TLDR;
This presentation explores how the value of traditional assets like real estate, stocks, gold, and silver has been eroded by monetary debasement, despite their price increases in US dollars. It highlights the difference between price and value, arguing that many assets have failed to protect against the expansion of the M2 money supply. The presenter suggests that Bitcoin is the only asset that has consistently increased in value relative to this debasement, urging viewers to consider whether they prioritise real value or the illusion of stability offered by traditional investments.
- The value of many traditional assets has not kept pace with monetary debasement, despite price increases.
- The S&P 500, NASDAQ, real estate, gold, and silver have all failed to protect value against M2 money supply expansion.
- Bitcoin is presented as the only asset that has consistently increased in value relative to debasement.
Introduction: The Erosion of Wealth [0:00]
The presenter introduces the topic of wealth preservation, particularly for those holding assets in real estate, the stock market, gold, silver, and other traditional investments. He asserts that the value of these assets is being eroded over time and promises to demonstrate this through charts and data. The core argument revolves around the distinction between the price of an asset and its actual value, especially in the context of monetary debasement.
Understanding Price vs. Value [3:00]
The presenter emphasises the importance of differentiating between price and value. Using the example of having one million dollars in 1971 and 7.4 million dollars in 2023, he explains that while the price has increased, the value has remained the same, merely keeping pace with published inflation figures. He suggests that a more accurate measure of value retention should be based on the capacity of the monetary system, specifically the M2 money supply. As the M2 supply increases, the value of one's wealth can be devalued if assets don't keep pace.
S&P 500: An Illusion of Returns [5:58]
The presenter analyses the performance of the S&P 500, noting that while its dollar price has increased significantly over the decades, its value, when priced in M2, has not. The S&P 500 has struggled to surpass its 2000 and 2007 highs in terms of value. This suggests that the returns seen in the S&P 500 this millennium are largely an illusion, failing to protect against monetary debasement.
NASDAQ: Failing to Generate Value [8:21]
The presenter examines the NASDAQ, expecting it to have outperformed in value due to the tech boom. However, when priced in M2, the NASDAQ has also failed to breach its 2000 high in terms of value. This reinforces the idea that gains in the NASDAQ are illusionary dollar gains, achieved at the expense of real value. The presenter argues that people are being given illusionary dollar gains for real value, and they are satisfied because they are seeing the number go up on the screen, but they are not seeing their value actually be protected.
Real Estate: The Biggest Scam in Value Protection [10:53]
Turning to real estate, the presenter uses the VNQ (a real estate investment trust) as an analogue. He reveals that real estate has not only failed to protect value but has also been on a downtrend since 2007 when priced in M2. Despite prices returning to 2007 levels, the value continues to decline, making real estate the "single biggest scam" in terms of protecting value. The presenter shares a personal anecdote about his parents, who invested in property for 35 years, unaware that the value of their portfolio was being eroded.
Gold and Silver: Not Protecting Against Debasement [13:36]
The presenter analyses gold, noting that while its price is hitting $2,000 again, its value, when priced in M2 expansion, is far from its 1980 high. Gold has not protected value against debasement, relying instead on a potential future re-evaluation. Silver tells the same story, with its value failing to protect against monetary debasement since its local peak in 2011.
Bitcoin: The Only Asset Beating Debasement [15:32]
The presenter concludes that stocks, real estate, gold, and silver have all failed to protect value against debasement. He posits that Bitcoin is the only asset that has consistently increased in value above and beyond the debasement. Bitcoin's supply dynamics make it uniquely capable of protecting wealth against monetary expansion.
Conclusion: Choosing Value Over Illusion [17:40]
The presenter challenges viewers to decide whether they want real value or illusionary dollars. He argues that the stability offered by traditional assets like the S&P 500 and real estate is an illusion, as they are price-stable but not value-stable. He urges viewers to recognise that their hard-earned currency is being exchanged for illusionary gains while their real value is being stolen. The presenter hopes this analysis will prompt viewers to reconsider their portfolio allocations and prioritise assets that protect against debasement, potentially increasing their allocation to Bitcoin.