. I’ve only taken undergraduate courses so far but to me it’s fundamental that assets inflate.
@@gustafholmberg4003 Yes, economists know asset prices can inflate. What I was trying to say there, and what I believe Mr. Saylor was getting at, is that asset price inflation is very much underrepresented in the CPI metrics that are what economists typically refer to as "inflation". Meaning, the Fed will target an inflation rate as a basket of consumer goods. And that's fine as long as you're a person that lives for present consumption. But most people also want to be able to buy assets so they can get ahead in society. But asset prices (housing, stock values as gauged by things like P/E ratios) have continually risen at a faster pace than the rate of income growth, making it harder and harder for your typical income earner to get ahead.
The real cost is the working class descending into poverty.
Print more money, or buy a drill press
I wonder why he is quick to point out that inflation is responsible for the increase in prices of assets such as stocks and bonds, but won't admit the price increase of Bitcoin is because of inflation.
He does admit that. But it’s one of few assets that is outpacing the rate of inflation. So therefore both inflation and growth in the network is causing the price to go up.
That is how real estate is the easiest way to get rich.
Each time money is printed it’s like it’s given to you (the value of the dept go down)
The more you have leverage with mortgage, the more you gain with inflation.
Wait till this housing bubble happens goofy 🤣 nobody has the money to buy a crib so you’re gonna be paying bills for nothing
@@JADiaz10 I am not in real estate at the moment. But I know people who went from zero to 300M$ in 15 years. Simple construction worker. While the pandemic was going on, their worth must have doubled!
I’m 25 and I don’t think I’ll ever be able to buy a house
Its over...land mismanagement, foreign real estate investors, tech engineers paying above market rate; working folks are at a disadvantage. Parking lots hoard lots of useful land...just for parking? Everything is wrong.
Get a remote job and move somewhere with a low cost of living.
It's alright Max, by 2030 nobody will own anything & will be happy- World Economic Forum.
Ya man I’m 20 and don’t think I will either. Buy crypto and have fun lmao
Anything is possible if you create a strategy to get to your goal and use the time value of money to your advantage.
But if you believe it is impossible, it will be.
You can do it!
4th omg
He can’t even define inflation. He’s just mad about CPI
There is no definition for inflation, the same way there's no definition for hate speech. The "definitions' that exist are not definite, ever changing and vague. So yes, he can't define it aside from trying to compress the complexity of the situation into a small paragraph of his opinion. Try harder to look intelligent.
@@af4396 inflation is the loss in buying power of currency due to shifts in price level. This dude was just talking about CPI, a measure of inflation. All he kept saying was “the measures can be manipulated” and it’s like yeah no shit, but the point is we set measures that are reflective of the economy as we can measure it. Not and we can prove that empirically. It’s not just “whatever the government says”
A lot of sloppy and inaccurate remarks
What are some examples?
You should give some examples or your comment is just as worthless.
@@rabbychan Happy to talk about it off-line, takes too much time for me to go through the whole video and dissecting every sentence he made, but there are mistakes in my opinion. I am studying towards a PhD in Finance.
This guy is epic.
A complete drunk.
A guy that borrows money to buy Bitcoin while completely tanking the stock of his company. Now he’s complaining about inflation because the bonds he issued have tanked and yields have spiked.
Meanwhile his Bitcoin investment has been cut in half. The debt he used to buy that Bitcoin has doubled in yield and been halved in value.
A brilliantly idiotic economic mind in an era of idiocracy. 😂😂😂
He’s doing great.