WBD213 Audio Transcription

WTF Happened in 1971 with Ben Prentice & Heavily Armed Clown

Interview date: Wednesday 1st April 2020

Note: the following is a transcription of my interview with Ben Prentice and Heavily Armed Clown from WTFhappenedin1971.com. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.

In this interview, I talk to Ben Prentice and Collin, the creators of WTFhappenedin1971.com. We discuss the gold standard, the Bretton Woods Agreement, monetary policy, inflation and hyperbitcoinisation.

“You teach a man to buy Bitcoin and he’ll HODL for a day, teach a man to understand Bitcoin and he’ll HODL for life.”

— Heavily Armed Clown

Interview Transcription

Peter McCormack: Ben, Colin, how are you both?

Ben Prentice: Doing good.

Heavily Armed Clown: Doing good.

Peter McCormack: All right, so listen, I can't remember what show, but a show I did recently, your website came up. I'm trying to remember which one it was. It was one of my last three or four shows. It might have been with Aleks Svetski, I can't exactly remember, but your website came up. I'd never seen it before and then it came up in my feed on Twitter, two days later and I was like, "Right, this is a sign. We need to talk about what the fuck happened in 1971."

I went through the website and I was like, "Okay, I'm a bit of a dumb ass. I don't think I'm going to try and figure this out myself." So what I want today, if you guys are keen to do this, can we do this? Can we run this like a school lesson? Can you teach me about what happened in 1971? I'll put my hand up when I'm like, "I don't get this. Can you explain it?" Because I don't know shit about economics.

Ben Prentice: Sure!

Heavily Armed Clown: Yeah!

Peter McCormack: You ready?

Heavily Armed Clown: I think Ben should, I think this is Ben's forte.

Peter McCormack: Come on Ben. What happened in 1971? I wasn't even born.

Ben Prentice: Good question Peter, I'm glad you asked. I started doing research on this because obviously we're all falling down the Bitcoin rabbit hole, quite precipitously and I started doing research about money and what types of money we use. I was reading about the gold standard versus not gold standard, trying to figure out when we were on the gold standard and when we weren't and in 1971, obviously as many people know, the end of the Bretton Woods Agreement happened. When that happened, it effectively took every country off of whatever close to a gold standard thing we had at the time.

It was the closest thing we've had in modern history and I was literally just on Wikipedia reading about that event and I started finding a few different charts and some of the first few charts I have at the top of WhatTheFuckHappenedin1971.com and you can see that there's a lot of crazy stuff. This is under the Nixon shock, which is a term for when Nixon took us off of the gold standard and that it had these far reaching implications on all the other countries too. You can see all these... Okay, I see you can have a question already Peter!

Peter McCormack: Yeah! All right, so my first question is talk through what the Bretton Woods Agreement was and talk about why Nixon took us off the gold standard. Well not us because I'm in the UK, but talk about what happens for people who don't know.

Ben Prentice: Sure, Colin, you want to take this one?

Heavily Armed Clown: Yeah, so the Bretton Woods Agreement was an international agreement. I believe, when was it Ben? It was the mid 40s, right?

Ben Prentice: 1944.

Heavily Armed Clown: Right after World War II or right in the tail end of World War II. It was an international agreement that was done between most of the world. It wasn't the entire world, but essentially what they agreed to do was get together and peg the US dollar to gold and then peg every other international currency to the US dollar. So indirectly, this made any other country that was in the agreement also on the gold standard, but they were more of on the dollar standard and the dollar was the gold standard.

This was pushed really hard by John Maynard Keynes who a lot of us are familiar with and in his mind, it wasn't a perfect system, it wasn't exactly what he wanted, but it was a step in the direction of globalization of economics that he wanted to see. The problem was over the years, there was... Everybody cheats, right?

You can never expect everybody to do exactly what they're supposed to do. Every nation, probably the US too, was printing more money than they actually had gold reserves for and the US was seeing a net arbitrage of gold out of the country. Then we were also having issues with physically transporting and settling that gold between countries and in 1971, Nixon basically just said, "Yeah, this is over. We're not doing this anymore. Gold window's closed."

Peter McCormack: Okay, so without any prediction of what would happen, they just went ahead and did it?

Heavily Armed Clown: So it's interesting to look... If we can start back at the start for a moment, the classical gold standard was that individual banks or even countries, would issue currencies against gold. Gold was kept in vaults and we transacted largely these pieces of paper. If you wanted to redeem the pieces of paper for gold, you could go down to the bank and you would redeem. In 1913, was established the federal reserve, which is the Central Bank for the United States and there's similar stories in other countries.

Then we all know there, in 1929, everything crashed. My thesis is that after the establishment of federal reserve, there was monetary inflation during the world war and they created too much money and they didn't have enough gold and it was attraction of that paper money supply that caused that crash in 1929. Then you had the New Deal in 1933, and there was a lot of price controls and a lot of issues. 1944, which is the beginning of the Bretton Woods, kind of returning to some kind of sanity in our monetary supply. So you're asking about what was the actual...

Why would we be coming off of the gold standard then again in 1971? My understanding of the situation is that essentially everyone was inflating their supply, even though we're on this technical redeemability between countries, by the way, this is not individual humans would take their $10 bill down to the bank and say, "I'd like $10 worth of gold," which was pegged at that time, technically to, I 1believe it's an ounce to $35.

Regardless, essentially they were inflating too much and they realized that if one of these countries came to the US and said, "Hey, we'd like to redeem some of these paper," and some of these US dollars that they've been printing for gold, they stood to lose the gold that they had in reserve. They literally were like, "Oh crap, we don't have enough gold for all these dollars if we don't take this off." Then Nixon in 1971, he said, "I am going to temporarily suspend the convertibility of dollars into gold", but that was over 50 years ago. It seems like it was not temporary!

Ben Prentice: The question that you asked, Peter, did they not really think about it? And that's an interesting question because no doubt they did. Certainly they did, but if you ever go back and read Nixon's memoirs, there's only one or two sentences in his entire book of memoirs that even mentions the closing of the gold window and he basically just says, "Well my economic advisors told me to do it, so I did it." We've actually experimented with this a little bit. If you ask people who were alive back then, most of them remember it as a non-event.

They don't even really talk about it. It's not something I was taught in school growing up, it's something that I might've heard about in passing, but it didn't mean anything to me until we went and started looking at some of the economic anomalies that have happened since then, that are really clearly visible when you look at the data in aggregate.

Peter McCormack: Yeah, I'd never heard of any form of gold standard until I'd heard of Bitcoin and then I'd heard about the gold standard and then I'd heard about us coming off it. I think I heard about the gold standard about the same time I read the Bitcoin standard, which my good friend Saifedean Ammous wrote, but I wasn't aware of any of this. So this was all new to me.

Ben Prentice: If you ask a vast majority of people, "What's the dollar backed by?" They'll say, "Oh yeah, gold." They still think essentially the gold standard is around in some paper form, but obviously we all know now that that's not the case.

Heavily Armed Clown: And what's interesting is that central banks still settle in gold internationally. What's really been happening over the last 150 years or so is the slow demonetization of metals as money for the average person. We saw the demonetization in the states of silver back in the late 1800s and then for a brief period of time in the 1930s, owning gold was actually illegal for United States citizens because of executive order 6102.

We've seen this slow transition from people using gold and silver coins, to people storing those gold and silver coins and bullion in bank faults and using paper instead and those having a one to one exchange ratio and then moving to a state issued paper peg to gold that's kept in vaults to that gold peg just completely going away and central banks being the only ones who settle internationally with gold.

Ben Prentice: On the history lesson part of it, the 6102 order that he was talking about that banned gold and confiscated gold from actual citizens, that was in 1933, right after the 1929 depression. So just so you understand where the timeline of events are.

Peter McCormack: Right, okay. So what was the immediate impact?

Heavily Armed Clown: Life went on, the average American didn't notice anything. The only thing that really changed for them was a little phrase on their paper currencies that said that this dollar was worth an equivalent amount of gold at the US Treasury. That was no longer the case, they could no longer make that exchange and I don't really get the feeling that people did. I don't even know if you could, if you were a citizen of the United States, if you could walk down to the US Treasury and exchange your dollar for gold.

I don't know that people did because why you would you? What are you going to do with that gold once you have it? Are you going to take it to the store and buy groceries? I don't think so. It was more of just a slow... At that point in time, people didn't even really think about gold as money anymore, at least from my understanding. I wasn't around back then, but dollars were money and gold wasn't money. The paper was the money and that was what they needed to have commerce and buying and sell goods and services. I think people had already long been disconnected from the fact that gold was the underlying money, even at that point in time.

Peter McCormack: But having gold as the underlying money creates a certain expected behaviours with the respect of money.

Ben Prentice: Due to the supply being constrained and once the supply was not constrained of our money, what we saw that the most direct results of this event. I think it's very clear if you look at the consumer price index over very long period of time, even dating back to the 1700s, there's very little change in that price index. Then in 1971, it sky rockets, meaning prices rise and that has all sorts of effects we could talk about. That is the main direct effect of this event, from my perspective.

Peter McCormack: And why though, why did that happen?

Ben Prentice: Because in this Bretton Woods Agreement, when there was this quasi gold-standard where countries could keep routine and keep in check each other, "Oh, it looks like Europe is printing too many Great British pounds," or "US is printing too many dollars", "Oh well, I'll take some of that gold back from you at this inflated rate." If they start, let's just say... Let's try to break this down, as that's what you'd like.

So if you start and the United States has exactly $100 and they have exactly 100 bars of gold and the Great Britain has exactly £100 and 100 bars of gold. Now, Great Britain prints £150, so that their total supply is £150 and the US doesn't print anything. Well they get some of those Great British Pounds, but really those pounds aren't worth as many, as you can get more gold for if they're pegged to... I'm not explaining this very well.

Peter McCormack: No, no, you are, because what you're saying is it creates a system of fairness in theory! In a world of international trade, you need this.

Ben Prentice: Right, it's a check on that. After 1971, there was no more check. So everybody can freely cheat and they can make more money and we know when they make more money, prices go up, it's very simple.

Heavily Armed Clown: So what we saw directly and what Ben is trying to say here, is that what we saw directly when the gold window closed, was a large expansion of the money supply and with that, a large expansion of credit. The 70s is also when we saw the rise of the consumer credit card, you could just go to the store and buy something with money that you didn't have and then pay that off at a future date and time, maybe with some interest, depending on how long you waited. That expansion of the money supply is necessary to keep that expansion of credit from completely collapsing in and of itself with enough default.

Peter McCormack: Right, okay, so I understand it. So I'm looking at your chart here, productivity versus compensation, but it's compensations for specific workers, right?

Ben Prentice: Right, this number's an aggregate, an average of what people earn.

Peter McCormack: Yeah, so what does this say? Does this say the distribution of money became unfair?

Ben Prentice: What we're seeing here is in this first chart, is that productivity and compensation appeared to be linked. So what does productivity mean? It means we can make more things for the same amount of man hours that seemed to be linked with wages and that's a great thing because as we get better at making things, we theoretically could make them cheaper to acquire. If wages are increasing with this at the same time that we're getting better at making things, then the standards of living actually go up over time and that's a fantastic thing.

This is the idea of deflation is good is because goods get cheaper because we're getting better at making it. It's just like computers and you can get a better iPhone every year or laptop or whatever it is and that's fantastic, that's the progress of society. But my thesis is that that's been torn away from us in this ominous year.

Heavily Armed Clown: Well I think it's worth pointing out that the artificial expansion of the money supply, one that happens outside of a traditional supply and demand structure of something like gold, that requires capital and labour to extract from the ground and turn into bars and coins, an artificial expansion of the money supply, where whoever controls that money supply is just printing dollars to meet demand of their financial obligations or demands of credit expansion, that is essentially socialized redistribution of wealth.

Everyone's got their piece of the pie, and if I make everyone pieces of the pie a little bit smaller and print a bunch over here, well now you have a little bit less pie and Ben has a little bit less pie and I have more pie because I've made your pieces worth less and I've made my pieces worth more. So I'm essentially redistributing wealth. I'm taking what you've saved because if you have a $100 in the bank and there's only $200 in the world and I print a $1,000, well now I have 90% of the money supply, whereas before we each had 50/50. Does that make sense?

Peter McCormack: Yeah, it does. Are there any other factors that come into play in any of these improvements in production movement to more machine-based production? Is there anything in here to do with greed and that actually what's just happened is the companies, the people who own the companies have just become more greedy. Does any of that play into this or is...

Ben Prentice: I know where you're going with that Peter, but I kind of try to ask you to change your perspective. Instead of looking at it like that, look at it like, if we all agree that the price level seems to go up more quickly after 1971, meaning if I want to buy a dozen eggs, the price of eggs goes up more quickly after 1971, each year the price is going up more rapidly, right? It was still going up before but it's going up more rapidly and then the price of housing and all these other things. If me as a wage earner, this wage slave, I try to get a raise from my boss, every year I try to get about 2% or 3% raise that's good, I'm doing better every year, right?

Well if you're getting only 3% on average over the last 50 years, you're only keeping pace with inflation. You haven't actually gotten any wage increase at all and when the price level is going up even faster, you have to get 5%, 6% raises every single year consistently, just to stay afloat and just to be making a little bit more.

Then on top of that the money that you're putting in the bank, because there are a lot of people today in this world that can barely afford stocks or 401ks or maybe even afford to buy a house, as stocks and houses all inflate because of inflation. That's an inflationary thing that most of these people can just barely keep money in a bank and that's getting inflated away too and when this stuff is happening more rapidly it makes the quality of life very difficult to maintain I think.

Heavily Armed Clown: It's important to remember the Cantillon effect as well. The best way that I've ever heard this described is pouring some honey into the bottom of a glass. You see the honey hit the glass and it very slowly pulls its way out into the rest of the glass.

That's sort of a great visualization of the way the Cantillon effect works where essentially, the fewer degrees of separation you have from the printing press, the more concentrated wealth you're going to get from the new money that's printed. Whereas wage earners, labourers like myself, the further we are away from that spigot of money the less we actually benefit from that new money creation and the more of our wealth is actually redistributed to that process.

Peter McCormack: Right, so everything that's happening right now must be fascinating for you guys. You must have a lens into this new money creation and we will come to that. I guess an easy way of understanding it is that if I went now and played a game of Monopoly with my kids, we start out with a fixed amount of money each, right?

That's the way it starts and we can go and buy our properties, and we can add our houses to it, and you have to be very careful about your money, you can't buy too many properties too quickly in case you get a fine or you land on somebody's property. You have to be really careful about your money. But I guess if just part way through the game we just tripled our money, then suddenly we can all start spending like crazy, I guess it's a similar effect in my simple version.

Ben Prentice: Do you know there's a rule in that game Peter, that if you play the game... Because the game could be very long sometimes, if you play the game long enough the bank can actually run out of the bills that you're supposed to get for selling a property or whatever and there's a rule in the game that says, if the bank runs out of money, the bank can never run out of money, so simply write down on pieces of paper, one, five etc. It's in the rules, go look it up.

Peter McCormack: I know, I've seen this on Twitter! Now you've told me, I've seen it on Twitter. It's funny, I've got a copy of Monopoly Socialism, the socialist version. I don't know if you've seen that I played it with my kids and they hated it! So the first time when I went through your website that really was like a "Whoa, what was going on here" was the consumer price index. Now that seemed to be pretty steady for a good couple of you know, nearly 200 years but it was going up. It was going up before 1971 to unprecedented levels.

Ben Prentice: Yes.

Peter McCormack: So, is this what you said about earlier said the things were already... The wheels were already in motion here?

Heavily Armed Clown: Yes.

Ben Prentice: So the temptation to print money is so great that it's almost unstoppable, that if you can print money, I believe you will.

Heavily Armed Clown: Well, and the other thing too, a lot of times I think we mistakenly think of inflation as a new phenomenon. But inflation stems its way back to the days of gold and silver coins issued by the Kings mint. This is not a new phenomenon. It's new that we have these neo-liberal economists telling us that it's necessary for the economy. It used to be called coin clipping, right? The King, he taxes his serfs, he collects all of the coin and he takes it into his vaults, and he gold off of each coin and then recirculates those coins as if they're still worth the weight that they were when he received them.

Then he takes all of those gold clippings, melts them into new gold coins and circulates those as well. That's essentially what's going on here when you're printing new money and introducing it into the economy artificially, outside of that traditional supply and demand structure of the metals market. Even when we were on like a buy metal peg in the United States, when we used gold and gold was pegged or silver was pegged to gold at a certain price, that's inflationary as well because that's essentially a fiat peg because it's by decree that...

Normally the market would decide how much gold is exchanged for how much silver based on how much the supply of those metals change and what their demand is like and that changes their value because value decisions are constantly being made by people all around the world all the time. So when a government enforces an artificial peg between gold and silver that's actually a form of inflation because it's making the [inaudible] purchasing power than it should actually have. So inflation has been around for a very long time.

Ben Prentice: But if you look at the chart, this consumer price index from 1775 until 2012, when it runs, you'll see that the creation of the Federal Reserve is when things started getting weirder, right? So Peter was talking about it seems like it was fine for a really long time but the unprecedented stuff kind of started right before 1971. Well that's why when I originally found this chart it just had the 1913 date. I added the 1971 date on it because now you can see this is when central banks really started to proliferate and it starts to kind of push its way up and it's trying to get it up.

But 1971 was when all limitations were removed and they can just print as much as they want, that's the way I see this, that they were trying to inflate more. This is also around the time Keynes was getting more and more popular in the 1930s, and 1940s, and 1950s and his economic thought is his way of trying to manage the economy through the monetary supply became more and more proliferated. Again, the shackles come off in 1971 and the sky's the limit.

Heavily Armed Clown: And it's worth repeating that the Federal Reserve, the organization, the private organization that oversees the creation of the money that... And it lends to the US Treasury, that organization was formed in 1913, long before the closing of the gold standard.

Peter McCormack: Right, okay. So look, the next one that really stood out to me and I just went through for the quite alarming looking charts, but was the national debt, the US national debt chart, because to be honest, it looks like a picture of a skyscraper. It's phenomenal! But the US started building some quite significant debts it looks like around 1945, so that's obviously after the Second World War. What happened there?

Ben Prentice: Well so this chart is nominal, right? A lot of these charts that we're looking at are kind of inflation adjusted. So, one of the reasons why this chart looks so alarming and people have even criticized me for being deceptive with this chart is by saying, "Oh, well if you adjust for inflation, it doesn't look as bad." I agree, but I leave it up for this sole purpose, just to see what we have really done and how many dollars we've created. So the truth is why this thing looks so incredibly crazy is because of inflation itself, that's the visualization of inflation in addition to how much debt we've added.

If you kind of look a little bit around, there's another one that says the federal debt held by the public, and it's purple, and there's all these kind of wavy lines, that is more adjusted and that's a percentage of GDP. You can still see this one is not as clear I think of what's happening, but you can see that this is projected by the Congressional Budget Office, so it's not like some crazy crackpot, you can see the projections. Then we were in World War II already, we're almost there and we're projected to go higher. I think that is a more real look at what the debt looks like.

Heavily Armed Clown: The other thing that's interesting about this is that if I'm a government and I have... We wind it all the way back and I have let's just call it a billion dollars worth of debt and in my current paradigm, a billion dollars is a lot of money, it might be most of the money, right? I already might owe most of the money in existence as a debt, but if I print more money, if I expand the money supply to, let's make it astronomical and call it a hundred billion, now my $1 billion in debt is suddenly a lot less consequential because it's only 1% of the money supply, as before it was close to a 100% of the money supply.

So as governments continue to increase their debt obligations, they benefited by continuing to increase the total money supply because that reduces their future debt obligations in terms of nominal percentage of outstanding circulating money.

Ben Prentice: The way I think about inflation is that it's an addiction that we're all addicted to and that we need more and more of it to have the same effects that we desire today.

Peter McCormack: See, every time I look at these national debt figures I always think this shit's never getting paid off.

Heavily Armed Clown: No.

Peter McCormack: Like when I take out a debt... I've got a mortgage, I know it's a 25 year term and I know at the end of that I'm paying that off, I have to, I can't miss a mortgage payment. Same with a car, same with any debt and I look at this and I'm like, this shit is never getting paid off. So what does that mean?

Heavily Armed Clown: That's a good question, what does it mean? We're in uncharted waters. Ben and I talk about this almost every day. The world is making less and less sense as we just sort of lose touch with reality. This meme, this "WTF Happened In 1971" has been so rewarding for Ben and I because we can reverse track the hits and see the conversations happening about our site all around the Internet and people have some wild ideas about what the fuck happened in 1971.

Usually people are blaming the sexual revolution, you hear them blaming the hippies, you hear them blaming the Vietnam war, you hear them blaming the opening of Disney World and corporate greed, there are some crazy theories out there for what caused WTF happened In 1971 and none of them really come close to... They're all second order effects. They're all describing usually things that are a consequence of inflation, not necessarily the direct cause of these economic anomalies.

Peter McCormack: Yeah, I'm just looking at an Etch A Sketch was $2.83 in 1971. I'm actually looking at some of the things that also actually happened, yeah, Disney World opens. People blame it on Disney World! 3e could go through every single chart, but I think I'm kind of understanding the general points you're making. But what I really want to know about now is you've done this work, you've built this website, you've got this lens into what happened with the money supply and the money printing coming off the gold standard and I've got two like really, really big questions for you and one's going to be about Bitcoin.

But before we do that, we are in unprecedented times. This very weird situation that the world finds itself in that, I don't underestimate how difficult the decisions that governments are having to make, I don't, but outside of the complexity of it all, there is a very significant amount of money printing happening right now globally. What is the lens of what happened in 1971 for you guys? If you transplant that over what's happening now, what are the biggest alarm bells for you and what are the things you think that are kind of the unknowns that this is going to cause? I know there unknowns, but I mean unknown to me.

Ben Prentice: No, this is unknown even to people that follow global macro environments for the last 50 years. Nobody really knows what's going on! I think one of the biggest alarm bells, which you know, both Colin and I have talked about a lot, is the negative interest rates, right?

Peter McCormack: Which were coming before.

Ben Prentice: Which were what?

Peter McCormack: They precede this coronavirus world. I was talking about them with Travis Kling last year.

Ben Prentice: Sure, yes, but I think it's becoming more apparent now that they're just trying to get people to borrow money and I think A, just trying to understand the concept of negative interest is like, why even do it? Because, it doesn't make sense, there's no reason... Negative interest breaks the concept of lending money in the first place, so therefore, I think it breaks... If lending money is an essential part of markets today, it breaks the way that we do business at all.

Heavily Armed Clown: And for your listeners who might be listening to this and really don't understand why negative interest is such a big deal, imagine you're having a conversation with your banker, imagine you go to your banker in 1980 and you say, "Hey, I want to take out a loan for this house, I need to have a place for my family to live," and the banker says, "All right, that's fine. I'll give you $40,000 and you pay us back over the next 30 years, and you're going to have to pay us back interest, of course, because it's only fair."

Then you fast forward to 2015 and you're having the same conversation with a banker in a different bank and he says, "All right, I'll give you this $250,000 loan. You don't have to pay us back any interest, we don't need any interest now, just make sure you pay us back the money that we give you." Then you fast forward to like 2022 and you're having a conversation with a banker and he says, "We will literally pay you if you take this money from us and go and use it to buy a house."

Peter McCormack: Because they have so little confidence in the future value of money? Is it that or they just need to get it off their balance sheets? What's going on here?

Ben Prentice: To me what is happening here is the government is trying to create inflation in any way they can. You've heard this term helicopter money before?

Peter McCormack: Yeah, of course man, especially this last few weeks.

Ben Prentice: Right, but what does that mean? The idea is that there's literally a helicopter riding around dropping all this money everywhere and you could do that but see that... If you literally just put more money in everybody's bank account, nothing changes at all. If you put the proportional amount, if this guy has $100, that guy has $5,000 and you multiply them by some proportion, by just 10x everybody's money supply, then nothing changes, just the unit of account.

Just the price has changed, everybody still has the same relative amount of money and actually nothing changes at all. You have to give more to somebody else in order for it to change anything at all. So the method of how you determine where new money goes becomes a very prickly process and one of the ways we do that today is by creating money through credit expansion and creating new credit, so that should be kind of letting off a bell in your head. They need to lend money in order to create inflation and they need to get people to try to borrow money and because they can make as much money technically as they like, their incentive method mechanism is to lower the interest rate to incentivize higher to borrow more money.

Peter McCormack: Because if they don't have inflation they have deflation and if they have deflation it slows the economy because people spend less because things will get cheaper in the future.

Ben Prentice: I disagree with that. I think their biggest motivator is to inflate the debt, that was what we were talking about before, that the debt is addictive too. They've created all this debt and they have to pay it back. They need to inflate that away and I think that's the biggest motivator.

Heavily Armed Clown: But economies that are heavily over leveraged, like our world economy was, probably still is, but was two months ago, they're very, very fragile and they demand that there is a continual expansion, a continual interchange of lending and we were seeing this breakdown all the way back in September with the meltdown in the United States re overnight lending markets. We were seeing the Federal Reserve have to step in and provide liquidity in these markets because this lending scheme that is necessary for this beast to continue to live, was breaking down.

And when you're seeing an environment like we're in right now that is deflationary, because you mentioned, are they trying to avoid deflation? Yes, in a sense they are, because in a deflationary environment, when there is a debt cascade like we are seeing, you're watching the effects happen of it in real time, and the bigger this thing gets, the more over-leveraged it gets, the more credit is swapped for other credit and used as collateral and re-hypothecated, sort of like Ben said, the more hungover we get, the more hair of the dog we need to get us back to the high before we crash. It's almost like we're on the fourth or fifth hair of the dog now and we're on a three-day binger.

Ben Prentice: Yeah and can I push back on something too, Peter?

Peter McCormack: Yeah, cool. I'm out of my depth here, so you tell me!

Ben Prentice: Yes, the Keynesian narrative if you will, is that deflation is bad because people will spend less money because they'll hoard it, right? But I love countering this with the example of electronics. Now electronics are deflationary today, we understand that. You can buy more computer for the same money or you can get a better computer for less money even, every year.

That in my opinion, is because of Moore's Law, because technology has gotten better so fast that it outpaces inflation altogether, but it is deflationary and it does not stop people from buying electronics or phones. Huawei and Apple are two of the largest corporations in the entire world, so it's not like people aren't buying things because of deflation. So that narrative is a bold-face lie.

Peter McCormack: I've never bought it as well. Yeah, you might hoard some money, but saving isn't such a bad thing, but you can't not spend, there's things you have to buy. So perhaps you just become a little bit more considered about what you buy, like you do as an adult. I guess as a kid, like when I got my first job, I spent like a motherfucker. Whatever I earned just went out the door! But now I'm older, I'm in time deflation now, I've got negative time!

Ben Prentice: Yeah, and you started talking about savings. We have a chart on there about savings too, that in 1971, the savings rate, it's clearly declined. The only time you see a little bit more savings was in 2008, when there was massive deflation. I would also point out that today, in the time that we're in right now, that if we had a little bit more saving, we might be a little bit better off because now we have millions and billions of people begging their governments for money, just so they can pay rent.

Peter McCormack: Let me just throw something in there. I did an interview a couple of days ago for my other podcast Defiance, with a British girl who lives in China. I wanted to understand what it's like there living in China through the lockdown, her feelings on it, and I did ask her about what support is the government providing for people. She said, "Well, they don't have to provide as much support because people have savings.

Most people I know have got probably a good five to six months in savings." I was like, "Really?!" Most of my friends are month to month, We've lost that savings culture. My parents always saved, Your parents probably always saved, but we've kind of lost that outside of Bitcoin, or certainly we've lost that saving culture, but you can see it. You can see it with Bitcoin, right? No one wants to spend their Bitcoin. Every time you've got to spend your Bitcoin, you're disappointed. You want to hold onto it.

Ben Prentice: But you said the cause already. You said inflation kind of causes you to save less and use more debt, and it makes sense, That makes perfect sense. So that's what we're talking about. This paradigm shift in 1971 has not only corrupted our markets, but it's corrupted our culture itself.

Heavily Armed Clown: It's interesting, because just a few...

Peter McCormack: I've been at war about this recently, corrupting our culture. Which way Ben, has it corrupted our culture?

Ben Prentice: I think it's pushed us towards consuming plastic crap and buying things on credit that we don't need versus saving, investing in sound things, as well.

Peter McCormack: No, I agree with that. Just don't go into modern art or we'll be at war.

Ben Prentice: I didn't! Your buddy Saifedean is rolling over right now.

Heavily Armed Clown: We tweeted, just the other day from our WTF71 Twitter account, the actual personal savings chart and we love to play up the meme and we love to ask the rhetorical question. Obviously we know what happened in 1971, but we like to play up the meme, right? Like, "Somebody tell me what the fuck happened in 1971 that caused Americans to abandon centuries of sound wisdom in saving for an unforeseen crisis." That really resonated with people right now, because they're like, "Yeah like, what the fuck did happen that caused this chart to go from here all the way down to here? What caused that?"

You see people, a lot of people, you see them blaming consumerism, you see them blaming greed, you see them blaming keeping up with the Joneses and they blame all sorts of these second-order effects of inflation. What's interesting to me is that I don't think... Americans are very financially savvy. They might spend more than they should in a lot of cases, but I think in general, Americans are very financially savvy.

They love to invest, you go in any office environment and you'll have everybody giving you their two cents on their favourite stock, their favourite new trading thing that they saw on YouTube, Americans love to talk about money. So why do we see this destruction? Of course people have always been greedy, that's the question that I like to phrase to people when they blame greed, I say, "Were people not greedy before 1971? Did a switch flip in everyone's head and they were like, 'Oh, I got to get more money'?" No! The world doesn't work that way.

Peter McCormack: Okay, all right, I'm getting it. So let's go back to the lens. I know this is a tough question and I know you don't want to answer it, but what is your interpretation of the money printing now? Obviously there's a lot of bailouts, corporate bailouts are going to happen for all the billionaires and the friends of the elite, but also money is going to be provided to people who can't go to work, and they've lost their jobs, who need to eat and they're going to get their $1,200 of the $18,000 it costs per person to do this. But what is your read on all this and what are your big fears over the next year?

Ben Prentice: I have a very short answer, and then I'll let Colin answer that. What this is doing is it's picking winners and losers, and that if something is failing now, I don't think that every single business on the world would fail today if there was no government printing money, but some of them are going to fail, and that means that possibly these capital allocators, the people that run businesses, weren't allocating capital properly. So if we bail out people that weren't allocating property, then we keep afloat capital allocators that were not doing well and therefore, in the future, we'll probably have more poor capital allocation.

Peter McCormack: Yeah that I can't disagree with and I find Boeing is the great example of a company that should be allowed to fail because it was failing. It was unable to deliver planes that can stay in the sky, there's serious inherent problems in that business. Let it fail and let somebody else take... This is where I like the libertarian arguments about free markets, let them fail and let them rise. But what about people? Because they're two separate issues. There's bailing out companies and then there's bailing out people.

Heavily Armed Clown: So there's a certain level of civil social order that must exist for a society to function, right? If things get so bad that we see revolution... You see it all throughout history, where people just get pushed to their breaking point and they start killing whoever they need to kill, whoever gets in the way, to uproot some sort of major revolutionary change, systemic change, right? It happens and it's absolutely a real thing.

The way that I think about this is our system we know, because it's become so leveraged, because it's become so fragile, because it's become so interdependent, because of things like the monetary policy and the expansion of credit, that people are not going to be able to survive unless we get this kind of intervention, and believe me, Ben and I are very sympathetic to that. We are not these two hard-asses who don't care about other people and want to see them suffer, certainly it's the exact opposite.

That's one of the reasons that we spend so much time highlighting these things, because it's the general progression of this constant expansion and swapping and expansion and swapping and booms and busts that hurts people and gets us to this point where we can't survive a crisis for several weeks and certainly, yes, the government has to intervene. If they don't intervene here, if they don't print more money... Because it's not like they have the money saved up. If they don't print more money and give it to people, if they don't provide that social relief valve for all this pressure that's building up, there will be revolution.

I was talking about this on Twitter just yesterday and revolution isn't always a good thing. Violent revolutions kill a lot of people and a lot of times they're innocent. Even in the French Revolution, they imprisoned Louis XVII, and he was five years old at the time. That doesn't even make sense when you think about it logically, but revolutions don't happen with a logical order to them. So yes, the governments have no options right now, they must print this money, they must bail out these businesses because if they don't, the consequences will be so severe that none of us might live to see what happens next.

Peter McCormack: I'm really glad you said that Ben, because I got into an argument with Michael Arrington on Twitter last week and he blocked me, because he had a poll or a meme about the money printing and I said, "All right, but what would you do?" His reply was very much, "I'm alarmed that you're in Bitcoin and you don't have the answer." I was like, "Well, that's not an answer to my question, just answer my question, what would you do?" And he said, "Well, hard money." I was like, "Yeah, but that's not going to solve the problem right now. We have a problem right now. Bitcoin will not solve this problem now.

Bitcoin is like the medicine for the future, what would you do right now?" And he couldn't give me an answer. I've asked this of a few people, because this keeps coming up, this meme and I just keep saying to people, "What would you do?" Because if anyone turns around and says, "Well, I wouldn't do anything," I was like, "Well you better be prepared for some social unrest." This crisis, the interesting thing is we have a way of looking into the future.

We can now look into the future in China and see what happened or we can look at Italy. Italy is a good way for say, the UK, the US, to all look into the future. So we've seen in terms of their response to the crisis, what the impact and what happens is and we're now seeing social unrest. So we saw a guy the other day, trying to smash down the front window of a bank, he's got no money. They're trying to get his mum's pension because that's all they can get to and he said, "I've got no money and no food in the house."

There are gangs raiding supermarkets, there was a guy offering to kill people for money, social unrest has started in Italy. I'm really glad you said that because my view is there is no other option to give people money who can't get out of their house, who can't eat. Yeah, the nuance of how you do it can be debated, but they do nothing means mass social unrest to levels of disorder that I don't think I've witnessed in my lifetime. That could happen! In your country, you've got a bigger problem, is you've got social unrest in a country where everyone owns a gun.

Heavily Armed Clown: Well I do want to caveat what I said a little bit. We've been kicking the can down the road for this great liquidation for so long that it only continues to get worse and worse. One of my friends on Twitter, just the other day, described this as, "It's either sink now or it's sail off the 10,000-foot waterfall." We are in such uncharted waters right now, when it comes to overleveraging and expansion of credit and expansion of money, that the longer we prolong this, the worse it's going to be when it does finally happen.

We have an interesting chart on the site about hyperinflationary episodes in the recent two centuries and how as obviously they become much more prevalent, the more these systems tend to get overleveraged and you look at case studies of hyperinflation like Zimbabwe, or like the Weimar German Republic, these events are catastrophic for the people that exist in those societies! People can't eat, people lose everything, they're terrible, terrible events.

I think Ben and I actually both agree that hyperbitcoinization is probably our only hope because there is just no other way out of this. All they can do is keep kicking the can down the road. They cannot fix the systemic imbalances that are created by this continual expansion of debt and continual expansion of the money supply.

Peter McCormack: I don't disagree. I've just got back from Venezuela and I've seen first-hand on the border, in Colombia and in Venezuela itself, I've seen it. It's the first time I've seen first-hand this kind of impact on people and how desperate a situation it is. I don't disagree. I guess what I'm saying is, I think I understand about kicking the can down the road, I don't think you want to stop kicking the can down the road during a public health crisis. I think the two of them together is potentially a nuclear social unrest problem. But I don't disagree that you can keep kicking the can down the road.

So I guess now is the time that let's bring Bitcoin into this, because I just did an interview with Andreas, which is really interesting because he talked about something I've talked about for a while. When people ask me, "What is Bitcoin?" Or "What does it do?" I always say, that there's two real strong arguments, and they can sit in parallel, but one is all about censorship-resistant money. It's about money that no one can take from you, that you can spend without anyone telling you what to do and you can live on Bitcoin and be out in a parallel monetary system, which is one.

The other one is this central banking era, this monetary policy era, this changed the monetary system, which I think it feels like that's come later on. When I've gone back and researched early Bitcoin, it was more about... I know what Satoshi put in the genesis block, but really it was still about people were talking about the use case of spending money. So this central banking thing does keep coming up and so let's talk about this in terms of Bitcoin. For you guys, you obviously think Bitcoin is a solution. You obviously therefore, believe in a Bitcoin standard, similar to a gold standard, but what is the actual reality of it?

Ben Prentice: No, I don't think that Satoshi misunderstood this concept of sound money and I'm sure you're well aware of the quote about the problem with central banking is all the trusts that is required to make it work.

Peter McCormack: Of course.

Ben Prentice: And I think most people read that, in our community, that the trust to not inflate the money supply. I would implore you...

Peter McCormack: Sorry Ben, I should just put something in there. In tracking back the history of this, the very early days of Bitcoin seemed to be dominated by... I know there are libertarians in there, but also nerds who just wanted to send money between each other and were interested in the technology. It feels like the economists have come later on.

Ben Prentice: Well I think that we're all trying to understand this enigma, what Bitcoin is and what Bitcoin did. I love the name of your podcast, because it did do something. It shifted the paradigm, it changed it forever in my opinion and I think what it will do is encourage everyone to save more, because I feel like this... I think you actually had a little mini epiphany in this episode. You were about halfway through and you said, "Oh well, I guess that would cause me to save a little bit more money and maybe not spend as much." That is...

Peter McCormack: No, that's already happened. That's happened and that's how my life has changed.

Ben Prentice: No, but we weren't talking about Bitcoin then. You were talking about hard money versus inflation. You were talking about inflation and you're like, "Oh, well, if there was less inflation, I suppose I would be more encouraged that"... Obviously you're saving more money now that you're a Bitcoiner and what is incentivizing you to do that? It might be a very complicated question, but don't think about just individual humans, either. Think about businesses, okay? Businesses themselves, do they save money today or do they have to go gamble it on the stock market to preserve their wealth, too?

And governments, do governments save money? Well no, they just print it, right? So who has any savings these days, and what would savings look like under a sound monetary paradigm? Because today we save using stocks and assets because they inflate, because of inflation. If we save using money, we would always have the most liquid good on hand, and then we would invest only in the most sound investments that could cause a return on our investment above what we already enjoy from the increases of productivity from society as we progress.

Peter McCormack: I am actually worried about my pound savings right now. I'm genuinely, right now, I'm looking at it, I see... So my allocation is, I would say, in terms of cash versus Bitcoin, it's say, 25% cash, 75% Bitcoin. But that's only because of the time of when I bought Bitcoin. I'm still holding a good few months of survival in cash, but I'm looking at it now and going, is there a chance in another year that's going to be worth significantly less? Should I be buying more scarce assets? Should I have some gold and should I have some more Bitcoin? But the Bitcoin price has been dropping. They're hard decisions to make.

Ben Prentice: That's the paradigm shift that we're talking about that happened in 1971 and then in 2009, there was a new paradigm shift that Bitcoin is here now, and it's changed the way that we approach things. Just to go back and answer your other question a little bit better, because I didn't really answer it, you were saying, "Oh, well, they weren't really talking about central banking back then." No, we were talking about cheap payments, remember? In fact, when I first learned about Bitcoin, it was probably 2010, on Slashdot, and I was not into Bitcoin back then. I was probably like, "Oh, it probably wouldn't work." They weren't talking about that either.

They were talking about anonymous money, right? We all know that Bitcoin is anonymous now. Just think about how this, our perception of Bitcoin, has changed so many times and how, as you learn more about it, you understand it as different things, because now you understand it for people in Venezuela, they're using it to maybe move between Colombia and Venezuela. It's so many different things to so many different people, and our continued understanding of all these different disciplines and all these different second-order effects really affects how we perceive this thing.

Peter McCormack: You know what there might be in a few years' time? There might be a new website that comes out that says, "What the fuck happened in 2020?"

Heavily Armed Clown: We've already had it proposed to us.

Peter McCormack: Have you built the domain?

Heavily Armed Clown: No, but we probably should. A few things that I do want to add to that though, in regards to the looking at your bank account and wondering, "Do I have enough? Will I be able to make it through the future?" I think all of us, to some degree, are going through that right now. No matter how much money you have in the bank, no matter how much you have in Bitcoin or gold or whatever it is, everybody right now has had to take a moment and look at their situation and say, "Where will we be in six months?"

And having to do that is not economically productive, that's energy and time that you're taking away from focusing on your business, focusing on the people around you, focusing on improving the world and meeting the needs of the consumers, satisfying human action. All of those things are not productive. Having to wonder whether or not you should have more money available in the most liquid good, whether or not you should be speculating on something that might turn out to be a harder store value.

Those are not economically productive decisions. You guys were talking about Satoshi and interestingly, we know Satoshi... Well, Satoshi was an Austrian, because you had said, it seems like the economic people came in later and if you look at some of the early Bitcoin talk threads, this is very apparent. There's actually a pretty famous quote where someone was reading the white paper when it first came out and they said, "Oh, so you're not just an Austrian, but you're a Machiavellian."

This is because Satoshi not only had a really good understanding of money and the history of money and of sound economics and of human action, he also understood power dynamics and he understood how to get people to do what you want without necessarily directly telling them what you want them to do. Ben and I talk about this a lot in terms of the hyperbitcoinization thing, our biggest strength is Number Go Up. Number Go Up is what we have to rely on, because that is what brings new people into this market. But I tweeted the other day that you teach a man to buy Bitcoin and he'll hodl for a day, you teach a man to understand Bitcoin and he'll hodl for life.

I think that there's a lot of wisdom there, but I think we need more than that. That's what Ben and I are here doing! I could stand on a street corner for the next three days and try to talk to every single person that walks by about monetary economics, and they would look at me like I had three eyes, they just don't care. You can't make people care about something, even if it's the most important thing in the world. But what you can do, is meme certain things into the collective conscious.

You can force people to ask the right questions and if you get them asking the right questions, if you get them started down the right rabbit holes, well then when Bitcoin comes up, they might think about it a little bit differently and they might say, "Hey, that sounds like what I'm looking for. That sounds like what we need."

Peter McCormack: You're entirely right. So I've done what, 200 odd shows now and every single one goes on my Facebook wall. Maybe one in five gets a like, no-one listens. I've always said to people, I've even tried to slip it in there, I was like, "You know, with all this money printing that's coming, there might be an inflationary event. That's a risk to your savings. You might want to hold some scares assets like gold and Bitcoin," like slipping in the Bitcoin in there. No one gives a fuck, no-one cares and I cannot get it into them!

But actually the, What The Fuck Happened In 1971, is a great meme, it is a really interesting meme and look, it's confirmation bias for me, but at the same time, I'm looking at that going again, okay, this is something I can show to people, so I think you're entirely right. I will add, yes, Number Go Up is important. I had the conversation this morning. I think there's two things, Number Go Up is the most important.

In 2017, all my friends were like, "Hey Pete, how'd you get Bitcoin? How do I buy Ripple?" Blah, blah, blah. But it's not been so much recently, but the other thing is pain, pain is another. Pain is where they may ask the questions if we go through an inflationary event, if people aren't working, if they're having to go to the shops and suddenly they're realizing, "Shit, everything's more expensive, I can't really afford it," they might start asking the questions or they might look back and go, "Shit, people are talking about this." So I agree that pain is another point.

Heavily Armed Clown: Yeah, absolutely!

Peter McCormack: All right man. So come on, what happens now? Tell me exactly what is going to happen over the next year and how this is all going to play out month by month.

Heavily Armed Clown: Well, problem with our... I was going to say, the problem with today is that to answer that question depends entirely on what 12 people in a room in the Federal Reserve decide.

Peter McCormack: Yeah, well they've got to decide to try and keep Donald Trump as president right now, which could be a very tricky thing. But are you concerned or do you think we will ride this out, and how much does time play into this? So for example, I'm assume you're considering, "Okay, we've got a bump now for three, four months, perhaps we're back to work in four months. Shit, what happens if we're not back into work for a year?" Are you weighing up the time on this?

Heavily Armed Clown: Yeah, absolutely. I think I'm certain that we're already seeing it, but we're going to see more continued and accelerated erosion of civil liberty, something that we've been seeing for decades, and right now we're seeing accelerate. That has to happen, because when you come to rely on government systems more for your livelihoods, it's necessary.

It's just simply necessary that the government needs more power and that's one of the main arguments behind libertarians is that, if we're all agorists, if we're all self-sufficient, if we're all solving things at the lowest level, if we're all localists and maybe that isn't necessarily anarcho-capitalist directly, but it's certainly libertarian, it's certainly in line with what the constitutional authors in the United States had in mind, you don't want more government control. You need more freedom, so you can solve all of your problems at the local level.

But when we become dependent on the government for things like checks to feed our children, checks to pay our mortgage and bailouts of the banks so that our money is still there when we go to withdraw it and bail out of the corporation so that our job is still there, and so we keep our benefits and our pension plans. These things, they're just a part of the deal. If you're going to take that, you're going to get maybe mandatory curfews. You're going to get locked in your home for weeks at a time. You're going to get price controls on things at the grocery store, that's just the natural progression of the way these things go. So I think we're going to see more pain.

I think we're going to see more liquidation of the stock market. If you look at the stats, most retail investors, like the average American who just passively contributes to their 401k, they don't pay attention to where it goes, they don't pay attention to what it does, they haven't changed a thing. They've still been buying this market collapse all the way down and that's really bearish, because that means that people aren't making the decision to withdraw their capital from failing systems and that means that lots of wealth could get wiped out. If we see a cascade of debt default in the United States, and the Federal Reserve isn't able to stop it fast enough, we could see a complete liquidation of all unfunded liabilities.

You could see, like Ben and I were talking about how on MacroVoices, they're talking about how the Federal Reserve's balance sheet could easily climb to $50 trillion or a $100 trillion within the next year and we think that might be a little bit conservative, because if we have a complete collapse of, like a just complete cascade of debt default, we have unfunded liabilities in the hundreds of trillions and it goes all the way down to the money that you have in your bank account. The bank has somewhere around a hundred or a couple hundred billion dollars worth of money, which is enough for $250 per person in the United States.

That's how much cash reserves the banks have and I bet you right now it's even less, because people have been going in withdrawing their cash as a safety net. So if that collapses, that's an unfunded liability. If we start to see an increase on people drawing social benefits, like unemployment, social security, Medicare, those problems are also going to stress the system.

So those are unfunded liabilities and then you have mortgages that start to default and those are unfunded liabilities and it just goes on and on and on and on, and if the entire thing, just all the dominoes fall, you're going to see everything get nationalized. Right now we have the system that socializes losses and privatizes gains, and that might change. We might see a shift to everyone becomes a worker and the government gives you a job number, and that determines what job you go and do, and then you get a check from the government. That is not out of the question here. That might become inevitable.

Peter McCormack: Global communism.

Heavily Armed Clown: It could happen and that's really why Ben and I sound the alarm bells on these things all the time and we're constantly trying to wake people up to this reality. The world as you know it is changing very quickly.

Peter McCormack: So how are you preparing? I know that's a personal question and you can choose to ignore it, but how are you preparing for this?

Ben Prentice: Hold dollars and hold Bitcoin, hold the most liquid good. One of the things I've learned in my research about money, and he mentioned MacroVoices, I don't know if you've ever heard of it, but they had a series called the Euro Dollar...

Peter McCormack: Yeah of course.

Ben Prentice: Oh, okay. So have you heard of the Euro Dollar University? It's a whole series, it's like 18 hours long and it's insane. One of the things you learned about the banking system that really even started in the 1950s and 60s, that explained some of that inflation, is the bank's use of these assets as money and monetary instruments, that we use stocks and real estate as monetary instruments, the mortgage backed securities in 2008 should sound familiar, but stocks, that's how people save money. Everybody's savings is in the stock market, which in the past month has declined by 30% or 40%.

So everyone's lost all their savings. It's the problem of dollars and euros as being the most important part of money, most likely the store of value. That part of money is so broken that we need to use these other things as money. So for me, I try to hold the most liquid money and that's the best way that I can prepare, because holding a cash balance is hedging against uncertainty and that's what you saw the market actually do. They sold their stocks to get into the most liquid thing for short term things, because they didn't know what they would need to spend on.

Peter McCormack: Yeah, Raoul Pal the other day said to me, he said the way to prepare for this is to "Hold cash, but physical cash as well, hold gold and hold Bitcoin" and he said, "Cut your spend and prepare to hustle."

Ben Prentice: Yeah and before he was saying diamonds and bonds, and now he's saying dollars and Bitcoin and gold. So what does that tell you?

Peter McCormack: Yeah, it tells you a lot. Okay, it would be good to try and finish on some kind of positive outlook. So do either of you hold any optimism? I know you're obviously optimistic about Bitcoin, but do you hold any optimism generally over the economy or is it all baked into Bitcoin as a solution to this?

Ben Prentice: Just briefly, we still have all these buildings, and we still have all these people that want to work. We still have all the fields to till, and we still have people that are going to want things and I do think that things can return to normal. So yes, I am optimistic even in the medium term, but things are just tough right now. We got to hunker down and hopefully people will learn a little bit and educate themselves so that we can make good decisions.

Peter McCormack: What about you, Colin?

Heavily Armed Clown: I think that humanity has made tremendous progress. If you look back into time to when we were all running around in loincloths and fighting off packs of wolves and finding berries to eat, look at where we are today. When's the last time you had to worry about survival, Peter? Probably never in your life. For most of us, that's the case and life continues to get better on average for most people, as time goes on. Humans are a remarkable thing, they just are, they're ingenious, they're creative, they solve problems in ways that you could never expect, especially under pressure and we've come a long way just in the last 100 years. Rewind time and look at where we were.

People were dying from all kinds of different diseases a hundred years ago, that today we don't even think about, because they're not a problem anymore, like bacterial infections and polio and all this type of stuff that human ingenuity eradicated. Now we're seeing this growth in information spread, and that's a double edged sword, because a lot of that information is noise and it's becoming harder and harder to discern truth in the world. But at the same time, you're seeing people like us, people like Bitcoiners collaborate with ideas and collaborate on tech, like world changing technologies from all over the world in real time.

We don't know what the long-term effects of this information collaboration is on human progress and if history is any indication, at the very least we're going to be continuing to press forward, continuing to solve problems, because that's what humanity does. So I would say I am optimistic, but that doesn't mean that I don't think there might be potential consequences for what we've allowed to go on for so long in the short-term or in the mid-term. Like you said Peter, pain wakes people up, and we don't like pain. Humans don't like pain. They tend to do whatever they can to avoid pain. So my hope would be that a little bit of pain wakes enough people up to avoid a lot of pain.

Peter McCormack: Yeah, that's a solid answer to a great show. Look, I really appreciate this guys, you teaching me about things I don't know about and I don't understand. One of the funny things is the more interviews I do, they're all like one giant jigsaw puzzle, all these interviews and they all come together and you start to make the puzzle and you start to see how this all come together, so it's really useful for someone like me.

This is the kind of interview I can easily point my friends to and say, just go and listen to this one. Just go and listen to this, go and check this website out, just see what the fuck is going on. I think you're right about the memes, I think it's certainly right about Number Go Up, I'm a firm believer in pain too. But all right, just to close out, is there anything outside of the website you want to point people to, anything you're working on? How do people get hold of you? This is your bit to kind of shout out.

Ben Prentice: I'm not currently working on anything right now, so I definitely recommend checking out the website and then if you have any questions at all, reach out to me on Twitter. I'm at @mrcoolbp, I'm happy to chat anytime.

Heavily Armed Clown: Yeah, and likewise for me, reach out to me on Twitter @heavilyarmedc, I'm Heavily Armed Clown. I also run a podcast of my own, it's the Bitcoin Echo Chamber, bitcoinechochamber.com and tends to focus on a lot of the same things What Bitcoin Did does, but maybe it gets... Yeah that's it.

Peter McCormack: I know what you're about to say, you can say it!

Heavily Armed Clown: Oh no, I don't know. I really don't know what I was going to say, because, you get a lot better guests, so yeah, we probably get into the economics a little more, but you've had a lot better guests on your show than I have!

Peter McCormack: Yeah, I'm the tabloid version, you're the FT!

Heavily Armed Clown: I don't know about that man!

Peter McCormack: Listen guys, I massively appreciate you coming on, really enjoyed this, this is really awesome and best of luck to you both. If you ever want to come on again, you got any other stories you want to tell, please just reach out to me. Anything I can do for you, just let me know and I'm very grateful to have had your time today.

Ben Prentice: Thank you so much Peter!

Heavily Armed Clown: Thank you!