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Harvard Extension School offers a world-class graduate education that is designed to be accessible and flexible for those seeking career impact. The program features challenging online classes taught by Harvard faculty and industry experts, enabling students to build actionable knowledge and skills. Additionally, the school provides opportunities to expand one’s professional network by connecting with high-achieving professionals from around the globe. The model caters specifically to part-time learners, allowing them to study at their own pace while making tangible contributions to their fields.
The episode discusses the concept of scarcity, comparing essential resources like oxygen, which is abundant and free, to luxury items like diamonds, which are scarce and costly due to high demand exceeding limited supply. This contrast illustrates how money itself is intrinsically scarce, unlike the products of necessity. The relationship between scarcity and value points to how tangible resources and currencies fluctuate based on supply and demand dynamics. Understanding this fundamental economic principle helps clarify the nature of money and its value in different contexts.
The discussion highlights historical events such as the aftermath of World War II, where an influx of gold led to the dollar becoming the global reserve currency, originally backed by gold. However, in 1971, President Nixon took the U.S. off the gold standard, transitioning the dollar to fiat money, only backed by government decree. This shift enabled the government to print unlimited amounts of money without the constraint of physical gold reserves, leading to a devaluation of the dollar. The episode points out how this fiat system has allowed for unchecked inflation and economic instability over time.
A significant portion of the episode is dedicated to defining what constitutes effective money, delineating five key properties: divisibility, durability, recognizability, portability, and scarcity. Effective money must be divisible to accommodate transactions of varying sizes and durable to withstand the test of time. Moreover, money must be easily recognizable for authenticity during transactions and portable enough to be carried without significant effort. Lastly, scarcity is essential to maintain its value, ensuring that demand outstrips supply to prevent devaluation.
Inflation is explored as a concept intertwined with wealth redistribution, wherein the erosion of purchasing power impacts individuals' financial circumstances. The discussion draws a parallel between legal inflation by central banks and counterfeiting, emphasizing how both diminish real wealth by manipulating currency supply. Inflation leads individuals to feel as though they are getting ahead, while in reality, their purchasing power is decreasing. The narrative posits that these economic conditions can lead to reduced long-term investments and increased short-term consumption.
The ideas of Austrian economics are introduced, which stress individual agency and self-ownership in economic interactions. The principle that money is a medium of exchange allows for voluntary action and promotes the division of labor, enhancing overall productivity in society. The narrative advocates for the understanding that wealth and richness are products of human innovation and cooperation. Recognizing the role of individuals in creating and exchanging value is pivotal to appreciating how markets function effectively.
The episode presents Bitcoin as a significant innovation that transcends traditional financial systems, positioning it as a decentralized form of money with unique properties. Unlike fiat currencies, Bitcoin operates on a fixed supply model, ensuring its scarcity and durability over time. The discussion contemplates the potential for Bitcoin to disrupt existing monetary systems and elevate individual property rights. Furthermore, the emphasis on self-custody of Bitcoin underscores the move toward financial autonomy and resistance to centralized control.
The conversation emphasizes the importance of a long-term perspective when viewing investments, particularly regarding Bitcoin. The volatility of cryptocurrencies can be daunting, yet the narrative encourages individuals to focus on the fundamental properties of Bitcoin as a hedge against inflation rather than a day-to-day asset for immediate transactions. A commitment to holding Bitcoin long-term is proposed as a strategy to navigate the complexities and uncertainties of financial markets. This approach promotes resilience and conviction in financial decision-making amid market fluctuations.
A significant focus is placed on the psychological effects of inflation and economic instability, highlighting how these experiences shape public sentiment and behavior. As individuals face increased costs of living without proportional wage increases, feelings of frustration and anger emerge, leading to broader societal unrest. This disconnect between personal experiences and the economic narrative often leads to a misattribution of blame, with potential scapegoating occurring within differing economic classes. Recognizing this psychological landscape is crucial for addressing the root causes of societal discontent.
The episode discusses the crucial role of property rights in determining the moral and ethical landscapes of societies. It posits that the violation of property rights, often through governmental mechanisms of taxation and inflation, drives people toward non-productive paths and encourages the perception of rich individuals as inherently evil. Without clear definitions and protections around property, societal structures succumb to corruption and moral decay. Emphasizing strong property rights can lead to virtuous economic behavior and enhance overall societal well-being.
Looking ahead, the dialogue anticipates significant shifts in financial structures and societal organization driven by the effects of Bitcoin and decentralized technologies. As individuals seek to protect their wealth and exercise their autonomy, the potential for redefining traditional government roles emerges. The challenge lies in ensuring that these transitions do not replicate the same oppressive patterns observed throughout history. The conversation concludes with questions about the future of governance, economic power, and the responsibility individuals hold in shaping a new financial landscape.
No one wants to hear that the money they save today will be worthless tomorrow, and yet no one can deny that inflation is hitting everyone at the grocery store. What does this all mean and what can you do about it? You’re living through a recession that the government can’t seem to agree on or admit to whether you like it or not.
Robert Breedlove hosts the podcast, ‘What Is Money?’ has joined Tom a few times and broken down the complexities of money, inflation, and property rights. He’s a freedom maximalist, and bitcoin philosopher that offers food for thought that can melt your brain. His breakdown of inflation being a version of legal theft should grab your attention as it’s hard to ignore once you hear his explanation.
We’re digging into key ideas such as:
The money crisis
How bitcoin is impacting future creation of wealth
How you can better thrive during this financial crisis
It always comes down to decision and how you choose to move through reality as
it is not how you wish it were.
[Original air date: 2-16-23]
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Podcast: https://whatismoneypodcast.com/
Instagram: https://www.instagram.com/breedlove_22/
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