143. Macro Myths w/ Rowais Hanna

Rowais Hanna operates Coinbits' Twitter account, and has used it to publish fascinating in-depth investigations into the common myths of modern macroeconomics. He joins us to discuss the Consumer Price Index, how it is calculated, and the endless justifications used to adjust it. We also discuss the mythical origins of the 2% inflation target, and the trade-off between unemployment and inflation, and why supposedly empirical economists refuse to ever admit it is invalid. Rowais also discusses why he views bitcoin as the only way out of this mess, and how Coinbits helps onboard newcomers to bitcoin in a smooth and easy-to-understand way. We conclude with a discussion of Rowais' thoughts on bitcoin through a Biblical lens.
🔗👇🏼 Links
Rent Equivalence Fiat-splanation: www.bls.gov/opub/mlr/1982/06/...
CPI "misconception" response from BLS: www.bls.gov/cpi/factsheets/co...
NY Fed Research connecting credit expansion and tuition rising: www.newyorkfed.org/medialibra...
Rowais' essay on Bitcoin through a Biblical Lens: / bitcoin-is-biblical
The Origins of 2 Percent Inflation Target - Mises.org:
mises.org/power-market/origin...
Rowais' tweet about being at the Egyptian Central Bank: CoinbitsApp/statu...
Sheikh Imam, The Ballad of Beans and Meat:
swedenburg.blogspot.com/2011/1...
Coinbits blog:
coinbits.app/blog
The philips curve is actually a blob: / 1593434145946046466
Coinbits ultimate Thread: CoinbitsApp/statu...
🔗👇🏼 Sponsors
CrowdHealth - get the tools you need to affordably break free from the insurance system - www.joincrowdhealth.com/
Coinbits - get better at money with bitcoin - coinbits.app/
CoinKite - Bitcoin Security and Fun Devices - coinkite.shop/bitcoinstandard
Bitwage - get paid in Bitcoin regardless who you work for - bit.ly/3FWDYtA
-----------------------------------------------------------------------
Saifedean’s first book, The Bitcoin Standard:
saifedean.com/thebitcoinstandard
Saifedean’s second book, The Fiat Standard:
saifedean.com/thefiatstandard
Enjoyed this episode? You can take part in podcast seminars, access Saifedean’s courses and read chapters of his forthcoming books by becoming a Saifedean.com member. Find out more here:
saifedean.com/membership/

[@9trogenta13]

I love how Saifedean finds all these amazing people to interview him.

[@beefcurtains3095]

Very true. I love Safe, but he really does talk more than his guests!

[@PenguinWhispererThe]

@@beefcurtains3095 it's because he's so full of himself :)

[@PenguinWhispererThe]

came here to say this :D if you're so full of yourself like Saife

[@Nasumbati]

These two together make a great duo. Brilliant

[@felipemillani8468]

Thx Saifedean greetings from Brazil.

[@vpnconsult]

Good side of the story which we don't hear a lot! Thank you.

[@IncredibleTOPCast]

"2% historically is the inflation rate of the gold supply." Glad I'm not the only person who's noticed this.

[@patrickbateman783]

Great discussion.

[@imminentsunset]

Awesome talk! Thanks for sharing your knowledge

[@Blockchain_bingo]

Inflation is a slice of an exponential figure we know that human beings have difficulty comprehending exponentially Allotey the metric is designed in this regard on purpose

[@paulheege12]

1:39:45 Why does Rowais argue that production doesn’t increase as a result of increased consumption? The price of every good with a normal demand curve is going to increase with increased consumption. The production of every good (without perfect inelasticity of supply like bitcoin) is going to increase with increased prices. What am I missing Excellent episode btw

[@CoinbitsApp]

The point I was looking to make is more about the attempt at artificial increase of consumption (via money printing) which doesn’t (necessarily) increase production. For example: People: “we need more housing” Govt: “ok, we don’t produce houses but we will stimulate their production by increasing the money supply”. This won’t increase the housing supply available. Because you still have to go and produce those houses. You must still produce first before you consume; JUST increasing consumption (via the increase of the money supply) ≠ increased production. Does this clarify?

[@paulheege12]

I believe in this case, the production in the real estate market would increase following increased prices as a result of increased demand. This is assuming the money supply is increased by artificial lowering of interest rates. But as real estate can’t be produced at the rate that credit for real estate is given out, the supply grows slower than the demand grows and real estate prices rise. Real estate supply grows slowly because of its low elasticity of supply. The low elasticity of supply is of course a result of goverment intervention limiting the production of real estate. Consumer good which have a normal elasticity of supply will react with symmetric increase of supply after price increase due to demand increasing. Of course the wealth destruction, increased goverment intervention, increased time preference and misallocation of capital through devaluation of the currency as a result of the monetary policy far outweigh the demand and production increases. There also is the phenomen that higher time preference and lower ?savings rate? (sparquote in german) leads to less innovation and thereby lower production standing in opposition to supposed production increase. I agree that monetary policy only harms the economy. The argument that lowering interest rates increases production does still apply somewhat. It is just way more nuanced and the increase in production fades in comparison to the other consequences.

[@johnnymidas5879]

THANKS AGAIN SAIF, AND GREETINGS FROM PALM DESERT CALIFORNIA BROTHER 🏜

[@Oldyeller562]

Nice more socal bitcoiners!

[@ayushmansharma4973]

Dear Saif could you explain how a Bitcoin economy would fight against the problem of monetary deflation. How would productivity and work innovations be affected in an economy where the money is more valuable than goods?

[@theguy9067]

I'd be interested in this as well. If your savings unit keeps increasing in value it doesn't incentivize people to work

[@paralyzdtheory]

We live in an economy with artificially low interest rates, but in the laws of economics, it would exist in an environment with a surplus of people saving. It incentivizes people to work, bc if they put in more effort/work into the economy, they can beat the rate of low interest

[@paulheege12]

My thinking is, deflation would incentivize people to spend money on investments that accrue a larger return than the deflationary money does. Instead of spending money at starbucks and mcdonalds it incentives saving to spend money on solid long-term profitable investments like a building a company with a sustainable business model.

[@paulheege12]

Deflation should increase productivity and sustainable innovation, as seen in the days of a global gold standard

[@theguy9067]

@@paulheege12 you mean as seen in the great depression?

[@formetoknow540]

The amount of bitcoin wallets with 1 bitcoin is at a all time high also with 0.01 or 0.1

[@emmahardesty4330]

Lots to think about. Thanks. Would like to know what you have to say about manufactured homes --now truly affordable--and they're booming in many countries. It will likely soon be possible to buy a zero carbon footprint house online with token currency. Banks no longer taking unreasonable chunks of money from home buyers. Can you see Bitcoin as a first step to attaining worldwide economic equality--that is, after we've begun teaching young children how money really works.

[@giteart]

How did this guy manage to put the Bible together with money and Bitcoin?? Dude you're just trying to manipulate the opinion of religious people to buy into your company...