Why Deflation is the Key to Abundance with Jeff Booth - WBD651

Jeff Booth is the Author of The Price of Tomorrow and
CEO/Chairman of Ego Death Capital. In this interview, we discuss
the effects of prices falling to the marginal cost of production,
Bitcoin and its role in a deflationary economy, how inflation and
debt distribute wealth unfairly, and the deflationary influence
of AI and its impact on the future.


- - - -


It is the natural order for prices to fall to the marginal cost
of production over time, and this principle applies to all
industries. The fiat system works against this by artificially
creating scarcity. And it has to work against deflation to
maintain its dominance, through manipulation of the monetary
system: debt, inflation and an ever more narrow concentration of
wealth.


As the fiat system falters, could the concept of a deflationary
economy take hold? Whilst it involves a massive shift in economic
value that is hard to comprehend, as innovation continues to push
the boundaries of what is possible, and AI comes of age, a
deflationary economy becomes very more likely. Jeff Booth argues
that it makes logical sense as a system to enable society to
continue to expand.


The common narrative is that we need inflation, and deflation
would harm living standards. However, Jeff argues that whilst
prices will fall in a deflationary economy, wages are sticky:
people are not willing to accept wage decreases as fast as prices
are falling. This would result in a massive transfer of wealth
back to productive members of society.


Jeff also promotes Bitcoin as part of an investment strategy as
we transition into a deflationary economy: its monetary policy is
designed to weather the current inflationary system, it’s outside
of anyone’s control and it has no counterparty risk. Further, in
a new period of abundance, a reliable fixed currency will become
a necessity. It will be the new measurement for productivity and
progress.