- “If they can pass the debt on to future voters, they can win the votes of current voters. The government’s incentive is therefore to create inflation because it reduces the cost of borrowing.
- “You have to protect yourself in this inflationary environment. But if you’re already super rich and you already own all those assets, then you win by default.”
- “In 2020, Forbes reported that the increase in wealth of the Forbes 400 (richest) rose in 2020 the highest than any year since they started recording. The reason it raised the highest rate, that’s because they printed money”
- “What is the motivation of a politician? The incentive for a politician is to get into power and stay in power…how are they going to try to get votes? By spending a lot of money without taking taxpayers’ money…they pass the book on the road”.
It was fun.
There are bigger things in the world than cryptocurrency; more important issues. Michael Kong, CEO of Fantom, understood this well. It’s also what cryptocurrency is trying to solve, although we’re not quite there yet – something he acknowledged and we discussed at length, assessing whether it’s reasonable to compare to growth from the Internet or other references that you often come across.
Personally, I’m pessimistic about the state of the economy right now. The cost of living crisis has hit ordinary citizens hard. Homes are becoming more and more unaffordable – part of the reason I left my native Ireland and moved to Colombia. Politicians went from calling inflation ‘passing’ to blaming it on Putin’s war, before shifting the past month to ‘it’s a problem but it’s peaked and will be under control by the end of it’. of 2022″.
Michael is CEO of Fantom, which is one of the biggest cryptocurrencies around. The episode came just hours after the June CPI reading showed inflation had risen again to 9.1%. Michael is a deep thinker and has many fascinating insights into the evolution of financial asset prices, why the economy is struggling, the political environment, and the inequality gap.
We also talked about Fantom (obviously!). We delved into what separates it from rival cryptocurrencies in terms of validation mechanism, and he was refreshingly candid about the trade-offs that were made by prioritizing attractive features such as low fees. high and high transaction speeds. In truth, the podcast was in two sections: Fantom/Blockchain technicals, and Macro/Today’s society and economy, which I timestamped in the description below.
I think cryptocurrency often suffers from tribalism, an argumentative and competitive landscape where investors sometimes jump at each other for liking certain coins and disliking others. I really appreciated Michael stating that Fantom “stands on the shoulders of the giants of Ethereum,” big enough to give credit to a rival coin for laying the foundations of the industry.
Sure, he thinks Fantom has improved some aspects of their technology, which we discussed in depth, but it was nice to hear an objective and balanced opinion from him.
My favorite part was when Michael showed how in touch he was with the economic reality that so many people face. He lamented that the money printer took money from the poor and put it into the hands of the rich so brutally during COVID, and that paycheck workers are paying the price.
“This leads to a massive transfer of wealth from the poor to the rich. This is one of the reasons I started getting into crypto… I can’t change the political system; I am one in 20 million voters in Australia. But what I can do is influence my own life and control what I can control. –Michael Kong
We talked about what you can do to protect yourself as the value of fiat currency continues to erode, the prices of goods rise, and it generally becomes harder to live. And why, unfortunately, everything is stacked in favor of the rich.
“You need to protect yourself in this inflationary environment. But if you’re already super rich and already own all those assets, then you win by default. That’s why in 2020, Forbes reported that the increase in wealth of the Forbes 400 (richest) rose in 2020 the highest than any year since they started recording. The reason he raised the highest rate is that they printed money”.
For me, it is the widening inequality gap that is the most painful part of it all. We saw this happen during COVID when those lucky enough to be able to work from home (including myself, for the record) were relatively immune (pardon the pun) to the economic carnage caused by the lockdowns.
On the other hand, those who work in person, such as bar staff, retail, performers and many others, have been hit mercilessly. Those who lived paycheck to paycheck suddenly didn’t have a paycheck anymore, while those at home just had to put on sweatpants and make sure their bed wasn’t too messy behind- plan of their Zoom call.
The government response has essentially shifted wealth from the poor to the rich. Huge stimulus packages have now served to trigger this full-scale inflation crisis, further exacerbating the hardships these same paycheck workers faced during the pandemic itself.
Michael Kong understands all of this. He’s a CEO and obviously very smart, but he understands how the world works. He also tries to make a difference. If you listen to a CoinJournal podcast, I think this should be it – covering important issues with a smart and candid guest was really enjoyable, informative and thought provoking. Timestamps are provided in the description of Spotify if you prefer to listen to certain sectors on Fantom/crypto/inflation/politics/the future etc.
Link to the podcast here on Spotify. YouTube to follow shortly.