The Inevitable Path for Central Banks w/ Jeff Booth - Fed Watch 31

In this episode of Fed Watch, Christian and I are joined by Jeff Booth. It results in a show that is unlike any other interview with Jeff you may have seen. Most listeners are familiar with his book, so we spend most of our time discussing what a timeline of events looks like from Jeff’s perspective, and then some possible limitations to the technology driven deflation theory. In usual Fed Watch style, we end with trying to understand how bitcoin affects these arguments and what bitcoin means for the world.

Jeff not only took bitcoin by storm in 2020, but all of macro investing, with his book The Price of Tomorrow: Why Deflation is the Key to an Abundant Future. In it he outlines a new way to look at monetary policy and economics, through the lens of a technologist. Technology has a massive deflationary effect in the sense that it lowers prices through the economy. Also, technology is multiplicative, meaning its effects are exponential, not linear. When we approach monetary economics from this angle, deflation becomes inevitable and, most disquieting of all, very near.

Jeff Booth’s deflationary arguments fit well into the broad discussion macro is currently having on inflation versus deflation, but with a new spin that is hard to deny. Fed Watch has explored this topic primarily from a financial angle. Are the actions of central banks inflationary, is the money supply increasing or decreasing, and so forth. We have argued that credit is contracting meaning there is deflation, but central banks can adjust banks’ balance sheets which looks like inflation. Jeff’s approach cuts straight through these academic arguments, right to the jugular. Humanity is approaching the vertical portion of the exponential curve of deflation. This technological deflation will force central banks and governments down a predefined path of money printing and centralization, which in turn will chase people and capital into bitcoin.

Throughout the podcast, we raise several questions to test Booth’s theory. The most important being, instead of technology driving deflation, could it be that inflation is driving technology? You will have to listen to hear how Jeff skillfully answers that question. It leads the interview into a deep conversation on bitcoin culture and our deflationary future.

Overall, this is a very thought provoking episode of Fed Watch. Behind a bearish view of the near future, Jeff Booth is an optimist. Technological deflation will win against centralization and central banks, leading us to a more prosperous future with a new money designed for deflation. Thanks to Jeff for coming on the show.

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You can find us @BitcoinMagazine on Twitter.
Ansel Lindner on Twitter @AnselLindner
Christian Keroles on Twitter @ck_SNARKs

Timestamps:
0:00 - 5:00 Intros
8:33 - 9:25 The fiat system is playing out as structured.
11:32 -13:41 Central banks have no choice and eventually the world will wake up to the reality that it is all make believe. Bitcoin fixes this.
15:51- 16:31 Commercial banks with turn to Bitcoin as Central Banks start to compete with them.
28:33 - 29:08: Governments will have to deal with Bitcoin and peg their currency to Bitcoin
33:35 - 34:59 We can’t solve climate changes until we switch to Bitcoin
41:13 - 44:11 Bitcoin will revolutionize how we see the world and growth and productivity.

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