Money Is Only Backed By Faith | EP#157

Hey everyone Scott Cunningham aka @scottcbusiness today we’re going to be talking about how money isn’t really
what you might think it is it’s backed by faith that’s a very interesting
concept but it is very true since we gone off the gold standard
what backs US dollars faith and unfortunately it’s misplaced faith you
know share with you exactly why that is if you look at this this this graph here
it shows you that since the inception of the US dollar or at least since 1913
when it was basically a hundred percent of its value inflation has grossly
destroyed the value of the US dollar and it’s very similar for many other
currencies but we’re just gonna look at US dollar because you know there’s only
so many that we’re gonna look at and you can clearly see that it starts at a
hundred and it slowly declines well I mean originally very fast made a little
bit of a recovery and since then it has trended towards zero losing about ninety
five percent of its value if not more than that in the in in those hundred
years were you know several years past 2008 but this is a great representation
of what has happened to the US dollar and what will likely continue to happen
interestingly enough Bitcoin and other cryptocurrencies seem to be very much
the opposite they start at a very low value and become more valuable so when
we compare almost any cryptocurrency to the value of the dollar you can actually
see that they increased exponentially more
where the dollar has only decreased how much longer is your money safe in u.s.
dollars in any sovereign currency before it hits zero I couldn’t tell you we’ve
been taught that you should save money because saving money will allow you to
have more wealth unfortunately that’s not the case you may have more money but
it’s only because of inflation it’s only because they want you to not use your
money effectively because it’s not an accurate representation of your wealth
and I’ll tell you why say you work 40 hours a week and you get paid a certain
amount of money you put that money in the bank and in ten years say the value
of the US dollar has decreased another 1% naturally your money’s worth less now
even with your interest rates and you know all that good stuff in your savings
account your money is now worth less money and you’ve been told that saving
is what’s going to help you get more money or at least have access to more
money but by virtue of saving you’re actually losing your wealth not your
money because you’ll end up with more money in the bank than you had before
problem is that money is just worth less meaning the actual wealth is worth less
because if I told you that the 40 hours that you worked last week today are only
worth 39 hours you would you’d probably not want to work there anymore and if I
told you that you know 40 hours in 1913 is only worth like a couple hours today
would you still work those hours because you’re still gonna work the 40 hours but
you’re only getting it paid for the two hours worth this is all from inflation
this is all from the way that these sovereign currencies are set up
they’re not backed by anything people always say but you know what’s back in
crypto well crypto has a max supply almost all of them do there’s some that
do not but let’s just assume we’re talking about Bitcoin because it’s like
68% dominance or something in the marketplace anyways right now say we’re
talking about Bitcoin and it has massively gained value like if we look
at how much value has Bitcoin gained since its inception well III don’t know
the actual percentage but going from zero point zero zero zero zero zeros or
one or whatever it was up to you know ten thousand eleven thousand that’s an
insane in sane increase I don’t even gave them what what the
number is but thousands and thousands of percent increase US dollar ninety five
percent down so why do we continue to put our faith in the US dollar in any
dollar well because we have been told that that’s what makes sense we
continually put our faith in in our governments in well I mean not even in
the government’s because the Federal Reserve isn’t run by the government we
think we’re putting faith in the government or whatever we’re putting our
faith in for this money to be valuable and we’re always left playing catch-up
or you know thrown under the bus while you try to save and then ten years later
your money’s worth significantly less your hours are losing value your labor
is losing value everything that you do is becoming less valuable and how do you
fight that well you can’t because it’s a centralized currency
well then what do you do create decentralized currencies like Bitcoin
however Bitcoin is extremely volatile so people don’t have the faith that they do
in the US dollar here’s the funny part though with Bitcoin the faith is that
it’s either gonna go up or it’s gonna go down with the US dollar your faith is
that it’s only slowly going down it’s not going down really quickly it’s only
slowly going down because then we have stable coins and they’re pegged to the
u.s. dollar and that’s not super helpful because that means they’re going down as
well but it allows you to take some of that Bitcoin and put it into a coin that
will at least not be volatile and allow you to spend your coins as you need to
in places that would otherwise accept it but again what do you do when the stable
coin is pegged to the US dollar and the u.s. dollar goes to zero it’s trending
downwards on its way to zero so so what do you do well you look for better
solutions decentralized currencies that aren’t controlled by you know a small
amount of entities that arbitrarily change the rate of inflation they
arbitrarily can manipulate the value well no one can arbitrarily manipulate
the value of Bitcoin I mean there’s Wales there’s pumps there’s there’s
different things that happen but we know that because there is a Max supply
similarly to gold and other you know luxuries and commodities there is a
certain amount that’s where the value comes from that we know there’s a
certain amount there’s a certain amount of difficulty to acquire it it’s more
and more challenging every day to acquire Bitcoin to mine it
the challenge to print money doesn’t become harder it’s the same challenge
it’s the same amount of effort and it’s only controlled by a few people and
that’s never really gonna change whereas again the value and you know the ways to
deal with inflation for Bitcoin and other cryptocurrencies they have set up
all of these like ways to mitigate losing the value of the coin and built
it into the infrastructure of that of the blockchain that it runs on and then
just in general with the coin and the technology and again people don’t
realize that you don’t need anything to back something for it to be value to
have value and we know that because the US dollar is not backed by anything and
it has no smacks supply thus it will infinitely and continually lose value
Bitcoin has a max supply it’s generally trending upwards compared to its
inception and you gain the value from that because people can actually track
it if you can’t track something how can you actually have faith in its value how
can you have faith in the US dollars value when you don’t know what the rate
of inflation is gonna be tomorrow you don’t know how much is gonna be printed
tomorrow you don’t know how much is in existence today and there’s no way that
you can find those things out with Bitcoin we know today there’s seventeen
million eight hundred and seventy eight thousand six hundred and thirty seven
bitcoins in circulation that means if we go back five days if we go forward five
days we can generally see how much will be in circulation
and it can in it can help us inform decisions it’s important to have
transparency and know the value of things especially if if they’re
centralized you can’t even control the value or have any say the very least
you’d want to know what that value is whereas with these decentralized
cryptocurrency z– you do know the value you do also have some say because you
can you know you can you can hold it you can help bring its value up by buying it
you can do so many different things that will actually help improve its value you
could burn coins whatever you want to do you can improve the value of a
cryptocurrency and there’s many many ways to do so but the point being here
that money u.s. dollars there is never going to be some way to make it more
valuable if you burn US dollars it’s also illegal to to to get to destroy
money well why is that they don’t want you to make money more valuable they’ve
got it set in legislation to ensure that money continues to lose its value and
that will just continue and continue and continue until people finally get wise
to it in a hundred years they’ll look back in the laughs that we ever used
money and were foolish enough to to opt into a system that degrades indefinitely
and loses its value it doesn’t make sense would you buy a a house or a stock
if you were guaranteed that its value would decrease probably not I mean you you could still
buy it but would it make sense to would it be financially viable no it would not
be I could probably go on this forever and ever and ever but I think it’s
really relevant I mean we talked about this a lot at futurist yesterday and the
day before so I think coming out of that I still have these thoughts buzzing
around about the real value of money and and the real value of cryptocurrencies
and then comparing the two because again it’s all about faith in in that
cryptocurrency in that regular sovereign currency people have so much faith in
these sovereign currencies but unfortunately your faith is in its value
going down with Bitcoin it could go up it could go down it’s very volatile yes
but it has part of its volatility is because we don’t let a central authority
control it and that’s more important than it is to be extremely extremely
stable and I mean even stable coins are pegged to the dollar thus if you have a
stable coin the whole point is that it’s not going to change at value well
because the US dollar is inflating and losing value though the dollar amount
will stay pegged the true true value will decrease as well and this is going
to continue to happen people shouldn’t be saving to save this should save to
invest but again I don’t want to get into giving financial advice I just want
to look at cryptocurrency versus regular sovereign currency fiat currency as a
whole because again when you compare them they’re basically opposite in terms
of how they’ve performed and though yes US dollar has been around a lot longer
and there’s certain points in its history that you compare to the short
period of time that Bitcoin has been around and you could probably make the
argument that they could look the same at certain
points in time and while that’s true bitcoin will eventually reach its max
supply sovereign currencies never will there will be a point where it wouldn’t
make sense that bitcoin would continue to go down because there would be no
more being created once all the gold was mined you would assume that its value
would actually go up not down and and with money there’s no there’s nothing
set in place to actually earn to actually be able to truly earn your
faith to be deserving of your faith in that currency because if you look at it
again you’ll see that it is downtrending to zero and at the end of the day people
should be looking more into their wealth and what is their wealth actually valued
money is not a true representation of wealth or value it is a arbitrary unit
of measurement that can be manipulated by the central authorities that control
it let me know what you guys think about this it’s crazy because we live in this
time where it almost seems conspiratorial to to think this way but
this is just the reality of the world we live in and I’m not telling you to
invest in Bitcoin but I’m telling you that investing your your hard earned
your hard earned money into sovereign currencies or allowing or keeping your
hard-earned money in sovereign currencies you’re putting your faith in
losing money you absolutely can’t gain money from saving if you just look at
the rate of inflation you absolutely cannot gain money or even keep it at the
same value you won’t even be able to store it and keep
because it’s going to lose value over time and most people don’t grasp this
concept of what the real value of money is worth again because we get caught up
in the numbers it’s like yeah but people who had a million dollars 100 years ago
now I have a billion yes a hundred years ago though
when you bought something it was also equally less expensive so you know
nothing really changed the numbers just got a lot bigger and like obviously the
numbers changed but the actual wealth the actual physical tangible items they
didn’t change it was the same and it’ll continue to be that way until people
wise up to this this thing that’s going on and and say enough let me know what
you guys think in the comments below I’m Scott Cunningham aka @scottcbusiness signing off Cheers

3 thoughts on “Money Is Only Backed By Faith | EP#157”

  1. Have you seen Mike Maloney's series called The Hidden Secrets of Money? If you haven't, I highly recommend it. It talks about what you said in this video and it goes in detail. There's even one episode about cryptocurrencies. It's here on YouTube.

  2. In 1975, my parents built a house and fully furnished it for around $20,000 dollar. If I were to build the same house today, it would cost over $200,000. The house's value hasn't gone up; it's the value of money that went down. The funny thing is that I'm making less today at my day job than what my father was making in 1975.

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