After Schrock | June 26, 2022 | Talk about the week in technology

all righty guys wait for everyone to get connected here make sure that uh we get my comment section up here so i can actually see what you guys are uh talking about as well there we go all right so what do you want to talk about this week yeah we're not going to talk about that we don't talk about bruno but man it's it's interesting times that we live in my wife and i went out and saw the the elvis movie yesterday or two days ago i'm not a huge like i'm not a big elvis fan like i don't you know i know his music i've heard his music you know i don't have it on a playlist or anything um you know i was born in 76 so you know i never really i didn't have the cultural phenomenon that was all of us that maybe a lot of you guys had um the movie was really good though i thought um it's done from the perspective it's not a movie about elvis it's a movie about elvis's manager um who roger olsen actually had met in vegas it was kind of funny um but uh but basically the uh the the story was it showed all the stuff that happened to elvis that elvis did and was doing gives you some some background on how you know how that some of that came about you know a little bit a little bit of the victimization that his manager may have done to him there but but it was a good movie all the way around and one of the things that that struck me was one when he died when elvis died i had no idea that jimmy carter addressed the nation about the death of elvis and it made me think who would have to die now for joe biden to address the nation like i was trying to think of like elon no he wouldn't address the nation for elon dying who would have to die to get a presidential address right now who is that popular in our society right now that would get a presidential address you know apolitical a politically popular you know i mean of course a lot of people on the right you know didn't like elvis because you know they didn't like his music or his the way he dressed or the fact that he wore makeup or whatever but anyway um it was just it's one of those things where you know the more the more i read and the more i learn about the late 1970s the more i can see parallels to what's going on it's not a it's not a rhyme it's not a it's not a repeat it's more of a rhyme than than a repeat of what happened in the 70s um but a lot of this we've talked about this on the after shock before doesn't make sense why is it that a recession is inbound but commodity prices are up normally commodities go down when you go into recession because demand for goods goes down which means demands for inputs goes down commodities are inputs so why is the price of why are the price of homes going up at the same time interest rates are going up and interest in housing is dropping makes no sense wouldn't the prices come down if fewer people were shopping for houses and fewer people could afford to buy houses because the interest rates were higher wouldn't that necessitate the price of homes coming down a bit so it's it's interesting to to watch the blend of inflationary and deflationary things happening at the same time in the economy it's basically pockets of instability and so the the challenge becomes how do you predict where the pockets of instability are and you can't you literally can't do it everything is a question everything is unstable everything is squishy um no matter where you put your money your your right now it's preservation of capital is you know the name of the game making sure you don't lose all your money so that you could have the chance to make money later but the problem is even if you stay at zero if inflation is actually at 17 which is what shadowstats says it's actually at uh you're losing 17 of the value of your money every year or this year anyway who knows what it'll be next year and that's the other thing they say that inflation it's going to come down we're going to we're going to see this inflation come down what they're saying is the rate of inflation is going to decrease in the future is what they're predicting so it'll go from let's just use the government's number say it'll go from eight percent to five percent well that's a five percent increase over last year's eight percent increase over last year's two percent increase so did it actually come down or is the rate of inflation just slowing it's kind of like with um i don't know government budgets if uh if you say that the government gets no increase in the budget this year well that's a cut you can't do that that's a that's a budget cut a zero zero percent rate of increase is a cut no it's a zero percent rate of increase it's not a cut so it's interesting to watch all the stuff going on and see all the issues and then look back at the problems and the issues that were present in the late 70s and i bet you i was not very aware at that time i'll mind you but uh i bet you that there was a lot of people that didn't think there was a way to come out of that i bet you there was a lot of people who thought that the country was done for um i bet you that there was a lot of people who were who you know who thought communists were coming for us and that there was an existential threat um that our weakened military who was defeated in vietnam and not supported at home couldn't stand up against communist threats uh you know i bet there was a there was a lot of fear right um how did how did the cover how did the country get out of that um a lot of people will credit ronald reagan with that um ronald reagan did a lot of things very very right man was not a saint know what politician is but he did a lot of things very right he was supported by a federal reserve that gave him a massive dose of pain early in his presidency to to get a big reward later um and then there was the natural deflationary tendencies of microprocessors which was one of the things no one ever talks about what happened in the late 80s or i should what happened in the early 80s that changed the way the world worked in the late 80s and allowed the dot-com boom to happen it was the invention of the microprocessor the simon says was responsible for it before simon says you had rubik's cube right well simon says is that game with a circle where it's got four colors and it goes green you press green then it goes green yellow and you go green yellow then it goes green yellow green green yellow green you remember the pattern and you have to keep mirroring the pattern back to the device until you get it wrong and it goes burn and you lose that changed the world that was the first ever game with a microprocessor and once that door was opened microprocessors could go into anything and every time a microprocessor went into something it made it more productive it made it do more things than it did before which meant you could buy less of it but it was a weird calculation because you know like the simon says that you would buy today the the chip the processor in that thing is way more efficient way more energy efficient than the processor from the 80s you know in the 80s you were popping a couple c batteries into your simon says to get it to do what you needed to do now you can run it you know on a pocket one in a watch battery or you can play simon says on your phone with your phone battery um so much more efficient with the chips today are so over time chips become more efficient which means they can do more but their prices tend to stay about the same over time roughly so that means that you're getting more performance at a lower price per gigahertz per megahertz whatever which means automation can happen and i think i think the thing that's going to pull us out of this is going to be another another technological revolution that's brought on by necessity in other words we can't find people and i don't know what what happened to the people where did they all go it really makes you like wonder like did the rapture happen and i got left behind like there's no one to bring my ice cream at sonic there's you know and it's like and it's not a matter of paying money per hour you can raise the amount of money you're willing to pay per hour and you just get more interest from the same small pool of people who will leave you the second they're offered another x amount per hour somewhere else so we have a price wage spiral in effect right now um that is ending it's in the tail end so unfortunately what that means for employers or employees is that there's going to be a balance shift of power back away from employees back to employers where employers are able to dictate the terms you will come to the office like elon was was doing you will come to the office or you won't have a job you can stay home if you want but you'll be staying home on your own dime not mine um that that was his position you're seeing this a lot more in technology now you're seeing uh mortgage bankers are getting their jobs cut like mad right now there was some bank that cut like thousands of mortgage bankers like how many mortgage bankers did you have they cut the ball um because people aren't interested in mortgages right now or refis are way down you remember when a refinance was going to take like three months to get done because there were so many people who wanted them because the interest rates were so low well now the interest rates are not low nobody wants to refinance now so what do you need all the mortgage bankers for so i think what we're going to see we need that dose of pain we desperately need the creative destruction that is the dose of pain we haven't had a dose of pain in 30 years we need the dose of pain we need the people to remember that investing is not an automatic win that the prices don't always just go up over time sometimes they go down and yes over time they always go up thanks to inflation but when you retire are they going to be up they don't always go up all the time so we need this dose of pain so the problem is the dose of pain that volcker hit the economy with drove it into a deep recession because he raised the interest rates higher than the rate of inflation well if let's just say inflation is what the government says it is at eight percent of the core if we raise inflation if you raise interest rates to eight percent my goodness they're having a heart attack right now at what you know one point something two two percent like they're having a heart attack over that could you imagine raising it to eight percent what that would do and then if the if the inflation is really 17 percent could you imagine yeah i can't that would be it's it's i politically it's unsustainable so you would need a fed that is just re-elected who has a four-year term under his belt to work with and doesn't care about the political ramifications of what he needs to do yeah we got a fed that's pretty much it he could be that if he decided he wanted to do that jerome powell just got another four-year term and uh you know the democrats are pretty hosed this election it looks like uh you know a lot of time between now and and presidential election time but you know i don't see anything dramatically changing to the upside for any particular reason maybe aside from just cyclic reasons you know we can see a moderating of the effects but yeah i don't know it could be interesting to watch but then right now we're in this weird place in the stock market where we got a ton of bad economic news last week but stock prices went up why because bad news is good news now because the worse the economy gets the less likely it is for the fed to keep hiking interest rates which means that the punch bull though will get turned back on we'll have quantitative easing coming back and low interest rates back to zero again and happy days are here again in the stock market that's why the market's going up it's predicting that within six months that they're going to stop breaking or the rate hikes because he won't be able to sustain them without driving the economy into recession which is something they don't want to do they're trying to thread the needle for a soft landing which is just going to stretch out this thing longer so it'll be interesting to see if the fed actually sticks with the plan or if the fed responds to market conditions and pulls back and stops tightening stops raising rates because the the economy is going into recession oh no you know what are we going to do what's recession recession is two quarters of negative growth okay i would stipulate that we've had four quarters of artificial growth because when everyone was when everything was locked down and everybody stayed home ain't nothing growing the only growth or gains that happened there were people getting stemi checks and businesses getting ppp loans that was the only growth happening now that giant flood of money is over with and a lot of businesses increase their spending because they believe that that money was actually new capital right like this was this was capital we could use to expand our business they didn't bank the money so they spent all the money on new equipment and advertising and marketing and all the things that make businesses grow and flourish and sell products but now they're out of money and now sales are dropping especially after adjustment for inflation so what do we do we discount so we have to we have to lower the prices on things to blow stuff out to get get it get the inventory out of our warehouses and to get at least some money you know some profit back on the goods in a mar in an environment where they might not sell if we don't put them on special so that's what you're seeing happening now you're starting to see it i will i will use my daughter my daughter loves these stupid lol surprise balls it's a surprise ball that you unwrap it and then inside that there's something else you unwrap and then inside that there's a bag and you open that and it's an experienced toy she doesn't actually play with the toys in fact you know we could probably throw away half of her lol surprise dolls and she probably wouldn't even know they were gone because she's my daughter is into the opening of things she's very fixated on opening uh so if we get an amazon package in the mail yeah she wants to if the mail comes she wants to open the mail she loves to open things and so the lol surprise dolls are a nice treat for her that she gets to to satisfy her her urge for opening things so once in a while if we're at target we'll pick up another wall surprise now they usually cost around ten dollars a ball except now they're on special for as low as six dollars a ball that's a forty percent price drop some of the larger lol surprise items are fifty percent off so instead of sixty bucks for like the big one with the kinetic sand and everything in it that one is now thirty dollars on special and it's not all the toys it's and it's not all the lol dolls it's just here and there some things it's almost as if a company is purposefully trying to reduce the number of things they have in inventory based on simply the number of things they have in inventory we have a lot of the year of the ox lol surprise balls we don't have so many movie magic balls so we want to get rid of these ox balls and we're not going to put the ones the movie magic on sale we're just going to get rid of the ox ones so those are 40 50 60 off so you can literally go to the store and you can see it happening it's not happening in the grocery section for sure but in the non-grocery section in the seasonal sections you can see this happening so shop for the deals i mean you can find some really really incredible deals on things that maybe you don't need to buy that's the trick and that's why they're on special they're trying to encourage you to come in there and buy them so they're going to see some deflationary pressures we're seeing just these weird imbalances in the market and eventually the market will find equilibrium the equilibrium point that i'm reading about though is pretty flipping scary equilibrium point predicted this year for gasoline is a national average of seven dollars and fifty cents a gallon national average makes you want to go buy some gas cans right now doesn't it get one of the big drums in the backyard it goes up on the stand like the farmers have you just fill it fill it with gas probably be a better investment than the 401k right you just put ten thousand dollars with the gas in there and then wait six months and it's worth fifteen thousand dollars baby there you go um yeah it's i'm trying to imagine 7.50 gas they're saying that in before the end of the summer in some areas of the country where they have the higher gas taxes and everything else like california basically you will have double digit gas and we already saw them doing the upgrades to the the software on the gas pumps to enable the double digit because a lot of the gas pumps don't have the ability to have double digits what about gas signs you know the signs outside the gas stations a lot of them don't have a space for an extra digit either what are they going to do with that are they're going to drop the decimals off the ends like they'll be like you know seven dollars ish a gallon if you have to ask the price you can't afford it you know than one of those things i don't know so anyway um there's more pain coming but this is the nature of market imbalances there's also opportunity so when there's an imbalance in the market everyone focuses on the negative imbalances so energy costs are up so anything you have to move is up right anything you have to do is going to go way up software shouldn't go way up software should actually should drop in price as people attempt to attract people to purchase their products right so you're going to see that i mean look at look at our software products you know secure updater install price sophos install price hasn't gone up any ever well secure updater ever has never gone up and um i think the sofos install price it went up like five years ago by five dollars i think but that that was it it was simply to cover labor increases um because there's a ceiling to what people will pay for subscriptions and so it is what it is we can't really raise them right so how do we get more people to subscribe to products with security products it's a different kind of subscription it's more of a a needed subscription but like let's say for example you have netflix and hulu and you have to get you have to get rid of one of them you're going to look at how much each one costs and when you go to cancel it let's say they send you to the retention department and they say well if you keep your netflix we'll give it to you for half off well then you go to cancel hulu and you don't get that deal from hulu you're going to keep your netflix at the lower price you know all things being equal so people are making decisions about things that they're going to keep and they're going to toss they're getting a little more frugal with their money luckily we're in an industry that is somewhat inelastic you know people need technology to do their day-to-day things they need the technology to work the challenge that we have to have as a company is to make sure that we have the right solutions in place at the right times at the right price points hence why i'm asking if people want to see a sale on upgrades for windows 11 compatibility even if you don't want to go to windows 11 right now just having your computer be compatible to go to windows 11 sets you up for a 2025 upgrade when the time comes so there's there's a lot of different ways to look at this and make sure that people are getting what they need from us but yeah i mean it's like everywhere you go you see it everywhere you go especially in nebraska and iowa and literally i'm like where did all the people go so i googled it i was like well why is nebraska's unemployment rate so low well primarily the the main thoughts of this now we've had a historically lower unemployment rate going all the way back to the great recession right so nebraska and iowa trend better than the rest of the country on unemployment at all times for some reason part of it during the coven pandemic was nebraska and iowa didn't close they didn't we didn't lock down like the other states did there were only nine states that did not lock down nebraska and iowa were two of the nine as a result our essential people the people working at sonic kept working um everybody kept working and everybody got stimmies and then it got harder to find people which caused employers to pay more money or find efficiencies um which then people got another stemi and then there was extended unemployment so now i can quit my job get government stemies and collect extended unemployment benefits why would i go back to work at this point what could you possibly offer me that beats me sitting at home and playing with my new puppy you know whatever where did all the people go well i think some of it is there was a lot of there's been a lot of discussion about what parents saw their kids learning during remote education so when the parents were basically present in the classrooms for the remote lessons and they realized how much time is spent in a public school classroom on non-educational tasks bathroom breaks pizza parties movie day teacher in service day half day you know the day the day before vacation nothing gets done the day after everyone gets back nothing gets done so all this time that's spent unproductively at school if taken into the home into a home environment that is catered to that individual child's exact needs school can be done in two or three hours and you actually get a better outcome and then the child is actually spending time with their family which is increasing family bond which is increasing trust and dependence and all these and reducing these mental health things that everybody everybody seems to have now you know my my family we were watching stranger things i don't know if i've if i've told this story on aftershock yet or not but we were watching stranger things i don't want to spoil it if you haven't watched it or whatever maybe you're not going to i don't know but there was a bullying scene right and it was vicious like they were at a roller skating rink and this girl was getting bullied and they called her out into the center of the rink and she thought she was going out with some friends to get some special attention or whatever and everyone was skating around her in a circle and then they started making fun of her and then the dj and the dj box started playing some song to taunt her and then people threw milkshakes on her all the while somebody else was recording this with a vhs camcorder as she falls on her butt in an apollo milkshake and starts crying and i looked at my son and i'm like that was what the 80s was like that's what bullying looks like bullying isn't a preferred pronoun or language that offends you that is bullying and you know how she got them to stop bullying her she cracked the girl in the face with a roller skate busted her face wide open everyone in the rig looked at her like she was some monster from busting that bully's face wide open but wasn't nobody making fun of her anymore that's how you stop a bully and my son literally just looks at me and like he always does because apparently i tend to say some unbelievable things at times he looks to mom and he goes is he for real and the lovely kimberly is like yeah jacob that's really what bullying is like that's that's what it was like in the 80s and everybody got bullied by somebody and if there was a it was a food chain everybody got bullied by somebody and if you didn't get bullied by somebody then you you exited high school and then your life fell apart because you had no resilience whatsoever but you know now it seems like everybody has anxiety about something or you know it's everybody expects life to be simple and easy and predictable and carefree and problem-free and that's just not how life works and kids spending more time at home with their families gives you that support network in my opinion that the kids need we need family right i mean it sounds i don't want to say something that's like radical here but because you know some kids just don't have family some kids don't have a dad some kids don't have a mom some kids they don't have a nuclear family you know but the family bonds are what you fall back on when everything else around you is crumbling because everything else around you doesn't matter your friends in the kids that were bullying you in elementary school don't matter the kids that that were taunting and making fun of you in high school don't matter anymore in fact all those grades you work so hard for in high school don't matter anymore this is what i'm like you know what i'm i support the scouting program but do i really need to put my kid through cub scouts because none of it matters none of it carries into boy scouts i can do all those lessons and skills with him at home why do i need to go because if in essence if you put your kid into cub scouts you end up being the cub scout master uh you know or at least a den leader you know why do i have to go through all that work and effort when i can just enjoy spending time with my kid as opposed to having to spend time with everybody else's kid and i can go take my kid out camping and fishing and teach him how to properly use a knife and how to properly handle a fire and things that kids learn in cub scouts why do i have to get the belt loops and pay the dues and do all the other stuff to go through that experience when it doesn't carry over into boy scouts has no impact on eagle scout whatsoever they don't even ask if you're a cub scout when you go in for your eagle don't even ask how many belt loops did you have they don't care they don't know doesn't matter so none of this stuff from high school none of this stuff matters none of this stuff from grade school matters none of this stuff from your childhood all those people are gone they're all gone right hopefully the ones that made fun of you anyway if they're still hanging around you got a problem um but yeah so having having all these kids at home doing school and the parents seeing that i'm wondering how many parents decided maybe i need to spend more time at home with my kids because they didn't like what they saw i'm not saying they didn't like what the teachers were doing i was just saying they didn't like how it displayed the disconnect like i am the parent but that's the teacher and that's the school and that's where my kid is and i'm just the parent but actually it's the other way around you're the parent that's just the school and just the teacher and just the administrator and if they don't like something they can stick it in their pie hole and smoke it because you're the parent and you have the power to pull that kid out of that school like that you don't have to ask permission did you know you can just take your kid out of school in the middle of the year and flip a giant bird to the to anybody now they might call cps on you because that's what they don't like that they lose funding when they lose a kid especially a special needs kid they lose a lot of funding so some parents maybe decided they wanted to stay home with their kiddos for various reasons well that means they're not in the workforce anymore right and that means we have fewer people i'm trying to figure out where the people went because i mean it wasn't the mom of five wasn't the one working at sonic you know where did the people go they didn't all die of covid they didn't all die of vaccines they're not dead where did they go why are they not working why is the unemployment rate so low well one website said the unemployment rate is lower in nebraska and iowa because people get paid less here so they have to work two jobs to get by so the unemployment rate is lower because people have multiple jobs well if people have multiple jobs why can't i hire anybody at any price now of course if i raise the price high enough i get completely unqualified people that i would normally not even interview applying for the job people who in their applications literally are telling me how they don't want to work for me literally like i do not want to work for you but for that amount of money i will come work for you why would you hire that person how desperate do you think we are i mean i'd rather automate before i hire that person i'd rather make my customer press one to get to the operator than hire that person to answer the phone who doesn't care about my people so anyway i don't know where they went maybe you guys do if you guys know where the people are hiding let me know good morning mary mitch roger good to have you are you using a cheat card like our president you know i uh i've been doing this for a little while now so while over time things have changed and i have implemented additional rules upon myself like you know i will do some show prep before i sit down to do the show and not just ad-lib the whole program from start to finish that's what the after shock is that's why i go off on these tangents like homeschool and then come back like oh yeah what was i talking about again oh yeah i was talking about where the people went yeah that happened during the broadcast show back in the day so i have to impose a structure on the show so that i stay within that structure the after shock is when i can just you know let my let my freaky flag fly around and talk about whatever i want well within reason of course cheryl and richard here mark's here pat northwest missouri is here richard's here can we upgrade our windows 10 shock notebook unfortunately um laptops that are not compatible can't be made compatible because you have to change hardware and a laptop you can't change that you can change the hard drive you can change the memory but you can't change the processor and that's the part that needs to be changed to make it compatible so if it is compatible now if it's a third gen ryzen chip or an intel 8th gen chip or older or newer oh boy coffee's wearing off if it's that or newer then it should be compatible just fine if it's an older computer with a laptop there's nothing you can really do to make them upgradeable unfortunately thank you for the audio check winston let's see the federal budget used to have an automatic 10 built in i think it's still there budget doubles every seven years i thought it was four percent but yeah i mean there's definitely an auto an auto increase in there in portugal it's illegal to name your baby thor why is that is that for real i'm gonna look that up why not baby names that can get you arrested guess i'm not going to portugal let's see four in certain us after a certain australian actors performance of the norse god of thunder lightning who wouldn't want their little boy named thor of course right officials in portugal for a start the war is on a long list of banned names in portugal resting along signs like james jimmy and william so you see when you when you say you can't name your kid thor or jimmy or bill then it kind of takes something away from you right like norway portugal takes the citizens names very seriously also the portuguese government is determined that its current and future residents take pride in the portuguese culture and heritage by using primarily portuguese and spanish names so instead of bumping into a thomas you are more likely to run into a tomas there you go illegal to name your baby thor or william or tommy no tommy's we don't want any tommy here i did not know that i learned something new today let's see aaron is still in physical rehab hospital you just need to get up and start doing push-ups erin she's saying that she's been there 17 days she's only had five rehab sessions you should get started you gotta start doing push-ups or something i don't know you know i'm thinking that um they're gonna do a rehab they're gonna do a physical therapy session but they gotta give you a day to recover so that five sessions is ten days you throw a couple weekends in there you're pretty close to 17 days yeah that would be extremely frustrating rehab hospitals i remember when my dad was in those uh he was in there multiple times and they are very frustrating um it's frustrating when your body is not doing what you're telling it to do right after all that success let's see here gotta hit the road we'll catch you on the cell network good thank you jason i appreciate it went through bullying like that in the 80s i didn't get a chance to fight back though i refused to have anything to do with the kids i went to school with yeah aaron i didn't i i wasn't much of a fighter in the 80s either i was kind of the wimpier kid so i learned to fight with my mouth which got me into trouble sometimes but it gave me a career in radio right oh let's see morning everyone finally woke up early enough to hear us live wow richard thank you i appreciate that quick get thor some more coffee i've got a little bit left i'm not quite empty yet do you think crypto is bottomed it looks pretty stable now yeah it looks stable until it drops to 16 5. um i think we're so my wife had never heard the term a dead cat bounce before and so i was telling her i think i think this is a dead cat bounce and she's like what does that even mean and like well that means if you throw a cat out of a second story window even a dead cat bounces so it doesn't mean the cat's back to life it's just bouncing and it's going to eventually fall back down to earth again but but while it's bouncing it sure looks like it's springing back to life right it's dead so i think what we're seeing right now is um everyone is betting that the federal reserve is going to crack and is going to stop hiking rates and stop the quantitative tightening and go back to quantitative easing and lower rates again this historically has happened before this is what happened a couple of years back when they tried to do this exact same thing right before cobit they ended up loosening back up again because the economy started to hiccup we didn't have 17 inflation then so now the question is is which does the fed want more which one pulls better for re-election a recession or runaway inflation and the answer is a recession actually pulls worse because they actually had to measure this for biden the recession would be a worse thing politically than a rampant inflation but the problem is i think you're going to get both and that is the definition of stagflation where you've got no growth and prices going up at the same time that wages are stagnant or falling so there's literally nowhere to hide there's instability everywhere as a result there's no there are no things so you're going to see people go into locks they're going to go back to bonds they're going to go back to savings accounts they're gonna they're you know you're gonna see a return to some of the things that were popular back before i was born um has crypto bottom it's hard to say i'm not going to call a bottom i will say that i have accumulated an entire bitcoin during this fall buying and selling which i told you i don't trade because i'm not emotionally i'm not i get too invested no pun intended and i make snap decisions based on what i think is going to happen and my brain works so fast and i think lots of things are going to happen so if i act as quickly as i can think i get into trouble so i just don't well i made an exception to the rule and i use the rationale to calm my inner nerves if the price of crypto goes through the floor i have buys programmed in going all the way down to sixteen thousand five hundred dollars so that if there's a flash crash or something i'll be able to buy it if the price of crypto goes up i have program sales at 24 26 and 28 000. if the price of crypto goes up i'll have more money than i started with which of these scenarios is a loss for me either i have more crypto or i have more money i know that the crypto is going to be worth more again in the future i know that i can invest the money that i profit into more crypto if i wanted to or pay down debt or you know put in a college fund or a health savings account or whatever else i want to do with it so there's a lot of different reasons or a lot of ways that i kind of calm myself down a little bit but all of my i've canceled all my cells on the upside because i'm like you know what i'm i'm not worried about making money on the upside i left my buys in place on the downside but i've acquired an entire bitcoin during this they're in the the process of buying and selling and you know trading this this range that we've been in now for about a week and a half as a result of that now i'm like i'm like the guy at the casino that hit a couple really good rolls on the craps table except i'm gonna take my chips and cash out now so i'm gonna take my chips and i'm gonna say i got my crypto i'm good i'm not selling and i've got these program buys going in just in case the price goes down because i mean wow 16.5 i would buy a half a bitcoin at 16.5 so let the price go down if it's going to go down i think we're going to see more volatility um we're starting to see some capitulation in miners uh last week my the miners who mine bitcoin literally sold everything they mined which is usually a bearish indicator it means that they believe the price will be lower tomorrow so they're going to sell everything that they might now to get money to pay their power bills on the flip side on the other side of that we've also seen now it's been trending down slowly as of yesterday i haven't looked at it this morning but as of yesterday it was about 2.1

down uh the the difficulty the expected next difficulty in bitcoin what that means in english is miners are turning off their equipment so a lot of their lower profitability equipment is getting shut off because at the lower price of bitcoin you can't run an s9 miner and make any money because it's too old it's too inefficient um as of right now we are at negative 2.291 on the next adjustment in 10 days which means 2.2 of the bitcoin network is turning off their their equipment because the price has fallen by 50 percent and that's all that's all the impact it had is 2.2 percent does that tell you how committed the miners are to securing the network the strength of the blockchain so i don't know it's it's hard to know which way things are going to go so in those moments i try to zoom out so when i'm when i'm looking at like my gosh you know crypto it really i mean it's not like it's gold right it's not like you can hold it in your hand um does it actually have an inherent value does the blockchain actually have a value or am i just deluding myself and believing what i'm reading and you know the tulip bulbs are really valuable you know is that what i'm doing here you know i gotta if you don't ask yourself those questions you you get stuck in group thinking you know if you don't ask yourself difficult questions that actually challenge what you believe you you can't grow so i ask myself these questions and so then i said okay let's zoom out what is the big picture look like the big picture tells me that the us economy is in trouble that we have runaway inflation and stagnating growth at the same time maybe there's a soft landing maybe there's not whatever the soft landing is it's two more years of inflation at price points where we're at now where literally i went to five guys and i got a burger and a fry and a drink and it cost 19 dollars for a burger a fry and a drink that's like two years ago disney world prices you got to be kidding me 19 for a hamburger and fries and there they they pour a lot of fries in the bag but it wasn't 20 worth of potatoes let me tell you my goodness when did things get so flippant expensive right so those prices are never going to go back to the way they were before they're never going to fall if okay if you if you don't believe that when is the price of gasoline ever going to be a nickel again because that's where it was at one point before all the inflation right it's going to come down to a nickel again at some point if you believe that it they never the price has never come down if they do come down it's a short-term anomaly before they go up again google it i did yesterday when is the last time the united states actually experienced deflation world war ii that was the last time we experienced deflation we have not had a deflationary experience since world war ii that's pretty much everybody in living memory doesn't remember a deflationary event now most people my age and younger have no memory of a stagflationary event either or a massive inflationary event a sudden inflationary event like we're experiencing so there's a lot of there's a lot of new things happening now so could deflation happen could we have another bout of deflation like what happened during world war ii yeah it's possible but i don't think that's a likely outcome you're going to see some short-term deflation in prices because people because demand is going to crater and retailers need to move their inventory that exists that they are not replacing by the way so once those deflationary price savings once the lol balls are sold for the year of the ox i'm going to have to buy movie magic balls and i'm going to pay the normal price for them if there are movie magic balls to be had so that's the standard of living argument i mean there's a lot of things that go into this so i try to zoom out and i try to look at the macroeconomic picture and say macroeconomically understanding that past performance does not predict the future result of anything you can use it as a guide but it's not a guarantee bitcoin has dropped 70 percent or more in value four times in its history and within two years of it dropping it always reaches a new high so while that is not a predictor of what will happen i also know there are other events happening in the world of bitcoin over the next two years we're going to have another have it which means all the mining equipment out there that exists will become 50 less efficient overnight how many people are going to turn off their rings then well guess what bit main is coming out with new manning mining equipment that is 40 percent more efficient just in time for the happening right i'll be able to buy those use the units right before the happening happens right now the units that uh that were new just a few months ago are selling for half the price they were before because the price drop in bitcoin so there's a market happening on the mining equipment there's a market there's all these markets interacting with each other and nobody knows how it's going to work out so macro economically i know that my time horizon i'm 45 years old i am not going to be retiring in the next 10 years 15 20 years right yeah maybe 20 but who knows who knows right i got some time is what i'm saying so it makes sense for me to continue to put money into my 401k right now because i'm buying as the price is falling because historically what has been shown to be true is people who leave the markets during a contraction inevitably miss the upswing i don't want to miss the upswing because that's where you make your money so i got to keep buying in same amount dollar cost averaging in what am i doing with crypto same thing dollar cost average again on the way down if the price starts going up i might slow down my buy a little bit because you know i have a i have a number in mind of what i want to have for crypto and at that after that number you know it's just more risk at that point why would i i can't have that much wealth tied up into one asset right i've got to i've got to spread it around into some other things a little bit but but anyway so when i zoom out and i consider that i've got some time and that as bad as the 1970s i'm sure felt at the time and there may be the early 80s even at the time as bad as they felt cycles changed and when the cycle changed there was money to be made for people who had capital so your goal right now is to preserve your capital so that you have it for the next cycle simple as that good simple right easy just preserve your capital you're fine don't lose it not a big fan of crypto but it seems the one thing that can't be confiscated yeah gene you are correct about that uh crypto can't be confiscated uh it can't be taxed but get this the government in their zeal to squeeze every last drop of taxable goodness from the the gift that keeps giving the golden goose of crypto they have generated the greatest income tax loss ever for everybody involved in crypto right all you have to do is sell your crypto now you bought it what 40 50 60 70 000 sell it now book your losses harvest those losses up file them on your taxes and get all your money back carry these losses forward in the future to offset future gains happy day yeah all that money spent on crypto all you have to do is sell it now i don't know how long you have to stay out before you can buy back in but if you if you're like me and you think you're going to have an opportunity to buy again at a lower price maybe as low as 16 500 maybe as low as 12 if you sell now and program some buys maybe don't sell it also half program some buys going down you get to harvest your losses from tax purposes you get to buy in at a lower price you get more bitcoin and you get the tax write-off thanks uncle sam we appreciate this huge injection of money into the economy among people who are most likely to spend it but least likely to hire an accountant to file their taxes all right back to the show yeah all right yeah brian it was 19 for that burger now that's not the same everywhere five guys is an expensive place to get a burger and they do give you two patties it's it's a double it means when you eat at five guys and you leave your stomach is extraordinarily full so you get a lot of food but nineteen dollars for it's not even a gourmet burger it's a foil it's a fall right it's like you're going to red robin right and getting like a basket of fries and having a server bringing to you and you're eating at a table and you have a fork and a knife and all this no this is like a burger and you wrap it up they sell in a paper bag of the grease is leaking through the bag literally it's delicious it's making me hungry thinking about it but it's 19 for a burger and a fry and a drink funny story so i had lou with me my youngest he's four and uh took him with the five guys i don't know why i had him with me that day like you know just took him with me oh because i dropped katie off at therapy and i had all the kids with me because the wife was doing something so i had all the kiddos dropped katie in therapy said let's go get a burger at five guys while i wait for katie to be done in therapy and so i go to five guys to get my burger and i get a drink um whenever i eat anything meat or bread i have a restriction in my esophagus i need a lot of i drink a lot of liquid with it so i get myself a drink while i'm there and uh my son says dad i want a drink of water and i'm like i'm not gonna buy another drink cup so that this kid can take one sip out of a water cup and then call it good so while i'm waiting for my burger i go over in my cup and i just put some water in it from the you know you can do the lemonade thing where you just pull the lever down it gets water give him some water and he's drinking like a big kid out of the cup pretty good stuff so then he's done i'm like okay give me my cup back kiddo time for me to get some lemonade and get me a lemonade i don't know why i felt like lemonade that day i just did so i poured out the rest of the water filling it up with lemonade and he says what's that i'm saying it's lemonade and he goes can i try it and you know whatever they're for they want to try something new you're like absolutely so you know unless it's like you know hey dad can i try your whiskey sour then you know you don't want to don't let the four-year-old do that but if it's a lemonade that's cool and it was funny because he drank it and he was like whoa and he he was like that was so good he was so he wanted one so i had to go and buy another cup the guy gave me the cup for free though because you know i paid 19 for a burger so he gave me a free cup five guys was awesome go over to the machine get him his lemonade all day long he is sipping on that lemonade all day long to the point where we started to worry that the cup might be disintegrating you know how like those those fast food cups eventually like the seams start leaking um like this cup is getting a little sketchy but he come mommy i'm drinking my sour he called it his sour and he walked around with it so you know 19 and a fun story to tell so now see the value is building right you didn't i wouldn't have that fun store if i would have spent 19 and had my son try lemonade and call it his sour and walk around all day long and then i picked up the cup literally at the end of the day pour it down the drain because he didn't drink it all just like the water and my hands stuck to the cup because it was it was seeping through the cup like they don't make the cups of the same stuff they used to for sure let's see yeah ronald the future of bitcoin mining yeah someday there will be no mining um the problem is that's like 80 years out and it's algorithmically protected so there eventually will come a time when there is no mining and all fees for people running mining equipment will be derived from the use of bitcoin on the network the idea being that there will be there there are transaction fees when you spend bitcoin um and 80 in 2080 or whatever the whenever the mining is done when all the bitcoin that's ever been minted has been minted the idea here is is that people will be transacting bitcoin by the time it would have been adopted at that point as a stable currency that is not going to inflate ever because it can't and as a result it will be desirable and it's transactable and it's easily it's fungible it's easily moved you can buy a loaf of bread with it you can buy a car with it you can buy a house with it um unlike gold but you know you can't buy a loaf of bread with gold you know the gold coin would be like it looked like a kid's toy i'd be so insignificant that's that's one of the limitations of precious metals well use a silver coin thor so anyway the uh the future of it you know eventually down the road at some point you know the equipment is going to become increasingly better at mining it the difficulty will get increasingly harder to mine it as a result you're going to continually have this this battle at some point i'll be out because you know i sat down with my wife and totaled up like the value of the equipment i have in the bitcoin mine and it's just it's getting stupid because it builds on itself right because you you're either in or you're out you always have to be buying new equipment so you're always retiring old equipment and buying new equipment and as a result you're constantly um you're constantly re-harvesting investment and keeping it going forward when you stop you can take a windfall profit for a while but then you're done then your equipment is all dated it's not efficient to run you'll lose money if you run it nobody wants your equipment because it's a money losing piece of equipment and then you just have to buy in and you're buying in for straight cash at that point so it's much better to let the equipment earn the money to pay for itself over time and then take a smaller percentage return on investment and constantly have that return than it is to take a big return and then be done but at some point i'm going to take a big return and i'll be done because that or i'm going to have to go really big because i'm going to outgrow the facilities that i have to mine with deflation before the creation of the federal reserve deflation should be standard it should be but it wasn't it was the weird thing um the the if you go back further so what what caused after world war ii what caused deflation um it wasn't the war itself it was the automation that came from the war the technological advances that came from the war led to efficiencies that led to increases in production so what causes deflation massive increases in production massive increases not in production in productive capability without additional inputs so in other words i don't have to give you more labor i don't have to give you more materials but i get more finished product which seems completely counterintuitive right but think about that how do you compete with china with slave labor well you build a robot force to build all your to manufacture your goods when the technology gets to that point we won't have kellogg's workers on the assembly lines in the confectionary union filling up cereal boxes full of cereal it will be completely automated you won't have auto workers assembling vehicles anymore you won't have a lot of these jobs that we have now you're going to have a lot of service jobs and a lot of repair jobs until the point comes years and years and years in the future where we have like you know robots that are so adept that they can they can come see the toilet for you then how much does it cost to have a toilet put down well the robot costs some money and then after that there's some maintenance costs you got to charge the robot but the robot doesn't take any breaks the robot can work 24 hours a day the robot is predictable and the robot means we don't need to have a human so yeah we're going to see a huge increase in productivity coming over the next decade because of what's happening right now restaurants are automating everything from serving staff down to kitchen staff to cleaning once these jobs are gone just like the atm just like the self checkout in the convenience store or in the grocery store once those jobs are gone they don't come back because they can be automated what jobs can't be automated well human interaction right we're getting there we're getting close uh have you been to a mcdonald's recently here in omaha i went to two different mcdonald's so far at two different mcdonald's i was greeted by a completely artificial intelligence person at the speaker so my kids wanted happy meals they wanted two chicken nugget happy meals with fries because nobody wants those stupid apple slices and apple juice okay my daughter won't eat the fries but she'll eat all the chicken nuggets my son won't eat the chicken nuggets but he'll eat all the fries so we swap them she gets eight chicken nuggets and he gets lots of fries and everyone's a happy camper with their happy meal they all get a cheap toy that they'll never play with that i can literally throw away by the time i get home from mcdonald's and nobody cares remember when the toys used to be good not anymore so i pull up to the speaker and it's like hi welcome to mcdonald's how can i help you today wow it's cheerful okay and i just figured you know how they record the message welcome to mcdonald's where you get like two big macs and a mcrib for like whatever can i take your order and you're like yeah i'll have a and then they're like uh welcome to mcdonald's how can i help you you're like did you not know there's a recorded thing that says that already like did they not train you that like i don't okay whatever so anyway the speaker says how can i take your can i take your order and i said i need two chicken nugget happy meals please and then it's like would you like a barbie toy or a girl toy or a boy boy toy or however they say it like okay whatever toy disney toy whatever and they would like apple juice for the drink and they want extra frie

2022-07-11 04:32

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