What is Money? An Exploration of the Corruption of Currency

Written Recap and Analysis of “Bitcoin, Not ‘Crypto’ with Robert Breedlove” (WiM470)

TL;DR: Robert Breedlove, host of the “What is Money?” podcast, argues that central banking and fiat currency are the root cause of many problems in society today. He explains how inflation robs people of their purchasing power and transfers wealth from the poor to the rich. Breedlove sees Bitcoin as the solution – a decentralized, fixed-supply currency that can transmit value across time and space without corruption.

The Most Important Question: What is Money?

According to podcast host Robert Breedlove, the question “What is money?” is perhaps the most important question in the world today. Breedlove argues that many of society’s ills can be traced back to a fundamental corruption and misunderstanding of money itself.

“If we could fix one thing in the world it would be to fix the money, because so many things in human experience are downstream from the money,” says Breedlove. “If the money doesn’t work, then human society basically does not work.”

Breedlove first realized the critical importance of sound money after reading the book “The Creature from Jekyll Island” about the history and problems of central banking. This set him on a years-long journey to understand economics, human action, and the nature of money itself.

The Illusion of Wealth

One of the most pervasive monetary misconceptions is confusing money with actual wealth. As Breedlove explains:

“Everyone thinks they want more dollars, but you don’t actually want more dollars – you want the things that dollars can buy you. Economists call this purchasing power – the amount of goods and services the money enables you to obtain.”

Breedlove calls this a “cognitive optical illusion” where people focus on the nominal amount of dollars rather than the actual purchasing power those dollars represent. Even though the number of dollars in your account may be increasing, the purchasing power of each individual dollar is simultaneously decreasing.

This masks a transfer of real wealth from those saving in dollars to those who get access to newly printed money first, such as banks and politically-connected entities. By the time the new money trickles down to the average person, the purchasing power has already been eroded through inflation.

To illustrate this point, Breedlove compares printing money to changing the way we measure a square foot to artificially increase the size of a house:

“This is the same thing as if we redefined the actual spatial dimensions of an inch, foot or meter. If I just make that smaller, then all of a sudden the square footage of my house goes up in nominal terms. But your actual house hasn’t changed – we’ve just changed what we call a square foot.”

In other words, creating more units of currency does not magically create more real wealth or resources. It simply reduces the value of each currency unit.

Inflation is Robbery

Inflation is fundamentally a violation of property rights, Breedlove asserts. When a central authority can arbitrarily print new units of currency, it is effectively stealing value from every other holder of that currency.

“This is the asymmetric system we live in. There’s one small group that can print new currency, and another vast group that are forced to use that currency via legal tender laws…So those creating new currency are basically taxing or robbing everyone else.”

Breedlove argues this is why prices tend to increase over time, as more dollars chase the same amount of goods and services. The government tries to mask the inflation by excluding essentials like food and energy from metrics like CPI. But the reality is that true inflation is best represented by the raw increase in money supply – which has ballooned by over 40% since 2020.

As Breedlove quips, the “Federal Reserve is as Federal as Federal Express and it has no reserves.” The central banking system is not a public institution but a private cartel that has monopolized the creation of currency to the detriment of the average citizen.

Bitcoin Fixes This

The invention of Bitcoin represents a historic innovation and potential solution to the corruption of money, in Breedlove’s view. Bitcoin is a fixed supply currency, capped at 21 million units, that cannot be altered or inflated.

“Bitcoin basically perfects the transmission of economic value across time. And because it’s purely digital information, it can be transmitted instantly across space at the speed of telecommunications.”

Unlike fiat currency, Bitcoin is decentralized and operated based on open-source code and mathematics rather than the whims of bankers and politicians. It enables people to store and transmit value in an unconfiscatable way.

Breedlove argues this has profound implications for civilization and human flourishing. History shows that sound money and property rights are essential for a functioning society. By providing an incorruptible foundation of value, Bitcoin restores those rights and could help realign society’s incentives in a more healthy direction.

Conclusion

Money is not just an economic issue – it’s a moral and social one that affects every aspect of civilization. By understanding what gives money value and how that value can be corrupted, we can work to fix the systemic theft and dysfunction in the current system.

Bitcoin provides a beacon of hope as an alternative form of sound money. While not without risks and challenges, its decentralized nature and hard-coded supply cap make it uniquely resistant to debasement. Humanity would do well to embrace this new monetary technology to build a freer and more prosperous future.

Thank you for reading “Recap and Analysis of “Bitcoin, Not ‘Crypto’ with Robert Breedlove” (WiM470)“.

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Sources

• Bitcoin, Not “Crypto” with Robert Breedlove (WiM470)
• “The Creature from Jekyll Island” by G. Edward Griffin
• “The Bitcoin Standard” by Saifedean Ammous
• “Human Action” by Ludwig von Mises
• “What Has Government Done to Our Money?” by Murray Rothbard