Latest / Bitcoin for Financial Services Podcast / The Real Reason You Lose 8% Every Year

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The Real Reason You Lose 8% Every Year · Bitcoin for Financial Services Podcast

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  true inflation is monetary expansion.
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  And they don't want to tell you,
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  hey, every nine to 10 years,
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  you're losing half your purchasing power
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  at current M2 growth.
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  Because if you said that,
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  there'd be riots in the streets.
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  And so they kind of have to pitch this idea
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  that it's 2% inflation target,
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  things are stable.
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  But yeah, in finance,
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  they literally are assuming
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  that this is a reliable tool.
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  But proof of that is look at any company 25 years ago.
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  like they literally all appear as small caps so how do you know what their actual financial stance
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  was or in position when you can't actually compare a company today to a company 25 years ago because
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  the dollar is so unstable bitcoin is a currency on the internet if you don't trust any other
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  currency this is where you go it's going to outperform everything bitcoin could eventually
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  be worthless every day is a good day to buy bitcoin bitcoin reached its highest price to date
• 0:55
  Bitcoin hitting a new high.
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  It really has reached escape velocity.
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  There is no second best.
• 1:00
  Who cares about Bitcoin?
• 1:01
  It's the only secure database that's ever been invented.
• 1:04
  Antisocial.
• 1:05
  Bitcoin is the real deal.
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  Stupid.
• 1:07
  Everything is bullish for Bitcoin.
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  Immoral.
• 1:10
  It's going up forever, Laura.
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  Fix the money.
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  Fix the world.
• 1:17
  White Rock is a registered investment advisor,
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  and the opinions expressed on the show are their own
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  and do not reflect the opinions of the Silicon LLC.
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  Joining us as a CPA and the opinions expressed on the show
• 1:23
  are their own and do not reflect the opinions of trusted CPA
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  or other affiliated firms.
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  information presented is for educational purposes only and does not intend to make an offer or
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  our firm name.
• 2:00
  Neither the information nor any opinion expressed is to be constructed as solicitation to buy
• 2:03
  or sell security or personalized investment tax or legal advice.
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  Welcome to Bitcoin for Financial Services Media, the podcast where sound money meets
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  professional services.
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  We explore how to build a financial service industry within the principles, values, and
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  ethos of Bitcoin.
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  Today, we're joined by Jonathan Camps, CPA at Orange Horizon Wealth.
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  Let's get started.
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  All righty.
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  Welcome back to another episode of the Bitcoin for Financial Services podcast.
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  And man, today we've got a treat like we do every week.
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  This week is kind of stacked.
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  We've got several shows to kind of, because I'm out of town next week and the time zones
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  will be a little too crazy.
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  But today we've got Jonathan Camps, who's a CPA. He's at Vista, or is that right? Vista Investment Partners?
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  Yeah, Vista Investment Partners. Yeah. And we're DBA's Orange Horizon Wealth, which most people might have heard of by now.
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  Yeah, yeah. Well, welcome to the show. We've got some deep content to go through.
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  You've put out some really great articles over the course of the past four or five months.
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  And I know we met out at our summit in Denver.
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  So glad to be on the pod with you.
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  And we're neighbors, basically, right?
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  Basically, next door.
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  Yeah.
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  Yeah.
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  I love it.
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  Just a quick two-hour hop and jump away.
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  So, well, thanks for coming on, man.
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  How's your week going?
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  Oh, it's going great.
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  um, working in business, uh, Bitcoin, you know, Bitcoin is good for business. So
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  it's always a good time. Yeah. Always a good time.
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  You guys are on the investment side and tax or tell us a little bit more about like,
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  just give everyone the quick download on what Vista does. Yeah. So we're a registered RIA,
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  that basically embraced Bitcoin a few years ago.
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  We went through a big process of building up a compliance team
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  to where we can offer Bitcoin to clients and speak on it
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  because we are strong believers that this is potentially
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  the greatest innovation of our lifetime.
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  Even though a lot of people are focused on AI and other investments,
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  we view Bitcoin as a game changer.
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  I myself came from the corporate accounting world and got orange-pilled.
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  And through my process, I joined Vista Investment Partners a couple years ago now.
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  And we're starting up a tax practice actually this year.
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  So we will be offering tax services, advisory, and prep for our regular traditional RIA clients,
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  as well as Bitcoiners that want CPA and tax advisory from a, you know, orange-pilled individual
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  who sees the asset that they hold the same way and can give good guidance on what to do with that.
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  So, yeah, we're regular RAA who embraced, got orange-pilled.
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  Our managing partners are all orange-pilled.
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  And we now are doing tax preparation and advisory services as well.
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  Wow. So you're going to put me and Wyatt out of business.
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  One stop shot. Why do we have this guy in the pod?
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  We're merging. Hey, Bitcoin is good for business. It rises all boats.
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  There's enough Bitcoiners out there that we'll be okay.
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  No, dude, absolutely. I love to hear that.
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  I mean, we are, I would say in some ways, like kind of drowning over here.
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  There's not enough practitioners on the tax side that are going down this route.
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  And, um, and man, it is, uh, potent, you know, I'm sure you guys have all seen it.
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  Like people, we have this like give and take where the government is like, they're only
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  going to continue to like really try to squeeze people on the tax side.
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  And then people are seeing the headlines and they're like, I don't know why I'm sending
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  money to Washington DC.
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  So I want to make sure I'm working with people who can help me in all the legal avenues, minimize that bill in the short and long term.
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  So I love to hear that. Congratulations to you guys.
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  Thanks. Yeah, we're really excited. Honestly, it's been a great couple of years embracing and getting through that hurdle.
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  but yeah it's been really good for us and I know you guys too with the space and everything you're
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  doing in the podcast there's there's enough people out there that will embrace bitcoin if they hear
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  about it and understand what the problem is that I don't think it's a problem there's not
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  too too many tax advisors well tax advisors maybe but in the bitcoin space like there's enough
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  people there yeah no certainly certainly and that that's our whole mission is you know get more folks
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  you know on board providing these services um and ultimately offering clients a better experience
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  yeah jonathan you guys kind of made a splash on your bitcoin twitter so just while you're
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  you know introducing this and orange horizons here you guys recently you opened up a office
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  in rockford which is sweet why don't you kind of walk us through what that process was like
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  And I was particularly surprised by, you know, the reception of the locals.
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  And I think this is kind of maybe a glimpse into the future of, you know, more orange carpets getting rolled out for Bitcoin companies.
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  And it was awesome to see, you know, your guys' success and reception there.
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  So I would love the inside scoop.
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  Yeah.
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  So it started several years ago.
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  We were introduced to Jeff Arand through Swan, Ryan Flynn specifically.
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  And he was basically saying like, hey, you guys might have a lot in common.
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  You guys should talk.
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  So Jeff was from the traditional brick and mortar RAA, where you're not allowed to talk
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  about Bitcoin.
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  You're not allowed to recommend it.
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  Even if someone wants to buy it, you're kind of like, I can't help you.
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  You have to go do it on yourself.
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  And so from his perspective, he was doing a disservice to his clients.
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  And so that started a conversation with us who just launched Orange Rising Wealth.
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  And over several years, he was able to transition from his old RIA firm to join Orange Horizon Wealth under our umbrella because we're independent.
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  And in that process, he ended up opening up his own branch out of Rockford, Illinois.
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  So he's not coming, you know, in our building. He's doing his own thing, but he's under our umbrella so he can offer Bitcoin and give advice that he feels is his fiduciary responsibility to his clients.
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  and in that process he had a ribbon cutting and the mayor of rockford shows up the news station
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  shows up the best part is across the hall and i mean like 50 feet away is a brick and mortar ria
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  inside the same building and they're all like peeking and looking over because there was probably
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  a crowd of 50 people that showed up and uh the chamber of commerce from rockford was there and
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  they said that this was the biggest ribbon cutting they've had in a long time so there's a lot of
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  interest in uh bitcoin sparks interest whether or not it's good or bad people when they hear the word
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  it you know they have curiosity of what's going on and the best part is there was a couple clients
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  walking into the other uh brick and mortar and they were looking and they were like i kind of
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  want to see what's going on over here um and then they end up sending some people that kind of like
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  interrogate what was going on and who we were and are we crypto uh are we bitcoin and then they you
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  know they do the typical i i heard about about bitcoin in 2012 and then i sold it at a 20 percent
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  game and they're it almost like you're trying to show that i know what this asset is but it shows
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  that they don't truly understand what the asset is um but yeah that's it was really great the
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  Twitter response was great.
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  I saw over 100,000 views on some channels,
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  which shows it was the thing of the day, I guess.
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  But yeah, congrats to Jeff on making the move.
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  Congrats to my team for getting it done.
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  And we're excited.
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  And we're waiting for more.
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  Like we're trying to get more.
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  So we're recruiting, you know.
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  We're like, hey, you want to offer actual Bitcoin,
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  not the ETFs?
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  We can.
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  So it's kind of cool.
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  I love it.
• 10:58
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• 11:25
  free consultation. Well, I want to talk through the article that you put out earlier this year.
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  I mean, I remember it got, I don't know how I got, maybe you sent it or I saw it on LinkedIn
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  and then I dropped it in the signal group for Bitcoin for Financial Services. I mean,
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  I think that we could spend, we could kind of live here for a little bit and just kind of
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  talk to the core thesis. I guess maybe to take a step back, because I think it is helpful for
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  people to understand why it is that you went down this path. In the article, you're talking about
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  COVID, which I hear that a lot from Bitcoiners, especially in that 21, 2020 class of saying,
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  it didn't really click for me until COVID and the things I saw that happened with the interest rates
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  going to zero and, and then, you know, the, the Canadian trucker protests and all kinds of things
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  where you're like, if you're caught on the wrong side of, uh, of the big government, you might,
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  you might want to think through what that looks like from a financial standpoint. So I guess maybe
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  let's go there first. Let's just talk through any, anything you want to, uh, bring up from
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  what you were seeing back then from macro data and the client work that you're working on
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  that kind of made you like the light bulb moment of like, wait, what's going on here? And,
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  and how do I approach things going forward? Yeah. So this goes back, you know, high school days
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  where Warren Buffett was like the legend to me. I just admired him and his work ethic and how he
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  would approach investing. And so I went to college and I got an accounting and business and finance
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  majors. And so that initially started my journey to be a value investor. So I read all the books,
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  you know, security analyst and not just read them. I wrote summaries and then summary of the summary
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  because the book's like 900 pages long if you read it and it's just really dense. And so I would
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  try to break it down because I saw what he was doing and I kind of inspired to be able to assess
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  a company, understand the operations, and then invest and make a lot of money.
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  That was the long-term goal.
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  And so what led me down this road is after working in corporate accounting for a decade,
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  value investing for about eight years, and doing deep research into companies and assessing
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  and doing discount cash flow analysis and looking at all these metrics, there's one
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  thing that occurred to me and that was we were taught accounting but we were not taught about
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  the money we were accounting for and I never really questioned the unit that we were measuring
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  and so when you're assessing a company and you're looking at this oh hey they're growing at eight
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  percent a year and you're you know you're forecasting and then doing a DCF on what you
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  think those operations will be and you're using all those metrics you're using nominal terms
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  which might be growing more than the actual nominal but you don realize that because in a financial statement they numbers They not discounting or using a net present value of what that is in real terms
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  compared to other things. You're using the dollar as if it's stable. And so that was kind of what
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  COVID happened and all the craziness with that real estate jumping up 30 to 50% everywhere.
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  you had the entire new car industry shut down and they were all those prices were going up 30 40 50
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  because i was in the used car uh corporate world for a while so i was watching what was happening
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  and we were all like a little confused and um then it got to companies i was value investing
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  in i was assessing them and they're coming up as seven or eight p.e ratios meaning they lost like
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  60 to 70% of their market cap within a month. And that kind of was the light bulb moment of like,
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  I should be rejoicing right now because these look like the greatest buys ever,
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  but something is off because you had other companies, I won't say their names, but they
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  were at thousand plus PE ratios. And I was like, this makes literally no sense. It doesn't even
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  matter if they only a hundred X, like if you're buying a thousand PE ratio company from a value
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  investors perspective, right? I'm not talking a price appreciation, but from a deep value,
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  you just wouldn't ever touch it. But then it goes up more and more. And then you had meme coins,
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  meme stocks. And so that kind of had to reassess what I thought I knew about money and the markets.
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  And then that's kind of what led me down videos, looking up Andrea Antopolis. And then he kind of
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  opened my eyes to reading about the Bitcoin standard. And then I basically read every book
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  you can find on money and Bitcoin. I read Jekyll Island. You know, you read Seven, the Property,
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  you understand how Bitcoin actually works. And that's kind of what started my transition of
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  changing my measurement tool of how valuable or healthy is this company. So long, you know,
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  the long story short is basically you're doing things for 10 years and then you get, you see the
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  red pill and the blue pill, you take the red pill and then you realize everything you thought you
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  knew about finance was actually not taught. You're kind of assuming the reference you're using is
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  reliable. And if you question that, it makes you question everything. Yeah, no, I mean, I think
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  Probably Wyatt and I definitely have seen that. And I mean, I've seen it more like in small business world, right? It's like, okay, you're depreciating an asset and then maybe you're trying to also set money aside to replace that asset or at least like account for that within strategic meetings to say like, okay, like I used to work with a big, you know, coffee roaster and they'd spend, you know, a hundred thousand dollars on one of these big roasters.
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  And you're trying to measure that, right? Of like, okay, well then this will only last us a decade or a decade and a half at the most. And then we're going to have to go figure out how we're going to actually replace that asset.
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  And if the ground is like moving and sliding beneath your feet, right? Like how do you plan for that as a business owner? And the answer I think is extremely difficult. And that's probably why you see so many small businesses, whether they know the reason or not, that's why they go under. It's just because they can't plan for this uncertain future that they're having to live through.
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  So, yeah, I mean, if you worked in that world too, you know, I'm presenting financial statements
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  and operation performance, and you're looking at measurements of like, hey, we're growing
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  five, six, seven, 8%.
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  And you think that's great year over year.
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  You're like, hey, we're really growing here.
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  But then you're not able to acquire future inventory.
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  Things aren't adding up.
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  You're like, well, we're growing.
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  Our profits should be able to acquire more goods and services to continue that business.
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  And to your point, eventually, if you're measuring wrong, like you'll hit that point to where your prices now have to go up or your quality is going down or you're just shutting down entirely because you get underwater in debt that you thought you could service, but you're not able to acquire the future goods.
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  And that's kind of what stood out to me when I wanted to write this article is business after business.
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  I'm helping and on paper, they look great.
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  But the reality of what's going on in the world is worse than what's happening on their balance sheet.
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  And so eventually, you know, something's going to have to give.
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  And it sucks because we should be able to run a business and store in something that is stable enough to plan long term.
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  And instead, now we're making short term decisions.
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  We're making malinvestments because we thought it looked good.
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  And then to your point, the ground moved under our feet and now we're underwater.
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  yes it's really well said jonathan i think it's such an important point and it's honestly one of
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  the biggest tools i use to orange pill people is trying to help them understand it's like look
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  you're not using a consistent measuring stick here uh yeah i kind of think of it as if money
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  is the base market and every other market is built on top of that and the value of that market is
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  constantly manipulating and shifting it's like you're building a house on sand and it's like
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  you're doomed to fail.
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  And it's unfortunate
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  and just obviously nothing you can do about it
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  besides opt out, you know,
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  and go on Bitcoin standard
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  and use a more solid unit of account.
• 20:39
  Yeah, because you don't know
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  if you're measuring the table or the ruler.
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  That's kind of my main point.
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  Like, what are you measuring here?
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  You measuring operation improvement and growth?
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  Are you measuring monetary debasement?
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  Yeah, when you made a point
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  in that last piece right there
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  where you just said,
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  measure in a more stable unit, right? I think for someone coming in off the street and they,
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  you know, they click on this video and they're like, oh, these guys are talking about Bitcoin,
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  interesting. And they hear into a more stable unit and they, you know, and they exist in the
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  year 2026 and they, you know, they watch CNBC maybe on the TV while they're working. And they're
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  like, well, I don't get that. That doesn't compute in my brain. Can you go down that path of why you
• 21:29
  would argue that Bitcoin is a stable unit when measured correctly? Yeah. Well, measuring in
• 21:37
  terms, it may appear very volatile. Although we know that the dollar is extremely volatile.
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  Well, interest rates, they alter, they print more or destroy through paying off debt.
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  And their measuring stick is moving.
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  But when that is your unit of account, then it appears stable.
• 21:57
  But in reality, the prices of everything are changing.
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  Bitcoin from that perspective, or you can use gold, gold or Bitcoin, the price may be changing.
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  But the quantity of that item is in Bitcoin terms fixed.
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  So we know that there's only 21 million or really 20 million point nine, nine, nine, nine, whatever, but basically 21 million of those units ever. So you can basically approach long term decisions on how much of this network or percent of this monetary unit or good. Am I growing?
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  So if you're accumulating more Bitcoin in Bitcoin terms every year, you can actually assess whether or not you are achieving profit.
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  If that's your capital, your unit of account that you're using, the capital good, then you know if you're increasing that unit.
• 22:46
  So stable in the sense of you know the denominator you are measuring everything in is not changing.
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  Now, in fiat terms, it may change. But I think because we have been the dollar reserve currency of the world, we assume that the dollar is stable or fixed when in reality nothing is stable or fixed unless it's controlled.
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  It's not a free market when you're altering all of the underlying properties of that money.
• 23:15
  That just basically means that we are either diluting or we are manipulating those figures to have an illusion of growth or stability when you could feel it today.
• 23:30
  I mean, things are growing at 10, 20% a year.
• 23:32
  So is pricing of everything in dollars is also not stable?
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  And so people just assume because you have $1, hey, this is stable.
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  It's $1.
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  But that dollar is getting you less and less goods every year.
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  So it's not stable in the sense of what you're acquiring in goods.
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  It's only stable in nominal terms.
• 23:53
  Yeah.
• 23:53
  And I do want to dig into kind of some of the equity analysis you did behind that in the article.
• 23:59
  But one of the things I want to double click on you mentioned, I think the finance industry is notorious for making these assumptions because, you know, also finance major.
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  and this never really clicks for me until I was a Bitcoiner.
• 24:12
  But, you know, in corporate finance, it was like,
• 24:14
  well, you know, you're whack.
• 24:16
  You're weighted average cost of capital, you know, risk free rate, 2%.
• 24:18
  It's just blindly 2% in every financial model ever.
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  It was like, where's this number even come from?
• 24:25
  Don't challenge it.
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  Don't bother, you know, tweaking it because that's what everybody uses.
• 24:31
  Yeah, and that's if you're using a 2%.
• 24:33
  But once again, that's based on CPI.
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  And from a Bitcoin's perspective, when you've done the work, you realize C&P is non-inflation.
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  It's literally just a proxy in the basket that they use to measure prices constantly changing.
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  And majority of the goods in the basket were substitute goods already.
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  So they'll go from ribeye to ground beef or they'll have like VHS tapes in there, which clearly nobody has.
• 24:59
  or just whatever they use to make that number appear better.
• 25:04
  Because true inflation is monetary expansion.
• 25:07
  And they don't want to tell you, hey, every nine to 10 years,
• 25:10
  you're losing half your purchasing power at current M2 growth.
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  Because if you said that, there'd be riots in the streets.
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  And so they kind of have to pitch this idea that it's 2% inflation target.
• 25:23
  Things are stable.
• 25:24
  But yeah, in finance, they literally are assuming that this is a reliable tool.
• 25:29
  But proof of that is look at any company 25 years ago.
• 25:34
  Like they literally all appear as small caps.
• 25:36
  So how do you know what their actual financial stance was or in position when you can't actually compare a company today to a company 25 years ago because the dollar is so unstable?
• 25:48
  So that'd be my answer to the stability of the dollar, I guess.
• 25:51
  Just look 20 years down the road or your grandparents were making what, $2, $3 an hour.
• 25:57
  and in those terms we'd be able to acquire,
• 26:00
  let's say 10 cheeseburgers.
• 26:01
  I can't work that much time
• 26:04
  to acquire the same amount of goods.
• 26:06
  So it's all about that measuring stick
• 26:08
  of what you're using.
• 26:10
  Yeah, price of Bitcoin is one Bitcoin
• 26:12
  and my co-host is on a VHS standard.
• 26:15
  So if we could maybe keep the VHS slander to a minimum,
• 26:19
  that'd be appreciated.
• 26:21
  Only because all the new movies are,
• 26:24
  I don't know what the right PC word is,
• 26:26
  But, you know, we just prefer, you know, the old school Disney.
• 26:30
  Classic Lion King.
• 26:32
  Yep.
• 26:33
  I'm on it.
• 26:34
  And they can't change it.
• 26:36
  You know, I don't know if you guys have seen that on Disney Plus.
• 26:39
  They might adjust, you know, some things or they might put some like, you know.
• 26:43
  So, yeah, I might be a VHS maxi.
• 26:46
  So, but I'm a Bitcoiner and an AI guy.
• 26:48
  So, I'm playing in both worlds.
• 26:50
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• 26:58
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• 27:04
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• 27:10
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• 27:15
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• 27:20
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• 27:22
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• 27:25
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• 27:29
  The one thing I want to bring up on this front is,
• 27:32
  I don't know if you guys have heard of this guy named Dr. John Dorrell.
• 27:36
  Is that named Maria Bell to either of you?
• 27:37
  He's a professor down at University of Tampa.
• 27:41
  If you haven't interacted with any of his stuff or anyone listening,
• 27:46
  he's a great resource.
• 27:47
  I don't know if he has a ton of content.
• 27:48
  I've only seen him speak in person when I've been down in Florida at a few events, but he has this great, he's very good at like these visual analogies.
• 27:58
  So one that he, that I've seen him do a couple of times now is he'll hold up an ounce of gold.
• 28:03
  Right.
• 28:04
  And he will be like, does anyone know what this, you know, was worth in when we went off the gold standard in 1971 or whatever?
• 28:12
  And he'll wait, you know, he'll be like, seriously, does anyone know what this is worth?
• 28:16
  And I always forget, but I think he says like $35 an ounce.
• 28:20
  Right.
• 28:21
  And then he's like, now this is worth, you know, whatever it is today.
• 28:25
  Right.
• 28:26
  Forty eight hundred or five thousand or whatever it is today.
• 28:29
  I don't follow it too closely.
• 28:30
  Fifty one hundred.
• 28:31
  Yeah.
• 28:31
  Give or take.
• 28:32
  Fifty one hundred.
• 28:33
  So so he makes that.
• 28:35
  It's a very powerful illustration to say, like, this little, you know, circle, it looks like a quarter.
• 28:41
  You know, he's just like this didn't change.
• 28:42
  the measuring uh stick uh changed right and this didn't get more valuable really uh the the thing
• 28:51
  that you're the units that you're applying against it got way less valuable um so that's one and then
• 28:57
  the other fun it's a it's not as it might be more powerful actually but it's it's just different
• 29:01
  is he'll take a dollar like a dollar bill or a 20 dollar bill and he'll just start ripping little
• 29:06
  pieces off of it and he throws it into you know off of the stage and he the illustration is like
• 29:12
  this is what is happening actually to your dollar every year when they debase you seven to eight
• 29:18
  percent a year so anyways i think it's um i just love that he's a very visual guy and does things
• 29:24
  that are like wait this guy ripping up a dollar isn that illegal and or and but i get it That crazy So anyways if you haven looked into his stuff he very just a good guy to follow
• 29:36
  So not really a question there.
• 29:38
  I just wanted to throw that out there.
• 29:39
  Yeah, something I want to build on there too, Jordan,
• 29:41
  because I think specifically in our advisor role,
• 29:45
  I use kind of a similar example
• 29:47
  when I'm sitting down with my financial planning clients.
• 29:49
  You know, we use a bottle of Coke and it's like,
• 29:51
  okay, you know, if you're 40 and we're projecting out,
• 29:54
  you know 50 years until you know end of plan at age 90 it's like one conceptualizing growth of
• 30:02
  assets which can be difficult and obviously forecasting more of an art than a science
• 30:06
  but then also understanding the for uh the growth of you know expenses like everybody gets excited
• 30:11
  about their portfolio growing they really kind of ignore like the expense side you know of their
• 30:16
  lives growing and so we really use this as an exercise to like ground us in like how much can
• 30:21
  change over you know a relatively short amount of time you know a generation or two certainly
• 30:27
  you know over the course of your living life and what you need to plan for and they're always like
• 30:31
  shocked and it's just kind of like this yeah like kind of like the shock factor we use it's like
• 30:36
  okay whoa it's like we really need to be you're planning on the long-term horizons and you know
• 30:41
  it's just day by day and you're just constantly getting chipped away at a little bit and a little
• 30:45
  bit you don't really notice but you know if you zoom out and actually look at the trend it's like
• 30:50
  it's shocking. And it's like, well, we need to comprehend this. And I'm sure you guys talk about
• 30:55
  that stuff all the time, Jonathan. Yeah. I have a illustration I use with high school kids or
• 31:02
  college kids that ask, you know, like about money or if we have an intern, I'll take a bag of sand,
• 31:08
  I'll poke holes in it and I'll have, you know, a bunch of sand in a scooper. And so while you're
• 31:13
  bleeding out, you have to pour more money in. I'm explaining like, this is what your income
• 31:18
  is doing with your actual purchasing power. You have to constantly refill it. Otherwise,
• 31:23
  you're going to bleed out over time. And then you obviously have the steel jar, you know,
• 31:28
  the stable reference of putting that in. And the difference of in nominal terms,
• 31:33
  those will be different because they may price this steel jar differently than the units in here.
• 31:40
  But I know this is a of the unit itself will not dilute. And so as long as the market grows to value,
• 31:47
  this item more than whatever is bleeding out, then you're going to be winning in real terms.
• 31:53
  I kind of use that for my kids and other interns. But yeah, I mean, it's illustrations are very
• 31:59
  powerful because we can talk numbers, but if you don't see it, it kind of doesn't resonate with you
• 32:05
  until you're feeling it. And I feel like most people are feeling it now. And that's kind of why
• 32:09
  they'll go off on more risk on assets. So we can kind of see the markets waking up.
• 32:17
  yeah it's interesting john so in in terms of the the market once you kind of
• 32:24
  dig into some of the work and research you did for the article and how really inflation or
• 32:30
  monetary you know expansion is really kind of fueling you know equity growth and how you guys
• 32:36
  talk to clients so this is where my like passion went into i started wanting to assess historical
• 32:44
  data of assets because, you know, being an investor and a value investor and assuming
• 32:50
  inflation rates or asset price increase, we always hear that, you know, real estate's a
• 32:56
  great investment or you always hear the S&P will always go up and it averages 10, whatever, say,
• 33:02
  percent a year. But it really goes based on what time frame, because if you're going based on like
• 33:09
  a hundred year investment, typically investments match M2, like to the T. It's almost like the
• 33:16
  same number, but over periods of time, they'll fluctuate. And so I started assessing companies,
• 33:23
  the S&P 500, I did NASDAQ, I did the median household income, median home price. And if you
• 33:31
  start looking over 50, 20, 10 years, they're all basically growing at the same rate of M2.
• 33:37
  And so when you start assessing from that perspective, you're actually not growing in real terms. You're literally treading water. Now, there are certain assets that sometimes that will grow exponentially, but they're almost forecasting the future print.
• 33:55
  And so the S&P for the last five years have grown about 15%, but M2 has been growing 7.4.
• 34:02
  So if you're not growing more than seven, you're actually in real terms losing purchasing power.
• 34:08
  So I spent many months just gathering data of all these investments because I wanted to know,
• 34:14
  okay, nominally it appears I'm getting wealthier, but what's really happening behind the scenes?
• 34:19
  And so if you look in chart form, you know, price is going up. But when you look at the denominator, the monetary expansion was going up at the same rate. And very few investments are actually outpacing inflation. And that was the really scary moment for me. When you look at in chart form, many companies, not companies, but assets like mainstream assets we're investing in might be beating the hurdle rate by 1%. But you have unlimited risk.
• 34:48
  so you're like okay i have a one to two percent buffer on the monetary debasement but risk is
• 34:57
  not it's almost not worth the risk and so you're unless you're willing to uh you know put up some
• 35:04
  capital but most people are not investors they're savers but now you're forced to be aggressive
• 35:10
  in your savings which means now you're at risk of loss of capital it's a really messed up system so
• 35:17
  when people are saving in real estate and they think that's like a good investment they're losing
• 35:22
  about two to three percent of purchasing power every year for the last 10 years and those are
• 35:26
  more of the eye openings and why bitcoin may appear very volatile long term it is one of the few
• 35:34
  asset classes today that actually beat monetary expansion but it beats it so
• 35:41
  on a long-term basis has beaten it so bad that it's worth handling the volatility on the downside
• 35:48
  as long as you know no matter what i'm losing here if i don't do something and that's why
• 35:54
  bitcoin gets more attractive because if you sit still you're down eight percent a year
• 35:58
  well it's crazy i read an interesting thread the other day and it was just
• 36:02
  that the s&p 500 is largely become like a savings account or people are viewing it as a savings
• 36:07
  account, which is just such an interesting indication of how far you have to move out
• 36:12
  in the risk spectrum just to stay where you're at.
• 36:15
  Monetization of all assets because money is not serving its purpose.
• 36:18
  Yeah.
• 36:19
  Store value has been lost in our money.
• 36:23
  We'll talk through the other side of the equation.
• 36:25
  I always find it so interesting that we've been talking kind of more about these equities,
• 36:31
  things like that.
• 36:32
  I guess for the listener who's like, well, I'm older, you know, I'm, I'm wealthy and I want to,
• 36:38
  I want to have a good chunk of, of my, uh, portfolio and fixed income. Uh, I think Bitcoiners
• 36:45
  have a pretty specific, uh, in particular view on, on that market, which is like what, uh, you know,
• 36:52
  multitudes more in, uh, in market cap than the equity, um, bucket. So maybe talk through just
• 37:00
  What does that look like? Because isn't it? Yeah. It's even more dim, right?
• 37:05
  Yeah. The 60 40 portfolio. We as a firm, in my personal opinion, is regarding bonds, you know, I'm 35.
• 37:14
  So to me, bonds are are dead. Like there's no point of me having bonds, but I'm also have a long time risk horizon.
• 37:23
  And so for people that are not as risk averse as me because they have certain things in their life, we're not zero bonds, but we're not zero Bitcoin.
• 37:37
  And so when it comes to the whole bond argument, it really comes down to each client and their risk tolerance.
• 37:44
  tolerance, as long as they're aware, like, hey, inflation is eight, your bond of five and a half
• 37:51
  is not hurtling that. But if you're unable to risk the tolerance, like risk tolerance of
• 37:57
  you're losing 20 to 30% of your equity, we understand that. So it's more of the educational
• 38:04
  aspect. And I can say, you know, when people ask about Bitcoin, they're like, how much should I put
• 38:09
  in Bitcoin? I don't know that answer, but I do know it's not zero. And so that's my answer to
• 38:17
  anyone asks what allocation percentage. I don't know, but it doesn't matter how old you are. It's
• 38:22
  not zero. And so that person that might want more heavy bonds will have a smaller Bitcoin allocation
• 38:28
  and will have maybe a smaller equity, but bonds, even though they are return-free risk,
• 38:36
  As Greg Foss said, it's not zero in everyone's portfolio, even if we hate bonds because you're bleeding purchasing power slowly.
• 38:48
  For some people, they have less time available in the market.
• 38:53
  And so as a fiduciary, we're kind of forced to walk with them throughout their journey to make sure that we're not being too risk on.
• 39:04
  but the preferreds are very attractive too. And so we're kind of doing some deep research on the
• 39:10
  preferreds and what that actually means, um, from a advisor perspective. Like I can't just say,
• 39:18
  we're going to go a hundred percent STRC because they're going to give you a 12% return.
• 39:22
  It sounds great. And so far it's worked out perfectly and I would expect it to continue,
• 39:28
  But I can't do that in someone who's 80 years old. And there's a risk there that I am ignoring. And that's just being in equity. You know, a company can fail. Sailor can die. I know I would hate to believe that's possible because of what they're doing, but something could change.
• 39:49
  And that's just something from our perspective, like someone that is in bonds, they understand that they are bleeding just slower than if they were doing nothing in cash. And sometimes that's okay. If you have something you have to spend in two, three years, you know?
• 40:04
  So, yeah. Yeah. I think as long as they know that, uh, that's happening, then that at least
• 40:10
  is a step in the right direction versus the vast majority of folks that are just, they don't even
• 40:14
  understand the reality there. I guess, you know, I'm sure you get this pushback. I've heard it
• 40:19
  before. Uh, you know, CPI comes out, it's, it's like 2.8, 2.9% and all these Bitcoiners come out
• 40:26
  and they're like, no, that's just a lie. I know we touched on a little bit, but it might be worth
• 40:30
  going back because you know there's this whole you're on the internet and like there's all these
• 40:36
  conspiracies and what do you believe and a lot of the conspiracies turn out to be true
• 40:42
  for give it enough time but i guess um talk the normal listener into like how do you maybe just
• 40:50
  go over one more time how do you back into by supporting with data the seven to eight percent
• 40:56
  and essentially, yes, the government is lying to you, I assume, right on all the CPI stuff.
• 41:03
  Yeah. So with inflation, we often pay attention to the price increase,
• 41:08
  but we completely ignore that prices should be going down as people get more competent
• 41:13
  and technology is deflationary. So why is my TV getting more expensive?
• 41:19
  If we're getting more efficient on making TVs and technology is deflationary,
• 41:25
  Why am I still paying more? And so when you're looking at CPI, one thing people miss is what it should have gone down.
• 41:33
  So you kind of have to add that deflationary aspect to the price increase to find a real number of actual inflation.
• 41:42
  And if you look at M2, it kind of works out pretty well.
• 41:46
  And that's kind of why I use that as my benchmark is that is a number that I can actually look at.
• 41:53
  Well, if I can believe the numbers, I'll be frank to say here, I'm looking at a website
• 41:58
  that's published from the Fed and those numbers could be a little off or whatnot, but that's what
• 42:04
  I have as a reference point. And so if you look at that growth, that's been growing at 6.8% for
• 42:10
  the last hundred years. And for the last five years, it's been 7.4%. And if you were to subtract
• 42:16
  CPI from that number, 2% to 3%, you would get a 3% to 4% buffer. And it's not crazy to say,
• 42:23
  you can't be growing your company and more efficiency 3% to 4%. If you really wanted to
• 42:31
  add those two numbers, you kind of have to count the deflationary aspect with the inflationary
• 42:37
  to get a real, what prices should be going down. That's kind of what my pitch would be on the price.
• 42:44
  Yeah, you have to account for why is nothing going down?
• 42:49
  Why is everything going up?
• 43:14
  of Bitcoiners and help you stay compliant while building for the long term. To learn more or book
• 43:18
  consultation, visit satoshipacioli.com. Well, I want to get both of you all like to speak on this,
• 43:25
  you know, even in the last week, a lot of SaaS, a lot of, a lot of, like I saw Schwab was down,
• 43:31
  what, eight or 9% earlier this week, I think. And I think Jeff Booth's thesis is starting to play out
• 43:39
  that actually, you know, things should be trending down, but we live in this upside down world,
• 43:45
  right. Of like, I mean, just take my, my firm, for example, right. We could get more efficient
• 43:51
  on the tax returns with, by implementing the correct technology. Um, but we actually have to,
• 43:58
  since our costs are going up right on the, on our software stack, on our payroll,
• 44:04
  we are actually having to continue to raise prices to your point earlier right We have to at least raise prices more than 5 maybe even more than 7 or 8 a year just so that we can survive But all the while our services should actually you compare how we prepare a tax return today versus how someone did it in the mid like physically writing things on a piece of paper and taking it to the post office
• 44:34
  um i guess square that circle for the audience and and how does that lead to and i want to open
• 44:41
  up to both you all to to like square that circle how does it how does that lead to the society that
• 44:47
  i think we're seeing start to break down in multiple facets yeah so sailor he put out a tweet
• 44:56
  and i put it in my article it just when he posted that it just stuck with me he said the road to
• 45:02
  serfdom is working exponentially harder for a currency growing exponentially weaker.
• 45:08
  And so when you're watching these companies grow nominally and they're getting larger too,
• 45:14
  and they're kind of falling back in, in, uh, in real terms, shrinkflation is a real thing.
• 45:21
  You know, where you used to buy that candy bar for when I was a kid, you know, 29 cents and it'd
• 45:28
  be like a full size candy bar. And today it's $1.29 and it's half the size. And so those are
• 45:36
  the corners that you're cutting when, even though you are more efficient in making those candy bars,
• 45:42
  the price and costs of everything has gone up so much that you are cutting your quality and you
• 45:47
  have to raise prices. So you're kind of getting hit on both sides. And usually we only see the
• 45:53
  obvious one, which is the price, but you're missing the hidden changes of the quality.
• 45:59
  First, they're using different products. It's not even food anymore. You read the back
• 46:03
  of almost anything and it's all seed oil or some type of chemical I cannot pronounce,
• 46:11
  where it used to be two ingredients. Now you're cutting corners in the quality of your product.
• 46:18
  You're cutting the quantity of that product that you were providing and you raise prices.
• 46:23
  and and to add on that the prices aren't going down and the quality is not getting better
• 46:30
  yeah it's uh it's insulting right it's a humiliation ritual i remember i was used to
• 46:37
  be a big mcdonald's fiend in high school i was like mcdouble dollar six you know i had change
• 46:42
  in my car for mcdoubles and now you know it's like 350. yeah yeah exactly and yeah they're awful
• 46:50
  you know tastes horrendous and it's half the meat yeah if it's me yeah yeah whatever and i i think i
• 46:59
  mean jeff booth is like the best in the world arguably at this you know his lines like prices
• 47:04
  fall to the marginal cost of production yeah i think he uses an example of coffee beans where
• 47:09
  we can harvest coffee 80 more efficiently than we could 20 30 years ago whatever and the cost the
• 47:16
  price of coffee is still rising it's interesting with ai jordan you know because i think like
• 47:22
  conceptually that that punchline prices fall to the marginal cost of production
• 47:28
  makes sense but nothing at least me personally anecdotally have seen that in more real time here
• 47:35
  than like playing with some of these ai tools seeing you know what people have built with ai
• 47:40
  tools and larger markets you know i tweeted a graph earlier this week uh you and i jordan went
• 47:47
  uh back and forth a little bit on x where you have the price of bitcoin is largely tracked
• 47:52
  you know software so it's like the market's perception of bitcoin is just essentially the
• 47:58
  same perception it has of you know a crm which i think is insulting as a bitcoiner because it's so
• 48:03
  much more than that um and but it can't be replicated in the same way that software can
• 48:08
  And so there's just like this total misconception, mispricing of everything, you know, even, you know, silver and gold, you know, precious metals that should be fairly stable are having these, you know, crazy kind of volatile move or, you know, multiple standard deviation moves outside of their normal trading ranges.
• 48:26
  and so it just seems to me that like something's coming to a head here i think maybe a little
• 48:33
  faster than we all kind of you know anticipated and i'm particularly kind of worried about the
• 48:39
  and maybe too strong language but for sake of conversation worried about like the the strength
• 48:44
  of u.s the economy just because largely you know since 2010 most of our you know gp or stock market
• 48:51
  growth has been software companies, you know, just blindly invest in software number go up.
• 48:57
  And I think that's really coming to a reckoning. Dude, I was at this market outlook, you know,
• 49:03
  I work out of this wealth management firm, right. And I went to their market outlook
• 49:06
  events like two weeks ago. I want to get to your thoughts on this too. So it was so bullish. The
• 49:13
  whole thing was like, markets are going to, you know, they're going to rip this year, everything's
• 49:18
  going up. And, um, and I was just sitting back kind of having the thought that you're having
• 49:23
  wide of like, man, I don't know. Like I talked to real, I talked to real people all the time.
• 49:28
  I don't know. And, and, uh, you know, I might get in trouble for saying this, but I, I, uh,
• 49:33
  it almost felt to me like, man, are these, are these like outsourced salespeople for keep your
• 49:42
  money in the market, even when times get tough. And I get that. Like, I understand you have to
• 49:46
  keep your money in the market. But if everyone is feeling this, like what's going on, the reading
• 49:52
  that article, I'm sure you guys saw that went viral on Twitter yesterday about how AI is
• 49:57
  accelerating to a point where, you know, you walk into a restaurant today. I don't know if you guys
• 50:01
  feel this. Like I walk into a restaurant or any like public place, like a Walmart or something.
• 50:06
  I'm like, no one knows. Like no one understands. They're not using Claude. They're not like in the
• 50:11
  terminal. They're not building like little apps to make them be more efficient. And that guy laid
• 50:16
  that article out like so well to be like oh i've been polite you know people are and he's a software
• 50:21
  person who's in ai so you know dinner parties people are like oh is this thing crazy or whatever
• 50:26
  he's like oh whatever it's like it we'll see you know kind of being polite right and then that
• 50:31
  article he's like no it's okay i can't hold back anymore like people have to understand
• 50:37
  and um yeah bitcoin's so well positioned for a world like that that where prices do have to fall
• 50:45
  and you do have to and especially if we see agents uh i saw albi hub talking about how they had a
• 50:52
  lightning uh product that was built entirely by agents they're trading with each other in lightning
• 50:58
  orange pilling other agents yeah but like the normal person man i just it's hard it's i it's
• 51:07
  moving so quickly um even i'm overwhelmed at times and i feel like i'm you know there's some nights i
• 51:12
  don't go to sleep till too late to say on the podcast.
• 51:15
  And like,
• 51:15
  uh,
• 51:16
  because I'm just so enamored with all this stuff.
• 51:19
  And then there's this permanent underclass meme,
• 51:21
  right?
• 51:21
  Where everyone,
• 51:22
  I think there's some of the people who are,
• 51:23
  who are seeing like reading all these things on Twitter and they're kind of
• 51:26
  just,
• 51:27
  um,
• 51:28
  lurking,
• 51:28
  but they don't know.
• 51:29
  They're kind of like frozen.
• 51:31
  They don't know what to do with it all.
• 51:32
  And they're scared.
• 51:34
  Um,
• 51:34
  anyways,
• 51:35
  I don't know where we go with that.
• 51:36
  I know we could go for a long time,
• 51:38
  but I just want to throw all that out there.
• 51:40
  Get your thoughts.
• 51:40
  I read that article last night.
• 51:42
  And when I was reading it, that's one of the first articles I've read in a while that I really had to sit down and think through.
• 51:49
  And first reaction is it sounded like a Bitcoiner.
• 51:52
  It's like, hey, he's right.
• 51:55
  It's when.
• 51:56
  And so because Bitcoiners were known for saying, hey, it's going to the moon tomorrow.
• 52:00
  You know, you should have put all your money into Bitcoin.
• 52:02
  And then it dropped 60 percent.
• 52:04
  And you're like, well, it's going to happen.
• 52:05
  I know it is.
• 52:06
  With this AI thing going down, most people are not acknowledging that as technology advances, prices should go down to Jeff Booth's point.
• 52:19
  And so the way I view Bitcoin is it is the first thing in the history of the world that is 100% demand driven because we already know the supply is 21 million.
• 52:31
  You cannot increase the supply if the price goes up.
• 52:34
  And so with AI, they are going to completely compete against each other in the most advanced tech to where they're going to be driving that price down, down, down, down.
• 52:46
  And what are they going to put their money?
• 52:47
  They're not going to put their money in anything that's inflationary because they themselves are deflationary.
• 52:53
  And so my long-term thesis-
• 52:54
  The price down of services and products, right?
• 52:56
  Services and products. They get better producing those goods. And being AI, they're going to be
• 53:02
  extremely advanced as they grow and code each other and make costs go down. They're not going
• 53:10
  to put their money that's inflationary because their prices are going to go down, their profits
• 53:14
  are going to go down. And now they're basically combating inflation in a deflationary world.
• 53:20
  And so my long-term thesis is AI, AGI, whatever, they're going to be storing their time in a deflationary asset that is not supply driven because you'll just increase the supply exponentially in any other asset or good.
• 53:36
  And then the price will go down, but you can't do that in Bitcoin.
• 53:39
  And so it kind of perfectly aligns AI and Bitcoin.
• 53:43
  You can see that they are aligning perfectly.
• 53:46
  You have something that will basically drive progress up, but prices are, I do not think, going up.
• 53:56
  I think we're just going to be more productive and prices will be going down in an AI world.
• 54:01
  And then people are going to be in trouble when we hit deflation because of the debt they can't service or the income.
• 54:09
  And so I think we're heading into a deflationary production with AI, even though prices may, you know, in dollar terms are going up.
• 54:19
  But if they're not using dollars anymore, it'd just be like using Venezuelan to the dollar today.
• 54:26
  Like those dollars are going up far more than the our dollar.
• 54:31
  And I think Bitcoin is going to kind of be the measuring stick of how society's, you know, moving on with AI.
• 54:39
  So I kind of ramble a little bit, but you can get it.
• 54:42
  No, no, that's good.
• 54:44
  Yeah, no.
• 54:44
  Okay.
• 54:45
  So I got to get back to mining fiat in like three minutes.
• 54:48
  And so, Jonathan, I want you to give us, I got to have you give us the hopeful Bitcoiner outlook to end here.
• 54:55
  Because we always, you know, we end on a positive note.
• 54:59
  And I know people are like, what is, what's going on?
• 55:03
  You know, give us your, I don't know, maybe go out one, three years, how many ever you want to go out and describe the future that Bitcoin can afford us.
• 55:11
  Yeah. So I think for us individually and businesses, if we start to analyze the world we're in and start to measure based on a more stable unit, there's like true growth and progress happening.
• 55:27
  And maybe the world today has not caught on because the price may be down.
• 55:31
  But if you're acquiring more hard money or hard assets that are not printable long term, those have proven to outpace monetary expansion.
• 55:42
  And I just think it's important to know, like in a world where there's persistent monetary debasement, how we're measuring our progress matters as much as what we're measuring.
• 55:55
  And so if you're measuring your progress in a more stable unit like Bitcoin, then I think long term you will be better off in real terms.
• 56:06
  That's kind of my my pitch. And I just think more people should study, you know, what money is, why storing money in something that someone can print is not a good long term solution.
• 56:20
  when you can store your wealth into a network that you cannot print
• 56:24
  and kind of have freedom and the ability to keep your wealth from being diluted.
• 56:34
  Yeah, it's beautifully said.
• 56:36
  I'll just end to, it's like you can't be idle.
• 56:39
  It's like you got to be taking action.
• 56:41
  You got to be integrating Bitcoin into your practice.
• 56:43
  You got to be integrating AI into your practice.
• 56:45
  Like these are two trends like I don't think you want to bet being on the wrong side of.
• 56:50
  And then last thing I'll say is new rule of BFFS.
• 56:54
  Like you can't go to bed until you hit your rate limit.
• 56:59
  So good job.
• 57:01
  Yeah, no, no, I'm, uh, that's good.
• 57:04
  I, I'm going to have to either bring my Claude plan down.
• 57:07
  Cause I, I've hit my rate limit a few times and it's like, all right, just give Anthropic
• 57:12
  more money, I guess.
• 57:13
  Um, yeah, but okay.
• 57:16
  We got to end here, but Jonathan tell people where they can find the article.
• 57:20
  Tell people where they can get their, you know, their wealth managed, their taxes prepped, how to find you on all the different platforms.
• 57:28
  So our website's orangehorizonwealth.com.
• 57:32
  You can find me on Twitter, CampsJonathan.
• 57:35
  My article is posted on my Twitter, or you can look it up on Medium Financial Measurement.
• 57:43
  It's called The Illusion of Growth Financial Measurement in an Era of Monetary Expansion.
• 57:49
  Yeah.
• 57:49
  And we'll link it in the show notes.
• 57:52
  And it's camps with a K, just so everyone knows.
• 57:55
  Camps with a K.
• 57:55
  If you're just listening.
• 57:56
  So, well, thank you, sir, for coming on.
• 57:58
  This is fun.
• 57:59
  Yeah, thanks, John.
• 57:59
  We could have gone probably for a long time.
• 58:02
  Yeah, thank you, guys.
• 58:04
  Fan of what you guys are doing.
• 58:06
  Appreciate it, man.
• 58:07
  All right, we'll talk to you soon.
• 58:08
  See ya.
• 58:08
  All right, thanks, y'all.
• 58:14
  We appreciate you joining us.
• 58:16
  If you want to help build a future of Bitcoin financial services,
• 58:19
  hit subscribe, leave a review, sign up for a newsletter,
• 58:22
  and share this with someone in your network
• 58:24
  who's integrating Bitcoin into their practice.
• 58:26
  The more professionals we reach,
• 58:28
  the better this ecosystem serve and our clients benefit.
• 58:32
  Stay sharp, stay sovereign, keep leading from the front.
• 58:49
  you