Anthony Pompliano 0:00
You recently read Ray Dalio, his new chapter that he released chapter two for his new book, he wrote a pretty deep dive on, basically, why you what you think he got wrong? Right? So let me spend a little bit of time kind of talking through that, and I mentioned it earlier, but just you know, what your takeaways were and kind of what do you think he got wrong?
Aleks Svetski 0:20
Well, I think so. I’ll hit on a couple pieces. Number one, he talks about, you know, understanding money, debt and credit and all that sort of stuff. But then, you know, he, he starts with that, but then he gives, like, such a really weak definition of what money is he’s like, Oh, you know, money is a medium of exchange. And it’s also some some sometimes used as a store hold of wealth. I was reading that I’m like, what, like, you can’t exchange something that doesn’t, that’s not, you know, valuable in the first place. So it’s like that, you know, doesn’t make sense.
And I’ve sort of argued that unless you give, you know, a much deeper definition of money. The whole argument that his entire chapter sits on just falls apart. So, you know, I kind of like to define money as something deep, it’s you know, it’s a mechanism via which participants in society can effectively collaborate. Like if you don’t have that mechanism. So it goes out the window, you can’t like, you know, money is used to represent the products of one’s time and labor. In other words, you know, their work.
And if you don’t get that depth, you don’t appreciate how important money is. And then you can, you know, call it something as stupid as AI is just the medium of exchange. So, that’s sort of where he starts off. Then he starts talking about, you know, you know, yeah, money doesn’t have intrinsic value, blah, blah, blah, but then he turns around and starts to talk about how gold became money because it has intrinsic value. And then I was like, facepalming myself again, I’m like, Okay.
There is no such thing as intrinsic value or value is subjective, simple as that like. And, like, the example that I like to use is, you know, we all valued air, right, like the ability to breathe. But if you have a child, and you’re both, let’s say, in a, in a car accident and you fall off a bridge and you’re in the water, and only one of you is going to be able to breathe, what are you going to value more in that moment, I know this is a brutal example. But you’re going to value air or you’re going to value a child’s life.
So it’s a very, what that means is that at that point in time, the value placed on air is much lower than the value placed on you know, your child’s life, for example. So it’s all value is subjective. Now, gold didn’t become money because of some notion of intrinsic value. It has specific attributes that we converge upon as human beings. To say that, hey, that is a really good object to represent the time and work that I’m trading for money. So that was another area. Then there was a couple sections that made him agreed on.
He talks about how central banks are able to rig the game. And he’s 100%. Right? Because that’s one of those things with I can see was highlighted in my article, you know, whilst the rest of us idiots spend out to find out resources, time and energy to to receive money in return. You know, there’s a few organizations who just gets to change the rules for themselves at the expense of the rest of us.
It’s just, it’s, um, it’s madness, then what else did I hit? things about where he talks Okay, so he mentioned the section in there while the virus triggered this particular financial economic downturn, something else would have eventually triggered. Get it which I agree with. And regardless of what it did, the dynamic value would have basically been the same. Because only intervention would have worked to reverse the downturn.
And I kind of really like, poked at that, which is, we didn’t actually reverse the downturn, I actually think we’ve just accelerated the downturn. by intervening again, we didn’t actually fix anything, we broke the shit even more than it was broken before. So the correction or this Corona crash or whatever, we’re going to label it as was the system fixing itself. And instead of getting out of the way and allowing the system to fix fix itself, we just doubled down on breaking the fucking thing.
And for me, when I see someone who’s supposedly you know, as intelligent or whatever is, is raised to assume that these interventions or some form of solution just baffles me because That’s, it’s not what we’re doing. Like we can’t perpetuate that narrative. Because all we’re doing is running the same game again, like the narrative has to be that the system is fixing itself by correcting. And we are breaking it more by intervening, not the opposite way around. And until we do that, we’re never going to fix it.
Anthony Pompliano 5:24
Why do you think that he hasn’t at least publicly kind of crossed the chiasm and, and said, Hey, this Bitcoin thing is real. Do you think it’s that he doesn’t understand it? He doesn’t believe in it. Or it’s more of a sleight of hand and actually, he’s doing one thing behind closed doors and not talking about it publicly.
Aleks Svetski 5:43
Yeah, dude, I This one’s one I’ve battled with for a long time. So, I mean, most of the writing that he does, like particularly prior writing this one, I think there was a lot of if you asked me that question six months ago, I will Probably said, it’s the latter. I think that you know, there’s a bit of sleight of hand going here and he’s buying our Bitcoin, like a boss in the background.
But reading this one, I was like, Yeah, man, he’s actually missing a few really fundamental pieces, like, you know, intrinsic value being one of them, and you know, presuppositions around, you know, he’s right about credit cycles, but he’s defining everything within that paradigm. And, you know, he talks about these paradigm shifts, but he seems to be unable to, to acknowledge that Bitcoin is an example of a paradigm shift, you know, or or a phase shift, something that is different to what exists.
So he’s either there’s either something really really really not clicking for him with respect to Bitcoin, or he’s just because he’s got such a I guess Public presence, it may be dangerous to, you know, publicly promote Bitcoin because I mean, you know, you got this hundred and what is a $200 billion asset now which I mean if he turns around and says, you know, Bridgewater is allocating to Bitcoin you know, we’re probably gonna we don’t need the having it’ll be called the Dalio inning.