{ "episodeId": "SLP217", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "godfrey_bloom": { "name": "Godfrey Bloom", "role": "guest", "tag": "GODFREY" } }, "segments": [ { "speaker": "stephan", "time": "00:08", "start": 7.91, "text": "Hi, you're listening to Stephan Livera podcast, a show about Bitcoin and Austrian economics. Today for episode two hundred and seventeen, my guest is Godfrey Bloom, former politician, libertarian author, and Austrian economist, and he's recently been exploring Bitcoin, so I thought I'd have a chat with him. This show is brought to you by Swan Bitcoin. You already know Swan is the best place to auto stack your Bitcoin in the US with low fees and easy- Easy setup, just connect your bank account, set the amount and frequency of your buys, and rest easy as Swan automatically buys your Bitcoin. Get started using my ref link swanbitcoin dot com slash livera. And Swan is also making a splash on the Bitcoin content scene with Swan Signal. Swan Signal pairs up great Bitcoiners for unique and compelling discussions. It's broadcast live on Twitter and YouTube, and also available as an audio podcast. One of the recent shows was Vijay and Raul Pal, so go and check them out there. That's at youtube dot com slash swansignal and the audio. audio podcast at swansignalpodcast dot com. This show also presented to you by Unchained Capital, Bitcoin native financial services. Unchained are doing great work to make multi-signature accessible to bitcoiners, and if you're thinking about your Bitcoin security, consider going from zero to multi-sig with Unchained. You can build it yourself, or if you want assistance, there's a Vault Conseil onboarding package, and you can have hardware wallet devices mailed to you and have guided setup calls to build your vault together. So the prices range, but you can use code LIVERA Also, Unchained recently launched business accounts, so if you wanna use them for your business treasury while still holding your own keys, definitely look them up. Go to unchained-dashcapital dot com to find out more. And lastly, Knox. Knox is a Bitcoin custodian dedicated to ensuring their insurance protection covers the full value of their customers' assets. So, for example, suppose a fiduciary wants to hold two hundred and fifty million dollars of Bitcoin with Knox, Knox will seek to obtain two hundred and fifty million dollars of insurance dedicated exclusively to that account and adjustable to volatility. No fractional coverage or narrow scope. Insurance for what it's worth, a tool to transfer risk. If you are a Bitcoin company, investment fund, trust, or family office, check out Knox for your insured custody. Knoxcustody dot com. Here's my interview with Godfrey. Godfrey, welcome to the show." }, { "speaker": "godfrey_bloom", "time": "02:17", "start": 137.37, "text": "Thank you very much for inviting me, Stephan. Thank you very much indeed." }, { "speaker": "stephan", "time": "02:21", "start": 140.51, "text": "So Godfrey, I've been following some of your work for a while, and obviously you are a noted, long time skeptic and critic of central banking and of the modern day- A banking system, and, I'd love to, you know, get into some of that and, understand a little bit around where, and, I guess I should preface this, I'm obviously also a fan of Austrian economics, so I'm, in a very similar position to yourself. I'd love to hear a little bit about how you came to become a skeptic of central banking." }, { "speaker": "godfrey_bloom", "time": "02:51", "start": 170.6, "text": "Well, it's, it's, it's interesting really. I've, I started my career in the city in 19 quite a long time ago, as, part of the, pension, fund management industry, in the City of London, which is I've been involved in in some way all my life. So you can imagine I've had a very traditional background in investment management, because, it's, pensions are all based on yield, they're based on wealth preservation, they've been based on safety, so on and so forth. So that's my background, and that's in some form, for over forty years. I was twenty-one when, Nixon, took, the dollar off the gold standard and of course, at twenty-one years old, I wasn't quite sure where that was gonna take us, and I don't think I worried too much about it. I was playing rugby and drinking beer, so I didn't fret too much about it. it was some years later, probably ten years later, when I came, this was, this was a very significant moment, in investment management, because obviously, as we all know, it led to the degradation of the dollar, which of course is the reserve currency. Currency, and I think the, purchasing power today of the nineteen seventy-one dollar is in, in around sort of six or seven percent. So we've seen massive degradation of currency, and obviously all currencies, even the Swiss franc has degraded very significantly, not as much as the dollar, but, every other single global currency has degraded even more. So in my investment lifetime, I have seen the degradation of fiat currency, and I've- We've also seen the unhealthy link between politicians, retail banks, and central banks, which all the Western boxes are the same democracies, excuse me, laughing. but, they've all based, their whole policies, on the degradation of money, and the degradation of money, is, is, is what they do, in, in order to do short-term, government spending, over budget permanently. And of course, as a, a fellow Austrian school economic, economist, you'll, you'll know, and, and anybody else watching this who is also, of the Austrian persuasion, knows that although we have been told, Keynesians have been telling us that, government economies don't work the same as a family or a small business, that you can in fact, in, in ad infinitum, spend more money than you actually bring in, we know that not to be the case. And the only way you can go on spending more money than you bring in" }, { "speaker": "godfrey_bloom", "time": "05:36", "start": 335.51, "text": "Over budget is by degrading, degrading money. and that penny took a little bit of time to drop with me, I have to say, to be honest. I think it was not really until the early 1990s I realized, that we were heading for a, a massive catastrophe, and of course, that is just around the corner." }, { "speaker": "stephan", "time": "05:55", "start": 355.45, "text": "So this is something that I think many Austrian, economists have faced as well, is that they've been saying, \"Look, this is unsustainable, this is unsustainable,\" and yet it's taken- Some time for this to play out, right? And so that's, I guess, that's a little bit of a difficult thing to explain. So how, how do you normally explain that when somebody, expresses that sort of criticism to you?" }, { "speaker": "godfrey_bloom", "time": "06:18", "start": 377.64, "text": "It, it is, it is difficult 'cause people say, you know, you've been, you've been a doomsday scenario, merchant now for many years, and of course, it hasn't arrived yet as far as the public perception is. They don't think the ordinary person, it, it doesn't think like Austrian school economists think. They know, they know that, for example, when the government says inflation's only running at one point nine percent or two percent, they vaguely know that that isn't true. so when I left school, you could buy, you know, you could buy a pint of beer for eleven old pence, and now it's four pounds fifty. they, they know this, but they don't really- We associate it with a, you know, that potential degradation. So what has already happened, it's, it's been so slow, it's like the boiled frog, you know, the slowly boiled frog which doesn't know that it's being boiled to death because it's happening so slowly, it just goes to sleep. And that's what happened with, has happened with the Western democracies, they've gone to sleep. but the reckoning is due to come. And of course, we do hear, oh, there hasn't been inflation, they say, oh, Printing of money. well, of course we have, what we haven't yet, is inflation on the high street. we've seen inflation basically on Wall Street, so we've seen inflation of asset prices. It is impossible for anybody now to buy a house in London, for example, a young man, a young professional man, to buy a house in London, it's just too expensive. I bought my house in London at twenty-one years old. I put my five hundred pound deposit down and I got a mo-- I got a mortgage and I bought my first house. Even professional people in their early thirties can't do that now. It's out of sight, places out of sight. I've got young friends who are surgeons, in their mid-thirties, who've just about managed to buy some pretty ordinary properties in bits of And that I wouldn't, you know, be standing. but they, but this is what's happening, but people, people don't really understand that, because, and of course, the government cheats, it's only white gu- if, if you've got white goods or computer gizmos that haven't gone up very much in, in in, in cost, they don't notice those things, and that's what the government uses in their basket of, of, of CPI and so on and so forth. but everybody knows, and beginning to realize, that if you have a man round to actually fix the cooker, or if you've got a man round to actually, unplug the drains, he's now charging twice as much as he did a couple of years ago. So people are beginning to realize this, but it, it has been a slow process." }, { "speaker": "stephan", "time": "09:06", "start": 546.24, "text": "Yeah And I know you've been speaking about Bitcoin a little bit, and you've been starting your own journey of learning a little bit more about Bitcoin. What was it for you that sparked that desire to go and learn a little bit more?" }, { "speaker": "godfrey_bloom", "time": "09:21", "start": 561.15, "text": "Well, my, I used to run money, big money in the city, and of course, it's impossible now to manage money, Stephan. You can't manage money sensibly. It isn't, it isn't possible because you never know what act of lunacy the government's gonna come, come up with next. And you can't manage money, you know, we, we've got zero interest rates on bonds, or supposed to zero, and sometimes negative. Well, of course, managing, I was a fixed interest manager, in Prizes for, for money managing fixed interest. But fixed interest now, you can't, you can't do it because, the government keep interfering, central banks keep interfering, they're printing money all the time, so you can't manage money. Now, this penny dropped for me, round about the mid-1990s. Where I was very heavily overweight for the 1990s in my personal portfolios and mainly financial service equities. And that because you were heavy into financial service equities in the 1990s, you did jolly well. and I did, I did pretty well on that. But then I began to realize that this equity bubble couldn't continue, because, stocks were coming overpriced. And then of course, you get to, you either managing money for wealth preservation, which I was up until two thousand and four when I went into politics. So So my role, as it were, professionally, has been wealth preservation, not to make money, you see. I didn't-- you get to a stage where, with your clients and your own portfolio, you don't want to make any more money, you've made your money, or you've made enough money. I'm not a rich man, but I'm-- my, my tastes are humble. I like to go to the rugby club for a few beers and stuff, you know? So, my-- I'm not particularly ambitious. I just need enough money for my wife" }, { "speaker": "godfrey_bloom", "time": "11:11", "start": 670.83, "text": "I started adding gold. I'm a gold bug, and I'm a shamed gold bug, and I was adding gold to my portfolios. Gold in specie, of course, as an Austrian school economist, you'll know that if you don't have gold in your pocket, you don't have gold. so, I've been building that portfolio for a long time. And incidentally, anybody watching this, I don't keep it at home. Don't come around and knock me over the head and try and steal it to disappear. it's in a lock" }, { "speaker": "godfrey_bloom", "time": "11:40", "start": 700.25, "text": "And I have the key, and, and, and that's an important thing. And I was buying gold when, our Chancellor of the Exchequer, Gordon Brown, was selling gold, and he was selling gold at something like two hundred and fifty dollars an ounce. Now, why was he doing that? Well, there's two possible scenarios there. Is he a moron? Well, yes, that's true. Or was he trying to actually bail out the bullion banks who didn't have any? Otherwise, why didn't he go to walk, you know, why didn And everything that was wrong. And of course, I came into politics in two thousand and four for completely different reasons, you know, that was Brexit, that, that's why I, I came into politics. I've never been involved in politics in my life before, it was Brexit, but I came into politics, and of course, I was under the impression, as a lot of people are in this country, that politicians know something we don't know. And that if we understood what they had and what they knew, I mean, what they knew, we would understand the decisions that they make. But of course, that isn't true. I became a politician, and I met a lot of senior politicians, had lunch with a lot of senior politicians and ministers and civil servants, and they're all, in fact, retarded. They don't know anything at all about anything. so consequently, they don't, they don't know anything. They don't have any clever ideas. They're actually stupid. And the most stupid people you will ever meet are politicians and senior civil servants who went to Oxford University. They're all incredibly stupid. Your common sense, your values, your understanding of life, you'll find in an English pub, in the artisan classes, the butcher, the baker, the sparky, the hairdresser. They're the people who actually understand how Things work in real life, politics don't. So that was an eye opener, I didn't buy gold, when the Chancellor was getting rid of it. So, I've been buying gold as a gold bug for, well, you know, for whatever that is, that's twenty years, and, that's done me very well. and I started to diversify last year into silver. I made one very bad call on silver, and then I made a very good call on silver, so I'm even money on silver at the moment in my portfolio. But of course, it's extremely volatile. It doesn't have the history silver of money. You see, again, teaching grady to stargaze here as you're a fellow Austrian school economist, but of course, gold isn't an investment Gold is money, JP Morgan said in, in, in the 1920s. Only gold is money. It isn't an investment, it's money. so consequently, that is how one has to view it. So I have, but you get to a stage, if you've got your portfolio, your defensive wealth protecting portfolio of eighty-five percent gold in specie You really can't, it goes against the grain to not diversify, you have to diversify. And I diversified into silver, and I'm a strategic investor, which your, your listeners might find amusing around my old age being strategic. But my wife is much younger, so I have to, I have to be strategic. so I look to the long term, even if it's not my long term, it's my wife's long term, and I have to leave her enough money, and believe me, she's capable of spending it, maybe we'll speak about that. So I I'm gonna have to leave a lot of money. She's, she's a horsey girl. She's got, we've got horses, and of course, she likes to drink. So what doesn't go in the horses, she'll probably drink. But leaving that aside, I have to be a strategic investor, so, so gold and silver long term. Now that brings me to Bitcoin, and of course, I've been pressured by fellow, Austrians, you know, to look into Bitcoin, and I have. I'm not suddenly a damasc I've so spotted this. I've known about Bitcoin for some time, but I've always taken the view, like Warren Buffett, who has an interesting case on gold, but that's another story. I've really taken the view that if, if, if I don't understand something, I won't invest in it. So I've always been very wary about something I don't understand, and Bitcoin, is only the logistics of Bitcoin are complicated. Somebody of my age We already have digital cur- We've, we've got digital currency now, but of course, it's run by governments and central banks. The advantage of Bitcoin, as I see it, as a, as a, as a new boy on the block, the advantage of Bitcoin is that it's a digital currency, which is something of the future and has to be. You know, we have to settle our bills. I can't go into town and, and, and buy, and buy a pint of milk, a few pints of milk and a tin Here is already worth four hundred pounds nearly. so we have to actually get through our day by buying and selling, at the store and, and, and putting petrol in the car. So we're going to have to have some form of digital currency or certainly a currency in specie which is small enough to transact. And of course, my old friend Alistair Mcleod thinks that could be silver again. We could, we could go back to, silver money, but that, that's another interesting story in itself, right? So we have to have some form of digital Been told all the, the rumor on the block is that there's going to be this reset, which makes me-- this, this word reset. When governments use words like reset, it means they're going to steal all your money. Yeah. They're, they're going to do something nasty to you. Of course. What they're doing is resetting their own mistakes. I'm very happy with my life, please. I don't want to be reset. Don't reset me, I'm fine. You know, or I think they probably know, that there's going to be a collapse of fiat currency, or there's going to be a collapse of, of banking as we know it today, which is why they're talking about reset, and which is why they want to get into a whole new global digital currency, if they possibly can, but controlled by them. Now, the attraction for me for Bitcoin is that it's not controlled by government. There is no point in getting into a digital currency which is run by, which is already run by the banks, the central banks, and politicians It'll go the same way. It will be degraded. Of course it will. How could it not be? That's what they do. That's what they, they want to. They, they say it's their policy. Inflation at two percent. They want to inflate the economy, inflate, money at two percent or prices at two percent. Well, a man of my age, if you go back, if you go back when I was doing my exams, my professional exams, on the economic side, so and so forth, wanting inflation, and of course, they think inflation's a good thing. Central banks, they can inflate away their mistakes. But if you're a saver or a pensioner, inflation is bad for you. Inflation is only good for debtors, to inflate away their debt. And so we have now Western society is run for the benefit of debtors, not creditors and investors and savers. You couldn't think of a more disastrous scenario than this. This is crazy. This is- It is madness. So the only way the ordinary individual can get away with this is by holding gold in specie, silver in specie if he can. and, and when I say gold in specie, of course, we have gold coins which carry no VAT in this country and no capital gains tax, 'cause it's coin of the realm. So miners in coinage, which is important. and you then, then Bitcoin becomes almost, if you're going to diversify, it's the only game in town, Stephan. It's the only game in town. Now, I don't accept this gold versus Bitcoin That's, that's a false argument that, oh, you can either have gold or you can have Bitcoin. And I know, one thing I've learned as I've been getting into this now, and it's been fun, fascinating, and, and what strikes me as interesting is that Bitcoin people seem to be very nice people. they seem to be nice people. It's quite an interesting phenomenon. very friendly, very helpful, and that's been, that's been interesting. but they of course are, and I understand this, Critical about Bitcoin. And so they are like the early evangelical Christians, they, their heart's in the right place and they believe in the right things, but, One has to be, one has to be careful about how much one diversifies, in my view, a portfolio to something which is volatile, and silver is volatile. gold, if you take gold over the long period, gold isn't that volatile. traders, gold traders, metal traders see it as a volatile thing, but, if you go back, as a strategic investor, you have to go back decades. You know, you can't, you can't sort of go back, oh, last month or the month before Before that, you have to take a strategic view, and of course, to be money, it needs to be relatively stable, and at the moment, of course, Bitcoin is volat- is volatile. That's not a problem with me. That's not a problem with me as long as you understand it. As long as you understand it, it can be volatile, and you can lose money in the short term. and, and if you're okay with that, if your portfolio is structured for that, that's not a problem. So I feel that Bitcoin has a place, in every portfolio. And funnily enough, my conversation with, with, with Claudio Grasso, who of course you might know, who's a- Very keen Swiss, Austrian economist, quite w-well known in America, in Europe. I was saying maybe I, for short term, for tactical diversification, maybe I should look at the Swiss franc again which is a fiat currency, but I'm talking-- when I'm talking about that kind of tactics, I'm talking eighteen months or something like that. And it was, it was he that actually, as a huge gold bug, a well-known European gold bug, said, \"If you're gonna diversify, I, I think it's more dangerous now,\" and these are his words, not mine, \"It might be more dangerous not to be in Bitcoin than to be in it,\" which is an interesting concept, and that just swayed me to get my toe in the water I haven't seen conversion because I was never against Bitcoin. I've always been sympathetic. So, anyway, h-here I am, dabbling, dabbling, and rather enjoying the experience, I have to say." }, { "speaker": "stephan", "time": "22:10", "start": 1330.15, "text": "Well, that's great to hear, and I think for many of us in the Bitcoin world, I think, absolutely, I can see that, that tension there between the kind of Bitcoin versus gold aspects, and I think it's probably fair to say that both have a lot of upside over the coming years. I think the Bitcoin story, I To understand it correctly, I think we have to sort of think about how-- what happened with gold in terms of its storage and it, the way that it tends to be stored in more centralized vaults and custodians. And so one of the messages in Bitcoin, as, as I'm sure you might have heard, is this kind of idea of \"Not your keys, not your coins,\" meaning you, you can self-custody this, digital-- it's like a digital bearer bond kind of, bearer asset, if you will. so I'm, I'm happy, Godfrey, if you have any questions about Bitcoin, I'm happy for you to ask me also. but, I think probably the key point I would say is, I think we, we-- people in the Bitcoin world are viewing this more like, \"This is the world adopting a superior money in some ways, that it's got certain characteristics, that right now, yes, it's volatile, but in the longer term, we sort of can more easily anticipate based on knowing what the ca- The twenty-one million cap is, and I think that's probably one of the key differentiators there, and then just the other key one is just being able to send it internationally without trusting somebody. So I think these are probably the key points of, like comparative, comparison between gold and Bitcoin. so I think, yeah, I'm curious what your view is, on, on some of those ideas." }, { "speaker": "godfrey_bloom", "time": "23:53", "start": 1433.4, "text": "certainly, I, I accept that, and that's why I'm interested in it, and of course- As we all know, that money, money is only money if it's accepted, as money and, and on trust. And of course, with that, there's, there's a, there's a, there's a big step now to, to, to come. There's a big step, forward when people, when it becomes accepted, you know, when you can go into your local store and pay in Bitcoin, you know, when that becomes, then it's trust and it's accepted money. and I think then certainly, now Now is the time, you know, because if you believe there's gonna be a collapse of central banking, banking and fiat currency, you'd been mad not to have some exposure to Bitcoin. It, it wouldn't make any sense because if you believe that, you would have to have that. The one thing you wouldn't have, is money in a traditional bank or fiat currency. You wouldn't have that. So you then got to say, where do I go next? And you're quite right, gold is-- Gold is a strategic investment and it, it's cumbersome. you You can store it and that's fine, and, you, you can cash it in bit by bit to get you through, or you can leave it, if from an inheritance perspective, all sorts of things you can do, which is why I'm a gold bug. but certainly on a day to day basis, one has to look elsewhere. because then if you want to sell gold, if you want to sell gold in order to say get through the next year, as, as an individual, what do you do? You sell the gold, but you sell it for fiat currency? and then you're back where you started. You're back where you started. so I understand these things. one of the problems is, is, is, is understanding Bitcoin, from a, a sort of a logistical perspective, and I have a, a colleague, my, my colleague, Patrick Orton is, is a young, very switched on guy who's already investing in Bit- Bitcoin. He's, he's already there. I would-- although I've had lots of help from Bitcoiners, across the globe on email and stuff, and, and I thank them here for it. Thank you for that. I think if he hadn't been at my elbow to actually guide me through the logistics of it and somebody who I trust who's a colleague of mine, who I can discuss it with one to one at this stage of my development, which is very new to this, not new to the idea, but new to the actual logistics of doing it. As many people, of course, ask Stephan when they ask me about gold. You'd be quite amazed the number of people that say, \"Where do I get my gold? How do I buy it? How do I store it? What do I do with it?\" They don't know. And of course, because I've been in the game for a long time, it's, it strikes me as extremely easy, you know? Yeah. But if you're not new, you don't understand it. It It's easy when you know the answer, no? When you're a quizmaster and you've got the answers, oh, you look really Jeremy Paxman, you know, on University Challenge. What a clever man he is. He's got the answers in front of him, isn't he? Very easy to look clever, so dig-- digital independent. Let's get slightly away from the concept of, or, or Bitcoin, not the concept, but Bitcoin. Let's call it an internationally independent digital currency. That, that, that's really what we're talking about. It seems to me that that must be the future, because I can't see how it could be anything else. But that, that does beg the question, and the questions that- You know, how do we deal-- how do we deal with government? And as a fellow Austrian school economist, you'll know, who is most likely to steal your money? You're not gonna get mugged or burgled, you might, but that, that's relatively unlikely if you're in a civilized community, even Australia. You're not gonna-- Excuse that, just a little bit of a dig. But the most likely people to steal your money are the government, and they've already, have, the, the revenue in England, as you will know, have already told Coinbase, that they've got to tell them who's buying Bitcoin Now, incidentally, that isn't just Bitcoin, because if you buy over ten thousand pounds worth of gold coins from Baird or Shaps, Pixley or the Mint, or wherever you buy it from, as I have done over the years, if it's over ten thousand, they register that as well, they have to hold that log. So if we see a situation where the, America saw under Roosevelt, where the, the, or indeed back into seventeen twenty, when the Parisian police were digging out people's gardens after the Mississippi bubble collapsed they were digging up people's gardens. So I know that the government one day will come for my gold, and they will, they will suggest to me, \"We know you bought this five years ago or six years ago,\" and it's, it can be under lock and key in a safe deposit box which has nothing to do with banks. I wouldn't dream of having that in a bank, a retail bank deposit box. but I know they can't get at it. They can't get at it, but what they can do is say, \"We're just gonna lock you up until you hand over the key and tell us where the safe deposit box is.\" and of course, if they know that you bought Bitcoin, they, they can't get at your Bitcoin, but what they can do is look at the, the, the problem we've had with your fellow countryman, Julian Assange, and you're, you're locked up! Yeah. Ever, I mean, it's disgraceful. Appalling. Appalling this can happen in a, in a so-called free society under the principles of English law and our constitution that this can happen, but it can. we are under house arrest over here, or we have been, and that we can only have six people to our dinner parties. I was seventy-one years old in, in November. I've never seen anything like this. My father was a fighter pilot in the war. There was nothing like this in the war. We didn't close the pubs in the war. There were V1s and there were V2s. We invaded, on the 6th of June, D-Day. We didn't-- the, the army didn't say, \"Oh, well, this looks a bit dangerous. Well, I don't think we'll go today. It looks a bit dangerous. I don't think we'll stay at home.\" I mean, the whole thing's mad. We, we have seen the biggest power grab, in the United Kingdom in, in the history Probably, I would say since the Commonwealth, under Oliver Cromwell, I would argue. We haven't seen anything like this for four hundred years. We're talking about stopping Christmas. so If anybody thinks that then the government is gonna come for you and your money, they're, they're living in cuckooland. The government will come. The government will come and steal your money, and they're gonna do it sooner rather than later. So the more you diversify, and, and, and the more difficult you make it for them to come for it, the better it is, and Bitcoin obviously has a role to play. How big that role is with me, I don't know." }, { "speaker": "stephan", "time": "30:37", "start": 1837.4, "text": "Yeah, certainly, I, I think you make some good points. I, you" }, { "speaker": "stephan", "time": "30:45", "start": 1844.86, "text": "Governments around the world have taken in terms of lockdowns and in terms of taxation and the levels of, the climbing taxation rates that we are seeing. I think with Bitcoin, there are a few different answers here. So I think some within the Bitcoin world actually go more private and they actually acquire their bitcoins in a more private way all to begin with, right? And they, they do, they treat it more like almost like a peer-to-peer, you know, almost like doing a drug deal sort of thing, like they're buying a small amount and they're keeping it, and that's- That's, that's one angle that some Bitcoin people do. the other angle I would suggest is that, it's like a, it's almost like an Uber story, right? So if you know, Uber came in and initially, in some of the cities that Uber was operating in, they weren't technically legal, but they managed to get enough people onside, whether that was passengers or drivers who wanted Uber to exist, such that they were able to get enough of the population That it just became infeasible to totally just ban Uber. And so I think there may be a similar story playing out with Bitcoin in that if there are enough people who demand to be able to store their own value, free from inflation, free from, that, those kinds of government interference, then it may be somewhat of a similar story there. And I think another angle also, now this may not be palatable for everyone, but people who are willing to move overseas for better treatment. So we may see this kind of jurisdictional competition element around, certain, maybe a smaller nation might say, \"Hey, we will give you lower tax rates,\" you know, to try and spur that. I think, so I think there's a few different answers there, and I think also it just comes down to, I think longer term, we will actually see governments also try to get Bitcoin for themselves. And so I think that may also kind of change the game too, in that- It's sort of like there's this tendency towards, so, a good book in this space is The Bitcoin Standard by my friend Saftein Amos. So I'm not sure if you've, had the opportunity to read that one yet, but if you haven't, I highly recommend it, and one of the key concepts he spells out in that book is this idea of stock to flow ratio, which I'm sure you're also familiar with in the gold world, and so one of the ideas that he's getting at there is that this is one of the important characteristics Some would argue it's, it's, it makes it an even better money because it's just got, it's, it's, it's a perfectly inelastic supply. Like, it doesn't matter how many more people demand more bitcoins to be created, there'll never be more than twenty-one million. And so from that perspective, it may also be that certain countries will compete on that basis or, you know, people will want, you know, people inside the government will want it for themselves, right? And so, and I guess here's the other point, it may even be Even if everyone pays a punitive capital gains tax rate, that it will still be an overall win in terms of everyone's liberty, because it means the government can't inflate anymore. It means even in that world, we would still be stuck with twenty-one million. So I guess these are a few different ideas around that, concept. and I think the other part also, is just maybe this is like a bit more of an out there idea, but with Bitcoin, it's possible to- To, to do this special technology called multi-signature, meaning you can split it up into multiple pieces and say, \"I need two of these three pieces, or I need three of these five pieces in order to spend that Bitcoin.\" Now, this is a technique used by some large Bitcoin custodians even today, and even individuals are able to use this technology, and this is another way in which people can put the pieces in different countries, as an example. So these are just a few of the different ideas that are possible, within the Bitcoin world, although obviously, I, I think the broader point that must be accepted here is that yes, it's likely that some governments around the world will try to become punitive, they'll try to, you know, tax or in-- at a high rate, they may even do this, but I think At the end of the day, there's still competition amongst the different countries, and so hopefully we'll see some jurisdictional competition there, and that may be somewhat of a A savior of people's liberties, but I'm curious what your thoughts are." }, { "speaker": "godfrey_bloom", "time": "35:20", "start": 2120.17, "text": "That's very interesting. I've learned a lot from that, and I thank you for it. it's interesting because, obviously the central banks now are buying gold again. the Western banks, of course, got rid of gold. the, Russians and Chinese were acquiring gold, so that's been interesting. Central banks are acquiring gold. there's still the interesting phenomenon from that, that perspective that, of course, gold is still a s- Rest price, because, as we know that there's, when each-- there are about five or roughly five or six hundred pieces of paper to every piece of gold, and of course, it's been that people have been allowed to trade in paper gold that they don't have, and of course, that's been complicit, governments and central banks have been complicit in that because they don't want people to go to gold as money, and so, the SEC in America has let that one ride, which is interesting, of course, just" }, { "speaker": "godfrey_bloom", "time": "36:16", "start": 2175.89, "text": "Steve Morgan wasn't it fined, a billion odd dollars or just under a billion dollars or something, for actually manipulating the gold price, supposedly, th-that sort, you know, on a trading platform basis, because the, the, the elephant in the room, is of course, is people trading under ETFs gold that they don't have, now. So yes, we know that phenomenon has happened with gold. So it makes sense that that could happen with Bitcoin. It makes absolute, that central banks- would acquire if, if, if it's accepted as money, it's seen as money, and it's, it's, the central banks would make that available to them as they have done gold. That's very interesting indeed. The-- you make another very interesting point, which I've considered, a-as an old man now, I've considered carefully over the years, where do you run to? And of course, I'm now beginning, wouldn't you believe, I'm beginning to understand at, at seventy odd years of age, why the pilgrims sought out the New World. I'm beginning now to understand that. It's now no longer something you see in a history book. That they risked, an Atlantic crossing, which is enormously dangerous, and to go to a place which was enormously dangerous because they just couldn't continue the way things were. They wanted a new world and, a-and that's now made more understandable to me. Now, where do we go physically? There isn't really anywhere to go physically now, if you look at, if you look at the globe. Where would you actually move yourself and your family to? It used to be down with you lot. It used to be down in Australia, which is a brave new world. but you seem to have caught the politically correct idiot disease from the English. and Melbourne, we look at the scenes in Melbourne. Oh, yeah. And, we- And we're stunned, because we tend to look here, both America, which is a little-- now that view of land of the free and cowboys and Indians and stuff, a little bit outdated now. but we've always regarded our cousins in Australia, which is how-- which is how we view Australia, as, as any Australian comes to London or this country, what, regardless of our sporting challenges between us, and, and the aggression that we have between us, I would- So I kind of tell a little anecdote here. I was in a bar when I was in the army years ago. I was in a bar in Hawaii, and there was, there was me and there was some Australian marines and, and, and my lot, and it was just getting a little bit tasty between us until the American marines came in. And the Australian Marie said to me, \"We'll sort this out later, mate. In the meantime, we've got this to deal with.\"" }, { "speaker": "godfrey_bloom", "time": "39:04", "start": 2344.24, "text": "There you go. So we are, whether, whether we like it, we're covered down to the skin. And certainly It's just, it's disappointing to see Australia pick up all the stupidities of Europe, the stupidities now of North America, and Canada's just the same. Canada's just as bad. And yet I know that in the same, in England, if you go into the pubs in England, you'll find ordinary straightforward common sense and people who are all wondering what this government is doing. And of course, it'll be, I'm quite sure, my trip to Australia was curtailed. Obviously, we were coming out this year, early in two thousand and twenty-one to see my Australian friends, and get some serious drinking done, and, of course, we can't go, but I know I wouldn't mind betting anything you like if I went into an Australian pub, they'd feel the same as every Englishman in an English pub. What are these people doing? Are they all mad?" }, { "speaker": "stephan", "time": "39:58", "start": 2398.21, "text": "Yeah, it certainly feels like our countries have been taken over from within in some ways, and so I think you're right that, it, it can, it can look a little bit-- it can look like there's not that many options, but It depends on which countries around the world. There are some that have no capital gains tax as well, so that's, that's a nice little, Isn't" }, { "speaker": "godfrey_bloom", "time": "40:17", "start": 2417.2, "text": "it interesting, Steph, and we've got, you've got these differentials in, the United States. So inheritance tax in Florida, there's no income tax in Texas, and if you move to, in other states, you know, they take every penny that you've got. generally the blue states, of course, which are socialist, but again, like" }, { "speaker": "godfrey_bloom", "time": "40:41", "start": 2441.32, "text": "It's socialism, you know what I mean? and we just saw our Chancellor, just make a speech just a couple of days ago where he referred, \"We'll get through all these troubles, the might of the United Kingdom state is behind you.\" That's a very dodgy phrase for a conservative. The might of the United Kingdom state. Oh, we saw some of that in Germany in the 1930s, the might of the state, and Italy in the 1920s. I don't wanna hear that. I don't wanna hear any of that. Thank you very much." }, { "speaker": "stephan", "time": "41:13", "start": 2472.61, "text": "Yeah. It's like a mask off moment, right? Yeah. Yeah, absolutely, Stephan." }, { "speaker": "godfrey_bloom", "time": "41:17", "start": 2477.13, "text": "Yeah." }, { "speaker": "stephan", "time": "41:18", "start": 2478.05, "text": "So yeah, I think, it's, it's an interesting story, and people often, you know, leave for better opportunities overseas, and I think maybe people will do that, and it's, a-and partly also, this is a digital revolution in some ways, that people can actually start transacting in a way that they're not being, inflated, like their money's not being inflated or stopped, even where they are. So in some sense, people are able to set up and do a, a Bitcoin business online, but I think, but to the point about at what stage and phase Bitcoin is in, the way we view it is more like people are going to view this more like it's a, it's like a reserve asset or it's a, you know, it's a collateral or it's a, it's, it's a store of value, and it's not necessarily, there's not gonna be large numbers of people doing day-to-day trades until other people also have savings in Bitcoin We're seeing this network effect grow over time, so that's kind of how we're thinking about it. but an interesting point as well, to the point about, moving overseas with your money. I mean, I'm sure you're probably familiar with there are stories of people trying to move overseas and trying to take gold overseas, and obviously, you know, it's difficult to do that or trying to move your even fiat dollars out, fiat money out of the current, out of the country, and then obviously the banking system can block that off. but in the A wallet and, memorizing twelve words or doing some other way to send it overseas. So I think there's a natural advantage there, and also one other point I think is interesting as well, I'd love to get your thoughts on this, is, so around this idea of, you know, rehypothecation and, trying to, keep, to try to suppress the price of an asset, I think an interesting part with Bitcoin is When you run the software correctly, when you run what's called a Bitcoin full node, right? so we don't need to get too much into the technical aspects of that, that's, that's part of the journey for you as well. But when you run this software, it allows you to, to see the entire ledger, in terms of the, in terms of the amount that has been issued. And so That already is like a, is a really big win in that you can know, that it's, it's not-- if, if you store your bitcoins in the correct way, you can know that you haven't been, you know, your bitcoins haven't been rehypothecated. And so I think that might also be a nice comparative in that way because- Bitcoin is a technology that allows people to resist fractional reserve banking, and so I think that's an interesting idea as well. But I'm wondering, what do you think?" }, { "speaker": "godfrey_bloom", "time": "43:55", "start": 2634.91, "text": "I accept all that. Everything you say there is actually spot on. I don't, I don't take issue with any of that. You're quite right, which makes it very exciting. But what I think is already happening, and I'm very new, I'm the new guy, here, but I think what is already happening and what will happen, the natural progression, is to mutualize Bitcoin. So you will Retail Bitcoin and work Bitcoin for the punters, and, you know, so you can sell it in the newspaper adverts, clips, and your financial advisor can deal with it certain sort of-- is to mutualize it, so you can say, \"I want to buy some Bitcoin.\" I, I don't wanna go through all this performance 'cause it's a bit complicated. but what I can do, my financial advisor can buy me, the Bitcoin fund, which is regulated in Britain or Luxembourg or whatever, I'll have the Bitcoin fund and I'm exposed to Bitcoin. and then of course, it'll be another system, where of course, they don't buy the Bitcoin, they just monitor the price of the Bitcoin and they will pay you back, but they don't hold it in specie. And then of course, they can" }, { "speaker": "godfrey_bloom", "time": "44:59", "start": 2699.23, "text": "When you find you've got, you thought you had a Bitcoin, but you haven't, you have a promissory note of a mutual fund institution, obviously of somebody like BlackRock or, or worse still, Goldman Sachs. No goodness me, what a bunch of crooks they are. so yeah, I would see I would see perhaps that developing for people buying Bitcoin for different reasons, not the reason you and I might buy it, buy it, because we're old and canny and like gold, I buy in specie. But I think you could find then the price could be manipulated, but, but by people who don't even, as they manipulate the price of gold, and have done for years, and, and, and, and, and, but, you know, we, we speculate, we speculate. Who knows what's, I mean, we are now, I think, w-we are about to see Things which I would argue are unprecedented in history, when, when, when we saw the collapse of the Deutschmark, in the 1920s in the Weimar Republic, which of course is still possibly the definitive example. You can talk about Zimbabwe and Venezuela, but who cares? You know, who cares? Germany, that, that Germany in the 1920s were the definitive thing with a major power, with a major sophisticated Western power, and their currency crisis. But you could go to the dollar, sterling, and at that time, many people don't know this, the franc was, gold backed. So the, the French franc, so there was an alternative to go to. Isn't the case now? There's no paper currency to fly to, and I mentioned it. In, in, in the clip here that, I'm t-talking about the Swiss franc, which of course used to be backed at least by twenty-five percent gold, the Swiss franc, they're up to, it's, it's back now, they've got huge equity holdings and stuff like that, it's, the Swiss franc isn't what it was, it's least disastrous, it's less, hopeless than other fiat currencies. so interesting how that's gonna develop, but we, we haven't seen anything like this before. The world hasn Collapse of banking and fiat currencies. But, you know, this, this, this is-- and, and indeed in America, I know, and I, I don't want to overblow this, but I have done a few videos on this, and so maybe- Maybe, you know, never mind about Bitcoin, Mike. What you might need is lots and tons of corned beef and some ammunition." }, { "speaker": "stephan", "time": "47:29", "start": 2849.46, "text": "Potentially. I think so. Certainly, I think you, you raised some really great points that, potentially there is this kind of-- There is some risk that, okay, Bitcoin gets co-opted and so on. I think, I guess, we'd have to say it's possible. I just think it's-- I would say it's probably, it's towards the end of unlikely. And the reason being Enough people will be holding it in their own self custody, as opposed to just leaving it somebody else to kind of custody it for them, that it just makes it more, like, very, very difficult for anybody to execute that. But certainly to the point around, you know, things degenerating quickly into, let's say, a Mad Max style society or things like that, where, you know, guns matter, having guns matters more than having bitcoins, let's say. I, we don't know the future, I, it, it could be possible. but I think for me, I, I'm actually seeing it more like Bitcoin is like a parallel system, and it's a parallel system that allows people to stop the worst of those kinds of ravages of society, and that people can have this Alternative now, instead of being stuck in fiat money that's constantly going down in value, they will naturally, switch over to better alternatives, right? And so I think we will see this particularly where people are already feeling the pain, right? So people like yourself and me and probably many of my listeners who are already more thinking about money, like actually thinking about what is money, what makes good money, what's the problem with central banking, but there'll be a lot of people who don't even think about any of that. They will just- Kind of run to whatever they can, and so I think we'll see this in, countries in, you know, countries in South America, some of them are already looking for ways to try to, you know, move money internationally and use it to, you know, for example, the diaspora effect where people are, you know, people from Venezuela are going to other countries to send money home using Bitcoin. So that's, that's kind of an example. But I guess the point I'm trying to get to is I think it, it may just be that if things get bad enough People will sort of figure out why Bitcoin and how to, how to use Bitcoin, such that they can still keep some semblance of trade going and hopefully, hopefully stave off the Mad Max future." }, { "speaker": "godfrey_bloom", "time": "49:48", "start": 2987.76, "text": "Well, the, Humankind is, nothing if not adaptable, so yes, I, I, I, I take your point. And I have already bought some Bitcoin, so I am already, I am already satisfied that it is another way of diversifying, and I shall continue to do so. So I, I won't be buying, unless of course I get a I don't know where any more money's gonna come from, actually. I can't see down the road at me getting any more money now at my age, and I don't care anyway. but, the fees I get and bits and pieces are enough to start now building a diversification. My future diversification will be in Bitcoin. Another question for you, if I may, and I know my Goldbug followers will ask, want me to ask this. Of course, there are other bitcoins, if I may use that dreadful expression to your, experts, your fellow experts I, is, is there any merit in, in, in other stuff, you know, o-o-others cryptocurrencies? What, what's your view on that? Sure." }, { "speaker": "stephan", "time": "50:48", "start": 3048.15, "text": "So short answer is no, but let me explain. So I think it comes down to seeing- Bitcoin is a network, and so ultimately it's about which of these have the strongest networks in terms of holders, in terms of people developing, in terms of exchanges that allow you to buy and sell Bitcoin, in terms of merchants that allow you to trade products and services for Bitcoin, and in terms of the kind of financialization. And so I think there's this kind of tendency for people to think, \"Oh, you know, what if Bitcoin is the MySpace, and there's a Facebook coming, and so on.\" But I think the important point is to really understand that Bitcoin Is actually the successor in something like three or four decades worth of p-people working at this idea of trying to create digital money. And so I think, the key point for me in terms of altcoins, the other currencies, is that, well, there's a few things here. So some of them aren't even trying to be money, first off. Some of them are just not, are simply not as decentralized as they claim to be. And so fundamentally, there's somebody somewhere who could be pressured to pull a lever to change the supply, to change some characteristic of the system. Whereas with Bitcoin, because it was designed by an anonymous founder, Satoshi Nakamoto, or a group, we don't know, That it, it would just be too difficult to sort of recreate that again. And so now it's sort of, it's like an open source money, it's just out there and nobody really control-- there's no kind of one group who control it. And so that is part of its- strength in a way that there's nobody there to kind of stop, there's no central company or mo-- a company who are running most of the infrastructure for Bitcoin. And so I think those are probably some of the key points. it takes a little bit of research and reading to come to that, but I think the other key point as well is, I mean, if we look at someone like Mises, right here, he speaks about this idea of if even if you had this world of competing monies, they would be one by one rejected until you're left with the most saleable one. And I think he mentions that in Theory of Money and Credit, right? And so I think we have to be very, like, cognizant of that point that it's, it's gonna be very much like a winner takes all sort of market. And so I think that is why for me personally, I'm in the Bitcoin, I'm in the Bitcoin only camp, but I can understand when people are coming into the space and they're And should I have those? and I think fundamentally that's why I try to-- Because here's the problem, right? Whenever whoever can print money will. And what happened in the space is, exactly. Yeah. Right? And so what's happened in the space is that essentially people would invent these very paper-thin rationalizations for creating a new coin because they wanted to be the king of the new coin, right? And they wanted to be the one printing the money. And so that's been a very strong tendency, and in fact, many past Bitcoin people have then- And turned around and started their own altcoin to try and, you know, and so, for me as somebody trying to teach people in the space, I have to be very careful to try and educate them about why they have to take a very skeptical eye to altcoins, basically. So I guess hopefully that holds. Did you have any more questions? I'm happy to answer if you do." }, { "speaker": "godfrey_bloom", "time": "54:05", "start": 3244.53, "text": "No, that, you've answered that very well. I, I, I, I've done enough. I'm revising because two years ago I, I looked quite carefully, and Rather than coming new, and that's pretty the conclusion I'd come to myself, a little bit the same way, not, not quite the same way, is the reason I went for gold and not other precious metals like platinum and, and other stuff, because if you're gonna diversify anyway, I think you need to diversify mainstream in what, in what you're gonna call Bitcoin, main-mainstream in that asset class. I used to, I used to, you know, write new stuff like that on asset classes, because it's interesting just on another subject here when it comes to equities. Pe-people always say, your, your equity gurus will always say, \"Ah, yes, you know, equities, but you've got to get the right equ- you've got to get this equities, and you've got to buy this, and you've got to buy that.\" Of course, what they always overlook, or, or conveniently overlook, is that when stock market crashes As this one is gonna do, make no mistake. There aren't gonna be shares there that haven't crashed. They all crash. some crash more than others, but when you see a stock market crash, I mean, for example, I do hold-- the only equities I think I hold now left are, gold mining stocks. Well, I would, wouldn't I? because sometimes holding gold in specie in certain trust funds is just too complicated technically. So I hold gold funds, and they've done reasonably well, but when- We may have a stock market crat, crash. They will crash. They will bounce quicker than anything else, but they will crash too, because you need to cover your position. so thinking that you can be, you can outsmart the market by buying, you know, very clever equity selection, you can't. Nobody ever has. some guys are cleverer than others. and, and I remember once in the eighties when I was representing a big equity house, in London, giving a, a lecture there, saying that the great thing about my" }, { "speaker": "stephan", "time": "56:06", "start": 3366.12, "text": "Well, that's unfortunately become the game now, because people don't believe, they don't sense that there's anywhere to keep their cash balance, and that is why we've seen, companies now look at Bitcoin as a cash balance, asset as well. Exactly." }, { "speaker": "godfrey_bloom", "time": "56:22", "start": 3382.11, "text": "I mean, that's a very, very important point. and I was holding cash, when, when I was holding cash, even- I'm going back, maybe, to fifteen years, and I was holding cash, with major institutions, you know, ticking the cash box. Now, I'm one out of the market here, only to find out that regulation was so slack, it wasn't cash at all. It wasn't cash. It was all sorts of weird options here and options there. And so cash, my cash funds fell, by six percent. and I, I drilled, I didn't get caught in two thousand and seven. By then, you know, I was very wise. I dug right down. What is it that they hold? is it a doctor's house in Arlington or is it trailer trash in, in South Chicago? I never made that mistake again, and it was a small mistake, but it was a well-learned, well-earned mistake. but of course, you've got lots of fund managers who run council, civil servants who run their council, run their funds and bits and pieces. but these people aren't experts, you know, they, they don't know, if Standard and Poor give it a three star rating, they think it's a three star rating. I can't believe that Moody's and Standard and Poor and these people are still around after 2 Bonds, they should have all been hanged from a lamp post, and they're still there earning their big bucks. Some of them haven't even started shaving." }, { "speaker": "stephan", "time": "57:53", "start": 3472.56, "text": "Yeah, and that's the problem that we're faced with, right? I mean, negative rates, bonds at ridiculously low yields, what is a company treasurer to do and what are individuals to do and what are fund managers to do?" }, { "speaker": "godfrey_bloom", "time": "58:06", "start": 3486.31, "text": "I think you finger, I think you might put your finger on something which could be a much more important, the reason for this This, this discussion is, for me to learn and my followers to learn as well, hopefully. that, that, that triggered in my head, that's, that's triggered in my head, is this a corporate cash alternative? and the answer to that is yes, it, it actually is or certainly could be in a much bigger way than I might previously imagine. Very interesting that, yeah." }, { "speaker": "stephan", "time": "58:33", "start": 3513.2, "text": "Yeah, and, I think, look, the other thing is some-- well, think of it this way, some people are forced into holding government bonds because of regulation or because there might be some kind of treatment i-in terms of the banking system that it kind of works a little bit better for them. But if you have the choice you know, and, and if you don't wanna play the greater fool game, the greater fool theory of, \"I buy this bond and I'm gonna, I'm gonna offload it to somebody else for a greater price,\" yeah, and you're think-- you're really thinking for the longer term, then what, how else, what else would you, how, you know, what else would make sense than an asset that you can self-custody and you know this, the eventual supply of it and you know what fraction of the total supply that you have? So I think that I guess even, you know, you've recently left the EU, but, there's been a lot of chatter about in the EU about negative rates coming as well." }, { "speaker": "godfrey_bloom", "time": "59:30", "start": 3569.74, "text": "Well, it's interesting, the ECB, and, it's on my website, I cross-examined, Draghi, who was the president then, I'm going back to two thousand and fourteen, an interesting exchange. It got quite a few hits, I don't know whether you've seen it. And he said, \"Well, I said, you know, you're talking about resc" }, { "speaker": "godfrey_bloom", "time": "59:53", "start": 3592.88, "text": "You just have to trust me. And I said, \"You're a central banker. \"I said I wouldn't trust you as far as I could throw you. \"And there was a guy, you can't-- In the European Union, you can't talk like that to these big people, you know? but, it's interesting to see the ECB, if you drill down, they say that, let's say, I mean, they're buying-- They're people who are buying sovereign debt. They're buying Italian sovereign debt, for example. You know? Really? Yeah So they're buying things like, Volkswagen Finance or something like that, or BMW, and they're claiming that that's asset back. They're saying, \"Oh, yes, we're buying this stuff, but this-- they're asset back bonds,\" which fits in with the, the story of, you know, what we're doing, the ECB are doing, and, you know, we'll do whatever it takes, if I may quote, Monsieur Draghi, who incidentally is a very nice guy. He's, he's a nice guy. He's a typical charming" }, { "speaker": "godfrey_bloom", "time": "01:00:53", "start": 3653.7, "text": "I think I'll put this in my book, in, I've done a little book, Magic of Ba-Banking. It's more of an aide memoir, it's more of an aide memoir than a book, so that an intelligent layman can spend forty minutes and think, \"I'm beginning to understand how they're conning me.\" but of course, oh, it's asset back. Well, what have you actually bought if it's BMW or Volkswagen finance? Is you've bought next door's teenage son's second hand BMW, which is worthless, and meaning that it's asset backed. But the problem is of course, if, if I get to get onto the mainstream media now, mainstream media don't understand money or banking either I've lectured at banking conferences where the bankers don't understand banking and money. There are people in the BBC, The Times newspaper, The Financial Times as well Who are their economic correspondents, who I've had lunch with, I know these people, they have no understanding of bank money at all. They're absolutely clueless. And of course, in the people who protecting society, protecting the ordinary punter, is it should be your, your correspondent, your economics correspondent of public service broadcasting, the BBC, should be cross-examining the Chancellor, who actually every year presents his budget illegally Really, he doesn't put in his budget, any, liabilities for public sector pensions or public funding initiatives. If you did that, f- as a company, as Shell or BP, if you did that, you'd go to prison. It's illegal. And every day, every year, he stands up the Chancellor of the Exchequer, telling you that our debt, our debt ratios are only eighty-nine percent of GDP. They're two hundred percent of GDP. The man's a liar and a cheat. And if he's watching this, Ricky Ticky Tavi, who Another really nice guy, actually, I've met him. He's a nice guy, pleasant guy. two things, he either doesn't understand banking and money, which I suspect is the case, or he is another ex-Goldman Sachs crook I don't know. You tell me." }, { "speaker": "stephan", "time": "01:03:04", "start": 3784.22, "text": "Godfrey, on, on this topic of, EU, bureaucrats, I, I'm curious as well. There's been some discussion coming out of, you know, EU around central bank digital currencies and, this kind of story of, \"Oh, we're gonna compete and we're gonna put this central bank digital currency out.\" I'm wondering, do you have any views on the central bank digital currency and whether they, will be- What's your view on their prospects for success on that?" }, { "speaker": "godfrey_bloom", "time": "01:03:34", "start": 3814.37, "text": "well, the goal-- this is something that isn't generally understood, certainly in my own country. We all talk about trade here, we're always talking about trade and our trade arrangements. Trade's got nothing whatsoever to do with the European Union, nothing whatsoever to do with it. It's a naive deal. It's a great political ideal, it's a dream that is held fervently with religious fervor. I worked out there for ten years. We're not talking about trade here, we're talking about one entity with its own anthem, its own leader, its own system. So certainly the goal, the, the goal will be A digital coun-currency which the ECB can control, they will have things like national wages, minimum wages for everybody and they will bring the-- this is the goal for them to bring all this in so they have complete and total control of everything, because it's, it's a control system. The European Union is a control system. There isn't no democratic ethos in it. The rules and regulations, of course, are made by the, by the, European Commission. The Parliament isn't an amending chamber, whereas that, the amending chamber. Got nothing to do with making the law at all. It, it, it's, they call it a parliament, but it's not a parliament at all. It's a talking shop. The deal's already been done by the Commission, unelected bureaucrats, most of whom are French. so consequently, the answer is, yes, that is where they're heading, that is the goal, that is their dream. The only other flip side of that argument, of course, is the European Union is one of the most incompetent and corrupt organizations since the Byzantine Empire. These people are appallingly stupid and incompetent, so that may be the goal of a national, a, an inter, a, a Eu- a pan-European digital currency. The question is when it get there. I mean, I mean, I don't know how they find their way to the lavatory, some of these people, I really don't. So what? So is it actually gonna happen? I don't think it will happen in my lifetime, but then of course, I'm an old geezer, so that might not be very long." }, { "speaker": "stephan", "time": "01:05:49", "start": 3949.64, "text": "You seem very hearty, so I think you got, you got a good amount of time. I'm also, wanted to bring up, so your book, The Magic of Banking, I had a read of it, and, I, I, there was really an interesting point you were making, is, which is that there seems to be this perception that major countries cannot go bankrupt, right? Why Why are they so quick to forget, the lessons of history?" }, { "speaker": "godfrey_bloom", "time": "01:06:15", "start": 3975.14, "text": "This is a very deeply and widely held view because, and the response you'll get is-- Well, the government prints money, so how can they go bankrupt if they can just print money? Of course, what they don't understand is, yes, of course, they can go on printing money, but if it's completely worthless, they're bankrupt, in all but name, and, and, and so consequently, that is the projection, And people don't understand it because, if you talk, for example, to a retired schoolteacher in England who's on an index-linked pension to die for that you couldn't possibly get in any other or any civil servant, they retire maybe at fifty-five or fifty-six, they retire early, which in, in the commercial world is almost impossible. The cost of a pension these days, with life expectancy, is almost impossible to do that. They get an increase every year of two percent or whatever the, CPI rate is. They are deep-- they deeply believe that that will continue forever because there's some kind of magic money tree that it comes from. They have no concept of where the money comes from. They know that it's a government pension, and therefore it must be, it must be sacrosanct. The idea that one day that check won't come, which is a total situation you see in second, oh, third world countries or even parts of Europe, like Greece, for example, the pension just doesn't arrive, doesn't arrive until they, until the Greeks manage to screw the Germans out of another loan, you know, and the Germans don't understand, the German punter doesn't understand it. You're out- Body worker, your Fiat, BMW worker, going to work every day, he doesn't understand, any of these matters. bless his cotton socks, he's working hard, he's producing good vehicles, and they're being bought, but of course, with the shadow banking system, and Deutsche Bank is a classic example of that, with something like nine hundred billion, euros of shadow banking debt, they've sent all these cars to these countries, exported all these cars, and of course, they've been paid under a shadow banking system, as far as Germany is concerned They might as well have dumped all those cars in the North Sea. They're never really going to be paid for them. It's all magic, hence the title of my book, \"Magic of Money.\" It's all magic, and it's part of the magic that they have persuaded people that a country can't go broke like the local factory, and this is another huge awakening, that is coming, and it's coming much sooner than people imagine. these checks will just stop coming, or they'll have to cap checks. We have people in the, in the sector, in our public sector, who are on unbelievable salaries. You know, the, at the town hall, we used to call them the chief clerk, and then we had all this new sort of stuff coming in, they now call the chief executive, and they're at the town hall, and they're on two hundred thousand pounds a year. Most of them are failed solicitors, and the, Lord only knows what they make under the counter, because This country is a very sophisticated Nigeria. the corruption here is absolutely deep, but we're far too clever to let the punters know how it works. So, their pensions were enormous So they're retiring early on pensions, so in the region of a hundred and fifty thousand pounds a year index link. My village alone, my villi-- I live in a tiny, tiny village, there's only a hundred and twenty souls all told in my little village in Yorkshire. We have six, no, we have eight retired civil servants. Charming people, very nice people, got nothing against them. But I worked out what the value of their pension was if you had to buy it from an insurance company today. They all retired under sixty, it's all index linked, and they were all quite senior-ish people, so they would have been on salaries of fifty or sixty thousand. The cost of those pensions on the open market would be nine million. Nine million pounds, and that's in my tiny little Yorkshire village alone. Nationwide, we're talking billions and trillions of pounds for these characters, all on their industrial pension, who then go back to the civil service or the school to earn \"pin money,\" to top up, you know, it's-- the whole system's crazy. And when history looks at this, when economic historians look at this, they will scratch their heads and wonder what were they- What were they thinking? Did they think they could do this forever? Did they think they could do this forever? And they won't believe it. And Her Majesty, when two thousand and seven, you might have got the quote down there in, in Australia, I'm sure you did. when she, she was at a, a, a dinner or something, and it was two thousand and eight, I think it was, to economists and bankers. You know, it was a, it was a senior dinner, and her speech after dinner, she said, \"How is it you didn't see any of this coming?\" And that's Her Majesty. And of course, I wrote a letter to the palace, 'cause I hold the Queen's commission, and I said, \"Your Majesty, I did, I did.\" I'll come for tea and I'll explain it to you." }, { "speaker": "stephan", "time": "01:11:29", "start": 4289.13, "text": "That's the, that's the great irony, isn't it? I mean, it seems like, you know, looking back, people are saying, \"How did they, how did they let it get this bad? Why did they do this incredibly unsustainable, government spending and projects?\" And the reality is that, it just wasn't convenient to listen to the people who were saying it was unsustainable, right?" }, { "speaker": "godfrey_bloom", "time": "01:11:48", "start": 4308.4, "text": "That's extraordinary. Our prime minister yesterday morning has said we're gonna go to a hundred percent wind power. He wants to" }, { "speaker": "stephan", "time": "01:11:56", "start": 4316.43, "text": "It's a, yeah, it's a joke, right? They'll" }, { "speaker": "godfrey_bloom", "time": "01:11:58", "start": 4318.15, "text": "tell him all about wind power. Germany's doing that. They're building emergency power stations 'cause Germany tried to go back, the Iberian Peninsula, but you can't tell Boris In fact, I've come to the conclusion you can't tell anybody who've graduated from Oxford University anything. I think they have a secret lobotomy as soon as they get there. That's my theory." }, { "speaker": "stephan", "time": "01:12:22", "start": 4342.58, "text": "and I, I just, I mean, to me, it just seems like such a great injustice also, because essentially younger taxpayers, younger generations are the ones who will foot the bill for all of this craziness. And so it, it becomes almost like a generational conflict because it's kind of like older generations might, spend and spend away, and then that, you know, the younger generations are being left to pick up the tab for that. And so that seems like a very, strong injustice there to me, and, I think that is also a big part of why people, at least in my experience, are now open, more open to the idea of alternatives like Bitcoin." }, { "speaker": "godfrey_bloom", "time": "01:12:59", "start": 4379.01, "text": "You're absolutely right. I mean, it's disgraceful, my generation has let down, the country, with baby boomers. I'm a baby boomer. I've had 70 years of basically peace in Europe and p-prosperous eco- broadly prosperous economy And we're leaving, we're leaving youngsters. When I die, the next generation will have the biggest debt in our history. But of course, as an Austrian school economist, you will also understand that is all about welfareism. But if you go to an English university, they're all in favor of it." }, { "speaker": "godfrey_bloom", "time": "01:13:37", "start": 4417.41, "text": "the average university student group is neo-socialist, almost to a man. And the ones that aren't in the lecture hall, of course, are playing rugby. They're not. They're proper champs. They're at parties, going out with girls. They're not in the debating hall, that's for geeks, isn't it? But I mean, it's absolutely, it's absolutely disgraceful that we could have handed over a country, after seventy years of prosperity and a mess. It's not just us, it's France, it's Spain, it's Italy, it's the United States. We've all done it. We all talk The nation is welfareism. The concept that you can get money for not working, which is what welfareism is, and was not the original idea under Beveridge in nineteen forty-two, nineteen forty-three, when the Beveridge Report put out the template, it was to put a safety net under people Who were suffering unfortunate circumstances, who no fault of their own, it is now a lifestyle choice, and that is at the root of the problem for the Western democracies, the liabilities they have under welfareism, which they don't have in the Far East. I worked in Hong Kong for a while. The concept of paying somebody when I was in Hong Kong for not working was belong-- beyond the Cantonese mind. The, the, the Chinese simply couldn't understand why you would pay for something for not working. it, it, they look after their own old, of course, you know, the Chinese have a respect for their elders, and if, if grandma's poorly, she stays at home and they look after her. They couldn't understand this concept of state welfare, and that is- You can't talk about so many things, gold standards, money, Bitcoin, without addressing, well, and it's the elephant in the room that we're not allowed to talk about. We're not allowed to talk about welfareism." }, { "speaker": "stephan", "time": "01:15:32", "start": 4532.05, "text": "It punishes savers, and in some sense, it, it also makes people as entrepreneurs perhaps less likely to even try to be innovative, and so it, it sort of stifles the soul of, the people in that country, and perhaps- Perhaps it's, I think it's fair to argue that, it, it, it kind of acts as a drag on that country's long-term, economic growth and prosperity." }, { "speaker": "godfrey_bloom", "time": "01:15:57", "start": 4557.75, "text": "Yes, it does, and you've got to be, it should be made really easy to start a business and perpetuate a business, and that's of course this desire of regulation with SWIFT, and we were in the European Union. I sat through, I was there for ten years, and I saw two thousand new regulations passed a year. Two thousand new regulations a year, quite at an extraordinary speed. You vote electronically out there. It was quite the most extraordinary phenomenon at the speed at which these regulations came, and of course, they have a system of corpus juris and Napoleonic code in their legal system, which we don't have, we have common law, and so we saw more r-- we saw more law passed, in our period of membership of the European Union than we had in its entirety since the 1688 Bill of Rights right the way through to us joining the European Union. You can't do anything to regulate for everything, and that stifles entrepreneurship. the-- and now, and small businesses are entrepreneurial, that everything starts as a small business. When the government here, I'm sure it's the same in Australia, the government will tell you What you can pay, what the holidays are, maternity leave, paternity leave, bereavement leave, you can't sack anybody if they're useless, you've gotta go through an unbelievable procedure. It's worse in France, isn't it? and Belgium, but they're not the sort of benchmarks we want. You, to build an entrepreneurial society, a rich society, you want low tax and low regulation, and under the principles of law, in English law, a contract between, if you wanted to employ me, I wanted to employ you, under common law, we should sign a contract that we're both happy with. You get a little bit, I'll get mine. I don't want a politician sitting at the table. I don't want a politician saying, cutting across of, of contract law, telling me that, no, I can't pay you that or I can't do this, I'll give you that amount or I've got to do this for your pension scheme as an, as an employer You make your own, and then people say, \"Oh, you know, when it comes to, pensions, oh, the, you know, old people, people...\" I've got my own pension, I don't need anything from the state. I don't need a state pension scheme, and I've paid, I worked it out once on a calculator on a bald wet afternoon, I've paid two million pounds in taxes I left school in nineteen sixty-seven. If you give me that back, I don't want any pensions, and I don't want any national health, and Get off my back, and I've done a few lectures to universities on this, on the basis of how you could Bitcoin, it's right up the Bitcoin street, is let's all have a little card Which absolves us from any responsibility to the state or the state to us. So you fill up your car, you can fill your car for twenty pounds, not fifty pounds. Your pint of beer doesn't cost you three pounds, it costs you one pound. Your salary is all yours. Where do you get it? At the end of the day, no deductions. The deal is you don't want anything from the state. You keep all your own money, so you can have your own private health insurance, you can have your own pension scheme, you don't want anything from the state. Yeah. Fantastic. Who wouldn't buy for, go for that? Unless of course, unless You're sucking at the teat of the state. If you're one of the millions of people who support the state, and you're not very comfortable with that idea. And I said, another thing that might amuse, people watching, I was lecturing at York University when I was in office, so there I was, a little old bald politician, and I said to the, the, to the kids in, in the classes, \"Do you think you can make decisions for yourself better than the state can make? Do you think I could make decisions?\" For you and your families better than you can make them from yourself. Hands up. You would be horrified at the number of hands that went up that thought, \"I can make better decisions than they could for themselves.\" We have a whole generation now of young people who believe that the state is their savior, the state is their support, not the people most like-- likely to rob you." }, { "speaker": "stephan", "time": "01:20:09", "start": 4809.63, "text": "It, it all ties in with this idea of Bitcoin and, this is a, well, a very popular book within Bitcoin circles, and I'm sure you've heard of it as well, The Sovereign Individual And, that one really spells out some of this thesis that, i-it's almost like a digital, way of exiting in some, in some sense, right? Not a hundred percent, but it's part of that, it's, it's part of the answer. And so we, we might also-- It's an interesting point there as well that you make about the people who are producers and the people who are, let's say, sucking at the teat, that, w- the situation we're getting into now is that Governments are basically making it so that there's less people producing, as a ratio versus the number of people sucking at the teat. And so what happens when those productive people want to opt out when they wanna leave, and there's-- they're leaving even less productive people behind to kind of foot the bill for all the people sucking at the teat?" }, { "speaker": "godfrey_bloom", "time": "01:21:03", "start": 4863.95, "text": "You make a very interesting point, which I've made, many times myself. We-- there are either wealth creators or wealth consumers. There's only two types of people. Those that create wealth and those that don't. Now, here's a horrifying thing, there's a guy at the Adam Smith Institute, who I was a co-speak, I was a co-speak at Durham University. Who didn't understand what a wealth creator was? He didn't understand it. This is a man from the Adam Smith Institute. I was trying to explain to the students that walk away from this idea that you have to be a captive of industry to be a wealth creator. Your local hairdresser is a we-well-wealth creator. Your little guy, the greengrocer is a wealth creator, 'cause he's the guy that's putting into the state with his taxes. Now your chief executive at the town hall only two hundred thousand pounds a year Is a wealth consumer. You might have what you c-consider worthy wealth consumers, like a top surgeon earning two hundred and fifty thousand pounds a year for the National Health, he's a consumer Of wealth, not a creator of wealth. No matter how noble or nice he may be, we've got two, and we are now at the situation, we're getting very close, and you're quite right to point it out, Stephan, you're right on the ball here. We're getting to the stage where there are so many people consuming wealth and too few actually creating it. Not just those who work in government, it's politicized charities, it's quangos, the number of people who work in some way directly for the state, and then you- Because you've got to look at people working directly for the state, you know, on state contracts, on permanent state contracts. So for example, the guy coming to cut-- I have a small holding in, in Yorkshire. The guy coming to cut our hedges, he wanted, for two hundred yards worth of hedge or something, he wanted two thousand pounds. and it was just outrageous and totally ridiculous. and everything he does is for the local council, so he charges something like a hundred pounds a yard or whatever it is to clip hedges, I can't remember what it, Unchallenged. So he does all the work for the local council, it's unchallenged because they don't have to negotiate a deal, they just pay him 'cause it's not their money. I got a guy to do it for six hundred pounds, and he did a very good job. So it isn't even what we see, it isn't even the guy at the town hall who we know is a lemon, it's all the guys that work directly for the town hall and only for the town hall, charging phenomenal amounts of money, they're also sucking at the Nobody in government has a serious background in commerce on both, so Labour Party or Conservative Party, on the front benches, there's nobody there who actually, so much as ran a Welk stall. These people have no idea of commerce whatsoever, and contrary to the civil service, bear in mind somebody, the people who negotiate our trade agreements, are civil servants who at university, usually Oxford, decided At Oxford, they weren't going to go into commerce. They made that decision as very young men not to go into commerce. They're now negotiating international trade agreements You couldn't think of anybody less suited to go and negotiate with the European Union, which is why we've made a mess of it for forty years, and we're still making a mess of it. I mean, you don't need trade agreements. You and I don't need a trade agreement. I wanna buy something from you down there in Australia, you send me the bill, I send you the money. Certainly not any politicians, do we? What's that got to do with anything? And of course, as soon as you get a trade agreement, it comes with baggage. We're talking over here at the moment about a trade agreement with the United States. All that means is we'll have a tariff-free game for some goods. So big business will win out of it, but the, the other thing is, of course, we will have to accept whatever the CIA give us. If the CIA, CIA tell us we're gonna do this, this, and this, that's what we'll do, 'cause that will be part of the unseen baggage of a trade agreement. I don't like trade agreements, I wouldn't have trade agreements with anybody, I would just have no tariffs. Let's have an international free tariff. I can't see that one flying 'cause too many people have got their hand in the till." }, { "speaker": "stephan", "time": "01:25:23", "start": 5123.02, "text": "It's unfortunate It's just, it's all just gonna drive people to look for alternatives, and I think that for me is, really where this is at. you're absolutely right. So look, I, I've really enjoyed chatting with you, Godfrey. It's probably a good time to, finish off here. But if you had any closing thoughts for the listeners, and of course, let the listeners know where they can find you online." }, { "speaker": "godfrey_bloom", "time": "01:25:46", "start": 5146.78, "text": "Well, I look forward to, continuing anybody who's come. It's been an enormous response I've had on Twitter and stuff. I have a, I have a website obviously, which is so easily found, just godfrey bloom dot uk, 'cause I've been writing articles on that in various, not just money and economics, other things, defense and so on and so forth, and, and, if, if I can just be a little bit arrogant on this, if you read it on my website, it will be common knowledge in about two years' time. Everything I've written has come true. And I'm always right. And this is the reason my wife said you've got no friends." }, { "speaker": "stephan", "time": "01:26:25", "start": 5185.99, "text": "Fantastic. Well, I'll leave some of the links in the show notes for listeners who want to find you online." }, { "speaker": "godfrey_bloom", "time": "01:26:31", "start": 5191.27, "text": "Let's keep the thing rolling, it's fascinating." }, { "speaker": "stephan", "time": "01:26:33", "start": 5193.53, "text": "Well, thank you for joining me, Godfrey. Thank you so much for inviting me. Subscribe to the show at stephanelivera dot com, and I'll see you in the citadels." } ] }