Speaker 0 00:00:00 Of the Atlas society asks. My name is Jennifer, an Angie Grossman. My friends know me as JAG. I am the CEO of the Atlas society. We are the leading nonprofit, introducing young people to the ideas of iron brand in fun, creative ways, like our graphic novels, animated videos, you know, the deal. Uh, today I am very excited, very proud to announce that we are joined by Michael sailor. Before I even begin to introduce Michael who really needs very little introduction. I wanna remind all of you who are watching us on zoom, Facebook, Instagram, Twitter, LinkedIn, or YouTube to use the comment section to type in your questions. Please keep them short. And we will get to as many of them as possible. Now, Michael sailor grew up on various air force bases, uh, and he was sent to, uh, join the air force as a pilot himself though, a misdiagnosis changed his trajectory, depriving the country of potentially, uh, a great pilot, but giving us someone, uh, who would later pilot micro strategy, a company he co co-founded after graduating from MIT to become one of the countries leading providers of enterprise software and mobile solutions.
Speaker 0 00:01:26 Uh, in 1912, he, sorry, 2 20 12 with the accelerated changes. It, it seems like it was that long ago. He published, uh, the mobile wave, which anticipated how mobile cloud and social networks would disrupt the status quo across most industrial and political domains. Uh, in 2009, he established the sailor foundation, which has donated millions to philanthropic causes, including children's health, refugee relief, education, environmental conservation, and support for the arts. Um, the foundation runs the sailor academy, which has provided free education to over 800,000 students more recently. Uh, he's become one of the most prominent advocates of Bitcoin. And, uh, he's also someone who's putting his money and his company, uh, his company's money where his mouth is with micro strategy now owning, uh, over two and a quarter billion dollars worth of Bitcoin who can correct me if I'm wrong, Michael. Uh, welcome again. Thank you so much for joining us.
Speaker 1 00:02:36 Yeah, thanks for having me, Jennifer.
Speaker 0 00:02:39 So, uh, you wrote mobile wave, how mobile intelligence will change everything, uh, nine, nine years ago in the context of a career that is not, uh, that's not a long time, but, you know, as I referenced in the context of mobile technology, um, it's certainly been, uh, more than enough time for all of the predictions that you, you made in the book to come true. So first, um, tell us what, what inspired you to, to write? So it's really an, an ambitious project. Um, a history of, of technology, not, not just a, uh, a prophecy, uh, and a manifesto on mobile computing.
Speaker 1 00:03:23 Um, you know, I wanted to go to Yale and study history, but I didn't have any money. So I went to MIT cuz I could get an air force scholarship and I studied, uh, spaceship design. But while I was there, I also still wanted to study history and MIT had a really good history of science program. So I studied the history of science at MIT and, and the history of science is the history of paradigm shifts. And, and uh, how does the society, how does the political system, how does the order of civilization get up ended by railroads and by nuclear power and by guns, germs and steel and computers and fire. Right. And, um, so when I left college, my first order of business was, uh, was to make a living. And so I started a company and I thought that would work for a while.
Speaker 1 00:04:19 And if it didn't work, I'd go back and get a PhD, uh, if it failed, but it didn't fail. So I never got the PhD, but I always had on my list that maybe I should write a book. And, uh, I was too busy during the internet revolution to write a book. And by about 2009, it was pretty clear to me that there was going to be something that was going to come after the internet wave. If I look at the waves of computing, there was, you know, there was the first wave, which was software running on mainframe computers and it was trapped in the back office and it revolutionized the back office counting function. And the second wave of computing was, um, uh, departmental computers like deck and, um, and uh, those, uh, seeped into factory floors and, uh, and became more broadly distributed throughout the department's corporations, not just accounting.
Speaker 1 00:05:16 The third wave of computing was the PC and that got on the desktop of white collar workers. And if you were an analyst, you work with a PC needed spreadsheeting and maybe a little bit of email. The fourth wave of computing was the internet and the internet allowed a software to reach a billion people. The fifth wave of computing was what happened when Steve jobs created the iPhone, the iPhone one was a toy. The iPhone two was a toy. The iPhone three, uh, was no longer a toy and you could run applications on it at an app store. And it became pretty clear that the iOS and Android we're going to be the platform that was going to deliver software outside of the white collar world, uh, to the next 5 billion people, maybe to everybody right now, I think we have 6 billion mobile devices or 8 billion people on the planet.
Speaker 1 00:06:13 I think it's only a matter of time before everybody above the age of three, I suppose, has a device. And, um, when I saw that coming, I saw there was business opportunity. And so I moved my own company into, into mobile intelligence and it was very successful for us. And then I, as a personal investor, I started investing and I invested, I bought a lot of apple stock and a lot of Facebook and a lot of Amazon and Google. And I thought this is a really big thing. And I thought I'd write a book. So the book, the mobile wave is it's a history of science, but, but it touches on the subject of what happens when software D materializes from solid state to liquid state, to vapor state. And it's all around us. Solid state software is software running on fixed computers and you have to go to it.
Speaker 1 00:07:09 And liquid software is when it's running on your laptop and you can move it, uh, from the office and home again. But vapor state software is software. That's in your clothing. It's software that you sleep with, you live with, you take it to the movie theater, you take it to dinner with you. And that's, that's a mobile device, right? And eventually a wearable device. And so I wrote the mobile wave and I said, well, what if software was something you slept with? And you wore, and you live with instead of a billion people that use software two hours a day. What if 5 billion people used software 16 hours a day? And what if the, what if the phone could chirp at you while you're sleeping? And, uh, and that's profound thing, cuz that changes the way you would think about software running in the world.
Speaker 1 00:08:02 And of course the mobile wave is all about when software leaps off the computer and it becomes fashion and it replaces your purse and it becomes jewelry and, and, and the mobile wave is the dematerialization of paper. When books go away, when libraries go away, when wallets go away, when, when phones and cameras go away, you know, when all these things go away, when, when eight track cassette tapes and VHS tapes and DVDs, when they all dematerialize, when maps dematerialize. And the idea that was fascinating to me was if ran McNally is a company worth $500 million because they publish a book which weighs 30 pounds, which has maps in it. That's the 20th century map. I can engineer a map if, if I think like an engineer and that map gets dematerialized, there's no 20 pounds. There's no cost to production. Now I can create a weightless map.
Speaker 1 00:09:06 I can give it to a billion people. It weighs nothing. And the variable cost is nothing. So giving away the map to a billion people takes us from publishing a maps that cost 30 bucks to free maps that are ad finance. And that's worth maybe a bit more, but I didn't just read science fiction when I was young. I read fantasy. Now I read every science fiction novel. I read all the grades. I read Robert Hyland stuff. Three times. I read Anne Rand's books, all the good ones. I think I they're all good. I read them all. Yeah. All good. <laugh> um, and uh, and then I played Dungeons and dragons and I read the fantasy stuff. The difference between fantasy and science fiction is you not if you know science fiction and you think like an engineer, I take a baseball, I throw it across the field. It goes 300 feet. And it drops if I take a baseball to outer space. And I'm a, and I understand engineering, the science fiction writers teach me. I can throw the baseball around the earth. It'll orbit the earth forever.
Speaker 1 00:10:09 But if I read fantasy, I realize I could throw the baseball and turn it into a dragon and burned down a city and it can fly back, become a hundred doves and convert themselves into like, uh, I don't know, chairs and six can be dwarves that will actually perform Shakespeare for me while you know, three of the dwarves feed me grapes and bring me beer. Okay. That's that's magic. And so oftentimes the people that didn't understand software are afraid of it. They just stuck with the map. You know, the book, the engineers converted the book into a wait list thing and gave it to a billion people. But the magicians created a magic map and a magic map goes onto a billion devices, keeps track of how fast they're moving and tells you how fast the traffic is. Moving down the map. Then it tells you how many people are in the restaurant.
Speaker 1 00:11:07 Then it tells you when you should go, then it tells you whether your friends liked the restaurant. Then it gives you directions. And that becomes Google maps. And that's not worth 500 million anymore. It's not even worth 5 billion anymore. It might be worth 50 billion. So the mobile wave is, is about thinking about the world, transforming it into software. That's like vapor making it worth a hundred times more with a combination of engineering, science fiction and fantasy ideas. And what would the world be like if every single thing transforms, if everything economically economics, entertainment, politics, retail, if at all transforms. And if you think right, you do Google maps. And if you think wrong, you put your Ram McNally map. You remember the early maps where they would just scan the map and they put it in and it was like a PDF file with 500 pages of maps and you could download the PDF and that business did not make it <laugh>. Right.
Speaker 0 00:12:13 Right,
Speaker 1 00:12:14 Right. So that that's the mobile wave. Um, and uh, I wrote the book and, and I, it gave me a chance to indulge my entry in the interest, in the history of technology. And, uh, look back 2000 years and look forward a few thousand years and then think about what kind of businesses would work and what kind of things were gonna fail. And, and, uh, it was a good time.
Speaker 0 00:12:40 So, uh, as I, I mentioned it it's really fascinating to, to read it nine, nine years later. Most of what you predicted in, uh, the book did come true, but in hindsight, you know, uh, was there anything that you feel you missed, uh, or how, how do you feel the book has held up? And is there another book in your future? I sure hope so.
Speaker 1 00:13:05 I look, the lesson of the book is if you know the future and you write the book, you know, you may make $50,000 in royalties, but if you know the future and you buy the stocks, you'll make hundreds of millions or billions of dollars. <laugh>. So the lesson is, if you do know the future, you need to figure out how to buy a piece of it because, you know, books are you're holding a book or the irony is of course, that everyone downloads these books outta the apple store, and you probably would be better off just to buy the apple stock. Um, it all came true. I
Speaker 0 00:13:38 Listen to the audible, which I, I have to recommend. It's also very good.
Speaker 1 00:13:42 The, the one thing that, um, I didn't have as much an appreciation for then that I understand now much clearer is, is although it's pretty clear, we're gonna dematerialize books and music and video, and we could dematerialize license and credit cards and, and keys to open doors. The part that, um, I didn't spend a lot of time focused on is the idea you could dematerialize property in cyber space. And, and that's what Bitcoin is. Bitcoin is digital property invented for the first time in the history of humanity. And we dematerialize the concept of property on a decentralized network, such that you could move digital property from device to device in a friction free fashion. And you can build a, a literal 21st century economy and cyberspace that is beyond the reach of a company, a CEO or a government. And so that, that idea that you needed, you needed a decentralized monetary network to create digital property.
Speaker 1 00:14:55 That, I mean, Satoshi just invented that around 2009, at the same time, the mobile wave was happening and it flickered. And now looking back on it, it's, it's the most disruptive force on the planet, in my opinion. And, uh, and that I didn't when I first saw it, I thought, oh, it's another thing going on. I knew, I knew the power appeared to peer. I got that. It was interesting, but I didn't see it as maybe the most important thing the human race has stumbled on in the 21st century, which is my view right now.
Speaker 0 00:15:32 So it seems like your thinking on, on Bitcoin, not just as a, as a currency, but perhaps more importantly as, as an asset, uh, came into a paradigm shift of, uh, if you will, during, um, the past year and a half, uh, the United States, government's response, responsive governments, uh, across the, the globe, um, led in many cases to a expansion of the, of the money supply, um, and concerns about inflation. And you also have some, um, sort of a different take on how to, to measure inflation and how it impacts different sets of people and, and how you need to think about the kinds of things that you would be consuming, or you would be investing in to, uh, to, to really understand, um, the, the true threat or the true impact of, um, of inflation. So, uh, can you share with us a little bit of, of your evolution and thinking about Bitcoin when it really came, uh, you had this epiphany that, that this was the, the apex of a few,
Speaker 1 00:16:51 Well, I mean, let start with, um, a general theme, uh, in the course of, of nature, studying the, studying the physical world, there's a tendency, uh, for things to collapse from a higher energy state to a lower energy state, like, uh, and chemistry, it's this crystallization, you know, when you have, uh, ice, you know, and, and, uh, it collapses, it gives off energy. You know, anything, if I'm, if I'm boiling the water, I've got steam and as it condenses, it gives off energy and it becomes ice. And it gives off more energy. When water's moving downhill, it's giving off, you know, it's, it's, uh, bleeding off potential energy, and you can capture and harness that energy. If you look at all the books behind you, the mobile wave and the success of the iPad is all about what if I took 10 billion books, dematerialize them digitally, put them into iBooks, or put them into Google books. And then I move the electrons around. I could give 5 billion people, a library of a million books each for the cost of electricity. So the modern, the modern environment is of dematerialized books is how you unleash and abundance.
Speaker 1 00:18:15 Andrew Carnegie. He, um, he took, took all of his money and he created libraries. And that was the best idea, put libraries everywhere in the world a hundred years ago. And then of course, libraries are obsolete. Uh, you know, the library in Washington, DC, you know what they did with the Carnegie library in DC, they turned into an apple store. Oh, okay. Talk about profound irony. Irony. Yes. Apple destroyed the library with the, with the iPad. Now there's no reason to have a library of books because you can have a billion books for free on the iPad. Um, and that is a lower energy state. How long, how much does it cost me to give every human being a rich person's library, right. A million dollars. Okay. Well, I'll give a million dollars worth of books to 5 billion people. What's that? Right? Well, the human race can't afford to do it that way.
Speaker 1 00:19:09 Well, what we do the same thing with Amazon music, how much I give you 50 million songs? How much is it gonna cost $9? Okay. All of those are de materializations that are, crystallizations where you have all of the property, the intellectual property, music books, collapsing onto a network. And that, uh, that DEMA same with Google maps, right? I mean, we gave everybody on earth. I mean, do you have any idea how many pages or in Google maps? Like if I gave you 500 million pages of maps, it wouldn't be what Google maps gives you. They have more, right? So we have this extraordinary amount of wealth created by the dematerialization of property. What is Bitcoin? Imagine that I took all the land in the world and I just collapsed it into cyberspace. Now, what if I took all the value? You have a billion dollars. You could buy 16 city blocks in New York city.
Speaker 1 00:20:12 What if you bought every city block and every city on earth, and then you bought every building on top of every block and not every, every collectible. What if you bought all the money and all the gold. And then what if you took all that stuff and you collapsed it onto a network and divided it by 21 million Bitcoin and made them all subdivided by a hundred million. So have 2.1 quadri and Satoshi. Then I put that on a network. I blew it into cyberspace and I ran it on hundred on thousands and thousands of decentralized nodes in places you can't even find so that no one person can stop it, no matter what, even if they tried, they couldn't stop it. I released it. I dematerialize the thing I, the blockchain for Bitcoin is DNA. I dematerialize in the cyberspace. I let it go. But now you don't actually need all the land.
Speaker 1 00:21:06 What, what if you didn't need the gold? What if, you know, we spend a hundred billion mining gold. And if the purpose of gold is to store property and I spend a hundred billion a year and I do it for a hundred years, right. I spent $10 trillion. What if I just gut it all back? So Bitcoin is this simple idea, digital property. Okay. Has it ever been done before? No Satoshi created the fir he was the first monetary engineer or she, or they were the first monetary engineer. Bitcoin is a monetary, uh, engineering feat. In fact, it's, um, it's a digital property network. And, um, the first one we ever got to work, we tried it dozens of times before they all failed. People have tried to create monetary networks afterwards. None of them have succeeded in displacing Bitcoin. Um, so what does this mean?
Speaker 1 00:22:10 Really? Because most people say it, but they don't think about what it means. Digital property. It means that I can slice up $387 worth of property, and I can give it to 8 billion people. Friction free at the speed of light and deposit it onto a mobile device. And maybe into their head, you can't do that with gold or silver, right? There's not enough ounces of gold to give everybody one ounce of gold. The markup would be 40%. It would cost you 40% more to ship the gold and take you eight weeks. And if you wanted to sell it, it cost you 30% to sell it. It's just not practical to, to dematerialize. Or in fact, gold is material property, right? I can't do it with cash. I can't do it with gold. I can't give everybody for you. Remember 40 acres in a mule. I mean, people came to America.
Speaker 1 00:23:04 Why for civil rights and property rights, they were really gonna get murdered because they wanted to, you know, the Protestants were murdering the Catholics in the north of Europe and the Catholics were murdering the Protestants in the south of Europe. And everybody was murdering the Quakers everywhere. And everybody's murdering everybody that didn't have the right religion. If they weren't, they all fled. They wanted to get away with their lives. And the second thing they wanted was land land was literally property, because now let's go back to Anne Rand. She said, without property rights, no other rights are possible. That's the quote, right? Most people don't get that. Most people think, you know, like we scrubbed prop land, you know, life, Liberty, and property. That's the phrase. We scrubbed that out and called it life, Liberty and pursuit of happiness. But there is no pursuit of happiness.
Speaker 1 00:23:57 If I strip you a property, what is property, metaphorically speaking? And what is money? Money is energy. Money is the apex energy of the human race. Money is monetary energy property. If there, if, if there is only energy and mass, you convert energy into matter, matter and matter back into energy property, therefore being the solid state form of energy. Um, once you understand it, that way you realize that every economy requires money to back haul the energy, uh, in order to balance, uh, the goods and services, you ship the other direction. So no economy is possible without, without strong money or, and no economy is pro possible without property rights. Bitcoin is digital property. Bitcoin is the first time in the history of the human race. You can give property rights to 8 billion people. Now I just put a period on it. This is the first time in the history of man.
Speaker 1 00:24:59 We have a technology that allows us to grant unfettered, property rights to 8 billion people. There's nothing. The closest thing to that was the dream of gold, but gold doesn't work. It's not practical to give gold to 8 billion people. You can't run a 21st century economy on gold. And I could just shoot you in the head and take your gold. The gold is, is, has, has, has invited violence since the beginning of time. And the history of, of humanity is the history of people, murdering people to take their gold, which is the same as what, what else can I do? I give you a farm. Okay. I murder you and I take your farm. It happened in Zimbabwe. It's happened throughout history. If you have money, whether it's a dollar or a hundred dollars, a hundred thousand dollars, a million dollars, a billion dollars, and you wanna, you wanna preserve your property.
Speaker 1 00:25:52 Your choices are you buy land in California. The governor of California can seize it, tax it, uh, take a, take it via right of imminent domain. And if you get driven out of the country, then you lose it. Right? The, the Germans in 1930s were able to murder the Jews because they couldn't get their property outta the country. You can't get your goal through the airport. You can't get your land. You can't move a building. You know, you can't, you can't move stocks. If you own a billion dollars of apple shares, you can't move them. There is no other property that, that we have in this world that you can take personal self custody of. And so the real power of Bitcoin is this idea that, that a corporation or an individual could take self custody of their own property. And that is, that is critical to sovereignty and freedom and Liberty and Satoshi, whoever he, she, they were came up with a technology network, a decentralized technology network based upon cryptography software engineering, borrowing some themes that pop up over and over again in electro engineering, servo mechanisms, you know, first order, negative feedback loops.
Speaker 1 00:27:14 They, they created that engineering system and gave as a gift to humanity, a monetary energy network. And what that means is we have, for the first time, the ability to collect energy store energy and channel energy through time and space with OUS power loss, okay, this is metaphorically speaking. This is a dam that's captured the potential energy of gravity in the form of a, of a liquid water. And you're gonna use it to generate electricity or it's compressed air, or it's running water. You get a water tower and you're using a water tower, generate water pressure, or an Aqua duck, you know, or it's fire, which is just harnessing, uh, chemical energy or it's electricity. And I'm har harnessing electricity. We have harnessed monetary energy on a network. Uh, and that I think is a, it's just as profound as electricity or fire, right. Is very poorly understood.
Speaker 1 00:28:23 And why do you discover it? The reason I discovered it is, is, is cuz the money got broken last year. I mean, the money's always been broken. The money, the money's, the history of humanity is empires creating a strong currency with integrity and durability. Like the Lidian striking a coin, the Romans striking a coin, the British striking a coin. Then it gets debased as the government becomes corrupt. As the money gets devalued, it gets counterfeited. Eventually the, the currency is debased. The money breaks. The economy goes into hyperinflation. The economy collapses, the empire falls, another empire rises. They, uh, they replaced the old broken currency with a new currency. It goes on thousands of times, thousands and thousands of thousands of times. The last time it broke is 1971. What happened was, um, you know, the us was on a gold reserve standard and uh, based on Bretton woods and then the us defaulted on that standard.
Speaker 1 00:29:33 And they decided to go off the gold standard. Every other country was tethered to the dollar when the us defaulted on gold and they went, uh, they went to a more inflationary environment. They started inflating to currency seven to 8% a year. So the currency started collapsing at 8% a year. But you know, you can almost not notice 8% a year. Uh, if you're getting paid 5% of your interest, maybe you might get through it. Mm-hmm <affirmative>. But, um, the, if you think about money, money is, uh, is divided in a medium of exchange in a store of value. Uh, the medium of exchange is currency. Like the dollar I used to buy coffee, the store of value. Once upon a time mythically, it was gold. I buy go because gold is gonna store value and you can't debase it so fast then after we gave up on gold, then the store of value became, uh, sovereign debt.
Speaker 1 00:30:28 Bonds issued by governments when bonds issued by governments yielded 8% in OAL Volker, back in 1980, raised the short term interest rates, 18%, 19%. Um, so if you're getting paid 8%, 12% interest on a bond, then that's a store of value. Then, uh, we went to ETFs and stocks, the Vanguard 500 and we gave up on the money as a store of value or the currency. And we used equity. And, uh, you bought the S and P 500 index, and that's been the status quo for last decade. The S and P's generating 10% return. The money's losing 7% of its value a year. You're getting a net two or 3% gain. And you're taking the risk of owning equity, which means you're getting a net, nothing gain, but you're holding your value in March of 2020, the monetary inflation rate tripled. And we went from a 7% inflation rate to a 21% inflation rate.
Speaker 1 00:31:25 And, uh, the S and P in the last 12 months is up 32%. The NASDAQ's up 40 something percent. If you had money in a bank, you lost 32% of your purchasing power against equity. Uh, the average single family home in America, it was up 24%. According to the front page story in the New York in the Washington, no, the wall street journal yesterday, 24% inflation rate in homes in 12 months, if you were holding cash, it got 24% more expensive in 12 months. If your salary went up by more than 24%, you broke. Even if you, if you owned assets and you did nothing for the year, and you laid on your floaty in the Hamptons, you had the best year of your career doing nothing because the money collapsed and the assets went up. If you worked on main street in a job, and you worked 32% harder, you worked 32% harder to get nothing.
Speaker 1 00:32:21 Everything's, you know, you just kept up. So I would say I lost my faith in the money in March. Like it kind of broke my faith in the money, and it caused me to go back and look at first principles. And I started studying Austrian economics. And what I realized is the inflation rate is not 2%. CPI is a lie. CPI is just a, is a, a crippled, uh, misleading metric. And it makes me think of like, you know, there's a famous statement. You know, it's attributed alternately to Ogilvy of Ogilvy Mather, and also to Joseph. Go's the propaganda minister of the Nazi party. And the statement is all of our focus groups show us. We can't tell people what to think, but we can tell them what to think about. Okay. So I can't convince you of something, but if I get you thinking about CPI, CPI, we all study CPI and CPIs, consumer price inflation.
Speaker 1 00:33:23 And as long as I define what it is, then I can tell you that the inflation rate is 2% or three or 4 0 1, and then there's no problem. Well, the truth is inflation was never CPI. No one thinks from first principles, if you thought from first principles, if you're an engineer, you'd realize inflation is the rate at which prices change for everything we wanna buy in the civilization. And so if you calculate, uh, a vector, if you calculate the thousand things you might buy and you calculate the price of them this year versus the price of them last year, then you realize that the prices are changing at different rates for different things. And then you realize that they're changing at different rates in New York city than they are in Kansas. And then you realize they're changing at different rates every month. And then you realize that the average person wants different things.
Speaker 1 00:34:13 Some people want a house in the suburbs and send their kids to Ivy league schools. And some people wanna sleep in their parents' basement and watch Netflix. And there's a different inflation rate for the former than the latter. And if you just wanna be rich, by the way, a news flash, there's a different inflation rate. If you wanna stay rich or be rich, it's different than watching Netflix and your parents' basement, the inflation rate, if you wanna be rich or stay rich was 32% this year. That's the rate at which the S and P 500 went up. So inflation's a vector is not a scaler. When people talk about inflation equals CPI, they're encouraging you to think about the world in, in terms of arithmetic with the scaler. And of course the only reason they can do this, cuz politicians and economics are not engineers because there's nothing that's ever been engineered in the history of humanity that was done properly with arithmetic, like Newton gave us the calculus of variations.
Speaker 1 00:35:11 You can't build a building, you can't build a ship, you can't build a plane. You can't build a nuclear reactor. You certainly can't build an electric power grid or a computer with arithmetic and scalers. And you can't do any kind of fluid dynamics without doing vector calculus. So if you wanted to describe the way that the economy was impacted by the printing of two or $3 trillion of currency, you can't describe it with one number. And of course, it's pretty obvious. For example, the inflation rate of cruise lines and movie tickets was not high in the three months after the lockdown, because it was illegal to take cruises and go to movies. The inflation rate of cryptocurrency or, or stocks you could trade on Robinhood was quite high because everyone had money jammed in their pocket and they could take their phone and they could buy a stock, but they could buy a cryptocurrency.
Speaker 1 00:36:09 So the velocity of all these things are different. What, what I realized in the last 12 months is all of the conventional thinking about, uh, economics and monetary theory and investment theory, uh, was, um, Pally, biased and just wrong. And, uh, and most conventional wisdom was based on arithmetic and it was going, it was leading people to a horrific outcome and it, it shook me outta my liturgy. And that's why I started on this search mad search for a store of value, for a way to, uh, to protect my company from the infl, the hyperinflation that we have, and we are going to keep having, and I discovered Bitcoin because my, you know, my mind was opened.
Speaker 0 00:37:07 So you have told a, uh, story that dramatically illustrates, uh, the insecurity of cash assets, I suppose, other kinds of assets as well to government confiscation. And that's something that happened to you in Argentina, which I found, uh, interesting in part, because of our large, the Atlas society's large presence in Latin America, specifically in Argentina, you had a million dollars seized by the Argentine, uh, government, what happened.
Speaker 1 00:37:41 So this is a good story. And I think it's illustrative because it, it, it also explains what's going on everywhere else in the world. Right now, it just happened a month ago in Lebanon. And here's what happened. We have a company in Argentina where the largest business intelligence software vendor in Argentina, very successful, made a lot of money. We sell software to Argentine companies. We would generate pesos. There was a time Jennifer, when the peso was one peso to the dollar. I remember the currencies were pegged. Uh, the Argentine currency was pegged to the dollar that was strong money. If you run a country with a conservative, uh, monetary policy, you would peg your currency to the dollar. The Drom and Emirates is pegged to the dollar today. The Saudi currency is to the dollar. Most, most strong countries have a currency, which is plus, or minus 10% off the dollar.
Speaker 1 00:38:41 They try to keep it that way. Um, so Argentine had that conservative policy. So we had, we had swept our profits into the bank and we had, and then the Argentines passed a law and the first law was capital controls. You have no freedom to repatriate your money. You can't leave the country with it. Okay. Well, that's your first loss of freedom. Yeah, you can, you can trickle it out, but we, we, so we had a million dollars. We couldn't bring back to the us. So what do you do? Well, we'll put it in American bank. So we put it in the bank of America in bonus airs. Okay. But we don't wanna keep it in pesos because the peso might devalue versus the dollar and we're in American company and we're publicly traded. So we'll convert it to us. Dollars us dollar accounts in the peso, all sorry, us dollar accounts and bank of America in Argentina.
Speaker 1 00:39:37 All good. Then we read about problems. The Argentine government's spending more than they're generating. They've an economic issue. Uh, are they going to UNP against the dollar? Maybe they're going to devalue the currency. Well, so we don't wanna payso they might devalue the currency. Currency is weakening. So what happened? Well, um, the government in the first day passed a law, making it illegal to keep foreign currency Val balances and in banks in the country. So you had to convert all your dollars back into pesos. And the second day they devalued the Paso 10 to one. And so by the third day with no due process, we had a hundred thousand dollars worth of pesos. Still locked up in Argentina, still losing five or 10% of its value a year. They just took the money. Wow. Okay. And, and they did it to 50 million people overnight.
Speaker 1 00:40:43 So a lot of times people think, well, couldn't, they just do that with Bitcoin or do that with anything else? And the answer is, well, no, the problem is if you have to store your property in currency, and, and if you ha, and if your local currency won't hold its value, you need to store your property in a foreign currency. But if the government makes it, makes it illegal to, and you can't get access to a foreign currency, like I can't get a million dollars worth of dollars. Like it couldn't take a million dollars out of the bank and put it into a safe. So I have to keep it in the, in, into foreign currency balances in the bank. So there's only five banks. So one bureaucrat can simply send a memo of fax to the five banks saying convert everybody's balances to pesos the pesos now worth one 10th, as much, all your money's gone.
Speaker 1 00:41:34 That just happened in Lebanon. In Lebanon. They froze everybody's bank accounts. And they devalued the Lebanese pound from 1500 to the dollar, to 7,500 to the dollar. And then they froze the us dollar accounts. And then they devalued further. So if you were actually Lebanese, you woke up one day and you lost 80% of your life savings. And then if you were smart enough to convert your money into dollars, the government sees them, they don't call it season. They call it, we froze your assets. And now they're negotiating with the IMF to decide whether they will give the people back $300 worth of their dollars or not. And so in essence, the government just steals all your money. Okay. So what could you have done about it? Like literally I had this con I lost the money in Argentina and I only lost money. Uh, two places, I, I had it seized by the government Argentina, and then I had another million dollars in Brazil and the, and the CEO of the company stole all the money and I lost the million dollars in Brazil.
Speaker 1 00:42:36 And the message that I got. One, the lesson that I learned was you can't trust companies, you can't trust CEOs and you can't trust governments with your property. So, uh, you know, by the way, there's something called the blue dollar. And if you go and you Google blue dollar, you'll find that's the black market rate of the dollar in Argentina. And when you watch it, it's gonna be blood curdling. You're gonna see that the dollar, the peso went from one peso to the dollar to three pesos, to the dollar. I encourage everybody on this, on this S caster. Livecast right now go to the web Google blue dollar, go look at it. The peso was three and a half payos to the dollar 15 years ago. And then it just slid to 10 payos to the dollar 20 pesos to the dollar 40 pesos to the dollar 80 pesos to the dollar.
Speaker 1 00:43:27 The, the rate right now is 155 pesos to the dollar. So if you were holding your money in Argentina for 20 years, you're gonna lose 99.5% of your money it's going away. Certainly. So I saw that happening. And when the payso was like 20 pesos dollars, we're still in Argentina. You know, my lawyers came and they said, you know, we think they're gonna do this again. The, the pesos weakening, I'm like, it's 20 pesos to the dollar. I know it's going to a hundred pesos to the dollar. I said, can you get the money out of the country? They said, um, this is 2018. Maybe they said, well, no, they won't let us repatriate the capital. I said, can we buy gold and bring the gold outta country? No, there's a law against carrying gold outta the country. I said, well, can we just buy something?
Speaker 1 00:44:24 You know, how about this? I, okay. I, I literally said this, Jennifer. I said, can we buy a yacht in Argentina and sailed the boat to the Caribbean and sell it? And I had literally like my finance people and my lawyer sitting in my office and they looked at me like I lost my mind. And I was like, I haven't lost my mind. I'm serious. Buy a boat, sail it, because at least the boat is floating property or liquid capital. And so the boat is like the last best idea if you can't buy Bitcoin. But if I'd known about Bitcoin, I would've bought Bitcoin. And the way that works is you buy the Bitcoin, take personal custody of your keys. If 50 million people in Argentina had Bitcoin, the government would have to arrest all 50 million people, put them in a cell and sweat them for 90 days to get the keys out of them.
Speaker 1 00:45:25 So it would be, you go figure, right? I mean, how, how hard is it to arrest 50 million people to seize their property? I mean, it's something like 10 billion times harder than sending an email and copying five bankers. And so Bitcoin is property rights. It's the apex property rights of the human race. There is no higher form of property, maybe in the future. We'll get to the point where we could graft it into your DNA. And you could think it telepathically from person to person that would be better. But short of that, it's a million times better than the next best thing. And, and the function of it is to allow human beings to take ownership of their life energy. And, uh, I'll give you one more metaphor, cuz I think it's helpful. A type one diabetic cannot form fat because they do not have insulin.
Speaker 1 00:46:25 And so if I strip you of insulin and you can't form fat, you cannot store organic energy on your frame. Then another phrase for organic energy is fat fat. ISGA an organic battery. So when someone's a type one diabetic, they can eat all day long and they're going to star the death. If I take your insulin away from you, it's a death sentence, removing someone's property rights. When I strip you a property rights is a death sentence economically. I'm literally saying you cannot store economic energy. If you're forced to store, uh, to make your life savings in the local currency of Zimbabwe and they're, and they're stealing 90% of it a year and it could be worse than that. What you've really got is a political system, which has turned everybody into a type one diabetic. And it's just a question of how you're gonna die in the two in the two weeks after you lose your job, you're just going to start to starve to death or freeze to death.
Speaker 1 00:47:34 That's why property rights are, are critical. Being able to store monetary energy over long periods of time is no different than being able to store fat. It's pretty much hopeless for the human race. If you can't convey property rights to everybody on the planet. And it's no, it's, it's no coincidence that in Africa and south America and other parts of the world where they have weak property rights and weak currencies, they have weak economies because there's no way for the economy be to function when they, uh, they don't have the system to back haul the economic energy to make the civilization work properly.
Speaker 0 00:48:17 So I'm gonna get in trouble here with all of the people watching us, because we have like hundreds of questions that are coming in and
Speaker 1 00:48:26 Speed rounds. I'll go through 'em as fast as
Speaker 0 00:48:28 You want. Okay. Got about 10, 10 minutes left of your time. And again, thank you for being so generous with your time. Uh, mark Goodkin can the government outlaw or at least control cryptocurrency,
Speaker 1 00:48:41 Can they outlaw cryptocurrency? Um, they can't stop people from holding it. Um, pro it's a question of property rights. As far as I know everyone in the world, people have the, have the ability with, with just a few exceptions to own own Bitcoin as property, even in China, they have to go to own Bitcoin as property, um, and places where they have capital controls like China as capital controls, they try to keep people from moving the property outside of the country or moving it, um, moving it, uh, into a different currency because they don't want billions of dollars of capital flow in a different currency. Right? And so you will see some governments that will start to try to control, uh, your ability to move it around. But generally in countries where they have property rights, which is a us Western Europe, if you can own gold and own equity and own bonds, you'll be able to own Bitcoin and own crypto.
Speaker 0 00:49:37 Okay. Question from Mike, did you read I Rams Atlas? If yes. When
Speaker 1 00:49:45 I read it, uh, when I graduated from MIT, uh, well I was driving across California. It was a very gripping book, most, a very powerful experience. So I guess I was 21 or 22, 22 or 21
Speaker 0 00:49:58 Time, time to have another question here, uh, from Germany. How do you deal with all of the stupidity of the mainstream? Not knowing is you do have continue kinda a calm, you know, demeanor. I dunno if that's your,
Speaker 1 00:50:21 You know, um,
Speaker 1 00:50:24 Because I've, I've been the CEO of a company for 30 years, I learned we have values and one of our values is be cheerful. And what I learned is nothing will be accomplished with anybody unless you're cheerful. So I try to approach my interactions in a cheerful, constructive fashion. Don't say anything. If it's not constructive, don't engage. If you're not cheerful. If, if you run into toxic trolls on Twitter, don't return toxicity with toxicity, you're never gonna convince anybody. And even if someone is toxic and brutally mean you're better to respond cheerfully and constructively, you may not convert them over, but you'll convert their followers or some portion of them over. And I, you know, I think that, uh, if, if you consider we, if we arrived to the world with electricity and we told everybody on the planet that had not used electricity, that we thought electricity was a big deal in year one, I would imagine that most P politicians and authority figures and writers would not understand it and think it's something of the devil or spirits or dangerous or crazy or witchcraft, you know, it might take years and years before they start to embrace it.
Speaker 1 00:51:39 And they decide that electricity is a, is a good thing for the civilization. You just gotta be patient and you just gotta educate,
Speaker 0 00:51:48 Right. Um, let, well, let's put in the, in our chat here, the link from, uh, Michael's debate that he did on gold versus Bitcoin. And I, I thought it was a very informative debate, but just also, uh, your adversary or, uh, the person arguing for gold was, um, was getting very, very exercised and kind of the more exercised he got, the calmer calmer you got. And I, I just thought that even though I was also intellectually, um, convinced by your arguments, uh, I agree with you, uh, arguing from a exercise, uh, demeanor never, never helps. Okay. Andreas Hoffner. Hello, Mike. My question is what is the bigger bet spending a hundred K on a college degree, um, or, uh, and studying for a bachelor for four years or spending a hundred K on Bitcoin and waiting four years.
Speaker 1 00:52:46 I think it'd be smarter to buy the Bitcoin for a hundred K because you've got all of humanity working to make it more valuable. Um, look, I went to MIT and in the first three weeks, the cost of MIT, uh, impoverished my family and sucked our life savings. The, the sum total of everything we had accumulated in 250 years in America. <laugh> okay. And now you can go on sailor.org and you can see the same lectures I saw at MIT for zero. So if what you're wanting to do is get an education. You can get a better education for free on the internet, on YouTube and spend not a nickel, right? Uh, and if I had a hundred thousand or $200,000, I would buy the Bitcoin, cuz it's been going up 115, 120% a year for the last decade and every single intelligent person on earth that understands it is doing everything they can to make it more valuable.
Speaker 1 00:53:44 So, yeah, it's a much better investment in general. I, but, but it's, it's twofold one. I think if you don't, if you don't have assets, if you don't have high quality assets that are gonna appreciate faster than the rate at which the money is collapsing, then life is hopeless. Okay. That's one, you have to get your hands on assets. And a it's like you're in the ocean. The asset is a sale. Put the sale up and the, let the wind blow you. You cannot row across the Atlantic in a row boat. You have to have technology helping you. So that's the number one issue. My number two point is just like libraries are obsolete and, and record collections are obsolete. You're a fool to spend a million on a library. You're a fool to spend a million dollars on records. You're a fool to spend a million dollars on an education.
Speaker 1 00:54:38 If you don't have the million dollars, if your parents are rich, then have added. But if you don't have the money, you know, uh, we are, dematerializing all that. You're a fool to buy a million dollars of maps. The point is get an iPad, download everything. You know, you know, the there's a hundred thousand people that can teach you calculus in a mediocre fashion and you can spend 25,000 a year for it. Or you can just go to the single best teacher or go listen to, you know, Richard Fineman, talk to you about physics. Why don't you just go to the best smartest person in the world? It's free, it's all free. So if you're not getting an education it's cuz you have no ambition. It's not cuz you don't have the money. Money, money, property should be used to secure the Fu your future and your family's future. If you have it, don't overpay for stuff.
Speaker 0 00:55:31 Mm-hmm <affirmative> well, we're, we've got about four minutes left, lot of good questions. We didn't get to them. Um, including some about differences you see between Bitcoin, Ethereum, different kinds of currency, but, but it generally it, uh, reading of your, your previous, uh, takes on this is that you believe that Bitcoin is, is the most. I'm
Speaker 1 00:55:54 Give you a quick market segment very quickly. There are three types of digital assets, digital property. Bitcoin is the apex property. If you wanted to own 16 blocks of cyber Manhattan for the next thousand years by 16 Bitcoin digital currency, tether and die and DM and CBDC, they're all currencies. They're a medium exchange, not a good investment. Don't hold them for a hundred years. You'll lose 99% of your money, buy coffee with them. Them they're gonna be regulated like currencies. The third is digital applications, Ethereum, all the smart contracts platforms. They're trying to dematerialize either the buildings in cyber Manhattan or the companies in the buildings. They wanna dematerialize stock exchanges, banks and insurance companies. So if you're an investor and you like the idea of owning a block south of central park for the next 300 years and keeping into your family, buy a Bitcoin, if you're an investor and you like the idea of building a building on central park, then get into defi because they're all about platforms.
Speaker 1 00:57:05 And just keep in mind. The building's probably good for 50 years, not 500 years. And if you want, if you really wanna launch a bar or a restaurant or a fast food chain or a fashion, you know, magazine, then you're like some kind of app, right? Maybe you'll only last five years. You'll be very famous. It's very cool. Maybe it'll work, but, but they're all different risk profiles. You know, if you just wanna own something for a thousand years, it's property, you know, the other things they're more complicated, maybe you'll get, maybe you'll have higher upside or downside. Maybe you'll lose everything. It's venture capital like launching a Instagram competitor, you know, maybe you'll be Bumble, you know, and maybe you won't. Right. How about
Speaker 0 00:57:53 Some, could you give us just a minute, Michael, on sailor academy, uh, the, the nonprofit initiative that, that you launched in 2008?
Speaker 1 00:58:03 Yeah. The idea is just give everybody a free college education. And so we uploaded college courses. We give you certificates, we've got cross accreditations with 25 universities now. Um, we're about to become a university in the next few years. Then we'll give our own degree. Um, Isaac Newton said everything there was to be said about math 99.9, 9% of humanity. Doesn't know more. Why is there a copyright on a math textbook? And why should you have to pay money to learn math? You don't need bricks and mortar and you don't need to spend a quarter million dollars in order to get a math degree. You just need to learn math. So watch the videos on YouTube, read the books, take the test, you know, and, and then you know it, so that's what we're trying to do there. Um, and it's been growing. I mean the, the lockdowns and COVID was a big accelerator for us.
Speaker 1 00:58:55 And, uh, you know, I'm anything that can be, if we're gonna advance the human race. I think there's two things to be done. One, give 8 billion people, property rights, and you're not gonna do it with gold because it's not technology. If you're gonna give 8 billion people, music or books or education, you're gonna have to do it with software that runs on computers. And, uh, and so the second big idea is give 8 billion people a PhD. You know, if we wanna advance the civilization, you need a billion people with a PhD and a PhD costs $2 million. And I know for a fact that someone making $382 a year in Africa is not gonna pay for that PhD, not conventionally. So dematerialize those things give them away freely, and then you should be able to catalyze human flourishing and, and raise the civilization just like electricity, right?
Speaker 1 00:59:49 People take it for granted. But think about having 250 horsepower on an appliance in your kitchen, and then try to imagine how many people in the civilization had 250 horses a thousand years ago. And, and then you realize the difference, right? The average lower class person has more power than the most powerful person on earth did a thousand years ago. That's technology. So that that's my belief, you know, make the world better with technology. That's the whole method to the madness here. That's why Bitcoin makes sense because it's hope and every other, all the anti Bitcoin rhetoric, it's people in the 20th, 20th century and their message is just, I don't understand it. I'm afraid of it. I don't like it, but let's keep doing things. The old fashioned way and the old fashioned way is mules and oxcarts, and there's no way we're gonna create a great civilization with mules and oxcarts and wooden ships and an Abacus. So we just have to move forward, even if it isn't new and scary and different.
Speaker 0 01:00:58 And sometimes it is new and scary and different. We need a leader to help, uh, lead and go out in front and also break it down for us in ways that, uh, that we can understand rich with metaphor based on historical example and from somebody, uh, who's spent 30 years of his career in, uh, the, the digital technology space. So for that, Michael, we, uh, are very grateful. We're very grateful for the generosity, uh, of what you've done, not just with sale or academy, but, uh, with the time that, that you are giving to helping to, um, open people's eyes and, and give them a greater understanding of, of property rights and, uh, and earning, uh, and, and finding a way to, to store Val value. So we're very grateful. Thank you so much.
Speaker 1 01:01:53 Yeah. Thanks for having me, Jennifer. If anybody wants to follow me, you can just find me on Twitter, Michael underscore sailor. And if you wanna know more about Bitcoin, Bitcoin is hope. Just remember that and go to hope.com H O P E. And you will find all things Bitcoin on hope.com and I wish you all the best.
Speaker 0 01:02:11 Thank you. And maybe folks who might even be able to, uh, to encourage Michael to come and join us at our gala. Uh, tickets are available November 4th here in Malibu, California. We're honoring Peter teal. Uh, who'll be introduced by Palmer lucky. If you enjoyed this webinar, uh, then please tune in next week. We we're gonna be joined by foster. And of course the out society is also a nonprofit. So if you, um, enjoying our work and
Speaker 2 01:02:53 <affirmative>.